Key Highlights - First Quarter 2022
- Posted adjusted net income of $55
million, or $1.02 per diluted
share, excluding merger-related costs.
- Leveraged higher interest rates to grow net interest margin by
15 basis points to 3.11 percent and deliver a $29 million net return on mortgage servicing
rights.
- Grew annualized average commercial loans, excluding warehouse
loans, by 28 percent.
- Expanded portfolio of loans serviced or subserviced to 1.3
million, or $0.3 trillion in
UPB.
- Maintained strong asset quality with no delinquent commercial
loans at quarter-end.
TROY,
Mich., April 27, 2022 /PRNewswire/ -- Flagstar
Bancorp, Inc. (NYSE: FBC), the holding company for Flagstar Bank,
today reported first quarter 2022 net income of $53 million, or $0.99 per diluted share, compared to fourth
quarter 2021 net income of $85
million, or $1.60 per diluted
share, and first quarter 2021 net income of $149 million, or $2.80 per diluted share. On an adjusted basis,
Flagstar reported net income of $55
million, or 1.02 per diluted share, for the first quarter
2022.
"This quarter highlighted the resilience of our business model,"
said Alessandro DiNello, president
and chief executive officer of Flagstar Bancorp. "It's a model
designed for banking and servicing to prosper when rates rise, once
we are through a transitionary period so that we continue to
produce best in class earnings. And that's exactly what you can see
happening in Q1, which clearly was a transitionary period. While
mortgage revenue declined more than expected due to an
unprecedented increase in mortgage rates, our net interest margin
and MSR returns have already improved significantly even though the
benefits only started to come through very late in the quarter.
"On an adjusted basis, net interest margin for Q1 was 3.12
percent—the highest adjusted net interest margin we have ever
reported. Even more encouraging is that our net interest margin for
March rose to 3.19 percent. MSR returns also rose
significantly, mostly late in the quarter, as we began to ease our
hedging position.
"As intimated, gain on sale revenue was under significant
pressure throughout the quarter as the velocity of the increase in
mortgage rates rose at the fastest rate this century. While our
channel margins held up fairly well, we experienced lower EBO
revenue and competitive factors. We responded by cutting costs,
including reducing our mortgage staff by 20 percent at the end of
Q1. We remain focused on reinforcing mortgage profitability, and
believe we can use our market position and scale to succeed in a
mortgage market with fewer players.
"The cyclicality of today's market is not new to us. We've been
navigating successfully through challenging mortgage markets for
many years, and while we don't yet know how this cycle will unfold,
we're going into it in a stronger position than in past cycles.
This is thanks to our high levels of capital and liquidity, our
diversified sources of revenue, our commitment to expense
discipline, and our solid credit quality. Taken together, I'm
excited about the prospects for our performance for full year
2022."
|
Income Statement Highlights
|
|
|
|
|
|
Three Months Ended
|
|
March 31,
2022
|
December 31,
2021
|
September 30,
2021
|
June 30,
2021
|
March 31,
2021
|
|
(Dollars in millions,
except per share data)
|
|
Net interest
income
|
$
165
|
$
181
|
$
195
|
$
183
|
$
189
|
|
(Benefit) provision for
credit losses
|
(4)
|
(17)
|
(23)
|
(44)
|
(28)
|
|
Noninterest
income
|
160
|
202
|
266
|
252
|
324
|
|
Noninterest
expense
|
261
|
291
|
286
|
289
|
347
|
|
Income before income
taxes
|
68
|
109
|
198
|
190
|
194
|
|
Provision for income
taxes
|
15
|
24
|
46
|
43
|
45
|
|
Net income
|
$
53
|
$
85
|
$
152
|
$
147
|
$
149
|
|
|
|
|
|
|
|
Income per
share:
|
|
|
|
|
|
|
Basic
|
$
0.99
|
$
1.62
|
$
2.87
|
$
2.78
|
$
2.83
|
|
Diluted
|
$
0.99
|
$
1.60
|
$
2.83
|
$
2.74
|
$
2.80
|
|
Adjusted Income Statement Highlights
(Non-GAAP)(1)
|
|
|
|
|
|
Three Months Ended
|
|
March 31,
2022
|
December 31,
2021
|
September 30,
2021
|
June 30,
2021
|
March 31,
2021
|
|
(Dollars in millions,
except per share data)
|
|
Net interest
income
|
$
165
|
$
181
|
$
195
|
$
183
|
$
189
|
|
(Benefit) provision for
credit losses
|
(4)
|
(17)
|
(23)
|
(44)
|
(28)
|
|
Noninterest
income
|
160
|
202
|
266
|
252
|
324
|
|
Noninterest
expense
|
258
|
285
|
281
|
290
|
312
|
|
Income before income
taxes
|
71
|
115
|
203
|
189
|
229
|
|
Provision for income
taxes
|
16
|
25
|
47
|
43
|
53
|
|
Net income
|
$
55
|
$
90
|
$
156
|
$
146
|
$
176
|
|
|
|
|
|
|
|
Income per
share:
|
|
|
|
|
|
|
Basic
|
$
1.03
|
$
1.71
|
$
2.94
|
$
2.78
|
$
3.34
|
|
Diluted
|
$
1.02
|
$
1.69
|
$
2.90
|
$
2.74
|
$
3.31
|
|
|
|
(1)
|
See Non-GAAP
Reconciliation for further information.
|
|
Key Ratios
|
|
|
|
|
|
Three Months Ended
|
|
March 31,
2022
|
December 31,
2021
|
September 30,
2021
|
June 30,
2021
|
March 31,
2021
|
|
Net interest
margin
|
3.11 %
|
2.96 %
|
3.00 %
|
2.90 %
|
2.82 %
|
|
Adjusted net interest
margin (1)
|
3.12 %
|
2.98 %
|
3.04 %
|
3.06 %
|
3.02 %
|
|
Return on average
assets
|
0.9 %
|
1.3 %
|
2.2 %
|
2.1 %
|
2.0 %
|
|
Return on average
common equity
|
7.9 %
|
12.7 %
|
23.4 %
|
24.0 %
|
25.7 %
|
|
Efficiency
ratio
|
80.4 %
|
75.9 %
|
62.2 %
|
66.6 %
|
67.7 %
|
|
HFI loan-to-deposit
ratio
|
68.5 %
|
67.2 %
|
68.8 %
|
71.8 %
|
74.4 %
|
|
Adjusted HFI
loan-to-deposit ratio (2)
|
64.1 %
|
60.5 %
|
60.3 %
|
64.3 %
|
66.3 %
|
|
|
|
(1)
|
Excludes loans with
government guarantees available for repurchase. See Non-GAAP
Reconciliation for further information.
|
|
(2)
|
Excludes warehouse
loans and custodial deposits. See Non-GAAP Reconciliation for
further information.
|
|
Average Balance Sheet
Highlights
|
|
|
|
|
|
|
|
Three Months Ended
|
% Change
|
|
March 31,
2022
|
December 31,
2021
|
September 30,
2021
|
June 30,
2021
|
March 31,
2021
|
Seq
|
Yr/Yr
|
|
(Dollars in
millions)
|
|
|
|
Average
interest-earning assets
|
$
21,569
|
$
24,291
|
$
25,656
|
$
25,269
|
$
27,178
|
(11) %
|
(21) %
|
|
Average loans
held-for-sale (LHFS)
|
4,833
|
6,384
|
7,839
|
6,902
|
7,464
|
(24) %
|
(35) %
|
|
Average loans
held-for-investment (LHFI)
|
12,384
|
13,314
|
13,540
|
13,688
|
14,915
|
(7) %
|
(17) %
|
|
Average total
deposits
|
18,089
|
19,816
|
19,686
|
19,070
|
20,043
|
(9) %
|
(10) %
|
Net Interest Income
Net interest income in the first quarter was $165 million, a decrease of $16 million, or 9 percent, as compared to the
fourth quarter 2021. The results primarily reflect a $2.7 billion, or 11 percent, net decrease in
average earning assets primarily from mortgage loans held-for-sale
and warehouse loans due to seasonality and a smaller mortgage
origination market. These decreases were partially offset by growth
in commercial and industrial loans.
