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New York Community Bancorp Inc (NYSE: NYCB) is down another 15% on Wednesday following a report that it has approached investors for capital.

What are NYCB’s plans for the 3^rd party capital?

The financial services company wants to use the third-party capital to finance a sizeable mortgage portfolio (residential) held under its Michigan-based subsidiary – Flagstar Bank.

Options being considered include a “synthetic risk transfer” supported by a portfolio of home loans worth about $5.0 billion; originated during a period of lower interest rates, as per Bloomberg.

The news arrives only hours after New York Community Bancorp Inc named Alessandro DiNello its new executive chairman – effective immediately (find out more).

Shares of the bank holding company are now down roughly 65% versus their year-to-date high.

What other options is NYCB considering?

Anonymous sources also told the media outlet today that NYCB is considering unloading a portfolio of recreational-vehicle and marine loans worth about $1.0 billion as an option as well.

The bank’s turmoil started last week after it reported a surprise loss for its fiscal fourth quarter and cut its dividend by over 70% in pursuit of strengthening its capital stature. In response, Moody’s lowered its credit rating on New York Community Bancorp to junk.

Note that representatives of the financial services company based out of Hicksville, New York are yet to comment on the Bloomsberg report on Wednesday.

Wall Street currently has a consensus “hold” rating on the NYCB stock.

Months ago, we were told that the regional bank crisis is over.

Now, the Regional Bank Index is down 13% YTD with New York Community Bank, $NYCB, down 63% in 1 month.

Here's where it get's interesting, directly from Fed Chair Powell's interview on 60 Minutes this week:

"There… pic.twitter.com/wgDRE4ZwEY

— The Kobeissi Letter (@KobeissiLetter) February 7, 2024

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