NYCB stock plummets as bank replaces CEO, cites 'material weakness'
New York Community Bank CEO Thomas Cangemi is leaving company
New York Community Bank can survive: Top banking analyst
Wedbush’s David Chiaverini believes the regional bank should be able to survive its latest financial storm on 'The Claman Countdown.'
New York Community Bancorp shares tumbled after replacing its CEO and disclosing lapsed internal controls. Shares of the regional bank fell over 25%.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| NYCB | NEW YORK COMMUNITY BANCORP INC. | 2.97 | -0.10 | -3.26% |
"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 detailed in a filing with the Securities and Exchange Commission.
As a result, recent financial reporting is being reviewed. The bank, whose parent is Flagstar Bank, one of the largest regional banks in the U.S, has over $116 billion in assets.
Alessandro DiNello, the bank's executive chairman, will succeed Thomas Cangemi as CEO, effective immediately. Cangemi will remain on the board.
Several firms, including Piper Sandler, Wedbush and Deutsche Bank cut price targets on NYCB shares to a range of $3.50 to $5.00 on Friday.
Wedbush analyst David Chiaverini, during an interview on ‘The Claman Countdown' said "this one is pretty bad" and he is bracing for another shoe to potentially drop.
"It comes down to credit quality for New York Community Bank. Their multifamily exposure in New York is the highest of our coverage and I think that is where the stress lies here" he said, while also noting the hiring of a new risk officer announced Friday.
"Will the bank need to set aside additional reserves to cover potential losses in their rent regulated multifamily portfolio?" he said.
IRS CRACKDOWN FOCUSES ON THE RICH
New York Community Bank
The SPDR Regional Banking ETF was down sharply, while bigger financial stocks, including JPMorgan, Bank of America, Citigroup and Wells Fargo, were also lower.
JPMORGAN CEO DIMON CAUTIOUS ON THE ECONOMY
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| KRE | SPDR SERIES TRUST S&P REGIONAL BKG ETF | 48.16 | -0.29 | -0.61% |
| JPM | JPMORGAN CHASE & CO. | 193.50 | +0.22 | +0.11% |
| BAC | BANK OF AMERICA CORP. | 37.83 | -0.08 | -0.21% |
| C | CITIGROUP INC. | 62.66 | +0.87 | +1.41% |
| WFC | WELLS FARGO & CO. | 59.90 | -0.02 | -0.03% |
Still, the broader markets remained higher.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| I:DJI | DOW JONES AVERAGES | 38239.66 | +153.86 | +0.40% |
| SP500 | S&P 500 | 5099.96 | +51.54 | +1.02% |
| I:COMP | NASDAQ COMPOSITE INDEX | 15927.900321 | +316.14 | +2.03% |
The disclosures come ahead of the anniversary of the collapse of Silicon Valley Bank (SVB) last March.
Employees walk in front of a sign outside the shuttered Silicon Valley Bank (SVB) headquarters in Santa Clara, California. (Justin Sullivan/Getty Images / Getty Images)
As fears ripped through the sector, NYCB picked up Signature Bank – which at the time experienced a massive investor exodus – for about $38 billion as its stand-alone survival became uncertain.
People wait inside the Signature Bank branch on March 13, 2023, in New York City. (Photo by Leonardo Munoz/VIEWpress / Getty Images)