NYCB names new chairman after Moody’s downgrades bank's credit rating to junk
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New York Community Bank on Wednesday promoted its chairman to help stabilize the company's operations, hours after Moody's Investors Service downgraded the bank's credit ratings two notches to junk.
Shares gained nearly 7% Wednesday after initially falling as much as 14%. The stock fell more than 20% Tuesday.
NYCB made Alessandro DiNello executive chairman effective immediately, promoting him from nonexecutive chairman, to work with CEO Thomas Cangemi «to improve all aspects of the Bank's operations,» according to a statement.
The regional bank has been in free fall, shedding more than 50% of its market value across a punishing series of trading sessions, since reporting a surprise fourth-quarter loss last week, along with mounting losses on commercial real estate and the need to slash its dividend by 71% to shore up capital levels.
The moves reignited concerns that some small and medium-sized banks could be squeezed by declines in profitability and losses on real estate holdings.
NYCB's announcement addresses concerns over management that emerged after last week's earnings report. The Hicksville, New York-based lender vaulted over $100 billion in assets after a pair of acquisitions — Flagstar Bank in late 2022 and the assets of Signature Bank in March 2023 — but then appeared to be caught off guard by heightened regulatory scrutiny after crossing that threshold.
DiNello, who was CEO of Flagstar Bank since 2013, joined NYCB after the acquisition closed.
Moody's cited «multi-faceted financial, risk-management and governance challenges» at NYCB in its note late Tuesday downgrading the bank.
It downgraded all the bank's long-term ratings to Ba2 from Baa3, which is junk status, partly on concerns about
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