PR Newswire
TROY, Mich., July 28, 2021 /PRNewswire/ —
Key Highlights – Second Quarter 2021
- Generated net interest income of $183 million, with net interest margin increasing 8 basis points.
- Produced mortgage revenue of $163 million as fallout adjusted locks remained strong at $12.4 billion.
- Maintained solid asset quality with low levels of nonperforming loans; reduced allowance for credit loss reserve by $45 million.
- Generated significant capital with total risk-based capital ratio increasing 95 basis points to 14.1 percent.
- Produced exceptional return on average tangible common equity of 25.9 percent and return on average assets of 2.1 percent.
Flagstar Bancorp, Inc. (NYSE: FBC), the holding company for Flagstar Bank, today reported second quarter 2021 net income of $147 million, or $2.74 per diluted share, compared to first quarter 2021 net income of $149 million, or $2.80 per diluted share, which on an adjusted basis was $176 million, or $3.31 per diluted share. Second quarter 2020 net income was $116 million, or $2.03 per diluted share.
“We posted another solid quarter – our fifth consecutive quarter where diluted earnings exceeded $2.00 per share,” said Alessandro DiNello, president and chief executive officer of Flagstar Bancorp. “Highlights included net interest margin expansion, strong asset quality, steady growth in our servicing portfolio, and excellent mortgage results that remain above historical averages. Of special note was our execution of four private label securitizations during the quarter, further demonstrating the versatility of our mortgage business and the optionality it provides – truly a differentiator for Flagstar in the industry. These positives combined to produce a 6 percent growth in tangible book value and continued a trend of achieving return on assets in excess of 2 percent. Our return on average tangible common equity in the last 12 months has been a remarkable 31 percent, and in the 12 months prior to that, an impressive 18 percent.
“Credit quality remained strong, and we continue to be encouraged by the low levels of nonperforming loans and net charge-offs. And I’m pleased to say that we have no commercial loans currently in deferral. This performance, along with an improved forecast for the macroeconomic environment, enabled us to release $45 million of our allowance for credit losses. Even with this release, excluding warehouse loans, our coverage ratio was 2.6 percent – among the strongest in the industry.”
“As we move closer to completing our previously announced partnership with New York Community Bank, we are well positioned with strong fundamentals and a demonstrated power to generate capital. Until then, we are focusing on ensuring a smooth transition and continuing to execute on the business plan that has served our shareholders so well and brought us to this pivotal point in the history of our company.”
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(Dollars in millions, except per share data) |
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Net interest income |
$ |
183 |
$ |
189 |
$ |
189 |
$ |
180 |
$ |
168 |
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(Benefit) provision for credit losses |
(44) |
(28) |
2 |
32 |
102 |
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Noninterest income |
252 |
324 |
332 |
448 |
375 |
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|
Noninterest expense |
289 |
347 |
314 |
301 |
293 |
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Income before income taxes |
190 |
194 |
205 |
295 |
148 |
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Provision for income taxes |
43 |
45 |
51 |
73 |
32 |
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Net income |
$ |
147 |
$ |
149 |
$ |
154 |
$ |
222 |
$ |
116 |
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Income per share: |
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|
Basic |
$ |
2.78 |
$ |
2.83 |
$ |
2.86 |
$ |
3.90 |
$ |
2.04 |
|||||
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Diluted |
$ |
2.74 |
$ |
2.80 |
$ |
2.83 |
$ |
3.88 |
$ |
2.03 |
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(Dollars in millions, except per share data) |
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Net interest income |
$ |
183 |
$ |
189 |
$ |
189 |
$ |
180 |
$ |
168 |
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(Benefit) provision for credit losses |
(44) |
(28) |
2 |
32 |
102 |
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Noninterest income |
252 |
324 |
332 |
448 |
375 |
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Noninterest expense |
290 |
312 |
314 |
301 |
293 |
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Income before income taxes |
189 |
229 |
205 |
295 |
148 |
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Provision for income taxes |
43 |
53 |
51 |
73 |
32 |
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Net income |
$ |
146 |
$ |
176 |
$ |
154 |
$ |
222 |
$ |
116 |
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Income per share: |
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Basic |
$ |
2.78 |
$ |
3.34 |
$ |
2.86 |
$ |
3.90 |
$ |
2.04 |
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Diluted |
$ |
2.73 |
$ |
3.31 |
$ |
2.83 |
$ |
3.88 |
$ |
2.03 |
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(1) See Non-GAAP Reconciliation for further information. |
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Net interest margin |
2.90 |
% |
2.82 |
% |
2.78 |
% |
2.78 |
% |
2.86 |
% |
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Adjusted net interest margin (1) |
3.06 |
% |
3.02 |
% |
2.98 |
% |
2.94 |
% |
2.88 |
% |
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Return on average assets |
2.1 |
% |
2.0 |
% |
2.1 |
% |
3.1 |
% |
1.8 |
% |
|
Return on average common equity |
24.0 |
% |
25.7 |
% |
27.6 |
% |
41.5 |
% |
23.5 |
% |
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Efficiency ratio |
66.6 |
% |
67.7 |
% |
60.4 |
% |
47.9 |
% |
54.1 |
% |
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HFI loan-to-deposit ratio |
71.8 |
% |
74.4 |
% |
74.5 |
% |
75.9 |
% |
76.7 |
% |
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Adjusted HFI loan-to-deposit ratio (2) |
64.3 |
% |
66.3 |
% |
69.8 |
% |
74.8 |
% |
85.4 |
% |
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(1) Excludes loans with government guarantees available for repurchase. See Non-GAAP Reconciliation for further information. |
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(2) Excludes warehouse loans and custodial deposits. See Non-GAAP Reconciliation for further information. |
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(Dollars in millions) |
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Average interest-earning assets |
$ |
25,269 |
$ |
27,178 |
$ |
27,100 |
$ |
25,738 |
$ |
23,692 |
(7) |
% |
7 |
% |
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Average loans held-for-sale (LHFS) |
6,902 |
7,464 |
5,672 |
5,602 |
5,645 |
(8) |
% |
22 |
% |
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Average loans held-for-investment (LHFI) |
13,688 |
14,915 |
15,703 |
14,839 |
13,596 |
(8) |
% |
1 |
% |
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Average total deposits |
19,070 |
20,043 |
21,068 |
19,561 |
17,715 |
(5) |
% |
8 |
% |
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Net Interest Income
Net interest income in the second quarter was $183 million, a decrease of $6 million, or 3 percent as compared to the first quarter 2021. The results primarily reflect lower earning assets, the result of lower warehouse and loans held-for-sale (LHFS) balances during the quarter. Average earning assets declined $1.9 billion, or 7 percent, as warehouse balances were $1.0 billion, or 15 percent lower and LHFS declined $0.6 billion. These declines were, partially offset by a favorable decrease in funding costs and broad-based increases in loan yields.
The net interest margin in the second quarter was 2.90 percent, an 8 basis point increase from the prior quarter. Excluding the impact from the loans with government guarantees that have not been repurchased and do not accrue interest, adjusted net interest margin expanded 4 basis points to 3.06 percent in the second quarter, compared to adjusted net interest margin of 3.02 percent in the prior quarter. The expansion in net interest margin was largely attributable to an increase in LHFS yields due to a mix shift to higher yielding products supporting our residential mortgage-backed securities program, higher LHFI yields and lower deposit costs. Retail banking deposit rates decreased 4 basis points primarily driven by the maturity of higher cost time deposits.
Average total deposits were $19.1 billion in the second quarter, decreasing $1.0 billion, or 5 percent from the first quarter 2021. Average custodial deposits decreased $1.0 billion, or 14 percent primarily driven by decreasing mortgage payoff rates and actions taken to manage internal liquidity measures.
Provision for Credit Losses
The benefit for credit losses was $44 million for the second quarter, as compared to a $28 million benefit for credit losses for the first quarter 2021, reflecting the performance of our portfolio and improved economic forecasts. Additionally, net charge-offs remained low at $1 million for the quarter, or 1 basis point of LHFI.
Noninterest Income
Noninterest income decreased $72 million to $252 million in the second quarter, as compared to $324 million for the first quarter 2021, primarily due to lower mortgage revenues and loan fees and charges.
Second quarter net gain on loan sales decreased $59 million, to $168 million, as compared to $227 million in the first quarter 2021. Gain on sale margins decreased 49 basis points, to 1.35 percent for the second quarter 2021, as compared to 1.84 percent for the first quarter 2021. The decrease was primarily driven by competitive factors and channel-mix based margin compression.
Net loss on mortgage servicing rights was $5 million in the second quarter 2021, reflecting an $8 million write off of mortgage servicing right fair value for those loans with government guarantees that were repurchased during the quarter. In addition, mortgage refinance activity continued to be elevated compared to historical norms which impacted prepayment speeds and overall net return on mortgage servicing rights.
Loan fees and charges decreased $5 million, to $37 million for the second quarter, compared to $42 million for the first quarter 2021, primarily due to a 7 percent decrease in mortgage loans closed.
