TROY, Mich., Oct. 24, 2017 /PRNewswire/ --
Key Highlights - Third Quarter 2017
- Net interest income rose $6
million, or 6 percent, from second quarter 2017, driven by
solid earning asset growth.
- Well-balanced loan growth with average commercial loans
increasing $434 million, or 13
percent, from last quarter.
- Mortgage revenues, including gain on sale and return on MSR,
increased $9 million, or 13 percent,
from prior quarter, led by higher retail originations.
- Asset quality strong with minimal net charge-offs and low
delinquencies across all loan portfolios.
- Strong capital position with Tier 1 leverage at 8.8
percent.
Flagstar Bancorp, Inc. (NYSE: FBC), the holding company for
Flagstar Bank, FSB, today reported third quarter 2017 net income of
$40 million, or $0.70 per diluted share, as compared to
$41 million, or $0.71 per diluted share, in the second quarter
2017, and $57 million, or
$0.96 per diluted share, in the third
quarter 2016. Excluding a one-time benefit, the Company had
adjusted non-GAAP third quarter 2016 net income of $41 million, or $0.69 per diluted share.
"Our transformation into a strong commercial bank continued this
quarter," said Alessandro DiNello,
president and chief executive officer of Flagstar Bancorp, Inc.
"Net interest income rose $6 million
on average earning asset growth of $717
million, or 5 percent, and a relatively stable net interest
margin. Earning asset growth was, again, broad-based, with
double-digit increases in all three commercial loan portfolios. We
also continued to maintain our disciplined deposit growth, which
saw average deposits increase $266
million, or 3 percent. Total mortgage revenues grew
$9 million, or 13 percent, as our
gain on sale margin expanded 11 basis points to 84 basis points,
reflecting a full quarter of revenue from Opes Advisors."
"Our noninterest expense increased $17
million in the third quarter 2017, in line with our
expectations, and largely due to a full quarter of expenses from
Opes Advisors, plus costs of investing in new businesses. The
integration of Opes is on track with our initial expectations and,
while it's still early, the financial performance of this unit is
slightly ahead of our expectations. The remaining expenses
associated with balance sheet expansion reflected our cost
discipline, and had a very low, incremental efficiency ratio.
Credit costs were negligible, as the provision for loan losses
replaced 8 basis points of net charge-offs."
"Finally, we are pleased to see the Capital Simplification
proposal from our regulators. If enacted as proposed, it would
accelerate the capital formation to support further balance sheet
growth, improve our capital flexibility to better manage the
uncertainties of the MSR market and allow us to hold more MSRs -- a
high yielding asset that we fund efficiently and hedge well. We
believe it should improve our position to continue to execute on
our business model, matching superior asset generation
capabilities, supported by the capital and liquidity to grow the
bank prudently, thereby creating value for our shareholders."
Third Quarter 2017 Highlights:
Income Statement
Highlights
|
|
|
|
|
|
Three Months
Ended
|
|
September 30,
2017
|
June 30,
2017
|
March 31,
2017
|
December 31,
2016
|
September 30,
2016 (1)
|
|
(Dollars in
millions)
|
Net interest
income
|
$
|
103
|
|
$
|
97
|
|
$
|
83
|
|
$
|
87
|
|
$
|
80
|
|
Provision (benefit)
for loan losses
|
2
|
|
(1)
|
|
3
|
|
1
|
|
7
|
|
Noninterest
income
|
130
|
|
116
|
|
100
|
|
98
|
|
156
|
|
Noninterest
expense
|
171
|
|
154
|
|
140
|
|
142
|
|
142
|
|
Income before income
taxes
|
60
|
|
60
|
|
40
|
|
42
|
|
87
|
|
Provision for income
taxes
|
20
|
|
19
|
|
13
|
|
14
|
|
30
|
|
Net income
|
$
|
40
|
|
$
|
41
|
|
$
|
27
|
|
$
|
28
|
|
$
|
57
|
|
|
|
|
|
|
|
Income per
share:
|
|
|
|
|
|
Basic
|
$
|
0.71
|
|
$
|
0.72
|
|
$
|
0.47
|
|
$
|
0.50
|
|
$
|
0.98
|
|
Diluted
|
$
|
0.70
|
|
$
|
0.71
|
|
$
|
0.46
|
|
$
|
0.49
|
|
$
|
0.96
|
|
(1)
Third quarter 2016 results include a $24
million benefit ($16 million after tax benefit or $0.27 per diluted
income per share) 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 third quarter 2016 net
income of $41 million, or $0.69 per diluted share.
|
Key
Ratios
|
|
|
|
|
|
|
|
Three Months
Ended
|
Change
|
|
September 30,
2017
|
June 30,
2017
|
March 31,
2017
|
December 31,
2016
|
September 30,
2016
|
Seq
|
Yr/Yr
|
Net interest
margin
|
2.78%
|
|
2.77%
|
|
2.67%
|
|
2.67%
|
|
2.58%
|
|
.01%
|
|
.20%
|
Return on average
assets
|
1.0%
|
|
1.0%
|
|
0.8%
|
|
0.8%
|
|
1.6%
|
|
(.1)%
|
|
(.6)%
|
Return on average
equity
|
11.1%
|
|
11.6%
|
|
7.9%
|
|
8.6%
|
|
16.5%
|
|
(.5)%
|
|
(5.4)%
|
Return on average
common equity
|
11.1%
|
|
11.6%
|
|
7.9%
|
|
8.6%
|
|
17.5%
|
|
(.5)%
|
|
(6.4)%
|
Efficiency
ratio
|
73.5%
|
|
72.0%
|
|
76.8%
|
|
76.7%
|
|
59.9%
|
|
1.5%
|
|
13.6%
|
Balance Sheet
Highlights
|
|
|
|
|
|
|
|
Three Months
Ended
|
%
Change
|
|
September 30,
2017
|
June 30,
2017
|
March 31,
2017
|
December 31,
2016
|
September 30,
2016
|
Seq
|
Yr/Yr
|
|
(Dollars in
millions)
|
|
|
Average Balance
Sheet Data
|
|
|
|
|
|
|
|
Average
interest-earning assets
|
$
|
14,737
|
|
$
|
14,020
|
|
$
|
12,343
|
|
$
|
12,817
|
|
$
|
12,318
|
|
5%
|
|
20%
|
Average loans
held-for-sale (LHFS)
|
4,476
|
|
4,269
|
|
3,286
|
|
3,321
|
|
3,416
|
|
5%
|
|
31%
|
Average loans
held-for-investment (LHFI)
|
6,803
|
|
6,224
|
|
5,639
|
|
6,163
|
|
5,848
|
|
9%
|
|
16%
|
Average total
deposits
|
9,005
|
|
8,739
|
|
8,795
|
|
9,233
|
|
9,126
|
|
3%
|
|
(1)%
|
Net Interest Income
Net interest income rose $6
million, or 6 percent, to $103
million, as compared to $97
million for the second quarter 2017. The results reflected a
5 percent increase in average earning assets, led by continued
solid growth in commercial loans, and a slight increase in the net
interest margin.
Loans held-for-investment averaged $6.8
billion for the third quarter 2017, increasing $579 million, or 9 percent, from the prior
quarter. During the third quarter 2017, average commercial loans
rose 13 percent with average commercial real estate loans
increasing $169 million, or 11
percent, average commercial and industrial loans increasing
$137 million, or 15 percent, and
average warehouse loans increasing $128
million, or 15 percent. Average consumer loans rose 5
percent, driven by an increase in mortgage loans (primarily
jumbos).
Average total deposits were $9.0
billion in the third quarter 2017, increasing $266 million, or 3 percent from the second
quarter 2017. The increase was led by a $121
million increase in company controlled deposits. Average
retail deposits increased $70
million, led by an increase in retail certificates of
deposit. Excluding warehouse loans and company-controlled deposits,
the Company's held-for-investment (HFI) loan-to-deposit ratio was
78 percent in the third quarter 2017, as compared to 73 percent in
the second quarter 2017, providing ample liquidity for balance
sheet growth.
Net interest margin increased 1 basis point to 2.78 percent for
the third quarter 2017, as compared to the second quarter 2017. The
slight increase from the prior quarter was driven by higher
interest income on commercial loans, partially offset by increased
interest expense on short-term Federal Home Loan Bank advances due
to recent Federal Reserve rate hikes. Total deposit costs were up
modestly due to higher rates paid on retail certificates of deposit
and government deposits.
Provision (Benefit) for Loan Losses
The provision for loan losses totaled $2
million for the third quarter 2017, as compared to a
$1 million benefit for the second
quarter 2017. The low level of provision expense reflected strong
asset quality and largely matched net charge-offs during the third
quarter.
Noninterest Income
Noninterest income rose $14
million, or 12 percent, to $130
million in the third quarter of 2017, as compared to
$116 million for the second quarter
2017. The increase was primarily due to an increase in net gain on
loan sales and loan fees and charges.
Third quarter 2017 net gain on loan sales increased to
$75 million, as compared to
$66 million in the second quarter
2017, led by a full quarter of the Opes acquisition.
Fallout-adjusted locks fell 1 percent to $8.9 billion due to lower correspondent and
broker volume, partially offset by stronger retail volume from a
full quarter of Opes Advisors. The net gain on loan sale margin
rose 11 basis points to 0.84 percent for the third quarter 2017, as
compared to 0.73 percent for the second quarter 2017. The increase
was led by a higher distributed retail mix from the Opes
acquisition.
