New York Community Banks appoints DiNello as CEO; announces $2.4 billion asset impairment loss

New York Community Bank Undergoes Leadership Shake-up and Reveals Significant Loss

New York Community Bank (NYCB) has announced a series of changes within its leadership team, as well as a substantial financial loss.

In a significant move, Alessandro DiNello has been named as the new CEO, succeeding Thomas Cangemi who recently stepped down after a 23-year tenure at the bank. DiNello, previously the CEO of Flagstar, assumed the role two days after Cangemi's resignation.

In addition, George Buchanan has been appointed as the bank's chief risk officer. Buchanan brings a wealth of experience to the role, having previously served as chief risk officer for consumer banking and wealth management at Regions. Prior to this, he worked at several prominent financial institutions, including Capital One, Bank of America, Wells Fargo, and BNY Mellon.

The changes come in the wake of a $2.4 billion loss, which NYCB has identified as a goodwill impairment charge. This represents a tenfold increase from the $252 million loss disclosed on January 31. Despite the substantial loss, the bank maintains that it has no impact on its regulatory capital ratios.

The loss has caused NYCB's stock to plummet further, with a 23% drop through noon on Friday following the disclosure of additional information. Piper Sandler analyst Mark Fitzgibbon stated that there is more to come for NYCB.

The bank has also identified material weaknesses in its internal controls related to internal loan review, as well as in the way it measures lending-related risk. In response, NYCB named Colleen McCullum as its chief audit executive and Marshall Lux, a former chief risk officer at JPMorgan Chase's consumer bank, as presiding director and chair of the board's nominating and corporate governance committee.

Octavio Marenzi, CEO of consulting firm Opimas, described NYCB as a bank that is "out of control." The presiding director, Hanif Dahya, stepped down after not supporting DiNello's ascent to chief executive. Since Cangemi's resignation, the chairperson of the supervisory boards of New York Community Bank is not explicitly named in the available search results, and no direct information has been found about his successor.

Despite the challenges, DiNello's appointment as CEO is viewed favorably, given his track record in turning around Flagstar. NYCB's board disclosed that it would not meet a deadline to timely file its annual report with the SEC, but that the report would be filed within 15 days.

New York Community Banks appoints DiNello as CEO; announces $2.4 billion asset impairment loss