Net interest margin in the first quarter was 3.11 percent, a 15
basis points increase compared to 2.96 percent in the prior
quarter. The margin expansion was largely attributable to the
impact from the Federal Reserve's March rate increase, income
recognition resulting from the payoff of loans with government
guarantees in forbearance, and higher rates on newly originated
loans held-for-sale.
Average total deposits were $18.1
billion in the first quarter, down $1.7 billion, or 9 percent, from the fourth
quarter 2021, largely due to a decrease of $1.3 billion, or 21 percent in average custodial
deposits.
Provision for Credit Losses
The benefit from credit losses was $4
million for the first quarter, as compared to a $17 million benefit for the fourth quarter 2021,
reflecting the clean performance of our portfolio, the low number
of non-accrual loans and the resolution of an outstanding problem
commercial credit during the quarter. At March 31, 2022, there were no commercial
delinquencies.
Noninterest Income
Noninterest income decreased to $160
million in the first quarter, as compared to $202 million for the fourth quarter 2021,
primarily due to lower gain on sale and loan administration income,
partially offset by higher net return on mortgage servicing
rights.
First quarter net gain on loan sales decreased $46 million, to $45
million, as compared to $91
million in the fourth quarter 2021. Gain on sale margins
decreased 44 basis points to 58 basis points for the first quarter
2022, compared to 102 basis points for the fourth quarter 2021. The
decrease was largely the result of fewer re-securitization gains
from the EBO book and secondary marketing, which were impacted by
the speed of rate changes in the quarter and volatility. Channel
margins held up well and were driven slightly lower by competitive
factors. Fallout adjusted lock volume declined to $7.7 billion from $8.9
billion for the fourth quarter 2021, reflecting lower
refinance volumes due to increasing interest rates.
Net return on mortgage servicing rights increased $10 million, to $29
million for the first quarter 2022, compared to a
$19 million net return for the fourth
quarter 2021. During the quarter, we reduced our hedges on this
portfolio to help mitigate the impact of higher mortgage rates on
our mortgage origination revenue. The increase in interest rates
during the quarter resulted in improved valuations and lower
runoff.
Loan administration income decreased $3
million, to $33 million for
the first quarter 2022, compared to $36
million for the fourth quarter 2021, driven by a decrease in
the average number of subserviced loans in forbearance which earn a
higher rate.
Loan fees and charges decreased $2
million, to $27 million for
the first quarter, compared to $29
million for the fourth quarter 2021, primarily due to a 23
percent decrease in mortgage loans closed. This decrease was
partially offset by higher ancillary fee income from our servicing
business.
|
Mortgage Metrics
|
|
|
|
|
|
|
|
As of/Three Months Ended
|
Change (% / bps)
|
|
March 31,
2022
|
December 31,
2021
|
September 30,
2021
|
June 30,
2021
|
March 31,
2021
|
Seq
|
Yr/Yr
|
|
(Dollars in
millions)
|
|
|
|
Mortgage rate lock
commitments (fallout-adjusted) (1) (2)
|
$
7,700
|
$
8,900
|
$
11,300
|
$
12,400
|
$
12,300
|
(13)%
|
(37)%
|
|
Mortgage loans closed
(1)
|
$
8,200
|
$
10,700
|
$
12,500
|
$
12,800
|
$
13,800
|
(23)%
|
(40)%
|
|
Net margin on mortgage
rate lock commitments (fallout-adjusted) (2)
|
0.58 %
|
1.02 %
|
1.50 %
|
1.35 %
|
1.84 %
|
(44)
|
(126)
|
|
Net gain on loan
sales
|
$
45
|
$
91
|
$
169
|
$
168
|
$
227
|
(51)%
|
(80)%
|
|
Net return (loss) on
mortgage servicing rights (MSR)
|
$
29
|
$
19
|
$
9
|
$
(5)
|
$
—
|
N/M
|
N/M
|
|
Gain on loan sales +
net return on the MSR
|
$
74
|
$
110
|
$
178
|
$
163
|
$
227
|
(33)%
|
(67)%
|
|
Loans serviced (number
of accounts - 000's) (3)
|
1,256
|
1,234
|
1,203
|
1,182
|
1,148
|
2%
|
9%
|
|
Capitalized value of
MSRs
|
1.31 %
|
1.12 %
|
1.08 %
|
1.00 %
|
1.06 %
|
19
|
25
|
|
N/M
- Not meaningful
|
|
|
|
|
|
|
|
|
(1) Rounded to the 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) Includes loans serviced for Flagstar's
own loan portfolio, serviced for others, and subserviced for
others.
|
Noninterest Expense
Noninterest expense decreased to $261
million for the first quarter, compared to $291 million for the fourth quarter 2021.
Excluding $3 million of merger costs
in the first quarter 2022 and $6
million of merger expenses in the fourth quarter 2021,
noninterest expense decreased $27
million, or 9 percent. Commissions were $12 million lower due to a 23 percent decrease in
mortgage loan closings. Compensation and benefits were $10 million lower due to a decrease in incentive
compensation and reductions in the number of full time equivalent
employees, partially offset by seasonally higher payroll taxes and
benefits.
Mortgage expenses were $102 million for the first quarter,
a decrease of $19 million compared to the prior quarter. The
ratio of mortgage noninterest expense to closings—our mortgage
expense ratio— was 1.24 percent, an increase of 10 basis points
from the fourth quarter 2021. We took action to cut mortgage costs,
including staff reductions, at the end of the first quarter. The
impact from the actions taken will be realized in the second
quarter.
The efficiency ratio was 80 percent for the first quarter, as
compared to 76 percent for the fourth quarter 2021. Excluding
$3 million of merger expenses in the
first quarter 2021 and $6 million of
merger expenses in the fourth quarter 2021, the adjusted efficiency
ratio was 80 percent and 74 percent, respectively. The higher
efficiency ratio was primarily driven by lower gain on sale revenue
and net interest income compared to the fourth quarter which
impacted the full quarter while cost reduction actions occurred at
the end of the first quarter.
Income Taxes
The first quarter provision for income taxes totaled
$15 million, with an effective tax
rate of 22.0 percent, in-line with the effective tax rate for the
fourth quarter 2021.
Asset Quality
|
Credit Quality Ratios
|
|
|
|
|
|
|
|
As of/Three Months Ended
|
Change (% / bps)
|
|
March 31,
2022
|
December 31,
2021
|
September 30,
2021
|
June 30,
2021
|
March 31,
2021
|
Seq
|
Yr/Yr
|
|
(Dollars in
millions)
|
|
|
|
Allowance for credit
losses (1)
|
$
145
|
$
170
|
$
190
|
$
220
|
$
265
|
(15)%
|
(45)%
|
|
Credit reserves to
LHFI
|
1.10 %
|
1.27 %
|
1.33 %
|
1.57 %
|
1.78 %
|
(17)
|
-68
|
|
Credit reserves to LHFI
excluding warehouse
|
1.64 %
|
1.96 %
|
2.29 %
|
2.63 %
|
3.11 %
|
(32)
|
(147)
|
|
Net
charge-offs
|
$
21
|
$
3
|
$
6
|
$
1
|
$
(13)
|
600%
|
(262)%
|
|
Total nonperforming
LHFI and TDRs
|
$
107
|
$
94
|
$
96
|
$
75
|
$
60
|
14%
|
78%
|
|
Net charge-offs to LHFI
ratio (annualized)
|
0.69 %
|
0.08 %
|
0.19 %
|
0.01 %
|
(0.35) %
|
61
|
104
|
|
Ratio of nonperforming
LHFI and TDRs to LHFI
|
0.80 %
|
0.70 %
|
0.66 %
|
0.53 %
|
0.40 %
|
10
|
40
|
|
|
|
|
|
|
|
|
|
Net charge-offs/(recoveries) to LHFI ratio
(annualized) by loan type (2):
|
|
|
|
Residential first
mortgage
|
0.31 %
|
0.04 %
|
— %
|
0.16 %
|
0.31 %
|
27
|
—
|
|
Home equity and other
consumer
|
0.07 %
|
0.14 %
|
0.01 %
|
0.15 %
|
0.16 %
|
(7)
|
(9)
|
|
Commercial real
estate
|
— %
|
— %
|
0.03 %
|
— %
|
(0.01) %
|
—
|
1
|
|
Commercial and
industrial
|
4.31 %
|
0.53 %
|
1.87 %
|
0.04 %
|
(4.12) %
|
378
|
843
|
|
N/M - Not
meaningful
|
|
|
|
|
|
|
|
|
(1)
|
Includes the allowance
for loan losses and the reserve on unfunded commitments.
