TROY, Mich., Oct. 22, 2019 /PRNewswire/ --
Key Highlights - Third Quarter 2019
- Mortgage revenues increased $28 million from prior quarter, led by margin expansion of 31 basis points and a $0.9 billion increase in fallout-adjusted locks.
- Net interest income increased $8 million, driven by diversified loan growth and a stable net interest margin.
- Strong asset quality -- minimal net charge-offs, low delinquencies, and no nonperforming commercial loans.
Flagstar Bancorp, Inc. FBC, the holding company for Flagstar Bank, FSB, today reported third quarter 2019 net income of $63 million, or $1.11 per diluted share, compared to second quarter 2019 net income of $61 million, or $1.06 per diluted share. On an adjusted basis, Flagstar reported net income of $41 million, or $0.71 per diluted share, for the second quarter 2019 and $49 million, or $0.85 per diluted share, for the third quarter 2018.
Third Quarter 2019 Highlights:
"The third quarter was a landmark quarter for Flagstar," said Alessandro DiNello, president and chief executive officer of Flagstar Bancorp, Inc. "Across the board, our businesses produced solid results, with mortgage banking taking advantage of market opportunities and our community banking and servicing segments again delivering strong, consistent earnings. The quarter also marked a milestone as the consent order with the CFPB expired, officially closing the book on our legacy regulatory matters.
"Community banking once again showed excellent growth, with net interest income climbing $8 million, or 6 percent, on an increase in earning assets of $1.2 billion, or 7 percent. Helping fuel the net interest income growth was a 12 percent increase in commercial loans, led by the continued success of our warehouse business. Also contributing to the growth were solid performances from our commercial real estate and homebuilder finance segments. Importantly, we achieved this growth while holding net interest margin nearly flat, despite two rate cuts, demonstrating strong margin management and the flexibility of our balance sheet.
"Our mortgage team had a strong quarter, with gain on sale rising to $110 million, a 47 percent increase over second quarter 2019 and a 156 percent increase over third quarter 2018. As a result of our continued focus on price discipline, combined with efforts to optimize volume and margin, gain on sale margin increased 31 basis points to 120 basis points in the third quarter 2019. Fallout-adjusted locks increased to $9.2 billion. These results highlight the diligence of our mortgage team to provide value to our customers at returns that maximize revenue for the company.
"We ended the quarter servicing or subservicing nearly 994,000 loans. The significant growth in this business over the past two years is testament to the quality platform and one-stop shop we offer our clients, underpinned by our industry-leading oversight, monitoring and compliance framework. We also successfully closed the default servicing transaction and integrated the business, further strengthening our servicing offering."
"This quarter's results demonstrated the earnings potential of our unique business model. Looking forward, we are confident that our business is well positioned to continue to generate strong risk-adjusted returns and create significant value for our shareholders in a variety of environments."
Income Statement Highlights | |||||||||||||||
Three Months Ended | |||||||||||||||
September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||
(Dollars in millions) | |||||||||||||||
Net interest income | $ | 146 | $ | 138 | $ | 126 | $ | 152 | $ | 124 | |||||
Provision (benefit) for loan losses | 1 | 17 | — | (5) | (2) | ||||||||||
Noninterest income | 171 | 168 | 109 | 98 | 107 | ||||||||||
Noninterest expense | 238 | 214 | 191 | 189 | 173 | ||||||||||
Income before income taxes | 78 | 75 | 44 | 66 | 60 | ||||||||||
Provision for income taxes | 15 | 14 | 8 | 12 | 12 | ||||||||||
Net income | $ | 63 | $ | 61 | $ | 36 | $ | 54 | $ | 48 | |||||
Income per share: | |||||||||||||||
Basic | $ | 1.12 | $ | 1.08 | $ | 0.64 | $ | 0.94 | $ | 0.84 | |||||
Diluted | $ | 1.11 | $ | 1.06 | $ | 0.63 | $ | 0.93 | $ | 0.83 | |||||
Adjusted Income Statement Highlights (Non-GAAP) (1) | |||||||||||||||
Three Months Ended | |||||||||||||||
September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||
(Dollars in millions) | |||||||||||||||
Net interest income | $ | 146 | $ | 138 | $ | 126 | $ | 123 | $ | 124 | |||||
Provision (benefit) for loan losses | 1 | 17 | — | (5) | (2) | ||||||||||
Noninterest income | 171 | 143 | 109 | 98 | 107 | ||||||||||
Noninterest expense | 238 | 214 | 190 | 175 | 172 | ||||||||||
Income before income taxes | 78 | 50 | 45 | 51 | 61 | ||||||||||
Provision for income taxes | 15 | 9 | 8 | 9 | 12 | ||||||||||
Net income | $ | 63 | $ | 41 | $ | 37 | $ | 42 | $ | 49 | |||||
Income per share: | |||||||||||||||
Basic | $ | 1.12 | $ | 0.72 | $ | 0.65 | $ | 0.73 | $ | 0.86 | |||||
Diluted | $ | 1.11 | $ | 0.71 | $ | 0.64 | $ | 0.72 | $ | 0.85 | |||||
(1) See Non-GAAP Reconciliation for further information. | |||||||||||||||
Key Ratios | ||||||||||
Three Months Ended | ||||||||||
September 30, | June 30, | March 31, | December 31, | September 30, | ||||||
Net interest margin | 3.05 | % | 3.08 | % | 3.09 | % | 3.70 | % | 2.93 | % |
Adjusted net interest margin (1) | 3.05 | % | 3.08 | % | 3.09 | % | 2.99 | % | 2.93 | % |
Return on average assets | 1.2 | % | 1.2 | % | 0.8 | % | 1.2 | % | 1.0 | % |
Return on average common equity | 14.7 | % | 14.6 | % | 9.2 | % | 14.0 | % | 12.8 | % |
