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New York Community Bank’s path to $100 billion club and share slide

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New York Community Bank's path to $100 billion club and share slide
© Reuters. A sign is pictured above a branch of the New York Community Bank in Yonkers, New York, U.S., January 31, 2024. REUTERS/Mike Segar/File Photo

(This Jan. 31 factbox has been corrected to say $185 million, not $185 billion, in paragraph 11)

By Nupur Anand

NEW YORK (Reuters) – Nearly a year ago, New York Community Bank waded into the regional bank crisis, buying up assets in failed Signature Bank (OTC:), helping secure a spot in the list of banks with over $100 billion in assets.

On Wednesday, the bank became the one under investor scrutiny after it posted an unexpected quarterly loss and its shares sank nearly 40%.

The surprise loss drove down other regional bank shares, dragging the KBW regional index down 6%, as it reignited concerns over the health of smaller lenders some of which are still recovering from bank failures in the U.S. last year.

Here are key facts about NYCB. The bank did not respond to an email request seeking comment.

* Thomas Cangemi, the CEO of NYCB, a long time bank veteran took over its reins in December 2020 and has been working to transition NYCB into a full-service commercial bank.

* Founded in 1859, the bank long served as a small regional bank. Between 2000 and 2023, NYCB completed 13 acquisitions. With two recent acquisitions, including Flagstar Bank, it expanded its footprint across the country.

* As of Dec. 31, the bank had $116.3 billion in total assets, $85.8 billion of loans, and $81.4 billion of deposits.

* In 2023, NYCB emerged as a buyer of failed Signature bank that was shuttered after unsustainable deposit outflows. NYCB acquired $34 billion of deposits, $13 billion in loans and $25 billion in cash from the failed bank, catapulting it into the over-$100 billion-in-assets club. These banks are required to follow stricter capital and liquidity requirements as mandated by the regulators.

Cangemi said on Wednesday the changes in its financial profile that pushed it into the new category occurred faster than expected.

“This (Signature’s) acquisition allows us to advance our strategy while strengthening and diversifying our balance sheet. However, we will become a $100 billion-plus bank sooner than we had anticipated,” Cangemi said on an analyst call on Wednesday. The bank crossed the $50 billion asset threshold in 2018.

* The bank had to set aside a higher sum to meet the regulatory requirements this quarter along with parking more money in its rainy day funds to cover potential losses, which led to an adjusted loss of $185 million. The bank also slashed its dividend by 70%.

* Regional banks that have a higher share of commercial real estate loans have been in the spotlight as concerns around these loans going sour have remained elevated since the March 2023 banking crisis. NYCB made increased provisions around its CRE loan books which once again raised concerns around this portfolio, said Ken Usdin, an analyst at Jefferies.

* A sluggish and cloudy outlook for 2024 also weighed on the bank’s stock performance. Despite a few repeated requests for clear guidance on net interest income by analyst Steven Alexopoulos at JPMorgan, management did not provide a number. JPMorgan declined to comment.

Keith Horowitz, analyst at Citigroup said there was a lot of uncertainty about the guidance due to missing pieces of information on net interest income and credit.

It is likely the stock will remain under pressure as a result of the dividend cut and the poor outlook, said Christopher McGratty, an analyst at KBW.

Stock Markets

Wendy’s, blasted over CEO’s pricing comment, vows no price hikes at busy times

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Wendy's, blasted over CEO's pricing comment, vows no price hikes at busy times
© Reuters. FILE PHOTO: A Wendy?s restaurant displays a “Now Hiring” sign in Tampa, Florida, U.S., June 1, 2021. REUTERS/Octavio Jones/File Photo

By Waylon Cunningham and Deborah Mary Sophia

DALLAS (Reuters) -Wendy’s said on Wednesday it has no plans to raise menu prices at times of peak demand, after the burger chain weathered heavy criticism on social media since its CEO said earlier this month it would start testing “dynamic pricing”.

CEO Kirk Tanner told investors on a call this month that starting as early as 2025, Wendy’s (NASDAQ:) would begin testing features including “dynamic pricing and daypart offerings”. Dynamic pricing refers to surge pricing based on demand, especially during peak hours of the day.

This practice often raises prices at busy times, similar to how Uber (NYSE:) adjusts ride fares.

Tanner’s comment this week sparked an online backlash. U.S. Senator Elizabeth Warren in a post on the social media platform X on Wednesday called it “price gouging plain and simple.”

Wendy’s, in a statement to Reuters, said on Wednesday it “would not raise prices when our customers are visiting us most.”

Its initiative to add digital menuboards to certain stores would instead allow Wendy’s to offer discounts to customers more easily, “particularly in the slower times of day,” it added.

“We said these menuboards would give us more flexibility to change the display of featured items. This was misconstrued in some media reports as an intent to raise prices when demand is highest … We have no plans to do that,” the company said.

