New York Metro-based New York Community Bancorp (NYCB) and Michigan’s Flagstar Bancorp have inked a merger agreement, the two banks announced in a Monday (April 26) press release.
NYCB, based in Westbury, N.Y., is focused on multi-family loans in the rent-controlled and non-luxury apartment space. Flagstar, for its part, provides commercial, small business and consumer banking services through 158 branches in Michigan, Indiana, California, Wisconsin and Ohio.
Under the agreement, the merger will occur by a stock swap that will give NYCB a 68 percent share of the new company. The newly-merged company will have over $87 billion in assets and operate nearly 400 traditional branches in nine states, along with 87 loan production offices across 28 states. The combined company will maintain the Flagstar Bank brand in the Midwest. Flagstar’s mortgage division will also maintain the Flagstar brand. Other states will retain their current branding.
NYCB’s Thomas R. Cangemi will be president and CEO of the combined company and Alessandro (Sandro) P. DiNello, Flagstar’s current president and CEO, will become non-executive chairman. John Pinto will serve as senior executive vice president and CFO of the combined company.
Cangemi said in the release, “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.”
According to PYMNTs, mergers such as this have been expected. In a recent interview with Karen Webster, Jim McCarthy, president at i2c, said that the digital shift will spur tie-ups of all sorts — from partnerships to outright buyouts — as incumbents seek to add assets and innovation in the payments processing and credit categories. The underlying theme is the realization that consumers increasingly want more control over digital payments and have higher expectations, according to McCarthy. And companies must deliver — or risk being rendered obsolete.
“I do see a ton of opportunity on the issuer processing side, the consumer side of this, where you’re going to see a lot of innovation because it’s where we’ve been stuck for a long time,” McCarthy noted.
Selected by EFXA