TROY, Mich., April 25,
2017 /PRNewswire/ --
Key Highlights - First Quarter 2017
- Strong commercial loan growth with period-end commercial and
industrial and commercial real estate loans up 11 percent from
prior quarter-end and up 58 percent versus same quarter-end last
year.
- Mortgage revenues, including gain on sale and return on MSR, up
$10 million, or 19 percent, from
fourth quarter 2016, resulting from improved MSR returns; increased
purchase mortgage volumes largely offset lower refinance
levels.
- Noninterest expense improved $2
million, or 1 percent, versus prior quarter, on lower
mortgage activity despite seasonally higher benefits costs and
acquisition-related expenses.
- Sold $65 million fair value of
MSR assets and entered into agreements to sell nearly $200 million additional MSRs in second quarter
2017, successfully executing MSR reduction strategy.
- Asset quality strong with nonperforming loans declining to
$28 million.
- Strategic goals advanced with acquisition of Stearns' delegated
correspondent business and agreement to acquire certain assets of
Opes Advisors.
Flagstar Bancorp, Inc. (NYSE: FBC), the holding company for
Flagstar Bank, FSB, today reported first quarter 2017 net income of
$27 million, or $0.46 per diluted share, as compared to
$28 million, or $0.49 per diluted share, in the fourth quarter
2016 and $39 million, or $0.54 per diluted share, in the first quarter
2016.
"We had another good quarter with solid results, despite facing
the headwinds of seasonality and higher interest rates in our
mortgage business," said Alessandro
DiNello, president and chief executive officer of Flagstar
Bancorp, Inc. "Our community bank came through again as a solid
contributor to net interest income where strong growth in
commercial real estate, commercial and industrial, and mortgage
loans partially overcame a decline in warehouse loans. We also saw
continued growth in retail deposits at an attractive funding
level."
"We saw strong returns on the mortgage servicing rights we hold,
reflecting the stronger market we are seeing in this rate
environment. In the first quarter, we sold $65 million of our mortgage servicing rights. In
the second quarter, we have entered into pending bulk sales of an
additional $195 million of mortgage
servicing rights under contract at a break-even price, including
transaction costs. We have retained servicing on approximately
two-thirds of the total MSR sale amount."
"We announced two acquisitions recently to support our position
as a national leader in the mortgage industry. First was the
purchase of the delegated correspondent business of Stearns
Lending. This was an opportunistic acquisition that allows us to
become a top five player in this channel. Second was our agreement
to purchase certain assets of Opes Advisors, a high-quality retail
mortgage originator. This acquisition dovetails nicely with our
interest in growing our retail mortgage channel."
"We remain committed to continuing to grow our community bank
and solidifying our position as an industry leader in mortgage
banking. Looking ahead, we believe we are well positioned to
benefit from a stronger economy, a stronger housing market and the
pivot to a stronger purchase mortgage market."
First Quarter 2017 Highlights:
|
Income Statement
Highlights
|
|
|
|
|
|
Three Months
Ended
|
|
March 31,
2017
|
December 31,
2016
|
September 30,
2016
|
June 30,
2016
|
March 31,
2016
|
|
(Dollars in
millions)
|
|
Net interest
income
|
$
|
83
|
|
$
|
87
|
|
$
|
80
|
|
$
|
77
|
|
$
|
79
|
|
|
Provision (benefit)
for loan losses
|
3
|
|
1
|
|
7
|
|
(3)
|
|
(13)
|
|
|
Noninterest
income
|
100
|
|
98
|
|
156
|
|
128
|
|
105
|
|
|
Noninterest
expense
|
140
|
|
142
|
|
142
|
|
139
|
|
137
|
|
|
Income before income
taxes
|
40
|
|
42
|
|
87
|
|
69
|
|
60
|
|
|
Provision for income
taxes
|
13
|
|
14
|
|
30
|
|
22
|
|
21
|
|
|
Net income
|
$
|
27
|
|
$
|
28
|
|
$
|
57
|
|
$
|
47
|
|
$
|
39
|
|
|
|
|
|
|
|
|
Income per
share:
|
|
|
|
|
|
|
Basic
|
$
|
0.47
|
|
$
|
0.50
|
|
$
|
0.98
|
|
$
|
0.67
|
|
$
|
0.56
|
|
|
Diluted
|
$
|
0.46
|
|
$
|
0.49
|
|
$
|
0.96
|
|
$
|
0.66
|
|
$
|
0.54
|
|
|
Key
Ratios
|
|
|
|
|
|
|
|
Three Months
Ended
|
Change
(bps)
|
|
March 31,
2017
|
December 31,
2016
|
September 30,
2016
|
June 30,
2016
|
March 31,
2016
|
Seq
|
Yr/Yr
|
|
Net interest
margin
|
2.67
|
%
|
2.67
|
%
|
2.58
|
%
|
2.63
|
%
|
2.66
|
%
|
0
|
1
|
|
Return on average
assets
|
0.8
|
%
|
0.8
|
%
|
1.6
|
%
|
1.4
|
%
|
1.2
|
%
|
(2)
|
(40)
|
|
Return on average
equity
|
7.9
|
%
|
8.6
|
%
|
16.5
|
%
|
11.5
|
%
|
10.1
|
%
|
(72)
|
(220)
|
|
Return on average
common equity
|
7.9
|
%
|
8.6
|
%
|
17.5
|
%
|
13.8
|
%
|
12.2
|
%
|
(72)
|
(430)
|
|
Efficiency
ratio
|
76.8
|
%
|
76.7
|
%
|
59.9
|
%
|
68.2
|
%
|
74.5
|
%
|
10
|
230
|
|
Balance Sheet
Highlights
|
|
|
|
|
|
|
|
Three Months
Ended
|
%
Change
|
|
March 31,
2017
|
December 31,
2016
|
September 30,
2016
|
June 30,
2016
|
March 31,
2016
|
Seq
|
Yr/Yr
|
|
(Dollars in
millions)
|
|
|
|
Average Balance
Sheet Data
|
|
|
|
|
|
|
|
|
Average
interest-earning assets
|
$
|
12,343
|
|
$
|
12,817
|
|
$
|
12,318
|
|
$
|
11,639
|
|
$
|
11,871
|
|
(4)
|
%
|
4
|
%
|
|
Average loans
held-for-sale (LHFS)
|
3,286
|
|
3,321
|
|
3,416
|
|
2,884
|
|
2,909
|
|
(1)
|
%
|
13
|
%
|
|
Average loans
held-for-investment (LHFI)
|
5,639
|
|
6,163
|
|
5,848
|
|
5,569
|
|
5,668
|
|
(9)
|
%
|
(1)
|
%
|
|
Average total
deposits
|
8,795
|
|
9,233
|
|
9,126
|
|
8,631
|
|
8,050
|
|
(5)
|
%
|
9
|
%
|
Net Interest Income
Net interest income decreased $4
million, or 5 percent, to $83
million, as compared to $87
million for the fourth quarter 2016. The results reflected a
4 percent decrease in average earning assets, led by a contraction
in warehouse loans, partially offset by increased investment
securities, mortgage loans, commercial real estate loans and
commercial and industrial loans.
Loans held-for-investment averaged $5.6
billion for the first quarter 2017, decreasing $524 million, or 9 percent, from the prior
quarter. During the first quarter 2017, average warehouse loans
fell $852 million, driven by
anticipated seasonal factors and lower overall mortgage volumes
experienced by the Company's warehouse customers. Commercial loan
growth was strong with average commercial real estate loans
increasing $109 million, or 9 percent
and average commercial and industrial loans increasing $53 million, or 7 percent. Average consumer loans
rose $166 million, or 6 percent,
driven by an increase in mortgage loans (primarily jumbos).
Average total deposits were $8.8
billion in the first quarter 2017, decreasing $438 million, or 5 percent, from the fourth
quarter 2016. The decrease was led by lower company-controlled
deposits, partially offset by higher retail deposits. Average
retail deposits increased $98
million, or 2 percent, due to growth in consumer savings
accounts. Excluding warehouse loans and company-controlled
deposits, the Company's HFI loan-to-deposit ratio remained low at
66 percent in the first quarter 2017, as compared to 63 percent in
the fourth quarter 2016.
