A New York Community Bank is located in Brooklyn, New York City, on February 8, 2024.
Spencer Platt | fake images
Actions of New York Community Bank fell more than 20% in expanded trading Thursday after the regional lender announced a leadership change and revealed problems with its internal controls.
the regional bank Announced that Alessandro DiNello, its executive chairman, will assume the roles of president and chief executive officer, effective immediately. NYCB has been under pressure in recent months due in part to concerns about its exposure to the commercial real estate sector.
NYCB shares fell sharply in after-hours trading.
The bank also announced a amendment to its fourth quarter results, adding a disclosure about its internal risk management.
“As part of management's evaluation of the Company's internal controls, management identified material weaknesses in the Company's internal controls related to internal loan review, as a result of ineffective supervision, risk assessment and monitoring activities. “the company said in a filing with the United States Securities and Exchange Commission.
DiNello previously served as CEO of Flagstar Bank, which NYCB acquired in 2022. He was named CEO of NYCB in early February, just after Moody's Investors Service downgraded the bank's credit rating to junk status.
“While 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 and leadership team reflect a new chapter is underway,” DiNello said in a news release Thursday.
In another leadership change, Marshall Lux was promoted to president director of NYCB's board of directors, replacing Hanif Dahya. Lux served as global chief risk officer for Chase Consumer Bank at JP Morgan from 2007 to 2009, according to the news release.
NYCB shares are down 53% so far this year, sparked by the Jan. 31 disclosure that it took a larger-than-expected charge for potential credit losses.
The specter of credit losses has revived fears about the state of the commercial real estate market and regional banks generally. Several regional banks failed in 2023 after customers and investors became uncomfortable with the value of debt on the banks' balance sheets, including Silicon Valley Bank.
NYCB was actually the acquirer of one of those failed banks, Signaturein March of last year.
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