TROY, Mich., Jan. 24, 2017 /PRNewswire/ -- Flagstar Bancorp,
Inc. (NYSE: FBC), the holding company for Flagstar Bank, FSB, today
reported fourth quarter 2016 net income of $28 million, or $0.49 per diluted share, as compared to
$57 million, or $0.96 per diluted share, in the third quarter
2016 and $33 million, or $0.44 per diluted share, in the fourth quarter
2015.
Full year 2016 net income was $171
million, or $2.66 per diluted
share, as compared to full year 2015 net income of $158 million, or $2.24 per diluted share. Third quarter 2016
results included a $24 million
benefit related to a decrease in the fair value of the Department
of Justice ("DOJ") settlement liability. Excluding this benefit,
the Company had adjusted non-GAAP 2016 net income of $155 million, or $2.38 per diluted share, an increase in diluted
earnings per share of 6 percent from the full year 2015.
"We are pleased to turn in another profitable quarter, capping a
year of solid earnings growth for our Company," said Alessandro DiNello, president and chief
executive officer of Flagstar Bancorp, Inc. "During the quarter, we
saw growth in earning assets combined with net interest margin
expansion. Asset quality remained rock solid, as it has all year,
and expenses were well controlled. Mortgage originations declined
seasonally, as expected, and coupled with rising interest rates
made mortgage production challenging."
"We reached an important milestone during the quarter with the
lifting of the Consent Order in December with the Office of the
Comptroller of the Currency. We believe this represented a
validation of the quality of our risk management organization, the
strength of our balance sheet and our improved performance, and
also reflected our success in building a broader, more stable and
less risky business model."
"With the positive momentum from our 2016 performance, we are
looking forward to 2017. We believe the economy will be a bit
stronger and the interest rate curve a little steeper. Our business
model is poised to continue to be successful."
Fourth Quarter 2016 Highlights:
Income Statement
Highlights
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
December 31,
2016
|
September 30,
2016
|
June 30,
2016
|
March 31,
2016
|
December 31,
2015
|
|
(Dollars in
millions)
|
Net interest
income
|
$
|
87
|
|
$
|
80
|
|
$
|
77
|
|
$
|
79
|
|
$
|
76
|
|
Provision (benefit)
for loan losses
|
1
|
|
7
|
|
(3)
|
|
(13)
|
|
(1)
|
|
Noninterest
income
|
98
|
|
156
|
|
128
|
|
105
|
|
97
|
|
Noninterest
expense
|
142
|
|
142
|
|
139
|
|
137
|
|
129
|
|
Income before income
taxes
|
42
|
|
87
|
|
69
|
|
60
|
|
45
|
|
Provision for income
taxes
|
14
|
|
30
|
|
22
|
|
21
|
|
12
|
|
Net income
|
$
|
28
|
|
$
|
57
|
|
$
|
47
|
|
$
|
39
|
|
$
|
33
|
|
|
|
|
|
|
|
Income per
share:
|
|
|
|
|
|
Basic
|
$
|
0.50
|
|
$
|
0.98
|
|
$
|
0.67
|
|
$
|
0.56
|
|
$
|
0.45
|
|
Diluted
|
$
|
0.49
|
|
$
|
0.96
|
|
$
|
0.66
|
|
$
|
0.54
|
|
$
|
0.44
|
|
Key
Ratios
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
Change
(bps)
|
|
December 3,
2016
|
September 30,
2016
|
June 30,
2016
|
March 31,
2016
|
December 31,
2015
|
Seq
|
Yr/Yr
|
Net interest
margin
|
2.67
|
%
|
2.58
|
%
|
2.63
|
%
|
2.66
|
%
|
2.69
|
%
|
9
|
(2)
|
Return on average
assets
|
0.8
|
%
|
1.6
|
%
|
1.4
|
%
|
1.2
|
%
|
1.0
|
%
|
(83)
|
(25)
|
Return on average
equity
|
8.6
|
%
|
16.5
|
%
|
11.5
|
%
|
10.1
|
%
|
8.6
|
%
|
(793)
|
4
|
Return on average
common equity
|
8.6
|
%
|
17.5
|
%
|
13.8
|
%
|
12.2
|
%
|
10.4
|
%
|
(885)
|
(180)
|
Efficiency
ratio
|
76.7
|
%
|
59.9
|
%
|
68.2
|
%
|
74.5
|
%
|
75.2
|
%
|
1680
|
150
|
Balance Sheet
Highlights
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
%
Change
|
|
December 31,
2016
|
September 30,
2016
|
June 30,
2016
|
March 31,
2016
|
December 31,
2015
|
Seq
|
Yr/Yr
|
|
(Dollars in
millions)
|
|
|
Average Balance
Sheet Data
|
|
|
|
|
|
|
|
Average
interest-earning assets
|
$
|
12,817
|
|
$
|
12,318
|
|
$
|
11,639
|
|
$
|
11,871
|
|
$
|
11,240
|
|
4
|
%
|
14
|
%
|
Average loans
held-for-sale (LHFS)
|
3,321
|
|
3,416
|
|
2,884
|
|
2,909
|
|
2,484
|
|
(3)
|
%
|
34
|
%
|
Average loans
held-for-investment (LHFI)
|
6,163
|
|
5,848
|
|
5,569
|
|
5,668
|
|
5,642
|
|
5
|
%
|
9
|
%
|
Average total
deposits
|
9,233
|
|
9,126
|
|
8,631
|
|
8,050
|
|
8,132
|
|
1
|
%
|
14
|
%
|
Note:
|
Please refer to the
financial tables at the end of this news release for a
reconciliation of adjusted non-GAAP financial measures to the most
directly comparable measure prepared in accordance with
GAAP.
|
Net Interest Income
The Company continued to realize growth in its community banking
business in the fourth quarter 2016. Net interest income increased
to $87 million, compared to
$80 million for the third quarter
2016. The results reflected a 4 percent increase in average earning
assets, led by growth in investment securities, commercial loans
and mortgage loans, and net interest margin expansion of 9 basis
points.
Loans held-for-investment averaged $6.2
billion for the fourth quarter 2016, increasing $315 million, or 5 percent, from the prior
quarter. During the fourth quarter 2016, average commercial real
estate loans increased $127 million,
or 12 percent. Average consumer loans rose $111 million, or 4 percent, driven by an increase
in mortgage loans (primarily jumbos). Average commercial and
industrial loans also registered solid gains, increasing
$88 million, or 14 percent.
Average total deposits were $9.2
billion in the fourth quarter 2016, increasing $107 million, or 1 percent, from the third
quarter 2016. The increase was led by higher retail deposits,
partially offset by lower government deposits. Average retail
deposits rose $132 million, or 2
percent, due to an $89 million
increase in savings deposits and a $28
million rise in demand deposits.
Net interest margin increased 9 basis points to 2.67 percent for
the fourth quarter 2016, as compared to 2.58 percent for the third
quarter 2016. During the quarter, the Company terminated
certain fixed rate FHLB advances which resulted in a $2 million benefit to interest expense,
accounting for 6 basis points of the increase.
Provision for Loan Losses
The provision for loan losses totaled $1
million for the fourth quarter 2016, as compared to
$7 million for the third quarter
2016. The lower level of provision expense reflected strong asset
quality and largely matched net charge-offs in the quarter.
Noninterest Income
Noninterest income decreased $58
million, or 37 percent, to $98
million, as compared to $156
million for the third quarter 2016. The decline was driven
by a $37 million drop in net gain on
loan sales and a $24 million benefit
that was recognized in the third quarter 2016 from the reduction in
fair value on the DOJ settlement liability.
Fourth quarter 2016 net gain on loan sales fell to $57 million, versus $94
million in the third quarter and $46
million in the same period last year. The decrease from the
prior quarter reflected lower fallout-adjusted locks and a drop in
the gain on sale margin. In the fourth quarter 2016,
fallout-adjusted locks decreased 27 percent to $6.1 billion, primarily due to anticipated
seasonal factors and lower refinance activity from significantly
higher interest rates. The net gain on loan sale margin fell 20
basis points to 0.93 percent for the fourth quarter 2016, as
compared to 1.13 percent for the third quarter 2016, driven by
price competition.
Mortgage
Metrics
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
Change (% /
bps)
|
|
December 31,
2016
|
September 30,
2016
|
June 30,
2016
|
March 31,
2016
|
December 31,
2015
|
Seq
|
Yr/Yr
|
|
(Dollars in
millions)
|
|
|
Mortgage rate lock
commitments (fallout-adjusted) (1)
|
$
|
6,091
|
|
$
|
8,291
|
|
$
|
8,127
|
|
$
|
6,863
|
|
$
|
5,027
|
|
(27)
|
%
|
21
|
%
|
Gain on sale margin
(change in bps) (1)(2)
|
|
0.93
|
%
|
|
1.13
|
%
|
|
1.04
|
%
|
|
0.96
|
%
|
|
0.92
|
%
|
(20)
|
1
|
|
Net gain on loan
sales on HFS
|
$
|
57
|
|
94
|
|
$
|
85
|
|
$
|
66
|
|
$
|
46
|
|
(39)
|
%
|
24
|
%
|
Net (loss) return on
the mortgage servicing rights ("MSR")
|
$
|
(5)
|
|
$
|
(11)
|
|
$
|
(4)
|
|
$
|
(6)
|
|
$
|
9
|
|
N/M
|
|
N/M
|
|
Gain on loan sales
HFS + net (loss) return on the MSR
|
$
|
52
|
|
$
|
83
|
|
$
|
81
|
|
$
|
60
|
|
$
|
55
|
|
(37)
|
%
|
(5)
|
%
|
Residential loans
serviced (number of accounts - 000's) (3)
|
383
|
|
375
|
|
358
|
|
354
|
|
361
|
|
2
|
%
|
6
|
%
|
Capitalized value of
mortgage servicing rights (change in bps)
|
|
1.07
|
%
|
|
0.96
|
%
|
|
0.99
|
%
|
|
1.06
|
%
|
|
1.13
|
%
|
11
|
(6)
|
N/M - Not
meaningful
|
|
|
|
|
|
|
|
(1)
Fallout-adjusted mortgage rate lock commitments are adjusted by a
percentage of mortgage loans in the pipeline that are not expected
to close based on previous historical experience and the level of
interest rates.
|
(2)
Gain on sale margin is based on net gain on loan sales (excluding
gains from loans transferred from HFI) to fallout-adjusted mortgage
rate lock commitments.
|
(3)
Includes loans serviced for own loan portfolio, serviced for
others, and subserviced for others.
|
Loan fees and charges fell to $20
million for the fourth quarter 2016, as compared to
$22 million for the third quarter
2016. The decrease primarily reflected lower mortgage loan
closings.
Net return on the mortgage servicing asset (including the impact
of hedges) was a net loss of $5
million for the fourth quarter 2016, as compared to a net
loss of $11 million for the third
quarter 2016. The net return on the mortgage servicing asset
increased from the third quarter 2016. This was primarily due to
lower prepayments and a $7 million
charge recognized in the third quarter 2016 related to MSR sales
with a fair value of $50 million that
closed in the fourth quarter 2016, partially offset by unfavorable
changes in fair value driven by an increase in market implied
interest rate volatility experienced in the fourth quarter
2016.
The representation and warranty benefit was $7 million for the fourth quarter 2016, as
compared to a $6 million benefit in
the third quarter 2016. The representation and warranty reserve was
reduced to $27 million at
December 31, 2016, from $32
million at September 30, 2016, reflecting a continued
improvement in risk trends and a repurchase demand pipeline that
was only $6 million at December 31, 2016.
