The troubled parent of Flagstar Bank has received a $1 billion lifeline from some leading names in finance and shaken up its executive ranks for the second time in a week, stabilizing its shares above $3 in recent trading after its stock was halted for news midday with shares below $2.
New York Community Bancorp. on Wednesday announced that a group of investors, led by former U.S. Treasury Secretary Steven Mnuchin, would inject $1 billion into the Long Island-based financial institution that owns the Flagstar brand, formerly headquartered in Michigan.
As part of the deal announced this afternoon, the bank also announced that Joseph Otting will assume the role of CEO. Otting, a former bank executive and comptroller of the currency under former President Donald Trump, takes the reins from Alessandro DiNello.
DiNello will return to his slot as nonexecutive chair of the bank’s board.
DiNello was previously CEO of Flagstar and moved into the CEO role at NYCB last week amid ongoing stock declines and the bank announcing “material weakness in internal controls, as well as a $2.4 billion hit to previously released earnings as the bank wrote down the value of its assets.
The new investor group consists of Mnuchin’s Liberty Strategic Capital, Hudson Bay Capital, Reverence Capital Partners, Citadel Securities, as well institutional investors and “certain members” of NYCB’s management, according to a news release.
Bloomberg reported that Liberty will invest $450 million, Hudson Bay $250 million and Reverence $200 million as part of the transaction, citing a bank spokesperson.
This is a breaking story and will be updated. This article originally appeared in Crain’s Detroit.
Nick Manes, Crain's Detroit , 2024-03-06 19:52:22
Source link
