New York Community Bancorp Discloses $2.4 Billion Goodwill Impairment and CEO Resignation Amid Control Failures

New York Community Bancorp disclosed a goodwill impairment charge of $2.4 billion on 29 February, a write-down that will be recognised retroactively in the bank's fourth-quarter 2023 results, weeks after the bank had cut its dividend. The announcement was accompanied by the resignation of chief executive Thomas Cangemi, who was replaced by Alessandro DiNello, and a disclosure of material weaknesses in its internal controls related to loan review oversight.

Shares fell by more than 20% in after-hours trading following the announcement, extending a decline that had left the stock down approximately 53% year-to-date at that point.

MATERIAL WEAKNESSES IN LOAN REVIEW CONTROLS

Material weaknesses, as defined under US securities rules and auditing standards, represent deficiencies significant enough that there is a reasonable possibility that a material misstatement of financial statements would not be prevented or detected on a timely basis. NYCB acquired assets from the failed Signature Bank in early 2023.

The bank has substantial exposure to New York multifamily and commercial real estate lending, a segment that has come under pressure as elevated interest rates weigh on property valuations and borrowers' ability to refinance.

Executive chairman Alessandro DiNello, former CEO of Flagstar, succeeded Thomas Cangemi as president and CEO with immediate effect.