Total other noninterest income for the fourth quarter 2016 was
$10 million, as compared to
$36 million for the third quarter
2016. The decrease was almost entirely due to a $24 million reduction in the fair value of the
Company's DOJ settlement liability recognized in the prior
quarter.
Noninterest Expense
Noninterest expense was unchanged at $142
million for the fourth quarter 2016, as compared to the
third quarter 2016. Legal and professional expense rose
$4 million, while compensation and
benefits expense fell $3 million.
The Company's efficiency ratio was 77 percent for the fourth
quarter 2016, compared to an adjusted non-GAAP efficiency ratio of
67 percent in the prior quarter, excluding the $24 million benefit from the drop in fair value
on the DOJ settlement liability in the third quarter 2016.
Income Taxes
The fourth quarter 2016 provision for income taxes totaled
$14 million, as compared to
$30 million in the third quarter
2016. The effective tax rate in the fourth quarter 2016 declined
slightly to 33 percent, as compared to 34 percent in the third
quarter 2016 and the full year 2016.
Asset Quality
Credit Quality
Ratios
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
Change (% /
bps)
|
|
December 31,
2016
|
September 30,
2016
|
June 30,
2016
|
March 31,
2016
|
December 31,
2015
|
Seq
|
Yr/Yr
|
|
(Dollars in
millions)
|
|
|
Allowance for loan
loss to LHFI
|
2.4
|
%
|
2.3
|
%
|
2.6
|
%
|
2.9
|
%
|
3.0
|
%
|
10
|
(60)
|
Allowance for loan
loss to LHFI and loans with government guarantees
|
2.2
|
%
|
2.2
|
%
|
2.4
|
%
|
2.7
|
%
|
2.8
|
%
|
0
|
(60)
|
|
|
|
|
|
|
|
|
Charge-offs, net of
recoveries
|
$
|
2
|
|
$
|
7
|
|
$
|
9
|
|
$
|
12
|
|
$
|
9
|
|
(71)%
|
(78)%
|
Charge-offs
associated with loans with government guarantees
|
1
|
|
5
|
|
4
|
|
3
|
|
3
|
|
(80)%
|
(67)%
|
Charge-offs
associated with the sale or transfer of nonperforming loans and
TDRs
|
—
|
|
—
|
|
2
|
|
6
|
|
2
|
|
N/M
|
N/M
|
Charge-offs, net
of recoveries, adjusted (1)
|
$
|
1
|
|
$
|
2
|
|
$
|
3
|
|
$
|
3
|
|
$
|
4
|
|
(50)%
|
(75)%
|
|
|
|
|
|
|
|
|
Total nonperforming
loans held-for-investment
|
$
|
40
|
|
$
|
40
|
|
$
|
44
|
|
$
|
53
|
|
$
|
66
|
|
— %
|
(39)%
|
Net charge-offs to
LHFI ratio (annualized)
|
0.13
|
%
|
0.51
|
%
|
0.62
|
%
|
0.86
|
%
|
0.62
|
%
|
(38)
|
(49)
|
Net charge-off ratio,
adjusted (annualized)
|
0.07
|
%
|
0.15
|
%
|
0.18
|
%
|
0.20
|
%
|
0.29
|
%
|
(8)
|
(22)
|
Ratio of
nonperforming LHFI to LHFI
|
0.67
|
%
|
0.63
|
%
|
0.76
|
%
|
0.95
|
%
|
1.05
|
%
|
4
|
(38)
|
N/M - Not
meaningful
|
|
|
|
|
|
|
|
(1) Excludes
charge-offs associated with loans with government guarantees and
charge-offs associated with the sale or transfer of nonperforming
loans and TDRs.
|
The Company continued to experience solid credit performance in
the fourth quarter 2016. The allowance for loan losses was
$142 million at December 31,
2016, covering 2.4 percent of loans held-for-investment, as
compared to an allowance for loan losses of $143 million at September 30, 2016, covering
2.3 percent of loans held-for-investment.
Net charge-offs in the fourth quarter 2016 were $2 million, or 0.13 percent of applicable loans,
compared to $7 million, or 0.51
percent of applicable loans in the prior quarter. The fourth
quarter 2016 amount included $1
million of net charge-offs associated with loans with
government guarantees compared to $5
million in the third quarter of 2016.
Nonperforming loans held-for-investment were $40 million at December 31, 2016, unchanged
from September 30, 2016. As in the prior quarter, there
were no nonperforming commercial loans at December 31, 2016.
The ratio of nonperforming loans to loans held-for-investment
increased to 0.67 percent at December 31, 2016 from 0.63
percent at September 30, 2016. At December 31, 2016,
consumer loan delinquencies totaled $10
million, up slightly from September 30, 2016. As in the
prior quarter, there were no commercial loans more than 30 days
delinquent at December 31, 2016.
Capital
Capital Ratios
(Bancorp)
|
Three Months
Ended
|
Change (% /
bps)
|
|
December 31,
2016
|
September 30,
2016
|
June 30,
2016
|
March 31,
2016
|
December 31,
2015
|
Seq
|
Yr/Yr
|
Total
capital
|
16.42
|
%
|
15.26
|
%
|
20.19
|
%
|
20.97
|
%
|
20.28
|
%
|
116
|
|
(386)
|
|
Tier 1
capital
|
15.14
|
%
|
13.98
|
%
|
18.89
|
%
|
19.67
|
%
|
18.98
|
%
|
116
|
|
(384)
|
|
Tier 1
leverage
|
8.88
|
%
|
8.88
|
%
|
11.59
|
%
|
11.04
|
%
|
11.51
|
%
|
—
|
|
(263)
|
|
Mortgage servicing
rights to Tier 1 capital
|
26.7
|
%
|
24.6
|
%
|
19.9
|
%
|
19.3
|
%
|
20.6
|
%
|
210
|
|
610
|
|
Book value per common
share
|
$
|
23.50
|
|
$
|
22.72
|
|
$
|
23.54
|
|
$
|
22.82
|
|
$
|
22.33
|
|
3
|
%
|
5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company maintained a robust capital position with regulatory
ratios well above current regulatory quantitative guidelines for
"well capitalized" institutions. At December 31, 2016, the
Company had a Tier 1 leverage ratio of 8.88 percent, unchanged from
September 30, 2016.
At December 31, 2016, the Company had a common
equity-to-assets ratio of 9.50 percent.
Earnings Conference Call
As previously announced, the Company's fourth quarter 2016
earnings call will be held Tuesday, January 24, 2017 at
11 a.m. (ET).
To join the call, please dial (800) 474-8920 toll free or (719)
457-2640 and use passcode 1910792. Please call at least 10 minutes
before the conference is scheduled to begin. A replay will be
available for five business days by calling (866) 375-1919 toll
free or (719) 457-0820, using passcode 1910792.
The conference call will also be available as a live audiocast
on the Investor Relations section of flagstar.com, where it will be
archived and available for replay and download. The slide
presentation accompanying the conference call will be posted on the
site.
About Flagstar
Flagstar Bancorp, Inc. (NYSE: FBC) is a $14.1 billion savings and loan holding company
headquartered in Troy, Mich.
Flagstar Bank, FSB, provides commercial, small business, and
consumer banking services through 99 branches in the state. It also
provides home loans through a wholesale network of brokers and
correspondents in all 50 states, as well as through 41 retail
locations in 21 states. Flagstar is a leading national originator
and servicer of mortgage loans, handling payments and record
keeping for $80 billion of home loans
representing 383,000 borrowers. For more information, please visit
flagstar.com.
Use of Non-GAAP Financial Measures
In addition to results presented in accordance with GAAP, this
news release includes non-GAAP financial measures, such as adjusted
net income, adjusted return on average assets, adjusted return on
average equity, adjusted return on common equity, adjusted
noninterest income, adjusted efficiency ratio and estimated fully
implemented Basel III capital levels and ratios. The Company
believes these non-GAAP financial measures provide additional
information that is useful to investors in helping to understand
the capital requirements Flagstar will face in the future and
underlying performance and trends of Flagstar.
Non-GAAP financial measures have inherent limitations. Readers
should be aware of these limitations and should be cautious with
respect to the use of such measures. To compensate for these
limitations, we use non-GAAP measures as comparative tools,
together with GAAP measures, to assist in the evaluation of our
operating performance or financial condition. Also, we ensure that
these measures are calculated using the appropriate GAAP or
regulatory components in their entirety and that they are computed
in a manner intended to facilitate consistent period-to-period
comparisons. Flagstar's method of calculating these non-GAAP
measures may differ from methods used by other companies. These
non-GAAP measures should not be considered in isolation or as a
substitute for those financial measures prepared in accordance with
GAAP or in-effect regulatory requirements.
Where non-GAAP financial measures are used, the most directly
comparable GAAP or regulatory financial measure, as well as the
reconciliation to the most directly comparable GAAP or regulatory
financial measure, can be found in this news release. Additional
discussion of the use of non-GAAP measures can also be found in
conference call slides, the Form 8-K Current Report related to this
news release and in periodic Flagstar reports filed with the U.S.
Securities and Exchange Commission. These documents can all be
found on the Company's website at flagstar.com.
Forward-Looking Statements
This earnings release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. These statements are based on the current beliefs and
expectations of Flagstar Bancorp, Inc.'s management and are subject
to significant risks and uncertainties. Actual results may differ
from those set forth in the forward-looking statements. Factors
that could cause the Company's actual results to differ materially
from those described in the forward-looking statements can be found
in periodic Flagstar reports filed with the U.S. Securities and
Exchange Commission, which are available on the Company's website
(flagstar.com) and on the Securities and Exchange Commission's
website (sec.gov). Other than as required under United States securities laws, Flagstar
Bancorp does not undertake to update the forward-looking statements
to reflect the impact of circumstances or events that may arise
after the date of the forward-looking statements.
For more information, contact:
David L. Urban
david.urban@flagstar.com
(248) 312-5970
Flagstar Bancorp,
Inc.