Net interest margin was unchanged at 2.67 percent for the first
quarter 2017, as compared to the fourth quarter 2016. During the
fourth quarter 2016, the Company terminated certain fixed rate FHLB
advances which resulted in a $2
million, or 6 basis point, benefit to interest expense in
the prior quarter.
Provision for Loan Losses
The provision for loan losses totaled $3
million for the first quarter 2017, as compared to
$1 million for the fourth quarter
2016. The low level of provision expense reflected strong asset
quality and largely matched net charge-offs in the quarter.
Noninterest Income
Noninterest income rose $2
million, or 2 percent, to $100
million in the first quarter of 2017, as compared to
$98 million for the fourth quarter
2016. The increase was primarily due to an increase in the net
return on the mortgage servicing rights, partially offset by a drop
in net gain on loan sales and loan fees and charges.
First quarter 2017 net gain on loan sales fell $9 million, or 16 percent, to $48 million, versus $57
million in the fourth quarter 2016. Fallout-adjusted locks
fell 2 percent to $6.0 billion due to
lower refinance volumes, largely offset by stronger purchase
activity. The net gain on loan sale margin fell 13 basis points to
0.80 percent for the first quarter 2017, as compared to 0.93
percent for the fourth quarter 2016. The lower margin was primarily
due to competitive factors and the impact of extended turn times,
offsetting the impact of lower warehouse loans.
|
Mortgage
Metrics
|
|
|
|
|
|
|
|
Three Months
Ended
|
Change (% /
bps)
|
|
March 31,
2017
|
December 31,
2016
|
September 30,
2016
|
June 30,
2016
|
March 31,
2016
|
Seq
|
Yr/Yr
|
|
(Dollars in
millions)
|
|
|
|
Mortgage rate lock
commitments (fallout-adjusted) (1)
|
$
|
5,996
|
|
$
|
6,091
|
|
$
|
8,291
|
|
$
|
8,127
|
|
$
|
6,863
|
|
(2)
|
%
|
(13)
|
%
|
|
Net margin on
mortgage rate lock commitments (fallout-adjusted) (1)
(2)
|
0.80
|
%
|
0.93
|
%
|
1.13
|
%
|
1.04
|
%
|
0.96
|
%
|
(13)
|
|
(16)
|
|
|
Net gain on loan
sales on HFS
|
$
|
48
|
|
57
|
|
$
|
94
|
|
$
|
85
|
|
$
|
66
|
|
(16)
|
%
|
(27)
|
%
|
|
Net (loss) return on
the mortgage servicing rights (MSR)
|
$
|
14
|
|
$
|
(5)
|
|
$
|
(11)
|
|
$
|
(4)
|
|
$
|
(6)
|
|
N/M
|
|
N/M
|
|
|
Gain on loan sales
HFS + net (loss) return on the MSR
|
$
|
62
|
|
$
|
52
|
|
$
|
83
|
|
$
|
81
|
|
$
|
60
|
|
19
|
%
|
3
|
%
|
|
Residential loans
serviced (number of accounts - 000's) (3)
|
393
|
|
383
|
|
375
|
|
358
|
|
354
|
|
3
|
%
|
11
|
%
|
|
Capitalized value of
mortgage servicing rights
|
1.10
|
%
|
1.07
|
%
|
0.96
|
%
|
0.99
|
%
|
1.06
|
%
|
3
|
|
4
|
|
|
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 $15
million for the first quarter 2017, as compared to
$20 million for the fourth quarter
2016. The decrease primarily reflected lower mortgage loan
closings.
Net return on the mortgage servicing rights (including the
impact of hedges) increased $19
million and was a net gain of $14
million for the first quarter 2017, as compared to a net
loss of $5 million for the fourth
quarter 2016. At March 31, 2017, the
Company had $295 million of mortgage
servicing rights and $195 million
fair value of contracted sales that are expected to settle in the
second quarter 2017.
The representation and warranty benefit was $4 million for the first quarter 2017, as
compared to a $7 million benefit in
the fourth quarter 2016. The representation and warranty reserve
was reduced to $23 million at
March 31, 2017, from $27 million
at December 31, 2016, reflecting a continued improvement in
risk trends and a repurchase pipeline that was only $6 million at March 31,
2017.
Noninterest Expense
Noninterest expense fell $2
million, or 1 percent, to $140
million for the first quarter 2017, as compared to
$142 million for the fourth quarter
2016. During the first quarter 2017, the Company experienced an
$8 million decline in
mortgage-related expense (commissions and loan processing) as a
result of lower mortgage closings, partially offset by a
$6 million increase in compensation
and benefits expense.
Compensation and benefits increased to $72 million for the first quarter 2017, as
compared to $66 million for the prior
quarter, substantially all of which was seasonally higher benefits
expense.
Commissions were $10 million for
the first quarter 2017, as compared to $15
million for the fourth quarter 2016. The $5 million decrease in the first quarter 2017 was
primarily attributable to lower mortgage closings this quarter.
The Company's efficiency ratio was unchanged at 77 percent for
the first quarter 2017, as compared to the fourth quarter 2016.
Excluding $6 million of seasonal
benefits expense and $1 million of
acquisition-related costs, the Company's adjusted non-GAAP
efficiency ratio was 73 percent for the first quarter 2017.
Income Taxes
The first quarter 2017 provision for income taxes totaled
$13 million, as compared to
$14 million in the fourth quarter
2016. The effective tax rate was unchanged at 33 percent for the
first quarter 2017, as compared to the fourth quarter 2016.
Asset Quality
|
Credit Quality
Ratios
|
|
|
|
|
|
|
|
Three Months
Ended
|
Change (% /
bps)
|
|
March 31,
2017
|
December 31,
2016
|
September 30,
2016
|
June 30,
2016
|
March 31,
2016
|
Seq
|
Yr/Yr
|
|
(Dollars in
millions)
|
|
|
|
Allowance for loan
loss to LHFI
|
2.4
|
%
|
2.4
|
%
|
2.3
|
%
|
2.6
|
%
|
2.9
|
%
|
0
|
|
(50)
|
|
|
Allowance for loan
loss to LHFI and loans with government guarantees
|
2.3
|
%
|
2.2
|
%
|
2.2
|
%
|
2.4
|
%
|
2.7
|
%
|
10
|
|
(40)
|
|
|
|
|
|
|
|
|
|
|
Charge-offs, net of
recoveries
|
$
|
4
|
|
$
|
2
|
|
$
|
7
|
|
$
|
9
|
|
$
|
12
|
|
100
|
%
|
(67)
|
%
|
|
Charge-offs
associated with loans with government guarantees
|
2
|
|
1
|
|
5
|
|
4
|
|
3
|
|
100
|
%
|
(33)
|
%
|
|
Charge-offs
associated with the sale or transfer of nonperforming loans and
TDRs
|
1
|
|
—
|
|
—
|
|
2
|
|
6
|
|
N/M
|
|
N/M
|
|
|
Charge-offs, net of
recoveries, adjusted (1)
|
$
|
1
|
|
$
|
1
|
|
$
|
2
|
|
$
|
3
|
|
$
|
3
|
|
—
|
%
|
(67)
|
%
|
|
|
|
|
|
|
|
|
|
Total nonperforming
loans held-for-investment
|
$
|
28
|
|
$
|
40
|
|
$
|
40
|
|
$
|
44
|
|
$
|
53
|
|
(30)
|
%
|
(47)
|
%
|
|
Net charge-offs to
LHFI ratio (annualized)
|
0.27
|
%
|
0.13
|
%
|
0.51
|
%
|
0.62
|
%
|
0.86
|
%
|
14
|
|
(59)
|
|
|
Net charge-off ratio,
adjusted (annualized)
|
0.07
|
%
|
0.07
|
%
|
0.15
|
%
|
0.18
|
%
|
0.20
|
%
|
0
|
|
(13)
|
|
|
Ratio of
nonperforming LHFI to LHFI
|
0.47
|
%
|
0.67
|
%
|
0.63
|
%
|
0.76
|
%
|
0.95
|
%
|
(20)
|
|
(48)
|
|
|
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 allowance for loan losses was $141
million at March 31, 2017, covering 2.4 percent of
loans held-for-investment, as compared to an allowance for loan
losses of $142 million at
December 31, 2016, covering 2.4 percent of loans
held-for-investment.
