New York Community Bank in Brooklyn, New York on February 8, 2024.
Spencer Platt | Getty Images
Shares New York Community Bank fell more than 20% in extended trading on Thursday after the regional lender announced a change in management and disclosed problems with its internal controls.
Regional bank announced that Alessandro DiNello, its executive chairman, assumes the position of president and chief executive officer effective immediately. NYCB has been under pressure in recent months, in part due to concerns about its impact on commercial real estate.
NYCB shares fell sharply in after-hours trading.
The bank also announced amendment to fourth quarter results by adding disclosures about internal risk management.
“As part of management’s assessment of the company’s internal controls, management identified material weaknesses in the company’s internal control system related to internal loan reviews that resulted from ineffective supervision, risk assessment and monitoring activities,” the company said in a filing with the Office of the Financial Services Authority. US Securities and Exchange Commission. Exchange commission.
Dinello previously served as CEO of Flagstar Bank, which NYCB acquired in 2022. He was appointed executive chairman of NYCB earlier in February, immediately after Moody’s Investors Service downgraded the bank’s credit rating to junk status.
“While we have faced challenges recently, we are confident in the direction of our bank and in our ability to deliver value to our customers, employees and shareholders in the long term. The changes we make to our board of directors and management are reflective. a new chapter that has already begun,” Dinello said in a press release Thursday.
In another leadership change, Marshall Lux was named chairman of NYCB’s board of directors, replacing Hanif Dahya. Lux served as director of global risk for Chase Consumer Bank at JP Morgan from 2007 to 2009, according to a press release.
NYCB shares are down 53% year to date, following a Jan. 31 announcement that the company was taking on larger-than-expected costs to cover potential loan losses.
The specter of loan losses has reignited concerns about the health of the commercial real estate market and regional banks in general. Several regional banks failed in 2023 after customers and investors became concerned about the cost of debt on banks’ balance sheets, including Silicon Valley Bank.
NYCB was actually the acquirer of one of these failed banks. Signaturein March last year.
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