Former Treasury Secretary Steven Mnuchin, Incoming CEO Joseph Otting, Milton
Berlinski, and Allen Puwalski Appointed to NYCB Board of
Directors
HICKSVILLE, N.Y., March 11,
2024 /PRNewswire/ -- New York Community Bancorp, Inc.
(NYSE: NYCB) ("NYCB" or the "Company") announced today it completed
the previously announced transactions resulting in individual
investments aggregating to approximately $1.05 billion in the Company by Liberty Strategic
Capital ("Liberty"), funds managed
by Hudson Bay Capital Management ("Hudson
Bay"), funds managed by Reverence Capital Partners
("Reverence Capital"), and other investors (collectively, the
"Investors").
Executive Chairman, President and Chief Executive Officer,
Sandro DiNello stated, "The
completion of this major equity raise demonstrates the confidence
these strategic investors have expressed in the turnaround
currently underway at the Company and allows us to execute on our
strategy from a position of strength. Our Company enters this next
phase with an enhanced balance sheet and liquidity position."
Former Treasury Secretary Steven
Mnuchin, newly appointed Lead Independent Director of the
Board and Founder and CEO of Liberty, stated, "We are pleased to be part of
NYCB's new chapter. We believe that this transaction has
strengthened the Company's balance sheet and liquidity position and
look forward to working with management and the dedicated workforce
of NYCB to deliver shareholder value."
Mr. Berlinski, a newly appointed member of the Board and
Managing Partner of Reverence Capital, added, "We are happy to be
investing alongside these strong investors. We believe NYCB has a
tremendous opportunity to reposition itself as a regional bank and
return to growth and profitability and we look forward to working
with incoming CEO Joseph Otting and
the management team."
In connection with the transactions, the Board has been reduced
to ten members and the Company has added four new directors to the
Board: Secretary Steven Mnuchin,
former Comptroller of the Currency Joseph Otting; Milton Berlinski, Managing Partner of Reverence
Capital; and Allen Puwalski, at the
recommendation of Hudson Bay. Mr. DiNello, Marshall Lux, Lawrence
Savarese, Peter Schoels,
David Treadwell and Jennifer Whip
remain members of the Board.
Description of Transactions and Issued Securities
The transactions involve the creation and issuance of additional
common stock, as well as new equity securities of the Company,
namely two new series of preferred stock (Series B and Series C)
that were issued upon the closing, as well as a new series of
preferred stock (Series D) issuable upon exercise of certain
warrants issued to the Investors. Preferred stock is being issued
in connection with the capital raise in part due to the fact that
the Company does not have a sufficient amount of authorized but
unissued shares of common stock under our Amended and Restated
Certificate of Incorporation of the Company (the "Certificate of
Incorporation") to permit the Company to issue only common shares
to the Investors. Accordingly, we need the approval of our
stockholders, as described in further detail below, in order to
amend our Certificate of Incorporation to increase our total
authorized shares of common shares and to permit the issuance of an
amount of common stock that is 20% or more of our total common
stock in compliance with the rules of the New York Stock Exchange
("NYSE"). Additionally, our issuance of non-voting preferred stock
facilitates the Investors' ability to make immediate larger equity
investments in the Company in a manner that complies with
applicable banking laws and regulations, including the rules and
limitations of Regulation Y of the Bank Holding Company Act of
1956, as amended (collectively, the "Control Limitations").
Upon receipt of antitrust clearance (as described below) and the
Share Issuance Approval (as defined below), and the related
amendment of our Certificate of Incorporation, (i) the Series C
preferred stock will automatically convert into common stock for
each Investor that acquired Series C preferred stock at closing to
the greatest extent permissible under the Control Limitations
(unless any such Investor obtains the prior non-objection of the
Federal Reserve Board to acquire an amount of our common stock
above the Control Limitations) and (ii) the dividend payable on the
Series B preferred stock will be eliminated, other than
participating with common stock dividends on a pro rata basis and,
therefore, holders of Series B preferred stock at such time will
have no economic rights beyond those which holders of our common
stock receive. In addition, if the Requisite Stockholder Approvals
are not obtained within 180 days of the closing, the Investors will
receive cash-settled warrants that become exercisable 60 days after
issuance (alternatively, these warrants will be cancelled if the
Requisite Stockholder Approvals are obtained during such 60-day
period).
