Struggling New York Community Bancorp said Friday it will cut 700 jobs at its Flagstar subsidiary as it seeks to return to profitability following an investor bailout earlier this year.
The bank said the job cuts amount to 8% of its workforce. The company also plans to sell its mortgage repayment business to mortgage company Mr. Cooper, which will mean cutting an additional 1,200 jobs at the company. Most of those employees will have the opportunity to transfer to Mr. Cooper, NYCB said.
Hicksville, New York-based NYCB's stock fell 1.6% to close Friday at $12.18.
NYCB received a lifeline of more than $1 billion from a group of investors in March when its stock price plummeted more than 80%.
Banks were hit by Weakness in commercial real estate and growing pains due to acquisitions A bank that went bankrupt.
The cash infusion brings four new directors to NYCB's board, including Steven Mnuchin, who served as Treasury secretary under President Donald Trump. Former Comptroller of the Currency Joseph Otting has been appointed CEO of the bank.
The deal called for NYCB to receive $450 million in investments from Mnuchin's Liberty Strategic Capital, $250 million from Hudson's Bay Capital and $200 million from Reverence Capital Partners. . The bank announced in March that cash from other institutional investors and some of the bank's management team totaled more than $1 billion.
NYCB was a relatively unknown bank until last year. Purchased assets of Signature Bank It will be sold at auction on March 19th for $2.7 billion. Signature was one of the banks that failed in the industry's mini-crisis last year, and the bank run also accelerated the failure of Silicon Valley banks.
NYCB's sudden increase in size meant it had to face increased regulatory scrutiny. That's part of the challenge for the bank, which is trying to reassure depositors and investors that it can handle the Signature Bank acquisition while also dealing with a struggling real estate portfolio. Losses on loans related to commercial real estate forced the company to report an unexpected loss in its latest quarter, heightening investor concerns about the bank.