|
|
(2)
|
Excludes loans carried
under the fair value option.
|
Our portfolio has held up well following the economic stress
posed by the pandemic, resulting in net charge-offs of $21 million, or 69 basis points of LHFI in the
first quarter 2022, substantially all from the $20 million charge-off associated with one
commercial borrower, compared to net charge-offs of $3 million, or 8 basis points in the prior
quarter. We had a specific reserve of $18
million for this charge-off at December 31, 2022.
Nonperforming loans held-for-investment and troubled debt
restructurings (TDRs) were $107
million and our ratio of nonperforming loans
held-for-investment and TDRs to loans held-for-investment was 0.80
basis points at March 31, 2022, a 10 basis point increase
compared to December 31, 2021. At
March 31, 2022, early stage loan delinquencies totaled
$22 million, or 17 basis points of
total loans, compared to $62 million,
or 46 basis points, at December 31,
2021.
The allowance for credit losses was $145 million and
covered 1.10 percent of loans held-for-investment at March 31,
2022, a 17 basis point decrease from December 31, 2021. Excluding warehouse loans, the
allowance coverage ratio was 1.64 percent, a 32 basis point
decrease from December 31, 2021. The
decrease in the allowance for credit losses primarily reflects the
aforementioned charge-off of a commercial credit that had a
specific reserve. Overall, our portfolio quality remains solid with
low levels of nonperforming loans and low delinquency levels,
including no commercial delinquencies.
Capital
|
Capital Ratios (Bancorp)
|
|
Change (% / bps)
|
|
March 31,
2022
|
December 31,
2021
|
September 30,
2021
|
June 30,
2021
|
March 31,
2021
|
Seq
|
Yr/Yr
|
|
Tier 1 leverage (to
adj. avg. total assets)
|
11.83 %
|
10.54 %
|
9.72 %
|
9.21 %
|
8.11 %
|
129
|
372
|
|
Tier 1 common equity
(to RWA)
|
13.79 %
|
13.19 %
|
11.95 %
|
11.38 %
|
10.31 %
|
60
|
348
|
|
Tier 1 capital (to
RWA)
|
15.06 %
|
14.43 %
|
13.11 %
|
12.56 %
|
11.45 %
|
63
|
361
|
|
Total capital (to
RWA)
|
16.47 %
|
15.88 %
|
14.55 %
|
14.13 %
|
13.18 %
|
59
|
329
|
|
Tangible common equity
to asset ratio (1)
|
11.13 %
|
10.09 %
|
9.23 %
|
8.67 %
|
7.48 %
|
104
|
365
|
|
Tangible book value per
share (1)
|
$
48.61
|
$
48.33
|
$
47.21
|
$
44.38
|
$
41.77
|
1%
|
16%
|
|
(1)
|
See Non-GAAP
Reconciliation for further information.
|
We maintained a strong capital position with regulatory ratios
above current regulatory quantitative guidelines for "well
capitalized" institutions. The risk-based capital ratios all
increased more than 100 basis points compared to the prior quarter
end. Further demonstrating our capital strength, the capital ratios
are impacted by a 100 percent risk-weighting of the warehouse loan
portfolio—the largest component of the held-for-investment
portfolio. Adjusting the risk-weighting of warehouse loans to 50
percent because of historically low levels of losses from this
portfolio, coupled with the fact that the portfolio is fully
collateralized with assets that would receive a 50 percent risk
weighting, we would have had a tier 1 common equity ratio of 15.54
percent and a total risk-based capital ratio of 18.57 percent at
March 31, 2022.
Importantly, tangible book value per share grew to $48.61, up $0.28,
or 1 percent from last quarter.
About Flagstar
Flagstar Bancorp, Inc. (NYSE: FBC) is a $23.2 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 82 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 $300 billion
of loans representing almost 1.3 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
Flagstar's beliefs, goals, intentions, and expectations regarding
revenues, earnings, loan production, asset quality, capital levels,
and acquisitions, among other matters; Flagstar's estimates of
future costs and benefits of the actions each company may take;
Flagstar's assessments of probable losses on loans; Flagstar's
assessments of interest rate and other market risks; and Flagstar's
ability to achieve their respective financial and other strategic
goals. Forward‐looking statements speak only as of the date they
are made; Flagstar does not assume any duty, and does 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 depending upon various factors as described in the "Risk
Factors" section in Flagstar's Annual Report on Form 10-K for the
year ended December 31, 2021 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.
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.
|
Flagstar Bancorp, Inc.
|
|
Consolidated
Statements of Financial Condition
|
|
(Dollars in
millions)
|
|
(Unaudited)
|
|
|
March 31,
2022
|
|
December 31,
2021
|
|
March 31,
2021
|
|
Assets
|
|
|
|
|
|
|
Cash
|
$
174
|
|
$
277
|
|
$
106
|
|
Interest-earning
deposits
|
231
|
|
774
|
|
343
|
|
Total cash and cash equivalents
|
405
|
|
1,051
|
|
449
|
|
Investment
securities available-for-sale
|
2,010
|
|
1,804
|
|
1,764
|
|
Investment
securities held-to-maturity
|
190
|
|
205
|
|
319
|
|
Loans
held-for-sale
|
3,475
|
|
5,054
|
|
7,087
|
|
Loans
held-for-investment
|
13,236
|
|
13,408
|
|
14,887
|
|
Loans with
government guarantees
|
1,256
|
|
1,650
|
|
2,457
|
|
Less: allowance
for loan losses
|
(131)
|
|
(154)
|
|
(241)
|
|
Total loans held-for-investment and loans with government
guarantees, net
|
14,361
|
|
14,904
|
|
17,103
|
|
Mortgage
servicing rights
|
523
|
|
392
|
|
428
|
|
Federal Home
Loan Bank stock
|
329
|
|
377
|
|
377
|
|
Premises and
equipment, net
|
354
|
|
360
|
|
393
|
|
Goodwill and
intangible assets
|
145
|
|
147
|
|
155
|
|
Bank-owned life
insurance
|
367
|
|
365
|
|
359
|
|
Other
assets
|
1,085
|
|
824
|
|
1,015
|
|
Total assets
|
$
23,244
|
|
$
25,483
|
|
$
29,449
|
|
Liabilities and Stockholders'
Equity
|
|
|
|
|
|
|
Noninterest-bearing deposits
|
$
6,827
|
|
$
7,088
|
|
$
8,622
|
|
Interest-bearing
deposits
|
10,521
|
|
10,921
|
|
10,798
|
|
Total deposits
|
17,348
|
|
18,009
|
|
19,420
|
|
Short-term
Federal Home Loan Bank advances and other
|
200
|
|
1,880
|
|
2,745
|
|
Long-term
Federal Home Loan Bank advances
|
1,200
|
|
1,400
|
|
1,200
|
|
Other long-term
debt
|
396
|
|
396
|
|
396
|
|
Loan with
government guarantees repurchase liability
|
63
|
|
200
|
|
1,780
|
|
Other
liabilities
|
1,304
|
|
880
|
|
1,550
|
|
Total liabilities
|
20,511
|
|
22,765
|
|
27,091
|
|
Stockholders' Equity
|
|
|
|
|
|
|
Common
stock
|
1
|
|
1
|
|
1
|
|
Additional paid
in capital
|
1,357
|
|
1,355
|
|
1,350
|
|
Accumulated
other comprehensive income
|
(2)
|
|
35
|
|
54
|
|
Retained
earnings
|
1,377
|
|
1,327
|
|
953
|
|
Total stockholders' equity
|
2,733
|
|
2,718
|
|
2,358
|
|
Total liabilities and
stockholders' equity
|
$
23,244
|
|
$
25,483
|
|
$
29,449
|
|
Flagstar Bancorp, Inc.
