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Key Takeaways
- New York Community Bancorp (NYCB) late Monday said it closed a $1 billion equity investment from a group of firms led by former Treasury Secretary Steven Mnuchin’s Liberty Capital.
- The bank announced its intention to propose a one-for-three reverse stock split to shareholders.
- Mnuchin and fellow investors Milton Berlinski and Allen Puwalski, as well as former Comptroller of the Currency Joseph Otting, joined the troubled lender’s 10-member board of directors.
New York Community Bancorp (NYCB) shares rose over 4% in intraday trading Tuesday after the bank announced the completion of a $1 billion equity investment by a group of firms and its intention to implement a one-for-three reverse stock split.
As part of the deal, former Comptroller of the Currency Joseph Otting was named the lender’s new chief executive. He also joined the bank’s board of directors, the size of which was reduced to 10 members, alongside former Treasury Secretary Steven Mnuchin and investors Milton Berlinksi and Allen Puwalski.
The company also said Monday that it was proposing a one-for-three reverse stock split to boost its share price, which has plummeted this year amid concerns about NYCB’s exposure to troubled commercial real estate loans.
Shares had tumbled following the company’s decision at the end of January to slash its dividend after reporting a surprise quarterly loss, and came under further pressure late last month when the bank replaced its longtime CEO after identifying “material weaknesses” in internal controls.
NYCB shares were up 4.2% at $3.38 as of 3:10 p.m. ET Tuesday. Still, the stock has lost about 67% of its value since the start of 2024.