Rating agency Moody’s downgraded New York Community Bancorp’s all long-term and some short-term issuer ratings to junk on Tuesday and warned of further downgrades.

The agency also downgraded all long-term and some short-term ratings and assessments of its lead bank, Flagstar Bank. Moody’s downgraded NYCB’s ratings from Baa3 to Ba2, which is considered a junk rating.

The downgrade reflects Moody’s views that NYCB faces high governance risks from its transition with regards to the leadership of its second and third lines of defense - the risk and audit functions of the bank - at a pivotal time, the agency said.

Moody’s said that NYCB’s core historical commercial real estate (CRE) lending, significant and unanticipated loss on its New York office and multifamily property could create potential confidence sensitivity.

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The elevated use of market funding may limit the bank’s financial flexibility in the current environment, the rating agency added. NYCB did not immediately respond to a Reuters request for comment.

The bank last week set aside bigger-than-expected provisions for potential bad loans, mainly due to its exposure to CRE, where several borrowers are at risk due to high interest rates and low occupancies.

At least 13 brokerages have downgraded or lowered their price targets for the bank’s stock since the earnings report.