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(Dollars in millions) |
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Mortgage rate lock commitments (fallout- |
$ |
12,400 |
$ |
12,300 |
$ |
12,000 |
$ |
15,000 |
$ |
13,800 |
1% |
(10)% |
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Mortgage loans closed (1) |
$ |
12,800 |
$ |
13,800 |
$ |
13,100 |
$ |
14,400 |
$ |
12,200 |
(7)% |
5% |
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Net margin on mortgage rate lock commitments |
1.35 |
% |
1.84 |
% |
1.93 |
% |
2.31 |
% |
2.19 |
% |
(49) |
(84) |
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Net gain on loan sales |
$ |
168 |
$ |
227 |
$ |
232 |
$ |
346 |
$ |
303 |
(26)% |
(45)% |
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Net return (loss) on mortgage servicing rights |
$ |
(5) |
$ |
— |
$ |
— |
$ |
12 |
$ |
(8) |
N/M |
(38)% |
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Gain on loan sales + net return on the MSR |
$ |
163 |
$ |
227 |
$ |
232 |
$ |
358 |
$ |
295 |
(28)% |
(45)% |
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Loans serviced (number of accounts – 000’s) (3) |
1,182 |
1,148 |
1,085 |
1,105 |
1,042 |
3% |
13% |
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Capitalized value of MSRs |
1.00 |
% |
1.06 |
% |
0.86 |
% |
0.85 |
% |
0.87 |
% |
(6) |
13 |
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N/M – Not meaningful |
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(1) |
Rounded to the nearest hundred million |
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(2) |
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. |
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(3) |
Includes loans serviced for Flagstar’s own loan portfolio, serviced for others, and subserviced for others. |
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Noninterest Expense
Noninterest expense decreased to $289 million for the second quarter, compared to $347 million for the first quarter 2021. Excluding the $35 million expense related to the DOJ settlement liability in the first quarter 2021 and $9 million of merger expenses in the second quarter 2021, noninterest expense decreased $32 million, or 10 percent. The decrease in noninterest expense primarily reflects lower commissions as mortgage loan closings decreased 7 percent compared to the prior quarter and the prior quarter included expenses associated with seasonally higher payroll taxes which did not reoccur. The second quarter included a $10 million benefit from an agreement to reduce the 2009 former CEO supplemental executive retirement plan liability.
Mortgage expenses were $131 million for the second quarter, a decrease of $17 million compared to the prior quarter. The ratio of mortgage noninterest expense to closings – our mortgage expense ratio – was 1.03 percent, a decrease of 5 basis points quarter over quarter, primarily driven by lower commissions.
The efficiency ratio was 67 percent for the second quarter, as compared to 68 percent for the first quarter 2021. Excluding the $35 million expense related to the DOJ settlement liability, the adjusted efficiency ratio was 61 percent for the first quarter, primarily driven by the strength of mortgage revenue in the first quarter.
Income Taxes
The second quarter provision for income taxes totaled $43 million, with an effective tax rate of 22.5 percent, compared to $45 million and an effective tax rate of 23.0 percent for the first quarter 2021.
Asset Quality
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(Dollars in millions) |
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Allowance for credit losses (1) |
$ |
220 |
$ |
265 |
$ |
280 |
$ |
280 |
$ |
250 |
(17)% |
(12)% |
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Credit reserves to LHFI |
1.57 |
% |
1.78 |
% |
1.73 |
% |
1.70 |
% |
1.69 |
% |
(21) |
-12 |
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Credit reserves to LHFI excluding warehouse |
2.63 |
% |
3.11 |
% |
3.20 |
% |
3.07 |
% |
2.60 |
% |
(48) |
3 |
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Net (recoveries) charge-offs |
$ |
1 |
$ |
(13) |
$ |
2 |
$ |
2 |
$ |
3 |
N/M |
(67)% |
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Total nonperforming LHFI and TDRs |
$ |
74 |
$ |
60 |
$ |
56 |
$ |
45 |
$ |
33 |
23% |
N/M |
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Net (recoveries) charge-offs to LHFI ratio (annualized) |
0.01 |
% |
(0.35) |
% |
0.04 |
% |
0.05 |
% |
0.11 |
% |
36 |
(10) |
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Ratio of nonperforming LHFI and TDRs to LHFI |
0.53 |
% |
0.40 |
% |
0.34 |
% |
0.28 |
% |
0.22 |
% |
13 |
31 |
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Residential first mortgage |
0.16 |
% |
0.31 |
% |
0.11 |
% |
0.07 |
% |
0.26 |
% |
(15) |
(10) |
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Home equity and other consumer |
0.15 |
% |
0.16 |
% |
0.06 |
% |
0.23 |
% |
0.28 |
% |
(1) |
(13) |
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Commercial real estate |
— |
% |
(0.01) |
% |
— |
% |
(0.01) |
% |
0.01 |
% |
1 |
(1) |
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Commercial and industrial |
0.04 |
% |
(4.12) |
% |
0.21 |
% |
0.06 |
% |
0.08 |
% |
416 |
(4) |
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N/M – Not meaningful |
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(1) Includes the allowance for loan losses and the reserve on unfunded commitments. |
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(2) Excludes loans carried under the fair value option. |
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The allowance for credit losses was $220 million and covered 1.57 percent of loans held-for-investment at June 30, 2021, a 21 basis point decrease from March 31, 2021. Excluding warehouse loans, the allowance coverage ratio was 2.63 percent, a 48 basis point decrease from March 31, 2021. The lower allowance for credit losses primarily reflects improvements in our economic forecasts and the performance of the LHFI portfolio throughout the pandemic.
Net charge-offs in the second quarter 2021 were $1 million, compared to $13 million of net recoveries in the prior quarter. Net charge-offs for the second quarter were 1 basis point of LHFI, compared to 8 basis points in the prior quarter when excluding the $16 million commercial loan recovery obtained in the quarter.
Nonperforming loans and troubled debt restructurings (TDRs) were $74 million and our ratio of nonperforming loans and TDRs to loans held-for-investment was 53 basis points at June 30, 2021, a 13 basis point increase compared to March 31, 2021 as nonperforming loans remained low and LHFI balances decreased $0.8 billion. At June 30, 2021, early stage loan delinquencies totaled $12 million, or 9 basis points of total loans, compared to $15 million, or 10 basis points, at March 31, 2021.
Capital
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Tier 1 leverage (to adj. avg. total assets) |
9.21 |
% |
8.11 |
% |
7.71 |
% |
8.04 |
% |
7.76 |
% |
110 |
145 |
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Tier 1 common equity (to RWA) |
11.38 |
% |
10.31 |
% |
9.15 |
% |
9.21 |
% |
9.11 |
% |
107 |
227 |
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Tier 1 capital (to RWA) |
12.56 |
% |
11.45 |
% |
10.23 |
% |
10.31 |
% |
10.33 |
% |
111 |
223 |
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Total capital (to RWA) |
14.13 |
% |
13.18 |
% |
11.89 |
% |
11.29 |
% |
11.32 |
% |
95 |
281 |
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Tangible common equity to asset ratio (1) |
8.67 |
% |
7.48 |
% |
6.58 |
% |
6.90 |
% |
6.58 |
% |
119 |
209 |
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Tangible book value per share (1) |
$ |
44.38 |
$ |
41.77 |
$ |
38.80 |
$ |
35.60 |
$ |
31.74 |
6% |
40% |
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(1) See Non-GAAP Reconciliation for further information. |
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The Company maintained a solid capital position with regulatory ratios above current regulatory quantitative guidelines for “well capitalized” institutions. The capital ratios are impacted by a 100 percent risk-weighting of the warehouse loan portfolio – the largest component of the Company’s held-for-investment portfolio. Adjusting the risk-weighting of warehouse loans to 50 percent, because of the historically low level of losses from this loan portfolio and the fact that the portfolio is fully collateralized with assets that would receive a 50 percent risk weighting, the Company would have had a Tier 1 common equity ratio of 13.13 percent and a total risk-based capital ratio of 16.30 percent at June 30, 2021.
Importantly, tangible book value per share grew to $44.38, up $2.61, or 6 percent from last quarter.
About Flagstar
Flagstar Bancorp, Inc. (NYSE: FBC) is a $27.1 billion savings and loan holding company headquartered in Troy, Mich. Flagstar Bank, FSB, provides commercial, small business, and consumer banking services through 158 branches in Michigan, Indiana, California, Wisconsin and Ohio. It also provides home loans through a wholesale network of brokers and correspondents in all 50 states, as well as 86 retail locations in 28 states. Flagstar is a leading national originator and servicer of mortgage and other consumer loans, handling payments and record keeping for $255.7 billion of loans representing almost 1.2 million 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 certain non-GAAP financial measures. 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 periodic Flagstar reports filed with the U.S. Securities and Exchange Commission, which are available on the Company’s website at flagstar.com.
Cautionary Statements Regarding Forward-Looking Statements
Certain statements in this press release may constitute “forward–looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, with respect to New York Community Banks (“NYCB”) and Flagstar’s beliefs, goals, intentions, and expectations regarding revenues, earnings, loan production, asset quality, capital levels, and acquisitions, among other matters; NYCB’s and Flagstar’s estimates of future costs and benefits of the actions each company may take; NYCB’s and Flagstar’s assessments of probable losses on loans; NYCB’s and Flagstar’s assessments of interest rate and other market risks; and NYCB’s and Flagstar’s ability to achieve their respective financial and other strategic goals.
Forward–looking statements are typically identified by such words as “believe,” “expect,” “anticipate,” “intend,” “outlook,” “estimate,” “forecast,” “project,” “should,” and other similar words and expressions, and are subject to numerous assumptions, risks, and uncertainties, which change over time. These forward-looking statements include, without limitation, those relating to the terms, timing and closing of the proposed transaction.