Consolidated
Statements of Financial Condition
(Dollars in
millions)
(Unaudited)
|
|
|
December 31,
2016
|
|
September 30,
2016
|
|
December 31,
2015
|
Assets
|
|
|
|
|
|
Cash
|
$
|
84
|
|
|
$
|
76
|
|
|
$
|
54
|
|
Interest-earning
deposits
|
74
|
|
|
98
|
|
|
154
|
|
Total cash and cash
equivalents
|
158
|
|
|
174
|
|
|
208
|
|
Investment securities available-for-sale
|
1,480
|
|
|
1,115
|
|
|
1,294
|
|
Investment securities held-to-maturity
|
1,093
|
|
|
1,156
|
|
|
1,268
|
|
Loans
held-for-sale
|
3,177
|
|
|
3,393
|
|
|
2,576
|
|
Loans
held-for-investment
|
6,065
|
|
|
6,290
|
|
|
6,352
|
|
Loans with government
guarantees
|
365
|
|
|
404
|
|
|
485
|
|
Less: allowance for
loan losses
|
(142)
|
|
|
(143)
|
|
|
(187)
|
|
Total loans
held-for-investment and loans with government guarantees,
net
|
6,288
|
|
|
6,551
|
|
|
6,650
|
|
Mortgage servicing rights
|
335
|
|
|
302
|
|
|
296
|
|
Federal Home Loan Bank stock
|
180
|
|
|
172
|
|
|
170
|
|
Premises and equipment, net
|
275
|
|
|
271
|
|
|
250
|
|
Net deferred tax asset
|
286
|
|
|
305
|
|
|
364
|
|
Other assets
|
781
|
|
|
834
|
|
|
639
|
|
Total
assets
|
$
|
14,053
|
|
|
$
|
14,273
|
|
|
$
|
13,715
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
Noninterest-bearing
|
$
|
2,077
|
|
|
$
|
2,544
|
|
|
$
|
1,574
|
|
Interest-bearing
|
6,723
|
|
|
6,827
|
|
|
6,361
|
|
Total
deposits
|
8,800
|
|
|
9,371
|
|
|
7,935
|
|
Short-term Federal
Home Loan Bank advances and other
|
1,780
|
|
|
905
|
|
|
2,116
|
|
Long-term Federal Home
Loan Bank advances
|
1,200
|
|
|
1,577
|
|
|
1,425
|
|
Other long-term
debt
|
493
|
|
|
493
|
|
|
247
|
|
Representation and warranty reserve
|
27
|
|
|
32
|
|
|
40
|
|
Other
liabilities
|
417
|
|
|
609
|
|
|
423
|
|
Total liabilities
|
12,717
|
|
|
12,987
|
|
|
12,186
|
|
Stockholders' Equity
|
|
|
|
|
|
Preferred
stock
|
—
|
|
|
—
|
|
|
267
|
|
Common
stock
|
1
|
|
|
1
|
|
|
1
|
|
Additional paid in capital
|
1,502
|
|
|
1,494
|
|
|
1,486
|
|
Accumulated other comprehensive (loss) income
|
(7)
|
|
|
(20)
|
|
|
2
|
|
Accumulated deficit
|
(160)
|
|
|
(189)
|
|
|
(227)
|
|
Total stockholders'
equity
|
1,336
|
|
|
1,286
|
|
|
1,529
|
|
Total liabilities and
stockholders' equity
|
$
|
14,053
|
|
|
$
|
14,273
|
|
|
$
|
13,715
|
|
Flagstar Bancorp,
Inc.
Condensed
Consolidated Statements of Operations
(Dollars in
millions, except per share data)
(Unaudited)
|
|
|
|
Fourth Quarter
2016 Compared to:
|
|
Three Months
Ended
|
|
Third
Quarter
2016
|
Fourth
Quarter
2015
|
|
December 31,
2016
|
September 30,
2016
|
June 30,
2016
|
March 31,
2016
|
December 31,
2015
|
|
Amount
|
Percent
|
Amount
|
Percent
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Income
|
|
|
|
|
|
|
|
|
|
|
Total interest
income
|
$
|
111
|
|
$
|
106
|
|
$
|
99
|
|
$
|
101
|
|
$
|
95
|
|
|
$
|
5
|
|
5
|
%
|
$
|
16
|
|
17
|
%
|
Total interest
expense
|
24
|
|
26
|
|
22
|
|
22
|
|
19
|
|
|
(2)
|
|
(8)
|
%
|
5
|
|
26
|
%
|
Net interest
income
|
87
|
|
80
|
|
77
|
|
79
|
|
76
|
|
|
7
|
|
9
|
%
|
11
|
|
14
|
%
|
Provision (benefit)
for loan losses
|
1
|
|
7
|
|
(3)
|
|
(13)
|
|
(1)
|
|
|
(6)
|
|
(86)
|
%
|
$
|
2
|
|
N/M
|
Net interest income
after provision (benefit) for loan losses
|
86
|
|
73
|
|
80
|
|
92
|
|
77
|
|
|
13
|
|
18
|
%
|
9
|
|
12
|
%
|
Noninterest
Income
|
|
|
|
|
|
|
|
|
|
|
Net gain on loan
sales
|
57
|
|
94
|
|
90
|
|
75
|
|
46
|
|
|
(37)
|
|
(39)
|
%
|
$
|
11
|
|
24
|
%
|
Loan fees and
charges
|
20
|
|
22
|
|
19
|
|
15
|
|
14
|
|
|
(2)
|
|
(9)
|
%
|
6
|
|
43
|
%
|
Deposit fees and
charges
|
5
|
|
5
|
|
6
|
|
6
|
|
6
|
|
|
—
|
|
—
|
%
|
(1)
|
|
(17)
|
%
|
Loan administration
income
|
4
|
|
4
|
|
4
|
|
6
|
|
7
|
|
|
—
|
|
—
|
%
|
(3)
|
|
(43)
|
%
|
Net (loss) return on
the mortgage servicing rights
|
(5)
|
|
(11)
|
|
(4)
|
|
(6)
|
|
9
|
|
|
6
|
|
(55)
|
|
(14)
|
|
N/M
|
Representation and
warranty benefit
|
7
|
|
6
|
|
4
|
|
2
|
|
6
|
|
|
1
|
|
17
|
%
|
1
|
|
17
|
%
|
Other noninterest
income
|
10
|
|
36
|
|
9
|
|
7
|
|
9
|
|
|
(26)
|
|
(72)
|
%
|
1
|
|
11
|
%
|
Total noninterest
income
|
98
|
|
156
|
|
128
|
|
105
|
|
97
|
|
|
(58)
|
|
(37)
|
%
|
1
|
|
1
|
%
|
Noninterest
Expense
|
|
|
|
|
|
|
|
|
|
|
Compensation and
benefits
|
66
|
|
69
|
|
66
|
|
68
|
|
59
|
|
|
(3)
|
|
(4)
|
%
|
$
|
7
|
|
12
|
%
|
Commissions
|
15
|
|
16
|
|
14
|
|
10
|
|
8
|
|
|
(1)
|
|
(6)
|
%
|
$
|
7
|
|
88
|
%
|
Occupancy and
equipment
|
21
|
|
21
|
|
21
|
|
22
|
|
21
|
|
|
—
|
|
—
|
%
|
$
|
—
|
|
—
|
%
|
Asset
resolution
|
1
|
|
2
|
|
1
|
|
3
|
|
2
|
|
|
(1)
|
|
(50)
|
%
|
$
|
(1)
|
|
(50)
|
%
|
Federal insurance
premiums
|
2
|
|
3
|
|
3
|
|
3
|
|
5
|
|
|
(1)
|
|
(33)
|
%
|
$
|
(3)
|
|
(60)
|
%
|
Loan processing
expense
|
15
|
|
13
|
|
15
|
|
12
|
|
12
|
|
|
2
|
|
15
|
%
|
$
|
3
|
|
25
|
%
|
Legal and
professional expense
|
9
|
|
5
|
|
6
|
|
9
|
|
9
|
|
|
4
|
|
80
|
%
|
$
|
—
|
|
—
|
%
|
Other noninterest
expense
|
13
|
|
13
|
|
13
|
|
10
|
|
13
|
|
|
—
|
|
—
|
%
|
$
|
—
|
|
—
|
%
|
Total noninterest
expense
|
142
|
|
142
|
|
139
|
|
137
|
|
129
|
|
|
—
|
|
—
|
%
|
13
|
|
10
|
%
|
Income before income
taxes
|
42
|
|
87
|
|
69
|
|
60
|
|
45
|
|
|
(45)
|
|
(52)
|
%
|
(3)
|
|
(7)
|
%
|
Provision for income
taxes
|
14
|
|
30
|
|
22
|
|
21
|
|
12
|
|
|
(16)
|
|
(53)
|
%
|
$
|
2
|
|
17
|
%
|
Net
income
|
$
|
28
|
|
$
|
57
|
|
$
|
47
|
|
$
|
39
|
|
$
|
33
|
|
|
$
|
(29)
|
|
(51)
|
%
|
$
|
(5)
|
|
(15)
|
%
|
Income per
share
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.50
|
|
$
|
0.98
|
|
$
|
0.67
|
|
$
|
0.56
|
|
$
|
0.45
|
|
|
$
|
(0.48)
|
|
(49)
|
%
|
$
|
0.05
|
|
11
|
%
|
Diluted
|
$
|
0.49
|
|
$
|
0.96
|
|
$
|
0.66
|
|
$
|
0.54
|
|
$
|
0.44
|
|
|
$
|
(0.47)
|
|
(49)
|
%
|
$
|
0.05
|
|
11
|
%
|
N/M - Not
meaningful
|
Flagstar Bancorp,
Inc.
Condensed
Consolidated Statements of Operations
(Dollars in
millions, except per share data)
(Unaudited)
|
|
|
|
Year Ended
December 31, 2016
|
|
Year
Ended
|
|
Compared
to:
Year Ended
December 31, 2015
|
|
December 31,
2016
|
December 31,
2015
|
|
Amount
|
Percent
|
Interest
Income
|
|
|
|
|
|
Total interest
income
|
$
|
417
|
|
$
|
355
|
|
|
$
|
62
|
|
17
|
%
|
Total interest
expense
|
94
|
|
68
|
|
|
26
|
|
38
|
%
|
Net interest
income
|
323
|
|
287
|
|
|
36
|
|
13
|
%
|
Provision (benefit)
for loan losses
|
(8)
|
|
(19)
|
|
|
11
|
|
(58)
|
%
|
Net interest income
after provision (benefit) for loan losses
|
331
|
|
306
|
|
|
25
|
|
8
|
%
|
Noninterest
Income
|
|
|
|
|
|
Net gain on loan
sales
|
316
|
|
288
|
|
|
28
|
|
10
|
%
|
Loan fees and
charges
|
76
|
|
67
|
|
|
9
|
|
13
|
%
|
Deposit fees and
charges
|
22
|
|
25
|
|
|
(3)
|
|
(12)
|
%
|
Loan administration
income
|
18
|
|
26
|
|
|
(8)
|
|
(31)
|
%
|
Net (loss) return on
the mortgage servicing rights
|
(26)
|
|
28
|
|
|
(54)
|
|
N/M
|
Representation and
warranty benefit
|
19
|
|
19
|
|
|
—
|
|
—
|
%
|
Other noninterest
income
|
62
|
|
17
|
|
|
45
|
|
N/M
|
Total noninterest
income
|
487
|
|
470
|
|
|
17
|
|
4
|
%
|
Noninterest
Expense
|
|
|
|
|
|
Compensation and
benefits
|
269
|
|
237
|
|
|
32
|
|
14
|
%
|
Commissions
|
55
|
|
39
|
|
|
16
|
|
41
|
%
|
Occupancy and
equipment
|
85
|
|
81
|
|
|
4
|
|
5
|
%
|
Asset
resolution
|
7
|
|
15
|
|
|
(8)
|
|
(53)
|
%
|
Federal insurance
premiums
|
11
|
|
23
|
|
|
(12)
|
|
(52)
|
%
|
Loan processing
expense
|
55
|
|
52
|
|
|
3
|
|
6
|
%
|
Legal and
professional expense
|
29
|
|
36
|
|
|
(7)
|
|
(19)
|
%
|
Other noninterest
expense
|
49
|
|
53
|
|
|
(4)
|
|
(8)
|
%
|
Total noninterest
expense
|
560
|
|
536
|
|
|
24
|
|
4
|
%
|
Income before income
taxes
|
258
|
|
240
|
|
|
18
|
|
8
|
%
|
Provision for income
taxes
|
87
|
|
82
|
|
|
5
|
|
6
|
%
|
Net
income
|
$
|
171
|
|
$
|
158
|
|
|
$
|
13
|
|
8
|
%
|
Income per
share
|
|
|
|
|
|
Basic
|
$
|
2.71
|
|
$
|
2.27
|
|
|
$
|
0.44
|
|
19
|
%
|
Diluted
|
$
|
2.66
|
|
$
|
2.24
|
|
|
$
|
0.42
|
|
19
|
%
|
N/M - Not
meaningful
|
Flagstar Bancorp,
Inc.