Efficiency ratio | 75.2 | % | 69.8 | % | 81.3 | % | 75.7 | % | 74.6 | % |
HFI loan-to-deposit ratio | 74.2 | % | 75.0 | % | 71.0 | % | 74.7 | % | 78.3 | % |
Adjusted HFI loan-to-deposit ratio (2) | 82.0 | % | 80.6 | % | 77.0 | % | 77.3 | % | 77.8 | % |
(1) | The three months ended December 31, 2018, excludes $29 million of hedging gains reclassified from AOCI to net interest income in |
(2) | Excludes warehouse loans and custodial deposits. See Non-GAAP Reconciliation for further information. |
Average Balance Sheet Highlights | |||||||||||||||||||
Three Months Ended | % Change | ||||||||||||||||||
September 30, | June 30, | March 31, | December 31, | September 30, | Seq | Yr/Yr | |||||||||||||
(Dollars in millions) | |||||||||||||||||||
Average interest-earning assets | $ | 18,997 | $ | 17,759 | $ | 16,294 | $ | 16,391 | $ | 16,786 | 7 | % | 13 | % | |||||
Average loans held-for-sale | 3,786 | 3,539 | 3,266 | 3,991 | 4,393 | 7 | % | (14) | % | ||||||||||
Average loans held-for- | 11,743 | 10,613 | 9,164 | 8,916 | 8,872 | 11 | % | 32 | % | ||||||||||
Average total deposits | 15,817 | 14,159 | 12,906 | 11,942 | 11,336 | 12 | % | 40 | % | ||||||||||
Net Interest Income
Net interest income increased $8 million, or 6 percent, to $146 million for the third quarter 2019 as compared to the second quarter 2019. The results reflect a 7 percent increase in average earning assets, fueled by 12 percent growth in commercial loans. Net interest margin remained stable, decreasing only 3 basis points despite two rate cuts in the quarter, to 3.05 percent for the third quarter 2019 as compared to the second quarter 2019.
Loans held-for-investment averaged $11.7 billion for the third quarter 2019, increasing $1.1 billion from the prior quarter. During the third quarter 2019, average warehouse loans increased $511 million, or 26 percent, benefiting from growth in the overall mortgage market. We also had solid growth in our commercial real estate portfolio as average balances increased $200 million, or 8 percent. Average consumer loans increased $396 million, or 9 percent, driven evenly by loan growth in non-auto indirect, mortgage and HELOCs.
Average total deposits were $15.8 billion in the third quarter 2019, increasing $1.7 billion, or 12 percent, from the second quarter 2019. The increase primarily reflects $1.1 billion higher custodial deposits driven by refinance activity and $328 million higher wholesale deposits.
Provision for Loan Losses
The provision for loan losses was $1 million for the third quarter 2019, as compared to $17 million for the second quarter 2019 reflecting strong asset quality, low delinquencies and no nonperforming commercial loans.
Noninterest Income
Noninterest income increased $3 million, or 2 percent, to $171 million in the third quarter 2019, as compared to $168 million for the second quarter 2019. Excluding the $25 million DOJ benefit in the second quarter, noninterest income rose $28 million, or 20 percent, primarily due to higher mortgage revenue.
Third quarter 2019 net gain on loan sales increased $35 million, or 47 percent, to $110 million, versus $75 million in the second quarter 2019. The net gain on loan sale margin expanded 31 basis points to 1.20 percent for the third quarter 2019, as compared to 0.89 percent for the second quarter 2019. Fallout-adjusted locks increased 10 percent to $9.2 billion, primarily reflecting increased refinance activity due to the continuation of lower mortgage rates.
This increased refinance activity accelerated prepayments, creating a net loss on mortgage servicing rights (including hedging) of $2 million for the third quarter 2019, compared to a $5 million net return for the second quarter 2019.
Loan fees and charges increased $5 million, or 21 percent, to $29 million for the third quarter 2019, as compared to $24 million for the second quarter 2019, driven by $621 million of higher mortgage loan closings.
Mortgage Metrics | |||||||||||||||||||
Change (% / bps) | |||||||||||||||||||
September 30, | June 30, | March 31, | December 31, | September 30, | Seq | Yr/Yr | |||||||||||||
(Dollars in millions) | |||||||||||||||||||
For the three months ended: | |||||||||||||||||||
Mortgage rate lock commitments (fallout- | $ | 9,197 | $ | 8,344 | $ | 6,602 | $ | 5,284 | $ | 8,290 | 10% | 11% | |||||||
Net margin on mortgage rate lock | 1.20 | % | 0.89 | % | 0.72 | % | 0.60 | % | 0.51 | % | 31 | 69 | |||||||
Net gain on loan sales | $ | 110 | $ | 75 | $ | 49 | $ | 34 | $ | 43 | 47% | 156% | |||||||
Net return on the mortgage servicing rights | $ | (2) | $ | 5 | $ | 6 | $ | 10 | $ | 13 | NM | NM | |||||||
Gain on loan sales + net return on the MSR | $ | 108 | $ | 80 | $ | 55 | $ | 44 | $ | 56 | 35% | 93% | |||||||
At the end of the period: | |||||||||||||||||||
Loans serviced (number of accounts - | 994 | 983 | 962 | 851 | 619 | 1% | 61% | ||||||||||||
Capitalized value of MSRs | 1.14 | % | 1.23 | % | 1.27 | % | 1.35 | % | 1.43 | % | (9) | (29) | |||||||
(1) | Fallout-adjusted mortgage rate lock commitments are adjusted by a percentage of mortgage loans in the pipeline that are not expected to close |
(2) | Based on net gain on loan sales (excludes net gain on loan sales of $2 million from loans transferred from LHFI during both the three months |
(3) | Includes loans serviced for own loan portfolio, serviced for others, and subserviced for others. |
NM - Not meaningful | |
Noninterest Expense
Noninterest expense increased to $238 million for the third quarter 2019, as compared to $214 million for the second quarter 2019, primarily reflecting higher mortgage-related expenses driven by an increase in mortgage closings.