Mortgage
Metrics
|
|
|
|
|
|
|
|
Three Months
Ended
|
Change (% /
bps)
|
|
September 30,
2017
|
June 30,
2017
|
March 31,
2017
|
December 31,
2016
|
September 30,
2016
|
Seq
|
Yr/Yr
|
|
(Dollars in
millions)
|
|
|
Mortgage rate lock
commitments (fallout-adjusted) (1)
|
$
|
8,898
|
|
$
|
9,002
|
|
$
|
5,996
|
|
$
|
6,091
|
|
$
|
8,291
|
|
(1)%
|
|
7%
|
|
Net margin on
mortgage rate lock commitments (fallout-adjusted) (1)
(2)
|
0.84%
|
|
0.73%
|
|
0.80%
|
|
0.93%
|
|
1.13%
|
|
11
|
|
(29)
|
|
Net gain on loan
sales on HFS
|
$
|
75
|
|
66
|
|
$
|
48
|
|
$
|
57
|
|
$
|
94
|
|
14%
|
|
(20)%
|
|
Net (loss) return on
the mortgage servicing rights (MSR)
|
$
|
6
|
|
$
|
6
|
|
$
|
14
|
|
$
|
(5)
|
|
$
|
(11)
|
|
N/M
|
|
N/M
|
|
Gain on loan sales
HFS + net (loss) return on the MSR
|
$
|
81
|
|
$
|
72
|
|
$
|
62
|
|
$
|
52
|
|
$
|
83
|
|
13%
|
|
(2)%
|
|
|
|
|
|
|
|
|
|
Residential loans
serviced (number of accounts - 000's) (3)
|
415
|
|
402
|
|
393
|
|
383
|
|
375
|
|
3%
|
|
11%
|
|
Capitalized value of
mortgage servicing rights
|
1.15%
|
|
1.14%
|
|
1.10%
|
|
1.07%
|
|
0.96%
|
|
1
|
|
19
|
|
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 rose to $23
million for the third quarter 2017, as compared to
$20 million for the second quarter
2017. The increase primarily reflected higher mortgage loan
closings with a greater mix of distributed retail loans.
Net return on the mortgage servicing rights (including the
impact of hedges) was a net gain of $6
million for the third quarter 2017, unchanged from the
second quarter 2017, reflecting stable prepayments and hedge
performance.
The representation and warranty benefit was $4 million for the third quarter 2017, as
compared to a $3 million benefit in
the second quarter 2017. The representation and warranty reserve
was reduced to $16 million at
September 30, 2017, from $20
million at June 30, 2017, reflecting continued
improvement in risk trends and a repurchase pipeline that was only
$5 million at September 30, 2017.
Noninterest Expense
Noninterest expense rose to $171
million for the third quarter 2017, as compared to
$154 million for the second quarter
2017. The increase from the prior quarter was primarily due to a
full quarter of operating expenses associated with the recent
acquisition of Opes Advisors.
The Company's efficiency ratio was 74 percent for the third
quarter 2017, as compared to 72 percent for the second quarter
2017. Excluding Opes noninterest expense, the Company experienced
positive operating leverage with the remaining expenses reflecting
a greater degree of expense control and a low level of incremental
cost from expanding community banking revenues.
Income Taxes
The third quarter 2017 provision for income taxes totaled
$20 million, as compared to
$19 million in the second quarter
2017. The effective tax rate was 32 percent for the third quarter
2017, unchanged from the second quarter 2017.
Asset Quality
Credit Quality
Ratios
|
|
|
|
|
|
|
|
Three Months
Ended
|
Change (% /
bps)
|
|
September 30,
2017
|
June 30,
2017
|
March 31,
2017
|
December 31,
2016
|
September 30,
2016
|
Seq
|
Yr/Yr
|
|
(Dollars in
millions)
|
|
|
Allowance for loan
loss to LHFI
|
2.0%
|
|
2.1%
|
|
2.4%
|
|
2.4%
|
|
2.3%
|
|
(10)
|
(30)
|
Allowance for loan
loss to LHFI and loans with government guarantees
|
1.9%
|
|
2.0%
|
|
2.3%
|
|
2.2%
|
|
2.2%
|
|
(10)
|
(30)
|
|
|
|
|
|
|
|
|
Charge-offs, net of
recoveries
|
$
|
2
|
|
$
|
—
|
|
$
|
4
|
|
$
|
2
|
|
$
|
7
|
|
N/M
|
(71)%
|
Charge-offs
associated with loans with government guarantees
|
1
|
|
—
|
|
2
|
|
1
|
|
5
|
|
N/M
|
(80)%
|
Charge-offs
associated with the sale or transfer of nonperforming loans and
TDRs
|
—
|
|
—
|
|
1
|
|
—
|
|
—
|
|
N/M
|
N/M
|
Charge-offs, net of
recoveries, adjusted (1)
|
$
|
1
|
|
$
|
—
|
|
$
|
1
|
|
$
|
1
|
|
$
|
2
|
|
N/M
|
(50)%
|
|
|
|
|
|
|
|
|
Total nonperforming
loans held-for-investment
|
$
|
31
|
|
$
|
30
|
|
$
|
28
|
|
$
|
40
|
|
$
|
40
|
|
3%
|
(23)%
|
Net charge-offs to
LHFI ratio (annualized)
|
0.08%
|
|
0.04%
|
|
0.27%
|
|
0.13%
|
|
0.51%
|
|
4
|
(43)
|
Net charge-off ratio,
adjusted (annualized)
|
0.06%
|
|
0.02%
|
|
0.07%
|
|
0.07%
|
|
0.15%
|
|
4
|
(9)
|
Ratio of
nonperforming LHFI to LHFI
|
0.44%
|
|
0.44%
|
|
0.47%
|
|
0.67%
|
|
0.63%
|
|
0
|
(19)
|
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 $140
million at September 30, 2017, unchanged from
June 30, 2017. The allowance for loan
losses covered 2.0 percent of loans held-for-investment at
September 30, 2017, as compared to
2.1 percent of loans held-for-investment at June 30, 2017.
Net charge-offs in the third quarter 2017 were $2 million, or 0.08 percent of HFI loans,
compared to less than $1 million, or
0.04 percent of such loans in the prior quarter.
Nonperforming loans held-for-investment were $31 million at September 30, 2017, compared
to $30 million at June 30, 2017.
The ratio of nonperforming loans to loans held-for-investment were
0.44 percent at September 30, 2017, unchanged from
June 30, 2017. At September 30, 2017, consumer loan
delinquencies totaled $5 million,
unchanged from June 30, 2017.
Capital
Capital Ratios
(Bancorp)
|
Three Months
Ended
|
Change (%
/$)
|
|
September 30,
2017
|
June 30,
2017
|
March 31,
2017
|
December 31,
2016
|
September 30,
2016
|
Seq
|
Yr/Yr
|
Total capital (to
RWA)
|
14.99%
|
|
15.92%
|
|
15.98%
|
|
16.41%
|
|
15.26%
|
|
(0.93)%
|
|
(0.27)%
|
|
Tier 1 capital (to
RWA)
|
13.72%
|
|
14.65%
|
|
14.70%
|
|
15.12%
|
|
13.98%
|
|
(0.93)%
|
|
(0.26)%
|
|
Tier 1 leverage (to
adjusted avg. total assets)
|
8.80%
|
|
9.10%
|
|
9.31%
|
|
8.88%
|
|
8.88%
|
|
(0.30)%
|
|
(0.08)%
|
|
Mortgage servicing
rights to Tier 1 capital
|
17.3%
|
|
13.1%
|
|
23.1%
|
|
26.7%
|
|
24.6%
|
|
4.2%
|
|
(7.3)%
|
|
Tangible book value
per share
|
$
|
25.01
|
|
$
|
24.29
|
|
$
|
23.96
|
|
$
|
23.50
|
|
$
|
22.72
|
|
0.72
|
|
2.29
|
|
The Company grew the average balance sheet $729 million in the third quarter 2017 while
maintaining a robust capital position with regulatory ratios well
above current regulatory quantitative guidelines for "well
capitalized" institutions. At September 30, 2017, the Company
had a Tier 1 leverage ratio of 8.8 percent, as compared to 9.10
percent at June 30, 2017. The decrease in the ratio resulted
from balance sheet growth and a 24 basis point deduction for higher
MSRs, partially offset by earnings retention.
On September 27, 2017, the federal
banking agencies issued a notice of proposed rulemaking ("NPR")
regarding several proposed simplifications of the Basel III capital
rules issued in 2013. This Capital Simplification NPR would
accelerate capital formation for balance sheet growth. On a
pro-forma basis at September 30,
2017, the proposal would have increased the Company's Tier 1
leverage ratio by approximately 70 bps and risk-based capital
ratios by approximately 30 - 45 basis points.
At September 30, 2017, the Company had a common
equity-to-assets ratio of 8.6 percent.
Earnings Conference Call
As previously announced, the Company's third quarter 2017
earnings call will be held Tuesday, October 24, 2017 at
11 a.m. (ET).
To join the call, please dial (800) 239-9838 toll free or (719)
325-2202 and use passcode 8531257. Please call at least 10 minutes
before the conference is scheduled to begin. A replay will be
available for five business days by calling (888) 203-1112 toll
free or (719) 457-0820 and using passcode 8531257.
