Shares of New York Community Bancorp plummeted 18% in after-hours trading on Thursday following the announcement of a leadership change and the revelation of internal control issues. Alessandro DiNello, the executive chairman, has assumed the roles of president and CEO with immediate effect. The bank has been grappling with concerns over its exposure to commercial real estate, which has contributed to the recent pressure on its performance.

The amendment to the fourth-quarter results included a disclosure about the bank’s internal risk management. The filing with the U.S. Securities and Exchange Commission stated, ‘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.’

DiNello, who previously served as the CEO of Flagstar Bank, acquired by NYCB in 2022, expressed confidence in the bank’s future despite recent challenges. The executive chairman emphasized, ‘The changes we’re making to our Board and leadership team are reflective of a new chapter that is underway.’

Marshall Lux, the new presiding director of the NYCB board, replaced Hanif Dahya. Lux’s prior experience includes serving as the global chief risk officer for Chase Consumer Bank at JP Morgan from 2007 to 2009.

NYCB’s shares have experienced a 53% decline year-to-date, triggered by the bank’s announcement on January 31 of a larger-than-expected charge against potential loan losses. The disclosure reignited concerns about the state of the commercial real estate market and the regional bank’s position within it.