Michigan | 1-16577 | 38-3150651 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
5151 Corporate Drive, Troy, Michigan | 48098 | |
(Address of principal executive offices) | (Zip Code) |
Exhibit No. | Exhibit Description | |
99.1
|
Press release of Flagstar Bancorp, Inc. dated April 26, 2011 | |
99.2
|
Flagstar Bancorp, Inc. Conference Call Presentation Slides First Quarter 2011 Financial Results |
FLAGSTAR BANCORP, INC. |
||||
Dated: April 27, 2011 | By: | /s/ Paul D. Borja | ||
Paul D. Borja | ||||
Executive Vice-President and CFO | ||||
NEWS RELEASE For more information, contact: Paul D. Borja Executive Vice President / CFO Bradley T. Howes Investor Relations Officer (248) 312-2000 FOR IMMEDIATE RELEASE |
| Sold $80.3 million of non-performing residential first mortgage loans in the available-for-sale category at a sale price which approximated carrying value. | ||
| Provision expense decreased by 87.4 percent from prior quarter, to $28.3 million (a 42.1 percent decrease, excluding $176.5 million related to the fourth quarter 2010 non-performing loan sale). | ||
| Asset resolution expense related to non-performing residential and commercial loans decreased by 15.7 percent from the prior quarter, to $25.3 million. | ||
| Core deposits increased by 10.0 percent from prior quarter, to $2.8 billion. | ||
| Net servicing revenue increased 39.1 percent from the prior quarter, to $39.3 million. | ||
| Launched the commercial banking business line, adding experienced and proven executives to solidify the management team. |
1
2
| First quarter 2011 net interest income decreased to $39.8 million, as compared to $54.4 million during the fourth quarter 2010, but increased compared to $37.7 million during the first quarter 2010. The $14.6 million decrease from fourth quarter 2010 reflects the decline in the average balances of interest-earning assets, including loans held-for-investment, loans available-for-sale and investment securities available-for-sale, offset by an increase in interest-earning deposits. | ||
| Excluding the $176.5 million fourth quarter 2010 provision expense related to the non-performing loan sale, the first quarter 2011 loan loss provision expense of $28.3 million decreased $20.6 million from the fourth quarter 2010. The total provision expense for the fourth quarter 2010 was $225.4 million, which included the $176.5 million related to the non-performing sale. The first quarter 2010 provision expense was $63.6 million. |
| Net servicing revenue, which is the combination of net loan administration income and the related hedging effect of gain (loss) on trading securities, increased 39.1 percent to $39.3 million during first quarter 2011 as compared to $28.3 million during fourth quarter 2010. This improved performance is primarily attributable to a 7.0 percent larger portfolio of loans serviced for others, slower than expected levels of prepayments, and effective hedge performance. Hedge performance was driven in part by the steepness of the yield curve and the resulting high level of carry on hedges as well as reduced market volatility. | ||
| Gain on loan sales decreased $26.7 million, or 34.8 percent, to $50.2 million, compared to $76.9 million for the fourth quarter 2010, reflecting the decrease in margin for the first quarter 2011 to 0.86 percent from 0.89 percent for the fourth quarter 2010, and the 38.2 percent decline in interest rate locks on mortgage loans to $5.5 billion in the first quarter 2011 from $8.9 billion in the fourth quarter 2010. Residential mortgage loan sales were $5.8 billion for the first quarter of 2011, a 32.6 percent decline, as compared to $8.6 billion in the fourth quarter 2010. | ||
| Loan fees, which arise from the origination of residential mortgage loans, decreased 43.6 percent to $16.1 million for the first quarter 2011, as compared to $28.6 million for the fourth quarter 2010. The decrease in loan fees reflected the 46.7 percent decrease in originations to $4.9 billion during the first quarter 2011 as compared to $9.2 billion during the fourth quarter 2010. |
3