The Company's efficiency ratio was 75 percent for the third quarter 2019, as compared to the second quarter 2019 adjusted efficiency ratio of 76 percent. The results reflect positive operating leverage as total adjusted revenue increased 13 percent while expenses rose 11 percent during the third quarter of 2019.
Income Taxes
The third quarter 2019 provision for income taxes totaled $15 million, compared to $14 million for the second quarter 2019. The effective tax rate was 18 percent for the third quarter 2019, compared to 19 percent for the second quarter 2019.
Asset Quality
Credit Quality Ratios | ||||||||||||||||||
As of/Three Months Ended | Change (% / bps) | |||||||||||||||||
September 30, | June 30, | March 31, | December 31, | September 30, | Seq | Yr/Yr | ||||||||||||
(Dollars in millions) | ||||||||||||||||||
Allowance for loan loss to LHFI | 0.9 | % | 0.9 | % | 1.3 | % | 1.4 | % | 1.5 | % | 0 | (60) | ||||||
Charge-offs, net of recoveries | $ | 1 | $ | 34 | $ | 1 | $ | 1 | $ | 1 | N/M | —% | ||||||
Total nonperforming LHFI and TDRs | $ | 26 | $ | 63 | $ | 24 | $ | 22 | $ | 25 | N/M | 4% | ||||||
Net charge-offs to LHFI ratio (annualized) | 0.02 | % | 1.29 | % | 0.05 | % | 0.04 | % | 0.05 | % | N/M | (3) | ||||||
Ratio of nonperforming LHFI and TDRs to LHFI | 0.21 | % | 0.54 | % | 0.24 | % | 0.24 | % | 0.28 | % | (33) | (7) | ||||||
N/M - Not meaningful | ||||||||||||||||||
The allowance for loan losses was $110 million and covered 0.9 percent of loans held-for-investment at September 30, 2019, consistent with reserve and coverage ratios as of June 30, 2019.
Net charge-offs in the third quarter 2019 were $1 million, or 2 basis points of LHFI, compared to $34 million, or 129 basis points in the prior quarter. The current period results reflect low net charge-offs, including a $1 million Live Well recovery. Charge-offs in the second quarter included the $30 million Live Well credit loss and $4 million in other net charge-offs primarily related to unsecured consumer credits acquired in the December branch acquisition.
Nonperforming loans were $26 million at September 30, 2019, compared to $63 million at June 30, 2019. Nonperforming loans at June 30, 2019 included the $37 million Live Well loan. The ratio of nonperforming loans to loans held-for-investment was 0.21 percent at September 30, 2019, compared to 0.54 percent at June 30, 2019. At September 30, 2019, early stage loan delinquencies totaled $12 million, or 0.10 percent, of total loans, compared to $8 million, or 0.07 percent, at June 30, 2019.
Capital
Capital Ratios (Bancorp) | Change | ||||||||||||||||||
September 30, | June 30, | March 31, | December 31, | September 30, | Seq | Yr/Yr | |||||||||||||
Tangible common equity to assets ratio (1) | 7.09 | % | 7.31 | % | 7.16 | % | 7.45 | % | 7.74 | % | (22) | (65) | |||||||
Tier 1 leverage (to adj. avg. total assets) | 7.98 | % | 7.94 | % | 8.37 | % | 8.29 | % | 8.36 | % | 4 | (38) | |||||||
Tier 1 common equity (to RWA) | 9.25 | % | 9.08 | % | 9.69 | % | 10.54 | % | 11.01 | % | 17 | (176) | |||||||
Tier 1 capital (to RWA) | 10.80 | % | 10.73 | % | 11.51 | % | 12.54 | % | 13.04 | % | 7 | (224) | |||||||
Total capital (to RWA) | 11.53 | % | 11.51 | % | 12.49 | % | 13.63 | % | 14.20 | % | 2 | (267) | |||||||
Tangible book value per share (1) | $ | 27.62 | $ | 26.16 | $ | 24.65 | $ | 23.90 | $ | 25.13 | 6% | 10% | |||||||
(1) See Non-GAAP Reconciliation for further information. | |||||||||||||||||||
The Company maintained a solid capital position with regulatory ratios well above current regulatory quantitative guidelines for "well capitalized" institutions. At September 30, 2019, the Company had a total risk-based capital ratio of 11.53 percent, as compared to 11.51 percent at June 30, 2019.
Under the terms of recently approved regulatory capital requirements, the Company's Tier 1 leverage ratio would have increased approximately 46 basis points and risk-based capital ratios would have increased by approximately 20 to 30 basis points at September 30, 2019 (pro forma basis).
Earnings Conference Call
As previously announced, the Company's third quarter 2019 earnings call will be held Tuesday, October 22, 2019 at 11 a.m. (ET).
To join the call, please dial (888) 254-3590 toll free or (786) 789-4797 and use passcode 2306380. Please call at least 10 minutes before the conference is scheduled to begin. A replay will be available for five business days by calling (888) 203-1112 toll free or (719) 457-0820 and using passcode 2306380.
The conference call will also be available as a live audiocast on the Investor Relations section of flagstar.com, where it will be archived and available for replay and download. The slide presentation accompanying the conference call will be posted on the site.
About Flagstar
Flagstar Bancorp, Inc. FBC is an $22.0 billion savings and loan holding company headquartered in Troy, Mich. Flagstar Bank, FSB, provides commercial, small business, and consumer banking services through 160 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 88 retail locations in 26 states, representing the combined retail branches of Flagstar and its Opes Advisors mortgage division. Flagstar is a leading national originator and servicer of mortgage and other consumer loans, handling payments and record keeping for $204 billion of loans representing 994,000 borrowers. For more information, please visit flagstar.com.
