Investor Group to Back NYCB With More Than $1B
March 12, 2024
New York Community Bancorp (NYCB) last week announced it is raising more than $1 billion from an investor group that includes former Treasury Secretary Steven Mnuchin. The Hicksville, N.Y., lender said the transaction is expected to close on March 11.
Investors providing fresh financing for the lender, which has $114 billion worth of assets, include:
- Liberty Strategic Capital (providing $450 million);
- Funds managed by Hudson Bay Capital Management (providing $250 million);
- Reverence Capital Partners (providing $200 million);
- Citadel Global Equities; and
- Other institutional investors and members of the bank’s management
Four new directors were brought on NYCB’s board:
- Mnuchin, who was Secretary of the Treasury under President Trump;
- Joseph Otting, former Comptroller of the Currency who was appointed Acting Director of the Federal Housing Finance Agency in 2018;
- Milton Berlinski, managing partner of Reverence Capital; and
- Allen Puwalski (at the recommendation of Hudson Bay)
NYCB Management Changes: Otting was named NYCB’s Chief Executive Officer and Alessandro DiNello was named as non-executive chairman.
Why It Matters: As of the fourth quarter, 44% of NYCB’s loan composition is secured by multifamily assets, according to an investor presentation.
NYCB said its multi-family loan portfolio is non-luxury, rent-regulated buildings in New York City, with ~37% maturing in the next three years. Commercial real estate, 12% of NYCB’s loan portfolio, includes retail, industrial, hotel, self storage, and student housing, according to the presentation.
Next Steps: NYCB said its 2024 initiatives include a continued effort to:
- Build its capital position,
- Proactively manage its liquidity profile,
- Enhance its focus on credit risk management,
- Continue reducing its CRE loan concentration,
- Build a regulatory and compliance focus, and
- Continue to strengthen its management team.
Moody’s Response: Moody's on March 7 changed the direction of its rating view of NYCB to "review for upgrade" from "review for downgrade” in response to news of the transaction, according to Reuters, which reported the rating agency changed the direction of its review “as the capital raise will increase NYCB's common equity tier 1 (CET1) ratio.”
Market Reaction: NYCB shares changed hands at $2.73 at the start of last week and the bank’s stock rose to $3.66 on March 7. By Friday, shares were trading at $3.42, compared to $10 in January 2024.
For additional questions, please contact Aleksandrs Rozens (ARozens@crefc.org).
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Aleksandrs Rozens
Senior Director, Communications
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