[ad_1]
(Add details about fundraising in paragraph 8)
March 11 (Reuters) – New York Community Bancorp said on Monday it had closed the $1 billion capital injection deal agreed last week with an investor group and plans to present shareholders with a reverse split of its common stock. in a proportion of one by three.
Joseph Otting, former comptroller of the currency in Donald Trump’s administration, was named CEO of NYCB last week as part of a $1 billion capital injection from a group of investors that included former U.S. Treasury Secretary Steven Mnuchin.
The bank said Monday that it had added Otting, Mnuchin, Milton Berlinski and Allen Puwalski as new board directors, while reducing the board’s composition to 10 members.
NYCB shares rose 5.8% to $3.44 in extended trading on Monday.
The lender said last week it was seeing interest from non-bank bidders for some of its loans and will outline a new business plan in April after the bank cut its dividend again and disclosed deposits fell 7%.
A surprise quarterly loss and a 70% cut to its dividend in January hit NYCB shares, which came under pressure again in late February after it said it had found “material weakness” in internal controls and revised its loss 10 times more than before. to a charge for impairment of goodwill.
Investment firms Hudson Bay Capital, Reverence Capital Partners, Citadel Global Equities, certain institutional investors and certain members of NYCB management agreed last week to participate in the equity investment.
NYCB said it plans to raise funds through shares and warrants and that investors will own about 39.6% of the company on a fully diluted basis after the latest fundraising.
Several Wall Street analysts have flagged concerns that the lender’s recovery will likely take a long time as profits remain under pressure from its efforts to increase reserves for potential bad loans in its commercial real estate portfolio. (Reporting by Manya Saini and Nilutpal Timsina in Bengaluru; Editing by Shounak Dasgupta, Rashmi Aich and Sherry Jacob-Phillips)