DiNello served as CEO of Flagstar Bancorp from 2013 until its 2022 acquisition by New York Community. During that nine-year stretch, Flagstar contended with numerous regulatory issues that had emerged from the 2008-2009 mortgage crisis.

"We were a monoline mortgage company that had been decimated by the Great Recession," DiNello said Wednesday, recalling his time at Michigan-based Flagstar. "That was a difficult time, but we made our way through it by building the right team, building a strong risk and compliance framework, and by building the right business model."

Later in the call, DiNello, a 1975 graduate of Western Michigan University, noted that he started his career as a bank examiner.

The emphasis on regulatory compliance followed a punishing week for Long Island-based New York Community, culminating in the announcement that DiNello will have a more hands-on role.

On Jan. 31, the bank announced a net loss of $260 million in the fourth quarter, driven by a large reserve increase. It also cut its dividend by 70%, which executives said was necessary to build capital. The company's stock price fell by 59% over the following week.

Industry observers believe that the bank's regulators were likely responsible for the surprise bad news, though New York Community has been tight-lipped about what happened.

The same day the earnings report was released, Jefferies downgraded New York Community's stock from "buy" to "hold," citing an "unexpectedly faster regulatory mandate" to comply with regulations for larger banks.

It now falls largely to DiNello to navigate the choppy waters ahead. While Thomas Cangemi is still New York Community's president and CEO, it was DiNello who answered most of the questions from stock analysts on Wednesday. He made the case that he has the right skills and experiences to engineer a turnaround of the $116.3 billion-asset bank.

Early in his career, DiNello worked at Jackson, Michigan-based Security Savings Bank, which was acquired in 1994 by a bank that later became Flagstar.

Over the following decades, DiNello's roles included leading government affairs for the bank. He also served as head of branch banking, an experience that he suggested will be useful in his new role at New York Community.

"I built the Flagstar branch network. These people know how to take care of customers," DiNello said Wednesday on the conference call, adding that New York Community's front-line bankers have a similar rapport with their clients.

"And because of that, we have seen virtually no deposit outflow from our retail branches," he said just hours after New York Community released an update on its deposits in an effort to convince investors that its funding was still solid.

When DiNello became Flagstar's CEO in 2013, he took over from a predecessor who'd lasted only eight months in the job. Flagstar, which was largely a mortgage lender, was in a tough spot. Between 2007 and early 2012, the company had lost nearly $1.4 billion. 

In 2010, Flagstar entered into a supervisory agreement with the Federal Reserve that required the bank to submit an annual capital plan and receive a written non-objection from the Fed before paying a dividend or repurchasing stock.

Then in October 2012, the lender entered into a consent order with the Office of the Comptroller of the Currency, which related to its regulatory capital, enterprise risk management and liquidity, among other matters.

There was more regulatory trouble ahead. In September 2014, the Consumer Financial Protection Bureau ordered Flagstar to pay $37.5 million in fines and restitution in connection with allegations that it blocked homeowners from receiving foreclosure relief.

But over time, Flagstar's crisis-era regulatory headaches got resolved. The OCC consent order was lifted in December 2016. Nearly two years later, so was the Fed's supervisory agreement.

Flagstar's financial results also showed gradual improvement during DiNello's time at the helm. Its net interest margin was under 2% when he became CEO, DiNello said Wednesday, but it rose to around 4% by the time the bank was acquired. 

"It took 10 years to do that, but we got it there," DiNello said. "And if you do it the right way, you do it gradually, and you don't try to do things too quickly, and you keep safety and soundness in the forefront, it can be done."

Between 2015 and 2020, Flagstar recorded net income of more than $1.3 billion, including $538 million during the first year of the COVID-19 pandemic, as the U.S. mortgage market boomed.

During Flagstar's quarterly earnings call in January 2021, DiNello described 2020 as the most successful year in the company's history. Three months later, New York Community announced plans to buy Flagstar in an all-stock deal valued at roughly $2.6 billion.

A month before the deal was announced, Flagstar resolved one last crisis-era regulatory matter. The bank settled its obligations under a 2012 settlement with the Department of Justice, which related to false certifications on government-backed loans that went bad. Flagstar agreed to pay $70 million, which was $48 million less than it had originally appeared to owe.

When the New York Community acquisition closed in December 2022, DiNello became the combined company's nonexecutive chairman. The events of the last two weeks have pushed into more of a day-to-day leadership role.

Since New York Community's tailspin began, DiNello and other executives have been buying shares in the company. The purchases are similar to those made by regional bank CEOs last spring, as they sought to reassure investors they thought their banks were sound. 

On Friday, DiNello bought more than $200,000 of shares, according to a securities filing. The company's stock rose 17% after the disclosure of the executives' stock purchases.

While Friday's insider stock purchases instilled some "calmness," showing that deposits are stable or growing will be key, said Peter Winter, an analyst at D.A. Davidson.

"It's all going to come down to deposits — it really is," Winter said. "If they come out with a midquarter update, and deposits are down, the stock is going to sell off."

Christopher McGratty of Keefe, Bruyette & Woods is among the analysts who have welcomed DiNello's new role. He wrote in a research note that DiNello was "the architect" of Flagstar's operation and regulatory restructuring.

"DiNello has a strong reputation of turning around Flagstar Bancorp," McGratty wrote, adding that the executive's direct communication during Wednesday's conference call, which included owning up to the challenges facing New York Community, should help start to restore confidence.

"He is well known to the Street, and his experience working through these matters should help NYCB, in our view," McGratty added.

Some of the challenges that New York Community faces revolve around meeting the expectations that regulators have for banks with more than $100 billion of assets — a threshold that the bank crossed when it bought parts of the failed Signature Bank last spring.

During Wednesday's call, DiNello spoke about the company's plans to reduce its commercial real estate concentration, sell nonstrategic assets and build capital. In other forums, he has spoken about his leadership traits.

"I am willing to take risks — calculated ones," he said in a 2017 interview with the Detroit Free Press. "If you are smart about the risks you take and you do so in a disciplined fashion, it works out."

"I don't use the word 'stress,'" he said in a 2020 podcast interview. "That's out of my vocabulary."

Daniel Tamayo, an analyst at Raymond James, said that DiNello proved to be a capable leader at Flagstar during a challenging time for the bank.

"I remember thinking, when I picked up coverage of Flagstar, 'Why would they have someone that was there when it almost went under to lead them out of it?'" Tamayo said. "DiNello ended up being the perfect guy for the job."