Flushing Bank in New York City.
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flushing financial, The New York-based commercial real estate lender is seeking to raise $70 million for a capital increase, CNBC reported.
The bank’s CEO, John Brann, said the bank intends to sell low-yield bonds and loans backed by commercial real estate, including multifamily properties, to potential investors. , such a move would result in losses and require the sale of new shares, the people said. The deal was told to CNBC.
Bankers working on the deal have not yet finalized the price, but one of the people said it would likely be between $15 and $15.50 per share, the level of the stock’s closing price on Thursday. It is said to be below $17.25.
The bank declined to comment to CNBC early Thursday, but later issued a release confirming the stock sale.
Banks with exposure to commercial real estate have struggled since the Federal Reserve raised interest rates through 2023, carrying unrealized losses on their balance sheets. new york community bank was forced to raise capital earlier this year after its stock price fell on concerns about its commercial loan portfolio.
Most of the U.S. banks under pressure are community banks with less than $10 billion in assets, including Flushing, which had about $9.3 billion in assets as of September.
Now, with the recovery in bank stock prices this year and the start of the Fed’s easing cycle in September, investors expect more banks to raise capital in the coming months. Behind the scenes, regulators are issuing secret orders to banks to improve their capital levels.
“The interest rate environment remains a challenge, but we are controlling what we can control and laying the foundations for a better future,” Brann told analysts in October.
Flushing Financial’s stock is up about 5% this year through Thursday, lagging the KBW Regional Bank Index’s 18% rise.
