Oct. 27, 2015, 9:53 AM
- Q3 net income of $47M or $0.69 per share vs. $46M and $0.68 in Q2, and a loss of $28M or $0.61 one year ago.
- The bank also announces the post-Q3 sale of another $214M of interest-only loans, bringing total sales this year to $600M.
- Net interest income of $73M, flat from Q2, up from $65M a year ago. NIM of 2.75% down four basis points for the quarter and 16 bps Y/Y.
- Noninterest income of $128M, up from $126M in Q2 and $119M a year ago.
- Noninterest expense of $131M down from $138M in Q2 and $138M a year ago.
- Average interest-earning assets of $10.693B up 21% Y/Y. Average loans held for sale of $2.2B up 35%. Average loans held for investment of $5.412B up 32%. Average total deposits of $8.26B up 17%.
- Tier 1 capital ratio of 20.32% up from 19.97% in Q2. Book value per share of $21.91 up from $20.98.
- Conference call at 11 ET
- Previously: Flagstar beats by $0.34, misses on revenue (Oct. 27)
- FBC +6% to $22.90
Jul. 28, 2015, 3:43 PM
- With the a challenging housing market still serving as a headwind to its core mortgage origination business, Flagstar (FBC +7.7%) has focused efforts on de-risking its balance sheet and reducing costs and risks associated with NPLs, writes BTIG's Mark Palmer.
- The bank's sale of $386M of interest-only loans during Q2 as well as $70M of NPLs helped drive a $10.3M after-tax reserve release, making a big earnings beat even bigger.
- Still, says Palmer, mortgage originations will be the primary driver of the stock price, and after a big uptick in Q1, things pulled back last quarter as gain on loan sales fell to $82.2M from $91.3M, and gain on sales margin fell six basis points to 1.21%.
- Palmer reiterates his Neutral rating and sees the stock - trading at 0.95x book value - as close to fair value.
- Previously: Cut in loan-loss provisions boosts Flagstar's quarter (July 28)
- Previously: Flagstar beats by $0.31, beats on revenue (July 28)
Jun. 30, 2015, 10:12 AM
Jan. 22, 2015, 12:35 PM
- Mercilessly sold since the year turned, banks are putting in a rare session of outperformance, helped along by some earnings beats from regional lenders and the return of animal spirits in M&A with RBC's purchase of City National (CYN +18.6%) for $5.4B.
- The XLF +1.4% vs. the S&P's 0.6% gain today, and the regional bank ETF (NYSEARCA:KRE) is higher by 3.1%.
- Among today's reporters putting in big gains are KeyCorp (KEY +5.5%), BB&T (BBT +2.4%), and Huntington Bancshares (HBAN +2.6%), though Flagstar Bancorp (FBC -4.8%) missed estimates.
- Others: Regions Financial (RF +3.9%), PNC Financial (PNC +1.6%), Synovus (SNV +3.2%), M&T Bank (MTB +3%), Hudson City (HCBK +3.1%), First Horizon (FHN +2.7%), and First Republic (FRC +4.9%).
- ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, IAT, IAI, SEF, IYG, FXO, FNCL, KBWB, QABA, FINU, KRU, RWW, KBWR, RYF, PSCF, FINZ, KRS
- Among the TBTFs, Citigroup (C +2.7%) and Bank of America (BAC +2.5%) are leading the way.
Jan. 6, 2015, 9:42 AM
Sep. 9, 2014, 9:35 AM
- Flagstar Bancorp (NYSE:FBC) opens 2% higher after Compass Point upgrades the stock to a Buy with $20 price target.
- The stock is off double-digits this year amid worry the big expense cuts are behind the bank, and late last month the company disclosed it's in talks with the CFPB over consumer finance law violations.
Jul. 23, 2014, 9:37 AM
- Many had thought the big cuts in expenses were behind the bank, but Flagstar (FBC +5.5%) reported noninterest expense of $121.4M in Q2, down from $139.3M in Q1, and $174.4M one year ago, with compensation and benefits of $55.2M down from $65.6M and $70.9M. Legal and professional expenses of $2.1M fell from $13.9M and $16.4M.
- CEO Sandro DiNello: "We continue to focus on controlling our noninterest expense in the current mortgage environment and are managing expenses in order to be profitable in any origination environment."
- Previously: Flagstar beats by $0.13
Apr. 23, 2014, 8:29 AM
- Continuing "to evaluate emerging credit data," the bank increased its estimate of the loss estimation period from 12 months to 18 months, resulting in the need to boost the loan loss allowance by nearly 50% to $307M. The ratio of loan loss allowance to non-performing loans goes to 286.9% from 145.9%. There's also a $21.1M reduction in the originally-recorded fair value of loans repurchased from the GSEs.