Below is a summary further describing the specific securities
being issued as part of the transactions:
- 76,630,965 shares of our common stock, at a price per share of
$2.00.
- 192,062 shares of a new series of preferred stock, par value
$0.01 per share, of the Company
designated as Series B Noncumulative Convertible Preferred Stock
(the "Series B Preferred Stock"), at a price per share of
$2,000. Each share of Series B
Preferred Stock cannot convert in a holder's hands but is
automatically convertible into 1,000 shares of our common stock in
the event of a transfer by the holder thereof consistent with the
rules and limitations of Regulation Y (a "Reg Y Transfer"). Holders
of shares of Series B Preferred Stock shall not have the right to
vote such shares on any matter submitted to a vote of the
stockholders of the Company, other than certain matters expressly
permitted by the associated Certificate of Designations, and all of
which shares of Series B Preferred Stock represent the right (on an
as converted basis) to receive approximately 192 million shares of
our common stock.
- 256,307 shares of a new series of preferred stock, par value
$0.01 per share, of the Company
designated as Series C Noncumulative Convertible Preferred Stock
(the "Series C Preferred Stock"), at a price per share of
$2,000. Each share of Series C
Preferred Stock is automatically convertible into 1,000 shares of
our common stock upon the occurrence of certain events (including
(i) a portion upon the expiration or termination of any applicable
waiting period (or extension thereof) under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, with respect to
such holder's acquisition or ownership of our common stock and (ii)
the remaining portion upon receipt of the Share Issuance Approvals
(as defined below)). In addition, in connection with Reg Y
Transfers, the Series C Preferred Stock is automatically
convertible into 1,000 shares of our common stock. Holders of
shares of Series C Preferred Stock shall not have the right to vote
such shares on any matter submitted to a vote of the stockholders
of the Company, other than certain matters expressly permitted by
the associated Certificate of Designations, and all of which shares
of Series C Preferred Stock represent the right (on an as converted
basis) to receive approximately 256 million shares of our common
stock.
- Warrants affording the holder thereof the right, until the
seven-year anniversary of the issuance of such warrant, to purchase
for $2,500 per share, shares of a new
class of non-voting, common-equivalent preferred stock of the
Company, par value $0.01 per share
(the "Series D NVCE Stock"). Each share of Series D NVCE Stock is
convertible into 1,000 shares of our common stock (or, in certain
limited circumstances, one share of Series C Preferred Stock) in a
Reg Y Transfer, and all of which shares of Series D NVCE Stock
represent the right (on an as converted basis) to receive 315
million shares of our common stock. The warrants will not be
exercisable for 180 days after closing.
As a result of the transactions, if all shares are converted
into common stock, the Company will issue a total of approximately
525 million shares of common stock and the Investors will own
approximately 39.6% of the Company on a fully diluted basis.
Additionally, the warrants can be exercised for up to 315 million
shares of common stock; however, given the net share settlement
feature of the warrant, the amount actually issued will be less
than the full 315 million shares.
Matters to be Submitted to Stockholders of the
Company
The Company plans to submit to its stockholders for their (a)
adoption and approval amendments to the Certificate of
Incorporation to (i) effect at least a 1-3 reverse stock split of
our common stock (the "COI Reverse Stock Split Amendment"), for
among other reasons, to make the bid price more attractive to a
broader group of institutional and retail investors, (ii) increase
the number of authorized shares of the Company's common stock to at
least 1,700,000,000 (or, in the event of the approval of the
Certificate of Incorporation Reverse Stock Split Amendment, at
least 566,670,000) (the "COI Authorized Share Amendment") and (iii)
exempt certain Investors and their respective affiliates from the
application of a provision of the Certificate of Incorporation that
prohibits any person who beneficially owns, directly or indirectly,
more than 10% of the then-outstanding shares of our common stock
from voting any such shares of common stock in excess of such 10%
threshold (the "COI Exemption Amendment" and, collectively with the
COI Reverse Stock Split Amendment and the COI Authorized Share
Amendment, the "COI Amendments"); and (b) approval of the issuance
of shares of our common stock in excess of 19.9% of the total
voting power of the Company's securities (the "Share Issuance") in
accordance with the rules of the NYSE.
