Flagstar selling to New York bank

Alessandro DiNello

New York Community Bancorp in Westbury is acquiring Michigan-based Flagstar Bancorp later this year in an all-stock deal worth $2.6 billion.

The new company will have over $87 billion in assets and operate nearly 400 traditional branches in nine states and 87 LPOs across a 28 state footprint. It will have its headquarters on Long Island, N.Y., with regional headquarters in Troy, Mich., including Flagstar’s mortgage operations. The combined company will maintain the Flagstar Bank brand in the Midwest.

Thomas Cangemi will be president and CEO of the combined company and Alessandro DiNello, Flagstar’s current president and CEO, will become non-executive chair with John Pinto serving as senior executive vice president and chief financial officer of the combined company. Lee M. Smith will continue to lead the mortgage division as senior executive vice president and president of mortgage and Reginald Davis will head up consumer and commercial banking and serve as senior executive vice president and president of banking.

“When I was appointed president and CEO of New York Community earlier this year,” Cangemi said, “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 combined board willhave12 directors, eight from New York Community and four from Flagstar.

The transaction is expected to be 16 percent accretive to NYCB’s earnings per share in 2022 (assuming fully phased-in cost savings) and 3.5 percent accretive to NYCB’s tangible book value per share.

Piper Sandler & Co. and Goldman Sachs & Co., LLC served as financial advisors to New York Community in connection with the transaction. Sullivan & Cromwell LLP served as legal advisor.

Morgan Stanley & Co., LLC and Jefferies LLC acted as financial advisors to Flagstar. Skadden, Arps, Slate, Meagher & Flom LLP served as legal advisor.