- The result: A net loss of $78.9M or $1.51 per share in Q1 vs. income of $160.5M or $2.77 per share a year ago.
- Net interest income of $58.2M up from $55.7M a year ago with NIM of 3.05% up from 1.89% thanks to Q4's repayment of high-cost FHLB advances. Noninterest income of $75M falls from $184.9M.
- Noninterest expense of $139.3M slides from $196.6M one year ago. Compensation expense of $65.6M down from $77.2M. Legal and professional expense of $13.9M down from $28.8M.
- Net charge-offs of $12.3M falls from $35.4M one year ago.
- CC at 11 ET
- FBC -2.7% premarket
Jan. 23, 2014, 2:01 PM
- Flagstar Bancorp (FBC +3.3%) is the outlier to the upside among a hard-hit regional banking sector (KRE -2.1%) today following last night's Q4 earnings results.
- The bank reported a big headline number ($2.77 per share in earnings) after finally reversing the valuation allowance on its DTA. However, notes BTIG's Mark Palmer (who was a big bull on the stock at about $13 per share, but not so much at $20), the results of the underlying core business left something to be desired.
- Net interest income was well lower, as was noninterest income as mortgage business vanished. On the expense side, the bank does appear to be executing on its plan to cut costs and guided towards the high-end of its previously estimated cost savings for this year.
Jan. 7, 2014, 9:22 AM
- The deal with Freddie Mac means Flagstar (FBC) has effectively settled the vast majority of its rep and warranty claims with the GSEs and will likely be shown to have over-reserved for them, says analyst Kevin Barker, who also expects the bank to report either a gain on sale or material mark-up in the value of its MSRs in Q4.
- "These two events, should put the company in a better position to report positive earnings in the face mortgage banking headwinds and potentially release the valuation allowance on the deferred tax assets."
- The stock is added to Compass Point's Focus List and the price target is upped to $23 from $21.
- Shares +0.5% premarket
Dec. 23, 2013, 10:23 AM
- Flagstar Bancorp (FBC +3%) continues a nice run after agreeing to sell MSRs with $40.7B in UPB to Two Harbors last week - a move freeing up capital for the bank even as it continues to receive fees through its role as a sub-servicer. Today, Sandler O'Neill initiates coverage with a Buy and $21 price target.
Dec. 19, 2013, 10:30 AM
- Win-win. Both Flagstar Bancorp (FBC +2.1%) and Two Harbors (TWO +2.5%) fade mostly red action in their sectors following Flagstar's sale of MSRs with $40.7B of UPB to Two Harbors last night.
- The sale represents 55% of Flagstar's mortgage loans serviced-for-others portfolio. Importantly, Flagstar will continue to receive income and fees as it will act as sub-servicer to the loans underlying the MSRs - in other words, the bank has unloaded the MSRs and the capital requirements they come with, but will still receive some income from the assets.
Dec. 18, 2013, 5:31 PM
- Two Harbors' (TWO) Matrix Financial unit is acquiring a "bulk pool" of mortgage servicing rights (MSRs) from Flagstar Bancorp (FBC) for $500M. The pool consists of Fannie Mae and Ginnie Mae loans largely originated after 2010, and has an aggregate unpaid principal balance of $40.7B. (PR)
- As part of the deal, Two Harbors and Flagstar have formed a subservicing agreement under which Flagstar "will act as the subservicer of the mortgage loans underlying the MSRs." The agreement will stay in effect as long as the MSRs are outstanding.
Nov. 7, 2013, 1:05 PM
- Soaring higher after settling with Fannie Mae and a big upgrade to Buy from Compass Point, Flagstar Bancorp (FBC +12.8%) has its Buy rating pulled by original bull Mark Palmer due to his $18 price target being hit.
- Palmer called the stock a Buy back in May when the stock was near its low point of the year. Kudos.
Jun. 20, 2013, 12:48 PM
Not participating in the regional bank stock rally (yes rally) today are Fifth Third (FITB -1.3%) and Flagstar (FBC -3.5%). The two are among several tagged by FBR's Paul Miller two months ago as being over-reliant on strong mortgage origination results. BTIG's Mark Palmer takes issue, suggesting investors stop worrying about gain on sale, and instead focus on new management's proven talents at cutting costs.| Jun. 20, 2013, 12:48 PM
Apr. 24, 2013, 11:13 AM
Flagstar Bancorp (FBC -7.6%) tumbles after last night's earnings revealed the company suffered not just from the industry-wide slowdown in the mortgage business, but also from market share losses. Gain on sales from mortgages had been comfortably above $200M during each 2012's quarters, but shrank to just $137.5M in Q1 (presentation slide #10). "We have taken steps to gain market share and improve margins." Book value/share of $16.46, up from $16.12 in Q4, $14.92 a year ago. Conference call is underway. (PR)| Apr. 24, 2013, 11:13 AM