Regional banks have been setting aside more money to deal with future losses on commercial real estate. Some analysts now fear it hasn't been enough.

The stock of commercial real estate lender New York Community Bancorp (NYCB) slid by 22% Tuesday and has now fallen nearly 60% since it surprised Wall Street last week by slashing its dividend and reporting a net quarterly loss of $252 million.

The turmoil surrounding this $116 billion bank is stoking new concerns about the industry’s vulnerability to office buildings and apartment complexes that are suddenly worth a lot less due to high interest rates and shifting work patterns.

"I'm concerned" about commercial real estate exposures, US Treasury Secretary Janet Yellen said during a US House Financial Services Committee hearing Wednesday.

Yellen said regulators are working closely with banks to ensure "loan loss reserves are built up to cover losses" and "that dividend policies are appropriate."

"I believe it's manageable, although there may be some institutions that are quite stressed by this problem," Yellen added, echoing comments made by Fed Chair Jerome Powell on Sunday.

Analysts are arguing that many other regional banks will likely have to set aside more money this year to absorb future losses from commercial real estate via a balance sheet addition known as "provisions."

Banks typically add more provisions when they anticipate credit will deteriorate, marking them as an expense. The more provisions banks add, the lower their profits will likely be.

New York Community Bancorp's provisions were $552 million in the fourth quarter, up from $62 million in the same year-ago period. That led to its quarterly loss.

"We believe consensus is too low on provision expense for 2024 for nearly every bank we cover," Manan Gosalia, a regional bank analyst for Morgan Stanley said in a research note Friday.

"I do think that we're going to see provisions going up across the industry," added David Chiaverini, a regional bank analyst with Wedbush Securities, in an interview with Yahoo Finance.

What also has investors and analysts concerned is whether regulators could force banks to stockpile more of these reserves.

Bloomberg reported Monday that officials from the Office of the Comptroller of the Currency applied pressure on New York Community Bancorp to set aside more money and slash its dividend in case commercial real estate loans end up souring.

The Hicksville, N.Y.-based bank has a high level of exposure to rent-controlled apartment complexes in New York City. Those buildings account for 22% of its loans.