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Kap, (replying to you cause I don't know if Dadunchda is still around)

I'm starting to become interested in this company, but not because I think the stock price is cheap. I live not too far from the corp. headquarters and would like to “own a piece of” a local company. Stupid reason to buy a stock? Perhaps, however I'm just window shopping right now. Most of the companies near by seem to be in the metal bending business. Very cyclical, and I'm not really looking to play the cycles.

I don't know enough about banks yet, except I think stable or declining interest rates are favorable, as well as steadily increasing fees. I'll have to do a little more digging to find out how FBC intends to make money.

I notice that it appears that OCF & FCF is strongly negative. It seems that it has quick and current ratios of less than one; and that it is leveraged above the industry average.

So at first glance it appears FBC needs ongoing financing. Since insiders are selling, I am not overly enthusiastic

From what I've read so far, this company is partially focusing on growing future earnings by opening new retail branches at a rapid rate (in comparison to their existing number of outlets).
Stolen directly from the 2000 annual report:
Growth & expansion
Throughout the year 2000, Flagstar Bank opened 17 new offices, eight of which are located in Wal-Mart stores. The new offices increased our total number of banking centers by 49%. These openings, coupled with strong marketing efforts at existing banking centers, resulted in retail deposit balances growing a phenomenal 46% in 2000.
Last year we began an ambitious community banking expansion within Wal-Mart Stores, Inc. We entered a series of long-term leases to open Flagstar InStore Banking Centers as tenants in 26 Michigan and 16 Indiana Wal-Mart stores.

Community Banking
… Flagstar is a growth-oriented bank with a firm commitment to community banking, as our accomplishments in 2000 demonstrate.
We will continue our aggressive growth plan in 2001…
Flagstar differentiates itself from its regional money center bank and international bank competitors in a number of ways... Finally, we generally provide lower fees and higher deposit rates than our large-bank competitors.

I guess the lower fees and higher deposit rates would attract retail deposits. However, on the surface this would seem to make FBC appear “less profitable” when comparing ratio's with some other banks. I also need to learn about the Preferred Shares. Do they have a certain date when they “mature”? And if they do, what happens then? I'm hoping the insiders are selling because they own a relatively large percentage of the company, and not because they think the future looks dim.
Looks like I have a lot of work to do.


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