HICKSVILLE, N.Y. – New York Community Bancorp , Inc. (NYSE: NYSE:NYCB), the parent company of Flagstar Bank, N.A., has announced that a one-for-three reverse stock split will take effect after trading hours on July 11, 2024.
This move, which was previously disclosed and received shareholder approval at the annual meeting on June 5th, will see the company's common stock begin trading on a split-adjusted basis from market open on July 12, 2024.
Following the reverse stock split, every three shares of issued and outstanding common stock will be consolidated into one new share, and the number of authorized shares will decrease from 2 billion to approximately 666.7 million. The common stock will also have a new CUSIP number, 649445400. Shareholders who would hold fractional shares after the split will receive a cash payment instead of stock.
The reverse stock split will also entail proportional adjustments to the company's equity compensation plans, awards, and the conversion ratio for certain preferred stock classes. Joseph M. Otting, the Chairman, President, and CEO, remarked that the reverse stock split is a milestone in the company's efforts to enhance shareholder value and build a robust regional banking presence.
As of March 31, 2024, New York Community Bancorp reported $112.9 billion in assets, $83.3 billion in loans, and $74.9 billion in deposits. The company operates 419 branches and has a significant presence in mortgage origination and servicing, being the seventh-largest bank originator of residential mortgages and the fifth-largest sub-servicer of residential mortgage loans nationwide.
The information in this article is based on a press release statement from New York Community Bancorp, Inc. and includes forward-looking statements which are subject to risks and uncertainties. These statements do not guarantee future performance, and actual results may differ materially from those projected.
The company cautions that forward-looking statements are not updates or guarantees of future performance and that investors should not place undue reliance on them.
In other recent news, New York Community Bancorp (NYCB) has announced several significant developments. The bank has confirmed plans for a one-for-three reverse stock split, set to take effect in mid-to-late July. This strategic move, approved by shareholders in June, aims to make the stock more appealing to a broad range of investors.
In addition, NYCB has completed the acquisition of assets from the defunct Signature Bank (OTC:SBNY), estimated at $37.8 billion. This includes $24.9 billion in cash and cash equivalents, as well as $11.7 billion in loans and leases. NYCB also assumed liabilities estimated at $35.7 billion, primarily composed of customer deposits.
Liberty Strategic Capital, led by former U.S. Treasury Secretary Steven Mnuchin, has disclosed a 7.7% ownership in NYCB. This stake was revealed following the firm's participation in an investor consortium that injected approximately $1 billion into NYCB earlier this year.
The U.S. Securities and Exchange Commission (SEC) has also requested NYCB to provide additional information regarding its recent capital-raising activities and its efforts to decrease its commercial real estate sector exposure. This request followed NYCB's capital raise of $1.05 billion from investors, including Steven Mnuchin.
Lastly, NYCB has appointed Joseph Otting as the executive chairman, adding to his current role as President and CEO. This follows the bank's strategy to improve liquidity and return to profitability, which includes selling approximately $5 billion in mortgage warehouse loans to JPMorgan Chase (NYSE:JPM).
InvestingPro Insights
In light of the recent announcement by New York Community Bancorp (NYCB) regarding the reverse stock split, investors are closely monitoring the company's performance metrics and market sentiment.
According to InvestingPro data, NYCB currently has a market capitalization of $3.63 billion. Despite a significant return over the last week, with a 1-week price total return of 8.36%, the company's stock has experienced a substantial decline over the past year, reflected in a 1-year price total return of -69.9%.
InvestingPro Tips suggest caution, highlighting that NYCB is quickly burning through cash and analysts are expecting a sales decline in the current year. Moreover, with an adjusted P/E ratio for the last twelve months as of Q1 2024 standing at -13.84, the company's valuation implies a poor free cash flow yield, as per another InvestingPro Tip. Such metrics may be particularly relevant for investors considering the impact of the reverse stock split on their holdings.
Moreover, NYCB has maintained dividend payments for 31 consecutive years, which could be a point of interest for income-focused investors, despite the stock's recent volatility and overall downward trend. For investors seeking a deeper dive into NYCB's financial health and future prospects, there are over 10 additional InvestingPro Tips available, providing comprehensive analysis and guidance.
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