Summary of
Selected Consolidated Financial and Statistical Data
(Dollars in millions,
except share data)
(Unaudited)
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
December 31,
2016
|
|
September 30,
2016
|
|
December 31,
2015
|
|
December 31,
2016
|
|
December 31,
2015
|
Mortgage loans
originated (1)
|
$
|
8,573
|
|
|
$
|
9,198
|
|
|
$
|
5,824
|
|
|
$
|
32,453
|
|
|
$
|
29,402
|
|
Mortgage loans sold
and securitized
|
$
|
8,422
|
|
|
$
|
8,723
|
|
|
$
|
5,164
|
|
|
$
|
32,033
|
|
|
$
|
26,307
|
|
Interest rate spread
(2)
|
2.49
|
%
|
|
2.36
|
%
|
|
2.54
|
%
|
|
2.45
|
%
|
|
2.58
|
%
|
Net interest
margin
|
2.67
|
%
|
|
2.58
|
%
|
|
2.69
|
%
|
|
2.64
|
%
|
|
2.74
|
%
|
Average common shares
outstanding
|
56,607,933
|
|
|
56,580,238
|
|
|
56,449,596
|
|
|
56,569,307
|
|
|
56,426,977
|
|
Average fully diluted
shares outstanding
|
57,824,854
|
|
|
57,933,806
|
|
|
57,502,017
|
|
|
57,597,667
|
|
|
57,164,523
|
|
Average
interest-earning assets
|
$
|
12,817
|
|
|
$
|
12,318
|
|
|
$
|
11,240
|
|
|
$
|
12,164
|
|
|
$
|
10,436
|
|
Average
interest-paying liabilities
|
$
|
10,222
|
|
|
$
|
9,773
|
|
|
$
|
9,078
|
|
|
$
|
9,757
|
|
|
$
|
8,305
|
|
Average stockholders'
equity
|
$
|
1,312
|
|
|
$
|
1,379
|
|
|
$
|
1,547
|
|
|
$
|
1,464
|
|
|
$
|
1,486
|
|
Return on average
assets (4)
|
0.78
|
%
|
|
1.61
|
%
|
|
1.03
|
%
|
|
1.23
|
%
|
|
1.32
|
%
|
Return on average
equity (4)
|
8.60
|
%
|
|
16.53
|
%
|
|
8.56
|
%
|
|
11.69
|
%
|
|
10.63
|
%
|
Return on average
common equity (4)
|
8.60
|
%
|
|
17.45
|
%
|
|
10.35
|
%
|
|
13.03
|
%
|
|
10.49
|
%
|
Efficiency ratio
(4)
|
76.7
|
%
|
|
59.9
|
%
|
|
75.2
|
%
|
|
69.2
|
%
|
|
70.9
|
%
|
Equity-to-assets
ratio (average for the period)
|
9.05
|
%
|
|
9.75
|
%
|
|
12.07
|
%
|
|
10.52
|
%
|
|
12.43
|
%
|
|
December 31,
2016
|
|
September 30,
2016
|
|
December 31,
2015
|
Book value per common
share
|
$
|
23.50
|
|
|
$
|
22.72
|
|
|
$
|
22.33
|
|
Number of common
shares outstanding
|
56,824,802
|
|
|
56,597,271
|
|
|
56,483,258
|
|
Mortgage loans
subserviced for others
|
$
|
43,127
|
|
|
$
|
41,017
|
|
|
$
|
40,287
|
|
Mortgage loans
serviced for others
|
$
|
31,207
|
|
|
$
|
31,372
|
|
|
$
|
26,145
|
|
Weighted average
service fee (basis points)
|
26.7
|
|
|
28.1
|
|
|
27.7
|
|
Capitalized value of
mortgage servicing rights
|
1.07
|
%
|
|
0.96
|
%
|
|
1.13
|
%
|
Mortgage servicing
rights to Tier 1 capital
|
26.7
|
%
|
|
24.6
|
%
|
|
20.6
|
%
|
Ratio of allowance
for loan losses to LHFI (3)
|
2.37
|
%
|
|
2.30
|
%
|
|
3.00
|
%
|
Ratio of allowance
for loan losses to LHFI and loans with government guarantees
(3)
|
2.23
|
%
|
|
2.16
|
%
|
|
2.78
|
%
|
Ratio of
nonperforming assets to total assets
|
0.39
|
%
|
|
0.39
|
%
|
|
0.61
|
%
|
Equity-to-assets
ratio
|
9.50
|
%
|
|
9.01
|
%
|
|
11.14
|
%
|
Common
equity-to-assets ratio
|
9.50
|
%
|
|
9.01
|
%
|
|
9.20
|
%
|
Number of bank
branches
|
99
|
|
|
99
|
|
|
99
|
|
Number of FTE
employees
|
2,886
|
|
|
2,881
|
|
|
2,713
|
|
|
|
(1)
|
Includes residential
first mortgage and second mortgage loans.
|
(2)
|
Interest rate spread
is the difference between the annualized yield earned on average
interest-earning assets
for the period and the annualized rate of interest paid on average
interest-bearing liabilities for the period.
|
(3)
|
Excludes loans
carried under the fair value option.
|
(4)
|
See Non-GAAP
Reconciliation in which applicable periods, three months ended
September 30, 2016 and full year
ended December 31, 2016, have been adjusted.
|
Flagstar Bancorp,
Inc.
Earnings Per
Share
(Dollars in millions,
except share data)
(Unaudited)
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
December 31,
2016
|
|
September 30,
2016
|
|
December 31,
2015
|
|
December 31,
2016
|
|
December 31,
2015
|
Net income
|
28
|
|
|
57
|
|
|
33
|
|
|
171
|
|
|
158
|
|
Cumulative preferred
stock dividends (1)
|
—
|
|
|
(2)
|
|
|
(8)
|
|
|
(18)
|
|
|
(30)
|
|
Net income applicable
to Common Stockholders
|
$
|
28
|
|
|
$
|
55
|
|
|
$
|
25
|
|
|
$
|
153
|
|
|
$
|
128
|
|
Weighted Average
Shares
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding
|
56,607,933
|
|
|
56,580,238
|
|
|
56,449,596
|
|
|
56,569,307
|
|
|
56,426,977
|
|
Effect of dilutive
securities
|
|
|
|
|
|
|
|
|
|
Warrants
|
151,560
|
|
|
364,791
|
|
|
348,939
|
|
|
138,314
|
|
|
305,484
|
|
Stock-based
awards
|
1,065,361
|
|
|
988,777
|
|
|
703,482
|
|
|
890,046
|
|
|
432,062
|
|
Weighted average
diluted common shares
|
57,824,854
|
|
|
57,933,806
|
|
|
57,502,017
|
|
|
57,597,667
|
|
|
57,164,523
|
|
Earnings per
common share
|
|
|
|
|
|
|
|
|
|
Net income applicable
to Common Stockholders
|
$
|
0.50
|
|
|
$
|
0.98
|
|
|
$
|
0.45
|
|
|
$
|
2.71
|
|
|
$
|
2.27
|
|
Effect of dilutive
securities
|
|
|
|
|
|
|
|
|
|
Warrants
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.01)
|
|
|
(0.01)
|
|
Stock-based
awards
|
(0.01)
|
|
|
(0.02)
|
|
|
(0.01)
|
|
|
(0.04)
|
|
|
(0.02)
|
|
Diluted earnings
per share
|
$
|
0.49
|
|
|
$
|
0.96
|
|
|
$
|
0.44
|
|
|
$
|
2.66
|
|
|
$
|
2.24
|
|
|
|
(1)
|
Under the terms of
the Series C Preferred Stock, we elected to defer dividends
beginning with the February 2012 dividend. In July 2016, we
ended the deferral and brought current our previously deferred
dividends.
|
Average Balances,
Yields and Rates
(Dollars in
millions)
(Unaudited)
|
|
|
Three Months
Ended
|
|
December 31,
2016
|
|
September 30,
2016
|
|
December 31,
2015
|
|
Average
Balance
|
Interest
|
Annualized Yield/Rate
|
|
Average
Balance
|
Interest
|
Annualized
Yield/Rate
|
|
Average
Balance
|
Interest
|
Annualized
Yield/Rate
|
|
Interest-Earning
Assets
|
|
Loans
held-for-sale
|
$
|
3,321
|
|
$
|
29
|
|
3.55
|
%
|
|
$
|
3,416
|
|
$
|
30
|
|
3.51
|
%
|
|
$
|
2,484
|
|
$
|
24
|
|
3.88
|
%
|
|
Loans
held-for-investment
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer loans
(1)
|
2,691
|
|
24
|
|
3.55
|
%
|
|
2,580
|
|
23
|
|
3.52
|
%
|
|
3,423
|
|
30
|
|
3.52
|
%
|
|
Commercial loans
(1)
|
3,472
|
|
35
|
|
4.06
|
%
|
|
3,268
|
|
33
|
|
3.96
|
%
|
|
2,219
|
|
21
|
|
3.77
|
%
|
|
Total loans
held-for-investment
|
6,163
|
|
59
|
|
3.84
|
%
|
|
5,848
|
|
56
|
|
3.77
|
%
|
|
5,642
|
|
51
|
|
3.62
|
%
|
|
Loans with government
guarantees
|
389
|
|
4
|
|
4.23
|
%
|
|
432
|
|
4
|
|
3.88
|
%
|
|
496
|
|
4
|
|
2.84
|
%
|
|
Investment
securities
|
2,845
|
|
18
|
|
2.53
|
%
|
|
2,516
|
|
16
|
|
2.55
|
%
|
|
2,441
|
|
16
|
|
2.55
|
%
|
|
Interest-earning
deposits
|
99
|
|
1
|
|
0.51
|
%
|
|
106
|
|
—
|
|
0.48
|
%
|
|
177
|
|
—
|
|
0.49
|
%
|
|
Total
interest-earning assets
|
12,817
|
|
$
|
111
|
|
3.46
|
%
|
|
12,318
|
|
$
|
106
|
|
3.42
|
%
|
|
11,240
|
|
$
|
95
|
|
3.36
|
%
|
|
Other
assets
|
1,672
|
|
|
|
|
1,830
|
|
|
|
|
1,585
|
|
|
|
|
Total
assets
|
$
|
14,489
|
|
|
|
|
$
|
14,148
|
|
|
|
|
$
|
12,825
|
|
|
|
|
Interest-Bearing
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail
deposits