Additionally, forward–looking statements speak only as of the date they are made; NYCB and Flagstar do not assume any duty, and do not undertake, to update such forward–looking statements. Furthermore, because forward–looking statements are subject to assumptions and uncertainties, actual results or future events could differ, possibly materially, from those indicated in such forward-looking statements as a result of a variety of factors, many of which are beyond the control of NYCB and Flagstar. The factors that could cause actual results to differ materially include the following: the occurrence of any event, change or other circumstances that could give rise to the right of one or both of the parties to terminate the definitive merger agreement among NYCB, 615 Corp. and Flagstar; the outcome of any legal proceedings that may be instituted against NYCB or Flagstar; the possibility that the proposed transaction will not close when expected or at all because required regulatory, shareholder or other approvals are not received or other conditions to the closing are not satisfied on a timely basis or at all, or are obtained subject to conditions that are not anticipated; the ability of NYCB and Flagstar to meet expectations regarding the timing, completion and accounting and tax treatments of the proposed transaction; the risk that any announcements relating to the proposed transaction could have adverse effects on the market price of the common stock of NYCB or Flagstar; the possibility that the anticipated benefits of the proposed transaction will not be realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the two companies or as a result of the strength of the economy and competitive factors in the areas where NYCB and Flagstar do business; certain restrictions during the pendency of the proposed transaction that may impact the parties’ ability to pursue certain business opportunities or strategic transactions; the possibility that the proposed transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events; diversion of management’s attention from ongoing business operations and opportunities; the possibility that the parties may be unable to achieve expected synergies and operating efficiencies in the proposed transaction within the expected timeframes or at all and to successfully integrate Flagstar’s operations and those of NYCB; such integration may be more difficult, time consuming or costly than expected; revenues following the proposed transaction may be lower than expected; potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the proposed transaction; NYCB’s and Flagstar’s success in executing their respective business plans and strategies and managing the risks involved in the foregoing; the dilution caused by NYCB’s issuance of additional shares of its capital stock in connection with the proposed transaction; and other factors that may affect future results of NYCB and Flagstar; and the other factors discussed in the “Risk Factors” section NYCB’s Annual Report on Form 10–K for the year ended December 31, 2020 and in other reports NYCB files with the U.S. Securities and Exchange Commission (the “SEC”), which are available at http://www.sec.gov and in the “SEC Filings” section of NYCB’s website, https://ir.mynycb.com, under the heading “Financial Information,” and in Flagstar’s Annual Report on Form 10-K for the year ended December 31, 2020 and in Flagstar’s other filings with SEC, which are available at http://www.sec.gov and in the “Documents” section of Flagstar’s website, https://investors.flagstar.com.
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(Dollars in millions) (Unaudited) |
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|||||||||||||||
|
Cash |
$ |
168 |
$ |
106 |
$ |
251 |
$ |
204 |
|||||||
|
Interest-earning deposits |
177 |
343 |
372 |
23 |
|||||||||||
|
Total cash and cash equivalents |
345 |
449 |
623 |
227 |
|||||||||||
|
Securitized HFS loans not sold |
— |
— |
— |
— |
|||||||||||
|
Investment securities available-for-sale |
1,823 |
1,764 |
1,944 |
2,348 |
|||||||||||
|
Investment securities held-to-maturity |
270 |
319 |
377 |
496 |
|||||||||||
|
Loans held-for-sale |
6,138 |
7,087 |
7,098 |
5,615 |
|||||||||||
|
Loans held-for-investment |
14,052 |
14,887 |
16,227 |
14,808 |
|||||||||||
|
Loans with government guarantees |
2,226 |
2,457 |
2,516 |
1,791 |
|||||||||||
|
Less: allowance for loan losses |
(202) |
(241) |
(252) |
(229) |
|||||||||||
|
Total loans held-for-investment and loans with government guarantees, net |
16,076 |
17,103 |
18,491 |
16,370 |
|||||||||||
|
Mortgage servicing rights |
342 |
428 |
329 |
261 |
|||||||||||
|
Federal Home Loan Bank stock |
377 |
377 |
377 |
377 |
|||||||||||
|
Premises and equipment, net |
374 |
393 |
392 |
410 |
|||||||||||
|
Goodwill and intangible assets |
152 |
155 |
157 |
164 |
|||||||||||
|
Other assets |
1,168 |
1,374 |
1,250 |
1,200 |
|||||||||||
|
Total assets |
$ |
27,065 |
$ |
29,449 |
$ |
31,038 |
$ |
27,468 |
|||||||
|
|
|||||||||||||||
|
Noninterest-bearing deposits |
$ |
10,675 |
$ |
10,798 |
$ |
9,458 |
$ |
7,921 |
|||||||
|
Interest-bearing deposits |
7,986 |
8,622 |
10,515 |
9,977 |
|||||||||||
|
Total deposits |
18,661 |
19,420 |
19,973 |
17,898 |
|||||||||||
|
Short-term Federal Home Loan Bank advances and other |
2,095 |
2,745 |
3,900 |
3,354 |
|||||||||||
|
Long-term Federal Home Loan Bank advances |
1,200 |
1,200 |
1,200 |
1,200 |
|||||||||||
|
Other long-term debt |
396 |
396 |
641 |
493 |
|||||||||||
|
Loan with government guarantee repurchase options |
989 |
1,780 |
1,851 |
1,067 |
|||||||||||
|
Other liabilities |
1,226 |
1,550 |
1,272 |
1,485 |
|||||||||||
|
Total liabilities |
24,567 |
27,091 |
28,837 |
25,497 |
|||||||||||
|
|
|||||||||||||||
|
Common stock |
1 |
1 |
1 |
1 |
|||||||||||
|
Additional paid in capital |
1,356 |
1,350 |
1,346 |
1,488 |
|||||||||||
|
Accumulated other comprehensive income |
45 |
54 |
47 |
46 |
|||||||||||
|
Retained earnings |
1,096 |
953 |
807 |
436 |
|||||||||||
|
Total stockholders’ equity |
2,498 |
2,358 |
2,201 |
1,971 |
|||||||||||
|
Total liabilities and stockholders’ equity |
$ |
27,065 |
$ |
29,449 |
$ |
31,038 |
$ |
27,468 |
|||||||
|
(Dollars in millions, except per share data) (Unaudited) |
|||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
|
|
|||||||||||||||||||||||||||
|
Total interest income |
$ |
198 |
$ |
208 |
$ |
212 |
$ |
206 |
$ |
201 |
$ |
(10) |
(5) |
% |
$ |
(3) |
(1) |
% |
|||||||||
|
Total interest expense |
15 |
19 |
23 |
26 |
33 |
(4) |
(21) |
% |
(18) |
(55) |
% |
||||||||||||||||
|
Net interest income |
183 |
189 |
189 |
180 |
168 |
(6) |
(3) |
% |
15 |
9 |
% |
||||||||||||||||
|
(Benefit) provision for |
(44) |
(28) |
2 |
32 |
102 |
(16) |
57 |
% |
N/M |
N/M |
|||||||||||||||||
|
Net interest income after |
227 |
217 |
187 |
148 |
66 |
10 |
5 |
% |
161 |
244 |
% |
||||||||||||||||
|
|
|||||||||||||||||||||||||||
|
Net gain on loan sales |
168 |
227 |
232 |
346 |
303 |
(59) |
(26) |
% |
(135) |
(45) |
% |
||||||||||||||||
|
Loan fees and charges |
37 |
42 |
48 |
41 |
38 |
(5) |
(12) |
% |
(1) |
(3) |
% |
||||||||||||||||