Net charge-offs in the first quarter 2017 were $4 million, or 0.27 percent of applicable loans,
compared to $2 million, or 0.13
percent of applicable loans in the prior quarter. The first quarter
2017 amount included $2 million of
net charge-offs associated with loans with government guarantees
compared to $1 million in the fourth
quarter of 2016.
Nonperforming loans held-for-investment were $28 million at March 31, 2017, compared to
$40 million at December 31,
2016, reflecting the sale of lower performing loans during the
quarter. As in the prior quarter, there were no nonperforming
commercial loans at March 31, 2017. The ratio of nonperforming
loans to loans held-for-investment decreased to 0.47 percent at
March 31, 2017 from 0.67 percent at December 31, 2016. At
March 31, 2017, consumer loan delinquencies totaled
$5 million, compared to $10 million at December 31, 2016. As in the
prior quarter, there were no commercial loans more than 30 days
delinquent at March 31, 2017.
Capital
|
Capital Ratios
(Bancorp)
|
Three Months
Ended
|
Change (% /
bps)
|
|
March 31,
2017
|
December 31,
2016
|
September 30,
2016
|
June 30,
2016
|
March 31,
2016
|
Seq
|
Yr/Yr
|
|
Total
capital
|
15.98
|
%
|
16.41
|
%
|
15.26
|
%
|
20.19
|
%
|
20.97
|
%
|
(43)
|
|
(499)
|
|
|
Tier 1
capital
|
14.70
|
%
|
15.12
|
%
|
13.98
|
%
|
18.89
|
%
|
19.67
|
%
|
(42)
|
|
(497)
|
|
|
Tier 1
leverage
|
9.31
|
%
|
8.88
|
%
|
8.88
|
%
|
11.59
|
%
|
11.04
|
%
|
43
|
|
(173)
|
|
|
Mortgage servicing
rights to Tier 1 capital
|
23.1
|
%
|
26.7
|
%
|
24.6
|
%
|
19.9
|
%
|
19.3
|
%
|
(360)
|
|
380
|
|
|
Book value per common
share
|
$
|
24.03
|
|
$
|
23.50
|
|
$
|
22.72
|
|
$
|
23.54
|
|
$
|
22.82
|
|
2
|
%
|
5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company maintained a robust capital position with regulatory
ratios well above current regulatory quantitative guidelines for
"well capitalized" institutions. At March 31, 2017, the
Company had a Tier 1 leverage ratio of 9.31 percent, as compared to
8.88 percent at December 31, 2016. The increase in the ratio
resulted from earnings retention, MSR sales and a decrease in
earning assets, partially offset by a higher phase-in requirement
under Basel III.
At March 31, 2017, the Company had a common
equity-to-assets ratio of 8.92 percent.
Earnings Conference Call
As previously announced, the Company's first quarter 2017
earnings call will be held Tuesday, April 25, 2017 at
11 a.m. (ET).
To join the call, please dial (877) 852-6583 toll free or (719)
325-4934 and use passcode 6536406. 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 6536406
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 $15.4 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 43 retail
locations in 23 states. Flagstar is a leading national originator
and servicer of mortgage loans, handling payments and record
keeping for $83 billion of home loans
representing 393,000 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
noninterest expense, 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)
|
|
|
March 31,
2017
|
|
December 31,
2016
|
|
March 31,
2016
|
|
(Unaudited)
|
|
|
|
(Unaudited)
|
|
Assets
|
|
|
|
|
|
|
Cash
|
$
|
72
|
|
$
|
84
|
|
$
|
54
|
|
Interest-earning
deposits
|
89
|
|
74
|
|
670
|
|
Total
cash and cash equivalents
|
161
|
|
158
|
|
724
|
|
Investment securities
available-for-sale
|
1,650
|
|
1,480
|
|
1,314
|
|
Investment securities
held-to-maturity
|
1,048
|
|
1,093
|
|
1,253
|
|
Loans
held-for-sale
|
4,543
|
|
3,177
|
|
2,591
|
|
Loans
held-for-investment
|
5,959
|
|
6,065
|
|
5,640
|
|
Loans with government
guarantees
|
322
|
|
365
|
|
462
|
|
Less: allowance for
loan losses
|
(141)
|
|
(142)
|
|
(162)
|
|
Total
loans held-for-investment and loans with government guarantees,
net
|
6,140
|
|
6,288
|
|
5,940
|
|
Mortgage servicing
rights
|
295
|
|
335
|
|
281
|
|
Federal Home Loan
Bank stock
|
201
|
|
180
|
|
172
|
|
Premises and
equipment, net
|
277
|
|
275
|
|
256
|
|
Net deferred tax
asset
|
273
|
|
286
|
|
352
|
|
Other
assets
|
773
|
|
781
|
|
854
|
|
Total
assets
|
$
|
15,361
|
|
$
|
14,053
|
|
$
|
13,737
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
Noninterest-bearing
|
$
|
1,831
|
|
$
|
2,077
|
|
$
|
1,984
|
|
Interest-bearing
|
6,814
|
|
6,723
|
|
6,485
|
|
Total
deposits
|
8,645
|
|
8,800
|
|
8,469
|
|
Short-term Federal
Home Loan Bank advances and other
|
3,186
|
|
1,780
|
|
1,250
|
|
Long-term Federal
Home Loan Bank advances
|
1,200
|
|
1,200
|
|
1,625
|
|
Other long-term
debt
|
493
|
|
493
|
|
247
|
|
Representation and
warranty reserve
|
23
|
|
27
|
|
40
|
|
Other
liabilities
|
443
|
|
417
|
|
548
|
|
Total
liabilities
|
13,990
|
|
12,717
|
|
12,179
|
|
Stockholders'
Equity
|
|
|
|
|
|
|
Preferred
stock
|
—
|
|
—
|
|
267
|
|
Common
stock
|
1
|
|
1
|
|
1
|
|
Additional paid in
capital
|
1,510
|
|
1,503
|
|
1,489
|
|
Accumulated other
comprehensive (loss) income
|
(6)
|
|
(7)
|
|
(11)
|
|
Accumulated
deficit
|
(134)
|
|
(161)
|
|
(188)
|
|
Total
stockholders' equity
|
1,371
|
|
1,336
|
|
1,558
|
|
Total liabilities and
stockholders' equity
|
$
|
15,361
|
|
$
|
14,053
|
|
$
|
13,737
|
|
Flagstar Bancorp,
Inc.
