Update 3-New York Commercial Bank concluded a $1 billion capital injection and announced a reverse stock split

(Adds details about fundraising in paragraph 8)

March 11 (Reuters) – New York Community Bancorp said on Monday it has closed a $1 billion capital injection deal agreed last week with a group of investors and plans to offer a reverse stock split of its common stock to shareholders.

Joseph Oetting, the former Comptroller of the Currency in the Donald Trump administration, was named CEO of the New York central bank last week as part of a $1 billion capital infusion from a group of investors including former US Treasury Secretary Steven Mnuchin.

The bank said on Monday that it had added Otting, Mnuchin, Milton Berlinski and Allen Powalski as new directors to the board, while reducing the number of board members to 10 members.

NYCB shares rose 5.8% to $3.44 in extended trading Monday.

The bank said last week it was seeing interest from non-bank bidders for some of its loans, and would draw up a new business plan in April after the bank cut its dividend again and disclosed deposits fell by 7%.

A surprise quarterly loss and a 70% dividend cut in January dented shares of New York Commercial Bank, which came under pressure again in late February after it said it found a “material weakness” in internal controls and revised its losses to 10 times what they were earlier. Due to goodwill impairment charges.

Investment firms Hudson Bay Capital, Reverence Capital Partners, Citadel Global Equities, certain institutional investors and some members of New York Commercial Bank management agreed last week to participate in the equity investment.

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The New York Mercantile Bank said it plans to raise funds through shares and warrants, and investors will own about 39.6% of the company on a fully diluted basis after the latest fundraising.

Many Wall Street analysts have cited concerns that the bank's turnaround is likely to take a long time as profits remain under pressure from its efforts to boost reserves for potential bad loans in its commercial real estate portfolio. (Reporting by Manya Saini and Nilotpal Timsina in Bengaluru; Editing by Shaunak Dasgupta, Rashmi Aish and Shri Jacob Phillips)

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