Use of Non-GAAP Financial Measures
In addition to results presented in accordance with GAAP, this news release includes non-GAAP financial measures, such as tangible book value per share, tangible common equity to assets ratio, return on average tangible equity, adjusted return on average tangible equity, adjusted return on average assets, adjusted HFI loan-to-deposit ratio, adjusted net interest income, adjusted noninterest income, adjusted noninterest expense, adjusted income before income taxes, adjusted provision for income taxes, adjusted net income, adjusted basic and diluted earnings per share, adjusted net interest margin, and adjusted efficiency ratio. The Company believes these non-GAAP financial measures provide additional information that is useful to investors in helping to understand the capital requirements Flagstar will face in the future and underlying performance and trends of Flagstar.
Non-GAAP financial measures have inherent limitations. Readers should be aware of these limitations and should be cautious with respect to the use of such measures. To compensate for these limitations, we use non-GAAP measures as comparative tools, together with GAAP measures, to assist in the evaluation of our operating performance or financial condition. Also, we ensure that these measures are calculated using the appropriate GAAP or regulatory components in their entirety and that they are computed in a manner intended to facilitate consistent period-to-period comparisons. Flagstar's method of calculating these non-GAAP measures may differ from methods used by other companies. These non-GAAP measures should not be considered in isolation or as a substitute for those financial measures prepared in accordance with GAAP or in-effect regulatory requirements.
Where non-GAAP financial measures are used, the most directly comparable GAAP or regulatory financial measure, as well as the reconciliation to the most directly comparable GAAP or regulatory financial measure, can be found in this news release. Additional discussion of the use of non-GAAP measures can also be found in conference call slides, the Form 8-K Current Report related to this news release and in periodic Flagstar reports filed with the U.S. Securities and Exchange Commission. These documents can all be found on the Company's website at flagstar.com.
Forward-Looking Statements
This earnings release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the current beliefs and expectations of Flagstar Bancorp, Inc.'s management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. The Company's actual results could differ materially from those described in the forward-looking statements depending upon various factors as described in periodic Flagstar reports filed with the U.S. Securities and Exchange Commission, which are available on the Company's website (flagstar.com) and on the Securities and Exchange Commission's website (sec.gov). Other than as required under United States securities laws, Flagstar Bancorp does not undertake to update the forward-looking statements to reflect the impact of circumstances or events that may arise after the date of the forward-looking statements.
Flagstar Bancorp, Inc. | |||||||||||||||
Consolidated Statements of Financial Condition | |||||||||||||||
(Dollars in millions) | |||||||||||||||
(Unaudited) | |||||||||||||||
September 30, | June 30, | December 31, | September 30, | ||||||||||||
Assets | |||||||||||||||
Cash | $ | 234 | $ | 268 | $ | 260 | $ | 150 | |||||||
Interest-earning deposits | 119 | 51 | 148 | 114 | |||||||||||
Total cash and cash equivalents | 353 | 319 | 408 | 264 | |||||||||||
Investment securities available-for-sale | 1,697 | 1,718 | 2,142 | 1,857 | |||||||||||
Investment securities held-to-maturity | 635 | 661 | 703 | 724 | |||||||||||
Loans held-for-sale | 4,196 | 3,345 | 3,869 | 4,835 | |||||||||||
Loans held-for-investment | 12,548 | 11,655 | 9,088 | 8,966 | |||||||||||
Loans with government guarantees | 607 | 507 | 392 | 305 | |||||||||||
Less: allowance for loan losses | (110) | (110) | (128) | (134) | |||||||||||
Total loans held-for-investment and loans with government guarantees, net | 13,045 | 12,052 | 9,352 | 9,137 | |||||||||||
Mortgage servicing rights | 285 | 316 | 290 | 313 | |||||||||||
Net deferred tax asset | 58 | 71 | 103 | 111 | |||||||||||
Federal Home Loan Bank stock | 303 | 303 | 303 | 303 | |||||||||||
Premises and equipment, net | 417 | 415 | 390 | 360 | |||||||||||
Goodwill and intangible assets | 174 | 178 | 190 | 70 | |||||||||||
Other assets | 860 | 828 | 781 | 723 | |||||||||||
Total assets | $ | 22,023 | $ | 20,206 | $ | 18,531 | $ | 18,697 | |||||||
