NEW YORK COMMUNITY BANCORP, INC. CLOSES OVER $1 BILLION EQUITY INVESTMENT STRENGTHENING BALANCE SHEET AND LIQUIDITY POSITION
Former Treasury Secretary
Executive Chairman, President and Chief Executive Officer,
Former Treasury Secretary
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
Description of
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
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
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 withReg 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 aReg 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
The Board approved the employment inducement awards on
The inducement award consists of an option to acquire 15,000,000 shares of the Company's common stock, with an exercise price of
The inducement awards are being made outside of the
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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
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
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
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
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
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
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:
(516) 683-4286
Media Contact:
(248) 312-5872
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