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Embattled bank NYCB lands $1B investment from group including Mnuchin’s firm
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New York Community Bank (NYCB) on Wednesday said it raised $1 billion from investors including former Treasury Secretary Steven Mnuchin’s Liberty Strategic Capital and named a former Comptroller of the Currency as its new CEO.
NYCB, which has been under pressure in recent weeks, said the investment group also included Hudson Bay Capital, Reverence Capital Partners, Citadel Global Equities, other institutional investors and certain members of the bank’s management.
The regional bank has been under pressure since it posted a surprise fourth-quarter loss on Jan. 31 and investors worried about its exposure to the beleaguered commercial real estate (CRE) sector.
It also cut its quarterly dividend by 70% to shore up its balance sheet to deal with more stringent regulations on banks with more than $100 billion in assets. The bank’s acquisition of Flagstar Bank in 2022 and Signature Bank’s assets last year pushed it over that threshold.
NEW YORK COMMUNITY BANCORP SEEKS CASH INFUSION
New York Community Bank announced it received a $1 billion infusion of capital from a group of investors. (Photo by Spencer Platt/Getty Images / Getty Images)
Last week, the bank said in a filing with the Securities and Exchange Commission that it “identified material weaknesses in the Company’s internal controls related to internal loan review, resulting from ineffective oversight, risk assessment and monitoring activities.”
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| NYCB | NEW YORK COMMUNITY BANCORP INC. | 3.48 | +0.28 | +8.58% |
“In evaluating this investment, we were mindful of the bank’s credit risk profile,” Mnuchin said in a statement. “With the over $1 billion of capital invested in the bank, 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 bank said that Liberty Strategic is infusing it with $450 million, Hudson Bay $250 million and Reverence Capital $200 million. Jefferies was the exclusive financial adviser and sole placement agent for NYCB as it secured this investment.
NYCB STOCK PLUMMETS AS BANK REPLACES CEO, CITES ‘MATERIAL WEAKNESS’
Former Treasury Secretary Steven Mnuchin’s Liberty Strategic Capital infused NYCB with $450 million as part of a broader group investing $1 billion in the regional lender. (Photo by Toni L. Sandys-Pool/Getty Images / Getty Images)
The lender has signaled it will look to reduce its exposure to the troubled CRE sector. Wedbush wrote in a note earlier this month that NYCB’s review of internal controls “could lead to additional CRE-related reserve building, particularly related to the company’s NYC rent-regulated multifamily exposure.”
NYCB also named Joseph Otting, former Comptroller of the Currency, as its new CEO, replacing Alessandro DiNello, who will serve as the non-executive chair.
NYCB’s stock rallied over 8% during Wednesday’s trading session on the news. The rise continued in after-hours trading, where it rose about 1.3% to $3.50 a share as of Wednesday evening.
NYCB has been under pressure since the end of January. (Photographer: Bing Guan/Bloomberg via Getty Images / Getty Images)
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This comes after the stock had slid to $1.76 a share during early afternoon trading – its lowest price since 1995.
Reuters contributed to this report.
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As we look ahead to 2024, many homeowners and prospective buyers are wondering what to expect when it comes to mortgage rates. The landscape of the housing market is constantly changing, so it’s important to stay informed about trends and predictions. In this blog post, we will discuss some factors that could impact mortgage rates in 2024 and what homeowners and buyers can expect.
One factor that could impact mortgage rates in 2024 is the overall state of the economy. If the economy is strong and growing, we may see higher mortgage rates as the Federal Reserve looks to combat inflation. On the other hand, if the economy is stagnant or in a recession, we may see lower mortgage rates as the Fed looks to stimulate growth. It’s important to keep an eye on economic indicators such as GDP growth, unemployment rates, and inflation to get a sense of where mortgage rates may be heading.
Another factor that could impact mortgage rates in 2024 is Federal Reserve policy. The Fed plays a key role in setting interest rates, and their decisions can have a ripple effect on mortgage rates. If the Fed decides to raise interest rates in response to inflation, we may see an increase in mortgage rates. Conversely, if the Fed decides to lower interest rates to stimulate growth, we may see a decrease in mortgage rates. Keeping up with the latest news and announcements from the Fed can give homeowners and buyers a sense of where mortgage rates may be heading.
In terms of specific cities and local mortgage companies, it’s important to note that mortgage rates can vary depending on location and lender. For example, in a city like New York City, where real estate prices are high, mortgage rates may be higher compared to a city like Indianapolis, where real estate prices are lower. Additionally, local mortgage companies may offer competitive rates and terms compared to national lenders. For example, in New York City, local lenders like Quontic Bank and CrossCountry Mortgage may offer specialized products and services tailored to the needs of local buyers.
It’s important for homeowners and buyers to shop around and compare rates from multiple lenders to ensure they are getting the best deal. Websites like Bankrate and LendingTree can be helpful resources for comparing rates and terms from multiple lenders. Homeowners and buyers should also consider working with a mortgage broker who can help them navigate the lending process and find the best mortgage product for their needs.
In conclusion, predicting mortgage rates in 2024 is not an exact science, but there are several factors that could impact rates. By staying informed about economic indicators, Federal Reserve policy, and local market trends, homeowners and buyers can make informed decisions about their mortgage. Shopping around and comparing rates from multiple lenders is key to ensuring you are getting the best deal on your mortgage. Whether you’re looking to refinance your existing mortgage or buy a new home, it’s important to stay informed and be proactive in managing your mortgage.
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