New York Community Bancorp, Flagstar get OCC approval for merger
After more than a year since agreeing to a merger, New York Community Bancorp (NYSE:NYCB) and Flagstar Bancorp (NYSE:FBC) have received approval from the Office of the Comptroller of the Currency for NYCB's acquisition of FBC, the companies said Friday.
The OCC approved the conversion of Flagstar Bank, FSB (FBC) to a national bank to be known as Flagstar Bank, N.A., and to merge New York Community Bank (NYCB) into Flagstar Bank, N.A., with Flagstar being the surviving entity. NYCB shares have gained 0.9% in Friday premarket trading.
NYCB's acquisition of Flagstar still must be approved by the Federal Reserve Board, and is subject to certain other customary closing conditions.
The OCC approval includes a waiting period, in which the merger cannot take place until the 15th day after the date of the OCC approval, which is Nov. 11, 2022 in this case. The FRB approval isn't expected to have a related waiting period.
Related to the approval, NYCB and Flagstar (FBC) extended their merger agreement from Oct. 31, 2022 to Dec. 31, 2022, to allow time to obtain the FRB approval and to close the transaction.
The consideration and exchange ratio remains the same. New York Community Bancorp (NYCB) originally agreed in April 2021 to acquire Flagstar (FBC). NYCB will issue 4.0151 shares of its common stock for each share of FBC common stock.
At Thursday's close, the deal valued each share of FBC at $35.13, currently a 3.8% premium to FBC's closing price of $33.83 on Thursday. In April, that value was ~$48.14 per share.
Based on Flagstar's (FBC) 53.3M shares outstanding as of Aug. 5, 2022, the deal value now stands at $1.87B, down from the $2.57B in April.
On Wednesday, New York Community Bancorp (NYCB) posted slightly lower Q3 EPS than Wall Street expected.