The requisite vote of our stockholders necessary to duly and
validly (a) adopt and approve the COI Reverse Stock Split Amendment
and the COI Authorized Share Amendment requires the affirmative
vote of a majority of votes cast by the holders of shares of Common
Stock, at a duly held meeting of the Company's stockholders, (b)
adopt and approve the COI Exemption Amendment requires the
affirmative vote of the holders of a majority of the outstanding
shares of our common stock entitled to vote on the COI Exemption
Amendment and (c) approve the Share Issuance requires the
affirmative vote of a majority of votes cast by holders of shares
of our common stock at a duly convened meeting of stockholders of
the Company at which a quorum is present (the "Share Issuance
Approval" and, together with the adoption and approval of the COI
Exemption Amendment, the "Requisite Stockholder Approvals").
Grant of Employment Inducement Awards
NYCB also has announced the grant of employment inducement
awards to Joseph Otting in connection with the commencement of
his employment with NYCB, which became effective as of March 6, 2024.
The Board approved the employment inducement awards on
March 6, 2024 as a material
inducement to enter into an offer of employment in reliance on the
employment inducement award exception to New York Stock Exchange
Listing Rule 303A.08 that requires shareholder approval of
equity-based compensation plans. Listing Rule 303A.08 requires the
public announcement of such an award.
The inducement award consists of an option to acquire 15,000,000
shares of the Company's common stock, with an exercise price of
$2.00 per share, and vesting in 12
quarterly installments commencing on March
6, 2024, with accelerated vesting upon a change in control
of the Company prior to the final vesting date.
The inducement awards are being made outside of the New York
Community Bancorp, Inc. 2020 Omnibus Incentive Plan (the "Plan")
and the Company's shareholder-approved equity compensation plan,
but will generally be subject to the same terms and conditions as
apply to awards granted under the Plan.
Advisors
Jefferies LLC is acting as exclusive financial advisor and sole
placement agent to NYCB. Skadden, Arps, Slate, Meagher & Flom
LLP is serving as legal counsel to NYCB. Sullivan & Cromwell
LLP is serving as legal counsel to Liberty Strategic
Capital. Schulte Roth & Zabel LLP is serving as legal
counsel to Hudson Bay Capital. Latham & Watkins LLP is acting
as legal counsel to Jefferies LLC.
About New York Community Bancorp, Inc.
New York Community Bancorp, Inc. is the parent company of
Flagstar Bank, N.A., one of the largest regional banks in the
country. The Company is headquartered in Hicksville, New York. At December 31,
2023, the Company had $113.9 billion
of assets, $85.8 billion of loans,
deposits of $81.4 billion, and
total stockholders' equity of $8.4 billion.
Flagstar Bank, N.A. operates 420 branches, primarily in the
Northeast and Midwest. Flagstar Mortgage operates nationally
through a wholesale network of approximately 3,000 third-party
mortgage originators. In addition, the Bank has 134 private banking
teams located in over ten cities in the metropolitan New York City region and on the West Coast,
which serve the needs of high-net worth individuals and their
businesses.
New York Community Bancorp, Inc. has market-leading positions in
several national businesses, including multi-family lending,
mortgage origination and servicing, and warehouse lending. Flagstar
Mortgage is the seventh largest bank originator of residential
mortgages for the 12-months ending December 31, 2023 and the
industry's fifth largest sub-servicer of mortgage loans nationwide,
servicing 1.4 million accounts with $382 billion in
unpaid principal balances. Additionally, the Company is the second
largest mortgage warehouse lender nationally based on total
commitments.
About Liberty Strategic Capital
Liberty Strategic Capital is a Washington, D.C.-based private equity firm
focused on strategic investments in technology, financial services
and fintech, and new forms of content. The firm was founded in 2021
and is led by Steven T. Mnuchin, the
77th Secretary of the Treasury. Our leadership team combines
decades of public service and private sector experience, creating
unique insight into the intersection of capital, technology, and
government regulation.
