Fed gives final blessing to New York Community-Flagstar deal
New York Community Bancorp on Long Island has received final regulatory approval for its $2.6 billion acquisition of Flagstar Bancorp.
The two banks announced the Federal Reserve Board’s signoff on Monday following approval from the Office of the Comptroller of the Currency on Oct. 28. The deal, which was first announced in April 2021, is now expected to close on Dec. 1.
Amid heightened federal scrutiny of bank acquisitions, the New York Community-Flagstar merger, which was originally expected to close at the end of last year, ultimately took more than 18 months for regulators to approve. An extended deadline of April 2022 passed with no approval, as did a subsequent Oct. 31 deadline.
Adobe Stock
After the OCC’s approval late last month, the banks set a new deadline of Dec. 31.
In a recent research note, Wedbush Securities analyst David Chiaverini cited “regulatory slowness” for the merger’s delay. Also last month, the Capitol Forum reported that the Department of Justice was weighing a racial discrimination case against Flagstar for allegedly charging Black borrowers more for home loans than other borrowers.
New York Community CEO Thomas Cangemi has said the deal will enable his company to transition from operating as a thrift to a commercial banking model. New York Community, a $63 billion-asset bank, has been heavily concentrated in multifamily loans, while Flagstar is one of the nation’s largest mortgage warehouse lenders.
The combined company will operate nearly 400 traditional branches in nine states, as well as 87 loan production offices across a 28-state footprint, according to a statement from the two companies when the deal was announced.
The $25.4 billion-asset Flagstar, based in Troy, Michigan, will be the first whole-bank acquisition for NYCB since 2007. In 2016, the company’s $2 billion deal to purchase Astoria Financial ultimately fell apart.
Comments are closed.