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 $16.9 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 95 retail locations in
27 states, representing the combined retail branches of Flagstar
and Opes Advisors mortgage division. Flagstar is a leading national
originator and servicer of mortgage loans, handling payments and
record keeping for $91 billion of
home loans representing 415,000 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
third quarter 2016 net income, adjusted earnings per share,
tangible book value per share 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)
|
|
|
September 30,
2017
|
|
June 30,
2017
|
|
December 31,
2016
|
|
September 30,
2016
|
Assets
|
|
|
|
|
|
|
|
Cash
|
$
|
88
|
|
|
$
|
80
|
|
|
$
|
84
|
|
|
$
|
76
|
|
Interest-earning
deposits
|
145
|
|
|
103
|
|
|
74
|
|
|
98
|
|
Total cash and cash
equivalents
|
233
|
|
|
183
|
|
|
158
|
|
|
174
|
|
Investment securities
available-for-sale
|
1,637
|
|
|
1,614
|
|
|
1,480
|
|
|
1,115
|
|
Investment securities
held-to-maturity
|
977
|
|
|
1,014
|
|
|
1,093
|
|
|
1,156
|
|
Loans
held-for-sale
|
4,939
|
|
|
4,506
|
|
|
3,177
|
|
|
3,393
|
|
Loans
held-for-investment
|
7,203
|
|
|
6,776
|
|
|
6,065
|
|
|
6,290
|
|
Loans with government
guarantees
|
253
|
|
|
278
|
|
|
365
|
|
|
404
|
|
Less: allowance for
loan losses
|
(140)
|
|
|
(140)
|
|
|
(142)
|
|
|
(143)
|
|
Total loans
held-for-investment and loans with government guarantees,
net
|
7,316
|
|
|
6,914
|
|
|
6,288
|
|
|
6,551
|
|
Mortgage servicing
rights
|
246
|
|
|
184
|
|
|
335
|
|
|
302
|
|
Federal Home Loan
Bank stock
|
264
|
|
|
260
|
|
|
180
|
|
|
172
|
|
Premises and
equipment, net
|
314
|
|
|
299
|
|
|
275
|
|
|
271
|
|
Net deferred tax
asset
|
248
|
|
|
266
|
|
|
286
|
|
|
305
|
|
Other
assets
|
706
|
|
|
725
|
|
|
781
|
|
|
834
|
|
Total
assets
|
$
|
16,880
|
|
|
$
|
15,965
|
|
|
$
|
14,053
|
|
|
$
|
14,273
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
Noninterest-bearing
|
$
|
2,272
|
|
|
$
|
2,012
|
|
|
$
|
2,077
|
|
|
$
|
2,544
|
|
Interest-bearing
|
6,889
|
|
|
6,683
|
|
|
6,723
|
|
|
6,827
|
|
Total
deposits
|
9,161
|
|
|
8,695
|
|
|
8,800
|
|
|
9,371
|
|
Short-term Federal
Home Loan Bank advances and other
|
4,065
|
|
|
3,670
|
|
|
1,780
|
|
|
905
|
|
Long-term Federal
Home Loan Bank advances
|
1,300
|
|
|
1,200
|
|
|
1,200
|
|
|
1,577
|
|
Other long-term
debt
|
493
|
|
|
493
|
|
|
493
|
|
|
493
|
|
Representation and
warranty reserve
|
16
|
|
|
20
|
|
|
27
|
|
|
32
|
|
Other
liabilities
|
394
|
|
|
479
|
|
|
417
|
|
|
609
|
|
Total
liabilities
|
15,429
|
|
|
14,557
|
|
|
12,717
|
|
|
12,987
|
|
Stockholders'
Equity
|
|
|
|
|
|
|
|
Common
stock
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
Additional paid in
capital
|
1,511
|
|
|
1,509
|
|
|
1,503
|
|
|
1,494
|
|
Accumulated other
comprehensive loss
|
(8)
|
|
|
(9)
|
|
|
(7)
|
|
|
(20)
|
|
Accumulated
deficit
|
(53)
|
|
|
(93)
|
|
|
(161)
|
|
|
(189)
|
|
Total stockholders'
equity
|
1,451
|
|
|
1,408
|
|
|
1,336
|
|
|
1,286
|
|
Total liabilities and
stockholders' equity
|
$
|
16,880
|
|
|
$
|
15,965
|
|
|
$
|
14,053
|
|
|
$
|
14,273
|
|
Flagstar Bancorp,
Inc.
Condensed
Consolidated Statements of Operations
(Dollars in
millions, except per share data)
(Unaudited)
|
|
|
|
Third Quarter 2017
Compared to:
|
|
Three Months
Ended
|
|
Second
Quarter
2017
|
|
Third
Quarter
2016
|
|
September 30,
2017
|
June 30,
2017
|
March 31,
2017
|
December 31,
2016
|
September 30,
2016
|
|
Amount
|
Percent
|
|
Amount
|
Percent
|
Interest
Income
|
|
|
|
|
|
|
|
|
|
|
|
Total interest
income
|
$
|
140
|
|
$
|
129
|
|
$
|
110
|
|
$
|
111
|
|
$
|
106
|
|
|
$
|
11
|
|
9
|
%
|
|
$
|
34
|
|
32
|
%
|
Total interest
expense
|
37
|
|
32
|
|
27
|
|
24
|
|
26
|
|
|
5
|
|
16
|
%
|
|
11
|
|
42
|
%
|
Net interest
income
|
103
|
|
97
|
|
83
|
|
87
|
|
80
|
|
|
6
|
|
6
|
%
|
|
23
|
|
29
|
%
|
Provision (benefit)
for loan losses
|
2
|
|
(1)
|
|
3
|
|
1
|
|
7
|
|
|
3
|
|
N/M
|
|
$
|
(5)
|
|
(71)
|
%
|
Net interest income
after provision (benefit) for loan losses
|
101
|
|
98
|
|
80
|
|
86
|
|
73
|
|
|
3
|
|
3
|
%
|
|
28
|
|
38
|
%
|
Noninterest
Income
|
|
|
|
|
|
|
|
|
|
|
|
Net gain on loan
sales
|
75
|
|
66
|
|
48
|
|
57
|
|
94
|
|
|
9
|
|
14
|
%
|
|
|
(19)
|
|
(20)
|
%
|
Loan fees and
charges
|
23
|
|
20
|
|
15
|
|
20
|
|
22
|
|
|
3
|
|
15
|
%
|
|
1
|
|
5
|
%
|
Deposit fees and
charges
|
5
|
|
5
|
|
4
|
|
5
|
|
5
|
|
|
—
|
|
—
|
%
|
|
—
|
|
—
|
%
|
Loan administration
income
|
5
|
|
6
|
|
5
|
|
4
|
|
4
|
|
|
(1)
|
|
(17)
|
%
|
|
1
|
|
25
|
%
|
Net (loss) return on
the mortgage servicing rights
|
6
|
|
6
|
|
14
|
|
(5)
|
|
(11)
|
|
|
—
|
|
—
|
%
|
|
17
|
|
N/M
|
Representation and
warranty benefit
|
4
|
|
3
|
|
4
|
|
7
|
|
6
|
|
|
1
|
|
33
|
%
|
|
(2)
|
|
(33)
|
%
|
Other noninterest
income
|
12
|
|
10
|
|
10
|
|
10
|
|
36
|
|
|
2
|
|
20
|
%
|
|
(24)
|
|
(67)
|
%
|
Total noninterest
income
|
130
|
|
116
|
|
100
|
|
98
|
|
156
|
|
|
14
|
|
12
|
%
|
|
(26)
|
|
(17)
|
%
|
Noninterest
Expense
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and
benefits
|
76
|
|
71
|
|
72
|
|
66
|
|
69
|
|
|
5
|
|
7
|
%
|
|
7
|
|
10
|
%
|
Commissions
|
23
|
|
16
|
|
10
|
|
15
|
|
16
|
|
|
7
|
|
44
|
%
|
|
7
|
|
44
|
%
|
Occupancy and
equipment
|
28
|
|
25
|
|
22
|
|
21
|
|
21
|
|
|
3
|
|
12
|
%
|
|
7
|
|
33
|
%
|
Loan processing
expense
|
15
|
|
14
|
|
12
|
|
15
|
|
13
|
|
|
1
|
|
7
|
%
|
|
2
|
|
15
|
%
|
Legal and
professional expense
|
7
|
|
8
|
|
7
|
|
9
|
|
5
|
|
|
(1)
|
|
(13)
|
%
|
|
2
|
|
40
|
%
|
Other noninterest
expense
|
22
|
|
20
|
|
17
|
|
16
|
|
18
|
|
|
2
|
|
10
|
%
|
|
4
|
|
22
|
%
|
Total noninterest
expense
|
171
|
|
154
|
|
140
|
|
142
|
|
142
|
|
|
17
|
|
11
|
%
|
|
29
|
|
20
|
%
|
Income before income
taxes
|
60
|
|
60
|
|
40
|
|
42
|
|
87
|
|
|
—
|
|
—
|
%
|
|
(27)
|
|
(31)
|
%
|
Provision for income
taxes
|
20
|
|
19
|
|
13
|
|
14
|
|
30
|
|
|
1
|
|
5
|
%
|
|
(10)
|
|
(33)
|
%
|
Net income
|
$
|
40
|
|
$
|
41
|
|
$
|
27
|
|
$
|
28
|
|
$
|
57
|
|
|
$
|
(1)
|
|
(2)
|
%
|
|
$
|
(17)
|
|
(30)
|
%
|
Income per
share
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.71
|
|
$
|
0.72
|
|
$
|
0.47
|
|
$
|
0.50
|
|
$
|
0.98
|
|
|
$
|
(0.01)
|
|
(1)
|
%
|
|
$
|
(0.27)
|
|
(28)
|
%
|
Diluted
|
$
|
0.70
|
|
$
|
0.71
|
|
$
|
0.46
|
|
$
|
0.49
|
|
$
|
0.96
|
|
|
$
|
(0.01)
|
|
(1)
|
%
|
|
$
|
(0.26)
|
|
(27)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
N/M - Not
meaningful
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Flagstar Bancorp,
Inc.
