After a
The Long Island-based parent company of Flagstar Bank has replaced its chief financial officer and its general counsel with executives who have experience working at larger banks and bank regulators. It has also hired a new head of commercial real estate lending and created a role for a "special advisor," who will advise Otting on matters related to credit administration, portfolio management and lending projects.
Who's out: John Pinto as CFO, R. Patrick Quinn as general counsel and John Adams, who was in charge of commercial real estate lending. All three were New York Community veterans, having joined the company in the early 2000s.
Who's in: Craig Gifford, the former corporate controller at super-regional U.S. Bancorp, who joins as CFO, and Bao Nguyen, who worked with Otting at the Office of the Comptroller of the Currency and has been hired as general counsel and chief of staff.
Also joining New York Community's executive ranks are Scott Shepherd, who has been named head of commercial real estate lending, and James Simons, who will fill the special advisor role. Both Shepherd and Simons previously worked with Otting at OneWest Bank.
The latest turnover — which comes nearly six weeks after
Otting's tenure as president and CEO of the $114 billion-asset company began on April 1.
"Clearly he is making his mark and surrounding himself with more of his people," Peter Winter, an analyst at D.A. Davidson, said in an interview.
The four hires demonstrate New York Community's focus on improving its operational capabilities, strengthening its risk and compliance systems and positioning itself to achieve sustainable growth, the company said in a press release.
Otting,
"These appointments underscore New York Community's commitment to fostering a culture of excellence, innovation, and integrity as it continues to deliver value to shareholders and service to our customers," Otting added in the press release.
The crux of the company's troubles lies in its loan book, which is
Gifford has 30 years of banking experience. Most recently, he led enterprise operations at Minneapolis-based U.S. Bancorp, where he oversaw the bank's branch and ATM network, according to New York Community's press release.
Nguyen was most recently a partner at Skadden, Arps, Slate, Meagher and Flom, where his clients included global and regional financial institutions, according to the press release. Before joining the law firm, he worked at the OCC as acting chief counsel and principal deputy chief counsel.
Shepherd had been a managing director at the Ruth Group, a commercial real estate deal sponsor, the press release said. He previously worked at Pasadena, California-based OneWest for six years as head of commercial real estate, building a $1 billion annual commercial real estate business.
Simons steps into the special advisor role with 45 years of banking experience. He has had roles at OneWest, which was acquired by CIT Group, and later at First Citizens BancShares, which
Simons has "considerable bank turn-around and loan workout experience as well as bank regulator experience with the OCC and Resolution Trust Company," New York Community said in its press release.
The four hires "seem to have solid credentials and underscore the urgency the new board and CEO are placing on turning around the bank, which is welcome," David Smith, an analyst at Autonomous Research, wrote in a research note.
He also said that the appointments "highlight the challenges" facing New York Community, "given what still seem to be considerable deposit headwinds" due to the loss of commercial and private banking teams as well as the company's "extremely high online deposit rates."
Investors and analysts are eager to hear more about New York Community's new business strategy, which it plans to discuss during its upcoming first-quarter earnings call. The date of that call has not yet been scheduled.
One area to watch: first-quarter severance-related costs, which could be "large," according to Chris Marinac, analyst at Janney Montgomery Scott.
Marinac said in a research note that he adjusted his earnings-per-share estimate for New York Community to reflect higher expenses and one-time charges in both the first quarter and subsequent ones.
There is also some concern about
Last week, Peapack-Gladstone Financial and Dime Community Bancshares said they had hired at least 16 teams of commercial and private bankers from New York Community.
Also this month, Customers Bancorp in West Reading, Pennsylvania, announced the hiring of 10 commercial and small-business banking teams that were formerly at Signature.
Then on Monday, a subsidiary of SouthState Bank in Winter Haven, Florida, said that it hired 12 former Signature employees to join its debt capital markets team. The group will be responsible for buying Small Business Administration loans in the secondary market and pooling them into securities to be sold to investors, according to a press release.
Winter said the exit of bankers from New York Community may show that the recent capital infusion and management overhaul hasn't been enough to retain certain employees.
"I think that's a major concern," he said. Even with the recent changes, "it didn't stem the concern that these bankers had. They still went forward with switching."
John Reosti contributed to this report.
