11:21 AM EST, 03/07/2024 (MT Newswires) -- New York Community Bancorp ( NYCB/PU ) deposit levels declined 7% since early February while the troubled regional lender slashed its quarterly dividend as it sought to shore up liquidity with a $1 billion-plus capital injection secured on Wednesday.

The bank said Thursday that it had $77.2 billion in deposits as of Tuesday, according to an investor presentation related to the capital raise. That marked a drop from $83 billion in deposits it had as of Feb. 5 and $81.4 billion at the end of 2023.

"There certainly were some people that lined up to withdraw" deposits on Wednesday following media reports about a potential capital raise at the bank, non-Executive Chairman Alessandro DiNello said on a Thursday conference call, according to a Capital IQ transcript. But "it was back to normal" after the official announcement was made on commitments from investors including former Treasury Secretary Steven Mnuchin, he said.

At the end of January, the bank reported a surprise fourth-quarter loss and a 2% sequential drop in deposits. Moody's downgraded the lender's ratings in February while the bank more recently said that it found material weakness in its internal controls. The stock price is down more than 60% so far this year, but was trading 12% higher in Thursday trade.

New York Community Bancorp ( NYCB/PU ) said Thursday that it lowered its per-share quarterly dividend to $0.01 from $0.05. This follows a reduction in the payout rate announced at the end of January.

As part of the $1.05 billion capital raise originally announced Wednesday, the investor group will buy 59,750,000 New York Community Bancorp ( NYCB/PU ) common shares at $2 apiece, along with 465,250 preferred shares in aggregate with a conversion price of $2 per share, according to the presentation released Thursday. The syndicate will also receive warrants to purchase non-voting stock representing $315 million of underlying shares, the company said in a press release published on its website Thursday.

In addition to Mnuchin-led Liberty Strategic Capital's commitment, the bank secured commitments for another $600 million of capital, DiNello told analysts. "With this additional capital, we now have a fortress balance sheet, and along with our strong liquidity position, better aligns ourselves with our large bank peers," he said. "Rest assured, we will take the necessary actions to improve earnings and profitability and drive enhanced client and shareholder value."

Morgan Stanley and Wedbush Securities on Thursday warned about the impact of the capital raise. "While this deal provides a much-needed lifeline to (New York Community Bancorp ( NYCB/PU )), it is tremendously dilutive to common shareholders," Wedbush analysts including David Chiaverini wrote in a note.

Price: 3.80, Change: +0.34, Percent Change: +9.82