|
Net return (loss) on the |
(5) |
— |
— |
12 |
(8) |
(5) |
N/M |
3 |
(38) |
% |
|||||||||||||||||
|
Loan administration income |
28 |
27 |
25 |
26 |
21 |
1 |
4 |
% |
7 |
33 |
% |
||||||||||||||||
|
Deposit fees and charges |
8 |
8 |
8 |
8 |
7 |
— |
— |
% |
1 |
14 |
% |
||||||||||||||||
|
Other noninterest income |
16 |
20 |
19 |
15 |
14 |
(4) |
(20) |
% |
2 |
14 |
% |
||||||||||||||||
|
Total noninterest income |
252 |
324 |
332 |
448 |
375 |
(72) |
(22) |
% |
N/M |
N/M |
|||||||||||||||||
|
|
|||||||||||||||||||||||||||
|
Compensation and benefits |
122 |
144 |
125 |
123 |
116 |
(22) |
(15) |
% |
6 |
5 |
% |
||||||||||||||||
|
Occupancy and equipment |
50 |
46 |
44 |
47 |
44 |
4 |
9 |
% |
6 |
14 |
% |
||||||||||||||||
|
Commissions |
51 |
62 |
70 |
72 |
61 |
(11) |
(18) |
% |
(10) |
(16) |
% |
||||||||||||||||
|
Loan processing expense |
22 |
21 |
24 |
20 |
22 |
1 |
5 |
% |
— |
— |
% |
||||||||||||||||
|
Legal and professional |
11 |
8 |
11 |
9 |
5 |
3 |
38 |
% |
6 |
N/M |
|||||||||||||||||
|
Federal insurance premiums |
4 |
6 |
5 |
6 |
7 |
(2) |
(33) |
% |
(3) |
(43) |
% |
||||||||||||||||
|
Intangible asset amortization |
3 |
3 |
3 |
3 |
4 |
— |
— |
% |
(1) |
(25) |
% |
||||||||||||||||
|
Other noninterest expense |
26 |
57 |
32 |
21 |
34 |
(31) |
(54) |
% |
(8) |
(24) |
% |
||||||||||||||||
|
Total noninterest expense |
289 |
347 |
314 |
301 |
293 |
(58) |
(17) |
% |
(4) |
(1) |
% |
||||||||||||||||
|
Income before income taxes |
190 |
194 |
205 |
295 |
148 |
(4) |
(2) |
% |
42 |
28 |
% |
||||||||||||||||
|
Provision for income taxes |
43 |
45 |
51 |
73 |
32 |
(2) |
(4) |
% |
11 |
34 |
% |
||||||||||||||||
|
Net income |
$ |
147 |
$ |
149 |
$ |
154 |
$ |
222 |
$ |
116 |
$ |
(2) |
(1) |
% |
$ |
31 |
27 |
% |
|||||||||
|
|
|||||||||||||||||||||||||||
|
Basic |
$ |
2.78 |
$ |
2.83 |
$ |
2.86 |
$ |
3.90 |
$ |
2.04 |
$ |
(0.05) |
(2) |
% |
$ |
0.74 |
36 |
% |
|||||||||
|
Diluted |
$ |
2.74 |
$ |
2.80 |
$ |
2.83 |
$ |
3.88 |
$ |
2.03 |
$ |
(0.06) |
(2) |
% |
$ |
0.71 |
35 |
% |
|||||||||
|
Cash dividends declared |
$ |
0.06 |
$ |
0.06 |
$ |
0.05 |
$ |
0.05 |
$ |
0.05 |
$ |
— |
— |
% |
$ |
0.01 |
20 |
% |
|||||||||
|
N/M – Not meaningful |
|||||||||||||||||||||||||||
|
(Dollars in millions, except per share data) (Unaudited) |
|||||||||||||
|
|
|
||||||||||||
|
|
|
|
|
||||||||||
|
|
|||||||||||||
|
Total interest income |
$ |
405 |
$ |
402 |
$ |
3 |
1 |
% |
|||||
|
Total interest expense |
34 |
86 |
(52) |
(60) |
% |
||||||||
|
Net interest income |
371 |
316 |
55 |
17 |
% |
||||||||
|
(Benefit) provision for credit losses |
(72) |
116 |
(188) |
N/M |
|||||||||
|
Net interest income after provision for credit losses |
443 |
200 |
243 |
N/M |
|||||||||
|
|
|||||||||||||
|
Net gain on loan sales |
395 |
393 |
2 |
1 |
% |
||||||||
|
Loan fees and charges |
79 |
61 |
18 |
30 |
% |
||||||||
|
Net return (loss) on the mortgage servicing rights |
(5) |
(2) |
(3) |
N/M |
|||||||||
|
Loan administration income |
54 |
33 |
21 |
64 |
% |
||||||||
|
Deposit fees and charges |
17 |
16 |
1 |
6 |
% |
||||||||
|
Other noninterest income |
36 |
28 |
8 |
29 |
% |
||||||||
|
Total noninterest income |
576 |
529 |
47 |
9 |
% |
||||||||
|
|
|||||||||||||
|
Compensation and benefits |
266 |
218 |
48 |
22 |
% |
||||||||
|
Occupancy and equipment |
95 |
85 |
10 |
12 |
% |
||||||||
|
Commissions |
112 |
90 |
22 |
24 |
% |
||||||||
|
Loan processing expense |
43 |
39 |
4 |
10 |
% |
||||||||
|
Legal and professional expense |
20 |
11 |
9 |
82 |
% |
||||||||
|
Federal insurance premiums |
10 |
13 |
(3) |
(23) |
% |
||||||||
|
Intangible asset amortization |
5 |
7 |
(2) |
(29) |
% |
||||||||
|
Other noninterest expense |
85 |
63 |
22 |
35 |
% |
||||||||
|
Total noninterest expense |
636 |
526 |
110 |
21 |
% |
||||||||
|
Income before income taxes |
383 |
203 |
180 |
89 |
% |
||||||||
|
Provision for income taxes |
87 |
42 |
45 |
107 |
% |
||||||||
|
Net income |
$ |
296 |
$ |
161 |
$ |
135 |
84 |
% |
|||||
|
|
|||||||||||||
|
Basic |
$ |
5.61 |
$ |
2.85 |
$ |
2.76 |
97 |
% |
|||||
|
Diluted |
$ |
5.54 |
$ |
2.83 |
$ |
2.71 |
96 |
% |
|||||
|
Cash dividends declared |
$ |
0.12 |
$ |
0.10 |
$ |
0.02 |
20 |
% |
|||||
|
N/M – Not meaningful |
|||||||||||||
|
(Dollars in millions, except share data) (Unaudited) |
|||||||||||||||||||
|
|
|
||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||
|
|
|||||||||||||||||||
|
Mortgage rate lock commitments (fallout-adjusted) (2) |
$ |
12,400 |
$ |
12,300 |
$ |
13,800 |
$ |
24,800 |
$ |
25,000 |
|||||||||
|
Mortgage loans closed |
$ |
12,800 |
$ |
13,800 |
$ |
12,200 |
$ |
26,600 |
$ |
20,700 |
|||||||||
|
Mortgage loans sold and securitized |
$ |
14,100 |
$ |
13,700 |
$ |
12,900 |
$ |
27,800 |
$ |
20,400 |
|||||||||
|
|
|||||||||||||||||||
|
Interest rate spread (3) |
2.70 |
% |
2.55 |
% |
2.52 |
% |
2.62 |
% |
2.41 |
% |
|||||||||
|
Net interest margin |
2.90 |
% |
2.82 |
% |
2.86 |
% |
2.86 |
% |
2.83 |
% |
|||||||||
|
Net margin on loans sold and securitized |
1.20 |
% |
1.65 |
% |
2.35 |
% |
1.42 |
% |
1.93 |
% |
|||||||||
|
Return on average assets |
2.09 |
% |
1.98 |
% |
1.77 |
% |
2.04 |
% |
1.30 |
% |
|||||||||
|
Adjusted return on average assets (4) (5) |
2.09 |
% |
2.34 |
% |
1.77 |
% |
2.19 |
% |
1.30 |
% |
|||||||||
|
Return on average common equity |
23.97 |
% |
25.73 |
% |
23.47 |
% |
12.41 |
% |
16.86 |
% |
|||||||||
|
Return on average tangible common equity (5) |
25.92 |
% |
27.99 |
% |
26.16 |
% |
13.46 |
% |
19.07 |
% |
|||||||||
|
Adjusted return on average tangible common equity (4) (5) |
25.68 |
% |
32.97 |
% |
26.16 |
% |
30.63 |
% |
19.07 |
% |
|||||||||
|
Efficiency ratio |
66.6 |
% |
67.7 |
% |
54.1 |
% |
67.2 |
% |
62.2 |
% |
|||||||||
|
Adjusted efficiency ratio (4) |
66.8 |
% |
60.8 |
% |
54.1 |
% |
70.7 |
% |
62.2 |
% |
|||||||||
|
Common equity-to-assets ratio (average for the period) |
8.74 |
% |
7.71 |
% |
7.53 |
% |
8.21 |
% |
15.42 |
% |
|||||||||
|
|
|||||||||||||||||||
|
Average interest-earning assets |
$ |
25,269 |
$ |
27,178 |
$ |
23,692 |
$ |
26,218 |
$ |
22,421 |
|||||||||
|
Average interest-bearing liabilities |
$ |
14,641 |
$ |
15,011 |
$ |
15,119 |
$ |
14,825 |
$ |
14,800 |
|||||||||
|
Average stockholders’ equity |
$ |
2,448 |
$ |
2,319 |
$ |
1,977 |
$ |
2,384 |
$ |
1,915 |
|||||||||
|
(1) |
Rounded to nearest hundred million. |
|
(2) |
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. |
|
(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) |
See Non-GAAP Reconciliation for further information. |
|
(5) |
Excludes goodwill, intangible assets and the associated amortization. See Non-GAAP Reconciliation for further information. |
|
|
|
|
|
||||||||||||
|
|
|||||||||||||||
|
Book value per common share |
$ |
47.26 |
$ |
44.71 |
$ |
41.79 |
$ |
34.62 |
|||||||
|
Tangible book value per share (1) |
$ |
44.38 |
$ |
41.77 |
$ |
38.80 |
$ |
31.74 |
|||||||
|
Number of common shares outstanding |
52,862,264 |
52,752,600 |
52,656,067 |
56,943,979 |
|||||||||||
|
Number of FTE employees |
5,503 |
5,418 |
5,214 |
4,641 |
|||||||||||
|
Number of bank branches |
158 |
158 |
158 |
160 |
|||||||||||
|
Ratio of nonperforming assets to total assets (2) |
0.30 |