Condensed
Consolidated Statements of Operations
(Dollars in
millions, except per share data)
(Unaudited)
|
|
|
|
First Quarter 2017
Compared to:
|
|
Three Months
Ended
|
|
Fourth
Quarter
2016
|
First
Quarter
2016
|
|
March 31,
2017
|
December 31,
2016
|
September 30,
2016
|
June 30,
2016
|
March 31,
2016
|
|
Amount
|
Percent
|
Amount
|
Percent
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Income
|
|
|
|
|
|
|
|
|
|
|
|
Total interest
income
|
$
|
110
|
$
|
111
|
$
|
106
|
$
|
99
|
$
|
101
|
|
$
|
(1)
|
(1) %
|
$
|
9
|
9 %
|
|
Total interest
expense
|
27
|
24
|
26
|
22
|
22
|
|
3
|
13 %
|
5
|
23 %
|
|
Net
interest income
|
83
|
87
|
80
|
77
|
79
|
|
(4)
|
(5) %
|
4
|
5 %
|
|
Provision (benefit)
for loan
losses
|
3
|
1
|
7
|
(3)
|
(13)
|
|
2
|
N/M
|
$
|
16
|
N/M
|
|
Net
interest income after
provision (benefit) for loan
losses
|
80
|
86
|
73
|
80
|
92
|
|
(6)
|
(7) %
|
(12)
|
(13) %
|
|
Noninterest
Income
|
|
|
|
|
|
|
|
|
|
|
|
Net gain on loan
sales
|
48
|
57
|
94
|
90
|
75
|
|
(9)
|
(16) %
|
$
|
(27)
|
(36) %
|
|
Loan fees and
charges
|
15
|
20
|
22
|
19
|
15
|
|
(5)
|
(25) %
|
—
|
— %
|
|
Deposit fees and
charges
|
4
|
5
|
5
|
6
|
6
|
|
(1)
|
(20) %
|
(2)
|
(33) %
|
|
Loan administration
income
|
5
|
4
|
4
|
4
|
6
|
|
1
|
25 %
|
(1)
|
(17) %
|
|
Net (loss) return on
the
mortgage servicing rights
|
14
|
(5)
|
(11)
|
(4)
|
(6)
|
|
19
|
N/M
|
20
|
N/M
|
|
Representation and
warranty
benefit
|
4
|
7
|
6
|
4
|
2
|
|
(3)
|
(43) %
|
2
|
N/M
|
|
Other noninterest
income
|
10
|
10
|
36
|
9
|
7
|
|
—
|
— %
|
3
|
43 %
|
|
Total
noninterest income
|
100
|
98
|
156
|
128
|
105
|
|
2
|
2 %
|
(5)
|
(5) %
|
|
Noninterest
Expense
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and
benefits
|
72
|
66
|
69
|
66
|
68
|
|
6
|
9 %
|
$
|
4
|
6 %
|
|
Commissions
|
10
|
15
|
16
|
14
|
10
|
|
(5)
|
(33) %
|
$
|
—
|
— %
|
|
Occupancy and
equipment
|
22
|
21
|
21
|
21
|
22
|
|
1
|
5 %
|
$
|
—
|
— %
|
|
Asset
resolution
|
2
|
1
|
2
|
1
|
3
|
|
1
|
N/M
|
$
|
(1)
|
(33) %
|
|
Federal insurance
premiums
|
3
|
2
|
3
|
3
|
3
|
|
1
|
50 %
|
$
|
—
|
— %
|
|
Loan processing
expense
|
12
|
15
|
13
|
15
|
12
|
|
(3)
|
(20) %
|
$
|
—
|
— %
|
|
Legal and
professional
expense
|
7
|
9
|
5
|
6
|
9
|
|
(2)
|
(22) %
|
$
|
(2)
|
(22) %
|
|
Other noninterest
expense
|
12
|
13
|
13
|
13
|
10
|
|
(1)
|
(8) %
|
$
|
2
|
20 %
|
|
Total
noninterest expense
|
140
|
142
|
142
|
139
|
137
|
|
(2)
|
(1) %
|
3
|
2 %
|
|
Income before income
taxes
|
40
|
42
|
87
|
69
|
60
|
|
(2)
|
(5) %
|
(20)
|
(33) %
|
|
Provision for income
taxes
|
13
|
14
|
30
|
22
|
21
|
|
(1)
|
(7) %
|
$
|
(8)
|
(38) %
|
|
Net income
|
$
|
27
|
$
|
28
|
$
|
57
|
$
|
47
|
$
|
39
|
|
$
|
(1)
|
(4) %
|
$
|
(12)
|
(31) %
|
|
Income per
share
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.47
|
$
|
0.50
|
$
|
0.98
|
$
|
0.67
|
$
|
0.56
|
|
$
|
(0.03)
|
(6) %
|
$
|
(0.09)
|
(16) %
|
|
Diluted
|
$
|
0.46
|
$
|
0.49
|
$
|
0.96
|
$
|
0.66
|
$
|
0.54
|
|
$
|
(0.03)
|
(6) %
|
$
|
(0.08)
|
(15) %
|
|
Flagstar Bancorp,
Inc.
Summary of Selected Consolidated Financial and Statistical
Data
(Dollars in millions, except share data)
(Unaudited)
|
|
Three Months
Ended
|
|
March 31,
2017
|
|
December 31,
2016
|
|
March 31,
2016
|
|
Selected Mortgage
Statistics:
|
|
|
|
|
|
|
Mortgage loans
originated (1)
|
$
|
5,912
|
|
$
|
8,573
|
|
$
|
6,352
|
|
Mortgage loans sold
and securitized
|
$
|
4,484
|
|
$
|
8,422
|
|
$
|
6,948
|
|
Mortgage rate lock
commitments (gross)
|
$
|
7,377
|
|
$
|
7,611
|
|
$
|
8,762
|
|
Selected
Ratios:
|
|
|
|
|
|
|
Interest rate spread
(2)
|
2.49%
|
|
2.49%
|
|
2.50%
|
|
Net interest
margin
|
2.67%
|
|
2.67%
|
|
2.66%
|
|
Net margin on loans
sold and securitized
|
1.06%
|
|
0.68%
|
|
0.94%
|
|
Return on average
assets
|
0.76%
|
|
0.78%
|
|
1.16%
|
|
Return on average
equity
|
7.88%
|
|
8.60%
|
|
10.08%
|
|
Return on average
common equity
|
7.88%
|
|
8.60%
|
|
12.15%
|
|
Efficiency
ratio
|
76.8%
|
|
76.7%
|
|
74.5%
|
|
Equity-to-assets
ratio (average for the period)
|
9.59%
|
|
9.05%
|
|
11.52%
|
|
Average
Balances:
|
|
|
|
|
|
|
Average common shares
outstanding
|
56,921,605
|
|
56,607,933
|
|
56,513,715
|
|
Average fully diluted
shares outstanding
|
58,072,563
|
|
57,824,854
|
|
57,600,984
|
|
Average
interest-earning assets
|
$
|
12,343
|
|
$
|
12,817
|
|
$
|
11,871
|
|
Average
interest-paying liabilities
|
$
|
10,319
|
|
$
|
10,222
|
|
$
|
9,823
|
|
Average stockholders'
equity
|
$
|
1,346
|
|
$
|
1,312
|
|
$
|
1,561
|
|
|
|
|
|
|
|
|
|
|
March 31,
2017
|
|
December 31,
2016
|
|
March 31,
2016
|
|
Selected
Statistics:
|
|
|
|
|
|
|
Book value per common
share
|
$
|
24.03
|
|
$
|
23.50
|
|
$
|
22.82
|
|
Number of common
shares outstanding
|
57,043,565
|
|
56,824,802
|
|
56,557,895
|
|
Number of FTE
employees
|
2,948
|
|
2,886
|
|
2,771
|
|
Number of bank
branches
|
99
|
|
99
|
|
99
|
|
Ratio of allowance
for loan losses to LHFI (3)
|
2.37%
|
|
2.37%
|
|
2.93%
|
|
Ratio of allowance
for loan losses to LHFI and loans with government
guarantees (3)
|
2.25%
|
|
2.23%
|
|
2.70%
|
|
Ratio of
nonperforming assets to total assets
|
0.27%
|
|
0.39%
|
|
0.49%
|
|
Equity-to-assets
ratio
|
8.92%
|
|
9.50%
|
|
11.34%
|
|
Common
equity-to-assets ratio
|
8.92%
|
|
9.50%
|
|
9.40%
|
|
MSR Key Statistics
and Ratios:
|
|
|
|
|
|
|
Weighted average
service fee (basis points)
|
26.7
|
|
26.7
|
|
28.2
|
|
Capitalized value of
mortgage servicing rights
|
1.10%
|
|
1.07%
|
|
1.06%
|
|
Mortgage servicing
rights to Tier 1 capital
|
23.1%
|
|
26.7%
|
|
19.3%
|
|
|
(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.
|
|
Flagstar Bancorp,
Inc.