Liabilities and Stockholders' Equity | |||||||||||||||
Noninterest bearing deposits | $ | 5,649 | $ | 4,784 | $ | 2,989 | $ | 3,096 | |||||||
Interest bearing deposits | 10,096 | 9,632 | 9,391 | 8,493 | |||||||||||
Total deposits | 15,745 | 14,416 | 12,380 | 11,589 | |||||||||||
Short-term Federal Home Loan Bank advances and other | 2,329 | 2,550 | 3,244 | 3,199 | |||||||||||
Long-term Federal Home Loan Bank advances | 650 | 500 | 150 | 1,280 | |||||||||||
Other long-term debt | 496 | 495 | 495 | 495 | |||||||||||
Other liabilities | 1,069 | 589 | 692 | 616 | |||||||||||
Total liabilities | 20,289 | 18,550 | 16,961 | 17,179 | |||||||||||
Stockholders' Equity | |||||||||||||||
Common stock | 1 | 1 | 1 | 1 | |||||||||||
Additional paid in capital | 1,481 | 1,477 | 1,522 | 1,519 | |||||||||||
Accumulated other comprehensive income (loss) | 5 | (8) | (47) | (42) | |||||||||||
Retained earnings | 247 | 186 | 94 | 40 | |||||||||||
Total stockholders' equity | 1,734 | 1,656 | 1,570 | 1,518 | |||||||||||
Total liabilities and stockholders' equity | $ | 22,023 | $ | 20,206 | $ | 18,531 | $ | 18,697 | |||||||
Flagstar Bancorp, Inc. Condensed Consolidated Statements of Operations (Dollars in millions, except per share data) (Unaudited) | |||||||||||||||||||||||||||
Third Quarter 2019 Compared to: | |||||||||||||||||||||||||||
Three Months Ended | Second Quarter 2019 | Third Quarter 2018 | |||||||||||||||||||||||||
September 30, | June 30, | March 31, | December 31, | September 30, | Amount | Percent | Amount | Percent | |||||||||||||||||||
Interest Income | |||||||||||||||||||||||||||
Total interest income | $ | 203 | $ | 198 | $ | 180 | $ | 181 | $ | 183 | $ | 5 | 3 | % | $ | 20 | 11 | % | |||||||||
Total interest expense | 57 | 60 | 54 | 29 | 59 | (3) | (5) | % | (2) | (3) | % | ||||||||||||||||
Net interest income | 146 | 138 | 126 | 152 | 124 | 8 | 6 | % | 22 | 18 | % | ||||||||||||||||
Provision (benefit) for loan losses | 1 | 17 | — | (5) | (2) | (16) | N/M | 3 | N/M | ||||||||||||||||||
Net interest income after provision (benefit) for loan losses | 145 | 121 | 126 | 157 | 126 | 24 | 20 | % | 19 | 15 | % | ||||||||||||||||
Noninterest Income | |||||||||||||||||||||||||||
Net gain on loan sales | 110 | 75 | 49 | 34 | 43 | 35 | 47 | % | 67 | 156 | % | ||||||||||||||||
Loan fees and charges | 29 | 24 | 17 | 20 | 23 | 5 | 21 | % | 6 | 26 | % | ||||||||||||||||
Net return on the mortgage servicing rights | (2) | 5 | 6 | 10 | 13 | (7) | (140) | % | (15) | (115) | % | ||||||||||||||||
Loan administration income | 5 | 6 | 11 | 8 | 5 | (1) | (17) | % | — | — | % | ||||||||||||||||
Deposit fees and charges | 10 | 10 | 8 | 6 | 5 | — | — | % | 5 | 100 | % | ||||||||||||||||
Other noninterest income | 19 | 48 | 18 | 20 | 18 | (29) | (60) | % | 1 | 6 | % | ||||||||||||||||
Total noninterest income | 171 | 168 | 109 | 98 | 107 | 3 | 2 | % | 64 | 60 | % | ||||||||||||||||
Noninterest Expense | |||||||||||||||||||||||||||
Compensation and benefits | 98 | 90 | 87 | 82 | 76 | 8 | 9 | % | 22 | 29 | % | ||||||||||||||||
Occupancy and equipment | 40 | 40 | 38 | 36 | 31 | — | — | % | 9 | 29 | % | ||||||||||||||||
Commissions | 38 | 25 | 13 | 16 | 21 | 13 | 52 | % | 17 | 81 | % | ||||||||||||||||
Loan processing expense | 22 | 21 | 17 | 16 | 14 | 1 | 5 | % | 8 | 57 | % | ||||||||||||||||
Legal and professional expense | 6 | 6 | 6 | 9 | 7 | — | — | % | (1) | (14) | % | ||||||||||||||||
Federal insurance premiums | 5 | 5 | 4 | 4 | 6 | — | — | % | (1) | (17) | % | ||||||||||||||||
Intangible asset amortization | 3 | 4 | 4 | 3 | 1 | (1) | (25) | % | 2 | N/M | |||||||||||||||||
Other noninterest expense | 26 | 23 | 22 | 23 | 17 | 3 | 13 | % | 9 | 53 | % | ||||||||||||||||
Total noninterest expense | 238 | 214 | 191 | 189 | 173 | 24 | 11 | % | 65 | 38 | % | ||||||||||||||||
Income before income taxes | 78 | 75 | 44 | 66 | 60 | 3 | 4 | % | 18 | 30 | % | ||||||||||||||||
Provision for income taxes | 15 | 14 | 8 | 12 | 12 | 1 | 7 | % | 3 | 25 | % | ||||||||||||||||
Net income | $ | 63 | $ | 61 | $ | 36 | $ | 54 | $ | 48 | $ | 2 | 3 | % | $ | 15 | 31 | % | |||||||||
Income per share | |||||||||||||||||||||||||||
Basic | $ | 1.12 | $ | 1.08 | $ | 0.64 | $ | 0.94 | $ | 0.84 | $ | 0.04 | 4 | % | $ | 0.28 | 33 | % | |||||||||
Diluted | $ | 1.11 | $ | 1.06 | $ | 0.63 | $ | 0.93 | $ | 0.83 | $ | 0.05 | 5 | % | $ | 0.28 | 34 | % | |||||||||
Cash dividends declared | $ | 0.04 | $ | 0.04 | $ | 0.04 | $ | — | $ | — | $ | — | — | % | $ | 0.04 | 100 | % | |||||||||
N/M - Not meaningful | |||||||||||||||||||||||||||
Flagstar Bancorp, Inc. | |||||||||||||
Condensed Consolidated Statements of Operations | |||||||||||||
(Dollars in millions, except per share data) | |||||||||||||