|
|
Condensed
Consolidated Statements of Operations
|
|
(Dollars in millions,
except per share data)
|
|
(Unaudited)
|
|
|
|
|
Change compared to:
|
|
Three Months Ended
|
|
4Q21
|
|
1Q21
|
|
March 31,
2022
|
December 31,
2021
|
September 30,
2021
|
June 30,
2021
|
March 31,
2021
|
|
Amount
|
Percent
|
|
Amount
|
Percent
|
|
Interest Income
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest income
|
$
177
|
$
196
|
$
209
|
$
198
|
$
208
|
|
$ (19)
|
(10) %
|
|
$ (31)
|
(15) %
|
|
Total interest expense
|
12
|
15
|
14
|
15
|
19
|
|
(3)
|
(20) %
|
|
(7)
|
(37) %
|
|
Net interest income
|
165
|
181
|
195
|
183
|
189
|
|
(16)
|
(9) %
|
|
(24)
|
(13) %
|
|
(Benefit) provision for
credit losses
|
(4)
|
(17)
|
(23)
|
(44)
|
(28)
|
|
13
|
(76) %
|
|
24
|
N/M
|
|
Net interest income after
provision for credit losses
|
169
|
198
|
218
|
227
|
217
|
|
(29)
|
(15) %
|
|
(48)
|
(22) %
|
|
Noninterest Income
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
gain on loan sales
|
45
|
91
|
169
|
168
|
227
|
|
(46)
|
(51) %
|
|
(182)
|
(80) %
|
|
Loan fees and charges
|
27
|
29
|
33
|
37
|
42
|
|
(2)
|
(7) %
|
|
(15)
|
(36) %
|
|
Net
return (loss) on the
mortgage servicing rights
|
29
|
19
|
9
|
(5)
|
—
|
|
10
|
N/M
|
|
29
|
N/M
|
|
Loan administration income
|
33
|
36
|
31
|
28
|
27
|
|
(3)
|
(8) %
|
|
6
|
22 %
|
|
Deposit fees and charges
|
9
|
8
|
9
|
8
|
8
|
|
1
|
13 %
|
|
1
|
13 %
|
|
Other noninterest income
|
17
|
19
|
15
|
16
|
20
|
|
(2)
|
(11) %
|
|
(3)
|
(15) %
|
|
Total noninterest income
|
160
|
202
|
266
|
252
|
324
|
|
(42)
|
(21) %
|
|
(164)
|
(51) %
|
|
Noninterest Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and benefits
|
127
|
137
|
130
|
122
|
144
|
|
(10)
|
(7) %
|
|
(17)
|
(12) %
|
|
Occupancy and equipment
|
45
|
47
|
46
|
50
|
46
|
|
(2)
|
(4) %
|
|
(1)
|
(2) %
|
|
Commissions
|
26
|
38
|
44
|
51
|
62
|
|
(12)
|
(32) %
|
|
(36)
|
(58) %
|
|
Loan processing expense
|
21
|
21
|
22
|
22
|
21
|
|
—
|
— %
|
|
—
|
— %
|
|
Legal and professional expense
|
11
|
13
|
12
|
11
|
8
|
|
(2)
|
(15) %
|
|
3
|
38 %
|
|
Federal insurance premiums
|
4
|
4
|
6
|
4
|
6
|
|
—
|
— %
|
|
(2)
|
(33) %
|
|
Intangible asset amortization
|
2
|
3
|
3
|
3
|
3
|
|
(1)
|
(33) %
|
|
(1)
|
(33) %
|
|
Other noninterest expense
|
25
|
28
|
23
|
26
|
57
|
|
(3)
|
(11) %
|
|
(32)
|
(56) %
|
|
Total noninterest expense
|
261
|
291
|
286
|
289
|
347
|
|
(30)
|
(10) %
|
|
(86)
|
(25) %
|
|
Income before income taxes
|
68
|
109
|
198
|
190
|
194
|
|
(41)
|
(38) %
|
|
(126)
|
(65) %
|
|
Provision for income taxes
|
15
|
24
|
46
|
43
|
45
|
|
(9)
|
(38) %
|
|
(30)
|
(67) %
|
|
Net income
|
$
53
|
$
85
|
$
152
|
$
147
|
$
149
|
|
$ (32)
|
(38) %
|
|
$ (96)
|
(64) %
|
|
Income per share
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
0.99
|
$
1.62
|
$
2.87
|
$
2.78
|
$
2.83
|
|
$
(0.63)
|
(39) %
|
|
$
(1.84)
|
(65) %
|
|
Diluted
|
$
0.99
|
$
1.60
|
$
2.83
|
$
2.74
|
$
2.80
|
|
$
(0.61)
|
(38) %
|
|
$
(1.81)
|
(65) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends
declared
|
$
0.06
|
$
0.06
|
$
0.06
|
$
0.06
|
$
0.06
|
|
$ —
|
— %
|
|
$ —
|
— %
|
|
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
|
|
March 31,
2022
|
|
December 31,
2021
|
|
March 31,
2021
|
|
Selected Mortgage Statistics
(1):
|
|
|
|
|
|
|
Mortgage rate lock commitments (fallout-adjusted)
(2)
|
$
7,700
|
|
$
8,900
|
|
$
12,300
|
|
Mortgage loans closed
|
$
8,200
|
|
$
10,700
|
|
$
13,800
|
|
Mortgage loans sold and securitized
|
$
9,900
|
|
$
12,100
|
|
$
13,700
|
|
Selected Ratios:
|
|
|
|
|
|
|
Interest rate spread (3)
|
2.91 %
|
|
2.79 %
|
|
2.55 %
|
|
Net
interest margin
|
3.11 %
|
|
2.96 %
|
|
2.82 %
|
|
Net
margin on loans sold and securitized
|
0.45 %
|
|
0.75 %
|
|
1.65 %
|
|
Return on average assets
|
0.87 %
|
|
1.28 %
|
|
1.98 %
|
|
Adjusted return on average assets (4)
|
0.92 %
|
|
1.35 %
|
|
2.34 %
|
|
Return on average common equity
|
7.87 %
|
|
12.74 %
|
|
25.73 %
|
|
Return on average tangible common equity (5)
|
8.61 %
|
|
13.79 %
|
|
27.99 %
|
|
Adjusted return on average tangible common equity (4)
(5)
|
9.10 %
|
|
14.90 %
|
|
32.97 %
|
|
Efficiency ratio
|
80.4 %
|
|
75.9 %
|
|
67.7 %
|
|
Adjusted efficiency ratio (4)
|
79.6 %
|
|
74.4 %
|
|
60.8 %
|
|
Common equity-to-assets ratio (average for the
period)
|
11.12 %
|
|
10.08 %
|
|
7.71 %
|
|
Average Balances:
|
|
|
|
|
|
|
Average interest-earning assets
|
$
21,569
|
|
$
24,291
|
|
$
27,178
|
|
Average interest-bearing liabilities
|
$
12,959
|
|
$
14,093
|
|
$
15,011
|
|
Average stockholders' equity
|
$
2,687
|
|
$
2,692
|
|
$
2,319
|
|
|
|
|
(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.