| Other fees and charges were a net expense of $(13.3) million, as compared to a net expense of $(4.7) million for the fourth quarter 2010, principally as the result of a $10.1 million increase in secondary market reserve provisions accrued for probable incurred losses on loans repurchased from the secondary market. |
| Compensation, benefits and commissions declined 4.2 percent to $63.3 million for the first quarter 2011, primarily reflecting a decrease in commissions. The $5.1 million, or 40.5 percent, decrease in commission expense was primarily due to the 46.7 percent decrease in loan originations for the first quarter 2011, as compared to the fourth quarter 2010. | ||
| Asset resolution expenses, which are expenses associated with foreclosed property and repurchased assets, decreased 15.7 percent to $25.3 million, as compared to $30.0 million in the fourth quarter of 2010. The decline was principally due to improving trends in the commercial real estate portfolio. | ||
| Prior warrant expense of $8.7 million was reversed in the first quarter 2011. The decrease was primarily due to the quarterly valuation of the outstanding warrant liability. |
4
5
For the Three Months Ended | ||||||||||||
March 31, | December 31, | March 31, | ||||||||||
2011 | 2010 | 2010 | ||||||||||
Summary of Consolidated |
||||||||||||
Statements of Operations |
||||||||||||
Interest income |
$ | 98,405 | $ | 118,292 | $ | 126,206 | ||||||
Interest expense |
(58,607 | ) | (63,876 | ) | (88,523 | ) | ||||||
Net interest income |
39,798 | 54,416 | 37,683 | |||||||||
Provision for loan losses |
(28,309 | ) | (225,375 | ) | (63,559 | ) | ||||||
Net interest income (loss) after provision |
11,489 | (170,959 | ) | (25,876 | ) | |||||||
Non-interest income |
||||||||||||
Deposit fees and charges |
7,500 | 7,385 | 8,413 | |||||||||
Loan fees and charges |
16,138 | 28,605 | 16,329 | |||||||||
Loan administration |
39,336 | 28,269 | 26,150 | |||||||||
Net loss on trading securities |
(74 | ) | (173 | ) | (3,312 | ) | ||||||
Net (loss) gain on residuals and transferors
interest |
(2,381 | ) | 3,812 | (2,682 | ) | |||||||
Net gain on loan sales |
50,184 | 76,930 | 52,566 | |||||||||
Net loss on sales of mortgage servicing rights |
(112 | ) | (2,303 | ) | (2,213 | ) | ||||||
Net gain on sale securities available for sale |
| | 2,166 | |||||||||
Net loss on sale of assets |
(1,036 | ) | | | ||||||||
Impairment securities available for sale |
(1,313 | ) | (3,286 | ) | ||||||||
Other fees |
(13,289 | ) | (4,749 | ) | (22,133 | ) | ||||||
Total non-interest income |
96,266 | 136,463 | 71,998 | |||||||||
Non-interest expenses |
||||||||||||
Compensation, benefits and commissions |
(63,308 | ) | (66,011 | ) | (61,022 | ) | ||||||
Occupancy and equipment |
(16,618 | ) | (17,614 | ) | (16,011 | ) | ||||||
Asset resolution |
(25,335 | ) | (30,037 | ) | (16,573 | ) | ||||||
Federal insurance premiums |
(8,725 | ) | (8,179 | ) | (10,047 | ) | ||||||
Warrant income (expense) |
827 | (7,853 | ) | (1,227 | ) | |||||||
Other taxes |
(866 | ) | 481 | (855 | ) | |||||||
General and administrative |
(20,430 | ) | (21,567 | ) | (17,607 | ) | ||||||
Total non-interest expense |
(134,455 | ) | (150,780 | ) | (123,342 | ) | ||||||
Loss before federal income taxes and preferred stock
dividends |
(26,700 | ) | (185,276 | ) | (77,220 | ) | ||||||
Provision for federal income taxes |
264 | 2,104 | | |||||||||
Net loss |
(26,964 | ) | (187,380 | ) | (77,220 | ) | ||||||
Preferred stock dividends |
(4,710 | ) | (4,690 | ) | (4,680 | ) | ||||||
Net loss available to common stockholders |
$ | (31,674 | ) | $ | (192,070 | ) | $ | (81,900 | ) | |||
Basic loss per share (1) |
$ | (0.06 | ) | $ | (0.74 | ) | $ | (1.05 | ) | |||
Diluted loss per share (1) |
$ | (0.06 | ) | $ | (0.74 | ) | $ | (1.05 | ) | |||
1) | Restated for a 1-for-10 reverse stock split announced May 27, 2010 and completed on May 28, 2010. |
For the Three Months Ended | ||||||||||||
March 31, | December 31, | March 31, | ||||||||||
2011 | 2010 | 2010 | ||||||||||
Summary of Consolidated |
||||||||||||
Statements of Operations |
||||||||||||
Net interest spread Consolidated |
1.78 | % | 2.06 | % | 1.40 | % | ||||||
Net interest margin Consolidated |
1.61 | % | 2.02 | % | 1.29 | % | ||||||
Net interest spread Bank only |
1.79 | % | 2.07 | % | 1.45 | % | ||||||
Net interest margin Bank only |
