March 1 (UPI) — Shares of New York Community Bank plummeted Friday after its CEO stepped down and it revealed an internal risk management issue related to exposure to commercial real estate.
Shares of NYCB were down roughly 21% as of 10 a.m. EST Friday amid the leadership shakeup that saw CEO Thomas R. Cangemi step down.
In a statement Thursday, NYCB said Executive Chairman of the Board Alessandro DiNello would take over the role of president and CEO, effective immediately.
“While we’ve faced 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.”
The NYCB statement also said that Presiding Director of the Board Hanif Dahya is also leaving his post and the board.
Marshall Lux will replace Dahya as Presiding Director of the Board.
A Securities and Exchange Commission filing said Cangemi’s resignation as CEO, “was not the result, in whole or in part, of any disagreement with the Company on any matters relating to the Company’s operations, policies or practices.”
The leadership shakeup came after a separate SEC filing said an assessment of the company’s internal controls “identified material weaknesses in the Company’s internal controls related to internal loan review, resulting from ineffective oversight, risk assessment and monitoring activities.”
The New York Community Bank-owned Flagstar Bank took over the failed crypto lender Signature Bank in 2023.
Moody’s Investors Service downgraded Flagstar’s credit rating to junk status in February. NYCB shares are down 53% year to date after the bank revealed it had to take a bigger charge against loan losses than expected.