% |
0.23 |
% |
0.21 |
% |
0.14 |
% |
|||||||
|
Common equity-to-assets ratio |
9.23 |
% |
8.01 |
% |
7.09 |
% |
7.18 |
% |
|||||||
|
|
|||||||||||||||
|
Weighted average service fee (basis points) |
32.6 |
33.2 |
34.3 |
37.0 |
|||||||||||
|
Capitalized value of mortgage servicing rights |
1.00 |
% |
1.06 |
% |
0.86 |
% |
0.87 |
% |
|||||||
|
(1) |
Excludes goodwill and intangibles. See Non-GAAP Reconciliation for further information. |
|
(2) |
Ratio excludes LHFS. |
|
(Dollars in millions) (Unaudited) |
||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||
|
|
|
|
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
|
||||||||||||||||||||||||||
|
Loans held-for-sale |
$ |
6,902 |
$ |
53 |
3.05% |
$ |
7,464 |
$ |
53 |
2.83% |
$ |
5,645 |
$ |
48 |
3.42% |
|||||||||||
|
Loans held-for-investment |
||||||||||||||||||||||||||
|
Residential first mortgage |
1,887 |
15 |
3.27% |
2,132 |
17 |
3.20% |
2,822 |
24 |
3.41% |
|||||||||||||||||
|
Home equity |
748 |
7 |
3.64% |
820 |
7 |
3.50% |
1,001 |
9 |
3.78% |
|||||||||||||||||
|
Other |
1,101 |
13 |
4.80% |
1,040 |
12 |
4.79% |
881 |
12 |
5.42% |
|||||||||||||||||
|
Total consumer loans |
3,736 |
35 |
3.79% |
3,992 |
36 |
3.68% |
4,704 |
45 |
3.87% |
|||||||||||||||||
|
Commercial real estate |
3,093 |
26 |
3.37% |
3,042 |
26 |
3.36% |
3,101 |
28 |
3.64% |
|||||||||||||||||
|
Commercial and industrial |
1,449 |
14 |
3.72% |
1,486 |
13 |
3.53% |
2,006 |
17 |
3.34% |
|||||||||||||||||
|
Warehouse lending |
5,410 |
54 |
3.95% |
6,395 |
64 |
4.00% |
3,785 |
38 |
3.88% |
|||||||||||||||||
|
Total commercial loans |
9,952 |
94 |
3.74% |
10,923 |
103 |
3.76% |
8,892 |
83 |
3.67% |
|||||||||||||||||
|
Total loans held-for-investment |
13,688 |
129 |
3.75% |
14,915 |
139 |
3.73% |
13,596 |
128 |
3.74% |
|||||||||||||||||
|
Loans with government guarantees |
2,344 |
5 |
0.79% |
2,502 |
4 |
0.56% |
858 |
4 |
1.97% |
|||||||||||||||||
|
Investment securities |
2,123 |
12 |
2.19% |
2,210 |
12 |
2.21% |
3,417 |
21 |
2.42% |
|||||||||||||||||
|
Interest-earning deposits |
212 |
— |
0.13% |
87 |
— |
0.14% |
176 |
— |
0.11% |
|||||||||||||||||
|
Total interest-earning assets |
25,269 |
$ |
199 |
3.12% |
27,178 |
$ |
208 |
3.06% |
23,692 |
$ |
201 |
3.38% |
||||||||||||||
|
Other assets |
2,742 |
2,887 |
2,569 |
|||||||||||||||||||||||
|
Total assets |
$ |
28,011 |
$ |
30,065 |
$ |
26,261 |
||||||||||||||||||||
|
|
||||||||||||||||||||||||||
|
Retail deposits |
||||||||||||||||||||||||||
|
Demand deposits |
$ |
1,686 |
$ |
— |
0.06% |
$ |
1,852 |
$ |
— |
0.07% |
$ |
1,800 |
$ |
1 |
0.22% |
|||||||||||
|
Savings deposits |
4,084 |
1 |
0.14% |
3,945 |
1 |
0.14% |
3,476 |
4 |
0.52% |
|||||||||||||||||
|
Money market deposits |
762 |
— |
0.07% |
685 |
— |
0.06% |
716 |
— |
0.12% |
|||||||||||||||||
|
Certificates of deposit |
1,126 |
3 |
0.62% |
1,293 |
4 |
0.96% |
1,987 |
10 |
2.00% |
|||||||||||||||||
|
Total retail deposits |
7,658 |
4 |
0.18% |
7,775 |
5 |
0.25% |
7,979 |
15 |
0.78% |
|||||||||||||||||
|
Government deposits |
1,795 |
1 |
0.19% |
1,773 |
1 |
0.22% |
1,088 |
2 |
0.63% |
|||||||||||||||||
|
Wholesale deposits and other |
1,170 |
4 |
1.33% |
1,031 |
4 |
1.59% |
738 |
4 |
2.07% |
|||||||||||||||||
|
Total interest-bearing deposits |
10,623 |
9 |
0.31% |
10,579 |
10 |
0.38% |
9,805 |
21 |
0.86% |
|||||||||||||||||
|
Short-term FHLB advances and other |
2,422 |
1 |
0.17% |
2,779 |
1 |
0.17% |
3,753 |
2 |
0.26% |
|||||||||||||||||
|
Long-term FHLB advances |
1,200 |
3 |
1.03% |
1,200 |
3 |
1.03% |
1,068 |
3 |
1.13% |
|||||||||||||||||
|
Other long-term debt |
396 |
3 |
3.19% |
453 |
5 |
4.11% |
493 |
7 |
4.99% |
|||||||||||||||||
|
Total interest-bearing liabilities |
14,641 |
16 |
0.43% |
15,011 |
19 |
0.51% |
15,119 |
33 |
0.86% |
|||||||||||||||||
|
Noninterest-bearing deposits |
||||||||||||||||||||||||||
|
Retail deposits and other |
2,259 |
2,270 |
1,687 |
|||||||||||||||||||||||
|
Custodial deposits (1) |
6,188 |
7,194 |
6,223 |
|||||||||||||||||||||||
|
Total noninterest-bearing deposits |
8,447 |
9,464 |
7,910 |
|||||||||||||||||||||||
|
Other liabilities |
2,476 |
3,271 |
1,255 |
|||||||||||||||||||||||
|
Stockholders’ equity |
2,448 |
2,319 |
1,977 |
|||||||||||||||||||||||
|
Total liabilities and stockholders’ |
$ |
28,012 |
$ |
30,065 |
$ |
26,261 |
||||||||||||||||||||
|
Net interest-earning assets |
$ |
10,628 |
$ |
12,167 |
$ |
8,573 |
||||||||||||||||||||
|
Net interest income |
$ |
183 |
$ |
189 |
$ |
168 |
||||||||||||||||||||
|
Interest rate spread (2) |
2.70% |
2.55% |
2.52% |
|||||||||||||||||||||||
|
Net interest margin (3) |
2.90% |
2.82% |
2.86% |
|||||||||||||||||||||||
|
Ratio of average interest-earning assets to |
172.6% |
181.1% |
156.7% |
|||||||||||||||||||||||
|
Total average deposits |
$ |
19,070 |
$ |
20,043 |
$ |
17,715 |
||||||||||||||||||||
|
(1) |
Approximately 80 percent of custodial deposits from loans subserviced which pay interest is recognized as an offset in net loan administration income. |
|
(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. |
|
(Dollars in millions) (Unaudited) |
|||||||||||||||||
|
|
|||||||||||||||||
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
||||||||||||
|
|
|||||||||||||||||
|
Loans held-for-sale |
$ |
7,181 |
$ |
105 |
2.94% |
$ |
5,447 |
$ |
97 |
3.56% |
|||||||
|
Loans held-for-investment |
|||||||||||||||||
|
Residential first mortgage |
2,009 |
33 |
3.23% |
2,942 |
51 |
3.46% |
|||||||||||
|
Home equity |
784 |
14 |
3.56% |
1,010 |
21 |
4.26% |
|||||||||||
|
Other |
1,071 |
25 |
4.80% |
848 |
24 |
5.59% |
|||||||||||
|
Total consumer loans |
3,864 |
72 |
3.73% |
4,800 |
96 |
4.01% |
|||||||||||
|
Commercial real estate |
3,068 |
52 |
3.36% |
3,025 |
63 |
4.11% |
|||||||||||
|
Commercial and industrial |
1,467 |
27 |
3.62% |
1,836 |
36 |
3.88% |
|||||||||||
|
Warehouse lending |
5,900 |
118 |
3.98% |
3,048 |
62 |
4.04% |
|||||||||||
|
Total commercial loans |
10,435 |
197 |
3.75% |
7,909 |
161 |
4.03% |
|||||||||||
|
Total loans held-for-investment |
14,299 |
269 |
3.74% |
12,709 |
257 |
4.02% |
|||||||||||
|
Loans with government guarantees |
2,422 |
8 |
0.67% |
834 |
7 |
1.68% |
|||||||||||
|
Investment securities |
2,166 |
24 |
2.20% |
3,239 |
40 |
2.45% |
|||||||||||
|
Interest-earning deposits |
150 |
— |
0.14% |
192 |
1 |
1.00% |
|||||||||||
|
Total interest-earning assets |
26,218 |
$ |
406 |
3.09% |
22,421 |
$ |
402 |
3.57% |
|||||||||
|
Other assets |
2,814 |
2,416 |
|||||||||||||||
|
Total assets |
$ |
29,032 |
$ |
24,837 |
|||||||||||||
|
|
|||||||||||||||||
|
Retail deposits |
|||||||||||||||||
|
Demand deposits |
$ |
1,768 |
$ |
— |
0.07% |
$ |
1,693 |
$ |
4 |
0.47% |
|||||||
|
Savings deposits |
4,015 |
3 |
0.14% |
3,433 |
14 |
0.79% |
|||||||||||
|
Money market deposits |
724 |
— |
0.06% |
701 |
1 |
0.22% |
|||||||||||
|
Certificates of deposit |
1,209 |
5 |
0.80% |
2,120 |
22 |
2.13% |
|||||||||||
|
Total retail deposits |
7,716 |
8 |
0.22% |
7,947 |
41 |
1.03% |
|||||||||||
|
Government deposits |
1,784 |
2 |
0.21% |
1,110 |
5 |
0.89% |
|||||||||||
|
Wholesale deposits and other |
1,101 |
8 |
1.47% |
659 |
7 |
2.21% |
|||||||||||
|
Total interest-bearing deposits |
