Flagstar Bancorp in Troy, Mich., brought in fewer deposits from branches it recently bought from Wells Fargo.
The $18 billion-asset company disclosed in a regulatory filing Monday that deposit balances in the 52 branches fell by 22% between the deal's announcement and its completion. Flagstar said when it announced
Flagstar, in its filing, said it actually picked up $1.8 billion in deposits and $109 million in loans. The company said when it announced the deal that it could lose another 17% of the deposits after completing the acquisition.
As a result, it will take longer for Flagstar to earn back the dilution to its tangible book value. The company, which originally forecast an earn-back period "of significantly less than five years," said in its filing that it will now take about six years to earn back dilution to its tangible book value.
Scott Siefers at Sandler O’Neill wrote in a Tuesday note to his firm's clients that the pre-closing attrition numbers seemed "pretty high." He said it was likely that many legacy Wells customers had moved away from areas where the branches are located, switched banks or chose to stay with the San Francisco banking giant.
