New York Community Bancorp (NYCB) announced a $1 billion equity investment and several leadership changes.
The new investment comes from several sources, the lender said in a Wednesday (March 6) press release.
Liberty Strategic Capital is expected to invest $450 million, Hudson Bay Capital will invest $250 million and Reverence Capital Partners will invest $200 million as part of the transaction, according to the release. Other institutional investors and some members of the company’s management will make up the remainder of the combined $1 billion investment.
The move is subject to regulatory approval and other conditions, the release said.
In connection with the transaction, NYCB will add four new directors to its board, and the board will be reduced to nine members, per the release.
The new directors include Steve Mnuchin, former secretary of the treasury; Joseph Otting, former comptroller of the currency; Allen Puwalski from Hudson Bay; and Milton Berlinski, managing partner of Reverence Capital, according to the release.
In addition, Otting will become CEO, succeeding current CEO Alessandro (Sandro) DiNello, who will become non-executive chairman, the release said.
Mnuchin said in the release: “We decided to make this investment because we believe Sandro, alongside new management, has taken the appropriate actions to stabilize the company and to position NYCB to become a best-in-class $100+ billion national bank with a diversified and de-risked business model that supports long-term profitability.”
DiNello said in the release that NYCB welcomes the approach that the investors took in evaluating the bank, looks forward to incorporating their insights and sees the investment as “a positive endorsement of the turnaround that is underway.”
“We enter this next chapter with a strong balance sheet and liquidity position supported by a diversified and retail focused deposit base,” DiNello said.
This news comes six days after NYCB disclosed two leadership changes and said that it could not complete its annual report by the due date.
In Feb. 29 filings with the Securities and Exchange Commission (SEC) the bank said that DiNello would succeed Thomas R. Cangemi as president and CEO, following Cangemi’s resignation from those roles; that Cangemi would remain a member of the board of directors; and that Hanif (Wally) Dahya resigned from board positions.
NYCB said in another Feb. 29 filing that it was unable to file its annual report by the due date because it discovered adjustments that must be made to its financial reports prior to completing the annual report.
Wednesday’s news also comes about a month after NYCB reported a dividend cut and an unexpected loss of $260 million in the fourth quarter of 2023.