The Wall Street Journal’s Nick Timiraos said Fed officials were downplaying the issue in the Craman countdown.
New York Community Bank (NYCB) on Wednesday raised $1 billion from investors including former Treasury Secretary Steven Mnuchin’s Liberty Strategic Capital and named former Comptroller of the Currency chief executive officer. It was announced that.
NYCB has been under pressure in recent weeks, with the investment group also including Hudson Bay Capital, Reverence Capital Partners, Citadel Global Equities, other institutional investors and some of the bank’s management. He said that
The regional bank has been under pressure since posting a surprise fourth-quarter loss on Jan. 31, with investors worried about its exposure to the struggling commercial real estate (CRE) sector. Was.
It also cut its quarterly dividend by 70% as it strengthens its balance sheet to deal with tougher regulations for banks with more than $100 billion in assets. The bank acquired Flagstar Bank in 2022, and Signature Bank’s assets exceeded that threshold last year.
New York Community Bank seeks cash infusion
New York Community Bank announced it has received a $1 billion capital injection from an investor group. (Photo by Spencer Pratt/Getty Images/Getty Images)
“As a result of ineffective oversight, risk assessment, and monitoring activities, we have identified material weaknesses in our internal controls related to internal loan review,” the bank said in a filing with the Securities and Exchange Commission last week. .
| ticker | safety | last | change | change % |
|---|---|---|---|---|
| new york cb | NEW YORK COMMUNITY BANCORP INC. | 3.48 | +0.28 | +8.58% |
“We kept the bank’s credit risk aspects in mind when evaluating this investment,” Mnuchin said in a statement. “With more than $1 billion of capital invested in the bank, we will have sufficient capital if we need to increase our reserves in the future to match or exceed the coverage ratios of large NYCB banks. That’s what I think.”
The bank announced that Liberty Strategic is injecting $450 million, Hudson’s Bay is injecting $250 million and Liberence Capital is injecting $200 million. Jefferies acted as exclusive financial advisor and sole intermediary agent for NYCB in securing this investment.
NYCB stock plummets after bank CEO change, “material weaknesses” cited as reason
Former Treasury Secretary Steven Mnuchin’s Liberty Strategic Capital injected $450 million into NYCB as part of a broader group investing $1 billion in regional financial institutions. (Photo by Toni L. Sandys-Pool/Getty Images / Getty Images)
Financial institutions have indicated they will consider reducing their exposure to the troubled CRE sector. Wedbush said in a memo earlier this month that NYCB’s internal control review “could lead to further increases in CRE-related reserves, particularly related to the company’s New York City rent-regulated multifamily exposure.” ” he said.
NYCB also named former Comptroller of the Currency Joseph Otting as its new CEO, replacing non-executive chairman Alessandro Dinero.
NYCB stock rose more than 8% during Wednesday trading on the news. Shares continued to rise in after-hours trading, rising about 1.3% to $3.50 per share as of Wednesday night.
NYCB has been under pressure since late January. (Photographer: Bing Guan/Bloomberg via Getty Images / Getty Images)
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This came after the stock fell to $1.76 per share in early afternoon trading, its lowest since 1995.
Reuters contributed to this report.