1.68 | % | 2.08 | % | 1.42 | % | ||||||
Return on average assets |
(0.96 | )% | (5.47 | )% | (2.38 | )% | ||||||
Return on average equity |
(10.17 | )% | (59.38 | )% | (41.02 | )% | ||||||
Efficiency ratio |
98.8 | % | 79.0 | % | 112.5 | % | ||||||
Average interest earning assets |
$ | 9,727,655 | $ | 10,773,561 | $ | 11,364,244 | ||||||
Average interest paying liabilities |
$ | 10,460,463 | $ | 10,960,772 | $ | 11,773,031 | ||||||
Average stockholders equity |
$ | 1,245,229 | $ | 1,293,937 | $ | 798,629 | ||||||
Equity/assets ratio (average for the period) |
9.48 | % | 9.20 | % | 5.80 | % | ||||||
Ratio of charge-offs to average loans held
for investment |
2.14 | % | 5.78 | % | 2.65 | % |
6
Summary of Consolidated | March 31, | December 31, | March 31, | |||||||||
Statements of Financial Condition: | 2011 | 2010 | 2010 | |||||||||
Total assets |
$ | 13,016,967 | $ | 13,643,504 | $ | 14,332,842 | ||||||
Securities classified as trading |
160,650 | 160,775 | 893,318 | |||||||||
Securities classified as available for sale |
452,368 | 475,225 | 733,788 | |||||||||
Loans available for sale |
1,609,501 | 2,585,200 | 1,873,744 | |||||||||
Loans held for investment |
5,764,675 | 6,305,483 | 7,580,679 | |||||||||
Allowance for loan losses |
(271,000 | ) | (274,000 | ) | (538,000 | ) | ||||||
Mortgage servicing rights |
635,122 | 580,299 | 543,447 | |||||||||
Government insured repurchased assets |
1,781,825 | 1,731,276 | 926,970 | |||||||||
Deposits |
7,748,910 | 7,998,099 | 8,145,679 | |||||||||
FHLB advances |
3,400,000 | 3,725,083 | 3,900,000 | |||||||||
Repurchase agreements |
| | 108,000 | |||||||||
Stockholders equity |
1,237,022 | 1,259,663 | 1,104,764 | |||||||||
Other Financial and Statistical Data: |
||||||||||||
Equity/assets ratio |
9.50 | % | 9.23 | % | 7.71 | % | ||||||
Core capital ratio (bank only) |
9.87 | % | 9.61 | % | 9.39 | % | ||||||
Total risk-based capital ratio (bank only) |
20.51 | % | 18.55 | % | 17.98 | % | ||||||
Book value per common share |
$ | 1.78 | $ | 1.83 | $ | 5.85 | ||||||
Shares outstanding at the period ended (000s) |
553,712 | 553,313 | 147,008 | |||||||||
Average shares outstanding for the period ended
(000s) |
553,555 | 161,565 | 77,699 | |||||||||
Average diluted shares outstanding for the
period
ended (000s) |
553,555 | 161,565 | 77,699 | |||||||||
Loans serviced for others |
$ | 59,577,239 | $ | 56,040,063 | $ | 48,264,731 | ||||||
Weighted average service fee (bps) |
30.2 | 30.8 | 33.0 | |||||||||
Value of mortgage servicing rights |
1.07 | % | 1.04 | % | 1.12 | % | ||||||
Allowance for loan losses to non-performing
loans held for investment (1) |
73.6 | % | 86.1 | % | 47.4 | % | ||||||
Allowance for loan losses to loans held for
investment (1) |
4.70 | % | 4.35 | % | 7.10 | % | ||||||
Non-performing assets to total assets (bank
only) |
4.26 | % | 4.35 | % | 9.30 | % | ||||||
Number of bank branches |
162 | 162 | 162 | |||||||||
Number of loan origination centers |
29 | 27 | 23 | |||||||||
Number of employees (excluding loan officers
and account executives) |
3,030 | 3,001 | 2,927 | |||||||||
Number of loan officers and account executives |
306 | 278 | 314 |
1) | Bank only and does not include non-performing loans available for sale |
For the Three Months Ended | ||||||||||||||||||||||||
March 31, | December 31, | March 31, | ||||||||||||||||||||||
Loan type | 2011 | 2010 | 2010 | |||||||||||||||||||||
Residential mortgage loans |
$ | 4,856,384 | 99.4 | % | $ | 9,164,615 | 99.9 | % | $ | 4,330,388 | 99.8 | % | ||||||||||||
Consumer loans |
1,127 | | 1,022 | | 621 | | ||||||||||||||||||
Commercial loans |
30,337 | 0.6 | 12,440 | 0.1 | 6,202 | 0.2 | ||||||||||||||||||
Total loan originations |
$ | 4,887,848 | 100.0 | % | $ | 9,178,077 | 100.0 | % | $ | 4,337,211 | 100.0 | % | ||||||||||||
March 31, | December 31, | March 31, | ||||||||||||||||||||||
Description | 2011 | 2010 | 2010 | |||||||||||||||||||||
First mortgage residential loans |
$ | 3,751,772 | 65.1 | % | $ | 3,784,700 | 60.1 | % | $ | 4,803,425 | 63.4 | % | ||||||||||||
Second mortgage residential
loans |
165,161 | 2.8 | 174,789 | 2.8 | 210,208 | 2.8 | ||||||||||||||||||
Construction loans |
3,246 | 0.1 | 8,012 | 0.1 | 15,544 | 0.2 | ||||||||||||||||||
