(Reuters) -New York Community Bancorp ( NYCB ) reported a loss for the first quarter on Wednesday, as the commercial real estate-focused lender set aside more funds to cover possible defaults.

The bank's exposure to rent-regulated multi-family properties and office buildings in New York has increased fears of borrowers defaulting on their loans, prompting it to set aside bigger rainy-funds.

"We anticipate an elevated level of loan loss provision over the remainder of 2024 related to the potential for market and rate conditions to impact borrower performance on certain portions of our loan portfolio," newly appointed CEO Joseph Otting said in a statement.

In the first quarter, provision for credit losses rose to $315 million in the quarter, compared with $170 million in the year-ago period.

Otting added the bank is targeting significantly higher profitability and higher capital levels by the end of 2026.

Analysts and investors expect NYCB will have to lure buyers for its CRE loans with steep discounts and diversify its revenue as it races to shore up its finances.

Shares of the bank, which have been under pressure since January, were up 4.5% in premarket trading after results. The stock is off 74% so far this year.

NYCB has been trying to arrest a persistent stock rout that has wiped billions off its market value, roughly a year after the collapse of Silicon Valley Bank and Signature Bank ( SBNY ) ignited widespread concerns over the health of the sector.

The stock took a hammering in January after posting a surprise quarterly loss and announcing a 70% reduction of its dividend.

A month later, the lender disclosed it had found "material weakness" in internal controls and revised its loss to 10 times higher than earlier due to a goodwill impairment charge.

It received a $1 billion lifeline from an investor consortium led by former U.S. Treasury Secretary Steven Mnuchin's Liberty Strategic Capital in March that has helped shore up the bank for the short-term.

The bank posted a loss of $327 million, or 45 cents per share, in the three months ended March 31. That compares with a profit of $2.01 billion, or $2.87 per share, in the year-ago period.

(Reporting by Niket Nishant and Manya Saini in Bengaluru; Editing by Saumyadeb Chakrabarty)