Condensed
Consolidated Statements of Operations
(Dollars in
millions, except per share data)
(Unaudited)
|
|
|
|
|
|
Nine Months
Ended
|
|
Compared
to:
Nine Months Ended
September 30, 2016
|
|
September 30,
2017
|
September 30,
2016
|
|
Amount
|
Percent
|
Total interest
income
|
$
|
379
|
|
$
|
306
|
|
|
$
|
73
|
|
24
|
%
|
Total interest
expense
|
96
|
|
70
|
|
|
26
|
|
37
|
%
|
Net interest
income
|
283
|
|
236
|
|
|
47
|
|
20
|
%
|
Provision (benefit)
for loan losses
|
4
|
|
(9)
|
|
|
13
|
|
N/M
|
Net interest income
after provision (benefit) for loan losses
|
279
|
|
245
|
|
|
34
|
|
14
|
%
|
Noninterest
Income
|
|
|
|
|
|
Net gain on loan
sales
|
189
|
|
259
|
|
|
(70)
|
|
(27)
|
%
|
Loan fees and
charges
|
58
|
|
56
|
|
|
2
|
|
4
|
%
|
Deposit fees and
charges
|
14
|
|
17
|
|
|
(3)
|
|
(18)
|
%
|
Loan administration
income
|
16
|
|
14
|
|
|
2
|
|
14
|
%
|
Net (loss) return on
the mortgage servicing rights
|
26
|
|
(21)
|
|
|
47
|
|
N/M
|
Representation and
warranty benefit
|
11
|
|
12
|
|
|
(1)
|
|
(8)
|
%
|
Other noninterest
income
|
32
|
|
52
|
|
|
(20)
|
|
(38)
|
%
|
Total noninterest
income
|
346
|
|
389
|
|
|
(43)
|
|
(11)
|
%
|
Noninterest
Expense
|
|
|
|
|
|
Compensation and
benefits
|
219
|
|
203
|
|
|
16
|
|
8
|
%
|
Commissions
|
49
|
|
40
|
|
|
9
|
|
23
|
%
|
Occupancy and
equipment
|
75
|
|
64
|
|
|
11
|
|
17
|
%
|
Loan processing
expense
|
41
|
|
40
|
|
|
1
|
|
3
|
%
|
Legal and
professional expense
|
22
|
|
20
|
|
|
2
|
|
10
|
%
|
Other noninterest
expense
|
59
|
|
51
|
|
|
8
|
|
16
|
%
|
Total noninterest
expense
|
465
|
|
418
|
|
|
47
|
|
11
|
%
|
Income before income
taxes
|
160
|
|
216
|
|
|
(56)
|
|
(26)
|
%
|
Provision for income
taxes
|
52
|
|
73
|
|
|
(21)
|
|
(29)
|
%
|
Net
income
|
$
|
108
|
|
$
|
143
|
|
|
$
|
(35)
|
|
(24)
|
%
|
Income per
share
|
|
|
|
|
|
Basic
|
$
|
1.90
|
|
$
|
2.21
|
|
|
$
|
(0.31)
|
|
(14)
|
%
|
Diluted
|
$
|
1.86
|
|
$
|
2.16
|
|
|
$
|
(0.30)
|
|
(14)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
Nine Months
Ended
|
|
September 30,
2017
|
|
June 30,
2017
|
|
September 30,
2016
|
|
September 30,
2017
|
|
September 30,
2016
|
Selected Mortgage
Statistics:
|
|
|
|
|
|
|
|
|
|
Mortgage loans
originated (1)
|
$
|
9,572
|
|
|
$
|
9,184
|
|
|
$
|
9,192
|
|
|
$
|
24,659
|
|
|
$
|
23,856
|
|
Mortgage loans sold
and securitized
|
$
|
8,924
|
|
|
$
|
8,989
|
|
|
$
|
8,723
|
|
|
$
|
22,397
|
|
|
$
|
23,611
|
|
Mortgage rate lock
commitments (gross)
|
$
|
9,878
|
|
|
$
|
10,813
|
|
|
$
|
10,328
|
|
|
$
|
28,068
|
|
|
$
|
29,258
|
|
Selected
Ratios:
|
|
|
|
|
|
|
|
|
|
Interest rate spread
(2)
|
2.58
|
%
|
|
2.59
|
%
|
|
2.36
|
%
|
|
2.56
|
%
|
|
2.43
|
%
|
Net interest
margin
|
2.78
|
%
|
|
2.77
|
%
|
|
2.58
|
%
|
|
2.74
|
%
|
|
2.62
|
%
|
Net margin on loans
sold and securitized
|
0.84
|
%
|
|
0.73
|
%
|
|
1.08
|
%
|
|
0.84
|
%
|
|
1.03
|
%
|
Return on average
assets
|
0.99
|
%
|
|
1.04
|
%
|
|
1.61
|
%
|
|
0.94
|
%
|
|
1.40
|
%
|
Return on average
equity
|
11.10
|
%
|
|
11.57
|
%
|
|
16.53
|
%
|
|
10.23
|
%
|
|
12.59
|
%
|
Return on average
common equity
|
11.10
|
%
|
|
11.57
|
%
|
|
17.45
|
%
|
|
10.23
|
%
|
|
14.52
|
%
|
Efficiency
ratio
|
73.5
|
%
|
|
72.0
|
%
|
|
59.9
|
%
|
|
73.9
|
%
|
|
66.9
|
%
|
Equity-to-assets
ratio (average for the period)
|
8.95
|
%
|
|
9.02
|
%
|
|
9.75
|
%
|
|
9.16
|
%
|
|
11.05
|
%
|
Average
Balances:
|
|
|
|
|
|
|
|
|
|
Average common shares
outstanding
|
57,162,025
|
|
|
57,101,816
|
|
|
56,580,238
|
|
|
57,062,696
|
|
|
56,556,188
|
|
Average fully diluted
shares outstanding
|
58,186,593
|
|
|
58,138,938
|
|
|
57,933,806
|
|
|
58,133,296
|
|
|
57,727,262
|
|
Average
interest-earning assets
|
$
|
14,737
|
|
|
$
|
14,020
|
|
|
$
|
12,318
|
|
|
$
|
13,709
|
|
|
$
|
11,944
|
|
Average
interest-paying liabilities
|
$
|
12,297
|
|
|
$
|
11,804
|
|
|
$
|
9,773
|
|
|
$
|
11,481
|
|
|
$
|
9,600
|
|
Average stockholders'
equity
|
$
|
1,471
|
|
|
$
|
1,418
|
|
|
$
|
1,379
|
|
|
$
|
1,412
|
|
|
$
|
1,515
|
|
|
September 30,
2017
|
|
June 30,
2017
|
|
December 31,
2016
|
|
September 30,
2016
|
Selected
Statistics:
|
|
|
|
|
|
|
|
Book value per common
share
|
$
|
25.38
|
|
|
$
|
24.64
|
|
|
$
|
23.50
|
|
|
$
|
22.72
|
|
Tangible book value
per share
|
25.01
|
|
|
24.29
|
|
|
23.50
|
|
|
22.72
|
|
Number of common
shares outstanding
|
57,181,536
|
|
|
57,161,431
|
|
|
56,824,802
|
|
|
56,597,271
|
|
Number of FTE
employees
|
3,495
|
|
|
3,432
|
|
|
2,886
|
|
|
2,881
|
|
Number of bank
branches
|
99
|
|
|
99
|
|
|
99
|
|
|
99
|
|
Ratio of
nonperforming assets to total assets
|
0.24
|
%
|
|
0.24
|
%
|
|
0.39
|
%
|
|
0.39
|
%
|
Common
equity-to-assets ratio
|
8.60
|
%
|
|
8.82
|
%
|
|
9.50
|
%
|
|
9.01
|
%
|
MSR Key Statistics
and Ratios:
|
|
|
|
|
|
|
|
Weighted average
service fee (basis points)
|
28.2
|
|
|
27.8
|
|
|
26.7
|
|
|
28.1
|
|
Capitalized value of
mortgage servicing rights
|
1.15
|
%
|
|
1.14
|
%
|
|
1.07
|
%
|
|
0.96
|
%
|
Mortgage servicing
rights to Tier 1 capital
|
17.3
|
%
|
|
13.1
|
%
|
|
26.7
|
%
|
|
24.6
|
%
|
|
(1) Includes residential
first mortgage.
|
(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.
|
Average Balances,
Yields and Rates
(Dollars in
millions)
(Unaudited)
|
|
Three Months
Ended
|
|
September 30,
2017
|
|
June 30,
2017
|
|
September 30,
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
|
$
|
4,476
|
|
$
|
45
|
|
3.99
|
%
|
|
$
|
4,269
|
|
$
|
42
|
|
4.00
|
%
|
|
$
|
3,416
|
|
$
|
30
|
|
3.51
|
%
|
Loans
held-for-investment
|
|
|
|
|
|
|
|
|
|
|
|
Residential first
mortgage
|
2,594
|
|
22
|
|
3.32
|
%
|
|
2,495
|
|
21
|
|
3.38
|
%
|
|
2,090
|
|
17
|
|
3.17
|
%
|
Home
equity
|
486
|
|
6
|
|
5.11
|
%
|
|
439
|
|
6
|
|
4.91
|
%
|
|
460
|
|
6
|
|
5.03
|
%
|
Other
|
26
|
|
—
|
|
4.52
|
%
|
|
27
|
|
—
|
|
4.54
|
%
|
|
30
|
|
—
|
|
4.59
|
%
|
Total Consumer
loans
|
3,106
|
|
28
|
|
3.61
|
%
|
|
2,961
|
|
27
|
|
3.61
|
%
|
|
2,580
|
|
23
|
|
3.52
|
%
|
Commercial Real
Estate
|
1,646
|
|
19
|
|
4.43
|
%
|
|
1,477
|
|
16
|
|
4.16
|
%
|
|
1,082
|
|
9
|
|
3.43
|
%
|
Commercial and
Industrial
|
1,073
|
|
13
|
|
4.77
|
%
|
|
936
|
|
11
|
|
4.77
|
%
|
|
633
|
|
7
|
|
4.27
|
%
|
Warehouse
Lending
|
978
|
|
12
|
|
4.82
|
%
|
|
850
|
|
10
|
|
4.71
|
%
|
|
1,553
|
|
17
|
|
4.21
|
%
|
Total Commercial
loans
|
3,697
|
|
44
|
|
4.63
|
%
|
|
3,263
|
|
37
|
|
4.48
|
%
|
|
3,268
|
|
33
|
|
3.96
|
%
|
Total loans
held-for-investment
|
6,803
|
|
72
|
|
4.16
|
%
|
|
6,224
|
|
64
|
|
4.07
|
%
|
|
5,848
|
|
56
|
|
3.77
|
%
|
Loans with government
guarantees
|
264
|
|
3
|
|
4.58
|
%
|
|
295
|
|
3
|
|
4.02
|
%
|
|
432
|
|
4
|
|
3.88
|
%
|
Investment
securities
|
3,101
|
|
20
|
|
2.58
|
%
|
|
3,166
|
|
20
|
|
2.57
|
%
|
|
2,516
|
|
16
|
|
2.55
|
%
|
Interest-earning
deposits
|
93
|
|
—
|
|
1.23
|
%
|
|
66
|
|
—
|
|
1.07
|
%
|
|
106
|
|
—
|
|
0.48
|
%
|
Total
interest-earning assets
|
14,737
|
|
$
|
140
|
|
3.77
|
%
|
|
14,020
|
|
$
|
129
|
|
3.69
|
%
|
|
12,318
|
|
$
|
106
|
|
3.42
|
%
|
Other
assets
|
1,702
|
|
|
