New York Community Bancorp in Hicksville just sold $899 million of consumer loans and shed more light on its recently disclosed material weakness.
The $114.1 billion-asset company said in its annual report that it recently sold the consumer loans and a commercial co-op loan. The pricing wasn’t disclosed.
The filing shared more insight into the company’s material weakness, which was originally disclosed in late February.
“We did not sufficiently maintain effective control activities related to internal loan review,” the filing said.
“Specifically, our internal loan review processes lacked an appropriate framework to ensure that ratings were consistently accurate, timely and appropriately challenged,” the filing said. “These ineffective controls impact the company’s ability to accurately disclose loan rating classifications, identify problem loans and ultimately” recognizing loan-loss allowances.
The filing also said that insufficient board oversight led to a lack of a “sufficient complement of qualified leadership resources to conduct effective risk assessment and monitoring activities.”
It was revealed shortly after the company reported a big fourth-quarter loss that its chief risk officer had left. The company recently filled the vacancy.
New York Community has endured a turbulent 2024. In January, it reported a $260 million fourth-quarter loss due to chargeoffs for a co-op loan and an office loan. It also cut its dividend to 5 cents a share after crossing $100 billion of assets.
Sandro DiNello was elevated to executive chairman, with Thomas Cangemi, president and CEO, reporting to him. Cangemi would resign in February, coinciding with the disclosure of the material weakness and a big goodwill charge that increased the quarterly loss to $2.7 billion.
New York Community announced last week that a group that includes Steven Mnuchin and Joseph Otting would infuse more than $1 billion of capital. Otting became president and CEO, with DiNello reverting back to nonexecutive chairman. Mnuchin and three other investors joined New York Community’s board.
The company cut its dividend again, to a penny a share, and reported that its deposits fell by 7% between Feb. 5 and March 5, to $77.2 billion.