Mortgage Matters and Buyback Bets
Within the financial newsletter industry, David Fried is a leading specialist in assessing stock buybacks and share repurchases. Here, the editor of The Buyback Letter look at two new additions to the model portfolio, both in the mortgage and financial services sector.
Kearny Financial Corp. (KRNY) is the holding company for Kearny Bank, a bank in N.J. that is considered a solid mortgage originator with experienced management.
The bank operates 42 branches located in northern and central New Jersey, and Brooklyn and Staten Island, New York, with some $4.8 billion in total assets.
Q3 profit was $4.1 million, with net income of 5 cents per share. The company posted revenue of $37.3 million in the period, with adjusted revenue of $28.5 million.
In May management authorized a repurchase plan to acquire up to 10% of the company’s currently outstanding common stock. Management has reduced shares outstanding by 7.622% in the last 12 months.
Bond and mortgage insurance provider MBIA Inc. (MBI) is a holding company headquartered in Purchase, New York.
First quarter earnings were a $0.55 per share loss for the quarter, narrower than the $0.58 per share loss a year ago.
But analysts noted the performance was $0.07 in profit, which was a penny better than Wall Street had been expecting to see, so they’re calling it an "earnings beat" even though MBIA lost money.
MBIA said its book value increased from $23.87 per share to $24.73 over the past three months, and adjusted book value increased from $31.88 to $33.69 per share.
MBIA booked $77 million in revenue in the quarter -- more than twice that of a year ago; this amounts to nearly a third of the yearly $249 revenue goal achieved in only a quarter of the year.
MBIA's national business has continued to expand, with a presence in more than half of the states in the U.S. (seven were added in the past quarter).
With a stronger capital position and smart risk management in terms of adding new underwriting risk, COO Bill Fallon says MBIA is coming back in a disciplined manner.
Management has reduced shares outstanding by 5.72% in the last 12 months.