|
|
1,690
|
|
|
|
|
1,830
|
|
|
|
Total
assets
|
$
|
16,439
|
|
|
|
|
$
|
15,710
|
|
|
|
|
$
|
14,148
|
|
|
|
Interest-Bearing
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
Retail
deposits
|
|
|
|
|
|
|
|
|
|
|
|
Demand
deposits
|
$
|
489
|
|
$
|
—
|
|
0.14
|
%
|
|
$
|
510
|
|
$
|
—
|
|
0.15
|
%
|
|
$
|
509
|
|
$
|
—
|
|
0.20
|
%
|
Savings
deposits
|
3,838
|
|
7
|
|
0.76
|
%
|
|
3,933
|
|
8
|
|
0.75
|
%
|
|
3,751
|
|
8
|
|
0.77
|
%
|
Money market
deposits
|
276
|
|
—
|
|
0.57
|
%
|
|
239
|
|
—
|
|
0.42
|
%
|
|
250
|
|
—
|
|
0.41
|
%
|
Certificates of
deposit
|
1,182
|
|
4
|
|
1.19
|
%
|
|
1,094
|
|
3
|
|
1.08
|
%
|
|
1,071
|
|
3
|
|
1.05
|
%
|
Total retail
deposits
|
5,785
|
|
11
|
|
0.78
|
%
|
|
5,776
|
|
11
|
|
0.75
|
%
|
|
5,581
|
|
11
|
|
0.75
|
%
|
Government
deposits
|
|
|
|
|
|
|
|
|
|
|
|
Demand
deposits
|
250
|
|
—
|
|
0.43
|
%
|
|
200
|
|
—
|
|
0.39
|
%
|
|
243
|
|
—
|
|
0.39
|
%
|
Savings
deposits
|
362
|
|
1
|
|
0.71
|
%
|
|
411
|
|
1
|
|
0.56
|
%
|
|
478
|
|
1
|
|
0.52
|
%
|
Certificates of
deposit
|
329
|
|
1
|
|
0.89
|
%
|
|
291
|
|
—
|
|
0.68
|
%
|
|
355
|
|
—
|
|
0.52
|
%
|
Total government
deposits
|
941
|
|
2
|
|
0.70
|
%
|
|
902
|
|
1
|
|
0.56
|
%
|
|
1,076
|
|
1
|
|
0.49
|
%
|
Wholesale deposits
and other
|
35
|
|
—
|
|
1.49
|
%
|
|
4
|
|
—
|
|
0.48
|
%
|
|
—
|
|
—
|
|
—%
|
Total
interest-bearing deposits
|
6,761
|
|
13
|
|
0.78
|
%
|
|
6,682
|
|
12
|
|
0.72
|
%
|
|
6,657
|
|
12
|
|
0.71
|
%
|
Short-term Federal
Home Loan Bank advances and other
|
3,809
|
|
11
|
|
1.17
|
%
|
|
3,429
|
|
8
|
|
0.98
|
%
|
|
1,073
|
|
1
|
|
0.44
|
%
|
Long-term Federal
Home Loan Bank advances
|
1,234
|
|
6
|
|
1.99
|
%
|
|
1,200
|
|
6
|
|
1.91
|
%
|
|
1,576
|
|
7
|
|
1.81
|
%
|
Other long-term
debt
|
493
|
|
7
|
|
5.09
|
%
|
|
493
|
|
6
|
|
5.06
|
%
|
|
467
|
|
6
|
|
4.86
|
%
|
Total
interest-bearing liabilities
|
12,297
|
|
37
|
|
1.19
|
%
|
|
11,804
|
|
32
|
|
1.10
|
%
|
|
9,773
|
|
26
|
|
1.06
|
%
|
Noninterest-bearing
deposits (1)
|
2,244
|
|
|
|
|
2,057
|
|
|
|
|
2,469
|
|
|
|
Other
liabilities
|
427
|
|
|
|
|
431
|
|
|
|
|
527
|
|
|
|
Stockholders'
equity
|
1,471
|
|
|
|
|
1,418
|
|
|
|
|
1,379
|
|
|
|
Total liabilities and
stockholders' equity
|
$
|
16,439
|
|
|
|
|
$
|
15,710
|
|
|
|
|
$
|
14,148
|
|
|
|
Net interest-earning
assets
|
$
|
2,440
|
|
|
|
|
$
|
2,216
|
|
|
|
|
$
|
2,545
|
|
|
|
Net interest
income
|
|
$
|
103
|
|
|
|
|
$
|
97
|
|
|
|
|
$
|
80
|
|
|
Interest rate spread
(2)
|
|
|
2.58
|
%
|
|
|
|
2.59
|
%
|
|
|
|
2.36
|
%
|
Net interest margin
(3)
|
|
|
2.78
|
%
|
|
|
|
2.77
|
%
|
|
|
|
2.58
|
%
|
Ratio of average
interest-earning assets to interest-bearing liabilities
|
|
|
119.9
|
%
|
|
|
|
118.8
|
%
|
|
|
|
126.0
|
%
|
Total average
deposits
|
$
|
9,005
|
|
|
|
|
$
|
8,739
|
|
|
|
|
$
|
9,126
|
|
|
|
|
(1) Includes
noninterest-bearing company-controlled deposits that arise due to
the servicing of loans for others.
|
(2) Interest rate
spread is the difference between rate of interest earned on
interest-earning assets and rate of interest paid on
interest-bearing liabilities.
|
(3) Net interest
margin is net interest income divided by average interest-earning
assets.
|
Average Balances,
Yields and Rates
(Dollars in
millions)
(Unaudited)
|
|
Nine Months
Ended
|
|
September 30,
2017
|
|
September 30,
2016
|
|
Average
Balance
|
Interest
|
Annualized
Yield/Rate
|
|
Average
Balance
|
Interest
|
Annualized
Yield/Rate
|
Interest-Earning
Assets
|
|
|
|
|
|
|
|
Loans
held-for-sale
|
$
|
4,014
|
|
$
|
119
|
|
3.96
|
%
|
|
$
|
3,071
|
|
$
|
83
|
|
3.64
|
%
|
Loans
held-for-investment
|
|
|
|
|
|
|
|
Residential first
mortgage
|
2,497
|
|
62
|
|
3.34
|
%
|
|
2,365
|
|
56
|
|
3.14
|
%
|
Home
equity
|
453
|
|
17
|
|
5.04
|
%
|
|
485
|
|
19
|
|
5.23
|
%
|
Other
|
26
|
|
1
|
|
4.52
|
%
|
|
29
|
|
1
|
|
4.82
|
%
|
Total Consumer
loans
|
2,976
|
|
80
|
|
3.61
|
%
|
|
2,879
|
|
76
|
|
3.51
|
%
|
Commercial Real
Estate
|
1,482
|
|
47
|
|
4.15
|
%
|
|
936
|
|
24
|
|
3.40
|
%
|
Commercial and
Industrial
|
929
|
|
33
|
|
4.71
|
%
|
|
601
|
|
19
|
|
4.12
|
%
|
Warehouse
Lending
|
840
|
|
30
|
|
4.70
|
%
|
|
1,279
|
|
41
|
|
4.25
|
%
|
Total Commercial
loans
|
3,251
|
|
110
|
|
4.45
|
%
|
|
2,816
|
|
84
|
|
3.94
|
%
|
Total loans
held-for-investment
|
6,227
|
|
190
|
|
4.05
|
%
|
|
5,695
|
|
160
|
|
3.72
|
%
|
Loans with government
guarantees
|
300
|
|
10
|
|
4.41
|
%
|
|
450
|
|
12
|
|
3.40
|
%
|
Investment
securities
|
3,093
|
|
59
|
|
2.55
|
%
|
|
2,589
|
|
50
|
|
2.58
|
%
|
Interest-earning
deposits
|
75
|
|
1
|
|
1.08
|
%
|
|
139
|
|
1
|
|
0.50
|
%
|
Total
interest-earning assets
|
13,709
|
|
$
|
379
|
|
3.68
|
%
|
|
11,944
|
|
$
|
306
|
|
3.40
|
%
|
Other
assets
|
1,697
|
|
|
|
|
1,767
|
|
|
|
Total
assets
|
$
|
15,406
|
|
|
|
|
$
|
13,711
|
|
|
|
Interest-Bearing
Liabilities
|
|
|
|
|
|
|
|
Retail
deposits
|
|
|
|
|
|
|
|
Demand
deposits
|
$
|
502
|
|
$
|
1
|
|
0.16
|
%
|
|
$
|
479
|
|
$
|
1
|
|
0.17
|
%
|
Savings
deposits
|
3,899
|
|
22
|
|
0.76
|
%
|
|
3,720
|
|
21
|
|
0.78
|
%
|
Money market
deposits
|
264
|
|
1
|
|
0.49
|
%
|
|
285
|
|
1
|
|
0.44
|
%
|
Certificates of
deposit
|
1,116
|
|
9
|
|
1.12
|
%
|
|
789
|
|
7
|
|
1.21
|
%
|
Total retail
deposits
|
5,781
|
|
33
|
|
0.76
|
%
|
|
5,273
|
|
30
|
|
0.77
|
%
|
Government
deposits
|
|
|
|
|
|
|
|
Demand
deposits
|
228
|
|
1
|
|
0.41
|
%
|
|
234
|
|
1
|
|
0.39
|
%
|
Savings
deposits
|
410
|
|
2
|
|
0.59
|
%
|
|
432
|
|
2
|
|
0.52
|
%
|
Certificates of
deposit
|
314
|
|
1
|
|
0.73
|
%
|
|
563
|
|
1
|
|
0.35
|
%
|
Total government
deposits
|
952
|
|
4
|
|
0.59
|
%
|
|
1,229
|
|
4
|
|
0.42
|
%
|
Wholesale deposits
and other
|
16
|
|
—
|
|
1.21
|
%
|
|
—
|
|
—
|
|
—
|
%
|
Total
interest-bearing deposits
|
6,749
|
|
37
|
|
0.74
|
%
|
|
6,502
|
|
34
|
|
0.70
|
%
|
Short-term Federal
Home Loan Bank advances and other
|
3,028
|
|
23
|
|
1.01
|
%
|
|
1,190
|
|
4
|
|
0.41
|
%
|
Long-term Federal
Home Loan Bank advances
|
1,211
|
|
17
|
|
1.92
|
%
|
|
1,587
|
|
22
|
|
1.88
|
%
|
Other long-term
debt
|
493
|
|
19
|
|
5.06
|
%
|
|
321
|
|
10
|
|
4.05
|
%
|
Total
interest-bearing liabilities
|
11,481
|
|
96
|
|
1.12
|
%
|
|
9,600
|
|
70
|
|
0.97
|
%
|
Noninterest-bearing
deposits (1)
|
2,098
|
|
|
|
|
2,101
|
|
|
|
Other
liabilities
|
415
|
|
|
|
|
495
|
|
|
|
Stockholders'
equity
|
1,412
|
|
|
|
|
1,515
|
|
|
|
Total liabilities and
stockholders' equity
|
$
|
15,406
|
|
|
|
|
$
|
13,711
|
|
|
|
Net interest-earning
assets
|
$
|
2,228
|
|
|
|
|
$
|
2,344
|
|
|
|
Net interest
income
|
|
$
|
283
|
|
|
|
|
$
|
236
|
|
|
Interest rate spread
(2)
|
|
|
2.56
|
%
|
|
|
|
2.43
|
%
|
Net interest margin
(3)
|
|
|
2.74
|
%
|
|
|
|
2.62
|
%
|
Ratio of average
interest-earning assets to interest-bearing liabilities
|
|
|
119.4
|
%
|
|
|
|
124.4
|
%
|
Total average
deposits
|
$
|
8,847
|
|
|
|
|
$
|
8,603
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes
noninterest-bearing company-controlled deposits that arise due to
the servicing of loans for others.