Warehouse lending |
303,785 | 5.3 | 720,770 | 11.4 | 576,719 | 7.6 | ||||||||||||||||||
Commercial real estate loans |
1,170,198 | 20.3 | 1,250,301 | 19.8 | 1,555,163 | 20.5 | ||||||||||||||||||
Commercial lease financing |
25,138 | 0.4 | | | | | ||||||||||||||||||
Non-real estate commercial |
9,326 | 0.2 | 8,875 | 0.1 | 11,878 | 0.1 | ||||||||||||||||||
Consumer loans |
336,049 | 5.8 | 358,036 | 5.7 | 407,742 | 5.4 | ||||||||||||||||||
Total loans held for
investment |
$ | 5,764,675 | 100.0 | % | $ | 6,305,483 | 100.0 | % | $ | 7,580,679 | 100.0 | % | ||||||||||||
7
March 31, 2011 | December 31, 2010 | |||||||||||||||
Portfolio Balance (1) | Allowance (1) | Portfolio Balance (1) | Allowance (1) | |||||||||||||
Performing modified (TDR) |
$ | 562,570 | $ | 45,309 | $ | 576,594 | $ | 46,857 | ||||||||
Performing and not delinquent
within
last 36 months |
2,326,486 | 29,798 | 2,084,578 | 27,700 | ||||||||||||
Performing with government
insurance |
127,953 | | 122,677 | | ||||||||||||
Other performing |
631,833 | 29,886 | 987,975 | 43,462 | ||||||||||||
Non-performing
90+ day
delinquent |
146,951 | 38,986 | 76,572 | 19,786 | ||||||||||||
Non-performing with government
insurance |
66,460 | 1,513 | 56,587 | 1,915 | ||||||||||||
30 day and 60 day delinquent |
57,926 | 4,642 | 62,518 | 4,866 | ||||||||||||
Total |
$ | 3,920,179 | $ | 150,134 | $ | 3,967,501 | $ | 144,586 | ||||||||
1) | Includes first mortgage, construction and second mortgage loans |
March 31, 2011 | December 31, 2010 | |||||||||||||||
Portfolio Balance (1) | Allowance (1) | Portfolio Balance (1) | Allowance (1) | |||||||||||||
Performing not impaired |
$ | 893,670 | $ | 33,766 | $ | 933,557 | $ | 31,291 | ||||||||
Special mention not impaired |
97,624 | 7,316 | 85,103 | 5,907 | ||||||||||||
Impaired |
5,649 | 957 | 73,631 | 17,181 | ||||||||||||
Non-performing not impaired |
63,915 | 15,834 | 6,485 | 752 | ||||||||||||
Non-performing |
143,804 | 36,429 | 160,400 | 39,847 | ||||||||||||
Total |
$ | 1,204,662 | $ | 94,302 | $ | 1,259,176 | $ | 94,978 | ||||||||
1) | Includes commercial real estate, commercial non-real estate and lease financing loans. |
For the Three Months Ended | ||||||||||||
March 31, | December 31, | March 31, | ||||||||||
2011 | 2010 | 2010 | ||||||||||
Beginning balance |
$ | (274,000 | ) | $ | (474,000 | ) | $ | (524,000 | ) | |||
Provision for losses |
(28,309 | ) | (48,914 | ) | (63,559 | ) | ||||||
Provision for losses NPL sale |
| (176,461 | ) | | ||||||||
Total provision for losses |
(28,309 | ) | (225,375 | ) | (63,559 | ) | ||||||
Charge offs, net of recoveries |
||||||||||||
First mortgage loans |
2,138 | 31,614 | 29,021 | |||||||||
First mortgage loans NPL sale |
| 327,295 | | |||||||||
Second mortgage loans |
4,920 | 5,454 | 6,429 | |||||||||
Commercial real estate loans |
18,608 | 55,833 | 8,108 | |||||||||
Construction loans |
| 81 | 20 | |||||||||
Warehouse loans |
(5 | ) | 182 | 472 | ||||||||
Consumer loans: |
||||||||||||
HELOC loans |
4,577 | 4,185 | 4,523 | |||||||||
Other consumer loans |
600 | 340 | 332 | |||||||||
Other |
471 | 391 | 654 | |||||||||
Charge-offs, net of recoveries |
31,309 | 425,375 | 49,559 | |||||||||
Ending balance |
$ | (271,000 | ) | $ | (274,000 | ) | $ | (538,000 | ) | |||
8
Description | General Reserves | Specific Reserves | Total | |||||||||
First mortgage loans |
$ | 118,112 | $ | 8,829 | $ | 126,941 | ||||||
Second mortgage loans |
21,523 | 572 | 22,095 | |||||||||
Commercial real estate loans |
42,435 | 49,969 | 92,404 | |||||||||
Construction loans |
551 | 288 | 839 | |||||||||
Warehouse lending |
1,040 | 976 | 2,016 | |||||||||
Consumer loans: |
||||||||||||
HELOC loans |
16,889 | | 16,889 | |||||||||
Other consumer loans |
2,479 | | 2,479 | |||||||||
Commercial lease financing |
251 | | 251 | |||||||||
Non-real estate commercial |
1,051 | 596 | 1,647 | |||||||||
Other and unallocated |
5,439 | | 5,439 | |||||||||
Total allowance for loan losses |
$ | 209,770 | $ | 61,230 | $ | 271,000 | ||||||
March 31, | December 31, | March 31, | ||||||||||
2011 | 2010 | 2010 | ||||||||||
Non-performing loans held for investment |
$ | 368,152 | $ | 318,416 | $ | 1,136,205 | ||||||
Real estate owned |
146,372 | 151,085 | 167,265 | |||||||||