(Unaudited) | |||||||||||||
Nine Months Ended | Compared to: Nine Months Ended | ||||||||||||
September 30, | September 30, | Amount | Percent | ||||||||||
Interest Income | |||||||||||||
Total interest income | $ | 581 | $ | 502 | $ | 79 | 16 | % | |||||
Total interest expense | 171 | 157 | 14 | 9 | % | ||||||||
Net interest income | 410 | 345 | 65 | 19 | % | ||||||||
Provision (benefit) for loan losses | 18 | (3) | 21 | N/M | |||||||||
Net interest income after provision (benefit) for loan losses | 392 | 348 | 44 | 13 | % | ||||||||
Noninterest Income | |||||||||||||
Net gain on loan sales | 234 | 166 | 68 | 41 | % | ||||||||
Loan fees and charges | 70 | 67 | 3 | 4 | % | ||||||||
Net return on the mortgage servicing rights | 9 | 26 | (17) | (65) | % | ||||||||
Loan administration income | 22 | 15 | 7 | 47 | % | ||||||||
Deposit fees and charges | 28 | 15 | 13 | 87 | % | ||||||||
Other noninterest income | 85 | 52 | 33 | 63 | % | ||||||||
Total noninterest income | 448 | 341 | 107 | 31 | % | ||||||||
Noninterest Expense | |||||||||||||
Compensation and benefits | 275 | 236 | 39 | 17 | % | ||||||||
Occupancy and equipment | 118 | 91 | 27 | 30 | % | ||||||||
Commissions | 76 | 64 | 12 | 19 | % | ||||||||
Loan processing expense | 60 | 43 | 17 | 40 | % | ||||||||
Legal and professional expense | 18 | 19 | (1) | (5) | % | ||||||||
Federal insurance premiums | 14 | 18 | (4) | (22) | % | ||||||||
Intangible asset amortization | 11 | — | 11 | N/M | |||||||||
Other noninterest expense | 71 | 52 | 19 | 37 | % | ||||||||
Total noninterest expense | 643 | 523 | 120 | 23 | % | ||||||||
Income before income taxes | 197 | 166 | 31 | 19 | % | ||||||||
Provision for income taxes | 37 | 33 | 4 | 12 | % | ||||||||
Net income | $ | 160 | $ | 133 | $ | 27 | 20 | % | |||||
Income per share | |||||||||||||
Basic | $ | 2.83 | $ | 2.32 | $ | 0.51 | 22 | % | |||||
Diluted | $ | 2.80 | $ | 2.28 | $ | 0.52 | 23 | % | |||||
Cash dividends declared | $ | 0.12 | $ | — | $ | 0.12 | 100 | % | |||||
N/M - Not meaningful | |||||||||||||
Flagstar Bancorp, Inc. | |||||||||||||||||||
Summary of Selected Consolidated Financial and Statistical Data | |||||||||||||||||||
(Dollars in millions, except share data) | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||
September 30, | June 30, | September 30, | September 30, | September 30, | |||||||||||||||
Selected Mortgage Statistics: | |||||||||||||||||||
Mortgage rate lock commitments (fallout-adjusted) (1) | $ | 9,197 | $ | 8,344 | $ | 8,290 | $ | 24,143 | $ | 25,024 | |||||||||
Mortgage loans originated (2) | $ | 9,262 | $ | 8,641 | $ | 9,199 | $ | 23,416 | $ | 26,125 | |||||||||
Mortgage loans sold and securitized | $ | 8,186 | $ | 8,838 | $ | 8,423 | $ | 22,194 | $ | 24,930 | |||||||||
Selected Ratios: | |||||||||||||||||||
Interest rate spread (3) | 2.48 | % | 2.57 | % | 2.57 | % | 2.57 | % | 2.57 | % | |||||||||
Net interest margin | 3.05 | % | 3.08 | % | 2.93 | % | 3.07 | % | 2.85 | % | |||||||||
Net margin on loans sold and securitized | 1.34 | % | 0.84 | % | 0.51 | % | 1.05 | % | 0.66 | % | |||||||||
Return on average assets | 1.20 | % | 1.22 | % | 1.04 | % | 1.08 | % | 1.00 | % | |||||||||
Adjusted return on average assets (4) (5) | 1.20 | % | 0.81 | % | 1.05 | % | 0.95 | % | 1.00 | % | |||||||||
Return on average common equity | 14.72 | % | 14.58 | % | 12.80 | % | 12.90 | % | 12.10 | % | |||||||||
Return on average tangible common equity (6) | 17.12 | % | 17.14 | % | 13.67 | % | 15.30 | % | 12.78 | % | |||||||||
Adjusted return on average tangible common equity (4)(5)(6) | 17.12 | % | 11.69 | % | 13.67 | % | 13.54 | % | 12.78 | % | |||||||||
Efficiency ratio | 75.2 | % | 69.8 | % | 74.6 | % | 75.0 | % | 76.2 | % | |||||||||
Common equity-to-assets ratio (average for the period) | 8.12 | % | 8.35 | % | 8.13 | % | 8.34 | % | 8.23 | % | |||||||||
Average Balances: | |||||||||||||||||||
Average interest-earning assets | $ | 18,997 | $ | 17,759 | $ | 16,786 | $ | 17,693 | $ | 16,050 | |||||||||
Average interest-bearing liabilities | $ | 12,893 | $ | 12,898 | $ | 13,308 | $ | 12,767 | $ | 13,150 | |||||||||
Average stockholders' equity | $ | 1,722 | $ | 1,668 | $ | 1,514 | $ | 1,658 | $ | 1,468 | |||||||||
(1) | Fallout-adjusted mortgage rate lock commitments are adjusted by a percentage of mortgage loans in the pipeline that are not expected to close based on previous historical experience and the level of interest rates. | |
(2) | Includes residential first mortgage. | |
(3) | Interest rate spread is the difference between the annualized yield earned on average interest-earning assets for the period and the annualized rate of interest paid on average interest-bearing liabilities for the period. | |
