New York Community Bancorp To Receive More Than $1 Bln Investment

(RTTNews) - New York Community Bancorp Inc. (NYCB) said that Liberty Strategic Capital, Hudson Bay Capital, Reverence Capital Partners, Citadel Securities, other institutional investors and certain members of the company's will make a combined over $1 billion investment in the company.

Liberty is expected to invest $450 million, Hudson Bay will invest $250 million, and Reverence will invest $200 million as part of the transaction.

NYCB closed Wednesday's regular trading at $3.46 up $0.24 or 7.45%. But in the after-hours trading, the stock dropped $0.06 or 1.73%.

In connection with the transaction, the company will add four new directors to its Board, including Steven Mnuchin, the 77th Secretary of the Treasury, Joseph Otting, former Comptroller of the Currency, Allen Puwalski from Hudson Bay, and Milton Berlinski, Managing Partner of Reverence Capital, New York Community Bancorp said in a statement.

In addition, Otting will become Chief Executive Officer and DiNello will be named as Non-Executive Chairman of New York Community Bancorp.

As part of the reconstitution, the Board will be reduced to nine members and will include Secretary Mnuchin, Otting, Puwalski, Berlinski, DiNello, Marshall Lux, Peter Schoels, Jennifer Whip and David Treadwell.

In connection with the equity capital raise transaction, NYCB will sell and issue, in the aggregate, to the Investors shares of common stock of the Company at a price per share of $2.00 and a series of convertible preferred stock with a conversion price of $2.00, for an aggregate investment amount of $1.05 billion. In addition, investors will receive 60% warrant coverage to purchase non-voting, common-equivalent stock with an exercise price of $2.50 per share, a 25% premium to the price paid on common stock.

The transaction is expected to close on or around Monday, March 11, 2024.

Last month, New York Community Bancorp disclosed in a regulatory filing that it identified material weaknesses in its internal controls related to internal loan review, resulting from ineffective oversight, risk assessment and monitoring activities, NYCB said in a filing with the U.S. Securities and Exchange Commission.

The company determined that Generally Accepted Accounting Principles required a "goodwill impairment" charge on the company's "Consolidated Statements of Income and Comprehensive Income" for the quarter and fiscal year ended December 31, 2023, resulting in a $2.4 billion decrease to the fourth quarter and annual net (loss) income available to common stockholders.