Net repurchased assets/non-performing assets |
32,402 | 28,472 | 29,189 | |||||||||
Non-performing assets (1) |
546,926 | 497,973 | 1,332,659 | |||||||||
Non-performing loans available for sale |
6,598 | 94,889 | | |||||||||
Non-performing assets including loans available for sale |
$ | 553,524 | $ | 592,862 | $ | 1,332,659 | ||||||
Non-performing loans held for investment as a percentage
of loans held for investment (1) |
6.39 | % | 5.05 | % | 14.99 | % | ||||||
Non-performing assets as a percentage of total assets |
4.26 | % | 4.35 | % | 9.30 | % |
1) | Does not include non-performing loans available for sale |
March 31, 2011 | December 31, 2010 | March 31, 2010 | ||||||||||||||||||||||
% of | % of | % of | ||||||||||||||||||||||
Days delinquent | Balance | Total | Balance | Total | Balance | Total | ||||||||||||||||||
30 |
$ | 94,132 | 1.6 | % | $ | 133,449 | 2.1 | % | $ | 178,830 | 2.4 | % | ||||||||||||
60 |
56,037 | 1.0 | 53,745 | 0.9 | 95,258 | 1.3 | ||||||||||||||||||
90+ and matured
delinquent |
368,152 | 6.4 | 318,416 | 5.0 | 1,136,205 | 14.9 | ||||||||||||||||||
Total |
$ | 518,321 | 9.0 | % | $ | 505,610 | 8.0 | % | 1,410,293 | 18.6 | % | |||||||||||||
Loans held for
investment |
$ | 5,764,675 | $ | 6,305,483 | $ | 7,580,679 | ||||||||||||||||||
9
For the Three Months Ended | ||||||||||||||||||||||||
March 31, 2011 | December 31, 2010 | March 31, 2010 | ||||||||||||||||||||||
Description | (000s) | bps | (000s) | bps | (000s) | bps | ||||||||||||||||||
Valuation gain (loss): |
||||||||||||||||||||||||
Value of interest rate locks |
$ | (616 | ) | (1 | ) | $ | (36,144 | ) | (42 | ) | $ | 3,024 | 6 | |||||||||||
Value of forward sales |
(40,361 | ) | (69 | ) | 54,937 | 64 | (20,055 | ) | (40 | ) | ||||||||||||||
Fair value of loans available for sale |
44,322 | 76 | 37,099 | 43 | 59,077 | 118 | ||||||||||||||||||
LOCOM adjustments on loans held for
investment |
(30 | ) | | 248 | | (88 | ) | | ||||||||||||||||
Total valuation gains |
3,315 | 6 | 56,140 | 65 | 41,958 | 84 | ||||||||||||||||||
Sales gains (losses): |
||||||||||||||||||||||||
Marketing gains, net of adjustments |
751 | 1 | 26,748 | 32 | 27,815 | 55 | ||||||||||||||||||
Pair-off gains (losses) |
48,458 | 83 | 5,998 | 7 | (10,064 | ) | (20 | ) | ||||||||||||||||
Provisions for secondary marketing reserve |
(2,339 | ) | (4 | ) | (11,956 | ) | (14 | ) | (7,143 | ) | (14 | ) | ||||||||||||
Total sales gains |
46,870 | 80 | 20,790 | 24 | 10,608 | 21 | ||||||||||||||||||
Total gain on loan sales and securitizations |
$ | 50,185 | 86 | $ | 76,930 | 89 | $ | 52,566 | 105 | |||||||||||||||
Total loan sales and securitizations |
$ | 5,829,508 | $ | 8,612,997 | $ | 5,014,748 | ||||||||||||||||||
For the Three Months Ended | ||||||||||||||||||||||||
March 31, 2011 | December 31, 2010 | March 31, 2010 | ||||||||||||||||||||||
Average | Annualized | Average | Annualized | Average | Annualized | |||||||||||||||||||
Balance | Yield/Rate | Balance | Yield/Rate | Balance | Yield/Rate | |||||||||||||||||||
Interest-Earning Assets: |
||||||||||||||||||||||||
Loans available for sale |
$ | 1,683,814 | 4.44 | % | $ | 2,408,275 | 4.39 | % | $ | 1,521,640 | 4.98 | % | ||||||||||||
Loans held for investment: |
||||||||||||||||||||||||
Mortgage loans |
3,935,068 | 4.67 | 4,276,034 | 4.57 | 5,115,419 | 4.79 | ||||||||||||||||||
Commercial loans |
1,562,079 | 5.02 | 2,149,127 | 5.11 | 1,956,926 | 4.89 | ||||||||||||||||||
Consumer loans |
347,019 | 6.05 | 364,926 | 6.13 | 415,930 | 5.97 | ||||||||||||||||||
Loans held for investment |
5,844,166 | 4.84 | 6,790,087 | 4.84 | 7,488,275 | 4.88 | ||||||||||||||||||
Securities classified as available for
sale
or trading |
629,444 | 5.15 | 659,650 | 5.28 | 1,137,521 | 5.43 | ||||||||||||||||||
Interest-earning deposits and other |
1,570,231 | 0.25 | 915,549 | 0.24 | 1,216,808 | 0.21 | ||||||||||||||||||
Total interest-earning assets |
9,727,655 | 4.05 | 10,773,561 | 4.37 | 11,364,244 | 4.45 | ||||||||||||||||||
Other assets |
3,410,758 | 3,284,523 | 2,397,983 | |||||||||||||||||||||
Total assets |
$ | 13,138,413 | $ | 14,058,084 | $ | 13,762,227 | ||||||||||||||||||
Interest-Bearing Liabilities: |
||||||||||||||||||||||||
Demand deposits |