10,601 |
18 |
0.35% |
9,716 |
53 |
1.09% |
|||||||||||
|
Short-term FHLB advances and other |
2,600 |
2 |
0.17% |
3,659 |
14 |
0.79% |
|||||||||||
|
Long-term FHLB advances |
1,200 |
6 |
1.03% |
931 |
6 |
1.20% |
|||||||||||
|
Other long-term debt |
424 |
8 |
3.68% |
494 |
13 |
5.16% |
|||||||||||
|
Total interest-bearing liabilities |
14,825 |
34 |
0.47% |
14,800 |
86 |
1.16% |
|||||||||||
|
Noninterest-bearing deposits |
|||||||||||||||||
|
Retail deposits and other |
2,264 |
1,541 |
|||||||||||||||
|
Custodial deposits (1) |
6,688 |
5,499 |
|||||||||||||||
|
Total noninterest-bearing deposits |
8,952 |
7,040 |
|||||||||||||||
|
Other liabilities |
2,871 |
1,082 |
|||||||||||||||
|
Stockholders’ equity |
2,384 |
1,915 |
|||||||||||||||
|
Total liabilities and stockholders’ equity |
$ |
29,032 |
$ |
24,837 |
|||||||||||||
|
Net interest-earning assets |
$ |
11,393 |
$ |
7,621 |
|||||||||||||
|
Net interest income |
$ |
372 |
$ |
316 |
|||||||||||||
|
Interest rate spread (2) |
2.62% |
2.41% |
|||||||||||||||
|
Net interest margin (3) |
2.86% |
2.83% |
|||||||||||||||
|
Ratio of average interest-earning assets to interest-bearing |
176.9% |
145.9% |
|||||||||||||||
|
Total average deposits |
$ |
19,554 |
$ |
16,755 |
|||||||||||||
|
a. |
Approximately 80 percent of custodial deposits from loans subserviced which pay interest is recognized as an offset in net loan administration income. |
|
b. |
Interest rate spread is the difference between rate of interest earned on interest-earning assets and rate of interest paid on interest-bearing liabilities. |
|
c. |
Net interest margin is net interest income divided by average interest-earning assets. |
|
(Dollars in millions, except share data) (Unaudited) |
|||||||||||||||||||
|
|
|
||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||
|
Net income |
$ |
147 |
$ |
149 |
$ |
116 |
$ |
296 |
$ |
161 |
|||||||||
|
Weighted average common shares outstanding |
52,763,868 |
52,675,562 |
56,790,642 |
52,719,959 |
56,723,254 |
||||||||||||||
|
Stock-based awards |
772,801 |
622,241 |
333,064 |
697,937 |
433,561 |
||||||||||||||
|
Weighted average diluted common shares |
53,536,669 |
53,297,803 |
57,123,706 |
53,417,896 |
57,156,815 |
||||||||||||||
|
Basic earnings per common share |
$ |
2.78 |
$ |
2.83 |
$ |
2.04 |
$ |
5.61 |
$ |
2.85 |
|||||||||
|
Stock-based awards |
(0.04) |
(0.03) |
(0.01) |
(0.07) |
(0.02) |
||||||||||||||
|
Diluted earnings per common share |
$ |
2.74 |
$ |
2.80 |
$ |
2.03 |
$ |
5.54 |
$ |
2.83 |
|||||||||
|
(Dollars in millions) (Unaudited) |
|||||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Tier 1 leverage (to adjusted avg. total assets) |
$ |
2,562 |
9.21 |
% |
$ |
2,423 |
8.11 |
% |
$ |
2,270 |
7.71 |
% |
$ |
2,021 |
7.76 |
% |
|||||||
|
Total adjusted avg. total asset base |
$ |
27,828 |
$ |
29,881 |
$ |
29,444 |
$ |
26,040 |
|||||||||||||||
|
Tier 1 common equity (to risk weighted assets) |
$ |
2,322 |
11.38 |
% |
$ |
2,183 |
10.31 |
% |
$ |
2,030 |
9.15 |
% |
$ |
1,781 |
9.11 |
% |
|||||||
|
Tier 1 capital (to risk weighted assets) |
$ |
2,562 |
12.56 |
% |
$ |
2,423 |
11.45 |
% |
$ |
2,270 |
10.23 |
% |
$ |
2,021 |
10.33 |
% |
|||||||
|
Total capital (to risk weighted assets) |
$ |
2,882 |
14.13 |
% |
$ |
2,790 |
13.18 |
% |
$ |
2,638 |
11.89 |
% |
$ |
2,214 |
11.32 |
% |
|||||||
|
Risk-weighted asset base |
$ |
20,399 |
$ |
21,164 |
$ |
22,190 |
$ |
19,562 |
|||||||||||||||
|
(Dollars in millions) (Unaudited) |
|||||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Tier 1 leverage (to adjusted avg. total assets) |
$ |
2,464 |
8.88 |
% |
$ |
2,523 |
8.45 |
% |
$ |
2,390 |
8.12 |
% |
$ |
1,969 |
7.57 |
% |
|||||||
|
Total adjusted avg. total asset base |
$ |
27,767 |
$ |
29,866 |
$ |
29,437 |
$ |
26,020 |
|||||||||||||||
|
Tier 1 common equity (to risk weighted assets) |
$ |
2,464 |
12.08 |
% |
$ |
2,523 |
11.93 |
% |
$ |
2,390 |
10.77 |
% |
$ |
1,969 |
10.07 |
% |
|||||||
|
Tier 1 capital (to risk weighted assets) |
$ |
2,464 |
12.08 |
% |
$ |
2,523 |
11.93 |
% |
$ |
2,390 |
10.77 |
% |
$ |
1,969 |
10.07 |
% |
|||||||
|
Total capital (to risk weighted assets) |
$ |
2,634 |
12.92 |
% |
$ |
2,740 |
12.96 |
% |
$ |
2,608 |
11.75 |
% |
$ |
2,161 |
11.05 |
% |
|||||||
|
Risk-weighted asset base |
$ |
20,395 |
$ |
21,141 |
$ |
22,194 |
$ |
19,559 |
|||||||||||||||
|
(Dollars in millions) (Unaudited) |
|||||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Subserviced for others (2) |
$ |
211,775 |
975,467 |
$ |
197,053 |
921,126 |
$ |
178,606 |
867,799 |
$ |
174,517 |
854,693 |
|||||||||||
|
Serviced for others (3) |
34,263 |
139,029 |
40,402 |
160,511 |
38,026 |
151,081 |
29,846 |
122,779 |
|||||||||||||||
|
Serviced for own loan portfolio (4) |
9,685 |
67,988 |
9,965 |
66,363 |
10,079 |
66,519 |
9,211 |
64,142 |
|||||||||||||||
|
Total loans serviced |
$ |
255,723 |
1,182,484 |
$ |
247,420 |
1,148,000 |
$ |
226,711 |
1,085,399 |
$ |
213,574 |
1,041,614 |
|||||||||||
|
(1) |
UPB, net of write downs, does not include premiums or discounts. |
|
(2) |
Loans subserviced for a fee for non-Flagstar owned loans or MSRs. Includes temporary short-term subservicing performed as a result of sales of servicing-released MSRs. |
|
(3) |
Loans for which Flagstar owns the MSR. |
|
(4) |
Includes LHFI (residential first mortgage, home equity and other consumer), LHFS (residential first mortgage), loans with government guarantees (residential first mortgage), and repossessed assets. |
|
(Dollars in millions) (Unaudited) |
|||||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||
|
|
|||||||||||||||||||||||
|
Residential first mortgage |
$ |
1,794 |
12.8 |
% |
$ |
1,998 |
13.4 |
% |
$ |
2,266 |
14.0 |
% |
$ |
2,716 |
18.3 |
% |
|||||||
|
Home equity |
717 |
5.1 |
% |
781 |
5.2 |
% |
856 |
5.3 |
% |
978 |
6.6 |
% |
|||||||||||
|
Other |
1,133 |
8.0 |
% |
1,049 |
7.0 |
% |
1,004 |
6.1 |
% |
898 |
6.1 |
% |
|||||||||||
|
Total consumer loans |
3,644 |
25.9 |
% |
3,828 |
25.6 |
% |
4,126 |
25.4 |
% |
4,592 |
31.0 |
% |
|||||||||||
|
|
|||||||||||||||||||||||
|
Commercial real estate |
3,169 |
22.6 |
% |
3,084 |
20.7 |
% |
3,061 |
18.9 |
% |
3,016 |
20.4 |
% |
|||||||||||
|
Commercial and industrial |
1,376 |
9.8 |
% |
1,424 |
9.6 |
% |
1,382 |
8.5 |
% |
1,968 |
13.3 |
% |
|||||||||||
|
Warehouse lending |
5,863 |
41.7 |
% |
6,551 |
44.1 |
% |
7,658 |
47.2 |
% |
5,232 |
35.3 |
% |
|||||||||||
|
Total commercial loans |
10,408 |
74.1 |
% |
11,059 |
74.4 |
% |
12,101 |
74.6 |
% |
10,216 |
69.0 |
% |
|||||||||||
|
Total loans held-for-investment |
$ |
14,052 |
100.0 |
% |
$ |
14,887 |
100.0 |
% |
$ |
16,227 |
100.0 |
% |
$ |
14,808 |
100.0 |
% |
|||||||
|
(Dollars in millions) (Unaudited) |
|||||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||
|
Indirect lending |
$ |
866 |
76.4 |
% |
$ |
791 |
75.4 |
% |
$ |
713 |
71.0 |
% |
$ |
647 |
72.0 |
% |
|||||||
|
Point of sale |
225 |
19.9 |
% |
214 |
20.4 |
% |
211 |
21.0 |
% |
181 |
20.2 |
% |
|||||||||||
|
Other |
42 |
3.7 |
% |
44 |
4.2 |
% |
80 |
8.0 |
% |
70 |
7.8 |
% |
|||||||||||
|
Total other consumer loans |
$ |
1,133 |
100.0 |
% |
$ |
1,049 |
100.0 |
% |
$ |
1,004 |
100.0 |
% |
$ |
898 |
100.0 |
% |
