A release on Friday evening is never good news. As you will see, Flagstar revises 2012 and wipes out income to provision for AGO and MBIA lawsuits... Ugh, this is a far cry from a 'vigorous appeal'. So, Monday is not going to be pretty... The only positive, is that once the dust settles, these matters will be behind us and it will not be headwinds against 2013 performance...
Flagstar Issues Revised 2012 Results Based on Analysis of Assured Decision
Revised Tier 1 capital ratio of 9.26 percent at December 31, 2012
TROY, Mich., Feb. 8, 2013 /PRNewswire/ -- Flagstar Bancorp, Inc. (NYSE: FBC) ("Flagstar"), the holding company for Flagstar Bank, FSB (the "Bank"), announced today that it has completed an analysis of the financial impact arising from the decision of the United States District Court for the Southern District of New York (the "Court") in the previously disclosed lawsuit filed by Assured Guaranty Municipal Corp., formerly known as Financial Security Assurance Inc. ("Assured"). This decision was described in a press release issued by Flagstar on February 5, 2013. Flagstar disagrees with the Court's decision and intends to contest the outcome on appeal.
Following the Court's decision in the Assured case, Flagstar increased, effective as of December 31, 2012, its reserve for pending and threatened litigation, which resulted in a decrease in net income of $161.0 million, or $2.87 per share (diluted), for the fourth quarter 2012. The total amount reserved for pending and threatened litigation, including amounts paid in anticipation of future settlements, was increased to approximately $244.6 million at December 31, 2012. Included in this reserve are amounts for the Court's decision regarding Assured and for the lawsuit that the MBIA Insurance Corporation filed against the Bank on January 11, 2013, along with other pending litigation.
Well, I used to have nice gains in FBC, but nevertheless,
All the very best,
We did this same exercise this time last year when the feds decided we had to pay up. What was funny about that exercise was the stock on Monday DID NOT GO DOWN. It just layed there and quivered and then started it slow run up to 20 by end of last year.
This is only going to turn into another VALUABLE buying opps. If you flinch and don't act you will loose on thousands of $$$$$'s
By Tuesday this will be a forgotten headache and we will start out run on up to 25.00
The only thing that can derail us would be another (AGO OR MBIA) announcement.
It's all factored in and BV is 16.12. We may run down to 13.00 but we won't stay long. IF we hit that mark you BETTER BE BUYING.
Someone once told me... BUY LOW SELL HIGH. You may get that opp. on Monday and Tuesday. It would be a massive mistake not to partake.
Watch the whining and selling and take advantage of it could be the last big drop for FBC for the foreseeable future. With a good Q1 2013 we will be back to 19.00.
I have been here since 4.30 post split this one has a LOOOOOOOOOOOOOOONG WAY TO GO UP. Barring anymore surprises and time is running out on those.
YOU BETTER BUY NEXT WEEK ON WEAKNESS!!!!!!!!!!!!!!!!!!!!!!!!!!! IMHO
This isn't the first time that FBC has done this type of thing. Management pulled this trick on 2/27/12, after the company disclosed on 2/24/12 the DOJ mess and settlement. The stock hovered between $.69 and $.75 for that week. Within a month, the stock was close to $1.
Will the market appreciate the proactive approach that management is taking? That's the question. I suspect that it will. Sure, you're always going to have panic sellers immediately after an announcement like this. But many of us on this board are looking at the stock with a long term perspective.
To a large extent, the market should view this as a relief. FBC addressed its weaknesses and accounted for them. That's what responsible management is supposed to do.
If I were to guess, I'd say that a week from today, we'll look back and say that this was all baked into the current pps.
Thanks again for your comments. I tend to agree with you and hopefully the market will eventually likewise do so! One thing that I really liked about CRBC (before their shotgun wedding with FMER), was that they 'bit the bullet' and cleaned up messes rather than let them continue to stink up the place. The new CEO seems to following suit -- terrific. FBC remains my largest holding and probably continue in that position throughout 2013.