$ | 398,360 | 0.39 | % | $ | 391,972 | 0.42 | % | $ | 370,016 | 0.56 | % | ||||||||||||
Savings deposits |
1,075,253 | 0.90 | 918,289 | 0.96 | 688,978 | 0.84 | ||||||||||||||||||
Money market deposits |
555,983 | 0.78 | 554,803 | 0.88 | 581,848 | 0.89 | ||||||||||||||||||
Certificate of deposits |
3,185,614 | 1.93 | 3,314,286 | 2.17 | 3,390,755 | 2.96 | ||||||||||||||||||
Total retail deposits |
5,215,210 | 1.48 | 5,179,350 | 1.68 | 5,031,597 | 2.26 | ||||||||||||||||||
Demand deposits |
77,747 | 0.54 | 161,056 | 0.28 | 291,901 | 0.38 | ||||||||||||||||||
Savings deposits |
357,122 | 0.65 | 313,394 | 0.65 | 77,233 | 0.48 | ||||||||||||||||||
Certificate of deposits |
251,646 | 0.69 | 274,820 | 0.80 | 273,685 | 0.76 | ||||||||||||||||||
Total government deposits |
686,515 | 0.65 | 749,270 | 0.63 | 642,819 | 0.55 | ||||||||||||||||||
Wholesale deposits |
841,073 | 3.34 | 987,189 | 3.15 | 1,790,434 | 2.95 | ||||||||||||||||||
Total deposits |
6,742,798 | 1.63 | 6,915,809 | 1.78 | 7,464,850 | 2.28 | ||||||||||||||||||
FHLB Advances |
3,469,055 | 3.50 | 3,796,353 | 3.26 | 3,900,000 | 4.35 | ||||||||||||||||||
Security repurchase agreements |
| | | | 108,000 | 4.33 | ||||||||||||||||||
Other |
248,610 | 2.62 | 248,610 | 2.64 | 300,182 | 4.99 | ||||||||||||||||||
Total interest-bearing liabilities |
10,460,463 | 2.27 | 10,960,772 | 2.31 | 11,773,032 | 3.05 | ||||||||||||||||||
Other liabilities |
1,432,721 | 1,803,375 | 1,190,566 | |||||||||||||||||||||
Stockholders equity |
1,245,229 | 1,293,937 | 798,629 | |||||||||||||||||||||
Total liabilities and stockholders equity |
$ | 13,138,413 | $ | 14,058,084 | $ | 13,762,227 | ||||||||||||||||||
10
Earnings Presentation First Quarter 2011 April 27, 2011 Presenters: Joseph P. Campanelli Chief Executive Officer Paul D. Borja Chief Financial Officer |
2 The information contained in this presentation is not intended as a solicitation to buy Flagstar Bancorp, Inc. stock and is provided for general information. This presentation may include forward-looking statements and include comments with respect to our objectives and strategies, and the results of our operations and our business. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words such as "expects," "assumes," "anticipates," "intends," "plans," "believes," "seeks," "estimates" or words of similar meaning, or future or conditional words such as "assuming," "will," "would," "possible," "proposed," "projected," "positioned," "vision," "opportunity," "should," "could," "indicative," "target" or "may." Forward-looking statements provide our expectations or predictions of future conditions, events or results. They are not guarantees of future performance. By their nature, these forward-looking statements involve numerous assumptions, uncertainties and opportunities, both general and specific. These statements speak only as of the date they are made. We do not undertake to update forward-looking statements to reflect the impact of circumstances or events that arise after the date the forward-looking statements were made. There a number of factors, many of which are beyond our control that could cause actual conditions, events or results to differ significantly from those described in the forward looking statements. Some of these are: Volatile interest rates that impact, amongst other things, (i) the mortgage banking business, (ii) our ability to originate loans and sell assets at a profit, (iii) prepayment speeds and (iv) our cost of funds, could adversely affect earnings, growth opportunities and our ability to pay dividends to shareholders. Our ability to maintain capital levels. Competitive factors for loans could negatively impact gain on loan sale margins. Competition from banking and non-banking companies for deposits and loans can affect our growth opportunities, earnings, gain on sale margins, market share and ability to transform business model. Changes in the regulation of financial services companies and government-sponsored housing enterprises, and in particular, declines in the liquidity of the mortgage loan secondary market, could adversely affect business. Changes in regulatory capital requirements or an inability to achieve desired capital ratios could adversely