The Federal Reserve has given the green light for the proposed merger between Flagstar Bank and New York Community Bank to go through, about 19 months after the deal was agreed to.
The $2.6 billion merger deal, which was first announced in April 2021, is now expected to close on Dec. 1.
The Office of the Comptroller of the Currency approved the merger in late October.
Michigan-based Flagstar ranks among the biggest mortgage lenders in America, originating $23 billion in mortgages over the first nine months of the year, according to figures by Inside Mortgage Finance.
Like its competitors, Flagstar had a challenging third quarter production-wise. Mortgage rate volumes of $4.8 billion were down 32% from the second quarter and missed Wall Street’s estimates. The company’s mortgage gain-on-sale figures, however, improved to 67 basis points in the third quarter, up 29 basis points from the second quarter. The company said its secondary marketing performance improved.
If approved, the combination of NYCB and Flagstar would create one of the largest regional banks in the country, operating 395 branches across a nine-state territory, including the Northeast and the Midwest with exposure to high-growth markets in the Southeast and West Coast.
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In a statement following the OCC’s approval, Flagstar said that through its mortgage division, the combined company would operate nationally through 81 retail lending offices in 26 states and a wholesale network of approximately 3,000 third-party originators.
New York Community Bank is one of New York City’s largest multifamily lenders.