|
(2) Interest rate
spread is the difference between rate of interest earned on
interest-earning assets and rate of interest paid on
interest-bearing liabilities.
|
(3) Net interest
margin is net interest income divided by average interest-earning
assets.
|
Flagstar Bancorp,
Inc.
Earnings Per
Share
(Dollars in millions,
except share data)
(Unaudited)
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September 30,
2017
|
|
June 30,
2017
|
|
September 30,
2016
|
|
September 30,
2017
|
|
September 30,
2016
|
Net income
|
40
|
|
|
41
|
|
|
57
|
|
|
108
|
|
|
143
|
|
Deferred cumulative
preferred stock dividends (1)
|
—
|
|
|
—
|
|
|
(2)
|
|
|
—
|
|
|
(18)
|
|
Net income applicable
to common stockholders
|
$
|
40
|
|
|
$
|
41
|
|
|
$
|
55
|
|
|
$
|
108
|
|
|
$
|
125
|
|
Weighted average
shares
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding
|
57,162,025
|
|
|
57,101,816
|
|
|
56,580,238
|
|
|
57,062,696
|
|
|
56,556,188
|
|
Effect of dilutive
securities
|
|
|
|
|
|
|
|
|
|
May Investor
warrants
|
—
|
|
|
—
|
|
|
364,791
|
|
|
16,383
|
|
|
339,893
|
|
Stock-based
awards
|
1,024,568
|
|
|
1,037,122
|
|
|
988,777
|
|
|
1,054,217
|
|
|
831,181
|
|
Weighted average
diluted common shares
|
58,186,593
|
|
|
58,138,938
|
|
|
57,933,806
|
|
|
58,133,296
|
|
|
57,727,262
|
|
Earnings per
common share
|
|
|
|
|
|
|
|
|
|
Basic earnings per
common share
|
$
|
0.71
|
|
|
$
|
0.72
|
|
|
$
|
0.98
|
|
|
$
|
1.90
|
|
|
$
|
2.21
|
|
Effect of dilutive
securities
|
|
|
|
|
|
|
|
|
|
May Investor
warrants
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.02)
|
|
Stock-based
awards
|
(0.01)
|
|
|
(0.01)
|
|
|
(0.02)
|
|
|
(0.04)
|
|
|
(0.03)
|
|
Diluted earnings per
common share
|
$
|
0.70
|
|
|
$
|
0.71
|
|
|
$
|
0.96
|
|
|
$
|
1.86
|
|
|
$
|
2.16
|
|
|
(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.
|
Regulatory Capital
- Bancorp
(Dollars in
millions)
(Unaudited)
|
|
|
September 30,
2017
|
|
June 30,
2017
|
|
December 31,
2016
|
|
September 30,
2016
|
|
Amount
|
Ratio
|
|
Amount
|
Ratio
|
|
Amount
|
Ratio
|
|
Amount
|
Ratio
|
Tier 1 leverage (to
adjusted avg. total assets)
|
$
|
1,423
|
|
8.80
|
%
|
|
$
|
1,408
|
|
9.10
|
%
|
|
$
|
1,256
|
|
8.88
|
%
|
|
$
|
1,225
|
|
8.88
|
%
|
Total adjusted avg.
total asset base
|
$
|
16,165
|
|
|
|
$
|
15,468
|
|
|
|
$
|
14,149
|
|
|
|
$
|
13,798
|
|
|
Tier 1 common equity
(to risk weighted assets)
|
$
|
1,208
|
|
11.65
|
%
|
|
$
|
1,196
|
|
12.45
|
%
|
|
$
|
1,084
|
|
13.06
|
%
|
|
$
|
1,056
|
|
12.04
|
%
|
Tier 1 capital
(to risk weighted assets)
|
$
|
1,423
|
|
13.72
|
%
|
|
$
|
1,408
|
|
14.65
|
%
|
|
$
|
1,256
|
|
15.12
|
%
|
|
$
|
1,225
|
|
13.98
|
%
|
Total capital (to
risk weighted assets)
|
$
|
1,554
|
|
14.99
|
%
|
|
$
|
1,530
|
|
15.92
|
%
|
|
$
|
1,363
|
|
16.41
|
%
|
|
$
|
1,338
|
|
15.26
|
%
|
Risk-weighted asset
base
|
$
|
10,371
|
|
|
|
$
|
9,610
|
|
|
|
$
|
8,305
|
|
|
|
$
|
8,767
|
|
|
Regulatory Capital
- Bank
(Dollars in
millions)
(Unaudited)
|
|
|
September 30,
2017
|
|
June 30,
2017
|
|
December 31,
2016
|
|
September 30,
2016
|
|
Amount
|
Ratio
|
|
Amount
|
Ratio
|
|
Amount
|
Ratio
|
|
Amount
|
Ratio
|
Tier 1 leverage (to
adjusted avg. total assets)
|
$
|
1,519
|
|
9.38
|
%
|
|
$
|
1,590
|
|
10.26
|
%
|
|
$
|
1,491
|
|
10.52
|
%
|
|
$
|
1,459
|
|
10.55
|
%
|
Total adjusted avg.
total asset base
|
$
|
16,191
|
|
|
|
$
|
15,504
|
|
|
|
$
|
14,177
|
|
|
|
$
|
13,824
|
|
|
Tier 1 common equity
(to risk weighted assets)
|
$
|
1,519
|
|
14.61
|
%
|
|
$
|
1,590
|
|
16.49
|
%
|
|
$
|
1,491
|
|
17.90
|
%
|
|
$
|
1,459
|
|
16.59
|
%
|
Tier 1 capital
(to risk weighted assets)
|
$
|
1,519
|
|
14.61
|
%
|
|
$
|
1,590
|
|
16.49
|
%
|
|
$
|
1,491
|
|
17.90
|
%
|
|
$
|
1,459
|
|
16.59
|
%
|
Total capital (to
risk weighted assets)
|
$
|
1,651
|
|
15.88
|
%
|
|
$
|
1,712
|
|
17.75
|
%
|
|
$
|
1,598
|
|
19.18
|
%
|
|
$
|
1,571
|
|
17.87
|
%
|
Risk-weighted asset
base
|
$
|
10,396
|
|
|
|
$
|
9,645
|
|
|
|
$
|
8,332
|
|
|
|
$
|
8,794
|
|
|
Loan
Originations (Dollars in millions)
(Unaudited)
|
|
Three Months
Ended
|
|
September 30,
2017
|
|
June 30,
2017
|
|
September 30,
2016
|
Residential first
mortgage
|
$
|
9,572
|
|
96.4
|
%
|
|
$
|
9,184
|
|
95.0
|
%
|
|
$
|
9,192
|
|
96.9
|
%
|
Home equity
(1)
|
94
|
|
0.9
|
%
|
|
75
|
|
0.8
|
%
|
|
50
|
|
0.5
|
%
|
Total consumer
loans
|
9,666
|
|
97.3
|
%
|
|
9,259
|
|
95.8
|
%
|
|
9,242
|
|
97.4
|
%
|
Commercial loans
(2)
|
265
|
|
2.7
|
%
|
|
410
|
|
4.2
|
%
|
|
248
|
|
2.6
|
%
|
Total loan
originations
|
$
|
9,931
|
|
100.0
|
%
|
|
$
|
9,669
|
|
100.0
|
%
|
|
$
|
9,490
|
|
100.0
|
%
|
|
|
|
Nine Months
Ended
|
|
September 30,
2017
|
|
September 30,
2016
|
Residential first
mortgage
|
$
|
24,659
|
|
95.5
|
%
|
|
$
|
23,856
|
|
97.4
|
%
|
Home equity
(1)
|
225
|
|
0.9
|
%
|
|
137
|
|
0.6
|
%
|
Total consumer
loans
|
24,884
|
|
96.4
|
%
|
|
23,993
|
|
98.0
|
%
|
Commercial loans
(2)
|
932
|
|
3.6
|
%
|
|
496
|
|
2.0
|
%
|
Total loan
originations
|
$
|
25,816
|
|
100.0
|
%
|
|
$
|
24,489
|
|
100.0
|
%
|
|
(1) Includes second mortgage
loans, HELOC loans, and other consumer loans.