affect our growth and earnings opportunities and our ability to originate certain types of loans, as well as our ability to sell certain types of assets for fair market value or to transform business model. - General business and economic conditions, including unemployment rates, further movements in interest rates, the slope of the yield curve, any increase in fraud and other criminal activity and the further decline of asset values in certain geographic markets, may significantly affect the company's business activities, loan losses, reserves, earnings and business prospects. - Factors concerning the implementation of proposed enhancements and transformation of business model could result in slower implementation times than we anticipate and negate any competitive advantage that we may enjoy. When relying on forward-looking statements to make decisions, investors should carefully consider the aforementioned factors as well as other uncertainties and events. Legal Disclaimer |
3 First Quarter 2011 Highlights Net loss to common stockholders of $(31.7) million, $(0.06) per share Significant improvement from both 4th quarter 2010 and 1st quarter 2010 Credit-related expenses declined for the fourth straight quarter Continued to de-risk balance sheet, selling additional $80.3 million of non- performing residential first mortgage loans Increased core deposits by 10% from prior quarter Strengthened capital and liquidity ratios from prior quarter Officially launched commercial banking business line in February Added experienced and proven executives to solidify management team |
4 Summary Financial Results |
5 Net Interest Margin ($ in millions) -- Bank net interest margin declined temporarily due to the increased short-term liquidity from sales of non-performing loans, seasonal pay-downs and reduced mortgage production... Positioned to fund C&I growth |
6 Cost of Funds ($ in millions) -- Average cost of funds continues to steadily decline... |
7 Core Deposits -- Steady growth in core deposits, driven by increases in both retail and government core... Note: Includes checking accounts, savings accounts, and money market accounts (excludes custodial accounts). If CDs $100,000 and under were included as core deposits, the core deposit / total deposit ratio would have been 57.7% ($ in millions) |
8 Residential Mortgage Originations ($ in millions) -- First quarter mortgage origination volume decreased from prior quarter, reflecting seasonality and slow-down of mortgage industry... |
9 Gain on Loan Sales -- First quarter gain on loan sale income decreased given lower rate lock commitments, while margin remained relatively flat from prior quarter level... ($ in millions) |
10 Mortgage Servicing Rights (MSR) Income -- The decrease in gain on sale and loan fee income during the quarter was partially offset by an increase in mortgage servicing right income... ($ in millions) Note: MSR income includes net loan administration income and net gain or loss on trading securities |
11 Credit-Related Expenses -- Credit-related expenses decreased for the fourth straight quarter... ($ in millions) Note: Provision for Q4 2010 excludes $176.5 million related to a loss on the sale of $474 million of non-performing loans and the concurrent transfer of $104.2 million of such loans to the available-for-sale category |
12 Asset Quality -- Most of the key asset quality trends continued their improvement in the first quarter... 1) Includes non-performing loans available for sale 2) Q4 2010 excludes $176.5 million related to loss on sale of non-performing loans |
13 Allowance for Loan Losses ($ in millions) -- Allowance for loan loss coverage remains at a prudent level... |
14 Regulatory Capital Ratios -- Capital ratios increased from the prior quarter and remain at historically high levels... |
15 Commercial Banking Initiative Steve Issa joined Flagstar and oversees Commercial Banking division Mike Tierney joined Flagstar and oversees Retail Banking division Dan Landers joined Flagstar as Chief Credit Officer 3 teams in place covering Michigan, New England and Specialty Lending Selectively hired over 30 professionals to support initiative, including lending, credit and operations Established commercial credit approval matrix and credit policy committee New relationship managers bring established and familiar client base |
