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(Reuters) – New York Community Bancorp on Monday closed on a $1 billion capital injection deal agreed to last week with an investor group and plans to submit to shareholders a 1-for-3 reverse split of its common stock. announced.
Joseph Otting, former Comptroller of the Currency under President Donald Trump, was named CEO of NYCB last week as part of a $1 billion capital infusion from a group of investors including former US Treasury Secretary Steven Mnuchin. It was done.
The bank announced Monday that it had added Mr. Otting, Mr. Mnuchin, Milton Berlinski and Allen Puwalski as new directors, reducing the number of board members to 10.
NYCB stock rose 5.8% to $3.44 in extended trading Monday.
The bank announced last week that it was receiving interest from non-bank bidders for some loans, after the bank cut its dividend again and disclosed deposits fell 7%. He said that he plans to outline a new business plan in April.
An unexpected quarterly loss and a 70% dividend cut in January hit NYCB stock, but in late February the company announced that it had found “material weaknesses” in its internal controls, increasing the loss to 10 times its original amount. The revisions put it under pressure again. Goodwill impairment charges.
Investment firms Hudson Bay Capital, Reverence Capital Partners, Citadel Global Equities, certain institutional investors, and some members of NYCB’s management team agreed last week to participate in the equity investment.
NYCB plans to raise funds through equity and stock acquisition rights, and said investors will own approximately 39.6% of the company’s stock on a fully diluted basis after the latest financing.
Wall Street analysts said the lender’s turnaround is likely to take a long time, with earnings still under pressure from efforts to increase provisions for potential bad loans in commercial real estate portfolios. This shows concern.
(Reporting by Manya Saini and Nirtpal Timsina in Bengaluru; Editing by Shonak Dasgupta, Rashmi Aitch and Sherry Jacob Phillips)
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