Shares of New York Community Bancorp plunged by double digits on Friday after the sudden exit of the regional bank's longtime president and CEO. The departure coincides with the bank's disclosure of "material weaknesses" related to loans.
Thomas Cangemi relinquished his leadership roles at the bank after 27 years, with Alessandro DiNello, who serves as its board's executive chairman, succeeding him, the bank said in a statement late Thursday. The bank also said in a regulatory filing that it had discovered "material weaknesses" in loan controls and took a $2.4 billion charge.
After plummeting almost 30% at Friday's start, shares of the Hicksville, N.Y.-based commercial real estate lender bank were lately down nearly 23%, and have lost more than half their value this year.
The bank — a major lender to New York City apartment landlords — is not able to file its annual report with the Securities and Exchange Commission, and will have to amend its fourth-quarter results, it said in the Thursday notice to regulators.
"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 bank said in the filing.
The developments come after the company in January said it was stockpiling cash in the event of possible loan troubles.
NYCB's struggles come nearly a year after three midsize lenders were seized by regulators after deposit runs, with the Federal Deposit Insurance Corp. then selling off the assets of the collapsed entities. Following those bank failures, NYCB subsidiary absorbed the deposits and some loans from one of the institutions, Signature Bank.
Yet while NYCB's struggles could be viewed as a warning sign for other regional banks or lenders with sizable commercial real estate loan portfolios, one analyst is pushing back on the idea.
"A lot of the issues are NYCB-specific when it comes to multi-family lending," Steve Moss of Raymond James told CBS News.
He added that NYCB's problems are unrelated to it acquiring Signature's assets, noting that NYCB appears to have been issuing a lot of interest-only loans, without equity from borrowers. Moss also thinks the bank can work through its current woes.
"There is coverage for uninsured deposits, they should have the liquidity to manage through this difficult time," he said.
Kate GibsonKate Gibson is a reporter for CBS MoneyWatch in New York.