New York Community Bancorp sent its shares plummeting as much as 28% in premarket trading Friday after the regional lender said has discovered “material weaknesses” in the ways it tracks loan risks and that its CEO is leaving.
The New York-based firm announced late Thursday that CEO Thomas Cangemi would be leaving NYCB — capping off a 27-year tenure at NYCB — and that Alessandro DiNello would take his place, effective immediately.
DiNello, NYCB’s executive chairman, had been acting as the bank’s true boss since earlier this month, according to Yahoo Finance. In the weeks leading up to his departure, Cangemi had been reporting to DiNello, even changing its bylaws to make it happen.
One NYCB director, Hanif “Wally” Dahya, said in a Feb. 25 letter that he “did not support the proposed appointment” of DiNello as CEO without saying why, according to Yahoo.
Dahya, who had been presiding director, also resigned from the board on Thursday.
He was replaced by Marshall Lux, who initially joined NYCB’s board in early 2022, works as a senior partner at Boston Consulting Group, and previously served as global chief risk officer for Chase Consumer Bank at JP Morgan from 2007 to 2009, according to a press release on the leadership changes.
Separately on Thursday, the bank — among the top 30 in the US — amended its fourth-quarter losses from $252 million to $2.7 billion and divulged “internal control issues.”
“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 review, resulting from ineffective oversight, risk assessment, and monitoring activities,” the company said in a filing with the Securities and Exchange Commission.
DiNello insisted in the release that despite NYCB’s “recent challenges, we are confident in the direction of our bank and our ability to deliver for our customers, employees, and shareholders in the long term.”
“The changes we’re making to our board and leadership team are reflective of a new chapter that is underway,” added.
Representatives for NYCB did not immediately respond to The Post’s request for comment.
The shakeup at NYCB is just the latest twist in a month-long saga that began in late January when the company — a major lender to New York apartment landlords — surprised analysts by slashing its dividend to stockpile more cash for loan losses.
The announcement reignited concerns about the commercial real estate market which, in New York City, has been struggling over the so-called “urban doom loop” caused by an influx of working from home during the pandemic — a trend that has stuck despite return-to-office mandates.
There have also been worries about the status of regional banks after three high-profile lenders suddenly collapsed last year: Silicon Valley Bank, Signature Bank and First Republic Bank.
NYCB acquired failed Signature in a $2.7 billion deal in March 2023.
Shares of NYCB are down 53% year to date.
This story originally appeared on NYPost
