Flagstar Bancorp — which continues to rank among the top 10 mortgage wholesalers in the U.S. — declined to confirm or deny that it is considering a $600 million offering of new equity.
A new report from FBR Capital Markets noted that, "no one expected an offering of this size."
The possibility of an additional equity offering by the Michigan-based thrift was reported by Bloomberg, which also said the company might sell $1 billion of loans.
Over the past two years Flagstar has been an occasional seller of mortgage servicing rights, according to reporting done by National Mortgage News. (It has declined to discuss servicing sales as well.)
When the possibility of an additional capital raise first came to light earlier this week, the news sent Flagstar's share price tumbling to a new 52-week low of $1.78. (Its 52-week high is $13.80.) Its stock price has since rebounded to just under $2.
Although the lender/servicer would not specifically address a new equity offering, it reaffirmed its outlook for this year on what it considers key drivers of its business: a target asset size between $13 billion and $14 billion; residential mortgage loan originations between $22 billion and $26 billion; a gain-on-loan sale margin between 100 and 115 basis points; net interest margin at the bank level of between 1.40% and 1.75%; and provision expenses between $200 million and $250 million.
Twice this year, Flagstar has raised additional capital. An affiliate of MatlinPatterson, its majority shareholder, purchased $300 million worth of common stock in January.
A March public offering raised $276 million. MatlinPatterson is a private equity firm based in New York.
