When Rhode Island native Steven Issa was tapped in 2011 to lead Mich.-based Flagstar Bancorp Inc.’s move into New England, his local ties made the Ocean State a natural launching point.
But aside from renovations to a sixth-floor office in the Textron Building in Providence, it’s hard to gauge what kind of physical presence the company has has managed locally. Now it may be exiting the region entirely.
Flagstar earlier this month announced it is selling for an estimated $779 million its Northeast-based commercial loan portfolio to CIT Bank.
“This transaction is another step in renewing Flagstar’s focus on our community banking operation in Michigan and our national mortgage business,” Flagstar CEO Michael Tierney said in the release.
Senior analyst Christine Pratt of the Aite Group in Boston, which does research on technologies for the banking industry, last week said Flagstar’s direction looks pretty clear.
“My take on it is they opened a commercial loan office and now they sold their commercial loans for the region, so I think they’re moving out of the Rhode Island operation,” said Pratt. “They gathered commercial real estate and equipment leasing loans and both of those types of loans are tied to construction, which we know is not flourishing.”
Flagstar has declined to comment on what the sale means for its New England operation, or on what that business entails.
As of last week, the only Flagstar employee that could be confirmed in Rhode Island by Providence Business News was Issa, president of Flagstar’s New England market. Issa told PBN on Jan. 9 that the Flagstar office in the Textron Building “is open and it’s business as usual. It’s our corporate commercial lending office and we have lending teams and support teams, as before.”
Issa, however, would not comment on how many employees are in the Providence office or on the status of the bank’s New England plans. Issa said he also serves as managing director for all commercial lending for Flagstar.