(Bloomberg) -- New York Community Bancorp may have its credit rating cut to junk by Moody’s Investors Service as the firm stockpiles money to cover troubled loans and spends more to fund operations.

Moody’s placed all of its assessments, including the bank’s long-term issuer rating of Baa3 — the lowest investment-grade level — on review for downgrade Wednesday after the firm reported a surprise fourth-quarter loss and slashed its dividend. The stock plunged 38%.

The review reflects the bank’s weak earnings, issues with office and multifamily real estate loans and a “material decline in its capitalization and high and growing reliance on wholesale funding,” Moody’s said in a statement. Increased regulation of the bank after it grew in 2023 is also likely to fuel expenses and compliance costs, the ratings firm said.

The lender, which acquired part of Signature Bank last year, said it lowered shareholder payouts as it prepared to meet stricter capital requirements. The bank’s provision for loan losses surged to $552 million, more than 10 times analysts’ estimates.

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