New York Community Bank struggles worsen

We are almost one year removed from the banking crisis precipitated by the struggles at Silicon Valley Bank.

Now, another bank is having its own struggles. New York Community Bank (NYCB) has announced a new CEO and discovered “material weaknesses” in some of its internal procedures.

You may remember that in the midst of the crisis last March, NYCB acquired the deposits and branches from the failed Signature Bank. That added almost $40 billion to the bank’s balance sheet.

NYCB has major real estate exposure in New York in the form of $37 billion in apartment building loans and it was the catalyst for the bank’s problems in January when it announced it was stockpiling cash to cover potential problems with those loans.

Now, the bank has a new CEO, Alessandro DiNello, and has taken a $2.4 billion goodwill impairment charge.

Investors do not like uncertainty and it is why shares in the publicly traded bank continue to fall. The bank is worth 70% less than it was on January 30. 

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> NYCB Flags Weaknesses in Loan Oversight and Names New CEO

www.bloomberg.com

Commercial real estate lender New York Community Bancorp said it discovered “material weaknesses” in how it tracks loan risks, wrote down the value of companies acquired years ago and replaced its leadership to grapple with the turmoil. The stock plunged.

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