Mamdani Loses Bid to Delay Rent-Control Auction. Flagstar Bank Stock Jumps. — Barrons.com

Dow Jones Newswires

Pinnacle Financial Partners, Inc. Depositary shares of Pinnacle Financial Partners, Inc., each representing a 1/40th Interest in a share of its 6.75% Fixed-Rate Non-Cumulative Perpetual Preferred Stock, Series B

0.00%

New York Community Bancorp

+0.29%

By Janet H. Cho

Flagstar Bank stock jumped on Thursday after a U.S. Bankruptcy Court denied New York City Mayor Zohran Mamdani's request to postpone the auction of about 5,500 rent-regulated apartments owned by bankrupt landlord Pinnacle Group.

The regional bank's shares were up 6.4% in midafternoon trading after the decision, which cleared the way for the auction to proceed this afternoon. The $13.35 price is up 44.2% from 52 weeks ago, according to Dow Jones Market Data.

For Flagstar, it's a chance to get past the long-running saga. Pinnacle filed for bankruptcy last year after Flagstar moved to foreclose on the portfolio. The bank has said it expects the process of auctioning the $563 million rent-regulated portfolio to conclude in early 2026, with a resolution to issues related to the debt during the first half of 2026.

Bernard von Gizycki, research analyst for Deutsche Bank, wrote in a Thursday note that while there might be some additional write down needed based on the current offer, Flagstar management "has already taken marks and reserves against the loan."

The analyst added that "if the loan issues can be resolved, it would be a credit positive" for Flagstar.

Rebel Cole, a chaired professor of finance at Florida Atlantic University in Boca Raton, Florida, told Barron's that although the city has legal standing to weigh in, it's a relatively small player in the proceedings. Flagstar has the right to recover on its debt, and the bankruptcy court is focused on finding a speedy resolution, he said.

The new mayor swept into office last week promising to tackle affordability issues, particularly related to housing. The city sought a 30-day pause on the auction to address concerns about "distressed conditions" and other problems raised by tenants, tenant organizations, public officials, and others.

The city said in court filings that a delay would give them more time to evaluate an offer by Summit Properties USA of up to $451 million for the portfolio or consider any possible alternatives.

Leila Bozorg, the city's deputy mayor for housing and planning, said in a statement after the judge's decision: "This is not the end of our fight to protect Pinnacle tenants and working New Yorkers across the city. We are assessing our options as these proceedings move forward, and we will continue to fight to ensure any owner of this portfolio makes necessary repairs to bring the buildings up to code and respects the rent stabilization regulations."

New York City was involved because Pinnacle owes the city about $12.7 million, according to preliminary city Housing Department estimates, stemming from more than 5,000 building-code violations and roughly 14,000 unresolved tenant complaints, The Wall Street Journal reported.

Mamdani met with tenants at one of the Pinnacle properties the afternoon after he was sworn in as mayor, and promised that his administration would work to protect tenants' rights to "safe and habitable homes" and the city's interests in the pending bankruptcy cases. "The city is owed money that Pinnacle never paid," he said.

The problem is, even if Summit succeeded in its bid, it might not have enough resources to rehabilitate the dwellings or maintain a profitable business, the city argued. Flagstar and Summit haven't demonstrated how the properties can support the sale price and maintenance needs given the lower rents, it said.

Delaying the auction wouldn't necessarily have resulted in another buyer emerging, Florida Atlantic's Cole told Barron's.

"I'm sure Pinnacle has looked high and low [for other buyers]," he said, but landlords are limited in how much they can raise rent despite their rising property taxes and other costs, and many are losing money renting their properties. "It's crazy to think that anyone would want to invest in multifamily properties in New York City under the current environment."

Write to Janet H. Cho at janet.cho@dowjones.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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Q3 Earnings Roundup: WaFd Bank (NASDAQ:WAFD) And The Rest Of The Thrifts & Mortgage Finance Segment

Stock Story

WaFd

+0.99%

WaFd, Inc. Depositary Shares

-0.42%

Arbor Realty Trust, Inc.

+2.23%

Ellington Financial Inc. Common Stock

+1.98%

New York Community Bancorp

+0.29%

Let’s dig into the relative performance of WaFd Bank and its peers as we unravel the now-completed Q3 thrifts & mortgage finance earnings season.