|||||||
|
(Dollars in millions) (Unaudited) |
|||||||||||
|
|
|
|
|||||||||
|
Residential first mortgage |
$ |
48 |
$ |
45 |
$ |
60 |
|||||
|
Home equity |
17 |
20 |
28 |
||||||||
|
Other |
38 |
33 |
34 |
||||||||
|
Total consumer loans |
103 |
98 |
122 |
||||||||
|
Commercial real estate |
58 |
84 |
83 |
||||||||
|
Commercial and industrial |
38 |
55 |
23 |
||||||||
|
Warehouse lending |
3 |
4 |
1 |
||||||||
|
Total commercial loans |
99 |
143 |
107 |
||||||||
|
Allowance for loan losses |
202 |
241 |
229 |
||||||||
|
Reserve for unfunded commitments |
18 |
24 |
21 |
||||||||
|
Allowance for credit losses |
$ |
220 |
$ |
265 |
$ |
250 |
|||||
|
(Dollars in millions) (Unaudited) |
||||||||||||||||||||||||
|
|
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
Adjusted beginning balance |
$ |
45 |
$ |
20 |
$ |
33 |
$ |
84 |
$ |
55 |
$ |
4 |
$ |
241 |
$ |
24 |
||||||||
|
Provision (benefit) for credit losses: |
||||||||||||||||||||||||
|
Loan volume |
6 |
(1) |
2 |
2 |
— |
(1) |
8 |
(6) |
||||||||||||||||
|
Economic forecast (2) |
(1) |
(1) |
2 |
(13) |
(4) |
— |
(17) |
— |
||||||||||||||||
|
Credit (3) |
3 |
1 |
1 |
(14) |
— |
— |
(9) |
— |
||||||||||||||||
|
Qualitative factor adjustments (4) |
(5) |
(2) |
— |
(1) |
(13) |
— |
(21) |
— |
||||||||||||||||
|
Charge-offs |
(1) |
— |
(1) |
— |
— |
— |
(2) |
— |
||||||||||||||||
|
Recoveries |
— |
1 |
— |
— |
— |
— |
1 |
— |
||||||||||||||||
|
Provision for net charge-offs |
1 |
(1) |
1 |
— |
— |
— |
1 |
— |
||||||||||||||||
|
Ending allowance balance |
$ |
48 |
$ |
17 |
$ |
38 |
$ |
58 |
$ |
38 |
$ |
3 |
$ |
202 |
$ |
18 |
||||||||
|
(1) |
Excludes loans carried under the fair value option. |
|
(2) |
Includes changes in the lifetime loss rate based on current economic forecasts as compared to forecasts used in the prior quarter. |
|
(3) |
Includes changes in the probability of default and severity of default based on current borrower and guarantor characteristics, as well as individually evaluated reserves. |
|
(4) |
Includes $9 million of unallocated reserves attributed to various portfolios for presentation purposes. |
|
(Dollars in millions) (Unaudited) |
||||||||||||||||||||||||
|
|
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
Adjusted beginning balance |
$ |
49 |
$ |
25 |
$ |
39 |
$ |
84 |
$ |
51 |
$ |
4 |
$ |
252 |
$ |
28 |
||||||||
|
Provision (benefit) for credit losses: |
||||||||||||||||||||||||
|
Loan volume |
3 |
(2) |
3 |
3 |
1 |
(1) |
7 |
(10) |
||||||||||||||||
|
Economic forecast (2) |
(4) |
(3) |
(1) |
(2) |
(9) |
— |
(19) |
— |
||||||||||||||||
|
Credit (3) |
6 |
2 |
1 |
(22) |
(1) |
— |
(14) |
— |
||||||||||||||||
|
Qualitative factor adjustments (4) |
(6) |
(5) |
(4) |
(5) |
(4) |
— |
(24) |
— |
||||||||||||||||
|
Charge-offs |
(3) |
— |
(2) |
— |
(1) |
— |
(6) |
— |
||||||||||||||||
|
Recoveries |
1 |
(1) |
2 |
— |
16 |
— |
18 |
— |
||||||||||||||||
|
Provision for net charge-offs |
2 |
1 |
— |
— |
(15) |
— |
(12) |
— |
||||||||||||||||
|
Ending allowance balance |
$ |
48 |
$ |
17 |
$ |
38 |
$ |
58 |
$ |
38 |
$ |
3 |
$ |
202 |
$ |
18 |
||||||||
|
(1) |
Excludes loans carried under the fair value option. |
|
(2) |
Includes changes in the lifetime loss rate based on current economic forecasts as compared to forecasts used in the prior quarter. |
|
(3) |
Includes changes in the probability of default and severity of default based on current borrower and guarantor characteristics, as well as individually evaluated reserves. |
|
(4) |
Includes $9 million of unallocated reserves attributed to various portfolios for presentation purposes. |
|
(Dollars in millions) (Unaudited) |
|||||||||||||||
|
|
|
|
|
||||||||||||
|
Nonperforming LHFI |
$ |
63 |
$ |
49 |
$ |
46 |
$ |
23 |
|||||||
|
Nonperforming TDRs |
6 |
5 |
4 |
4 |
|||||||||||
|
Nonperforming TDRs at inception but performing for less than six months |
5 |
6 |
6 |
6 |
|||||||||||
|
Total nonperforming LHFI and TDRs (1) |
74 |
60 |
56 |
33 |
|||||||||||
|
Other nonperforming assets, net |
6 |
7 |
8 |
7 |
|||||||||||
|
LHFS |
9 |
9 |
9 |
7 |
|||||||||||
|
Total nonperforming assets |
$ |
89 |
$ |
76 |
$ |
73 |
$ |
47 |
|||||||
|
Ratio of nonperforming assets to total assets (2) |
0.30 |
% |
0.23 |
% |
0.21 |
% |
0.14 |
% |
|||||||
|
Ratio of nonperforming LHFI and TDRs to LHFI |
0.53 |
% |
0.40 |
% |
0.34 |
% |
0.22 |
% |
|||||||
|
Ratio of nonperforming assets to LHFI and repossessed assets (2) |
0.57 |
% |
0.45 |
% |
0.40 |
% |
0.27 |
% |
|||||||
|
(1) |
Includes less than 90 day past due performing loans placed on nonaccrual. Interest is not being accrued on these loans. |
|
(2) |
Ratio excludes LHFS. |
|
(Dollars in millions) (Unaudited) |
|||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||
|
|
|||||||||||||||||||
|
Consumer loans |
$ |
8 |
$ |
4 |
$ |
55 |
$ |
67 |
$ |
3,644 |
|||||||||
|
Commercial loans |
— |
— |
20 |
20 |
10,408 |
||||||||||||||
|
Total loans |
$ |
8 |
$ |
4 |
$ |
75 |
$ |
87 |
$ |
14,052 |
|||||||||
|
|
|||||||||||||||||||
|
Consumer loans |
$ |
10 |
$ |
5 |
$ |
42 |
$ |
57 |
$ |
3,828 |
|||||||||
|
Commercial loans |
— |
— |
18 |
18 |
11,059 |
||||||||||||||
|
Total loans |
$ |
10 |
$ |
5 |
$ |
60 |
$ |
75 |
$ |
14,887 |
|||||||||
|
|
|||||||||||||||||||
|
Consumer loans |
$ |
9 |
$ |
6 |
$ |
38 |
$ |
53 |
$ |
4,126 |
|||||||||
|
Commercial loans |
21 |
— |
18 |
39 |
12,101 |
||||||||||||||
|
Total loans |
$ |
30 |
$ |
6 |
$ |
56 |
$ |
92 |
$ |
16,227 |
|||||||||
|
|
|||||||||||||||||||
|
Consumer loans |
$ |
9 |
$ |
6 |
$ |
33 |
$ |
48 |
$ |
4,592 |
|||||||||
|
Commercial loans |
— |
— |
— |
— |
10,216 |
||||||||||||||
|
Total loans |
$ |
9 |
$ |
6 |
$ |
33 |
$ |
48 |
$ |
14,808 |
|||||||||
|
(1) |
Includes performing nonaccrual loans that are less than 90 days delinquent and for which interest cannot be accrued. |
|
(Dollars in millions) (Unaudited) |
|||||||||||
|
|
|||||||||||
|
|
|
|
|||||||||
|
|
|||||||||||
|
Consumer loans |
$ |
31 |
$ |
11 |
$ |
42 |
|||||
|
Commercial loans |
2 |
— |
2 |
||||||||
|
Total TDR loans |
$ |
33 |
$ |
11 |
$ |
44 |
|||||
|
|
|||||||||||
|
Consumer loans |
$ |
31 |
$ |
11 |
$ |
42 |
|||||
|
Commercial loans |
5 |
— |
5 |
||||||||
|
Total TDR loans |
$ |
36 |
$ |
11 |
$ |
47 |
|||||
|
|
|||||||||||
|
Consumer loans |
$ |
31 |
$ |
10 |
$ |
41 |
|||||
|
Commercial loans |
5 |
— |
5 |
||||||||
|
Total TDR loans |
$ |
36 |
$ |
10 |
$ |
46 |
|||||
|
|
|||||||||||
|
Consumer loans |
$ |
35 |
$ |
10 |
$ |
45 |
|||||
|
Commercial loans |
5 |
— |
5 |
||||||||
|
Total TDR loans |
$ |
40 |
$ |
10 |
$ |
50 |
|||||
|
(Unaudited) |
|||||||||||||||||||
|
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. The non-GAAP measures presented in the tables below 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 DOJ benefit and loans with government guarantees that have not been repurchased and don’t accrue interest are not reflective of our ongoing operations and, therefore, have been excluded from our U.S. GAAP results. The Company believes that tangible book value per share, tangible common equity to assets ratio, adjusted return on average tangible common equity, adjusted return on average tangible common equity, adjusted return on average assets, adjusted HFI loan-to-deposit ratio, adjusted noninterest expense, adjusted income before income taxes, adjusted provision for income taxes, adjusted net income, adjusted basic earnings per share, adjusted diluted earnings per share, adjusted net interest margin and adjusted efficiency ratio provide a meaningful representation of its operating performance on an ongoing basis. |