Earnings Per Share
(Dollars in millions, except share
data)
(Unaudited)
|
|
|
|
Three Months
Ended
|
|
March 31,
2017
|
|
December 31,
2016
|
|
March 31,
2016
|
|
Net income
|
27
|
|
28
|
|
39
|
|
Deferred cumulative
preferred stock dividends (1)
|
—
|
|
—
|
|
(8)
|
|
Net
income applicable to common stockholders
|
$
|
27
|
|
$
|
28
|
|
$
|
31
|
|
Weighted average
shares
|
|
|
|
|
|
|
Weighted average
common shares outstanding
|
56,921,605
|
|
56,607,933
|
|
56,513,715
|
|
Effect of dilutive
securities
|
|
|
|
|
|
|
May Investor
warrants
|
49,149
|
|
151,560
|
|
305,219
|
|
Stock-based
awards
|
1,101,809
|
|
1,065,361
|
|
782,050
|
|
Weighted
average diluted common shares
|
58,072,563
|
|
57,824,854
|
|
57,600,984
|
|
Earnings per
common share
|
|
|
|
|
|
|
Basic earnings per
common share
|
$
|
0.47
|
|
$
|
0.50
|
|
$
|
0.56
|
|
Effect of dilutive
securities
|
|
|
|
|
|
|
May Investor
warrants
|
—
|
|
—
|
|
—
|
|
Stock-based
awards
|
(0.01)
|
|
(0.01)
|
|
(0.02)
|
|
Diluted
earnings per common share
|
$
|
0.46
|
|
$
|
0.49
|
|
$
|
0.54
|
|
|
(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 and
redeemed the stock.
|
|
Average Balances,
Yields and Rates
|
|
(Dollars in
millions)
|
|
(Unaudited)
|
|
|
Three Months
Ended
|
|
March 31,
2017
|
|
December 31,
2016
|
|
March 31,
2016
|
|
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
|
$
|
3,286
|
|
$
|
32
|
|
3.87
|
%
|
|
$
|
3,321
|
|
$
|
29
|
|
3.55
|
%
|
|
$
|
2,909
|
|
$
|
28
|
|
3.81
|
%
|
|
Loans
held-for-investment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer loans
(1)
|
2,857
|
|
26
|
|
3.60
|
%
|
|
2,691
|
|
24
|
|
3.55
|
%
|
|
3,314
|
|
29
|
|
3.52
|
%
|
|
Commercial
loans (1)
|
2,782
|
|
29
|
|
4.19
|
%
|
|
3,472
|
|
35
|
|
4.06
|
%
|
|
2,354
|
|
23
|
|
3.91
|
%
|
|
Total loans
held-for-investment
|
5,639
|
|
55
|
|
3.89
|
%
|
|
6,163
|
|
59
|
|
3.84
|
%
|
|
5,668
|
|
52
|
|
3.68
|
%
|
|
Loans with government
guarantees
|
342
|
|
4
|
|
4.61
|
%
|
|
389
|
|
4
|
|
4.23
|
%
|
|
475
|
|
4
|
|
3.05
|
%
|
|
Investment
securities
|
3,012
|
|
19
|
|
2.51
|
%
|
|
2,845
|
|
18
|
|
2.53
|
%
|
|
2,692
|
|
17
|
|
2.51
|
%
|
|
Interest-earning
deposits
|
64
|
|
—
|
|
0.86
|
%
|
|
99
|
|
1
|
|
0.51
|
%
|
|
127
|
|
—
|
|
0.52
|
%
|
|
Total
interest-earning assets
|
12,343
|
|
$
|
110
|
|
3.55
|
%
|
|
12,817
|
|
$
|
111
|
|
3.46
|
%
|
|
11,871
|
|
$
|
101
|
|
3.39
|
%
|
|
Other
assets
|
1,700
|
|
|
|
|
1,672
|
|
|
|
1,672
|
|
|
|
|
Total
assets
|
$
|
14,043
|
|
|
|
|
$
|
14,489
|
|
|
|
$
|
13,543
|
|
|
|
|
Interest-Bearing
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail
deposits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand
deposits
|
$
|
507
|
|
$
|
—
|
|
0.18
|
%
|
|
$
|
521
|
|
$
|
—
|
|
0.21
|
%
|
|
$
|
445
|
|
$
|
—
|
|
0.13
|
%
|
|
Savings
deposits
|
3,928
|
|
7
|
|
0.76
|
%
|
|
3,840
|
|
7
|
|
0.77
|
%
|
|
3,722
|
|
7
|
|
0.79
|
%
|
|
Money market
deposits
|
276
|
|
1
|
|
0.46
|
%
|
|
256
|
|
—
|
|
0.43
|
%
|
|
243
|
|
—
|
|
0.36
|
%
|
|
Certificates
of deposit
|
1,073
|
|
3
|
|
1.06
|
%
|
|
1,079
|
|
3
|
|
1.05
|
%
|
|
856
|
|
2
|
|
0.92
|
%
|
|
Total retail
deposits
|
5,784
|
|
11
|
|
0.75
|
%
|
|
5,696
|
|
10
|
|
0.75
|
%
|
|
5,266
|
|
9
|
|
0.74
|
%
|
|
Government
deposits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand
deposits
|
235
|
|
—
|
|
0.39
|
%
|
|
211
|
|
—
|
|
0.39
|
%
|
|
256
|
|
—
|
|
0.39
|
%
|
|
Savings
deposits
|
459
|
|
1
|
|
0.52
|
%
|
|
470
|
|
1
|
|
0.52
|
%
|
|
419
|
|
1
|
|
0.52
|
%
|
|
Certificates
of deposit
|
318
|
|
—
|
|
0.63
|
%
|
|
352
|
|
1
|
|
0.60
|
%
|
|
412
|
|
1
|
|
0.47
|
%
|
|
Total
government deposits
|
1,012
|
|
1
|
|
0.52
|
%
|
|
1,033
|
|
2
|
|
0.52
|
%
|
|
1,087
|
|
2
|
|
0.47
|
%
|
|
Wholesale deposits
and other
|
8
|
|
—
|
|
0.39
|
%
|
|
—
|
|
—
|
|
—
|
%
|
|
—
|
|
—
|
|
—
|
%
|
|
Total
interest-bearing deposits
|
6,804
|
|
12
|
|
0.72
|
%
|
|
6,729
|
|
12
|
|
0.72
|
%
|
|
6,353
|
|
11
|
|
0.69
|
%
|
|
Short-term Federal
Home Loan Bank
advances and other
|
1,822
|
|
3
|
|
0.73
|
%
|
|
1,427
|
|
1
|
|
0.50
|
%
|
|
1,662
|
|
2
|
|
0.38
|
%
|
|
Long-term Federal
Home Loan Bank
advances
|
1,200
|
|
6
|
|
1.87
|
%
|
|
1,573
|
|
5
|
|
1.24
|
%
|
|
1,560
|
|
7
|
|
1.86
|
%
|
|
Other long-term
debt
|
493
|
|
6
|
|
5.04
|
%
|
|
493
|
|
6
|
|
4.89
|
%
|
|
248
|
|
2
|
|
3.22
|
%
|
|
Total
interest-bearing liabilities
|
10,319
|
|
27
|
|
1.06
|
%
|
|
10,222
|
|
24
|
|
0.97
|
%
|
|
9,823
|
|
22
|
|
0.89
|
%
|
|
Noninterest-bearing
deposits (2)
|
1,991
|
|
|
|
|
2,504
|
|
|
|
|
1,697
|
|
|
|
|
Other
liabilities
|
387
|
|
|
|
|
451
|
|
|
|
|
462
|
|
|
|
|
Stockholders'
equity
|
1,346
|
|
|
|
|
1,312
|
|
|
|
|
1,561
|
|
|
|
|
Total liabilities and
stockholders'
equity
|
$
|
14,043
|
|
|
|
|
$
|
14,489
|
|
|
|
|
$
|
13,543
|
|
|
|
|
Net interest-earning
assets
|
$
|
2,024
|
|
|
|
|
$
|
2,595
|
|
|
|
|
$
|
2,048
|
|
|
|
|
Net interest
income
|
|
|
$
|
83
|
|
|
|
|
|
$
|
87
|
|
|
|
|
|
$
|
79
|
|
|
|
Interest rate spread
(3)
|
|
|
|
2.49
|
%
|
|
|
|
2.49
|
%
|
|
|
|
|
2.50
|
%
|
|
Net interest margin
(4)
|
|
|
|
2.67
|
%
|
|
|
|
2.67
|
%
|
|
|
|
|
2.66
|
%
|
|
Ratio of average
interest-earning
assets to interest-bearing liabilities
|
|
|
|
119.6
|
%
|
|
|
|
125.4
|
%
|
|
|
|
|
|
120.9
|
%
|
|
Total average
deposits
|
$
|
8,795
|
|
|
|
|
$
|
9,233
|
|
|
|
$
|
8,050
|
|
|
|
|
|
|
(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.
