Two top executives at a New York community bank have resigned.
Chief Financial Officer John Pinto and commercial real estate president John Adams are leaving the bank after more than 20 years with the bank, according to information obtained by The Real Deal. General counsel Patrick Quinn is also leaving the bank.
The bank appointed Craig Gifford as its new chief financial officer, replacing Adams, and named Scott Shepherd as head of commercial real estate lending. Shepherd was a managing director at the Luce Group, a company that sponsors and manages commercial real estate deals, and previously founded bridge lending firm Archbell Capital.
Bao Nguyen was named general counsel to replace Quinn, and James Simmons moved from First Citizens Bank to the newly created role of special advisor to the CEO.
The latest resignations from Pinto, Adams and Quinn come as the bank, a major lender to New York property owners, tries to restore investor and customer confidence.
“It was important to us to appoint leaders for these roles with the requisite large-bank experience and track record of building high-performing financial institutions with strong risk and compliance structures,” CEO Joseph Otting said in a memo to employees about the new hires.
The bank reported an unexpected loss in January, cut its dividend and predicted a further deterioration in its multifamily loan book. The following month, it fired longtime CEO Thomas Cangemi.
At the same time, the bank revealed “weaknesses in its internal controls over internal loan reviews due to a lack of effective oversight.”
About half of NYCB's multifamily loans are secured by rent-stabilized properties that were hit hard by New York state's 2019 rent law, which has squeezed property income and left owners struggling to cover expenses, including mortgage payments, with many saying they are overindebted.
On the fourth-quarter earnings call, Pinto described NYCB's troubled multifamily loans as “manageable,” but someone else will now be managing them.
Following Cangemi's departure, Alessandro Dinero, chairman of the Bank of New York's board of directors and former CEO of Flagstar Bank, which New York acquired in late 2022, became CEO, but he lasted less than a week in the position.
In early March, the bank's shares plummeted, dropping 47% in one morning and forcing the New York Stock Exchange to halt trading.
The bank quickly secured a $1 billion bailout from institutional investors, including former Treasury Secretary Steven Mnuchin's Liberty Strategic Capital, which helped stabilize its stock price and prevented the bank from failing.
On the same day, former Comptroller of the Currency Otting was named CEO.
The capital infusion and new management have helped the stock rise from a year-to-date low of $2.73 to $3.46, and it remained above $3 until Wednesday.
New York City Bank shares fell 5.3 percent on Friday to $2.84 before Adams' departure was announced late Friday afternoon.
This story has been updated to add the names of the newly hired executives at New York Community Bank.
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