Latest York Community Bancorp sent its shares plummeting as much as 28% in premarket trading Friday after the regional lender said has discovered “material weaknesses” within the ways it tracks loan risks and that its CEO is leaving.
The Latest York-based firm announced late Thursday that CEO Thomas Cangemi could 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, in accordance with Yahoo Finance. Within the weeks leading as much as his departure, Cangemi had been reporting to DiNello, even changing its bylaws to make it occur.
One NYCB director, Hanif “Wally” Dahya, said in a Feb. 25 letter that he “didn’t support the proposed appointment” of DiNello as CEO without saying why, in accordance with 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, in accordance with a press release on the leadership changes.
Individually on Thursday, the bank — among the many top 30 within the US — amended its fourth-quarter losses from $252 million to $2.7 billion and divulged “internal control issues.”
“As a part of management’s assessment of the Company’s internal controls, management identified material weaknesses within the Company’s internal controls related to internal loan review, resulting from ineffective oversight, risk assessment, and monitoring activities,” the corporate said in a filing with the Securities and Exchange Commission.
DiNello insisted in the discharge that despite NYCB’s “recent challenges, we’re confident within the direction of our bank and our ability to deliver for our customers, employees, and shareholders in the long run.”
“The changes we’re making to our board and leadership team are reflective of a recent chapter that’s underway,” added.
Representatives for NYCB didn’t immediately reply to The Post’s request for comment.
The shakeup at NYCB is just the most recent twist in a month-long saga that began in late January when the corporate — a significant lender to Latest York apartment landlords — surprised analysts by slashing its dividend to stockpile extra cash for loan losses.
The announcement reignited concerns in regards to the business real estate market which, in Latest York City, has been struggling over the so-called “urban doom loop” attributable to an influx of working from home in the course of the pandemic — a trend that has stuck despite return-to-office mandates.
There have also been worries in regards to the status of regional banks after three high-profile lenders suddenly collapsed last yr: 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% yr thus far.