Leadership Change at NYCB

A month after surprising the regional bank industry with a provision for loan losses, New York Community Bancorp has made another significant announcement. Chairman Sandro DiNello will take over as the new chief executive, following Thomas Cangemi's decision to step down after 27 years with the New York-based lender.

Transition of Power

The changes come after NYCB's recent dividend cut and increase in loan loss reserves, which prompted DiNello to take a more hands-on role in leading the bank. Having successfully guided troubled Flagstar Bank in Michigan, DiNello is now set to oversee NYCB's transformation into a larger, more diversified commercial institution.

Looking Ahead

In a statement, DiNello expressed confidence in the bank's direction and its ability to serve customers, employees, and shareholders effectively in the long term. The company remains committed to navigating recent challenges and delivering on its promises.

Response to Inquiries

Despite the announcement, NYCB has not yet provided further details or comments on the leadership change.

NYCB Announces $2.4 Billion Impairment Charge

Thursday brought more turbulence for NYCB as CEO Cangemi resigned and a major impairment charge was revealed. The bank disclosed that it will take a $2.4 billion hit to its net income in the December quarter due to a reassessment of goodwill on its balance sheet. Despite this, regulatory capital and credit agreements remain unaffected, according to an 8-K filing with the SEC.

Impact on Balance Sheet

In addition to the impairment charge, approximately $30 million in other balance sheet adjustments are necessary, all stemming from NYCB's acquisition of assets from the failed Signature Bank last year.

Market Reaction

Following this wave of troubling updates, NYCB shares plummeted by 14% in after-hours trading on Thursday, closing at $4.14. The stock has now fallen by 60% since the turmoil began at the end of January.

Internal Control Concerns

While the bank provided summary financial statements for the quarter and year ending December 2023 in the 8-K filing, it also disclosed that NYCB has requested an extension to file its 10-K annual report. During the annual reporting process, "material weaknesses" in internal controls related to loan review were identified, attributed to deficiencies in oversight, risk assessment, and monitoring activities.

Stay informed for more updates on this developing story.