Valley National Bancorp in Wayne, N.J., says it is fixing a material weakness in its internal controls for financial reporting.
The corporate governance matter is an early test of the leadership of Ira Robbins, who succeeded longtime CEO Gerald Lipkin at the beginning of the year.
It's unclear exactly what the problem was, but the $24 billion-asset Valley's disclosure of the matter and the discussion of its corrective steps in its 10-K issued Thursday give some hint.
Valley implemented a remediation plan during the first quarter and “has made enhancements to ensure the proper identifications of noncompliance with laws and regulations, company policies and procedures and other complaints that require the attention of senior management and those charged with governance,” the 10-K said.
Valley will now require that allegations and complaints be directly communicated to its ethics officer, chief risk officer and chief human resources officer.
The weakness was likely detected after an employee allegation or complaint was not sufficiently communicated with upper management, Sandler O’Neill analyst Frank Schiraldi wrote in a research note Friday.
Valley said it did not misstate earnings or other financial statements as a result of the weakness.
As a result of the identified problem, KPMG, Valley’s independent auditor, issued an adverse opinion on the company’s internal controls in its 2017 audit.