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Flagstar Bancorp (FBC) will move $48.3M from reserves to income after agreeing to pay Assured...

Flagstar Bancorp (FBC) will move $48.3M from reserves to income after agreeing to pay Assured Guaranty (AGO) $105M to settle fraud claims related to $902M of MBS. The $48.3M represents about $0.85/share, no small amount compared to analyst EPS estimates of $2.06 for all 2013. One of the legs of a bullish Flagstar thesis is its over-reserving for MBS reps & warranties, litigation expense, and future loan losses.
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Comments (1)
  • dhdhoora
    , contributor
    Comments (515) | Send Message
     
    The new management @ Flagstar continues to clean house and put the past mess behind itself. Earlier, they had indicated that they would appeal the Assured Guaranty judgement against them. Obviously, they have made the decision to move on and settle. The $48MM will take a chunk out of provisions, but will not 'break the bank'. Better days ahead -- now to settle TARP.

     

    All the very best,
    Don
    23 Jun 2013, 08:42 PM Reply Like
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