(4) | Excludes acquisition-related expenses attributable to the Wells Fargo branch acquisition of $1 million for the three and nine months ended September 30, 2018 and the nine months ended September 30, 2019. See Non-GAAP Reconciliation for further information. | |
(5) | Excludes DOJ benefit of $25 million during the three months ended June 30, 2019 and the nine months ended September 30, 2019. See Non-GAAP Reconciliation for further information. | |
(6) | Excludes goodwill, intangible assets and the associated amortization. See Non-GAAP Reconciliation for further information. |
September 30, | June 30, | December 31, | September 30, | ||||||||||||
Selected Statistics: | |||||||||||||||
Book value per common share | $ | 30.69 | $ | 29.31 | $ | 27.19 | $ | 26.34 | |||||||
Tangible book value per share (1) | $ | 27.62 | $ | 26.16 | $ | 23.90 | $ | 25.13 | |||||||
Number of common shares outstanding | 56,510,341 | 56,483,937 | 57,749,464 | 57,625,439 | |||||||||||
Number of FTE employees | 4,171 | 4,147 | 3,938 | 3,496 | |||||||||||
Number of bank branches | 160 | 160 | 160 | 108 | |||||||||||
Ratio of nonperforming assets to total assets (2) | 0.16 | % | 0.36 | % | 0.16 | % | 0.17 | % | |||||||
Common equity-to-assets ratio | 7.88 | % | 8.19 | % | 8.47 | % | 8.12 | % | |||||||
MSR Key Statistics and Ratios: | |||||||||||||||
Weighted average service fee (basis points) | 39.9 | 39.7 | 35.8 | 34.3 | |||||||||||
Capitalized value of mortgage servicing rights | 1.14 | % | 1.23 | % | 1.35 | % | 1.43 | % | |||||||
(1) | Excludes goodwill and intangibles of $174 million, $178 million, $190 million and $70 million at September 30, 2019, June 30, 2019, December 31,2018 and September 30, 2018, respectively. See Non-GAAP Reconciliation for further information. | |
(2) | Ratio excludes LHFS. |
Average Balances, Yields and Rates | ||||||||||||||||||||||||||
(Dollars in millions) | ||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||||||||
September 30, 2019 | June 30, 2019 | September 30, 2018 | ||||||||||||||||||||||||
Average | Interest | Annualized Yield/Rate | Average | Interest | Annualized Yield/Rate | Average | Interest | Annualized Yield/Rate | ||||||||||||||||||
Interest-Earning Assets | ||||||||||||||||||||||||||
Loans held-for-sale | $ | 3,786 | $ | 40 | 4.22 | % | $ | 3,539 | $ | 40 | 4.55 | % | $ | 4,393 | $ | 52 | 4.69 | % | ||||||||
Loans held-for-investment | ||||||||||||||||||||||||||
Residential first mortgage | 3,282 | 29 | 3.58 | % | 3,146 | 28 | 3.61 | % | 3,027 | 27 | 3.63 | % | ||||||||||||||
Home equity | 934 | 13 | 5.37 | % | 814 | 11 | 5.54 | % | 695 | 9 | 5.12 | % | ||||||||||||||
Other | 658 | 10 | 5.99 | % | 518 | 9 | 6.78 | % | 128 | 2 | 5.54 | % | ||||||||||||||
Total Consumer loans | 4,874 | 52 | 4.24 | % | 4,478 | 48 | 4.33 | % | 3,850 | 38 | 3.96 | % | ||||||||||||||
Commercial Real Estate | 2,594 | 35 | 5.39 | % | 2,394 | 35 | 5.65 | % | 2,106 | 29 | 5.37 | % | ||||||||||||||
Commercial and Industrial | 1,767 | 22 | 4.97 | % | 1,744 | 23 | 5.26 | % | 1,330 | 18 | 5.28 | % | ||||||||||||||
Warehouse Lending | 2,508 | 32 | 5.00 | % | 1,997 | 27 | 5.21 | % | 1,586 | 21 | 5.10 | % | ||||||||||||||
Total Commercial loans | 6,869 | 89 | 5.14 | % | 6,135 | 85 | 5.40 | % | 5,022 | 68 | 5.26 | % | ||||||||||||||
Total loans held-for-investment | 11,743 | 141 | 4.77 | % | 10,613 | 133 | 4.95 | % | 8,872 | 106 | 4.70 | % | ||||||||||||||
Loans with government guarantees | 574 | 4 | 2.78 | % | 502 | 4 | 2.94 | % | 292 | 3 | 4.20 | % | ||||||||||||||
Investment securities | 2,713 | 17 | 2.63 | % | 2,907 | 20 | 2.75 | % | 3,100 | 21 | 2.81 | % | ||||||||||||||
Interest-earning deposits | 181 | 1 | 2.22 | % | 198 | 1 | 2.23 | % | 129 | 1 | 2.38 | % | ||||||||||||||
Total interest-earning assets | 18,997 | $ | 203 | 4.27 | % | 17,759 | $ | 198 | 4.42 | % | 16,786 | $ | 183 | 4.32 | % | |||||||||||
Other assets | 2,200 | 2,207 | 1,825 | |||||||||||||||||||||||
Total assets | $ | 21,197 | $ | 19,966 | $ | 18,611 | ||||||||||||||||||||
Interest-Bearing Liabilities | ||||||||||||||||||||||||||
Retail deposits | ||||||||||||||||||||||||||
Demand deposits | $ | 1,388 | $ | 3 | 0.88 | % | $ | 1,323 | $ | 3 | 0.84 | % | $ | 727 | $ | 3 | 1.62 | % | ||||||||
Savings deposits | 3,262 | 10 | 1.20 | % | 3,191 | 9 | 1.16 | % | 3,229 | 7 | 0.90 | % | ||||||||||||||
Money market deposits | 722 | 1 | 0.34 | % | 745 | 1 | 0.32 | % | 252 | — | 0.62 | % | ||||||||||||||
Certificates of deposit | 2,583 | 15 | 2.40 | % | 2,611 | 15 | 2.34 | % | 2,150 | 10 | 1.78 | % | ||||||||||||||
Total retail deposits | 7,955 | 29 | 1.45 | % | 7,870 | 28 | 1.42 | % | 6,358 | 20 | 1.27 | % | ||||||||||||||