|
|
March 31,
2022
|
|
December 31,
2021
|
|
March 31,
2021
|
|
Selected Statistics:
|
|
|
|
|
|
|
Book value per common share
|
$
51.33
|
|
$
51.09
|
|
$
44.71
|
|
Tangible book value per share (1)
|
$
48.61
|
|
$
48.33
|
|
$
41.77
|
|
Number of common shares outstanding
|
53,236,067
|
|
53,197,650
|
|
52,752,600
|
|
Number of FTE employees
|
5,341
|
|
5,395
|
|
5,418
|
|
Number of bank branches
|
158
|
|
158
|
|
158
|
|
Ratio of nonperforming assets to total assets
(2)
|
0.48 %
|
|
0.39 %
|
|
0.23 %
|
|
Common equity-to-assets ratio
|
11.75 %
|
|
10.67 %
|
|
8.01 %
|
|
MSR Key Statistics and Ratios:
|
|
|
|
|
|
|
Weighted average service fee (basis points)
|
31.2
|
|
31.5
|
|
33.2
|
|
Capitalized value of mortgage servicing rights
|
1.31 %
|
|
1.12 %
|
|
1.06 %
|
|
|
|
(1)
|
Excludes goodwill and
intangibles. See Non-GAAP Reconciliation for further
information.
|
|
(2)
|
Ratio excludes
LHFS.
|
|
Average Balances,
Yields and Rates
|
|
(Dollars in
millions)
|
|
(Unaudited)
|
|
|
Three Months Ended
|
|
March 31, 2022
|
|
December 31, 2021
|
|
March 31, 2021
|
|
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
|
$
4,833
|
$
40
|
3.31 %
|
|
$ 6,384
|
$
49
|
3.10 %
|
|
$ 7,464
|
$
53
|
2.83 %
|
|
Loans
held-for-investment
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential first mortgage
|
1,500
|
13
|
3.35 %
|
|
1,569
|
13
|
3.22 %
|
|
2,132
|
17
|
3.20 %
|
|
Home equity
|
598
|
6
|
4.05 %
|
|
635
|
6
|
3.93 %
|
|
820
|
7
|
3.50 %
|
|
Other
|
1,253
|
15
|
4.86 %
|
|
1,229
|
16
|
4.80 %
|
|
1,040
|
12
|
4.79 %
|
|
Total consumer loans
|
3,351
|
34
|
4.04 %
|
|
3,433
|
35
|
3.92 %
|
|
3,992
|
36
|
3.68 %
|
|
Commercial real estate
|
3,226
|
29
|
3.60 %
|
|
3,260
|
29
|
3.45 %
|
|
3,042
|
26
|
3.36 %
|
|
Commercial and industrial
|
1,834
|
16
|
3.52 %
|
|
1,473
|
14
|
3.69 %
|
|
1,486
|
13
|
3.53 %
|
|
Warehouse lending
|
3,973
|
32
|
3.25 %
|
|
5,148
|
47
|
3.54 %
|
|
6,395
|
64
|
4.00 %
|
|
Total commercial loans
|
9,033
|
77
|
3.43 %
|
|
9,881
|
90
|
3.53 %
|
|
10,923
|
103
|
3.76 %
|
|
Total loans
held-for-investment
|
12,384
|
111
|
3.59 %
|
|
13,314
|
125
|
3.63 %
|
|
14,915
|
139
|
3.73 %
|
|
Loans with
government guarantees
|
1,402
|
15
|
4.40 %
|
|
1,742
|
11
|
2.62 %
|
|
2,502
|
4
|
0.56 %
|
|
Investment
securities
|
2,021
|
11
|
2.19 %
|
|
2,104
|
11
|
2.09 %
|
|
2,210
|
12
|
2.21 %
|
|
Interest-earning
deposits
|
929
|
—
|
0.16 %
|
|
747
|
—
|
0.15 %
|
|
87
|
—
|
0.14 %
|
|
Total interest-earning assets
|
21,569
|
$
177
|
3.30 %
|
|
24,291
|
$
196
|
3.18 %
|
|
27,178
|
$
208
|
3.06 %
|
|
Other
assets
|
2,592
|
|
|
|
2,408
|
|
|
|
2,887
|
|
|
|
Total assets
|
$ 24,161
|
|
|
|
$
26,699
|
|
|
|
$
30,065
|
|
|
|
Interest-Bearing Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail
deposits
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand deposits
|
$
1,626
|
$
—
|
0.09 %
|
|
$ 1,692
|
$
—
|
0.05 %
|
|
$ 1,852
|
$
—
|
0.07 %
|
|
Savings deposits
|
4,253
|
2
|
0.14 %
|
|
4,211
|
2
|
0.14 %
|
|
3,945
|
1
|
0.14 %
|
|
Money market deposits
|
887
|
—
|
0.09 %
|
|
927
|
—
|
0.09 %
|
|
685
|
—
|
0.06 %
|
|
Certificates of deposit
|
929
|
1
|
0.35 %
|
|
973
|
1
|
0.44 %
|
|
1,293
|
4
|
0.96 %
|
|
Total retail deposits
|
7,695
|
3
|
0.15 %
|
|
7,803
|
3
|
0.15 %
|
|
7,775
|
5
|
0.25 %
|
|
Government
deposits
|
1,879
|
1
|
0.17 %
|
|
1,998
|
1
|
0.17 %
|
|
1,773
|
1
|
0.22 %
|
|
Wholesale
deposits and other
|
1,071
|
2
|
0.89 %
|
|
1,238
|
3
|
0.93 %
|
|
1,031
|
4
|
1.59 %
|
|
Total interest-bearing deposits
|
10,645
|
6
|
0.23 %
|
|
11,039
|
7
|
0.25 %
|
|
10,579
|
10
|
0.38 %
|
|
Short-term FHLB
advances and other
|
658
|
—
|
0.22 %
|
|
1,258
|
1
|
0.19 %
|
|
2,779
|
1
|
0.17 %
|
|
Long-term FHLB
advances
|
1,260
|
3
|
0.98 %
|
|
1,400
|
4
|
0.88 %
|
|
1,200
|
3
|
1.03 %
|
|
Other long-term
debt
|
396
|
3
|
3.23 %
|
|
396
|
3
|
3.16 %
|
|
453
|
5
|
4.11 %
|
|
Total interest-bearing liabilities
|
12,959
|
$
12
|
0.39 %
|
|
14,093
|
$
15
|
0.39 %
|
|
15,011
|
19
|
0.51 %
|
|
Noninterest-bearing deposits
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail deposits and other
|
2,474
|
|
|
|
2,468
|
|
|
|
2,270
|
|
|
|
Custodial deposits (1)
|
4,970
|
|
|
|
6,309
|
|
|
|
7,194
|
|
|
|
Total noninterest-bearing deposits
|
7,444
|
|
|
|
8,777
|
|
|
|
9,464
|
|
|
|
Other
liabilities
|
1,071
|
|
|
|
1,137
|
|
|
|
3,271
|
|
|
|
Stockholders'
equity
|
2,687
|
|
|
|
2,692
|
|
|
|
2,319
|
|
|
|
Total liabilities and stockholders' equity
|
$ 24,161
|
|
|
|
$
26,699
|
|
|
|
$
30,065
|
|
|
|
Net interest-earning assets
|
$
8,610
|
|
|
|
$
10,198
|
|
|
|
$
12,167
|
|
|
|
Net interest income
|
|
$
165
|
|
|
|
$
181
|
|
|
|
$
189
|
|
|
Interest rate
spread (2)
|
|
|
2.91 %
|
|
|
|
2.79 %
|
|
|
|
2.55 %
|
|
Net interest
margin (3)
|
|
|
3.11 %
|
|
|
|
2.96 %
|
|
|
|
2.82 %
|
|
Ratio of average
interest-earning assets to interest-bearing liabilities
|
|
|
166.4 %
|
|
|
|
172.4 %
|
|
|
|
181.1 %
|
|
Total average
deposits
|
$ 18,089
|
|
|
|
$
19,816
|
|
|
|
$
20,043
|
|
|
|
|
|
|
(1)
|
Approximately 80
percent of custodial deposits from loans subserviced for which
LIBOR based fees are 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.
