New York Community set for a corporate rebranding

A year of upheaval for New York Community Bank is culminating with a corporate name change, as it fully takes on the branding of a company it acquired in 2022.

Directors at the regional bank approved an amendment to change its name to Flagstar Financial. While under previous leadership, NYCB acquired Flagstar Bank, a company with extensive mortgage lending and servicing operations at the time, in 2021, closing on the deal a year later. 

The rebranding takes effect following the close of business on Oct. 25, with the publicly listed company to begin trading on the New York Stock Exchange under new ticker symbol FLG on Oct. 28.     

Consumers will likely see little change with the new corporate moniker, after NYCB previously converted all of its existing branch locations to Flagstar offices after the acquisition. 

"This name change is a continuation of those efforts and unifies the company and our vision into a single brand." New York Community President and CEO Joseph Otting said in a press release. 

"We are excited to announce our new holding company name and stock symbol, marking another milestone in our ongoing transformation. Over the past six months, the board of directors and management have made remarkable progress in laying a strong foundation for the future," Otting said. 

Representatives from NYCB had not responded to a request for comment on the potential impact to its mortgage business prior to article publication. Shortly after NYCB took over Flagstar, the bank reduced home lending operations of its newly acquired company due to expectations of an industry slowdown. 

For several years prior to the merger, Flagstar began a mortgage-specific technology accelerator program, which continues to operate. 

On the corporate and investor relations side, the streamlining of the company under the Flagstar name could represent a more positive strategy development as New York Community closes out the year. After analysts expressed concerns over the concentration of multifamily and other commercial loans within its portfolio, the Long Island, New York-based bank took hits to both reputation and stock price, with the bad news quickly multiplying in the first three months of this year.

Poorer-than-expected earnings from the fourth quarter of 2023 drove New York Community's stock value to plummet in the immediate aftermath of the report early this year, later followed by major leadership shakeups, including the ouster of former president and CEO Thomas Cangemi. Further scrutiny pointed to flaws in internal processes elevating risk at the bank during its period of rapid growth, when it also acquired assets of Signature Bank. 

A capital infusion coming from Otting and former Treasury Secretary Steven Mnuchin helped save New York Community, with the former ascending to the top leadership roles, while other former key leaders exited. 

The new leadership warned 2024 would continue to present challenges for the bank. Among moves made later in the year in its restructuring efforts was the third-quarter sale of its residential mortgage servicing portfolio to Mr. Cooper. At the time, Otting cited the operational risk posed by servicing behind the decision to offload the portfolio, which also came days after New York Community sold almost $6 billion worth of mortgage warehouse loans to JPMorganChase. 

At the close of the second quarter, NYCB held over $119 billion in assets and $82 billion of loans in its books. The bank will announce third-quarter results on Oct. 24. 

New York Community saw its stock price head higher following the late Tuesday announcement, rising by 1.7% to begin Wednesday morning trading. After ending Tuesday at $11.84, NYCB opened at $12.05 and then continued up throughout most of the day to close 4.6% higher at $12.39.

Before NYCB's troubles accelerated early this year, its stock sat at $31.14 just prior to its fourth-quarter 2023 earnings call in late January.