In a report released yesterday, Steve Moss from B.Riley FBR maintained a Buy rating on Flagstar Bancorp (FBC), with a price target of $38. The company’s shares closed on Friday at $34.74.
Moss observed:
“Flagstar Bancorp (FBC) disclosed in its Form 10-Q that a reverse mortgage borrower with $75M outstanding had unexpectedly ceased operations. FBC expects to be fully repaid on a $6M warehouse line to the client, however, a $69M C&I line of credit is collateralized by Ginnie Mae interest-only securities worth approximately $35M-$40M. This results in a potential shortfall of $29M-$34M, or a loss of $0.40-$0.47 (12-14% of consensus 2019 EPS). The exposure and potential loss are significant and we hope to have additional color after speaking with management. While the exposure is disappointing, we continue to like management’s efforts to improve its commercial loan and deposit franchise and maintain our Buy rating.”
According to TipRanks.com, Moss is a 2-star analyst with an average return of 0.7% and a 49.4% success rate. Moss covers the Financial sector, focusing on stocks such as Seacoast Banking Corporation Of Florida, Bridgewater Bancshares Inc, and Meta Financial Group.
The word on The Street in general, suggests a Moderate Buy analyst consensus rating for Flagstar Bancorp with a $37.50 average price target.
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The company has a one-year high of $38 and a one-year low of $25.30. Currently, Flagstar Bancorp has an average volume of 306.8K.
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Flagstar Bancorp, Inc. is a bank holding company, which engages in the provision of financial services. It operates through the following segments: Mortgage Originations, Mortgage Servicing, Community Banking, and Other. The Mortgage Originations segment acquires and markets residential mortgage loans.
