In a continuation of its downward spiral, New York Community Bancorp (NYCB) witnessed another wave of credit downgrades, leading to a sharp decline in its share price. Fitch Ratings and Moody's Investors Service both issued unfavorable assessments, signaling increased borrowing costs for the struggling bank.

Following a 26% plunge on Friday, NYCB shares took another blow, falling as much as 17% on Monday, reaching their lowest level since 1996. Fitch Ratings downgraded NYCB to non-investment grade, while Moody's, which had already assigned a junk rating, lowered it even further.

The catalyst for Friday's sell-off was NYCB's announcement of a leadership change, with the ousting of its chief executive officer due to the discovery of "material weaknesses" in the bank's loan risk tracking. The subsequent credit downgrades are expected to put additional pressure on NYCB's cost of capital, according to Wedbush Securities Inc. analyst David Chiaverini.

By midday in New York, NYCB shares had dropped 13% to $3.08, after reaching a low of $2.96 earlier in the day. Despite being a relative outperformer among regional banks in 2023, NYCB has experienced a significant loss of value this year, with its stock plummeting by more than two-thirds.

The downward trajectory began in January when NYCB reported its earnings, which included a substantial dividend reduction and increased provisions for loan losses. Moody's responded with a downgrade to junk status in February. In a further blow, Moody's also downgraded the long-term deposit rating of NYCB's lead bank, Flagstar Bank, from Baa2 to Ba3 on Friday.

While NYCB continues to struggle, the overall outlook for bank stocks remains positive. The KBW Bank Index saw gains of up to 2.8% on Monday, and a broader regional gauge, which includes NYCB, saw an increase of 0.8%.

The future remains uncertain for NYCB as it grapples with the repercussions of the recent credit downgrades. Investors and analysts will closely monitor the bank's ability to address the identified weaknesses and stabilize its financial standing.