Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Northeast regional bank Flagstar Bancorp (NYSE:FBC) dipped as much as 14% following the release of its fourth-quarter and full-year earnings results.

So what: For the quarter, Flagstar continued the progress of repairing its loan portfolio and reported a profit of $1.12, reversing a large year-ago loss. More importantly, Flagstar improved its tier 1 capital ratio by 110 basis points to 10.4% and highlighted the pending sale of its Northeast-based commercial loan portfolio, which is expected to be capital accretive. With the lone expectation only calling for a profit of $0.82, Flagstar appears to have handily "surpassed" the consensus. However, it's worth noting that net interest margin -- the difference between what it pays to borrow versus the rate at which it turns around and lends to consumers -- fell 16 basis points to 2.21% over the previous year. Not surprisingly, return on average assets fell 32 basis points to 1.78% from its sequential third quarter.

Now what: I didn't like Flagstar when I red-thumbed it more than a year ago, and despite being brutally wrong on that call, I still don't like it. Flagstar has done what it can to remove bad loans from its commercial loan portfolio, but it still has a long way to go. With a heavy reliance on consumer home loans, it wouldn't take much of a slowdown in the U.S. economy or the housing market to disrupt this still-fragile regional bank. I've been keeping my distance from Flagstar and will continue to do so.

Craving more input? Start by adding Flagstar Bancorp to your free and personalized Watchlist so you can keep up on the latest news with the company. 

Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

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