|
(2) Includes commercial real
estate and commercial and industrial loans.
|
Residential Loans
Serviced
(Dollars in
millions)
(Unaudited)
|
|
|
September 30,
2017
|
|
June 30,
2017
|
|
December 31,
2016
|
|
September 30,
2016
|
|
Unpaid Principal
Balance
|
Number of
accounts
|
|
Unpaid Principal
Balance
|
Number of
accounts
|
|
Unpaid Principal
Balance
|
Number of
accounts
|
|
Unpaid Principal
Balance
|
Number of
accounts
|
Serviced for own loan
portfolio (1)
|
$
|
7,376
|
|
31,135
|
|
|
$
|
7,156
|
|
30,875
|
|
|
$
|
5,816
|
|
29,244
|
|
|
$
|
5,645
|
|
29,052
|
|
Serviced for
others
|
21,342
|
|
87,215
|
|
|
16,144
|
|
66,106
|
|
|
31,207
|
|
133,270
|
|
|
31,372
|
|
138,771
|
|
Subserviced for
others (2)
|
62,351
|
|
296,913
|
|
|
63,991
|
|
304,830
|
|
|
43,127
|
|
220,075
|
|
|
41,017
|
|
207,039
|
|
Total residential
loans serviced
|
$
|
91,069
|
|
415,263
|
|
|
$
|
87,291
|
|
401,811
|
|
|
$
|
80,150
|
|
382,589
|
|
|
$
|
78,034
|
|
374,862
|
|
|
(1) Includes loans
held-for-investment (residential first mortgage and home equity),
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.
|
Loans
Held-for-Investment
(Dollars in
millions)
(Unaudited)
|
|
|
September 30,
2017
|
|
June 30,
2017
|
|
December 31,
2016
|
|
September 30,
2016
|
Consumer
loans
|
|
|
|
|
|
|
|
|
|
|
|
Residential first
mortgage
|
$
|
2,665
|
|
37.0
|
%
|
|
$
|
2,538
|
|
37.5
|
%
|
|
$
|
2,327
|
|
38.3
|
%
|
|
$
|
2,136
|
|
33.9
|
%
|
Home
equity
|
496
|
|
6.9
|
%
|
|
459
|
|
6.7
|
%
|
|
443
|
|
7.3
|
%
|
|
453
|
|
7.2
|
%
|
Other
|
26
|
|
0.4
|
%
|
|
27
|
|
0.4
|
%
|
|
28
|
|
0.5
|
%
|
|
30
|
|
0.5
|
%
|
Total consumer
loans
|
3,187
|
|
44.3
|
%
|
|
3,024
|
|
44.6
|
%
|
|
2,798
|
|
46.1
|
%
|
|
2,619
|
|
41.6
|
%
|
Commercial
loans
|
|
|
|
|
|
|
|
|
|
|
|
Commercial real
estate
|
1,760
|
|
24.4
|
%
|
|
1,557
|
|
23.1
|
%
|
|
1,261
|
|
20.8
|
%
|
|
1,168
|
|
18.6
|
%
|
Commercial and
industrial
|
1,097
|
|
15.2
|
%
|
|
1,040
|
|
15.3
|
%
|
|
769
|
|
12.7
|
%
|
|
708
|
|
11.3
|
%
|
Warehouse
lending
|
1,159
|
|
16.1
|
%
|
|
1,155
|
|
17.0
|
%
|
|
1,237
|
|
20.4
|
%
|
|
1,795
|
|
28.5
|
%
|
Total commercial
loans
|
4,016
|
|
55.7
|
%
|
|
3,752
|
|
55.4
|
%
|
|
3,267
|
|
53.9
|
%
|
|
3,671
|
|
58.4
|
%
|
Total loans
held-for-investment
|
$
|
7,203
|
|
100.0
|
%
|
|
$
|
6,776
|
|
100.0
|
%
|
|
$
|
6,065
|
|
100.0
|
%
|
|
$
|
6,290
|
|
100.0
|
%
|
Allowance for Loan
Losses
(Dollars in
millions)
(Unaudited)
|
|
|
As of/For the
Three Months Ended
|
|
September 30,
2017
|
|
June 30,
2017
|
|
September 30,
2016
|
Allowance for loan
losses
|
|
|
|
|
|
Residential first
mortgage
|
$
|
52
|
|
|
$
|
56
|
|
|
$
|
70
|
|
Home
equity
|
20
|
|
|
19
|
|
|
25
|
|
Other
|
1
|
|
|
1
|
|
|
1
|
|
Total consumer
loans
|
73
|
|
|
76
|
|
|
96
|
|
Commercial real
estate
|
42
|
|
|
37
|
|
|
25
|
|
Commercial and
industrial
|
19
|
|
|
21
|
|
|
14
|
|
Warehouse
lending
|
6
|
|
|
6
|
|
|
8
|
|
Total commercial
loans
|
67
|
|
|
64
|
|
|
47
|
|
Total allowance for
loan losses
|
$
|
140
|
|
|
$
|
140
|
|
|
$
|
143
|
|
Charge-offs
|
|
|
|
|
|
Total consumer
loans
|
(3)
|
|
|
(2)
|
|
|
(9)
|
|
Total
commercial loans
|
—
|
|
|
—
|
|
|
—
|
|
Total
charge-offs
|
$
|
(3)
|
|
|
$
|
(2)
|
|
|
$
|
(9)
|
|
Recoveries
|
|
|
|
|
|
Total consumer
loans
|
1
|
|
|
2
|
|
|
2
|
|
Total commercial
loans
|
—
|
|
|
—
|
|
|
—
|
|
Total
recoveries
|
1
|
|
|
2
|
|
|
2
|
|
Charge-offs, net of
recoveries
|
$
|
(2)
|
|
|
$
|
—
|
|
|
$
|
(7)
|
|
Net charge-offs to
LHFI ratio (annualized) (1)
|
0.08
|
%
|
|
0.04
|
%
|
|
0.51
|
%
|
Net charge-offs
ratio, adjusted (annualized) (1)(2)
|
0.06
|
%
|
|
0.02
|
%
|
|
0.15
|
%
|
Net
charge-offs/(recoveries) to LHFI ratio (annualized) by loan
type (1):
|
|
|
Residential first
mortgage
|
0.12
|
%
|
|
0.09
|
%
|
|
1.33
|
%
|
Home equity and other
consumer
|
0.52
|
%
|
|
0.02
|
%
|
|
0.40
|
%
|
Commercial and
industrial
|
(0.01)
|
%
|
|
(0.01)
|
%
|
|
(0.01)
|
%
|
|
(1) Excludes loans carried
under the fair value option.
|
(2) There were no charge offs
relating to the sale of nonperforming loans, TDRs and non-agency
loans during the three months ended September 30, 2017,
June 30, 2017, and September 30, 2016. Also excludes
charge-offs related to loans with government guarantees of $1
million, zero, and $5 million during the three months ended
September 30, 2017, June 30, 2017, and September 30,
2016, respectively.
|
Allowance for Loan
Losses (continued)
(Dollars in
millions)
(Unaudited)
|
|
|
|
|
|
Nine Months
Ended
|
|
|
September 30,
2017
|
|
September 30,
2016
|
Total allowance for
loan losses
|
|
$
|
140
|
|
|
$
|
143
|
|
Charge-offs
|
|
|
|
|
Total consumer
loans
|
|
(10)
|
|
|
(33)
|
|
Total
commercial loans
|
|
—
|
|
|
—
|
|
Total
charge-offs
|
|
$
|
(10)
|
|
|
$
|
(33)
|
|
Recoveries
|
|
|
|
|
Total consumer
loans
|
|
4
|
|
|
5
|
|
Total commercial
loans
|
|
—
|
|
|
—
|
|
Total
recoveries
|
|
4
|
|
|
5
|
|
Charge-offs, net of
recoveries
|
|
$
|
(6)
|
|
|
$
|
(28)
|
|
Net charge-offs to
LHFI ratio (annualized) (1)
|
|
0.12
|
%
|
|
0.66
|
%
|
Net charge-offs
ratio, adjusted (annualized) (1)(2)
|
|
0.05
|
%
|
|
0.15
|
%
|
Net
charge-offs/(recoveries) to LHFI ratio (annualized) by loan
type (1):
|
|
Residential first
mortgage
|
|
0.26
|
%
|
|
1.43
|
%
|
Home equity and other
consumer
|
|
0.28
|
%
|
|
0.86
|
%
|
Commercial real
estate
|
|
(0.01)
|
%
|
|
(0.01)
|
%
|
Commercial and
industrial
|
|
(0.01)
|
%
|
|
(0.01)
|
%
|
|
(1) Excludes loans carried
under the fair value option.
|
(2) Excludes charge-offs of
$1 million and $8 million during the nine months ended
September 30, 2017 and 2016, related to the sale of
nonperforming loans, TDRs and non-agency loans. Also excludes
charge-offs related to loans with government guarantees of $3
million and $13 million during the nine months ended
September 30, 2017 and 2016, respectively.