About Hudson Bay Capital Management
Hudson Bay Capital Management is a global investment management
firm operating in Greenwich, New
York, Miami, Boston, London and Dubai. Hudson Bay Capital's team
seeks to achieve outstanding performance by uncovering market
inefficiencies and undervalued investment opportunities that are
uncorrelated to each other and to market indices while maintaining
a focus on risk management, portfolio construction and capital
preservation. Hudson Bay Capital has been managing assets on behalf
of pension plans, sovereign wealth funds, endowments, foundations,
high net worth individuals and families since 2006.
About Reverence Capital
Reverence Capital Partners is a private investment firm focused
on three complementary strategies: (i) Financial Services-Focused
Private Equity, (ii) Opportunistic, Structured Credit, and (iii)
Real Estate Solutions. Today, Reverence manages in excess of
$8 billion in AUM. Reverence focuses
on thematic investing in leading global Financial Services
businesses. The firm was founded in 2013, by Milton Berlinski, Peter
Aberg and Alex Chulack, after
distinguished careers advising and investing in a broad array of
financial services businesses. The Partners collectively bring over
100 years of advisory and investing experience across a wide range
of Financial Services sectors.
Forward Looking Statements
This press release may include forward‐looking statements by the
Company pertaining to such matters as our goals, intentions, and
expectations regarding, among other things, the convertibility of
the shares of preferred stock and exercisability of the warrants
issued in connection with this capital raise transaction; the
Company's seeking (and the Company's ability to obtain) approval of
its stockholders of any necessary amendments of the Company's
organizational documents or approvals of the issuance of shares of
common stock or preferred stock in connection with this capital
raise transaction; receipt of any required regulatory approvals or
non-objections in connection with this capital raise transaction;
revenues, earnings, loan production, asset quality, capital levels,
and acquisitions, among other matters; our estimates of future
costs and benefits of the actions we may take; our assessments of
probable losses on loans; our assessments of interest rate and
other market risks; and our ability to achieve our financial and
other strategic goals, including those related to our merger with
Flagstar Bancorp, Inc., which was completed on December 1, 2022, the purchase and assumption of
certain assets and liabilities of Signature Bridge Bank beginning
March 20, 2023 (the "Signature
Transaction"), and our transition to a $100
billion plus bank.
Forward‐looking statements are typically identified by such
words as "believe," "expect," "anticipate," "intend," "outlook,"
"estimate," "forecast," "project," "should," and other similar
words and expressions, and are subject to numerous assumptions,
risks, and uncertainties, which change over time. Additionally,
forward‐looking statements speak only as of the date they are made;
the Company does not assume any duty, and does not undertake, to
update our forward‐looking statements. Furthermore, because
forward‐looking statements are subject to assumptions and
uncertainties, actual results or future events could differ,
possibly materially, from those anticipated in our statements, and
our future performance could differ materially from our historical
results.
Our forward‐looking statements are subject to the following
principal risks and uncertainties: general economic conditions and
trends, either nationally or locally; conditions in the securities
markets; changes in interest rates; changes in deposit flows, and
in the demand for deposit, loan, and investment products and other
financial services; changes in real estate values; changes in the
quality or composition of our loan or investment portfolios;
changes in future allowance for credit losses requirements under
relevant accounting and regulatory requirements; the ability to pay
future dividends at currently expected rates; changes in our
capital management and balance sheet strategies and our ability to
successfully implement such strategies; changes in competitive
pressures among financial institutions or from non‐financial
institutions; changes in legislation, regulations, and policies;
the success of our blockchain and fintech activities, investments
and strategic partnerships; the restructuring of our mortgage
business; the impact of failures or disruptions in or breaches of
the Company's operational or security systems, data or
infrastructure, or those of third parties, including as a result of
cyberattacks or campaigns; the impact of natural disasters, extreme
weather events, military conflict (including the Russia/Ukraine conflict, the conflict in Israel and surrounding areas, the possible
expansion of such conflicts and potential geopolitical
consequences), terrorism or other geopolitical events; and a
variety of other matters which, by their nature, are subject to
significant uncertainties and/or are beyond our control. Our
forward-looking statements are also subject to the following
principal risks and uncertainties with respect to our merger with
Flagstar Bancorp, which was completed on December 1, 2022, and the Signature Transaction;
the possibility that the anticipated benefits of the transactions
will not be realized when expected or at all; the possibility of
increased legal and compliance costs, including with respect to any
litigation or regulatory actions related to the business practices
of acquired companies or the combined business; diversion of
management's attention from ongoing business operations and
opportunities; the possibility that the Company may be unable to
achieve expected synergies and operating efficiencies in or as a
result of the transactions within the expected timeframes or at
all; and revenues following the transactions may be lower than
expected. Additionally, there can be no assurance that the
Community Benefits Agreement entered into with NCRC, which was
contingent upon the closing of the Company's merger with Flagstar
Bancorp, Inc., will achieve the results or outcome originally
expected or anticipated by us as a result of changes to our
business strategy, performance of the U.S. economy, or changes to
the laws and regulations affecting us, our customers, communities
we serve, and the U.S. economy (including, but not limited to, tax
laws and regulations).
