Wall Street is worried about NYCB's loan losses and deposit levels as stock sinks below $4

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Regional lender New York Community Bank finds itself in an apparently worsening predicament just as the anniversary of last year's banking turmoil nears.

Shares of the troubled lender plunged 25% on Friday to below $4 apiece after NYCB restated recent quarterly earnings lower by $2.4 billion, formally replaced its CEO and delayed the release of a key annual report.

The most worrying development, though, is directly tied to investors' fears about commercial real estate and shortfalls the bank reported in a key aspect of its business: NYCB said that poor oversight led to «material weaknesses» in the way it reviewed its portfolio of loans.

The disclosure is a «significant concern that suggests credit costs could be higher for an extended period,» Raymond James analyst Steve Moss said Thursday in a research note. «The disclosures add to our concern about NYCB's interest-only multi-family portfolio, which may require a long workout period unless interest rates decline.»

In a remarkable reversal of fortunes, a year after deposit runs consumed regional lenders including Silicon Valley Bank, NYCB — one of the perceived winners from that period after acquiring a chunk of the assets of Signature Bank following government seizure — is now facing existential questions of its own.

The bank's trajectory shifted suddenly a month ago after a disastrous fourth-quarter report in which it posted a surprise loss, slashed its dividend and shocked analysts with its level of loan loss provisions.

Days later, ratings agency Moody's cut the bank's credit ratings two notches to junk on concerns over the bank's risk management capabilities after the departure of NYCB's chief risk officer and chief audit executive.

At the time, some