New York Community Bancorp Idling Until Regulators Wave Green Flag On Flagstar Merger

At this point New York Community Bancorp (NYSE:NYCB) shares remind me of an F1 driver that has to start the race from pit lane; they’re sitting there watching the pack fly by while the company waits for regulators to wave the green flag and clear the transformational merger with Flagstar (FBC). Since my last update, these shares have fallen more than 10%, underperforming regional peers by more than 15%.

I don’t see any evidence that NYCB and Flagstar won’t get that clearance, and that’s key to the bull argument here. While there are several good things going on at NYCB beyond that deal, a liability-sensitive effectively single-market lender is not going to fare well in this market. I still expect the deal to close in 2022, though, and I still believe that the combined bank will generate mid-single-digit core earnings growth that supports a fair value in the $15-16 range today.

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New York Community Bancorp Idling Until Regulators Wave Green Flag On Flagstar Merger