|
|
Regulatory Capital
- Bancorp
(Dollars in millions)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
2017
|
|
December 31,
2016
|
|
September 30,
2016
|
|
June 30,
2016
|
|
March 31,
2016
|
|
Amount
|
Ratio
|
|
Amount
|
Ratio
|
|
Amount
|
Ratio
|
|
Amount
|
Ratio
|
|
Amount
|
Ratio
|
|
Tier 1 leverage (to
adjusted
tangible assets)
|
$
|
1,277
|
|
9.31
|
%
|
|
$
|
1,256
|
|
8.88
|
%
|
|
$
|
1,225
|
|
8.88
|
%
|
|
$
|
1,514
|
|
11.59
|
%
|
|
$
|
1,453
|
|
11.04
|
%
|
|
Total adjusted
tangible
asset base
|
$
|
13,716
|
|
|
|
$
|
14,149
|
|
|
|
$
|
13,798
|
|
|
|
$
|
13,068
|
|
|
|
$
|
13,167
|
|
|
|
Tier 1 common equity
(to
risk weighted assets)
|
$
|
1,071
|
|
12.32
|
%
|
|
$
|
1,084
|
|
13.06
|
%
|
|
$
|
1,056
|
|
12.04
|
%
|
|
$
|
1,086
|
|
13.55
|
%
|
|
$
|
1,032
|
|
13.96
|
%
|
|
Tier 1 capital
(to risk
weighted assets)
|
$
|
1,277
|
|
14.70
|
%
|
|
$
|
1,256
|
|
15.12
|
%
|
|
$
|
1,225
|
|
13.98
|
%
|
|
$
|
1,514
|
|
18.89
|
%
|
|
$
|
1,453
|
|
19.67
|
%
|
|
Total capital (to
risk
weighted assets)
|
$
|
1,389
|
|
15.98
|
%
|
|
$
|
1,363
|
|
16.41
|
%
|
|
$
|
1,338
|
|
15.26
|
%
|
|
$
|
1,618
|
|
20.19
|
%
|
|
$
|
1,549
|
|
20.97
|
%
|
|
Risk weighted
asset base
|
$
|
8,689
|
|
|
|
$
|
8,305
|
|
|
|
$
|
8,767
|
|
|
|
$
|
8,014
|
|
|
|
$
|
7,387
|
|
|
|
|
Regulatory Capital
- Bank
(Dollars in millions)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
2017
|
|
December 31,
2016
|
|
September 30,
2016
|
|
June 30,
2016
|
|
March 31,
2016
|
|
Amount
|
Ratio
|
|
Amount
|
Ratio
|
|
Amount
|
Ratio
|
|
Amount
|
Ratio
|
|
Amount
|
Ratio
|
|
Tier 1 leverage (to
adjusted
tangible assets)
|
$
|
1,477
|
|
10.74
|
%
|
|
$
|
1,491
|
|
10.52
|
%
|
|
$
|
1,459
|
|
10.55
|
%
|
|
$
|
1,576
|
|
12.03
|
%
|
|
$
|
1,509
|
|
11.43
|
%
|
|
Total adjusted
tangible
asset base
|
$
|
13,754
|
|
|
|
$
|
14,177
|
|
|
|
$
|
13,824
|
|
|
|
$
|
13,102
|
|
|
|
$
|
13,200
|
|
|
|
Tier 1 common equity
(to
risk weighted assets)
|
$
|
1,477
|
|
16.93
|
%
|
|
$
|
1,491
|
|
17.90
|
%
|
|
$
|
1,459
|
|
16.59
|
%
|
|
$
|
1,576
|
|
19.58
|
%
|
|
$
|
1,509
|
|
20.34
|
%
|
|
Tier 1 capital
(to risk
weighted assets)
|
$
|
1,477
|
|
16.93
|
%
|
|
$
|
1,491
|
|
17.90
|
%
|
|
$
|
1,459
|
|
16.59
|
%
|
|
$
|
1,576
|
|
19.58
|
%
|
|
$
|
1,509
|
|
20.34
|
%
|
|
Total capital (to
risk
weighted assets)
|
$
|
1,588
|
|
18.20
|
%
|
|
$
|
1,598
|
|
19.18
|
%
|
|
$
|
1,571
|
|
17.87
|
%
|
|
$
|
1,679
|
|
20.86
|
%
|
|
$
|
1,605
|
|
21.63
|
%
|
|
Risk weighted
asset base
|
$
|
8,726
|
|
|
|
$
|
8,332
|
|
|
|
$
|
8,794
|
|
|
|
$
|
8,048
|
|
|
|
$
|
7,421
|
|
|
|
Loan
Originations
(Dollars in
millions)
(Unaudited)
|
|
Three Months
Ended
|
|
March 31,
2017
|
|
December 31,
2016
|
|
March 31,
2016
|
|
Consumer
loans
|
|
|
|
|
|
|
|
|
|
Mortgage
(1)
|
$
|
5,912
|
|
95.1
|
%
|
|
$
|
8,573
|
|
97.3
|
%
|
|
$
|
6,352
|
|
98.3
|
%
|
|
Other consumer
(2)
|
47
|
|
0.8
|
%
|
|
46
|
|
0.5
|
%
|
|
27
|
|
0.4
|
%
|
|
Total consumer
loans
|
5,959
|
|
95.9
|
%
|
|
8,619
|
|
97.8
|
%
|
|
6,379
|
|
98.7
|
%
|
|
Commercial loans
(3)
|
257
|
|
4.1
|
%
|
|
191
|
|
2.2
|
%
|
|
84
|
|
1.3
|
%
|
|
Total loan
originations
|
$
|
6,216
|
|
100.0
|
%
|
|
$
|
8,810
|
|
100.0
|
%
|
|
$
|
6,463
|
|
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)
|
|
|
March 31,
2017
|
|
December 31,
2016
|
|
March 31,
2016
|
|
Consumer
loans
|
|
|
|
|
|
|
|
|
|
Residential first
mortgage
|
$
|
2,463
|
|
41.3
|
%
|
|
$
|
2,327
|
|
38.3
|
%
|
|
$
|
2,410
|
|
42.8
|
%
|
|
Second
mortgage
|
86
|
|
1.4
|
%
|
|
126
|
|
2.1
|
%
|
|
129
|
|
2.3
|
%
|
|
HELOC
|
290
|
|
4.9
|
%
|
|
317
|
|
5.2
|
%
|
|
366
|
|
6.5
|
%
|
|
Other
|
27
|
|
0.5
|
%
|
|
28
|
|
0.5
|
%
|
|
31
|
|
0.5
|
%
|
|
Total consumer
loans
|
2,866
|
|
48.1
|
%
|
|
2,798
|
|
46.1
|
%
|
|
2,936
|
|
52.1
|
%
|
|
Commercial
loans
|
|
|
|
|
|
|
|
|
|
Commercial real
estate
|
1,399
|
|
23.5
|
%
|
|
1,261
|
|
20.8
|
%
|
|
851
|
|
15.1
|
%
|
|
Commercial and
industrial
|
854
|
|
14.3
|
%
|
|
769
|
|
12.7
|
%
|
|
571
|
|
10.1
|
%
|
|
Warehouse
lending
|
840
|
|
14.1
|
%
|
|
1,237
|
|
20.4
|
%
|
|
1,282
|
|
22.7
|
%
|
|
Total
commercial loans
|
3,093
|
|
51.9
|
%
|
|
3,267
|
|
53.9
|
%
|
|
2,704
|
|
47.9
|
%
|
|
Total loans
held-for-investment
|
$
|
5,959
|
|
100.0
|
%
|
|
$
|
6,065
|
|
100.0
|
%
|
|
$
|
5,640
|
|
100.0
|
%
|
|
Residential Loans
Serviced
|
|
(Dollars in
millions)
|
|
(Unaudited)
|
|
|
March 31,
2017
|
|
December 31,
2016
|
|
March 31,
2016
|
|
Unpaid
Principal
Balance
|
Number of
accounts
|
|
Unpaid
Principal
Balance
|
Number of
accounts
|
|
Unpaid
Principal
Balance
|
Number of
accounts
|
|
Serviced for own loan
portfolio (1)
|
$
|
7,369
|
|
33,766
|
|
|
$
|
5,816
|
|
29,244
|
|
|
$
|
5,293
|
|
29,078
|
|
|
Serviced for
others
|
26,763
|
|
116,965
|
|
|
31,207
|
|
133,270
|
|
|
26,613
|
|
118,768
|
|
|
Subserviced for
others (2)
|
48,940
|
|
242,445
|
|
|
43,127
|
|
220,075
|
|
|
40,437
|
|
206,033
|
|
|
Total residential
loans serviced
|
$
|
83,072
|
|
393,176
|
|
|
$
|
80,150
|
|
382,589
|
|
|
$
|
72,343
|
|
353,879
|
|
|
|
(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
|
|
March 31,
2017
