(Bloomberg) -- Guggenheim Securities Co-Chair Jim Millstein said the US banking system is “pretty sound” in the wake of fresh turmoil at New York Community Bancorp, the lender hammered by a fresh stock rout after acknowledging weaknesses in how it tracks loan risks.

“There are always going to be a couple of banks that get out over their skis,” Millstein said Friday in a Bloomberg Television interview. While investors typically bail at any mention of trouble in financial reporting, NYCB’s latest woes stem from acquisitions that pushed its assets past the $100 billion threshold that triggers stricter federal oversight, he said. “They’re feeling a little stressed with that.”

Millstein’s assessment underscored the muted Wall Street reaction outside of the selloff in NYCB’s stock. The shares plunged more than 20%, deepening the 53% slide this year through Thursday. But the KBW Bank Index and the S&P 500 Financials Index were only down fractionally, a far cry from the beatdown that swept through the industry in the tumult that toppled Silicon Valley Bank, First Republic Bank and Signature Bank almost a year ago.

“These are mostly idiosyncratic issues that have hit certain banks,” Millstein said. “The big run on Silicon Valley Bank as a result of some of the tech bros out in Silicon Valley saying, ‘Get the hell out of there’ — they knew. And First Republic, I think, was part of the fallout of that. New York Community Bank was opportunistic, they acquired deposits from Signature — not so much the assets, but really the deposit base.”

NYCB’s slide began in January, when it posted a surprise loss tied to deteriorating credit quality and cut its dividend. Besides the “material weaknesses” filing on Thursday, NYCB also replaced its leadership and said it expects to miss a deadline to file its annual report.

Millstein, who was the Treasury Department’s chief restructuring officer under President Barack Obama, helping oversee the bailouts of American International Group Inc. and Citigroup Inc., said NYCB should escape the worst pain of weakness in commercial real estate loans because it has limited exposure to office properties, the hardest-hit sector. 

“They have a multifamily real estate portfolio that is generally pretty good. It’s rent-stabilized and rent-controlled apartments,” Millstein said. “The real issue for them in that part of their book is going to be the refinancing that has to occur as those loans mature. They’ll be refinancing into a much higher interest rate environment, and the result may be that there’s some deterioration in the asset value that they actually have on their books.”

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