Shares of Flagstar Bancorp Inc. shot up 4.9% in premarket trading Monday, after the Michigan-based bank announced an agreement to be acquired by New York Community Bancorp. Inc. in a stock deal valued at $2.6 billion. New York Community’s stock rose 0.9% ahead of the open. Under terms of the deal, Flagstar shareholders will receive 4.0151 New York Community shares for each Flagstar share they own. Based on Friday’s closing prices, that values Flagstar stock at $48.14 each, or a 6.1% premium. The combined bank is expected to have more than $87 billion in assets and nearly 400 bank branches in nine states. The deal, which is expected to close by the end of 2021, is expected to add 16% to New York Community’s earnings per share in 2022. “[I]n partnership with NYCB, we are positioned to further accelerate everything we’ve been doing during my tenure as Flagstar’s CEO to build a best-in-class commercial bank, supported by one of the best mortgage and servicing businesses in the country,” said Flagstar Chief Executive Alessandro DiNello. Flagstar’s stock has rallied 22.5% over the past 12 months and New York Community shares have soared 112.1%, while the SPDR S&P Regional Banking ETF has hiked up 97.4% and the S&P 500 has advanced 47.4%.

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