|
|
Earnings Per
Share
|
|
(Dollars in millions,
except share data)
|
|
(Unaudited)
|
|
|
Three Months Ended
|
|
March 31,
2022
|
|
December 31,
2021
|
|
March 31,
2021
|
|
Net income
|
$
53
|
|
$
85
|
|
$
149
|
|
Weighted average
common shares outstanding
|
53,219,866
|
|
52,867,138
|
|
52,675,562
|
|
Stock-based
awards
|
358,135
|
|
710,694
|
|
622,241
|
|
Weighted average diluted common shares
|
53,578,001
|
|
53,577,832
|
|
53,297,803
|
|
Basic earnings
per common share
|
$
0.99
|
|
$
1.62
|
|
$
2.83
|
|
Stock-based
awards
|
—
|
|
(0.02)
|
|
(0.03)
|
|
Diluted earnings per common share
|
$
0.99
|
|
$
1.60
|
|
$
2.80
|
|
Regulatory Capital
- Bancorp
|
|
(Dollars in
millions)
|
|
(Unaudited)
|
|
|
March 31, 2022
|
|
December 31, 2021
|
|
March 31, 2021
|
|
Amount
|
Ratio
|
|
Amount
|
Ratio
|
|
Amount
|
Ratio
|
|
Tier 1 leverage (to
adjusted avg. total assets)
|
$
2,843
|
11.83 %
|
|
$
2,798
|
10.54 %
|
|
$
2,423
|
8.11 %
|
|
Total adjusted avg. total asset base
|
$
24,026
|
|
|
$
26,545
|
|
|
$
29,881
|
|
|
Tier 1 common equity
(to risk weighted assets)
|
$
2,603
|
13.79 %
|
|
$
2,558
|
13.19 %
|
|
$
2,183
|
10.31 %
|
|
Tier 1 capital (to
risk weighted assets)
|
$
2,843
|
15.06 %
|
|
$
2,798
|
14.43 %
|
|
$
2,423
|
11.45 %
|
|
Total capital (to risk
weighted assets)
|
$
3,110
|
16.47 %
|
|
$
3,080
|
15.88 %
|
|
$
2,790
|
13.18 %
|
|
Risk-weighted asset base
|
$
18,877
|
|
|
$
19,397
|
|
|
$
21,164
|
|
|
Regulatory Capital -
Bank
|
|
(Dollars in
millions)
|
|
(Unaudited)
|
|
|
March 31, 2022
|
|
December 31, 2021
|
|
March 31, 2021
|
|
Amount
|
Ratio
|
|
Amount
|
Ratio
|
|
Amount
|
Ratio
|
|
Tier 1 leverage (to
adjusted avg. total assets)
|
$
2,758
|
11.50 %
|
|
$
2,706
|
10.21 %
|
|
$
2,523
|
8.45 %
|
|
Total adjusted avg. total asset base
|
$
23,984
|
|
|
$
26,502
|
|
|
$
29,866
|
|
|
Tier 1 common equity
(to risk weighted assets)
|
$
2,758
|
14.62 %
|
|
$
2,706
|
13.96 %
|
|
$
2,523
|
11.93 %
|
|
Tier 1 capital (to
risk weighted assets)
|
$
2,758
|
14.62 %
|
|
$
2,706
|
13.96 %
|
|
$
2,523
|
11.93 %
|
|
Total capital (to risk
weighted assets)
|
$
2,875
|
15.24 %
|
|
$
2,839
|
14.65 %
|
|
$
2,740
|
12.96 %
|
|
Risk-weighted asset base
|
$
18,861
|
|
|
$
19,383
|
|
|
$
21,141
|
|
|
Loans
Serviced
|
|
(Dollars in
millions)
|
|
(Unaudited)
|
|
|
March 31, 2022
|
|
December 31, 2021
|
|
March 31, 2021
|
|
Unpaid
Principal
Balance (1)
|
Number of
accounts
|
|
Unpaid
Principal
Balance (1)
|
Number of
accounts
|
|
Unpaid
Principal
Balance (1)
|
Number of
accounts
|
|
Subserviced for others
(2)
|
$ 253,013
|
1,041,251
|
|
$ 246,858
|
1,032,923
|
|
$ 197,053
|
921,126
|
|
Serviced for others
(3)
|
40,065
|
154,404
|
|
35,074
|
137,243
|
|
40,402
|
160,511
|
|
Serviced for own loan
portfolio (4)
|
7,215
|
60,167
|
|
8,793
|
63,426
|
|
9,965
|
66,363
|
|
Total loans serviced
|
$ 300,293
|
1,255,822
|
|
$ 290,725
|
1,233,592
|
|
$ 247,420
|
1,148,000
|
|
|
|
|
(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.
|
|
Loans
Held-for-Investment
|
|
(Dollars in
millions)
|
|
(Unaudited)
|
|
|
March 31, 2022
|
|
December 31, 2021
|
|
March 31, 2021
|
|
Consumer loans
|
|
|
|
|
|
|
|
|
|
Residential first mortgage
|
$
1,499
|
11.3 %
|
|
$
1,536
|
11.5 %
|
|
$
1,998
|
13.4 %
|
|
Home equity
|
596
|
4.5 %
|
|
613
|
4.6 %
|
|
781
|
5.2 %
|
|
Other
|
1,267
|
9.6 %
|
|
1,236
|
9.2 %
|
|
1,049
|
7.0 %
|
|
Total consumer loans
|
3,362
|
25.4 %
|
|
3,385
|
25.3 %
|
|
3,828
|
25.6 %
|
|
Commercial loans
|
|
|
|
|
|
|
|
|
|
Commercial real estate
|
3,254
|
24.6 %
|
|
3,223
|
24.0 %
|
|
3,084
|
20.7 %
|
|
Commercial and industrial
|
1,979
|
15.0 %
|
|
1,826
|
13.6 %
|
|
1,424
|
9.6 %
|
|
Warehouse lending
|
4,641
|
35.1 %
|
|
4,974
|
37.1 %
|
|
6,551
|
44.1 %
|
|
Total commercial loans
|
9,874
|
74.7 %
|
|
10,023
|
74.7 %
|
|
11,059
|
74.4 %
|
|
Total loans
held-for-investment
|
$
13,236
|
100.1 %
|
|
$
13,408
|
100.0 %
|
|
$
14,887
|
100.0 %
|
|
Other Consumer Loans
Held-for-Investment
|
|
(Dollars in
millions)
|
|
(Unaudited)
|
|
|
March 31, 2022
|
|
December 31, 2021
|
|
March 31, 2021
|
|
Indirect
lending
|
$
935
|
73.8 %
|
|
$
925
|
74.8 %
|
|
$
791
|
75.4 %
|
|
Point of
sale
|
295
|
23.3 %
|
|
271
|
22.0 %
|
|
214
|
20.4 %
|
|
Other
|
37
|
2.9 %
|
|
40
|
3.2 %
|
|
44
|
4.2 %
|
|
Total other consumer loans
|
$
1,267
|
100.0 %
|
|
$
1,236
|
100.0 %
|
|
$
1,049
|
100.0 %
|
|
Allowance for Credit
Losses
|
|
(Dollars in
millions)
|
|
(Unaudited)
|
|
|
March 31, 2022
|
|
December 31, 2021
|
|
March 31, 2021
|
|
Residential first
mortgage
|
$
43
|
|
$
40
|
|
$
45
|
|
Home equity
|
16
|
|
14
|
|
20
|
|
Other
|
34
|
|
36
|
|
33
|
|
Total consumer
loans
|
93
|
|
90
|
|
98
|
|
Commercial real
estate
|
22
|
|
28
|
|
84
|
|
Commercial and
industrial
|
13
|
|
32
|
|
55
|
|
Warehouse
lending
|
3
|
|
4
|
|
4
|
|
Total commercial
loans
|
38
|
|
64
|
|
143
|
|
Allowance for loan losses
|
131
|
|
154
|
|
241
|
|
Reserve for unfunded commitments
|
14
|
|
16
|
|
24
|
|
Allowance for credit
losses
|
$
145
|
|
$
170
|
|
$
265
|
|
Allowance for Credit
Losses
|
|
(Dollars in
millions)
|
|
(Unaudited)
|
|
|
Three Months Ended March 31,
2022
|
|
Residential
First
Mortgage
|
Home
Equity
|
Other
Consumer
|
Commercial
Real Estate
|
Commercial
and
Industrial
|
Warehouse
Lending
|
Total LHFI
Portfolio (1)
|
Unfunded
Commitments
|
|
Beginning
balance
|
$
40
|
$
14
|
$
36
|
$
28
|
$
32
|
$
4
|
$
154
|
$
16
|
|
Provision
(benefit) for credit losses:
|
|
|
|
|
|
|
|
|
|
Loan volume
|
—
|
—
|
1
|
—
|
3
|
—
|
4
|
(2)
|
|
Economic forecast (2)
|
1
|
2
|
—
|
1
|
(2)
|
—
|
2
|
—
|
|
Credit (3)
|
2
|
—
|
(3)
|
(6)
|
2
|
(1)
|
(6)
|
—
|
|
Qualitative factor adjustments
|
—
|
—
|
—
|
(1)
|
(4)
|
—
|
(5)
|
—
|
|
Charge-offs
|
(1)
|
—
|
(2)
|
—
|
(20)
|
—
|
(23)
|
—
|
|
Recoveries
|
—
|
1
|
1
|
—
|
—
|
—
|
2
|
—
|
|
Provision for
net charge-offs
|
1
|
(1)
|
1
|
—
|
2
|
—
|
3
|
—
|
|
Ending allowance balance
|
$
43
|
$
16
|
$
34
|
$
22
|
$
13
|
$
3
|
$
131
|
$
14
|
|
|
|
|
(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.
