NYCB was the 28th largest bank in the US at the end of 2023|Tdorante10|CC BY-SA 4.0
The struggling regional bank New York Community Bancorp (NYCB) announced a $1 billion capital raise from investors, including former Treasury Secretary Steven Mnuchin.
These investments, led by Mnuchin’s team—Liberty Strategic Capital—and others like Hudson Bay Capital and Reverence Capital Partners, are aimed at bolstering the regional lender’s financial standing.
New faces at the helm
As part of the deal, Mnuchin and three others join NYCB’s board of directors, with Joseph Otting replacing Alessandro DiNello as CEO.
With more than $100 billion in assets, NYCB was the 28th largest bank in the US at the end of 2023.
Before this lifeline, NYCB’s stock had plummeted 42%, hitting rock bottom below $2 per share from its January high of above $10 a share.
NYCB’s struggles stem from concerns over real estate loan losses and internal control deficiencies, leading to credit downgrades from Moody’s Investors Service and Fitch Ratings.
These woes echo past struggles of banks like Silicon Valley Bank and Signature Bank, which succumbed to economic pressure in 2023.