16 J.D. Power and Associates Study Results Flagstar tied for 1st in customer satisfaction for the North Central Region in the 2011 J.D. Power and Associates Retail Banking Satisfaction Study SM Marks second consecutive year Flagstar has ranked highest in its region Region includes banks in Michigan, Indiana, Ohio, Kentucky and West Virginia Flagstar improved its overall score from 800 in 2010 to 802 in 2011 Score of 802 ranks 37 points above the regional average Disclaimer: Flagstar Bank received the highest numerical score among retail banks in the North Central region in the proprietary J.D. Power and Associates 2010-2011 Retail Banking Satisfaction StudiesSM, tied in 2011. 2011 study based on 51,620 total responses measuring 28 providers in the North Central region (IN, KY, MI, OH, WV) and measures opinions of consumers with their primary banking provider. Proprietary study results are based on experiences and perceptions of consumers surveyed in January 2011. Your experiences may vary. Visit jdpower.com. |
17 2011 Outlook |
Appendix |
19 Full Income Statement |
20 Pre-tax, Pre-credit-cost Income |
21 Selected Balance Sheet Items |
22 Asset Composition |
23 Funding Composition ($ in billions) |
24 Deposit Mix Note: represents the ending balance and rate for period noted 1) retail core deposits include retail demand, savings and money market |
25 Historical Monthly Lock Volume ($ in millions) Note: residential mortgage volume |
26 Historical Monthly Closing Volume ($ in millions) Note: residential mortgage volume |
27 First Mortgage Portfolio - by State Note: Reflects unpaid principal balance of underlying loans before accounting adjustments for discounts and other items. Also excludes loans eligible for repurchase from Ginnie Mae pools As of Mar 31, 2011 |
28 First Mortgage Portfolio - by Vintage Note: Reflects unpaid principal balance of underlying loans before accounting adjustments for discounts and other items. Also excludes loans eligible for repurchase from Ginnie Mae pools As of Mar 31, 2011 |
29 First Mortgage Portfolio - by Original FICO Note: Reflects unpaid principal balance of underlying loans before accounting adjustments for discounts and other items. Also excludes loans eligible for repurchase from Ginnie Mae pools As of Mar 31, 2011 |
30 First Mortgage Portfolio - by LTV Note: Reflects unpaid principal balance of underlying loans before accounting adjustments for discounts and other items. Also excludes loans eligible for repurchase from Ginnie Mae pools As of Mar 31, 2011 |
31 First Mortgage Portfolio - by Original FICO and LTV Note: non-performing loans include 90 day + matured and non performing accruals, calculated using OTS method. LTV equals current principal balance divided by appraised value at origination. As of Mar 31, 2011 |
32 Legacy Commercial RE Portfolio As of Mar 31, 2011 |
33 Legacy Commercial RE Portfolio - by State As of Mar 31, 2011 Note: reflects unpaid principal balance of underlying loans before accounting adjustments for discounts and other items. Also excludes commercial letters of credit |
34 Legacy Commercial RE Portfolio - by Vintage As of Mar 31, 2011 Note: reflects unpaid principal balance of underlying loans before accounting adjustments for discounts and other items. Also excludes commercial letters of credit |
35 Non-Agency Investment Securities AFS Portfolio As of Mar 31, 2011 |
36 Real Estate Owned Portfolio As of Mar 31, 2011 |
37 Asset Quality by Loan Type - HFI 1) Over 90 day delinquent plus matured plus performing non-accrual, calculated using OTS method As of Mar 31, 2011 |
38 Delinquent Loan Trends - Total HFI Portfolio Note: calculated using OTS method ($ in millions) |
39 Non Performing Loans HFI - by State As of Mar 31, 2011 Note: non-performing loans include 90 day + matured and non-performing accruals, calculated using OTS method |
40 Non Performing Loans HFI - by Vintage As of Mar 31, 2011 Note: non-performing loans include 90 day + matured and non-performing accruals, calculated using OTS method |
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