Warren’s post on X, previously Twitter, said Wendy’s plan “means you could pay more for your lunch, even if the cost to Wendy’s stays exactly the same. It’s price gouging plain and simple, and American families have had enough.”

“I guess I won’t be eating at Wendy’s anymore,” one Reddit user said in a post, while others on X called for boycotts.

Analysts and consultants were skeptical of the idea of surge pricing at restaurants.

Wendy’s “dynamic pricing” was a hot topic at a restaurant conference in the Dallas area, with several executives saying customers – already skittish after recent price increases – would likely be scared off by unpredictable prices.

“I don’t see it taking off any time soon,” said Victor Fernandez, a senior analyst at restaurant analytics firm Black Box Intelligence.

Michael Lukianoff, CEO of, who has consulted with restaurants about pricing for years, said that “dynamic pricing” is a great success in other industries such as airlines, but would not work in restaurants.

“Customers will shop elsewhere,” he said.

Wendy’s sales have already slowed. data showed visits to Wendy’s outlets declined in all three months of the fourth quarter of 2023.

Wendy’s shares, which dropped about 14% in 2023, were up 1% on Wednesday. The company also recently issued a profit forecast for this year below Wall Street estimates, hurt by higher commodity and labor costs.

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Stock Markets

Apple shareholders reject AI disclosure proposal

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Apple to disclose AI plans later this year, CEO Tim Cook says
© Reuters. Apple logo is seen in this illustration taken, August 22, 2022. REUTERS/Dado Ruvic/Illustration

By Stephen Nellis

(Reuters) -Apple plans to disclose more about its plans to put generative artificial intelligence to use later this year, Chief Executive Officer Tim Cook said during the company’s annual shareholder meeting on Wednesday.

Cook said that the iPhone maker sees “incredible breakthrough potential for generative AI, which is why we’re currently investing significantly in this area. We believe that will unlock transformative opportunities for users when it comes to productivity, problem solving and more.”

Apple (NASDAQ:) has been slower in rolling out generative AI, which can generate human-like responses to written prompts, than rivals such as Microsoft (NASDAQ:) and Alphabet (NASDAQ:)’s Google, which are weaving them into products.

On Wednesday, Cook argued that AI is already at work behind the scenes in Apple’s products but said there would be more news on explicit AI features later this year. Bloomberg previously reported Apple plans to use AI to improve the ability to search through data stored on Apple devices.

“Every Mac that is powered by Apple silicon is an extraordinarily capable AI machine. In fact, there’s no better computer for AI on the market today,” Cook said.

Apple shareholders on Wednesday rejected a measure asking the company to disclose more information about how it uses artificial intelligence in its business and its ethical guidelines for the technology.

The proposal, which was defeated at the company’s annual shareholder meeting, was put forth by the pension trust of the AFL-CIO, the largest American labor union federation, which has also proposed AI measures at other technology companies.

A similar proposal will be heard at Walt Disney (NYSE:)’s annual meeting in April.

At Apple, the AFL-CIO asked for a report on the company’s use of AI “in its business operations and disclose any ethical guidelines that the company has adopted regarding the company’s use of AI technology.”

In its supporting statement in Apple’s proxy materials, the AFL-CIO wrote that “AI systems should not be trained on copyrighted works, or the voices, likenesses and performances of professional performers, without transparency, consent and compensation to creators and rights holders.”

Apple opposed the measure, saying that disclosures could tip its hand on strategy as it competes against rivals in the fast-moving AI field.

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Stock Markets

UMG to generate 250 million euros in savings by 2026, flags job cuts

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UMG to generate 250 million euros in savings by 2026, flags job cuts
© Reuters. FILE PHOTO: Universal Music Group logo is seen displayed in this illustration taken, May 3, 2022. REUTERS/Dado Ruvic/Illustration/File Photo

(Reuters) – Universal Music Group (AS:) will cut jobs and streamline its operations with the aim of generating 250 million euros ($271.03 million) in run-rate savings by 2026.

In the first phase of the plan, which will be introduced immediately, the group plans to save 125 million euros in 2025, including 75 million euros in 2024, the company said.

“Our organizational redesign achieves efficiencies in targeted cost areas while providing our labels with unprecedented capabilities to deepen artist and fan connections via new experiential, commerce, and content offerings,” the group said in a statement.

UMG also posted a 9.2% year-on-year increase in adjusted core profit (EBITDA), to 677 million euros in the fourth quarter, as its revenue rose to 3.21 billion euros, up 9.0% from previous year.

It proposed a year-end dividend of 0.27 euros per share, bringing total dividend payout in 2023 to 0.51 per share.

($1 = 0.9224 euros)

(This story has been refiled to add ‘euros’ in the headline)

(Reportin by Dagmarah Mackos, editing by Tassilo Hummel)

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