|
|
Nonperforming Loans and Assets
|
|
(Dollars in
millions)
|
|
(Unaudited)
|
|
|
March 31,
2022
|
|
December 31,
2021
|
|
March 31,
2021
|
|
Nonperforming
LHFI
|
$
95
|
|
$
81
|
|
$
49
|
|
Nonperforming
TDRs
|
7
|
|
8
|
|
5
|
|
Nonperforming TDRs at
inception but performing for less than six months
|
5
|
|
5
|
|
6
|
|
Total nonperforming LHFI and TDRs (1)
|
107
|
|
94
|
|
60
|
|
Other nonperforming
assets, net
|
4
|
|
6
|
|
7
|
|
LHFS
|
24
|
|
17
|
|
9
|
|
Total nonperforming assets
|
$
135
|
|
$
117
|
|
$
76
|
|
|
|
|
|
|
|
Ratio of nonperforming
assets to total assets (2)
|
0.48 %
|
|
0.39 %
|
|
0.23 %
|
|
Ratio of nonperforming
LHFI and TDRs to LHFI
|
0.80 %
|
|
0.70 %
|
|
0.40 %
|
|
Ratio of nonperforming
assets to LHFI and repossessed assets (2)
|
0.84 %
|
|
0.74 %
|
|
0.45 %
|
|
|
|
(1)
|
Includes one commercial
loan less than 90 days past due in nonaccrual and $33 million of
first residential mortgage loans that are current in accordance
with their forbearance exit plan and not yet returned to accrual
status as of March 31, 2022.
|
|
(2)
|
Ratio excludes
nonperforming LHFS.
|
|
Asset Quality -
Loans Held-for-Investment
|
|
(Dollars in
millions)
|
|
(Unaudited)
|
|
|
30-59 Days
Past Due
|
|
60-89 Days
Past Due
|
|
Greater than 90
days
|
|
Total Past
Due
|
|
Total LHFI
|
|
March 31, 2022
|
|
|
|
|
|
|
|
|
|
|
Consumer loans
(1)
|
$
12
|
|
$
10
|
|
$
98
|
|
$
120
|
|
$
3,362
|
|
Commercial
loans
|
—
|
|
—
|
|
—
|
|
—
|
|
9,874
|
|
Total loans
|
$
12
|
|
$
10
|
|
$
98
|
|
$
120
|
|
$
13,236
|
|
December 31, 2021
|
|
|
|
|
|
|
|
|
|
|
Consumer
loans
|
$
26
|
|
$
36
|
|
$
62
|
|
$
124
|
|
$
3,385
|
|
Commercial
loans
|
—
|
|
—
|
|
32
|
|
32
|
|
10,023
|
|
Total loans
|
$
26
|
|
$
36
|
|
$
94
|
|
$
156
|
|
$
13,408
|
|
March 31, 2021
|
|
|
|
|
|
|
|
|
|
|
Consumer
loans
|
$
10
|
|
$
5
|
|
$
42
|
|
$
57
|
|
$
3,828
|
|
Commercial
loans
|
—
|
|
—
|
|
18
|
|
18
|
|
11,059
|
|
Total loans
|
$
10
|
|
$
5
|
|
$
60
|
|
$
75
|
|
$
14,887
|
|
|
|
|
(1)
|
Includes $33 million of
first residential mortgage loans that are current in accordance
with their forbearance exit plan and not yet returned to accrual
status as of March 31, 2022.
|
|
Troubled
Debt Restructurings
|
|
(Dollars in
millions)
|
|
(Unaudited)
|
|
|
TDRs
|
|
Performing
|
|
Nonperforming
|
|
Total
|
|
March 31, 2022
|
|
|
Consumer
loans
|
$
23
|
|
$
12
|
|
$
35
|
|
Commercial
loans
|
—
|
|
—
|
|
—
|
|
Total TDR loans
|
$
23
|
|
$
12
|
|
$
35
|
|
December 31, 2021
|
|
|
|
|
|
|
Consumer
loans
|
$
22
|
|
$
13
|
|
$
35
|
|
Commercial
loans
|
2
|
|
—
|
|
2
|
|
Total TDR loans
|
$
24
|
|
$
13
|
|
$
37
|
|
March 31, 2021
|
|
|
|
|
|
|
Consumer
loans
|
$
31
|
|
$
11
|
|
$
42
|
|
Commercial
loans
|
5
|
|
—
|
|
5
|
|
Total TDR loans
|
$
36
|
|
$
11
|
|
$
47
|
|
Non-GAAP Reconciliation
|
|
(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 settlement expense 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, 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.
|
|
|
Tangible book value
per share and tangible common equity to assets
ratio.
|
|
|
March 31,
2022
|
|
December 31,
2021
|
|
September 30,
2021
|
|
June 30,
2021
|
|
March 31,
2021
|
|
(Dollars in millions,
except share data)
|
|
Total stockholders'
equity
|
$
2,733
|
|
$
2,718
|
|
$
2,645
|
|
$
2,498
|
|
$
2,358
|
|
Less: Goodwill and
intangible assets
|
145
|
|
147
|
|
149
|
|
152
|
|
155
|
|
Tangible book value
|
$
2,588
|
|
$
2,571
|
|
$
2,496
|
|
$
2,346
|
|
$
2,203
|
|
|
|
|
|
|
|
|
|
|
|
Number of common shares
outstanding
|
53,236,067
|
|
53,197,650
|
|
52,862,383
|
|
52,862,264
|
|
52,752,600
|
|
Tangible book value per share
|
$
48.61
|
|
$
48.33
|
|
$
47.21
|
|
$
44.38
|
|
$
41.77
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
$
23,244
|
|
$
25,483
|
|
$
27,042
|
|
$ 27,065
|
|
$
29,449
|
|
Tangible common equity to assets
ratio
|
11.13 %
|
|
10.09 %
|
|
9.23 %
|
|
8.67 %
|
|
7.48 %
|
Return on average tangible common equity, adjusted return on
average tangible common equity and adjusted return on average
assets.
