New York Community Bancorp in Westbury and Astoria Financial in Lake Success, N.Y., have terminated their merger.
The companies said in a press release Tuesday that their boards had "mutually agreed" to not extend the deal's termination date set for Jan. 1. The short release gave no other information.
New York Community, which has $49.5 billion in assets, agreed in October 2015 to pay $2 billion for the $14.8 billion-asset Astoria. The deal was supposed to help the $49.5 billion-asset New York Community jump over $50 billion of assets — a threshold that triggers additional regulatory scrutiny — but it did little to help diversify its balance sheet away from a reliance on commercial real estate loans. Regulators have warned about potential risks in CRE and have started paying more attention to banks that are highly concentrated in this area.
The companies announced last month that New York Community would not receive regulatory approval in time to close by the end of this year, as originally planned. The parties "remain committed to the transaction," New York Community said at that time, but it noted that any extension would need to be approved by both boards.
Shareholders of both companies approved the transaction in April.
Both companies also are in the residential mortgage business. Astoria Financial originated $261.5 million in single-family mortgages for the bank's portfolio in the third quarter, up from $151.5 million one year prior.
New York Community originated $1.4 billion of single-family mortgages that were sold in the secondary market. It also did $1.7 billion of mortgage loans held for investment, of which $1.3 billion was multifamily, $346 million were commercial and $101 million were single-family.