shares New York Community Bancorp It fell more than 25% on Friday after the regional bank announced a change in leadership and revealed issues with its internal controls.
Alessandro Dinello, Executive Chairman, will assume the roles of President and CEO, effective immediately, the regional bank announced after the market close on Thursday. New York Commercial Bank has been under pressure in recent months due in part to concerns about its exposure to commercial real estate.
NYCB shares fell sharply in after-hours trading.
The bank also announced an amendment to its results for the fourth quarter by adding a disclosure about its internal risk management.
“As part of management’s assessment of the Company’s internal controls, management identified material weaknesses in the Company’s internal controls related to internal loan reviews, resulting from ineffective oversight, risk assessment, and monitoring activities,” the company said in a filing with the US Securities and Exchange Commission. Exchange commission.
DiNello previously served as CEO of Flagstar Bank, which was acquired by New York Commercial Bank in 2022. He was named CEO of New York Commercial Bank earlier in February after Moody's Investors Service downgraded the bank's credit rating to junk status.
“Although we have faced recent challenges, we are confident in the direction of our bank and our ability to deliver for our customers, employees and shareholders over the long term. The changes we are making to our Board of Directors and leadership team reflect that of a new chapter,” DiNello said in a press release on Thursday. It's happening now.”
In another leadership change, Marshall Lux has been promoted to the position of Chairman of the Board of Directors of the New York Commercial Bank, replacing Hanif Dahiya. Lux served as global chief risk officer for Chase Consumer Bank at JPMorgan from 2007 to 2009, according to the press release.
NYCB shares are now down 65% year to date, a sell-off sparked by the bank's Jan. 31 disclosure that it was taking larger-than-expected charges for potential loan losses.
The specter of loan losses has reignited concerns about the state of the commercial property market and regional banks more broadly. Several regional banks failed in 2023 after customers and investors became uneasy about the value of debt on the balance sheets of banks, including Silicon Valley Bank.
The New York Commercial Bank was actually the acquirer of one of those failed banks, Signature, in March of last year.
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