New York Community Bancorp Inc., which says it's the nation's largest savings and loan, has agreed to acquire a Michigan thrift in a $2.6 billion stock deal.
The acquisition of Flagstar Bancorp Inc. extends the footprint and asset base of Westbury-based NYCB, which had 236 branches in New York and four other states and $57.7 billion in assets as of March 31.
The deal with Troy-based Flagstar is the latest in a string of mergers and acquisitions by Long Island banking institutions.
The headquarters of the combined company will remain on Long Island and NYCB chief executive Thomas R. Cangemi will be president and CEO.
"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," Cangemi said in a statement. "The combination of our two companies will allow each of us to continue our transformation to a full-service commercial bank by broadening our product offerings while expanding our geographic reach."
Alessandro P. DiNello, Flagstar's president and CEO, will become the merged company's non-executive chairman.
The combined company will have more than $87 billion in assets and operate about 400 branches in nine states and 87 loan offices in 28 states, according to the announcement.
The transaction was approved by the boards of directors of both companies and is expected to close by the end of the year.
The agreement also will require approval of shareholders of both companies and regulators.
Terms of the agreement call for NYCB shareholders to own about 68% of the combined company with Flagstar shareholders getting the remainder.
NYCB shares climbed after the deal was announced on Monday but shed 2.6% to close Wednesday at $12.41. Flagstar shares also retreated after Monday's gains, falling 2.5% to close Wednesday at $47.57.
NYCB operates branches under eight divisions: Queens County Savings Bank, Roslyn Savings Bank, Richmond County Savings Bank, Roosevelt Savings Bank, and Atlantic Bank in New York; Garden State Community Bank in New Jersey; Ohio Savings Bank in Ohio; and AmTrust Bank in Florida and Arizona.
Its largest division is Roslyn Savings Bank with 41 locations in Nassau and Suffolk counties.
The thrift has used naming rights deals on Long Island such as the NYCB Cradle of Aviation Museum and NYCB Theatre at Westbury to extend brand awareness.
On Monday NYCB also announced its earnings for the quarter ended March 31.
The company posted a 45% year-over-year increase in net income to $145.6 million on revenue of $332.1 million.
Savings and loans have come under pressure to grow to keep up with the technology offered by major commercial banks.
In July 2020, Hauppauge-based Dime Community Bancshares Inc. announced a $489 million merger with Bridge Bancorp. In October 2020, Uniondale-based Flushing Financial Corp. closed on an $85.4 million deal for Islandia's Empire Bancorp Inc.