New York Community Bancorp (NYCB) played the role of rescuer during a 2023 regional banking crisis by purchasing some assets of the failed Signature Bank. Now it is experiencing some trouble of its own.

The stock of the Hicksville, N.Y.-based lender initially fell 46% Wednesday after it reported a surprise net loss of $252 million for the fourth quarter and announced it slashed its dividend. Its 37% decline for the day was the largest one-day percentage drop in the stock’s history.

The news sent new shockwaves through the regional banking world as stocks of other mid-sized lenders such as Valley National Bancorp (VLY), BankUnited (BKU), and Western Alliance (WAL) fell. An index that tracks those banks ended the day down roughly 6%.

New York Community Bancorp’s troubles can be traced back to how it responded to a crisis that roiled the regional banking world in 2023. Signature was one of three sizable regional lenders that failed between March and May, triggering panic about the strength of many other mid-sized financial institutions across the US.

NYCB’s decision to absorb billions in loans seized from that fallen rival pushed the bank above an important asset threshold of $100 billion, subjecting the company to higher regulatory standards. Bigger banks in the US are required to set aside more capital to give them sizable buffers against future losses.

That, the company said, is the reason it cut its dividend and boosted the money it set aside for loan losses. Those loan loss provisions were $552 million, well above analyst estimates, a sign that credit is also deteriorating. Its deposits also dropped by 2% between the third and fourth quarters.

“We took decisive actions to build capital, reinforce our balance sheet, strengthen our risk management processes, and better align ourselves with the relevant bank peers,” CEO Thomas Cangemi said in a release Wednesday.

The bank’s predicament is one faced by many regional lenders as they recover from the turmoil of 2023.

What will it take to still thrive in that pocket between a colossus like JPMorgan Chase (JPM) and thousands of tiny community banks? Do they need to consolidate and get much bigger to ensure their long-term survival? Or does that create new challenges of their own?

New York Community Bank has roughly doubled in size over the last two years, following its December 2022 acquisition of Flagstar Bancorp and the Signature deal in 2023 — which involved the purchase of $38 billion in loans and other assets from the Federal Deposit Insurance Corporation. The NYCB deal helped the FDIC absorb some of the costs associated with those failures.

By the end of 2023, NYCB had $116 billion in assets, making it one of the country’s 30 largest banks and placing it in a larger category of regulatory scrutiny as applied by the Federal Reserve. A crucial capital ratio is 9.1%, below some rivals in this category like KeyCorp (KEY).

“While we began preparing to be a $100 billion bank almost immediately after closing the Flagstar acquisition, we crossed this important threshold sooner than anticipated as a result of the Signature transaction,” the CEO said Wednesday.

“We have pivoted quickly and accelerated some necessary enhancements that come with being a $100 billion-plus Category IV bank.”

That includes cutting the company’s quarterly dividend to $0.05 a share of common stock, from $0.17 a share.

“We recognize the importance and impact of the dividend reduction on all of our stockholders, and it was not made lightly,” Cangemi added. “While these necessary actions negatively impacted our fourth-quarter results, we are confident they better align our larger organization with our new peers and provide a solid foundation going forward.”

NYCB also did not provide guidance for how its net interest income — a critical measure of a bank’s loan profitability — would do this year.

It did, however, give much of the components to calculate the forecast, leaving some analysts on edge.

NYCB is largely a commercial real estate lender, and there have been concerns across the industry about the fallout for banks as office properties fall in value across the country.

Its net charge-offs rose to $185 million from $1 million in the year-earlier period, largely due to the drop in value of one office loan and one co-op loan.

The office loan turned sour after an updated valuation in the third quarter and was labeled “non-accrual.” The co-op loan, it said, was not in default but will be sold in the first quarter of this year.

“We also performed a review of other co-op loans and did not find any other loans with similar characteristics,” the bank said.

David Hollerith is a senior reporter for Yahoo Finance covering banking, crypto, and other areas in finance.