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand
deposits
|
$
|
521
|
|
$
|
—
|
|
0.21
|
%
|
|
$
|
509
|
|
$
|
—
|
|
0.20
|
%
|
|
$
|
431
|
|
$
|
—
|
|
0.13
|
%
|
|
Savings
deposits
|
3,840
|
|
7
|
|
0.77
|
%
|
|
3,751
|
|
8
|
|
0.77
|
%
|
|
3,725
|
|
8
|
|
0.84
|
%
|
|
Money market
deposits
|
256
|
|
—
|
|
0.43
|
%
|
|
250
|
|
—
|
|
0.41
|
%
|
|
272
|
|
—
|
|
0.39
|
%
|
|
Certificates of
deposit
|
1,079
|
|
3
|
|
1.05
|
%
|
|
1,071
|
|
3
|
|
1.05
|
%
|
|
813
|
|
2
|
|
0.88
|
%
|
|
Total retail
deposits
|
5,696
|
|
10
|
|
0.75
|
%
|
|
5,581
|
|
11
|
|
0.75
|
%
|
|
5,241
|
|
10
|
|
0.76
|
%
|
|
Government
deposits
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand
deposits
|
211
|
|
—
|
|
0.39
|
%
|
|
243
|
|
—
|
|
0.39
|
%
|
|
304
|
|
—
|
|
0.40
|
%
|
|
Savings
deposits
|
470
|
|
1
|
|
0.52
|
%
|
|
478
|
|
1
|
|
0.52
|
%
|
|
401
|
|
1
|
|
0.52
|
%
|
|
Certificates of
deposit
|
352
|
|
1
|
|
0.60
|
%
|
|
355
|
|
—
|
|
0.52
|
%
|
|
410
|
|
1
|
|
0.45
|
%
|
|
Total government
deposits
|
1,033
|
|
2
|
|
0.52
|
%
|
|
1,076
|
|
1
|
|
0.49
|
%
|
|
1,115
|
|
2
|
|
0.46
|
%
|
|
Total
interest-bearing deposits
|
6,729
|
|
12
|
|
0.72
|
%
|
|
6,657
|
|
12
|
|
0.71
|
%
|
|
6,356
|
|
12
|
|
0.71
|
%
|
|
Short-term Federal
Home Loan Bank advances and other
|
1,427
|
|
1
|
|
0.50
|
%
|
|
1,073
|
|
1
|
|
0.44
|
%
|
|
1,226
|
|
1
|
|
0.25
|
%
|
|
Long-term Federal
Home Loan Bank advances
|
1,573
|
|
5
|
|
1.24
|
%
|
|
1,576
|
|
7
|
|
1.81
|
%
|
|
1,219
|
|
4
|
|
1.60
|
%
|
|
Other long-term
debt
|
493
|
|
6
|
|
4.89
|
%
|
|
467
|
|
6
|
|
4.86
|
%
|
|
277
|
|
2
|
|
2.66
|
%
|
|
Total
interest-bearing liabilities
|
10,222
|
|
24
|
|
0.97
|
%
|
|
9,773
|
|
26
|
|
1.06
|
%
|
|
9,078
|
|
19
|
|
0.83
|
%
|
|
Noninterest-bearing
deposits (2)
|
2,504
|
|
|
|
|
2,469
|
|
|
|
|
1,776
|
|
|
|
|
Other
liabilities
|
451
|
|
|
|
|
527
|
|
|
|
|
424
|
|
|
|
|
Stockholders'
equity
|
1,312
|
|
|
|
|
1,379
|
|
|
|
|
1,547
|
|
|
|
|
Total liabilities and
stockholders' equity
|
$
|
14,489
|
|
|
|
|
$
|
14,148
|
|
|
|
|
$
|
12,825
|
|
|
|
|
Net interest-earning
assets
|
$
|
2,595
|
|
|
|
|
$
|
2,545
|
|
|
|
|
$
|
2,162
|
|
|
|
|
Net interest
income
|
|
$
|
87
|
|
|
|
|
$
|
80
|
|
|
|
|
$
|
76
|
|
|
|
Interest rate spread
(3)
|
|
|
2.49
|
%
|
|
|
|
2.36
|
%
|
|
|
|
2.54
|
%
|
|
Net interest margin
(4)
|
|
|
2.67
|
%
|
|
|
|
2.58
|
%
|
|
|
|
2.69
|
%
|
|
Ratio of average
interest-earning assets to interest-bearing liabilities
|
|
|
125.4
|
%
|
|
|
|
126.0
|
%
|
|
|
|
123.8
|
%
|
|
Total average
deposits
|
$
|
9,233
|
|
|
|
|
$
|
9,126
|
|
|
|
|
$
|
8,132
|
|
|
|
|
|
|
(1)
|
Consumer loans
include: residential first mortgage, second mortgage, HELOC and
other consumer loans. Commercial loans include: commercial real
estate, commercial and industrial, and warehouse lending
loans.
|
(2)
|
Includes
noninterest-bearing company-controlled deposits that arise due to
the servicing of loans for others.
|
(3)
|
Interest rate spread
is the difference between rate of interest earned on
interest-earning assets and rate of interest paid on
interest-bearing liabilities.
|
(4)
|
Net interest margin
is net interest income divided by average interest-earning
assets.
|
Average Balances,
Yields and Rates
(Dollars in
millions)
(Unaudited)
|
|
|
Year
Ended
|
|
December 31,
2016
|
|
December 31,
2015
|
|
Average
Balance
|
Interest
|
Annualized
Yield/Rate
|
|
Average
Balance
|
Interest
|
Annualized
Yield/Rate
|
|
|
Interest-Earning
Assets
|
|
|
|
|
|
|
|
Loans
held-for-sale
|
$
|
3,134
|
|
$
|
113
|
|
3.62
|
%
|
|
$
|
2,188
|
|
$
|
85
|
|
3.90
|
%
|
Loans
held-for-investment
|
|
|
|
|
|
|
|
Consumer loans
(1)
|
2,832
|
|
99
|
|
3.52
|
%
|
|
3,083
|
|
114
|
|
3.68
|
%
|
Commercial loans
(1)
|
2,981
|
|
120
|
|
3.97
|
%
|
|
1,993
|
|
78
|
|
3.88
|
%
|
Total loans
held-for-investment
|
5,813
|
|
219
|
|
3.75
|
%
|
|
5,076
|
|
192
|
|
3.76
|
%
|
Loans with government
guarantees
|
435
|
|
16
|
|
3.59
|
%
|
|
633
|
|
18
|
|
2.86
|
%
|
Investment
securities
|
2,653
|
|
68
|
|
2.56
|
%
|
|
2,305
|
|
59
|
|
2.55
|
%
|
Interest-earning
deposits
|
129
|
|
1
|
|
0.50
|
%
|
|
234
|
|
1
|
|
0.50
|
%
|
Total
interest-earning assets
|
12,164
|
|
$
|
417
|
|
3.42
|
%
|
|
10,436
|
|
$
|
355
|
|
3.39
|
%
|
Other
assets
|
1,743
|
|
|
|
|
1,520
|
|
|
|
Total
assets
|
$
|
13,907
|
|
|
|
|
$
|
11,956
|
|
|
|
Interest-Bearing
Liabilities
|
|
|
|
|
|
|
|
Retail
deposits
|
|
|
|
|
|
|
|
Demand
deposits
|
$
|
489
|
|
$
|
1
|
|
0.18
|
%
|
|
$
|
429
|
|
$
|
1
|
|
0.14
|
%
|
Savings
deposits
|
3,751
|
|
29
|
|
0.78
|
%
|
|
3,693
|
|
30
|
|
0.82
|
%
|
Money market
deposits
|
278
|
|
1
|
|
0.44
|
%
|
|
258
|
|
1
|
|
0.31
|
%
|
Certificates of
deposit
|
990
|
|
10
|
|
1.05
|
%
|
|
787
|
|
6
|
|
0.77
|
%
|
Total retail
deposits
|
5,508
|
|
41
|
|
0.76
|
%
|
|
5,167
|
|
38
|
|
0.73
|
%
|
Government
deposits
|
|
|
|
|
|
|
|
Demand
deposits
|
228
|
|
1
|
|
0.39
|
%
|
|
257
|
|
1
|
|
0.39
|
%
|
Savings
deposits
|
442
|
|
2
|
|
0.52
|
%
|
|
405
|
|
2
|
|
0.52
|
%
|
Certificates of
deposit
|
382
|
|
2
|
|
0.40
|
%
|
|
358
|
|
1
|
|
0.39
|
%
|
Total government
deposits
|
1,052
|
|
5
|
|
0.45
|
%
|
|
1,020
|
|
4
|
|
0.44
|
%
|
Total
interest-bearing deposits
|
6,560
|
|
46
|
|
0.71
|
%
|
|
6,187
|
|
42
|
|
0.68
|
%
|
Short-term Federal
Home Loan Bank advances and other
|
1,249
|
|
5
|
|
0.44
|
%
|
|
311
|
|
1
|
|
0.30
|
%
|
Long-term Federal
Home Loan Bank advances
|
1,584
|
|
27
|
|
1.72
|
%
|
|
1,500
|
|
18
|
|
1.17
|
%
|
Other long-term
debt
|
364
|
|
16
|
|
4.34
|
%
|
|
307
|
|
7
|
|
2.42
|
%
|
Total
interest-bearing liabilities
|
9,757
|
|
94
|
|
0.97
|
%
|
|
8,305
|
|
68
|
|
0.82
|
%
|
Noninterest-bearing
deposits (2)
|
2,202
|
|
|
|
|
1,690
|
|
|
|
Other
liabilities
|
484
|
|
|
|
|
475
|
|
|
|
Stockholders'
equity
|
1,464
|
|
|
|
|
1,486
|
|
|
|
Total liabilities and
stockholders' equity
|
$
|
13,907
|
|
|
|
|
$
|
11,956
|
|
|
|
Net interest-earning
assets
|
$
|
2,407
|
|
|
|
|
$
|
2,131
|
|
|
|
Net interest
income
|
|
$
|
323
|
|
|
|
|
$
|
287
|
|
|
Interest rate spread
(3)
|
|
|
2.45
|
%
|
|
|
|
2.58
|
%
|
Net interest margin
(4)
|
|
|
2.64
|
%
|
|
|
|
2.74
|
%
|
Ratio of average
interest-earning assets to interest-bearing liabilities
|
|
|
124.7
|
%
|
|
|
|
125.7
|
%
|
Total average
deposits
|
$
|
8,762
|
|
|
|
|
$
|
7,877
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Consumer loans
include: residential first mortgage, second mortgage, HELOC and
other consumer loans. Commercial loans include: commercial real
estate, commercial and industrial, and warehouse lending
loans.
|
(2)
|
Includes
noninterest-bearing company-controlled deposits that arise due to
the servicing of loans for others.
|
(3)
|
Interest rate spread
is the difference between rate of interest earned on
interest-earning assets and rate of interest paid on
interest-bearing liabilities.
|
(4)
|
Net interest margin
is net interest income divided by average interest-earning
assets.
