Skip to main content

Market Overview

UPDATE: Compass Point Upgrades Flagstar Bancorp Following Disclosure of Fannie Mae Settlement

Share:

In a report published Thursday, Compass Point analyst Kevin Barker upgraded the rating on Flagstar Bancorp (NYSE: FBC) from Neutral to Buy, and raised the price target from $15.50 to $20.00.

In the report, Compass Point noted, “We are upgrading shares of Flagstar Bank to Buy from Neutral and increasing our price target to $20 from $15.50 following the disclosure the bank entered into an agreement with Fannie Mae to resolve all representations and warranties for loans originated between 2000 and 2008. The total resolution is $121.5M, but after some adjustments, FBC will pay $93.5M. FBC is fully reserved for the settlement and we do not expect the company to incur additional provisions in any negotiations with Freddie Mac concerning the same origination vintages. We have remained on the sidelines with FBC given the overhang of the Fannie settlement and the potential hit to book value it may have caused. FBC screened as having the most exposure to GSE rep/warrants liabilities of any bank still dealing with GSE rep/warrants. With the announcement of this settlement, we estimate FBC will incur (including remaining liabilities with Freddie Mac) total losses on GSE rep/warrants equal to 0.96% of UPB sold between 2005 and 2009. This compares to the industry average loss rate of 1.29%. The settlement was the biggest hurdle the company needed to overcome before it could effectively restructure its balance sheet.”

Flagstar Bancorp closed on Wednesday at $16.00.

Latest Ratings for FBC

DateFirmActionFromTo
May 2021Raymond JamesDowngradesStrong BuyMarket Perform
Apr 2021WedbushDowngradesOutperformNeutral
Jan 2021Raymond JamesMaintainsStrong Buy

View More Analyst Ratings for FBC
View the Latest Analyst Ratings

 

Related Articles (FBC)

View Comments and Join the Discussion!

Posted-In: Compass Point Kevin BarkerAnalyst Color Upgrades Analyst Ratings

Latest Ratings

StockFirmActionPT
CMRXHC Wainwright & Co.Maintains18.0
PZZAStephens & Co.Maintains115.0
SIMONeedhamMaintains100.0
STAACanaccord GenuityMaintains150.0
DGIICanaccord GenuityMaintains25.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
SPAC
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com