Shares of banks and other financial institutions fell as regional-banking fears lingered.

Shares of New York Community Bank tumbled by more than 25% after the bank unearthed "material weaknesses" in loan controls, replaced its chief executive with recently appointed executive chairman Alessandro DiNello and took a $2.4 billion charge.

NY Community Bank represented itself as a force for stability in the rattled banking business last year when it bought distressed assets from Signature Bank, one of the major victims of a run on regional banks sparked by fears about the implications of rising interest rates.

But the New York bank has faced pressures from its interest in rent-controlled buildings and other commercial real estate, and because it was badly prepared for the increased scale -- and increased regulation -- that came with its Signature gambit.

The SPDR S&P Regional Bank exchange-traded fund fell by more than 1%. Losses at diversified large-cap banks were less pronounced.


Write to Rob Curran at rob.curran@dowjones.com

(END) Dow Jones Newswires

03-01-24 1758ET