|
Gain on Loan Sales
on Loans Held-for-Sale
(Dollars in
millions)
(Unaudited)
|
|
|
Three Months
Ended
|
|
December 31,
2016
|
|
September 30,
2016
|
|
June 30,
2016
|
|
March 31,
2016
|
|
December 31,
2015
|
|
(Dollars in
millions)
|
Mortgage rate lock
commitments (fallout-adjusted) (1)
|
$
|
6,091
|
|
|
$
|
8,291
|
|
|
$
|
8,127
|
|
|
$
|
6,863
|
|
|
$
|
5,027
|
|
Gain on sale margin
(change in bps) (1)
|
0.93
|
%
|
|
1.13
|
%
|
|
1.04
|
%
|
|
0.96
|
%
|
|
0.92
|
%
|
Net gain on loan
sales on HFS
|
$
|
57
|
|
|
$
|
94
|
|
|
$
|
85
|
|
|
$
|
66
|
|
|
$
|
46
|
|
Net (loss) return on
the mortgage servicing rights
|
$
|
(5)
|
|
|
$
|
(11)
|
|
|
$
|
(4)
|
|
|
$
|
(6)
|
|
|
$
|
9
|
|
Gain on loan sales
HFS + net (loss) return on the MSR
|
$
|
52
|
|
|
$
|
83
|
|
|
$
|
81
|
|
|
$
|
60
|
|
|
$
|
55
|
|
Residential loans
serviced (number of accounts - 000's) (2)
|
383
|
|
|
375
|
|
|
358
|
|
|
354
|
|
|
361
|
|
Capitalized value of
mortgage servicing rights
|
1.07
|
%
|
|
0.96
|
%
|
|
0.99
|
%
|
|
1.06
|
%
|
|
1.13
|
%
|
Mortgage rate lock
commitments (gross)
|
$
|
7,611
|
|
|
$
|
10,328
|
|
|
$
|
10,168
|
|
|
$
|
8,762
|
|
|
$
|
6,258
|
|
Mortgage loans sold
and securitized
|
$
|
8,422
|
|
|
$
|
8,723
|
|
|
$
|
7,940
|
|
|
$
|
6,948
|
|
|
$
|
5,164
|
|
Net margin on loan
sales
|
0.68
|
%
|
|
1.08
|
%
|
|
1.07
|
%
|
|
0.94
|
%
|
|
0.90
|
%
|
|
|
(1)
|
Fallout-adjusted
mortgage rate lock commitments are adjusted by a percentage of
mortgage loans in the pipeline that are not expected to close based
on previous historical
experience and the level of interest rates. The net margin is based
on net gain on loan sales to fallout-adjusted mortgage rate lock
commitments.
|
(2)
|
Includes serviced for
own loan portfolio, serviced for others and subserviced for others
loans.
|
|
Year
Ended
|
|
December 31,
2016
|
|
December 31,
2015
|
|
|
Mortgage rate lock
commitments (fallout-adjusted) (1)
|
$
|
29,372
|
|
|
$
|
25,511
|
|
Gain on sale margin
(change in bps) (1)
|
1.03
|
%
|
|
1.13
|
%
|
Net gain on loan
sales on HFS
|
$
|
301
|
|
|
$
|
288
|
|
Net (loss) return on
the mortgage servicing rights
|
$
|
(26)
|
|
|
$
|
28
|
|
Gain on loan sales
HFS + net (loss) return on the MSR
|
$
|
275
|
|
|
$
|
316
|
|
Residential loans
serviced (number of accounts - 000's) (2)
|
383
|
|
|
361
|
|
Capitalized value of
mortgage servicing rights
|
1.07
|
%
|
|
1.13
|
%
|
Mortgage rate lock
commitments (gross)
|
$
|
36,869
|
|
|
$
|
31,718
|
|
Mortgage loans sold
and securitized
|
$
|
32,033
|
|
|
$
|
26,307
|
|
Net margin on loan
sales
|
0.94
|
%
|
|
1.09
|
%
|
|
|
(1)
|
Fallout-adjusted
mortgage rate lock commitments are adjusted by a percentage of
mortgage loans in the pipeline that are not expected to close based
on previous historical experience and the level of interest rates.
The net margin is based on net gain on loan sales to
fallout-adjusted mortgage rate lock commitments.
|
(2)
|
Includes serviced for
own loan portfolio, serviced for others and subserviced for others
loans.
|
Regulatory Capital
- Bancorp
(Dollars in
millions)
(Unaudited)
|
|
|
December 31,
2016
|
|
September 30,
2016
|
|
June 30,
2016
|
|
March 31,
2016
|
|
December 31,
2015
|
|
Amount
|
Ratio
|
|
Amount
|
Ratio
|
|
Amount
|
Ratio
|
|
Amount
|
Ratio
|
|
Amount
|
Ratio
|
Tier 1 leverage (to
adjusted tangible assets)
|
$
|
1,256
|
|
8.88
|
%
|
|
$
|
1,225
|
|
8.88
|
%
|
|
$
|
1,514
|
|
11.59
|
%
|
|
$
|
1,453
|
|
11.04
|
%
|
|
$
|
1,435
|
|
11.51
|
%
|
Total adjusted
tangible asset base
|
$
|
14,149
|
|
|
|
$
|
13,798
|
|
|
|
$
|
13,068
|
|
|
|
$
|
13,167
|
|
|
|
$
|
12,474
|
|
|
Tier 1 common equity
(to risk weighted assets)
|
$
|
1,084
|
|
13.07
|
%
|
|
$
|
1,056
|
|
12.04
|
%
|
|
$
|
1,086
|
|
13.55
|
%
|
|
$
|
1,032
|
|
13.96
|
%
|
|
$
|
1,065
|
|
14.09
|
%
|
Tier 1 capital
(to risk weighted assets)
|
$
|
1,256
|
|
15.14
|
%
|
|
$
|
1,225
|
|
13.98
|
%
|
|
$
|
1,514
|
|
18.89
|
%
|
|
$
|
1,453
|
|
19.67
|
%
|
|
$
|
1,435
|
|
18.98
|
%
|
Total capital (to
risk weighted assets)
|
$
|
1,363
|
|
16.42
|
%
|
|
$
|
1,338
|
|
15.26
|
%
|
|
$
|
1,618
|
|
20.19
|
%
|
|
$
|
1,549
|
|
20.97
|
%
|
|
$
|
1,534
|
|
20.28
|
%
|
Risk weighted asset
base
|
$
|
8,298
|
|
|
|
$
|
8,767
|
|
|
|
$
|
8,014
|
|
|
|
$
|
7,387
|
|
|
|
$
|
7,561
|
|
|
Regulatory Capital
- Bank
(Dollars in
millions)
(Unaudited)
|
|
|
December 31,
2016
|
|
September 30,
2016
|
|
June 30,
2016
|
|
March 31,
2016
|
|
December 31,
2015
|
|
Amount
|
Ratio
|
|
Amount
|
Ratio
|
|
Amount
|
Ratio
|
|
Amount
|
Ratio
|
|
Amount
|
Ratio
|
Tier 1 leverage (to
adjusted tangible assets)
|
$
|
1,491
|
|
10.52
|
%
|
|
$
|
1,459
|
|
10.55
|
%
|
|
$
|
1,576
|
|
12.03
|
%
|
|
$
|
1,509
|
|
11.43
|
%
|
|
$
|
1,472
|
|
11.79
|
%
|
Total adjusted
tangible asset base
|
$
|
14,177
|
|
|
|
$
|
13,824
|
|
|
|
$
|
13,102
|
|
|
|
$
|
13,200
|
|
|
|
$
|
12,491
|
|
|
Tier 1 common equity
(to risk weighted assets)
|
$
|
1,491
|
|
17.91
|
%
|
|
$
|
1,459
|
|
16.59
|
%
|
|
$
|
1,576
|
|
19.58
|
%
|
|
$
|
1,509
|
|
20.34
|
%
|
|
$
|
1,472
|
|
19.42
|
%
|
Tier 1 capital
(to risk weighted assets)
|
$
|
1,491
|
|
17.91
|
%
|
|
$
|
1,459
|
|
16.59
|
%
|
|
$
|
1,576
|
|
19.58
|
%
|
|
$
|
1,509
|
|
20.34
|
%
|
|
$
|
1,472
|
|
19.42
|
%
|
Total capital (to
risk weighted assets)
|
$
|
1,597
|
|
19.19
|
%
|
|
$
|
1,571
|
|
17.87
|
%
|
|
$
|
1,679
|
|
20.86
|
%
|
|
$
|
1,605
|
|
21.63
|
%
|
|
$
|
1,570
|
|
20.71
|
%
|
Risk weighted asset
base
|
$
|
8,325
|
|
|
|
$
|
8,794
|
|
|
|
$
|
8,048
|
|
|
|
$
|
7,421
|
|
|
|
$
|
7,582
|
|
|
Loan
Originations
(Dollars in
millions)
(Unaudited)
|
|
Three Months
Ended
|
|
December 31,
2016
|
|
September 30,
2016
|
|
December 31,
2015
|
Consumer
loans
|
|
|
|
|
|
|
|
|
Mortgage (1)
|
$
|
8,573
|
|
97.3
|
%
|
|
$
|
9,198
|
|
96.9
|
%
|
|
$
|
5,824
|
|
96.0
|
%
|
Other consumer (2)
|
46
|
|
0.5
|
%
|
|
44
|
|
0.5
|
%
|
|
39
|
|
0.6
|
%
|
Total consumer
loans
|
8,619
|
|
97.8
|
%
|
|
9,242
|
|
97.4
|
%
|
|
5,863
|
|
96.6
|
%
|
Commercial loans
(3)
|
191
|
|
2.2
|
%
|
|
248
|
|
2.6
|
%
|
|
205
|
|
3.4
|
%
|
Total loan
originations
|
$
|
8,810
|
|
100.0
|
%
|
|
$
|
9,490
|
|
100.0
|
%
|
|
$
|
6,068
|
|
100.0
|
%
|
|
Year
Ended
|
|
December 31,
2016
|
|
December 31,
2015
|
Mortgage (1)
|
$
|
32,453
|
|
97.5
|
%
|
|
$
|
29,402
|
|
98.2
|
%
|
Other consumer (2)
|
159
|
|
0.5
|
%
|
|
132
|
|
0.4
|
%
|
Total consumer
loans
|
32,612
|
|
97.9
|
%
|
|
29,534
|
|
98.6
|
%
|
Commercial loans
(3)
|
687
|
|
2.1
|
%
|
|
415
|
|
1.4
|
%
|
Total loan
originations
|
$
|
33,299
|
|
100.0
|
%
|
|
$
|
29,949
|
|
100.0
|
%
|
|
|
(1)
|
Includes residential
first mortgage and second mortgage loans.
|
(2)
|
Includes HELOC and
other consumer loans.
|
(3)
|
Includes commercial
real estate and commercial and industrial loans.
|
Loans
Held-for-Investment
(Dollars in
millions)
(Unaudited)
|
|
|
December 31,
2016
|
|
September 30,
2016
|
|
December 31,
2015
|
Consumer
loans
|
|
|
|
|
|
|
|
|
Residential first
mortgage
|
$
|
2,327
|
|
38.3
|
%
|
|
$
|
2,136
|
|
33.9
|
%
|
|
$
|
3,100
|
|
48.9
|
%
|
Second
mortgage
|
126
|
|
2.1
|
%
|
|
127
|
|
2.0
|
%
|
|
135
|
|
2.1
|
%
|
HELOC
|
317
|
|
5.2
|
%
|
|
326
|
|
5.2
|
%
|
|
384
|
|
6.0
|
%
|
Other
|
28
|
|
0.5
|
%
|
|
30
|
|
0.5
|
%
|
|
31
|
|
0.5
|
%
|
Total consumer loans
|
2,798
|
|
46.1
|
%
|
|
2,619
|
|
41.6
|
%
|
|
3,650
|
|
57.5
|
%
|
Commercial
loans
|
|
|
|
|
|
|
|
|
Commercial real
estate
|
1,261
|
|
20.8
|
%
|
|
1,168
|
|
18.6
|
%
|
|
814
|
|
12.8
|
%
|
Commercial and
industrial
|
769
|
|
12.7
|
%
|
|
708
|
|
11.3
|
%
|
|
552
|
|
8.7
|
%
|
Warehouse
lending
|
1,237
|
|
20.4
|
%
|
|
1,795
|
|
28.5
|
%
|
|
1,336
|
|
21.0
|
%
|
Total commercial loans
|
3,267
|
|
53.9
|
%
|
|
3,671
|
|
58.4
|
%
|
|
2,702
|
|
42.5
|
%
|
Total loans
held-for-investment
|
$
|
6,065
|
|
100.0
|
%
|
|
$
|
6,290
|
|
100.0
|
%
|
|
$
|
6,352
|
|
100.0
|
%
|
Residential Loans
Serviced
(Dollars in
millions)
(Unaudited)
|
|
|
December 31,
2016
|
|
September 30,
2016
|
|
December 31,
2015
|
|
Unpaid Principal
Balance
|
Number of
accounts
|
|
Unpaid Principal
Balance
|
Number of
accounts
|
|
Unpaid Principal
Balance
|
Number of
accounts
|
Serviced for own loan
portfolio (1)
|
$
|
5,816
|
|
29,244
|
|
|
$
|
5,645
|
|
29,052
|
|
|
$
|
6,088
|
|
30,683
|
|
Serviced for
others
|
31,207
|
|
133,270
|
|
|
31,372
|
|
138,771
|
|
|
26,145
|
|
118,662
|
|
Subserviced for
others (2)
|
43,127
|
|
220,075
|
|
|
41,017
|
|
207,039
|
|
|
40,287
|
|
211,937
|
|
Total residential
loans serviced
|
$
|
80,150
|
|
382,589
|
|
|
$
|
78,034
|
|
374,862
|
|
|
$
|
72,520
|
|
361,282
|
|
|
|
(1)
|
Includes loans
held-for-investment (residential first mortgage, second mortgage
and HELOC), loans-held-for-sale
(residential first mortgage), loans with government guarantees
(residential first mortgage), and repossessed assets.
