Insider buying can provide investors with crucial investment insights. Insiders sell company stock for many reasons. But they only buy stock for one reason – they expect it to go up.
Here, we are going to flag some bullish insider buying at Flagstar Bancorp Inc (FBC:US). Flagstar is a financial services holding company which through its main subsidiary, Flagstar Bank, offers banking services to individuals and businesses. The company is listed on the New York Stock Exchange and currently has a market capitalization of $2.4 billion.
Flagstar Bancorp Inc: Insider Buying
Our records show that on 26 January, Flagstar’s Executive Vice President of Operations Karen Buck purchased 2,000 FBC shares. This purchase cost the insider approximately $95,000. This insider transaction comes after two other insiders, including the CFO, purchased stock in November last year.
This insider purchase stands out because it has increased the size of the insider’s holding significantly, from 1,000 shares to 3,000 shares. This suggests Buck sees considerable value in the stock at present.
It’s also worth pointing out that while Buck only recently joined Flagstar Bank, she has over 30 years of experience in the financial services industry. Previously, she was Executive Vice President of Commercial, Retail, and Payment Operations at TD Bank in New Jersey. Buck was also previously recognized by The American Banker as a member of The Most Powerful Teams in Banking. Given her industry experience, she is likely to have a good read on Flagstar’s future prospects.
Strong Q4 Results
Flagstar Bancorp posted a strong set of quarterly results on 21 January.
For the fourth quarter, net income was $154 million, or $2.83 per diluted share versus fourth quarter 2019 net income of $58 million, or $1.00 per diluted share. Net interest income grew by $9 million to $189 million with lower deposit costs and higher warehouse balances, while tangible book value per share reached $38.80 at year-end, representing a 36% increase for 2020. The company advised that asset quality remains solid with low levels of non-performing loans and an industry-leading coverage ratio.
"It was yet another outstanding quarter, capping off an exceptionally successful year for Flagstar," said Alessandro DiNello, President and CEO of Flagstar Bancorp. “With the momentum of a strong year behind us and the power of a diversified franchise carrying us forward, we believe we are well positioned for continued success in 2021," he added.
Given this strong recent update, and confidence about the future, we see the insider buying here as a bullish signal.