DBRS Morningstar Assigns New Ratings to NYCB Subsidiary Flagstar Bank, N.A.

DBRS, Inc. (DBRS Morningstar) has assigned ratings to New York Community Bancorp’s (NYCB) bank subsidiary, Flagstar Bank, N.A. (FBNA or the Bank), including a Long-Term Issuer Rating of A (low). The trend for all ratings is Stable. The Intrinsic Assessment (IA) for the Bank is A (low), while its Support Assessment is SA1. At the same time, DBRS Morningstar has withdrawn and discontinued the ratings of New York Community Bank.

KEY RATING CONSIDERATIONS
The ratings actions follow the completion of the acquisition of Flagstar Bancorp, Inc. (Flagstar) by NYCB. Subsequently, NYCB’s banking subsidiary, New York Community Bank, was merged into Flagstar’s FBNA bank subsidiary with New York Community Bank now operating as a division of FBNA.

RATING DRIVERS
Over the longer-term, sustained levels of better-than-peer earnings generation, greater revenue diversity and an improved funding profile would result in an upgrade of ratings. Conversely, a significant weakening in asset quality, financial performance or operational issues with merger integration would result in a ratings downgrade.

RATING RATIONALE
As the lead operating bank with an SA1 designation, FBNA’s ratings would move in tandem and remain one notch above NYCB’s Long-Term Issuer Rating.

ENVIRONMENTAL, SOCIAL, GOVERNANCE CONSIDERATIONS
There were no Environmental/ Social/ Governance factor(s) that had a significant or relevant effect on the credit analysis.

A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework can be found in the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings at https://www.dbrsmorningstar.com/research/396929/dbrs-morningstar-criteria-approach-to-environmental-social-and-governance-risk-factors-in-credit-ratings. (May 17, 2022)

Notes:
All figures are in U.S. dollars unless otherwise noted.

The principal methodology is the Global Methodology for Rating Banks and Banking Organisations https://www.dbrsmorningstar.com/research/398692/global-methodology-for-rating-banks-and-banking-organisations (June 23, 2022).
In addition, DBRS Morningstar uses the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings https://www.dbrsmorningstar.com/research/396929/dbrs-morningstar-criteria-approach-to-environmental-social-and-governance-risk-factors-in-credit-ratings (May 17, 2022).

The primary sources of information used for this rating include Company Documents. DBRS Morningstar considers the information available to it for the purposes of providing this rating was of satisfactory quality.

The rated entity or its related entities did participate in the rating process for this rating action. DBRS Morningstar had access to the accounts and other relevant internal documents of the rated entity or its related entities in connection with this rating action.

The conditions that lead to the assignment of a Negative or Positive trend are generally resolved within a 12-month period. DBRS Morningstar’s outlooks and ratings are monitored.

Lead Analyst: John Mackerey, Senior Vice President, North American Financial Institutions – Global FIG
Rating Committee Chair: Michael Driscoll, Managing Director, Head of North American FIG – Global FIG
Initial Rating Date: January 13, 2023

For more information on this credit or on this industry, visit www.dbrsmorningstar.com.

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