Troubled New York Community Bancorp (NYSE: NYCB) is under new leadership after disclosing “material weakness” in how it tracks loan risk. The fresh bad news is another blow for investors, sending NYCB shares down 22% as of 10 a.m. ET.

New troubles emerge as the bank looks inward

It’s been a rough year for New York Community Bancorp. In late January, the company slashed its dividend and reported a surprise loss, raising questions about the health of the bank. The stock had stabilized in the weeks since, but a fresh round of bad news has the markets on edge about this bank stock yet again.

NYCB said CEO Thomas R. Cangemi was stepping down effective immediately after 27 years with the company, though he will remain on the board. Alessandro DiNello, who was appointed as executive chairman of the board on Feb. 6, has been appointed CEO.

Marshall Lux, a financial services industry veteran, has been named presiding director of the board.

The bank said it intends to provide a full account of the weakness it discovered, as well as what it is doing to rectify the situation, in its annual report, but it also said it is likely to miss the deadline to file that report as it works to fix the problems.

The weakness is “related to internal loan review, resulting from ineffective oversight, risk assessment and monitoring activities,” NYCB said in a regulatory filing.

Is NYCB a buy after its management overhaul?

Shares of New York Community Bancorp had recovered somewhat after the initial late-January shock, only to plunge lower on this latest news. That’s a valuable lesson for those tempted to buy the dip without knowing everything. Those tempted to buy in today need to be aware that we still don’t know how this story plays out.

The good news is that NYCB seems to be taking its difficulties seriously and has a seasoned team of new executives ready to make a fresh start. But confidence is everything in banking, and we don’t yet know what depositors are thinking after these latest headlines. If New York Community’s customers decide enough is enough, no management overhaul will be enough to save the company.

Even when things stabilize, New York Community faces a difficult future as it navigates a potentially troubled portfolio heavy on local multifamily loans. Until we know more, the best advice is to avoid this stock.

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Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.