New York Community Bancorp.’ s stock deepened its recent losses on Tuesday after a report that its chief risk officer has departed the company and comments from Treasury Secretary Janet Yellen about the challenges posed by regional banks.
dropped 22% to $4.20 a share at the closing bell, its lowest price since May 1, 1997 when it ended the session at $4.19 a share. according to Dow Jones Market Data.
On Tuesday, Treasury Secretary Janet Yellen told lawmakers at the House Financial Services Committee that regulators remain “quite focused” on the problem of the weak values of commercial real estate for banks.
“I do have a concern about commercial real estate,” Yellen said. “I’m concerned. I believe it’s manageable although there may be some institutions that are quite stressed by this problem.”
The stock is now down 59.5% in the past five sessions, after it disclosed an unexpected loss and problems with two loans, including an office loan with earnings released last week.
The stock also weighed on the SPDR S&P Regional Banking ETF
which fell by 1.3%.
Also read: Bank stocks rise from lows after New York Community Bancorp triggers worst swoon since Silicon Valley Bank collapse
The Financial Times reported that New York Community Bancorp’s chief risk officer Nicholas Munson left the bank earlier this year, and said a bank spokesperson had confirmed his departure. The bank did not comment on whether a replacement had been named, the report said.
A bank spokesperson did not respond to a voicemail from MarketWatch on the matter.
The absence of a chief risk officer also surfaced in the aftermath of the demise of Silicon Valley Bank, and contributed to the run on that bank last year.
Also read: Silicon Valley Bank CEO’s stock sales and chief risk officer’s exit may trigger closer look by Feds: SEC veteran
Meanwhile, when asked about a potential real-estate lending crisis, Federal Reserve Chairman Jerome Powell told 60 Minutes television program on Sunday that some smaller banks and regional banks “have concentrated exposures in these areas that are challenged.”
Powell predicted that there will be “expected losses” among regional banks but that overall, the banking system will remain sound, according to a transcript posted by CBS.
“It feels like a problem we’ll be working on for years,” Powell said. “It’s a sizable problem” but, “it doesn’t appear to have the makings of the kind of crisis that we’ve seen sometimes in the past, for example, with the global financial crisis.”
Other regional bank stocks were also lower. KeyCorp
was down 2.3%, Comerica Inc.
was down 2.2% and Regions Financial
was down 0.6%.
Also read: Does New York Community Bancorp have another surprise in store for investors?
Also read: Banks’ office-loan exposure remains a ‘mixed bag’ as lenders manage through downturn