NYCB shares, which had witnessed a 40% plunge earlier in the day, experienced a significant revival as investors responded positively to the news.

The struggling lender revealed that it had secured a deal with several investment firms, including Liberty Strategic Capital, Hudson Bay Capital, and Reverence Capital Partners. Liberty, led by former US Treasury secretary Steven Mnuchin, has committed $450 million, while Hudson Bay Capital and Reverence Capital Partners have agreed to invest $250 million and $200 million, respectively. Mnuchin will also join the bank's board.

Moreover, NYCB unveiled its new CEO, Joseph Otting, the former comptroller of the currency. Otting's extensive experience and expertise in the financial industry make him a valuable addition to the bank's leadership team.

The announcement of the $1 billion capital raise and new CEO brought immediate relief to NYCB, as its shares began their ascent. After hitting a low of $1.76 earlier in the day, the share price quickly picked up momentum and reached $3.30 by 3pm. This surpassed the morning opening level of $3.18.

The recent crisis faced by NYCB stemmed from the deterioration of commercial real estate loans, which resulted in the downgrade of the bank's credit status to junk by ratings agencies. Approximately 16% of NYCB's loans are tied to commercial real estate acquisition, development, and construction. These financial setbacks left commercial property owners unable to repay their loans to NYCB, exacerbating the bank's difficulties.

The decline in NYCB's share price began at the end of January when the bank announced a dividend cut and reported an unexpected loss. On the last day of January, shares plummeted by 38%, dropping from $10.38 to $5.47. Additionally, the bank recently disclosed the identification of material weaknesses in its internal controls related to its loan review process. This revelation, coupled with an amendment to fourth-quarter results reporting significantly higher losses, further eroded investor confidence.

The appointment of Joseph Otting as the new CEO comes in the wake of Alessandro DiNello's role transition from executive chairman to non-executive chairman. The bank aims to benefit from the leadership and strategic direction offered by its newly-formed team in order to address its ongoing challenges effectively.

As NYCB moves forward with renewed vigor, the $1 billion capital raise is expected to inject much-needed stability and provide necessary funds to mitigate its current crisis. With new leadership at the helm, the bank will strive to strengthen its internal controls and rehabilitate its credit status.