New York Community Bancorp Inc. will shutter more than 80 Flagstar mortgage loan offices nationwide and lay off about 10% of employees, the company announced Tuesday.
The move comes two months after NYCB closed on its $2.6 billion acquisition of Troy, Michigan-based Flagstar Bancorp and will cover all standalone Flagstar loan offices in 26 states, which includes a Long Island unit in Garden City.
In NYCB's earnings conference call for the quarter ended Dec. 31, president and chief executive Thomas R. Cangemi attributed the restructuring to a moribund market for mortgage loans during a period when the Federal Reserve is raising interest rates.
"The substantial and aggressive shift in Fed monetary policy over the past year resulted in significantly higher mortgage rates," he said. "While legacy Flagstar was proactive in rightsizing its mortgage business throughout the past year, we expect the mortgage market to remain challenged."
Cangemi said that NYCB will continue to make mortgage loans, but only through its bank branches. The combined company has a footprint of 395 branches in nine states, including 51 on Long Island.
Hicksville-based NYCB operates under 10 brands — New York Community Bank, 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; AmTrust Bank in Florida and Arizona; Ohio Savings Bank in Ohio, and Flagstar Bank in Michigan and eight other states.
The company plans to unify the disparate brands under the Flagstar name and combine its banking and technology systems in 2024.
Employees at Flagstar loan offices, including one in California, turned to social media after the layoffs: "I was one of the hundreds of people impacted by the Flagstar layoffs this morning, my second day back from maternity leave," the worker said. "As a new mom to two, I'm determined to show my girls how to pick up the pieces."
"It's a difficult decision when you have to make these types of significant restructuring efforts," Cangemi said in the conference call.
The company had about 7,200 employees when the Flagstar merger closed on Dec.1.
The company reported net income for the quarter ended December 31 of $172 million, or 30 cents per diluted share, compared to $150 million, or 30 cents per diluted share, in the prior year'sfourth quarter.
Shares of NYCB rose 3.3% Tuesday to close at $9.99.