UPDATE 3-NYCB closes $1 bln capital infusion deal, announces reverse stock split

(Adds details on fund raise in paragraph 8)

March 11 (Reuters) – New York Community Bancorp said on Monday it had closed the $1 billion capital infusion deal that was agreed last week with an investor group and plans to submit one-for-three reverse stock split of its common stock to shareholders.

Joseph Otting, former Comptroller of the Currency in the Donald Trump administration, was named NYCB’s chief executive last week as part of a $1 billion capital injection from a group of investors that included former U.S. Treasury Secretary Steven Mnuchin.

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

Shares of NYCB rose 5.8% to $3.44 in extended trading on Monday.

The lender said last week that it was seeing interest from non-bank bidders for some of its loans, and will outline a new business plan in April after the bank had slashed its dividend again and disclosed deposits fell 7%.

A surprise quarterly loss and a 70% reduction of its dividend in January hammered NYCB’s stock, which came under pressure again in late February after it said it had found “material weakness” in internal controls and revised its loss to 10 times higher than earlier due to a goodwill impairment charge.

Investment firms Hudson Bay Capital, Reverence Capital Partners, Citadel Global Equities, some institutional investors and certain members of NYCB’s management last week had agreed to participate in the equity investment.

NYCB said it plans to raise the funds through stocks and warrants and investors will own about 39.6% of the company on a fully-diluted basis after the latest fund raising.

Several Wall Street analysts have flagged concerns that the lender’s turnaround will likely 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 Nilutpal Timsina in Bengaluru; Editing by Shounak Dasgupta, Rashmi Aich and Sherry Jacob-Phillips)