Dive Brief:
- New York Community Bank is adding executive chairman duties to CEO Joseph Otting’s title, effective after close of business Wednesday, according to a Tuesday news release.
- With the change, Alessandro DiNello leaves his position as non-executive chairman, although he will retain a seat on the bank’s board. DiNello will remain a senior adviser to Otting, “where his strong banking knowledge” will support Otting and other executives in their turnaround of the bank, the release said.
- It’s the latest leadership change for the embattled bank, which installed Otting as CEO on April 1. That March announcement came alongside a $1.05 billion capital injection into the Hicksville, New York-based bank, led by former Treasury Secretary Steven Mnuchin’s Liberty Strategic Capital.
Dive Insight:
Moving Otting, a former comptroller of the currency, into the chairman seat at NYCB “will better facilitate his ability, alongside the new senior executive leadership team, to continue to improve all aspects of the Company's operations and execute on its strategic initiatives,” the release said.
In recent months, the bank has also hired a new CFO, general counsel, chief risk officer and head of commercial real estate lending. Last month, NYCB’s chief operating officer, Julie-Ann Signorille-Browne, resigned.
The struggling lender disclosed a $252 million loss during its Jan. 31 earnings report, which sent the bank’s share price into a tailspin that continued as it changed CEOs twice and revamped its board. NYCB’s exposure to commercial real estate is largely seen as the driving force behind the bank’s losses.
The bank also posted a $335 million loss for the first quarter, but executives laid out a strategy to diversify the bank and return it to profitability. Last month, NYCB announced it was selling about $5 billion in mortgage warehouse loans to JPMorgan Chase. That followed NYCB’s pledge to slash its CRE exposure from $47 billion at the end of March to about $30 billion.
NYCB grew quickly after buying pieces of failed Signature Bank last year — less than five months after regulators approved its purchase of Flagstar Bank. DiNello was NYCB’s non-executive chairman when it purchased parts of Signature, pushing NYCB over the $100 billion-asset threshold.
During the company’s first-quarter earnings call last month, executives said there’s work yet to be done on the bank’s internal infrastructure, as NYCB seeks to put an appropriate risk framework in place. The bank was “not ready to be regulated by the OCC, and so we have a lot of catching up to do to get our standards up,” Otting said in May.
Executives also aim to diversify the NYCB’s loan portfolio so there’s less concentration and geographic risk, and boost core deposits to improve the bank’s funding profile.
DiNello, the former CEO of Flagstar, was named NYCB’s executive chairman in February and then CEO three weeks later, succeeding Thomas Cangemi.