|
Three Months Ended
|
|
March 31,
2022
|
|
December 31,
2021
|
|
March 31,
2021
|
|
(Dollars in
millions)
|
|
Net income
|
$
53
|
|
$
85
|
|
$
149
|
|
Add: Intangible asset
amortization, net of tax
|
1
|
|
2
|
|
2
|
|
Tangible net income
|
$
54
|
|
$
87
|
|
$
151
|
|
|
|
|
|
|
|
Total average
equity
|
$
2,687
|
|
$
2,692
|
|
$
2,319
|
|
Less: Average goodwill
and intangible assets
|
146
|
|
148
|
|
156
|
|
Total tangible average equity
|
$
2,541
|
|
$
2,544
|
|
$
2,163
|
|
|
|
|
|
|
|
Return on average
tangible common equity
|
8.61 %
|
|
13.79 %
|
|
27.99 %
|
|
Adjustment to remove
DOJ settlement expense
|
— %
|
|
— %
|
|
4.98 %
|
|
Adjustment for merger
costs
|
0.49 %
|
|
1.11 %
|
|
— %
|
|
Adjusted return on average tangible common
equity
|
9.10 %
|
|
14.90 %
|
|
32.97 %
|
|
|
|
|
|
|
|
Return on average
assets
|
0.89 %
|
|
1.28 %
|
|
1.98 %
|
|
Adjustment to remove
DOJ settlement expense
|
— %
|
|
— %
|
|
0.36 %
|
|
Adjustment for merger
costs
|
0.03 %
|
|
0.07 %
|
|
— %
|
|
Adjusted return on average
assets
|
0.92 %
|
|
1.35 %
|
|
2.34 %
|
Adjusted HFI loan-to-deposit ratio.
|
March 31,
2022
|
|
December 31,
2021
|
|
September 30,
2021
|
|
June 30,
2021
|
|
March 31,
2021
|
|
(Dollars in
millions)
|
|
Average LHFI
|
$
12,384
|
|
$
13,314
|
|
$
13,540
|
|
$
13,688
|
|
$
14,915
|
|
Less: Average warehouse
loans
|
3,973
|
|
5,148
|
|
5,392
|
|
5,410
|
|
6,395
|
|
Adjusted average LHFI
|
$
8,411
|
|
$
8,166
|
|
$
8,148
|
|
$
8,278
|
|
$
8,520
|
|
|
|
|
|
|
|
|
|
|
|
Average
deposits
|
$
18,089
|
|
$
19,816
|
|
$
19,686
|
|
$
19,070
|
|
$
20,043
|
|
Less: Average custodial
deposits
|
4,970
|
|
6,309
|
|
6,180
|
|
6,188
|
|
7,194
|
|
Adjusted average deposits
|
$
13,119
|
|
$
13,507
|
|
$
13,506
|
|
$
12,882
|
|
$
12,849
|
|
|
|
|
|
|
|
|
|
|
|
HFI loan-to-deposit
ratio
|
68.5 %
|
|
67.2 %
|
|
68.8 %
|
|
71.8 %
|
|
74.4 %
|
|
Adjusted HFI loan-to-deposit
ratio
|
64.1 %
|
|
60.5 %
|
|
60.3 %
|
|
64.3 %
|
|
66.3 %
|
Adjusted noninterest expense, income before income taxes,
provision for income taxes, net income, basic earnings per share,
diluted earnings per share, and efficiency ratio.
|
Three Months Ended
|
|
March 31,
2022
|
|
December 31,
2021
|
|
September 30,
2021
|
|
June 30,
2021
|
|
March 31,
2021
|
|
(Dollar in
millions)
|
|
Noninterest
expense
|
$
261
|
|
$
291
|
|
$
286
|
|
$
289
|
|
$
347
|
|
Adjustment to remove
DOJ settlement expense
|
—
|
|
—
|
|
—
|
|
—
|
|
35
|
|
Adjustment for former
CEO SERP agreement
|
—
|
|
—
|
|
—
|
|
(10)
|
|
—
|
|
Adjustment for merger
costs
|
3
|
|
6
|
|
5
|
|
9
|
|
—
|
|
Adjusted noninterest expense
|
$
258
|
|
$
285
|
|
$
281
|
|
$
290
|
|
$
312
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
$
68
|
|
$
109
|
|
$
198
|
|
$
190
|
|
$
194
|
|
Adjustment to remove
DOJ settlement expense
|
—
|
|
—
|
|
—
|
|
—
|
|
35
|
|
Adjustment for former
CEO SERP agreement
|
—
|
|
—
|
|
—
|
|
(10)
|
|
—
|
|
Adjustment for merger
costs
|
3
|
|
6
|
|
5
|
|
9
|
|
—
|
|
Adjusted income before income
taxes
|
$
71
|
|
$
115
|
|
$
203
|
|
$
189
|
|
$
229
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
$
15
|
|
$
24
|
|
$
46
|
|
$
43
|
|
$
45
|
|
Adjustment to remove
DOJ settlement expense
|
—
|
|
—
|
|
—
|
|
—
|
|
(8)
|
|
Adjustment for former
CEO SERP agreement
|
—
|
|
—
|
|
—
|
|
2
|
|
—
|
|
Adjustment for merger
costs
|
(1)
|
|
(1)
|
|
(1)
|
|
(2)
|
|
—
|
|
Adjusted provision for income
taxes
|
$
16
|
|
$
25
|
|
$
47
|
|
$
43
|
|
$
53
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
53
|
|
$
85
|
|
$
152
|
|
$
147
|
|
$
149
|
|
Adjusted net income
|
$
55
|
|
$
90
|
|
$
156
|
|
$
146
|
|
$
176
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common
shares outstanding
|
53,219,866
|
|
52,867,138
|
|
52,862,288
|
|
52,763,868
|
|
52,675,562
|
|
Weighted average
diluted common shares
|
53,578,001
|
|
53,577,832
|
|
53,659,422
|
|
53,536,669
|
|
53,297,803
|
|
Adjusted basic earnings per
share
|
$
1.03
|
|
$
1.71
|
|
$
2.94
|
|
$
2.78
|
|
$
3.34
|
|
Adjusted diluted earnings per
share
|
$
1.02
|
|
$
1.69
|
|
$
2.90
|
|
$
2.74
|
|
$
3.31
|
|
|
|
|
|
|
|
|
|
|
|
Efficiency ratio
|
80.4 %
|
|
75.9 %
|
|
62.2 %
|
|
66.6 %
|
|
67.7 %
|
|
Adjustment to remove
DOJ settlement expense
|
— %
|
|
— %
|
|
— %
|
|
— %
|
|
(6.8) %
|
|
Adjustment for former
CEO SERP agreement
|
— %
|
|
— %
|
|
— %
|
|
1.6 %
|
|
— %
|
|
Adjustment for merger
costs
|
(0.8) %
|
|
(1.5) %
|
|
(1.1) %
|
|
(1.4) %
|
|
— %
|
|
Adjusted efficiency ratio
|
79.6 %
|
|
74.4 %
|
|
61.1 %
|
|
66.8 %
|
|
60.9 %
|
Adjusted net interest margin
|
Three Months Ended
|
|
March 31,
2022
|
|
December 31,
2021
|
|
September 30,
2021
|
|
June 30,
2021
|
|
March 31,
2021
|
|
Average interest
earning assets
|
$
21,569
|
|
$
24,291
|
|
$
25,656
|
|
$
25,269
|
|
$
27,178
|
|
Net interest
margin
|
3.11 %
|
|
2.96 %
|
|
3.00 %
|
|
2.90 %
|
|
2.82 %
|
|
Adjustment to LGG loans
available for repurchase
|
0.01 %
|
|
0.02 %
|
|
0.04 %
|
|
0.16 %
|
|
0.20 %
|
|
Adjusted net interest margin
|
3.12 %
|
|
2.98 %
|
|
3.04 %
|
|
3.06 %
|
|
3.02 %
|
For more information, contact:
Kenneth Schellenberg
FBCInvestorRelations@flagstar.com
(248) 312-5741
View original
content:https://www.prnewswire.com/news-releases/flagstar-bancorp-reports-first-quarter-2022-net-income-of-53-million-or-0-99-per-diluted-share-301533818.html
SOURCE Flagstar Bancorp, Inc.