Flagstar Financial Merges with New York Community Bank

Flagstar Financial has merged with New York Community Bank. This merger marked a significant milestone in Flagstar's history, expanding its reach and services in the banking industry.

Flagstar Financial is a leading mortgage lender and bank holding company. It provides a range of financial services to individuals and businesses.

The merger with New York Community Bank brought together two experienced institutions, creating a stronger and more competitive player in the market. This move has enabled Flagstar to offer an even broader array of products and services to its customers.

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Flagstar Financial has a significant history in the banking industry, particularly in 2021 when it was acquired by New York Community Bancorp, Inc. (NYCB) in an all-stock strategic merger.

The acquisition was completed on December 1, 2022, marking a major milestone in Flagstar's evolution.

In a surprising turn of events, Flagstar Bank took on nearly all of Signature Bank's deposits in March 2023, after Signature Bank was closed by regulators.

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Flagstar Bank was founded in 1987 as a federal savings bank, initially focusing on funding regional retail and wholesale mortgage operations.

Thomas J. Hammond was the chairman of the bank at its founding.

The company established a bank holding company, FSSB Holding Corporation, in 1993.

In 1996, the company adopted its current name, Flagstar Bank, after acquiring Security Savings Bank.

Flagstar became a public company via an initial public offering in 1997.

It moved its stock listing from the NASDAQ to the New York Stock Exchange in 2001.

During the 2007-2008 financial crisis, Flagstar raised $1.6 billion in new capital with investments from MP Thrift Investments L.P., the Troubled Asset Relief Program (TARP), and public offerings.

Flagstar repaid all the funds it received under TARP in August 2016.

The company effected 1:10 reverse stock splits in 2010 and 2012 to maintain its New York Stock Exchange listing.

Flagstar paid a $110 million settlement to MBIA in May 2013, and a $105 million settlement with Assured Guaranty in June 2013, related to its RMBS.

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The bank paid a $93.5-million settlement to Fannie Mae in November 2011, and $8.9 million to Freddie Mac in December 2013, regarding its RMBS mortgage repurchase obligations.

Flagstar agreed to pay $37.5 million to the Consumer Financial Protection Bureau in September 2014.

In 2018, Flagstar acquired 8 branches in San Bernardino County, California from Desert Community Bank.

The company also acquired a mortgage warehouse loan portfolio from Santander Bank during that same year.

Flagstar acquired all 52 branches of Wells Fargo in Indiana, Michigan, and Ohio, as well as four in Wisconsin, in 2018.

However, numerous issues plagued Flagstar during the transfer, including technical glitches on its main website.

New York Community Bancorp, Inc. (NYCB) acquired Flagstar in an all stock strategic merger on April 26, 2021.

The acquisition was completed on December 1, 2022.

Flagstar Bank took on nearly all of Signature Bank's deposits in March 2023.

Signature Bank was closed by regulators on March 12, 2023, making it the third largest bank failure in U.S. history.

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The agreement did not include about $4 billion linked to Signature's crypto business, which the FDIC said it would deal with directly.

Flagstar Bank operated the 40 former branches of Signature Bank as of Monday, March 20, 2023.

Depositors of Signature Bridge Bank, N.A., other than those related to the digital banking business, automatically became depositors of Flagstar Bank.

Flagstar also bought some of Signature's loan portfolios.

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Flagstar Financial has a strong focus on community involvement, with a long history of supporting local organizations and initiatives.

The company's commitment to community development is evident in its partnership with the Detroit Regional Chamber, a leading business organization in the region.

Flagstar Financial also has a dedicated Community Reinvestment Act (CRA) program, which helps to revitalize and strengthen neighborhoods in underserved areas.

NYCB is changing its name to Flagstar Financial, effective October 25.

The company is adopting a single brand name to unify its operations and report third-quarter results on the same day.

The new name complements the re-branding of the bank's branches, which was implemented earlier this year.

The bank's ticker symbol will change to FLG as of October 28.

The name change is a significant milestone and a continuation of efforts to diversify the bank and return it to profitability.

The bank has already made progress in this area, selling $5 billion in mortgage warehouse loans to JPMorgan Chase within two weeks of announcing a strategy to diversify and return to profitability.

The bank is also selling its residential mortgage servicing business to Mr. Cooper for $1.4 billion.

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At Flagstar Bank and Flagstar Bancorp, leadership has evolved over the years, with several key figures playing important roles.

Thomas J. Hammond founded the organization and served as chairman of both the bank and the parent company, Flagstar Bancorp.

Mark Hammond took over as president in 1995 and later became CEO in 2002, marking a significant leadership transition.

Joseph P. Campanelli, former CEO of Sovereign Bancorp, was appointed chairman, president, and CEO of Flagstar Bank and Flagstar Bancorp in 2009.

In 2012, Michael J. Tierney became president and CEO, bringing his experience as executive vice president and managing director of personal financial services to the role.

John D. Lewis, a seasoned banking professional with experience at Comerica, was named chairman in 2012.

Alessandro P. DiNello took over as president, CEO, and director of the organizations in 2013, marking another significant leadership change.

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Flagstar Bank invested $10 million in a 5-year economic development program for Pontiac, Michigan in 2016. This initiative aimed to revitalize the city.

The program included $5 million for home mortgages, offering a customized home loan product for Pontiac residents. This made homeownership more accessible to the community.

$2.5 million was allocated for small businesses and start-ups, providing a boost to the local economy. This investment helped entrepreneurs and small business owners grow their businesses.

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The program also included $1.5 million for the naming rights of the Flagstar Strand Theatre for the Performing Arts. This investment helped preserve a local landmark and promote the arts.

Additionally, Flagstar Bank invested $1 million in financial literacy programs for the community. This education helped residents make informed financial decisions and improve their economic stability.

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Flagstar Financial was fined $3.5M for making misleading statements after a 2021 cyberattack. The attack resulted in the theft of 1.5 million customers' personally identifying information.

The bank "negligently made" materially misleading statements on its website and in financial filings. It failed to disclose that it had already experienced such attacks that resulted in customer data leaks and interruptions to its mortgage origination business.

The SEC found that in a June 17, 2022, notice to customers and an August 9, 2022, securities filing, the bank made misleading statements regarding the scope of the Citrix breach. Flagstar also failed to maintain disclosure controls and procedures.

The bank paid $3.5 million to the Securities and Exchange Commission for making allegedly misleading statements about the cyberattack. It also consented to a cease-and-desist order barring it from making misleading statements in the future.

The cyberattack was the bank's second of 2021, after bad actors took advantage of a flaw in Accellion's File Transfer Appliance software. Flagstar also fell victim to the 2023 breach of file transfer system MOVEIt.