|
|
December 31,
2016
|
|
March 31,
2016
|
|
|
|
|
|
|
|
Allowance for loan
losses
|
$
|
141
|
|
|
$
|
142
|
|
|
$
|
162
|
|
|
Charge-offs
|
|
|
|
|
|
|
Consumer
loans
|
|
|
|
|
|
|
Residential first
mortgage
|
(4)
|
|
|
(3)
|
|
|
(11)
|
|
|
Second
mortgage
|
—
|
|
|
—
|
|
|
(1)
|
|
|
HELOC
|
—
|
|
|
—
|
|
|
(1)
|
|
|
Other
|
(1)
|
|
|
(1)
|
|
|
(1)
|
|
|
Total consumer loans
|
(5)
|
|
|
(4)
|
|
|
(14)
|
|
|
Total commercial loans
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
charge-offs
|
$
|
(5)
|
|
|
$
|
(4)
|
|
|
$
|
(14)
|
|
|
Recoveries
|
|
|
|
|
|
|
Consumer
loans
|
|
|
|
|
|
|
Residential first
mortgage
|
—
|
|
|
1
|
|
|
—
|
|
|
HELOC
|
—
|
|
|
—
|
|
|
1
|
|
|
Other
|
1
|
|
|
—
|
|
|
1
|
|
|
Total consumer
loans
|
1
|
|
|
1
|
|
|
2
|
|
|
Commercial
loans
|
|
|
|
|
|
|
Commercial
real estate
|
—
|
|
|
1
|
|
|
—
|
|
|
Total
commercial loans
|
—
|
|
|
1
|
|
|
—
|
|
|
Total
recoveries
|
1
|
|
|
2
|
|
|
2
|
|
|
Charge-offs, net of
recoveries
|
$
|
(4)
|
|
|
$
|
(2)
|
|
|
$
|
(12)
|
|
|
Net charge-offs to
LHFI ratio (annualized) (1)
|
0.27
|
%
|
|
0.13
|
%
|
|
0.86
|
%
|
|
Net charge-offs
ratio, adjusted (annualized) (1)(2)
|
0.07
|
%
|
|
0.07
|
%
|
|
0.20
|
%
|
|
Net
charge-offs/(recoveries) to LHFI ratio (annualized) by loan type
(1)
|
|
|
|
|
|
|
Residential first
mortgage
|
0.60
|
%
|
|
0.38
|
%
|
|
1.50
|
%
|
|
Second
mortgage
|
0.51
|
%
|
|
(0.92)
|
%
|
|
4.72
|
%
|
|
HELOC and
consumer
|
0.24
|
%
|
|
0.50
|
%
|
|
0.69
|
%
|
|
Commercial real
estate
|
(0.02)
|
%
|
|
(0.05)
|
%
|
|
(0.02)
|
%
|
|
Commercial and
industrial
|
(0.01)
|
%
|
|
(0.12)
|
%
|
|
(0.01)
|
%
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Excludes loans
carried under the fair value option.
|
|
(2)
|
Excludes charge-offs
of $1 million, zero, and $6 million related to the sale of
nonperforming loans, TDRs and non-agency loans during the three
months ended March 31, 2017, December 31, 2016, and March 31, 2016,
respectively. Also excludes charge-offs related to loans with
government guarantees of $2 million, $1 million, and $3 million
during the three months ended March 31, 2017, December 31, 2016,
and March 31, 2016, respectively.
|
|
Composition of
Allowance for Loan Losses
|
|
(Dollars in
millions)
|
|
(Unaudited)
|
|
|
March 31,
2017
|
March 31,
2017
|
|
December 31,
2016
|
|
Consumer
loans
|
|
|
|
|
Residential first
mortgage
|
$
|
61
|
|
|
$
|
65
|
|
|
Second
mortgage
|
7
|
|
|
8
|
|
|
HELOC
|
14
|
|
|
16
|
|
|
Other
|
1
|
|
|
1
|
|
|
Total consumer
loans
|
83
|
|
|
90
|
|
|
Commercial
loans
|
|
|
|
|
Commercial real
estate
|
32
|
|
|
28
|
|
|
Commercial and
industrial
|
20
|
|
|
17
|
|
|
Warehouse
lending
|
6
|
|
|
7
|
|
|
Total
commercial loans
|
58
|
|
|
52
|
|
|
Total
allowance for loan losses
|
$
|
141
|
|
|
$
|
142
|
|
|
Nonperforming
Loans and Assets
|
|
(Dollars in
millions)
|
|
(Unaudited)
|
|
|
March 31,
2017
|
|
December 31,
2016
|
|
March 31,
2016
|
|
Nonperforming
loans
|
$
|
17
|
|
|
$
|
22
|
|
|
$
|
27
|
|
|
Nonperforming
TDRs
|
5
|
|
|
8
|
|
|
6
|
|
|
Nonperforming TDRs at
inception but performing for less than six months
|
6
|
|
|
10
|
|
|
20
|
|
|
Total nonperforming
loans held-for-investment
|
28
|
|
|
40
|
|
|
53
|
|
|
Real estate and other
nonperforming assets, net
|
13
|
|
|
14
|
|
|
14
|
|
|
Nonperforming assets
held-for-investment, net (1)
|
$
|
41
|
|
|
$
|
54
|
|
|
$
|
67
|
|
|
|
|
|
|
|
|
Ratio of
nonperforming assets to total assets
|
0.27
|
%
|
|
0.39
|
%
|
|
0.49
|
%
|
|
Ratio of
nonperforming loans held-for-investment to loans
held-for-investment
|
0.47
|
%
|
|
0.67
|
%
|
|
0.95
|
%
|
|
Ratio of
nonperforming assets to loans held-for-investment and
repossessed
assets
|
0.69
|
%
|
|
0.90
|
%
|
|
1.20
|
%
|
|
Ratio of
nonperforming assets to Tier 1 capital + allowance for loan
losses
|
2.90
|
%
|
|
3.93
|
%
|
|
4.15
|
%
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Does not include
nonperforming loans held-for-sale of $21 million, $6 million, and
$6 million at March 31, 2017, December 31, 2016, and
March 31, 2016, 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 Loans
Held-for-
Investment
|
|
March 31,
2017
|
|
|
|
|
|
|
|
|
|
|
Consumer
loans
|
$
|
4
|
|
|
$
|
1
|
|
|
$
|
28
|
|
|
$
|
33
|
|
|
$
|
2,866
|
|
|
Commercial
loans
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,093
|
|
|
Total
loans
|
$
|
4
|
|
|
$
|
1
|
|
|
$
|
28
|
|
|
$
|
33
|
|
|
$
|
5,959
|
|
|
December 31,
2016
|
|
|
|
|
|
|
|
|
|
|
Consumer
loans
|
$
|
8
|
|
|
$
|
2
|
|
|
$
|
40
|
|
|
$
|
50
|
|
|
$
|
2,798
|
|
|
Commercial
loans
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,267
|
|
|
Total
loans
|
$
|
8
|
|
|
$
|
2
|
|
|
$
|
40
|
|
|
$
|
50
|
|
|
$
|
6,065
|
|
|
March 31,
2016
|
|
|
|
|
|
|
|
|
|
|
Consumer
loans
|
8
|
|
|
3
|
|
|
52
|
|
|
$
|
63
|
|
|
$
|
2,936
|
|
|
Commercial
loans
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
2,704
|
|
|
Total
loans
|
$
|
8
|
|
|
$
|
3
|
|
|
$
|
53
|
|
|
$
|
64
|
|
|
$
|
5,640
|
|
|
|
|
(1)
|
Includes performing
nonaccrual loans that are less than 90 days delinquent and for
which interest cannot be accrued.
