Finance  ·  Industry

New York Community Bank Ousts CEO (Again), Receives $1B Lifeline From Investors

Former Treasury Secretary Steven Mnuchin and other wealthy investors are attempting to stabilize the reeling commercial bank


New York Community Bank has replaced its CEO for the second time in one week and received a $1 billion capital infusion from investors tied to former Treasury Secretary Steve Mnuchin. The C-suite ouster and private capital infusion came Wednesday after the bank’s stock fell below $2 and trading was halted. 

Bloomberg first reported the news. 

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New York Community Bank (NYCB) announced Wednesday that it received $1 billion in equity from a consortium led by Liberty Strategic Capital – home to Mnuchin since he left the Trump administration – Hudson Bay Capital, Reverence Capital Advisors, Citadel Global Equities and other individual investors. 

“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,” said Mnuchin in a statement. 

The deal comes with a caveat and another stunning announcement: Alessandro DiNello, who was named the bank’s CEO on Feb. 29, will be replaced by Joseph Otting, the former comptroller of the currency during the Trump administration. DiNello barely lasted a week after replacing Thomas Cangemi as CEO a mere six days ago. 

NYCB’s fortunes have taken a turn for the worse since a disastrous Jan. 31 earnings call when the firm reported a $252 million loss tied to loans on the bank’s office and rent-regulated properties, and that fourth-quarter credit losses reached a staggering $552 million. 

The bank faces the possibility of collapse after its stock cratered Wednesday to less than $2 per share, a decline of 83 percent on the year, and trading was halted. 

For all that, the investors within Mnuchin’s rescue team expressed confidence in their capital infusion. 

We are excited to be investing behind this management team with such a strong investor group, and believe NYCB has a great opportunity to reposition the company and return to growth,” said Milton Berlinski, co-founder of Reverence Capital, in a statement. Berlinksi will also be joining the bank’s board. 

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.

Brian Pascus can be reached at 

Correction: An earlier version of this story incorrectly referenced Citadel Securities, the broker dealer. The correct entity who invested is Citadel Global Equities.