(Bloomberg) -- New York Community Bancorp’s new leader wants the beleaguered commercial real estate lender to look more like other regional banks.

Chief Executive Officer Joseph Otting, a former comptroller of the currency, was named to his post Wednesday as part of an equity investment of more than $1 billion from investors led by former US Treasury Secretary Steven Mnuchin. Otting, who has experience turning around a regional lender, said Thursday that he wants Hicksville, New York-based NYCB to tone down its concentration on commercial real estate and ultimately look more like peers. 

“The right balance sheet for an organization is a third of it being in consumer-related businesses, a third in commercial banking-type relationships and a third of it in real estate,” Otting said on a conference call with analysts. “I think you can probably see a path for us to head in that direction organizationally, because I think that diversification works well through economic fluctuations.”

Read More: NYCB Raises Over $1 Billion in Equity Led by Mnuchin’s Firm

Otting, who officially takes the CEO post on April 1, said the bank’s executives will come back with a vision of how they see the future of NYCB, but they need a bit more time to do that.

Shares rallied as much as 16% on Thursday following the conference call, and were up 7.6% to $3.72 at 12:11 p.m. in New York.

The lender’s been under pressure since its January earnings release, when the firm slashed its dividend to 5 cents and built reserves. In the latest update, the firm cut that payout to 1 cent per quarter.

Customer deposits, the stability of which has been a key concern for investors amid the stock’s rapid drop, totaled more than $77 billion as of March 5, according to a presentation from the company Thursday. Its prior update in early February had pegged them at around $83 billion. The relative steadiness of those deposits amid tumult at the bank shows the resilience of its base, executives said Thursday. 

Piper Sandler Cos. analyst Mark Fitzgibbon said the update on deposits is better than he had expected.

“In general, we liked what we heard,” Fitzgibbon, who has a neutral rating on NYCB’s shares, wrote in a note to clients.

Flagstar, Signature

The lender had rapidly swelled in asset size in recent years due to the acquisitions of Flagstar Bancorp and part of failed Signature Bank, and NYCB was a relative winner among regional-bank stocks last year. After the shares began to plunge this year, two rating firms cut NYCB’s credit to junk, and the lender disclosed it had identified material weaknesses in how it tracked loan risks. Shares were down about two-thirds this year through Wednesday.

The new capital infusion has boosted shares since the announcement Wednesday afternoon, with analysts saying it bolsters confidence despite dilution to existing shareholders. Further details were given Thursday, with NYCB saying the new investors will hold 41.4% of the firm on a converted fully diluted basis. The firm is issuing nearly 60 million shares of common stock at a price of $2 each, as well as warrants with a term of seven years.

On Thursday, Fitch Ratings affirmed NYCB’s credit rating in the wake of the capital infusion, describing it as a “positive near-term development for creditors and could limit downside ratings momentum.” Last week, the ratings firm had downgraded the grade to junk following NYCB’s disclosure about material weaknesses. Moody’s Investors Service had already cut it to junk in February.

‘Unique Franchise’

Investors increased the size of the deal from what was going to be an infusion of around $700 million to a little over $1 billion, Mnuchin said Thursday in a CNBC interview. Moving forward, there may be opportunities for the bank to acquire other troubled regional lenders, though that isn’t the immediate plan, he said.

Mnuchin described his conversations with the Federal Reserve and the Office of the Comptroller of the Currency as “extensive” over the past few days, saying the regulators were supportive of the investment.

“I think there’s a lot of opportunity to build out this business,” he said. “It’s a unique franchise. And not everybody wants to be with the top three or four mega-banks.”

Mnuchin and Otting have worked together in a similar capacity before: Mnuchin led a group of billionaires who bought failed mortgage lender IndyMac in the wake of the 2008 financial crisis. After transforming the firm into OneWest, he hired Otting as CEO.

Milton Berlinski, co-founder of Reverence Capital Partners and one of Mnuchin’s co-investors in the bank, said his firm took a hard look at NYCB’s real estate portfolio before deciding to back the lender. Reverence houses a group that focuses on opportunistic real estate ventures and was familiar with NYCB, and has experts who have spent the past 27 years working in Northeast real estate, he said.

“We were able to leverage that expertise that we had in-house to ultimately make a decision that this was an attractive opportunity for us to help re-capitalize” NYCB, he said in a BNN Bloomberg interview Thursday.

--With assistance from Hannah Levitt.

(Updates to add additional details from the call, Fitch update and analyst commentary starting in eighth paragraph.)

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