Insider transactions can give investors a more complete view of activity within the world’s publicly-listed companies. No one has more information in relation to a company’s prospects than its executives and directors.
In this report, we are going to highlight some interesting 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. Chartered in 1987 as a federal savings bank, it has assets of nearly $30 billion today and is the sixth-largest bank mortgage originator in the US. The company is listed on the New York Stock Exchange and currently has a market capitalization of $2.05 billion.
Flagstar Bancorp Inc: Insider Buying
Our insider transaction data shows that on May 27, board member Peter Schoels bought 13,500 FBC shares at a price of $37.72 per share. This trade cost the insider $509,190 and increased his holding to 18,579 shares.
Mr. Schoels – who joined Flagstar’s board in 2013 – is an experienced investor. Currently, he is a Managing Partner at MP Global Advisers. Prior to MatlinPatterson, he was a Vice President of Credit Suisse’s Global Distressed Securities Group, and before that, he was a director of Finance and Strategy of Itim Group Plc. Given this experience, he is likely to have a good understanding of the investment potential here.
What stands out about this trade from Mr. Schoels is that it has boosted his holding by 266%. The fact that the insider has upped his stake by such a large percentage suggests that he is very confident the stock is set to move higher.
It’s worth noting that Mr. Schoels is not the only insider that has purchased stock here recently. This year, we have also observed large purchases from the CFO.
Last year, New York Community Bancorp (NYCB) announced that it was planning to acquire Flagstar Bancorp in an all-stock strategic merger. Under the terms of the agreement, which was unanimously approved by the Boards of Directors of both companies, Flagstar shareholders would receive 4.0151 shares of NYCB common stock for each Flagstar share they own.
Originally, this deal was expected to close by the end of 2021. However, it has been delayed due to a lack of regulatory approval and recently, Flagstar announced that the two companies had extended the merger agreement until October 31, 2022, in order to obtain a national bank charter. Under the amended merger agreement, the necessary bank regulatory approvals required to consummate the merger are the approval of the Federal Reserve Board and the Office of the Comptroller of the Currency (OCC).
The large purchase here from Mr. Schoels suggests that he expects the deal to go through. Because if it is approved, we are likely to see NYCB shares – which have drifted lower recently – rebound. This would result in a larger payout for Flagstar shareholders.
Given the size of the purchase from Mr. Schoels, we see this insider transaction activity as a bullish indicator.