New York Community Bancorp (NYCB.N) shares dipped in early trade on Monday after the lender changed its CEO and noted "material weaknesses" in internal controls connected to a loan review.
The shares fell 13.8% to a 28-year low. They fell 26% on Friday despite the bank saying financial reporting concerns will not affect its 2023 results. "Unfortunately, these additional news items place further scrutiny on the company at a time when it needs to restore confidence," Morningstar DBRS analysts wrote.
Following a surprising fourth-quarter loss on Jan. 31 due to greater provisions related to its exposure to the ailing commercial real estate (CRE) sector, NYCB slashed its dividend and faced pressure.
Last Monday, it increased its quarterly loss to $2.7 billion due to a $2.4 billion goodwill impairment from 2007 and earlier transactions and recruited financial industry veteran George Buchanan as its chief risk officer.
"The return to the news cycle will once again test customer loyalty and deposit stickiness given this new round of stock price pressure following the fallout from a disappointing 4Q23," the agency added.
After acquiring Flagstar and some Signature Bank assets, the lender's balance sheet exceeds the $100 billion regulatory barrier, requiring tougher capital and liquidity standards.
As worldwide CRE concerns spread, the bank's shares have fallen over 65% this year. In the same period, the KBW Regional Banking Index (.KRX), a major market sentiment indicator, fell 11.1%.
Ortex data indicated that short-sellers targeting a regional U.S. bank exchange-traded fund had made $977 million this year, while NYCB's drop has netted them $145 million.
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