Flushing Bank in New York City.
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Flushing Financial, A New York-based commercial real estate lender is seeking to raise $70 million to bolster its capital, CNBC has learned.
The bank’s chief executive, John Buran, has told potential investors that he plans to sell low-yield bonds and loans backed by commercial real estate, including multifamily housing, a move that will generate losses and New stock needs to be sold.
Bankers involved in the deal have not yet finalized pricing, but it could range from $15 to $15.50 per share, down from the stock’s closing price of $17.25 on Thursday, one of the people said.
The bank declined to comment to CNBC earlier Thursday but later issued a statement release Confirmation of equity sale.
After the Federal Reserve raises interest rates in 2023, banks with exposure to commercial real estate are in trouble, with unrealized losses on their balance sheets. New York Community Bank The company was forced to raise capital earlier this year after its share price fell amid concerns about its commercial loan portfolio.
most U.S. banks under pressure are community banks with less than $10 billion in assets, such as Flushing, which had about $9.3 billion in assets as of September.
Now, with bank stock prices rebounding this year and the Federal Reserve’s September easing cycle beginning, investors expect more banks to raise capital in the coming months. Behind the scenes, regulators have been urging banks to boost capital levels through secret orders.
“The interest rate environment remains a challenge, but we are controlling what we can control and laying the foundation for a better future,” Brann told analysts in October.
Flushing Financial’s shares have gained about 5% this year through Thursday, lagging the KBW Regional Bank Index’s 18% gain.