|
(2)
|
Includes temporary
short-term subservicing performed as a result of sales of
servicing-released mortgage servicing rights. Includes repossessed
assets.
|
Allowance for Loan
Losses
(Dollars in
millions)
(Unaudited)
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
December 31,
2016
|
|
September 30,
2016
|
|
December 31,
2015
|
|
December 31,
2016
|
|
December 31,
2015
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan
losses
|
$
|
142
|
|
|
$
|
143
|
|
|
$
|
187
|
|
|
$
|
142
|
|
|
$
|
187
|
|
Charge-offs
|
|
|
|
|
|
|
|
|
|
Consumer
loans
|
|
|
|
|
|
|
|
|
|
Residential first
mortgage
|
(3)
|
|
|
(7)
|
|
|
(7)
|
|
|
(29)
|
|
|
(87)
|
|
Second mortgage
|
—
|
|
|
—
|
|
|
(2)
|
|
|
(2)
|
|
|
(4)
|
|
HELOC
|
—
|
|
|
(1)
|
|
|
(1)
|
|
|
(2)
|
|
|
(3)
|
|
Other
|
(1)
|
|
|
(1)
|
|
|
(1)
|
|
|
(3)
|
|
|
(4)
|
|
Total consumer
loans
|
(4)
|
|
|
(9)
|
|
|
(11)
|
|
|
(36)
|
|
|
(98)
|
|
Commercial
loans
|
|
|
|
|
|
|
|
|
|
Commercial and
industrial
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3)
|
|
Total
commercial loans
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3)
|
|
Total
charge-offs
|
$
|
(4)
|
|
|
$
|
(9)
|
|
|
$
|
(11)
|
|
|
$
|
(36)
|
|
|
$
|
(101)
|
|
Recoveries
|
|
|
|
|
|
|
|
|
|
Consumer
loans
|
|
|
|
|
|
|
|
|
|
Residential first
mortgage
|
1
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
3
|
|
Second mortgage
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
2
|
|
HELOC
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Other
|
—
|
|
|
1
|
|
|
1
|
|
|
3
|
|
|
3
|
|
Total consumer
loans
|
1
|
|
|
2
|
|
|
2
|
|
|
5
|
|
|
8
|
|
Commercial
loans
|
|
|
|
|
|
|
|
|
|
Commercial real
estate
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
2
|
|
Total commercial
loans
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
2
|
|
Total
recoveries
|
2
|
|
|
2
|
|
|
2
|
|
|
6
|
|
|
10
|
|
Charge-offs, net
of recoveries
|
$
|
(2)
|
|
|
$
|
(7)
|
|
|
$
|
(9)
|
|
|
$
|
(30)
|
|
|
$
|
(91)
|
|
Net charge-offs to
LHFI ratio (annualized) (1)
|
0.13
|
%
|
|
0.51
|
%
|
|
0.62
|
%
|
|
0.52
|
%
|
|
1.85
|
%
|
Net charge-offs
ratio, adjusted (annualized) (1)(2)
|
0.07
|
%
|
|
0.15
|
%
|
|
0.29
|
%
|
|
0.15
|
%
|
|
0.40
|
%
|
Net charge-offs to
LHFI ratio (annualized) by loan type (1)
|
|
|
|
|
|
|
|
|
|
Residential first
mortgage
|
0.38
|
%
|
|
1.33
|
%
|
|
1.03
|
%
|
|
1.18
|
%
|
|
3.34
|
%
|
Second
mortgage
|
(0.92)
|
%
|
|
1.03
|
%
|
|
1.89
|
%
|
|
1.34
|
%
|
|
1.72
|
%
|
HELOC and
consumer
|
0.50
|
%
|
|
0.23
|
%
|
|
0.86
|
%
|
|
0.53
|
%
|
|
1.18
|
%
|
Commercial real
estate
|
(0.05)
|
%
|
|
—
|
%
|
|
—
|
%
|
|
(0.02)
|
%
|
|
(0.29)
|
%
|
Commercial and
industrial
|
(0.12)
|
%
|
|
(0.01)
|
%
|
|
(0.01)
|
%
|
|
(0.04)
|
%
|
|
0.71
|
%
|
|
|
(1)
|
Excludes loans
carried under the fair value option.
|
(2)
|
Excludes charge-offs
of zero, zero, and $2 million related to the sale of nonperforming
loans, TDRs and non-agency loans during the
three months ended December 31, 2016, September 30, 2016 and
December 31, 2015, respectively and $8 million and $69 million
during the years ended December 31, 2016 and 2015, respectively.
Also excludes charge-offs related to loans with government
guarantees of $1 million, $5 million, and $3 million during the
three months ended December 31, 2016, September 30, 2016 and
December 31, 2015, respectively, and $13 million and $3 million
during the years ended December 31, 2016 and December 31, 2015,
respectively.
|
Representation and
Warranty Reserve
(Dollars in
millions)
(Unaudited)
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
December 31,
2016
|
|
September 30,
2016
|
|
December 31,
2015
|
|
December 31,
2016
|
|
December 31,
2015
|
Balance,
beginning of period
|
$
|
32
|
|
|
$
|
36
|
|
|
$
|
45
|
|
|
$
|
40
|
|
|
$
|
53
|
|
Provision
(release)
|
|
|
|
|
|
|
|
|
|
|
Charged to gain on
sale for current loan sales
|
1
|
|
|
1
|
|
|
1
|
|
|
5
|
|
|
7
|
|
|
Charged to
representation and warranty benefit
|
(7)
|
|
|
(6)
|
|
|
(6)
|
|
|
(19)
|
|
|
(19)
|
|
|
Total
|
(6)
|
|
|
(5)
|
|
|
(5)
|
|
|
(14)
|
|
|
(12)
|
|
Charge-offs,
net
|
1
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
(1)
|
|
Balance, end of
period
|
$
|
27
|
|
|
$
|
32
|
|
|
$
|
40
|
|
|
$
|
27
|
|
|
$
|
40
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Composition of
Allowance for Loan Losses
(Dollars in
millions)
(Unaudited)
|
|
December 31,
2016
|
Collectively
Evaluated Reserves
|
|
Individually
Evaluated Reserves
|
|
Total
|
Consumer
loans
|
|
|
|
|
|
Residential first mortgage
|
$
|
60
|
|
|
$
|
5
|
|
|
$
|
65
|
|
Second
mortgage
|
2
|
|
|
6
|
|
|
8
|
|
HELOC
|
14
|
|
|
2
|
|
|
16
|
|
Other
|
1
|
|
|
—
|
|
|
1
|
|
Total consumer
loans
|
77
|
|
|
13
|
|
|
90
|
|
Commercial
loans
|
|
|
|
|
|
Commercial real estate
|
28
|
|
|
—
|
|
|
28
|
|
Commercial and industrial
|
17
|
|
|
—
|
|
|
17
|
|
Warehouse lending
|
7
|
|
|
—
|
|
|
7
|
|
Total commercial
loans
|
52
|
|
|
—
|
|
|
52
|
|
Total allowance for
loan losses
|
$
|
129
|
|
|
$
|
13
|
|
|
$
|
142
|
|
September 30,
2016
|
Collectively
Evaluated Reserves
|
|
Individually
Evaluated Reserves
|
|
Total
|
Consumer
loans
|
|
|
|
|
|
Residential first mortgage
|
$
|
63
|
|
|
$
|
7
|
|
|
$
|
70
|
|
Second
mortgage
|
3
|
|
|
6
|
|
|
9
|
|
HELOC
|
15
|
|
|
1
|
|
|
16
|
|
Other
|
1
|
|
|
—
|
|
|
1
|
|
Total consumer
loans
|
82
|
|
|
14
|
|
|
96
|
|
Commercial
loans
|
|
|
|
|
|
Commercial real estate
|
25
|
|
|
—
|
|
|
25
|
|
Commercial and industrial
|
14
|
|
|
—
|
|
|
14
|
|
Warehouse lending
|
8
|
|
|
—
|
|
|
8
|
|
Total commercial
loans
|
47
|
|
|
—
|
|
|
47
|
|
Total allowance for
loan losses
|
$
|
129
|
|
|
$
|
14
|
|
|
$
|
143
|
|
Nonperforming
Loans and Assets
(Dollars in
millions)
(Unaudited)
|
|
|
December 31,
2016
|
|
September 30,
2016
|
|
December 31,
2015
|
Nonperforming
loans
|
$
|
22
|
|
|
$
|
23
|
|
|
$
|
31
|
|
Nonperforming
TDRs
|
8
|
|
|
8
|
|
|
7
|
|
Nonperforming TDRs at
inception but performing for less than six months
|
10
|
|
|
9
|
|
|
28
|
|
Total nonperforming
loans held-for-investment
|
40
|
|
|
40
|
|
|
66
|
|
Real estate and other
nonperforming assets, net
|
14
|
|
|
15
|
|
|
17
|
|
Nonperforming assets
held-for-investment, net (1)
|
$
|
54
|
|
|
$
|
55
|
|
|
$
|
83
|
|
|
|
|
|
|
|
Ratio of
nonperforming assets to total assets
|
0.39
|
%
|
|
0.39
|
%
|
|
0.61
|
%
|
Ratio of
nonperforming loans held-for-investment to loans
held-for-investment
|
0.67
|
%
|
|
0.63
|
%
|
|
1.05
|
%
|
Ratio of
nonperforming assets to loans held-for-investment and repossessed
assets
|
0.90
|
%
|
|
0.87
|
%
|
|
1.32
|
%
|
Ratio of
nonperforming assets to Tier 1 capital + allowance for loan
losses
|
3.93
|
%
|
|
4.03
|
%
|
|
5.12
|
%
|
|
|
(1)
|
Does not include
nonperforming loans held-for-sale of $6 million, $5 million, and
$12 million at December 31, 2016,
September 30, 2016, and December 31, 2015,
respectively.
