DiNello this week was named chief executive officer of the bank that bought Flagstar in late 2022: New York Community Bancorp, whose troubles erupted at the end of January when the company — a major lender to New York apartment landlords — said it was stockpiling cash to cover potential problems with loans. The bank’s issues deepened this week as it announced “material weaknesses” in how it tracks loan risks, took a $2.4 billion goodwill impairment tied to past transactions and pushed Thomas Cangemi out as CEO, naming DiNello his replacement.

Even before the latest announcements, NYCB was already touting DiNello, 69, as key to reworking the Hicksville, New York-based lender. In a Feb. 15 investor presentation, the bank pointed to the many accomplishments DiNello — or “Sandro,” as the slideshow called him — achieved while atop Troy, Michigan-based Flagstar: selling $278 million of real estate loans to Customers Bancorp Inc., launching a homebuilder-lending platform, buying bank branches from East West Bancorp and Wells Fargo & Co., and ultimately striking the deal with NYCB.

“We view NYCB’s change in leadership as a net positive given the significant issues the bank has disclosed over the past month,” Raymond James & Associates analysts Steve Moss and Thomas Reid said in note to clients late Thursday. “We believe the appointment will be viewed favorably given Mr. DiNello’s prior history of turning around Flagstar, which was a troubled institution at one point, and building a commercial franchise.”

During the roughly nine years that DiNello ran Flagstar, the stock price of the regional lender climbed 232% — more than double the gain in a benchmark regional-banking fund — before he sold the company off, according to the presentation.

DiNello — already non-executive chairman of NYCB’s board — was appointed executive chairman in early February, and his rising clout was was immediately on display. On a Feb. 7 conference call to discuss the bank’s troubles, DiNello fielded almost all the questions from analysts, effectively sidelining Cangemi.

It’s hardly the first time DiNello has led a bank through a crisis, having run Flagstar through the Covid-19 pandemic.

“I just tell myself all the time that I’m just doing my job — and right now it’s just a little different than it was yesterday,” he told The Jungle, a business podcast, in April 2020. “The Lord blessed me with the ability to put my head on the pillow and get a good night’s sleep, and get back at it the next day, and not dwell on what didn’t go well — concentrate on the positives, and every day lead with a tremendous amount of intensity, knowing that every minute I’m going to give it the best I’ve got all day long.”

‘Help Management’

He had told Crain’s Detroit Business in 2022 that his role as NYCB’s non-executive chairman gave him “oversight” of the bank’s management.

“I want to help management be successful,” the Detroit native told the newspaper at the time. “And then if they’re not getting it done, then I’ve got to have the courage to shape it differently if that’s what needs to be done.”

DiNello, who has a bachelor of business administration from Western Michigan University, began his career as a bank examiner, later joining Security Savings Bank in Jackson, Michigan, eventually rising to president, according to a biography on the university’s website. In 1994, Security Savings was taken over by First Security Savings Bank, which later became Flagstar. DiNello remained with the combined bank as an executive officer responsible for expanding the bank’s funding sources, eventually serving as president and chief administrative officer, then CEO in 2013.

During his time at Flagstar, DiNello served as head of branch banking, retail-product strategy, marketing, communications, internet banking and branch expansion, and also oversaw the lender’s technology, operations and commercial units. He also led government affairs and community relations.

DiNello has been active in the local business community, serving on the boards of organizations including Business Leaders of Michigan, the American Bankers Council, the Detroit Regional Chamber and its economic-development CEO advisory board.

CEO’s Burden

In the 2020 podcast interview, DiNello spoke about how Covid-19 had affected Flagstar. He was working from an office above the garage of his Birmingham, Michigan, home, which was outfitted with four computer screens, a treadmill, a couch and a TV tuned to CNBC — a space he called his “bachelor pad,” not because he’s a bachelor, but because of his wife’s tastes in television.

“This is where I come when my wife watches The Bachelor,” he said, adding that his own weekend viewing at the time veered more toward The Walking Dead and Ozark.

DiNello said the pandemic was very different from past challenges Flagstar had faced.

“It is not a financial crisis — it is a health, humanitarian crisis, and it’s very different,” he said. “The burden I feel as a CEO of 4,700 people is very different when it’s about their health, and not the company’s health. Right now a company’s health comes behind all of that. On every other crisis, you’re fighting for the company’s health.”

At the time, Flagstar executives held a balance-sheet meeting — “where are the risks, what do we need to get our arms around,” he said — at the end of each business day.

“I’m the one who’s got to think 360,” he said. “I have to have a vision to question everything that might be a problem and get the right people together to talk through, ‘Is that a real problem? Is it just me thinking about the worst that might happen?’ Which is my job. And if it’s a real problem, how do we deal with it? How do we mitigate that problem? That’s what leaders have to do.”

–With assistance from Bre Bradham.