Thrifts & Mortgage Finance institutions operate by accepting deposits and extending loans primarily for residential mortgages, earning revenue through interest rate spreads (difference between lending rates and borrowing costs) and origination fees. The industry benefits from demographic tailwinds as millennials enter prime homebuying age, technological advancements streamlining the loan approval process, and potential interest rate stabilization improving affordability. However, significant headwinds include net interest margin compression during rate volatility, increased competition from fintech disruptors offering digital-first experiences, mounting regulatory compliance costs, and potential housing market corrections that could impact loan portfolios and default rates.

The 15 thrifts & mortgage finance stocks we track reported a mixed Q3. As a group, revenues beat analysts’ consensus estimates by 4.7% while next quarter’s revenue guidance was 2.4% below.

In light of this news, share prices of the companies have held steady as they are up 2.8% on average since the latest earnings results.

Weakest Q3: WaFd Bank

Founded in 1917 and rebranded from Washington Federal in 2023, WaFd is a bank holding company that provides lending, deposit services, and insurance through its Washington Federal Bank subsidiary across eight western states.

WaFd Bank reported revenues of $187.2 million, flat year on year. This print fell short of analysts’ expectations by 1.7%. Overall, it was a disappointing quarter for the company with a significant miss of analysts’ net interest income and EPS estimates.

Interestingly, the stock is up 18.6% since reporting and currently trades at $33.02.

Read our full report on WaFd Bank here, it’s free for active Edge members.

Best Q3: Ellington Financial

Operating under the guidance of Ellington Management Group, a respected name in structured credit markets, Ellington Financial acquires and manages a diverse portfolio of mortgage-related, consumer-related, and other financial assets to generate returns for investors.

Ellington Financial reported revenues of $82.76 million, up 23.6% year on year, outperforming analysts’ expectations by 4.9%. The business had an exceptional quarter with a beat of analysts’ EPS estimates and a solid beat of analysts’ revenue estimates.

However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $13.74.

Flagstar Financial

Tracing its roots back to 1859 and rebranded from New York Community Bancorp in 2024, Flagstar Financial is a bank holding company that offers commercial and consumer banking services, with specialties in multi-family lending, mortgage originations, and warehouse lending.

Flagstar Financial reported revenues of $497 million, down 23.1% year on year, falling short of analysts’ expectations by 3.7%. It was a softer quarter as it posted a significant miss of analysts’ revenue estimates and a slight miss of analysts’ net interest income estimates.

Interestingly, the stock is up 11.9% since the results and currently trades at $12.93.

Read our full analysis of Flagstar Financial’s results here.

Arbor Realty Trust

With roots dating back to 2003 and a focus on the stability of multifamily housing, Arbor Realty Trust is a specialized lender that provides financing solutions for multifamily and commercial real estate while also originating and servicing government-backed mortgage loans.

Arbor Realty Trust reported revenues of $112.4 million, down 28.2% year on year. This print lagged analysts' expectations by 25.8%. Taking a step back, it was a mixed quarter as it also produced a beat of analysts’ EPS estimates but a significant miss of analysts’ revenue estimates.

Arbor Realty Trust had the weakest performance against analyst estimates and slowest revenue growth among its peers. The stock is down 33.3% since reporting and currently trades at $7.70.

Read our full, actionable report on Arbor Realty Trust here, it’s free for active Edge members.

Annaly Capital Management

Operating as a real estate investment trust since 1996 with a focus on generating income from interest rate spreads, Annaly Capital Management is a diversified capital manager that invests in agency mortgage-backed securities, residential mortgage loans, and mortgage servicing rights.

Annaly Capital Management reported revenues of $885.6 million, up 637% year on year. This result beat analysts’ expectations by 7.2%. More broadly, it was a mixed quarter as it also recorded a solid beat of analysts’ revenue estimates but a significant miss of analysts’ net interest income estimates.

Annaly Capital Management scored the fastest revenue growth among its peers. The stock is up 7.8% since reporting and currently trades at $22.97.

Read our full, actionable report on Annaly Capital Management here, it’s free for active Edge members.

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UiPath stock rises after inclusion in S&P MidCap 400 index

Investing.com

Investing.com -- UiPath Inc. (NYSE:PATH) stock gained 4.2% in after-hours trading Tuesday following the announcement that the company will be added to the S&P MidCap 400 index.

The automation software provider will replace Synovus Financial Corp. (NYSE:SNV) in the index, with the change set to take effect prior to the opening of trading on Friday, January 2. The replacement comes as S&P MidCap 400 constituent Pinnacle Financial Partners Inc. (NASDAQ:PNFP) is in the process of acquiring Synovus Financial, with the deal expected to close soon pending final conditions.

