Shares of New York Community Bank lost more than a third of their value on Wednesday after the regional bank announced plans to slash its dividend by 70%.

The move is intended to boost capital and increase the reserves that the regional bank holds to cover losses, with NYCB expecting to see more distress within its multifamily and office loan portfolio over the coming months. The bank will drop its quarterly dividend to 5 cents per share.

“We understand the importance and the impact of this decision to our stockholders,” NYCB CEO Thomas Cangemi said on the earnings call. “This was not made lightly.”

NYCB also increased its estimates for unrecoverable debts, known as credit losses, to $552M, a 790% increase from the previous quarter’s allowance of $62M.

The increase in holdings to cover potential loan losses drove the bank to a $252M loss in the fourth quarter after turning a profit of $172M in the same period last year.

It reported $185M in net loan charge-offs, partially attributed to an office building loan that stopped performing. Roughly 44% of NYCB’s loan book is made up of multifamily loans, and around 8% of those are marked as criticized, or in probability of default, The Real Deal reported.

The bank also has $18B of loans covering rent-regulated properties. Around 14% of these were at risk of default and 0.51% were nonperforming. Distress in the rent-stabilized apartment market has been an increasing cause for concern among market insiders, Bisnow reported last year.

Roughly $4B of the bank's criticized debt is tied to multifamily and office assets, NYCB Chief Financial Officer John Pinto said on the call. A third of the bank’s office loan portfolio, around $414M, was criticized at the end of Q4, TRD reported.

“It's a very, very low number,” Pinto told analysts on the earnings call. “It's a very manageable amount.”

NYCB’s stock plunged by 50% when markets opened on Wednesday, with shares hitting a 23-year low of $5.70. Just before the close of trading, the price had recovered to $6.48 per share, still down more than 37% on the day.

Bank executives said the worse-than-expected performance was partly attributable to its acquisition of Signature Bank's deposits after its collapse last year. The bank grew faster than anticipated and must now adhere to different liquidity requirements as it ascends to a different categorization of financial institution, it said in its earnings release.

“NYCB remains well capitalized,” Cangemi said.