New York Community Bancorp in Hicksville will raise more than $1 billion by selling securities to Liberty Strategic Capital, Hudson Bay Capital Management, Reverence Capital Partners and other investors.
Liberty will invest $450 million, Hudson Bay will invest $250 million, and Reverence will invest $200 million. The sales are expected to close on March 11.
New York Community will add four directors: Steven Mnuchin, Joseph Otting, Milton Berlinski and Allen Puwalski. Overall, the board will be reduced to nine members; the other remaining directors are Sandro DiNello, Marshall Lux, Peter Schoels, Jennifer Whip and David Treadwell.
Otting, former Comptroller of the Currency, will become CEO, succeeding DiNello, who will return to serving as non-executive chairman. Mnuchin was Treasury Secretary in the Trump Administration.
“In evaluating our investment, we were mindful of the Bank’s credit risk profile,” Mnuchin said in a press release. “We believe we now have sufficient capital should reserves need to be increased in the future to be consistent with or above the coverage ratio of NYCB’s large bank peers.”
The company slashed its dividend for the second time in recent weeks, lowering it to 1 cent a share from 5 cents. It also disclosed that its deposits fell by about 7% between Feb. 5 and March 5, to $77.2 billion.