|
Asset Quality -
Loans Held-for-Investment
(Dollars in
millions)
(Unaudited)
|
|
|
30-59 Days Past
Due
|
60-89 Days Past
Due
|
Greater than 90
days (1)
|
Total Past
Due
|
Total Investment
Loans
|
December 31,
2016
|
|
|
|
|
|
Consumer
loans
|
$
|
8
|
|
$
|
2
|
|
$
|
40
|
|
$
|
50
|
|
$
|
2,798
|
|
Commercial
loans
|
—
|
|
—
|
|
—
|
|
—
|
|
3,267
|
|
Total loans
|
$
|
8
|
|
$
|
2
|
|
$
|
40
|
|
$
|
50
|
|
$
|
6,065
|
|
September 30,
2016
|
|
|
|
|
|
Consumer
loans
|
$
|
6
|
|
$
|
2
|
|
$
|
40
|
|
$
|
48
|
|
$
|
2,619
|
|
Commercial
loans
|
—
|
|
—
|
|
—
|
|
—
|
|
3,671
|
|
Total loans
|
$
|
6
|
|
$
|
2
|
|
$
|
40
|
|
$
|
48
|
|
$
|
6,290
|
|
December 31,
2015
|
|
|
|
|
|
Consumer
loans
|
$
|
10
|
|
$
|
4
|
|
$
|
64
|
|
$
|
78
|
|
$
|
3,650
|
|
Commercial
loans
|
—
|
|
—
|
|
2
|
|
2
|
|
2,702
|
|
Total loans
|
$
|
10
|
|
$
|
4
|
|
$
|
66
|
|
$
|
80
|
|
$
|
6,352
|
|
|
|
(1)
|
Includes performing
nonaccrual loans that are less than 90 days delinquent and for
which interest cannot be accrued.
|
Troubled Debt
Restructurings
(Dollars in
millions)
(Unaudited)
|
|
|
TDRs
|
|
Performing
|
|
Nonperforming
|
|
Nonperforming TDRs
at inception but performing for less than six months
|
|
Total
|
December 31,
2016
|
|
Consumer
loans
|
$
|
67
|
|
|
$
|
8
|
|
|
$
|
10
|
|
|
$
|
85
|
|
Total TDR loans
|
$
|
67
|
|
|
$
|
8
|
|
|
$
|
10
|
|
|
$
|
85
|
|
September 30,
2016
|
|
|
|
|
|
|
|
Consumer
loans
|
$
|
70
|
|
|
$
|
8
|
|
|
$
|
9
|
|
|
$
|
87
|
|
Commercial
loans
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
Total TDR loans
|
$
|
71
|
|
|
$
|
8
|
|
|
$
|
9
|
|
|
$
|
88
|
|
December 31,
2015
|
|
|
|
|
|
|
|
Consumer
loans
|
$
|
101
|
|
|
$
|
7
|
|
|
$
|
28
|
|
|
$
|
136
|
|
Total TDR loans
|
$
|
101
|
|
|
$
|
7
|
|
|
$
|
28
|
|
|
$
|
136
|
|
Non-GAAP Reconciliation
(Dollars in millions)
(Unaudited)
Basel III (transitional) to Basel III (fully phased-in)
reconciliation. On January 1,
2015, the Basel III rules became effective, subject to
transition provisions primarily related to regulatory deductions
and adjustments impacting common equity Tier 1 capital and Tier 1
capital. We have transitioned to the Basel III framework beginning
in January 2015 and are subject to a
phase-in period extending through 2018. Accordingly, the
calculations provided below are estimates. These measures are
considered to be non-GAAP financial measures because they are not
formally defined by GAAP and the Basel III implementation
regulations will not be fully phased-in until January 1, 2019. The regulations are subject to
change as clarifying guidance becomes available and the
calculations currently include our interpretations of the
requirements including informal feedback received through the
regulatory process. Other entities may calculate the Basel III
ratios differently from ours based on their interpretation of the
guidelines. Since analysts and banking regulators may assess our
capital adequacy using the Basel III framework, we believe that it
is useful to provide investors information enabling them to assess
our capital adequacy on the same basis.
December 31,
2016
|
Common Equity Tier
1 (to Risk Weighted Assets)
|
|
Tier 1 Leverage
(to Adjusted Tangible Assets)
|
|
Tier 1 Capital (to
Risk Weighted Assets)
|
|
Total Risk-Based
Capital (to Risk Weighted Assets)
|
|
|
(Dollars in
millions)
(Unaudited)
|
|
Flagstar Bancorp
(the Company)
|
|
|
|
|
|
|
|
|
Regulatory capital
– Basel III (transitional) to Basel III (fully
phased-in)
|
|
|
|
|
|
|
|
|
Basel III
(transitional)
|
$
|
1,084
|
|
|
$
|
1,256
|
|
|
$
|
1,256
|
|
|
$
|
1,363
|
|
|
Increased deductions
related to deferred tax assets, mortgage servicing assets and other
capital components
|
(230)
|
|
|
(162)
|
|
|
(162)
|
|
|
(160)
|
|
|
Basel III (fully
phased-in) capital
|
$
|
854
|
|
|
$
|
1,094
|
|
|
$
|
1,094
|
|
|
$
|
1,203
|
|
|
Risk-weighted
assets – Basel III (transitional) to Basel III (fully
phased-in)
|
|
|
|
|
|
|
|
|
Basel III assets
(transitional)
|
$
|
8,298
|
|
|
$
|
14,149
|
|
|
$
|
8,298
|
|
|
$
|
8,298
|
|
|
Net change in
assets
|
35
|
|
|
(161)
|
|
|
35
|
|
|
35
|
|
|
Basel III (fully
phased-in) assets
|
$
|
8,333
|
|
|
$
|
13,988
|
|
|
$
|
8,333
|
|
|
$
|
8,333
|
|
|
Capital
ratios
|
|
|
|
|
|
|
|
|
Basel III
(transitional)
|
13.07
|
%
|
|
8.88
|
%
|
|
15.14
|
%
|
|
16.42
|
%
|
|
Basel III (fully
phased-in)
|
10.25
|
%
|
|
7.82
|
%
|
|
13.13
|
%
|
|
14.44
|
%
|
|
|
|
|
|
|
|
|
|
December 31,
2016
|
Common Equity Tier
1 (to Risk Weighted Assets)
|
|
Tier 1 Leverage
(to Adjusted Tangible Assets)
|
|
Tier 1 Capital (to
Risk Weighted Assets)
|
|
Total Risk-Based
Capital (to Risk Weighted Assets)
|
Flagstar Bank (the
Bank)
|
(Dollars in
millions)
(Unaudited)
|
Regulatory capital
– Basel III (transitional) to Basel III (fully
phased-in)
|
|
|
|
|
|
|
|
Basel III
(transitional)
|
$
|
1,491
|
|
|
$
|
1,491
|
|
|
$
|
1,491
|
|
|
$
|
1,597
|
|
Increased deductions
related to deferred tax assets, mortgage servicing assets and other
capital components
|
(119)
|
|
|
(119)
|
|
|
(119)
|
|
|
(116)
|
|
Basel III (fully
phased-in) capital
|
$
|
1,372
|
|
|
$
|
1,372
|
|
|
$
|
1,372
|
|
|
$
|
1,481
|
|
Risk-weighted
assets – Basel III (transitional) to Basel III (fully
phased-in)
|
|
|
|
|
|
|
|
Basel III assets
(transitional)
|
$
|
8,325
|
|
|
$
|
14,177
|
|
|
$
|
8,325
|
|
|
$
|
8,325
|
|
Net change in
assets
|
196
|
|
|
(120)
|
|
|
196
|
|
|
196
|
|
Basel III (fully
phased-in) assets
|
$
|
8,521
|
|
|
$
|
14,057
|
|
|
$
|
8,521
|
|
|
$
|
8,521
|
|
Capital
ratios
|
|
|
|
|
|
|
|
Basel III
(transitional)
|
17.91
|
%
|
|
10.52
|
%
|
|
17.91
|
%
|
|
19.19
|
%
|
Basel III (fully
phased-in)
|
16.10
|
%
|
|
9.76
|
%
|
|
16.10
|
%
|
|
17.39
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net Income and Adjusted Income per Share.
In addition to analyzing the Company's results on a reported basis,
management reviews the Company's results and the results on an
adjusted basis. These non-GAAP measures reflect the adjustment of
the reported U.S.GAAP results for significant items that management
does not believe are reflective of the Company's current and
ongoing operations. The Company believes that adjusted net income
and adjusted non-interest income and ratios based on these non-GAAP
measures provide a meaningful representation of its operating
performance on an ongoing basis. These are measures that management
uses to assess performance of the Company against its peers and
evaluate overall performance. The Company believes these non-GAAP
financial measures provide useful information for investors,
securities analysts and others because they provide a tool to
evaluate the Company's performance on an ongoing basis and compared
to its peers.
The following table provides a reconciliation of non-GAAP financial
measures.
|
Three Months
Ended
|
|
Year
Ended
|
|
September 30,
2016
|
|
December 31,
2016
|
|
(Dollars in
millions)
(Unaudited)
|
Net
income
|
$
|
57
|
|
|
$
|
171
|
|
Adjustment to remove
DOJ adjustment
|
(24)
|
|
|
(24)
|
|
Tax impact of
adjusting item
|
8
|
|
|
8
|
|
Adjusted net
income
|
$
|
41
|
|
|
$
|
155
|
|
|
|
|
|
Diluted income per
share
|
$
|
0.96
|
|
|
$
|
2.66
|
|
Adjustment to remove
DOJ adjustment
|
(0.41)
|
|
|
(0.42)
|
|
Tax impact of
adjusting item
|
0.14
|
|
|
0.14
|
|
Diluted adjusted
income per share
|
$
|
0.69
|
|
|
$
|
2.38
|
|
|
|
|
|
Return on average
assets
|
1.61
|
%
|
|
1.23
|
%
|
Adjustment to remove
DOJ adjustment including tax impact
|
(0.45)
|
%
|
|
(0.12)
|
%
|
Adjusted return on
average assets
|
1.16
|
%
|
|
1.11
|
%
|
|
|
|
|
Return on average
equity
|
16.53
|
%
|
|
11.69
|
%
|
Adjustment to remove
DOJ adjustment including tax impact
|
(4.64)
|
%
|
|
(1.10)
|
%
|
Adjusted return on
average equity
|
11.89
|
%
|
|
10.59
|
%
|
|
|
|
|
Return on average
common equity
|
17.45
|
%
|
|
13.03
|
%
|
Adjustment to remove
DOJ adjustment including tax impact
|
(4.89)
|
%
|
|
(1.22)
|
%
|
Adjusted return on
average common equity
|
12.56
|
%
|
|
11.81
|
%
|
|
|
|
|
Total noninterest
expense
|
$
|
142
|
|
|
$
|
560
|
|
Net interest
income
|
$
|
80
|
|
|
$
|
323
|
|
|
|
|
|
Total noninterest
income
|
$
|
156
|
|
|
$
|
487
|
|
Adjustment to remove
DOJ adjustment
|
(24)
|
|
|
(24)
|
|
Adjusted total
noninterest income
|
$
|
132
|
|
|
$
|
463
|
|
|
|
|
|
Efficiency
Ratio
|
59.9
|
%
|
|
69.2
|
%
|
Adjustment to remove
DOJ adjustment
|
7.1
|
%
|
|
2.0
|
%
|
Adjusted
Efficiency Ratio
|
67.0
|
%
|
|
71.2
|
%
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/flagstar-reports-fourth-quarter-2016-net-income-of-28-million-or-049-per-diluted-share-300395333.html
SOURCE Flagstar Bancorp, Inc.