Flagstar Financial (FLG) Sheds 5% on Planned Merger with Bank

We recently published These 10 Stocks Have Collapsed. Flagstar Financial Inc. (NYSE:FLG) is one of the worst-performing stocks on Friday.

Flagstar Financial dropped its share prices by 5.48 percent on Friday to finish at $11.39 apiece as investor sentiment was dampened by news that it was merging with its banking subsidiary, but with the latter the surviving entity.

In a statement, Flagstar Financial Inc. (NYSE:FLG) said that its board of directors approved on Thursday the company’s proposed merger with Flagstar Bank, N.A. However, it will continue to trade on the New York Stock Exchange under the same ticker symbol.

Flagstar Financial Inc. (NYSE:FLG) said that the reorganization was aimed at further reducing costs, simplifying organizational structure, streamlining managerial, operational, and administrative functions throughout the bank, eliminating redundant corporate activities and duplicative supervision and regulation.

The reorganization is subject to both regulatory and shareholder approval.

In other news, Flagstar Financial Inc. (NYSE:FLG) said it narrowed its net loss attributable to shareholders for the first half of the year by 72 percent to $186 million from $668 million in the same period last year.

Net interest income after provision for credit losses increased by 44 percent to $686 million from $476 million year-on-year.

Additionally, Flagstar Financial Inc. (NYSE:FLG) announced the distribution of quarterly cash dividends amounting to $0.01 for every common share to stockholders as of September 7. The dividends are payable on September 17.

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