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More than 18 months after announcing their planned merger, Flagstar Bank and New York Community Bank received approval from the Office of the Comptroller of the Currency on Friday.
The custodian banks, which first announced their plans 19 months ago, extended the merger agreement from October. Dec. 31 – Dec. 31, but still requires Fed approval. Michigan-based Flagstar is one of the largest U.S. mortgage lenders, with $23 billion in mortgages in the first nine months of the year, according to Inside Mortgage Finance.
Like its competitors, Flagstar had a difficult third quarter in terms of production. Mortgage loans were $4.8 billion, down 32% from the second quarter and beating Wall Street estimates.
However, the company’s net sales in the third quarter were 67 bps, up 29 bps from the second quarter. The company said secondary marketing metrics improved.
If approved, the combination of NYCB and Flagstar will make it one of the largest regional banks in the United States, with 395 branches in nine states, including the Northeast and Midwest, and exposure to high-growth markets along the coast southeast and west. ..
Flagstar said in a statement that the combined company will operate nationwide through the mortgage industry, through 81 retail lending offices in 26 states and a wholesale network of nearly 3,000 third-party originators.
The deal came in a settlement with New York Community Bank, which is seeking a $2.6 billion all-stock merger in the spring of 2021. New York Community Bank is one of the largest multifamily lenders in New York City.
Thomas Cangemi of NYCB will become president and CEO of the combined company, and Sandro DiNello, now president and CEO of Flagstar, will serve as non-executive chairman.
Lee Smith will continue to lead the mortgage sector as Senior Vice President and President of Mortgage. The Board of Directors consists of 12 directors, 8 from the New York community and 4 from Flagstar.
Reference Source: Housingwire