|||||||||||||||||||
|
The following tables provide a reconciliation of non-GAAP financial measures. |
|||||||||||||||||||
|
|
|||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||
|
(Dollars in millions, except share data) |
|||||||||||||||||||
|
Total stockholders’ equity |
$ |
2,498 |
$ |
2,358 |
$ |
2,201 |
$ |
2,195 |
$ |
1,971 |
|||||||||
|
Less: Goodwill and intangible assets |
152 |
155 |
157 |
160 |
164 |
||||||||||||||
|
Tangible book value |
$ |
2,346 |
$ |
2,203 |
$ |
2,044 |
$ |
2,035 |
$ |
1,807 |
|||||||||
|
Number of common shares outstanding |
52,862,264 |
52,752,600 |
52,656,067 |
57,150,470 |
56,943,979 |
||||||||||||||
|
|
$ |
44.38 |
$ |
41.77 |
$ |
38.80 |
$ |
35.60 |
$ |
31.74 |
|||||||||
|
Total assets |
$ |
27,065 |
$ |
29,449 |
$ |
31,038 |
$ |
29,476 |
$ |
27,468 |
|||||||||
|
|
8.67 |
% |
7.48 |
% |
6.58 |
% |
6.90 |
% |
6.58 |
% |
|||||||||
|
|
|||||||||||||||||||
|
|
|
||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||
|
(Dollars in millions) |
|||||||||||||||||||
|
Net income |
$ |
147 |
$ |
149 |
$ |
116 |
$ |
296 |
$ |
161 |
|||||||||
|
Add: Intangible asset amortization, net of tax |
2 |
2 |
3 |
2 |
6 |
||||||||||||||
|
Tangible net income |
$ |
149 |
$ |
151 |
$ |
119 |
$ |
298 |
$ |
167 |
|||||||||
|
Total average equity |
$ |
2,448 |
$ |
2,319 |
$ |
1,977 |
$ |
2,384 |
$ |
1,915 |
|||||||||
|
Less: Average goodwill and intangible assets |
153 |
156 |
165 |
155 |
167 |
||||||||||||||
|
Total tangible average equity |
$ |
2,295 |
$ |
2,163 |
$ |
1,812 |
$ |
2,229 |
$ |
1,748 |
|||||||||
|
Return on average tangible common equity |
25.92 |
% |
27.99 |
% |
26.16 |
% |
26.89 |
% |
19.07 |
% |
|||||||||
|
Adjustment to remove DOJ settlement expense |
— |
% |
4.98 |
% |
— |
% |
3.86 |
% |
— |
% |
|||||||||
|
Adjustment for former CEO SERP agreement |
(2.14) |
% |
— |
% |
— |
% |
(1.10) |
% |
— |
% |
|||||||||
|
Adjustment for merger costs |
1.89 |
% |
— |
% |
— |
% |
0.97 |
% |
— |
% |
|||||||||
|
|
25.67 |
% |
32.97 |
% |
26.16 |
% |
30.62 |
% |
19.07 |
% |
|||||||||
|
Return on average assets |
2.09 |
% |
1.98 |
% |
1.77 |
% |
2.04 |
% |
1.30 |
% |
|||||||||
|
Adjustment to remove DOJ |
— |
% |
0.36 |
% |
— |
% |
0.16 |
% |
— |
% |
|||||||||
|
Adjustment for former CEO SERP settlement |
(0.11) |
% |
— |
% |
— |
% |
(0.05) |
% |
— |
% |
|||||||||
|
Adjustment for merger costs |
0.10 |
% |
— |
% |
— |
% |
0.04 |
% |
— |
% |
|||||||||
|
|
2.08 |
% |
2.34 |
% |
1.77 |
% |
2.19 |
% |
1.30 |
% |
|||||||||
|
|
|||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||
|
(Dollars in millions) |
|||||||||||||||||||
|
Average LHFI |
$ |
13,688 |
$ |
14,915 |
$ |
15,703 |
$ |
14,839 |
$ |
13,596 |
|||||||||
|
Less: Average warehouse loans |
5,410 |
6,395 |
6,948 |
5,697 |
3,785 |
||||||||||||||
|
Adjusted average LHFI |
$ |
8,278 |
$ |
8,520 |
$ |
8,755 |
$ |
9,142 |
$ |
9,811 |
|||||||||
|
Average deposits |
$ |
19,070 |
$ |
20,043 |
$ |
21,068 |
$ |
19,561 |
$ |
17,715 |
|||||||||
|
Less: Average custodial deposits |
6,188 |
7,194 |
8,527 |
7,347 |
6,223 |
||||||||||||||
|
Adjusted average deposits |
$ |
12,882 |
$ |
12,849 |
$ |
12,541 |
$ |
12,214 |
$ |
11,492 |
|||||||||
|
HFI loan-to-deposit ratio |
71.8 |
% |
74.4 |
% |
74.5 |
% |
75.9 |
% |
76.7 |
% |
|||||||||
|
|
64.3 |
% |
66.3 |
% |
69.8 |
% |
74.8 |
% |
85.4 |
% |
|||||||||
|
|
|||||||||||||||||||
|
|
|||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||
|
(Dollar in millions) |
|||||||||||||||||||
|
Noninterest expense |
$ |
289 |
$ |
347 |
$ |
314 |
$ |
301 |
$ |
293 |
|||||||||
|
Adjustment to remove DOJ settlement expense |
— |
35 |
— |
— |
— |
||||||||||||||
|
Adjustment for former CEO SERP agreement |
(10) |
— |
— |
— |
— |
||||||||||||||
|
Adjustment for merger costs |
9 |
— |
— |
— |
— |
||||||||||||||
|
|
$ |
290 |
$ |
312 |
$ |
314 |
$ |
301 |
$ |
293 |
|||||||||
|
Income before income taxes |
$ |
190 |
$ |
194 |
$ |
205 |
$ |
295 |
$ |
148 |
|||||||||
|
Adjustment to remove DOJ settlement expense |
$ |
— |
$ |
35 |
$ |
— |
$ |
— |
$ |
— |
|||||||||
|
Adjustment for former CEO SERP agreement |
(10) |
— |
— |
— |
— |
||||||||||||||
|
Adjustment for merger costs |
9 |
— |
— |
— |
— |
||||||||||||||
|
|
$ |
189 |
$ |
229 |
$ |
205 |
$ |
295 |
$ |
148 |
|||||||||
|
Provision for income taxes |
$ |
43 |
$ |
45 |
$ |
51 |
$ |
73 |
$ |
32 |
|||||||||
|
Adjustment to remove DOJ settlement expense |
— |
(8) |
— |
— |
— |
||||||||||||||
|
Adjustment for former CEO SERP agreement |
2 |
— |
— |
— |
— |
||||||||||||||
|
Adjustment for merger costs |
(2) |
— |
— |
— |
— |
||||||||||||||
|
|
$ |
43 |
$ |
53 |
$ |
51 |
$ |
73 |
$ |
32 |
|||||||||
|
Net income |
$ |
147 |
$ |
149 |
$ |
154 |
$ |
222 |
$ |
116 |
|||||||||
|
|
$ |
146 |
$ |
176 |
$ |
154 |
$ |
222 |
$ |
116 |
|||||||||
|
Weighted average common shares outstanding |
52,763,868 |
52,675,562 |
53,912,584 |
57,032,746 |
56,790,642 |
||||||||||||||
|
Weighted average diluted common shares |
53,536,669 |
53,297,803 |
54,343,966 |
57,379,809 |
57,123,706 |
||||||||||||||
|
|
$ |
2.78 |
$ |
3.34 |
$ |
2.86 |
$ |
3.90 |
$ |
2.04 |
|||||||||
|
|
$ |
2.73 |
$ |
3.31 |
$ |
2.83 |
$ |
3.88 |
$ |
2.03 |
|||||||||
|
Average interest earning assets |
$ |
25,269 |
$ |
27,178 |
$ |
27,100 |
$ |
25,738 |
$ |
23,692 |
|||||||||
|
Net interest margin |
2.90 |
% |
2.82 |
% |
2.78 |
% |
2.78 |
% |
2.86 |
% |
|||||||||
|
Adjustment to LGG loans available for repurchase |
0.16 |
% |
0.20 |
% |
0.20 |
% |
0.16 |
% |
0.02 |
% |
|||||||||
|
|
3.06 |
% |
3.02 |
% |
2.98 |
% |
2.94 |
% |
2.88 |
% |
|||||||||
|
|
66.6 |
% |
67.7 |
% |
60.4 |
% |
47.9 |
% |
54.1 |
% |
|||||||||
|
Adjustment to remove DOJ settlement expense |
— |
% |
(6.8) |
% |
— |
% |
— |
% |
0.1 |
% |
|||||||||
|
Adjustment for former CEO SERP agreement |
1.6 |
% |
— |
% |
— |
% |
— |
% |
— |
% |
|||||||||
|
Adjustment for merger costs |
(1.4) |
% |
— |
% |
— |
% |
— |
% |
— |
% |
|||||||||
|
|
66.8 |
% |
60.9 |
% |
60.4 |
% |
47.9 |
% |
54.2 |
% |
|||||||||
|
|
|||||
|
|
|
||||
|
(Dollar in millions) |
|||||
|
Average Equity |
2,285,768,506 |
1,838,956,372 |
|||
|
Average GW/Intangible |
156,156,714 |
168,585,196 |
|||
|
Adjusted Average Equity |
2,129,611,792 |
1,670,371,176 |
|||
|
Tangible Net Income |
681,175,736 |
293,106,675 |
|||
|
Adjustments for DOJ, CEO SERP, and merger costs (net of tax effect) |
26,048,207 |
— |
|||
|
Adjusted Tangible Net Income |
655,127,529 |
293,106,675 |
|||
|
|
31 |
% |
18 |
% |
|
For more information, contact:
Kenneth Schellenberg
[email protected]
(248) 312-5741
View original content to download multimedia:https://www.prnewswire.com/news-releases/flagstar-bancorp-reports-second-quarter-2021-net-income-of-147-million-or-2-74-per-diluted-share-301342778.html
SOURCE Flagstar Bancorp, Inc.
