Rescued New York Community Bank to Lay Off 700 at Its Flagstar Subsidiary – VINNews

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%.

The bank has been plagued by a downturn in commercial real estate and growing pains from acquiring distressed banks.

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 it acquired Signature Bank's assets for $2.7 billion in an auction on March 19 last year. 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, raising investor concerns about the bank.