|
|
Representation and
Warranty Reserve
|
|
(Dollars in
millions)
|
|
(Unaudited)
|
|
|
Three Months
Ended
|
|
March 31,
2017
|
|
December 31,
2016
|
|
March 31,
2016
|
|
Balance at beginning
of period
|
$
|
27
|
|
|
$
|
32
|
|
|
$
|
40
|
|
|
Provision
(benefit)
|
|
|
|
|
|
|
Gain on sale
reduction for representation and warranty liability
|
—
|
|
|
1
|
|
|
2
|
|
|
Representation and
warranty provision (benefit)
|
(4)
|
|
|
(7)
|
|
|
(2)
|
|
|
Total
|
(4)
|
|
|
(6)
|
|
|
—
|
|
|
(Charge-offs)
recoveries, net
|
—
|
|
|
1
|
|
|
—
|
|
|
Balance at end
of period
|
$
|
23
|
|
|
$
|
27
|
|
|
$
|
40
|
|
|
|
|
|
|
Troubled Debt
Restructurings
|
|
(Dollars in
millions)
|
|
(Unaudited)
|
|
|
TDRs
|
|
Performing
|
|
Nonperforming
|
|
Total
|
|
March 31,
2017
|
|
|
Consumer
loans
|
$
|
48
|
|
|
$
|
11
|
|
|
$
|
59
|
|
|
Total TDR
loans
|
$
|
48
|
|
|
$
|
11
|
|
|
$
|
59
|
|
|
December 31,
2016
|
|
|
|
|
|
|
Consumer
loans
|
$
|
67
|
|
|
$
|
18
|
|
|
$
|
85
|
|
|
Total TDR
loans
|
$
|
67
|
|
|
$
|
18
|
|
|
$
|
85
|
|
|
March 31,
2016
|
|
|
|
|
|
|
Consumer
loans
|
$
|
75
|
|
|
$
|
25
|
|
|
$
|
100
|
|
|
Commercial
loans
|
—
|
|
|
1
|
|
|
1
|
|
|
Total TDR
loans
|
$
|
75
|
|
|
$
|
26
|
|
|
$
|
101
|
|
|
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.
|
|
|
March 31,
2017
|
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)
|
$
|
1,071
|
|
|
$
|
1,277
|
|
|
$
|
1,277
|
|
|
$
|
1,389
|
|
|
Increased deductions
related to deferred tax assets, mortgage
servicing rights and other capital components
|
(119)
|
|
|
(85)
|
|
|
(85)
|
|
|
(83)
|
|
|
Basel III (fully
phased-in) capital
|
$
|
952
|
|
|
$
|
1,192
|
|
|
$
|
1,192
|
|
|
$
|
1,306
|
|
|
Risk-weighted
assets – Basel III (transitional) to Basel III
(fully phased-in)
|
|
|
|
|
|
|
|
|
Basel III assets
(transitional)
|
$
|
8,689
|
|
|
$
|
13,716
|
|
|
$
|
8,689
|
|
|
$
|
8,689
|
|
|
Net change in
assets
|
131
|
|
|
(85)
|
|
|
131
|
|
|
131
|
|
|
Basel III (fully
phased-in) assets
|
$
|
8,820
|
|
|
$
|
13,631
|
|
|
$
|
8,820
|
|
|
$
|
8,820
|
|
|
Capital
ratios
|
|
|
|
|
|
|
|
|
Basel III
(transitional)
|
12.32
|
%
|
|
9.31
|
%
|
|
14.70
|
%
|
|
15.98
|
%
|
|
Basel III (fully
phased-in)
|
10.79
|
%
|
|
8.75
|
%
|
|
13.52
|
%
|
|
14.81
|
%
|
|
|
|
|
March 31,
2017
|
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)
|
$
|
1,477
|
|
|
$
|
1,477
|
|
|
$
|
1,477
|
|
|
$
|
1,588
|
|
|
Increased deductions
related to deferred tax assets, mortgage
servicing rights and other capital components
|
(60)
|
|
|
(60)
|
|
|
(60)
|
|
|
(56)
|
|
|
Basel III (fully
phased-in) capital
|
$
|
1,417
|
|
|
$
|
1,417
|
|
|
$
|
1,417
|
|
|
$
|
1,532
|
|
|
Risk-weighted
assets – Basel III (transitional) to Basel III (fully
phased-in)
|
|
|
|
|
|
|
|
|
Basel III assets
(transitional)
|
$
|
8,726
|
|
|
$
|
13,754
|
|
|
$
|
8,726
|
|
|
$
|
8,726
|
|
|
Net change in
assets
|
262
|
|
|
(61)
|
|
|
262
|
|
|
262
|
|
|
Basel III (fully
phased-in) assets
|
$
|
8,988
|
|
|
$
|
13,693
|
|
|
$
|
8,988
|
|
|
$
|
8,988
|
|
|
Capital
ratios
|
|
|
|
|
|
|
|
|
Basel III
(transitional)
|
16.93
|
%
|
|
10.74
|
%
|
|
16.93
|
%
|
|
18.20
|
%
|
|
Basel III (fully
phased-in)
|
15.77
|
%
|
|
10.35
|
%
|
|
15.77
|
%
|
|
17.04
|
%
|
|
Adjusted
Noninterest Expense and Adjusted Efficiency Ratio. 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 noninterest
expense and an adjusted efficiency ratio 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
|
|
March 31,
2017
|
|
(Dollars in
millions)
(Unaudited)
|
|
Total noninterest
expense
|
$
|
140
|
|
|
Adjustment to remove
seasonal payroll taxes
|
(6)
|
|
|
Adjustment to remove
acquisition-related
costs
|
(1)
|
|
|
Total adjusted
noninterest expense
|
$
|
133
|
|
|
|
|
Net interest
income
|
$
|
83
|
|
|
Total noninterest
income
|
$
|
100
|
|
|
|
|
Efficiency
Ratio
|
76.8
|
%
|
|
Adjustment to remove
seasonal payroll taxes
|
(3.3)
|
%
|
|
Adjustment to remove
acquisition-related costs
|
(0.5)
|
%
|
|
Adjusted Efficiency
Ratio
|
73.0
|
%
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/flagstar-reports-first-quarter-2017-net-income-of-27-million-or-046-per-diluted-share-300444773.html
SOURCE Flagstar Bancorp, Inc.