Index inclusion typically benefits companies by increasing their visibility to investors and potentially boosting demand for their shares, as funds that track the S&P MidCap 400 will need to purchase UiPath stock.

In the same announcement, S&P Dow Jones Indices also revealed that Versant Media Group Inc. (NASDAQ:VSNT) will replace Brandywine Realty Trust (NYSE:BDN) in the S&P SmallCap 600, effective before trading begins on Tuesday, January 6. This change follows Comcast Corp.’s (NASDAQ:CMCSA) planned spin-off of Versant Media Group, expected to complete on January 5.

UiPath, which specializes in robotic process automation software, has been expanding its presence in the enterprise automation market. The addition to the midcap index represents a milestone for the company as it continues to grow its market position.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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Pinnacle Financial Is Maintained at Overweight by Barclays

Dow Jones Newswires

Pinnacle Financial Partners

0.00%

(18:17 GMT) Pinnacle Financial Price Target Raised to $135.00/Share From $125.00 by Barclays

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Pinnacle Financial Is Maintained at Overweight by JP Morgan

Dow Jones Newswires

Pinnacle Financial Partners

0.00%

(16:10 GMT) Pinnacle Financial Price Target Raised to $125.00/Share From $110.00 by JP Morgan

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Pinnacle Financial Initiated at Buy by B of A Securities

Dow Jones Newswires

Pinnacle Financial Partners

0.00%

(13:39 GMT) Pinnacle Financial Price Target Announced at $113.00/Share by B of A Securities

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QCR Holdings, Pinnacle Financial Partners, CVB Financial, Bank OZK, and First Citizens BancShares Shares Skyrocket, What You Need To Know

Stock Story

CVB Financial

+1.92%

First Citizens BancShares

+3.43%

First Citizens BancShares, Inc. 5.625% Non-Cumulative Perpetual Preferred Stock, Series C

-0.45%

First Citizens BancShares, Inc. Depositary Shares Each Representing a 1/40th Interest in a Share of 5.375% Non-Cumulative Perpetual Preferred Stock, Series A

+0.38%

Bank OZK

+1.87%

What Happened?

A number of stocks jumped in the afternoon session after comments from a key Federal Reserve official boosted hopes for an interest rate cut. New York Federal Reserve President John Williams stated he sees “room for a further adjustment” in the near term, sparking a significant market rally. Following his remarks, the probability of the central bank cutting rates at its December meeting jumped from 39% to over 73%, according to the CME FedWatch tool. This positive sentiment provided relief to markets amid concerns over high valuations, particularly in AI-related stocks.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.

Among others, the following stocks were impacted:

Regional Banks company QCR Holdings jumped 3.6%. Is now the time to buy QCR Holdings? Access our full analysis report here, it’s free for active Edge members.
Regional Banks company Pinnacle Financial Partners jumped 3.7%. Is now the time to buy Pinnacle Financial Partners? Access our full analysis report here, it’s free for active Edge members.
Regional Banks company CVB Financial jumped 3.7%. Is now the time to buy CVB Financial? Access our full analysis report here, it’s free for active Edge members.
Regional Banks company Bank OZK jumped 3.7%. Is now the time to buy Bank OZK? Access our full analysis report here, it’s free for active Edge members.
Regional Banks company First Citizens BancShares jumped 3.5%. Is now the time to buy First Citizens BancShares? Access our full analysis report here, it’s free for active Edge members.

Zooming In On Bank OZK (OZK)

Bank OZK’s shares are not very volatile and have only had 7 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was about 1 month ago when the stock dropped 5.4% on the news that disclosures from two lenders raised concerns about deteriorating loan quality across the industry. The drop was triggered by specific incidents that have spooked investors. Zions Bancorp announced a $50 million charge-off—a debt the bank doesn't expect to collect—on a single loan. Separately, Western Alliance Bancorp revealed it was dealing with a borrower who had failed to provide proper collateral. These events are compounding existing anxieties about the regional banking sector, which is already under pressure from elevated interest rates and declining commercial real estate values. The news heightened investor concerns that more cracks could appear in borrowers' creditworthiness, potentially leading to increased loan losses and reduced profitability for other banks in the sector.

Bank OZK is up 1.8% since the beginning of the year, but at $44.61 per share, it is still trading 16.1% below its 52-week high of $53.14 from August 2025. Investors who bought $1,000 worth of Bank OZK’s shares 5 years ago would now be looking at an investment worth $1,582.

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