New York Community Bancorp to acquire Flagstar Bancorp for $2.6bn
New York Community Bancorp (NYCB) has signed an all-stock deal to acquire Michigan-based Flagstar Bancorp (FBC) for about $2.6 billion.
Flagstar Bancorp is a $29.4 billion savings and loan holding firm that owns Flagstar Bank. The bank offers commercial, small business, and consumer banking services via 158 branches across Michigan, California, Indiana, Wisconsin, and Ohio.
On the other hand, New York Community Bancorp provides multi-family loans on non-luxury, rent-regulated apartment buildings across New York City. It is also the parent company of New York Community Bank.
As of 31 March 2021, New York Community Bancorp had assets of $57.7 billion, $43.1 billion loans, and $34.2 billion in deposits.
Thomas R. Cangemi – New York Community Bancorp President and CEO said: “When I was appointed President and CEO of New York Community earlier this year, one of my top priorities was to seek out a like-minded partner that would provide NYCB with a diversified revenue stream, an improved funding mix, and leverage our scale and technology, as we transition away from a traditional thrift model.
“In Flagstar, we have found such a like-minded partner. The combination of our two companies will allow each of us to continue our transformation to a full-service commercial bank by broadening our product offerings while expanding our geographic reach with no branch overlap.”
Thomas R. Cangemi will be President and also the CEO of the combined company.
As per the terms of the deal, Flagstar Bancorp shareholders will exchange each of their shares with 4.0151 shares of New York Community Bancorp.
After closing of the deal, New York Community Bancorp’s shareholders will hold a stake of around 68% of the combined company, while Flagstar Bancorp shareholders hold the remaining stake of around 32%.
New York Community Bancorp to acquire Flagstar Bancorp for $2.6bn. Photo courtesy of Marvin Young/Wikipedia.org.
Alessandro DiNello – President and CEO of Flagstar Bancorp said: “With our existing Flagstar platform, we had every expectation of continuing to build on our success as a leader in creating value in the mid-size bank space.
“Now, in partnership with NYCB, we are positioned to further accelerate everything we’ve been doing during my tenure as Flagstar’s CEO to build a best-in-class commercial bank, supported by one of the best mortgage and servicing businesses in the country.
“Tom is a young, dynamic CEO who shares my vision. Together his team and the Flagstar team will grow our combined businesses smartly and safely.”
The combined company, which will be based in Long Island, New York, will have more than $87 billion in assets. It will operate around 400 branches across nine states and 87 loan production offices across 28 states.
As per the parties, the enlarged bank holding company will maintain the Flagstar Bank brand in the Midwest. The mortgage division of Flagstar Bank will also maintain its original brand.
Other states will continue with their current branding, said the parties.
The deal, which is subject to shareholders’ approvals of both the firms, regulatory approvals, and other customary closing conditions, is likely to be wrapped up by the year end.