Flagstar's rocky 2024 leads to $3.6 bln loss in market capitalization

Dennys

31/12/2024 13:55

** Shares of Flagstar Financial  FLG.N , formerly known as
New York Community Bancorp, fell over 70% YTD 
    ** Bank poised to end one of the most tumultuous periods in
its 165-year history, having lost nearly $3.6 bln in market
value
    ** The frenzied sell-off began with FLG reporting a surprise
quarterly loss due to provisions tied to commercial real estate
loans and slashing of its dividend in January
    ** More than a month later, the bank disclosed "material
weakness" in some internal controls and replaced its management
team
    ** FLG's troubles sparked wider concerns about regional
banks, threatening to upset the recovery of an industry that had
been battered by another crisis in 2023
    ** A $1 bln investment from investors, including former U.S.
Treasury Secretary Steven Mnuchin's Liberty Strategic Capital,
helped calm FLG investors
    ** The bank also sold some non-core assets to boost capital,
but delayed its targeted timeline for a return to profitability
in October, highlighting the challenges of its turnaround
    ** Stock is the worst performer on the S&P Composite 1500
banks index  .SPCOMBNKS , which has gained ~17% YTD

 (Reporting by Niket Nishant in Bengaluru)
 ((Niket.Nishant@thomsonreuters.com))