More information regarding some of these factors is provided in
the Risk Factors section of our Annual Report on Form 10‐K for the
year ended December 31, 2022,
Quarterly Reports on Form 10-Q for the quarters ended March 31, 2023, June 30,
2023, and September 30, 2023
and in other Securities and Exchange Commission ("SEC") reports we
file. Our forward‐looking statements may also be subject to other
risks and uncertainties, including those we may discuss in this
Amendment, during investor presentations, or in our other SEC
filings, which are accessible on our website and at the SEC's
website, www.sec.gov.
Important Information and Where You Can Find It
This press release may be deemed to be solicitation material in
respect of a charter amendment and other approvals by the
stockholders of the Company. In connection with the Requisite
Stockholder Approvals, NYCB will file with the SEC a preliminary
proxy statement and a definitive proxy statement, which will be
sent to the stockholders of NYCB, seeking certain approvals related
to the issuances of shares of common stock issued under each
investment agreement and to be issued upon the conversion of shares
of the preferred stock issued under the investment agreements.
INVESTORS AND SECURITY HOLDERS OF NYCB AND THEIR RESPECTIVE
AFFILIATES ARE URGED TO READ, WHEN AVAILABLE, THE PROXY STATEMENT
AND ANY OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC
IN CONNECTION WITH THE TRANSACTION, AS WELL AS ANY AMENDMENTS OR
SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT NYCB AND THE TRANSACTION. Investors and
security holders will be able to obtain a free copy of the proxy
statement, as well as other relevant documents filed with the SEC
containing information about NYCB, without charge, at the SEC's
website (http://www.sec.gov). Copies of documents filed with the
SEC by NYCB can also be obtained, without charge, by directing a
request to Investor Relations, New York Community Bancorp,
Inc., 102 Duffy Avenue, Hicksville,
New York 11801 or by telephone (516-683-4420).
Participants in the Solicitation of Proxies in Connection
with Proposed Transaction
NYCB and certain of their respective directors, executive
officers and employees may be deemed to be participants in the
solicitation of proxies in respect of the Requisite Stockholder
Approvals under the rules of the SEC. Information regarding
NYCB's directors and executive officers is available in its
definitive proxy statement for its 2023 annual stockholders
meeting, which was filed with the SEC on April 21, 2023, and
certain of its Current Reports on Form 8-K. Other information
regarding the participants in the solicitation of proxies in
respect of such stockholder approvals and a description of their
direct and indirect interests, by security holdings or otherwise,
will be contained in the proxy statement and other relevant
materials to be filed with the SEC. Free copies of these documents,
when available, may be obtained as described in the preceding
paragraph.
Not an Offer of Securities
The information in this press release is for informational
purposes only and shall not constitute, or form a part of, an offer
to sell or the solicitation of an offer to sell or the solicitation
of an offer to buy any securities. The securities that are the
subject of the private placement have not been registered under the
Securities Act of 1933, as amended, and may not be offered or sold
in the U.S. absent registration or an applicable exemption
from registration requirements.
Investor Contact:
Salvatore J.
DiMartino
(516) 683-4286
Media Contact:
Steven
Bodakowski
(248) 312-5872
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SOURCE New York Community Bancorp, Inc.