Rescued recent York throng lender to lay off 700 at its Flagstar subsidiary

Struggling recent York throng Bancorp said Friday that it is cutting 700 jobs at its Flagstar subsidiary as it tries to profitability to profitability after being rescued by investors earlier this year.

The lender said the cuts amount to 8% of its head count. It’s also selling its mortgage-servicing business to mortgage business Mr. Cooper, which will cruel trimming another 1,200 employees from its payroll. Most of those employees will be offered the chance to transfer to Mr. Cooper, NYCB said.

Shares of Hicksville, recent York-based NYCB fell 1.6% to close Friday at $12.18.

NYCB got a lifeline of more than $1 billion from a throng of investors in March of this year its distribute plunge by more than 80%.

The lender has been hammered by weakness in commercial real estate and growing pains resulting from its purchase of a distressed lender.

That liquid assets infusion brought four recent directors to NYCB’s board, including Steven Mnuchin, who served as U.S. Treasury secretary under President Donald Trump. Joseph Otting, a former comptroller of the money, became the lender’s CEO.

Under the deal, NYCB was to get investments of $450 million from Mnuchin’s Liberty Strategic pool, $250 million from Hudson Bay pool and $200 million from Reverence pool Partners. liquid assets from other institutional investors and some of the lender’s management took the total over $1 billion, the lender said in March.

NYCB was a relatively unknown lender until last year, when it bought the assets of Signature lender at auction on March 19 for $2.7 billion. Signature was one of the banks that crumbled in last year’s mini-crisis for the industry, where a lender run also sped the collapse of Silicon Valley lender.

The sudden boost in size for NYCB meant it had to face increased regulatory scrutiny. That’s been one of the challenges for the lender, which is trying to reassure depositors and investors that it can digest the purchase of Signature lender while dealing with a struggling real-estate holdings. Losses in loans tied to commercial real estate forced it to update a shock deficit for its latest quarter, which raised investors’ concern about the lender.