New York Community Bank will raise more than $1bn in a deal led by the investment firm of former US Treasury secretary Steven Mnuchin, in an effort to shore up its finances and calm fears after weeks of turmoil surrounding the bank.

The regional lender also appointed Joseph Otting, a former Comptroller of the Currency in the Donald Trump administration, as its new chief executive. Otting replaces Alessandro DiNello, who became CEO of the bank less than a week ago and will return to a previous role as non-executive chair. Mnuchin is also joining the board.

Mnuchin said: “With the over $1bn of capital invested in the bank, we believe we now have sufficient capital should reserves need to be increased in the future to be consistent with or above the coverage ratio of NYCB’s large bank peers.”