NYCB 2017 Annual Report

Third, the Company received approval from the FDIC to sell the assets covered under our Loss Share Agreements and entered into an agreement to sell the majority of our one-to-four family residential mortgage-related assets to an affiliate of Cerberus Capital Management, L.P. These last two strategies collectively generated a one-time pre-tax gain of $82 million and resulted in the Company receiving in excess of $2 billion in cash from the transactions. These actions laid the foundation for our future growth by allowing us to re-focus on our traditional business model. Historically, this focus on our traditional business model has resulted in strong returns for our shareholders. While the growth since our initial public offering on November 23, 1993 has been impressive, more recently, our growth has been held in check due to the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), specifically, the $50 billion in assets threshold to be considered a Systemically Important Financial Institution (“SIFI”). Since the end of 2011, when we first approached our primary regulators for their guidance on our becoming a SIFI bank, (so as to acquire a bank which was larger than us), we have been in constant communication so that we would be pre- pared to meet their expectations to growing above $50 billion in assets. In the interim, we invested over $180 million into becoming SIFI compliant. These costs were allocated to various resources, including additional personnel in certain regulatory- facing departments, our credit risk management processes, systems and technology upgrades, and into enhancing our capital planning and stress testing capabilities. At this juncture, we have incurred the majority of our SIFI-related costs and regulatory relief notwithstanding, the Company plans to resume meaningful balance sheet growth in 2018. Regulatory Relief Advances For the past several years, we have taken the opportunity in this letter to discuss with you our thoughts on the impact to the Company and to the industry as a whole, from overly burdensome, and in some cases, unnecessary regulations. We have also shared with you our hopes that some of these regulations would be eased in the coming years. Specifically, that the SIFI threshold would, at some point, be increased to a higher level. We are encouraged by the progress made in 2017 and in the early part of 2018 on this front. On March 14, 2018, the Senate passed, by a vote of 67 to 31, S.2155, otherwise known as the Economic Growth, Regulatory Relief, and Consumer Protection Act. This is an important piece of legislation, as it is the first that attempts to fix many of the flaws that are a part of the Dodd-Frank Act. The legislation does not alter how the large, complex commercial and investment banks are regulated. Rather, it removes many of the hurdles that were unfairly applied to community and regional banks. This is 2 | NYCB “The Company plans to resume meaningful balance sheet growth in 2018.”