|
Nonperforming
Loans and Assets
(Dollars in
millions)
(Unaudited)
|
|
|
September 30,
2017
|
|
June 30,
2017
|
|
December 31,
2016
|
|
September 30,
2016
|
Nonperforming
loans
|
$
|
16
|
|
|
$
|
18
|
|
|
$
|
22
|
|
|
$
|
23
|
|
Nonperforming
TDRs
|
4
|
|
|
5
|
|
|
8
|
|
|
8
|
|
Nonperforming TDRs at
inception but performing for less than six months
|
11
|
|
|
7
|
|
|
10
|
|
|
9
|
|
Total nonperforming
loans held-for-investment
|
31
|
|
|
30
|
|
|
40
|
|
|
40
|
|
Real estate and other
nonperforming assets, net
|
9
|
|
|
9
|
|
|
14
|
|
|
15
|
|
Nonperforming assets
held-for-investment, net (1)
|
$
|
40
|
|
|
$
|
39
|
|
|
$
|
54
|
|
|
$
|
55
|
|
|
|
|
|
|
|
|
|
Ratio of
nonperforming assets to total assets
|
0.24
|
%
|
|
0.24
|
%
|
|
0.39
|
%
|
|
0.39
|
%
|
Ratio of
nonperforming loans held-for-investment to loans
held-for-investment
|
0.44
|
%
|
|
0.44
|
%
|
|
0.67
|
%
|
|
0.63
|
%
|
Ratio of
nonperforming assets to loans held-for-investment and repossessed
assets
|
0.58
|
%
|
|
0.57
|
%
|
|
0.90
|
%
|
|
0.87
|
%
|
Ratio of
nonperforming assets to Tier 1 capital + allowance for loan
losses
|
2.57
|
%
|
|
2.51
|
%
|
|
3.93
|
%
|
|
4.03
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Does not include
nonperforming loans held-for-sale of $8 million, $7 million, $6
million, and $5 million at September 30, 2017, June 30,
2017, December 31, 2016, and September 30, 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
|
September 30,
2017
|
|
|
|
|
|
|
|
|
|
Consumer
loans
|
$
|
4
|
|
|
$
|
1
|
|
|
$
|
30
|
|
|
$
|
35
|
|
|
$
|
3,187
|
|
Commercial
loans
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
4,016
|
|
Total
loans
|
$
|
4
|
|
|
$
|
1
|
|
|
$
|
31
|
|
|
$
|
36
|
|
|
$
|
7,203
|
|
June 30,
2017
|
|
|
|
|
|
|
|
|
|
Consumer
loans
|
$
|
2
|
|
|
$
|
3
|
|
|
$
|
30
|
|
|
$
|
35
|
|
|
$
|
3,024
|
|
Commercial
loans
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
3,752
|
|
Total loans
|
$
|
3
|
|
|
$
|
3
|
|
|
$
|
30
|
|
|
$
|
36
|
|
|
$
|
6,776
|
|
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
|
|
|
(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
|
|
Total
|
September 30,
2017
|
|
Consumer
loans
|
$
|
46
|
|
|
$
|
15
|
|
|
$
|
61
|
|
Commercial
loans
|
—
|
|
|
—
|
|
|
—
|
|
Total TDR
loans
|
$
|
46
|
|
|
$
|
15
|
|
|
$
|
61
|
|
June 30,
2017
|
|
|
|
|
|
Consumer
loans
|
$
|
46
|
|
|
$
|
12
|
|
|
$
|
58
|
|
Commercial
loans
|
—
|
|
|
—
|
|
|
—
|
|
Total TDR
loans
|
$
|
46
|
|
|
$
|
12
|
|
|
$
|
58
|
|
December 31,
2016
|
|
|
|
|
|
Consumer
loans
|
$
|
67
|
|
|
$
|
18
|
|
|
$
|
85
|
|
Commercial
loans
|
—
|
|
|
—
|
|
|
—
|
|
Total TDR loans
|
$
|
67
|
|
|
$
|
18
|
|
|
$
|
85
|
|
September 30,
2016
|
|
|
|
|
|
Consumer
loans
|
$
|
70
|
|
|
$
|
17
|
|
|
$
|
87
|
|
Commercial
loans
|
1
|
|
|
—
|
|
|
1
|
|
Total TDR
loans
|
$
|
71
|
|
|
$
|
17
|
|
|
$
|
88
|
|
Representation and
Warranty Reserve
(Dollars in
millions)
(Unaudited)
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September 30,
2017
|
|
June 30,
2017
|
|
September 30,
2016
|
|
September 30,
2017
|
|
September 30,
2016
|
Balance at beginning
of period
|
$
|
20
|
|
|
$
|
23
|
|
|
$
|
36
|
|
|
$
|
27
|
|
|
$
|
40
|
|
Provision
(benefit)
|
|
|
|
|
|
|
|
|
|
Gain on sale
reduction for representation and warranty liability
|
1
|
|
|
1
|
|
|
1
|
|
|
3
|
|
|
4
|
|
Representation and
warranty provision (benefit)
|
(4)
|
|
|
(3)
|
|
|
(6)
|
|
|
(11)
|
|
|
(12)
|
|
Total
|
(3)
|
|
|
(2)
|
|
|
(5)
|
|
|
(8)
|
|
|
(8)
|
|
(Charge-offs)
recoveries, net
|
(1)
|
|
|
(1)
|
|
|
1
|
|
|
(3)
|
|
|
—
|
|
Balance at end
of period
|
$
|
16
|
|
|
$
|
20
|
|
|
$
|
32
|
|
|
$
|
16
|
|
|
$
|
32
|
|
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.
September 30,
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)
|
$
|
1,208
|
|
|
$
|
1,423
|
|
|
$
|
1,423
|
|
|
$
|
1,554
|
|
Increased deductions
related to deferred tax assets, mortgage servicing rights and other
capital components
|
(90)
|
|
|
(65)
|
|
|
(65)
|
|
|
(62)
|
|
Basel III (fully
phased-in) capital
|
$
|
1,118
|
|
|
$
|
1,358
|
|
|
$
|
1,358
|
|
|
$
|
1,492
|
|
Risk-weighted
assets – Basel III (transitional) to Basel III (fully
phased-in)
|
|
|
|
|
|
|
|
Basel III assets
(transitional)
|
$
|
10,371
|
|
|
$
|
16,165
|
|
|
$
|
10,371
|
|
|
$
|
10,371
|
|
Net change in
assets
|
191
|
|
|
(65)
|
|
|
191
|
|
|
191
|
|
Basel III (fully
phased-in) assets
|
$
|
10,562
|
|
|
$
|
16,100
|
|
|
$
|
10,562
|
|
|
$
|
10,562
|
|
Capital
ratios
|
|
|
|
|
|
|
|
Basel III
(transitional)
|
11.65
|
%
|
|
8.80
|
%
|
|
13.72
|
%
|
|
14.99
|
%
|
Basel III (fully
phased-in)
|
10.58
|
%
|
|
8.43
|
%
|
|
12.86
|
%
|
|
14.13
|
%
|
September 30,
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)
|
$
|
1,519
|
|
|
$
|
1,519
|
|
|
$
|
1,519
|
|
|
$
|
1,651
|
|
Increased deductions
related to deferred tax assets, mortgage servicing rights and other
capital components
|
(44)
|
|
|
(44)
|
|
|
(44)
|
|
|
(41)
|
|
Basel III (fully
phased-in) capital
|
$
|
1,475
|
|
|
$
|
1,475
|
|
|
$
|
1,475
|
|
|
$
|
1,610
|
|
Risk-weighted
assets – Basel III (transitional) to Basel III (fully
phased-in)
|
|
|
|
|
|
|
|
Basel III assets
(transitional)
|
$
|
10,396
|
|
|
$
|
16,191
|
|
|
$
|
10,396
|
|
|
$
|
10,396
|
|
Net change in
assets
|
293
|
|
|
(45)
|
|
|
293
|
|
|
293
|
|
Basel III (fully
phased-in) assets
|
$
|
10,689
|
|
|
$
|
16,146
|
|
|
$
|
10,689
|
|
|
$
|
10,689
|
|
Capital
ratios
|
|
|
|
|
|
|
|
Basel III
(transitional)
|
14.61
|
%
|
|
9.38
|
%
|
|
14.61
|
%
|
|
15.88
|
%
|
Basel III (fully
phased-in)
|
13.80
|
%
|
|
9.13
|
%
|
|
13.80
|
%
|
|
15.06
|
%
|
Tangible book value per share, adjusted net income and
adjusted earnings 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 adjustments 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 tangible book value per share, adjusted net
income and adjusted earnings per share provide a meaningful
representation of its operating performance on an ongoing basis.
Management uses these measures 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
it provides a tool to evaluate the Company's performance on an
ongoing basis and compared to its peers.
The following tables provide a reconciliation of non-GAAP
financial measures.
Tangible book
value per share
|
|
|
|
|
|
|
|
|
|
|
September 30,
2017
|
|
June 30,
2017
|
|
March 31,
2017
|
|
December 31,
2016
|
|
September 30,
2016
|
|
(Dollars in millions,
except share data)
|
Total stock holders'
equity
|
$
|
1,451
|
|
|
$
|
1,408
|
|
|
$
|
1,371
|
|
|
$
|
1,336
|
|
|
$
|
1,286
|
|
Preferred
stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Goodwill and
intangibles
|
21
|
|
|
20
|
|
|
4
|
|
|
—
|
|
|
—
|
|
Tangible book
value
|
$
|
1,430
|
|
|
$
|
1,388
|
|
|
$
|
1,367
|
|
|
$
|
1,336
|
|
|
$
|
1,286
|
|
|
|
|
|
|
|
|
|
|
|
Number of common
shares outstanding
|
57,181,536
|
|
|
57,161,431
|
|
|
57,043,565
|
|
|
56,824,802
|
|
|
56,597,271
|
|
Tangible book value
per share
|
$
|
25.01
|
|
|
$
|
24.29
|
|
|
$
|
23.96
|
|
|
$
|
23.50
|
|
|
$
|
22.72
|
|
Adjusted Net
Income and Adjusted Earnings per Share
|
|
|
Three Months
Ended
|
Nine Months
Ended
|
|
September 30,
2016
|
September 30,
2016
|
|
(Dollars in
millions)
(Unaudited)
|
Net
income
|
$
|
57
|
|
$
|
143
|
|
Adjustment to remove
DOJ adjustment
|
(24)
|
|
(24)
|
|
Tax impact of
adjusting item
|
8
|
|
8
|
|
Adjusted net
income
|
$
|
41
|
|
$
|
127
|
|
|
|
|
Diluted earnings
per share
|
$
|
0.96
|
|
$
|
2.16
|
|
Adjustment to remove
DOJ adjustment
|
(0.41)
|
|
(0.42)
|
|
Tax impact of
adjusting item
|
0.14
|
|
0.14
|
|
Diluted adjusted
earnings per share
|
$
|
0.69
|
|
$
|
1.88
|
|
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SOURCE Flagstar Bancorp, Inc.