What happened with FLG today?
No read yet
Uses news and trading volume to explain the day’s move and how it relates to the market.
Stop guessing. Get the call, a three-month target price, the best and worst cases, and a source for every claim.
Flagstar Bank, National Association serves depositors and borrowers through retail branches and private banking offices, with major footholds in the New York/New Jersey area and upper Midwest. It lends to rental-apartment owners, other commercial property owners and mid-sized businesses. Customer deposits provide its main funding source, supplemented by borrowings. Borrowers pay interest on loans, and the bank also earns interest on investment securities; what remains after funding interest costs is its main source of income.
Rental-apartment and other commercial real estate loans make up most of its loan portfolio. Its apartment lending is heavily concentrated in New York City, so repayment depends substantially on property rental income and values. New York rent regulation limits landlords’ ability to raise rents and convert regulated apartments to market rates. The bank is pursuing a plan to reduce its apartment and commercial real estate lending concentration and diversify its loan portfolio.
Its earnings also depend on retaining deposits and on how lending and investment yields compare with funding costs. Deposit and borrowing costs tend to follow short-term interest rates, while loan and securities yields generally follow intermediate-term rates. The bank must maintain regulatory capital levels, which can limit lending growth and other capital-intensive activities.
The risk section is the longest, dullest part of the filing. This keeps only what can really hurt you: where it hits, how hard, when it plays out.
Every company claims an edge. Each one is checked against hard numbers like margins and returns: which hold, and which line gives way first.
Valley National Bancorp competes with Flagstar for commercial property borrowers, business banking customers and deposits in New York, New Jersey and Florida. Watch Valley’s commercial property lending and deposit gathering in those markets for a read on the competition facing Flagstar.
ConnectOne, shown here under Center Bancorp Inc, competes with Flagstar for business borrowers and deposits in metropolitan New York, New Jersey and Florida. Its lending to small and mid-sized businesses and the interest it earns after paying for deposits and borrowings are useful checks on this shared banking market.
Bankunited, Inc. serves the same commercial borrowers and deposit customers as Flagstar in Florida and metropolitan New York. Florida is BankUnited’s largest banking market; watch its lending and banking services for growing small and middle-market businesses there.
Old National Bancorp competes with Flagstar for Midwest businesses that need loans and customers placing deposits.
First Merchants Corp competes with Flagstar for business, consumer and private-banking customers in the upper Midwest, including Michigan. Its commercial loans, mortgages and private-wealth services show where its branch and mobile banking offerings overlap with Flagstar’s.
Cathay General Bancorp and Flagstar both lend to businesses and take deposits in New York and California, with commercial property loans an important overlap. Watch Cathay’s property lending to small and medium-sized businesses and its competition for deposits in those markets.
Fulton Financial Corp competes with Flagstar for New Jersey deposits and business borrowers, and both lend against commercial property in the Northeast. Fulton’s commercial mortgages and construction loans provide a comparison for that part of Flagstar’s lending business.
Byline Bancorp, Inc. competes with Flagstar’s upper-Midwest operations for business customers, commercial property loans and deposits. Watch how Byline’s Chicago-area branches attract low-cost deposits and loans from local small and medium-sized businesses.
Northeast Community Bancorp, Inc. competes with Flagstar for property borrowers and deposits in metropolitan New York, but focuses on construction lending rather than Flagstar’s New York City rental-apartment loans. Its construction-loan interest income is a more relevant comparison than treating the two property loan books as alike.
Bankunited, Inc. earningsBKU
BankUnited’s report will show how small and middle-market business borrowing and deposit competition are changing in Florida, a market where Flagstar also operates.
Compare BankUnited’s small and middle-market business lending with its deposit growth and deposit costs. Rising business loans alongside stable deposits and contained costs would point to demand without sharply worsening funding competition for Flagstar in Florida; weaker lending or higher deposit costs would signal a less favorable market for Flagstar’s loan growth or margin.
Flagstar Bank, National Association earningsThis company
Flagstar earns mainly from the spread between interest on loans and securities and the cost of deposits and borrowings; its report will show whether net interest income can stabilize as it reduces multifamily and commercial real estate loans.
Read net interest income and net interest margin—the gap between yields on earning assets and funding costs—alongside loan and deposit balances. Stable income, a firmer margin and steady deposits would show that pricing and funding are improving without further erosion from shrinking loans; falling income or margin, or continuing deposit and loan declines, would show that fewer earning assets or funding costs still weigh on the core business.
Fed Interest Rate Decision
Flagstar earns much of its income from the gap between what it earns on loans and securities and what it pays depositors and short-term lenders, and Fed rate decisions influence those costs and yields.
Expected4.0%Last release4.0%
If it comes in above expectations
If the Fed sets rates higher than expected, Flagstar may pay more for deposits and short-term borrowing before yields on its loans and securities rise as much, squeezing the income left after funding costs.
If it comes in below expectations
If the Fed sets rates lower than expected, Flagstar may pay less for deposits and short-term borrowing; if asset yields also fall, the net effect on income depends on which adjusts faster.