Government deposits | 1,253 | 4 | 1.45 | % | 1,128 | 5 | 1.51 | % | 1,174 | 4 | 1.28 | % | ||||||||||||||
Wholesale deposits and other | 744 | 5 | 2.42 | % | 417 | 2 | 2.35 | % | 537 | 3 | 2.03 | % | ||||||||||||||
Total interest-bearing deposits | 9,952 | 38 | 1.52 | % | 9,415 | 35 | 1.47 | % | 8,069 | 27 | 1.32 | % | ||||||||||||||
Short-term FHLB advances and other | 1,910 | 10 | 2.24 | % | 2,633 | 17 | 2.53 | % | 3,465 | 18 | 2.10 | % | ||||||||||||||
Long-term FHLB advances | 536 | 2 | 1.72 | % | 354 | 1 | 1.72 | % | 1,280 | 7 | 2.11 | % | ||||||||||||||
Other long-term debt | 495 | 7 | 5.60 | % | 496 | 7 | 5.77 | % | 494 | 7 | 5.62 | % | ||||||||||||||
Total interest-bearing liabilities | 12,893 | 57 | 1.79 | % | 12,898 | 60 | 1.85 | % | 13,308 | 59 | 1.75 | % | ||||||||||||||
Noninterest-bearing deposits | ||||||||||||||||||||||||||
Retail deposits and other | 1,315 | 1,275 | 1,298 | |||||||||||||||||||||||
Custodial deposits (1) | 4,550 | 3,469 | 1,969 | |||||||||||||||||||||||
Total Noninterest-bearing deposits | 5,865 | 4,744 | 3,267 | |||||||||||||||||||||||
Other liabilities | 717 | 656 | 522 | |||||||||||||||||||||||
Stockholders' equity | 1,722 | 1,668 | 1,514 | |||||||||||||||||||||||
Total liabilities and stockholders' equity | $ | 21,197 | $ | 19,966 | $ | 18,611 | ||||||||||||||||||||
Net interest-earning assets | $ | 6,104 | $ | 4,861 | $ | 3,478 | ||||||||||||||||||||
Net interest income | $ | 146 | $ | 138 | $ | 124 | ||||||||||||||||||||
Interest rate spread (2) | 2.48 | % | 2.57 | % | 2.57 | % | ||||||||||||||||||||
Net interest margin (3) | 3.05 | % | 3.08 | % | 2.93 | % | ||||||||||||||||||||
Ratio of average interest-earning assets to interest-bearing liabilities | 147.3 | % | 137.7 | % | 126.1 | % | ||||||||||||||||||||
Total average deposits | $ | 15,817 | $ | 14,159 | $ | 11,336 | ||||||||||||||||||||
(1) | Approximately 80 percent includes custodial deposits from loans subserviced which pay interest that 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. |
Average Balances, Yields and Rates | |||||||||||||||||
(Dollars in millions) | |||||||||||||||||
(Unaudited) | |||||||||||||||||
Nine Months Ended | |||||||||||||||||
September 30, 2019 | September 30, 2018 | ||||||||||||||||
Average | Interest | Annualized Yield/Rate | Average | Interest | Annualized Yield/Rate | ||||||||||||
Interest-Earning Assets | |||||||||||||||||
Loans held-for-sale | $ | 3,532 | $ | 119 | 4.48 | % | $ | 4,265 | $ | 142 | 4.44 | % | |||||
Loans held-for-investment | |||||||||||||||||
Residential first mortgage | 3,158 | 85 | 3.61 | % | 2,893 | 76 | 3.52 | % | |||||||||
Home equity | 832 | 34 | 5.50 | % | 681 | 26 | 5.13 | % | |||||||||
Other | 512 | 25 | 6.51 | % | 71 | 3 | 5.37 | % | |||||||||
Total Consumer loans | 4,502 | 144 | 4.29 | % | 3,645 | 105 | 3.86 | % | |||||||||
Commercial Real Estate | 2,414 | 102 | 5.56 | % | 2,026 | 79 | 5.12 | % | |||||||||
Commercial and Industrial | 1,702 | 67 | 5.20 | % | 1,269 | 51 | 5.26 | % | |||||||||
Warehouse Lending | 1,898 | 74 | 5.17 | % | 1,312 | 51 | 5.08 | % | |||||||||
Total Commercial loans | 6,014 | 243 | 5.34 | % | 4,607 | 181 | 5.15 | % | |||||||||
Total loans held-for-investment | 10,516 | 387 | 4.89 | % | 8,252 | 286 | 4.58 | % | |||||||||
Loans with government guarantees | 511 | 11 | 2.88 | % | 288 | 8 | 3.86 | % | |||||||||
Investment securities | 2,957 | 61 | 2.77 | % | 3,127 | 64 | 2.74 | % | |||||||||
Interest-earning deposits | 177 | 3 | 2.38 | % | 118 | 2 | 1.95 | % | |||||||||
Total interest-earning assets | 17,693 | $ | 581 | 4.37 | % | 16,050 | $ | 502 | 4.15 | % | |||||||
Other assets | 2,184 | 1,784 | |||||||||||||||
Total assets | $ | 19,877 | $ | 17,834 | |||||||||||||
Interest-Bearing Liabilities | |||||||||||||||||
Retail deposits | |||||||||||||||||
Demand deposits | $ | 1,311 | $ | 8 | 0.80 | % | $ | 660 | $ | 4 | 0.89 | % | |||||
Savings deposits | 3,181 | 26 | 1.10 | % | 3,376 | 21 | 0.85 | % | |||||||||
Money market deposits | 748 | 2 | 0.31 | % | 235 | 1 | 0.54 | % | |||||||||
Certificates of deposit | 2,561 | 44 | 2.29 | % | 1,927 | 24 | 1.64 | % | |||||||||
Total retail deposits | 7,801 | 80 | 1.37 | % | 6,198 | 50 | 1.09 | % | |||||||||
Government deposits | |||||||||||||||||
Government deposits | 1,184 | 13 | 1.49 | % | 1,137 | 10 | 1.14 | % | |||||||||
Wholesale deposits and other | 518 | 9 | 2.35 | % | 325 | 5 | 1.99 | % | |||||||||
Total interest-bearing deposits | 9,503 | 102 | 1.44 | % | 7,660 | 65 | 1.13 | % | |||||||||
Short-term FHLB advances and other | 2,420 | 44 | 2.45 | % | 3,713 | 50 | 1.81 | % | |||||||||
Long-term FHLB advances | 349 | 4 | 1.71 | % | 1,283 | 21 | 2.15 | % | |||||||||
Other long-term debt | 495 | 21 | 5.76 | % | 494 | 21 | 5.53 | % | |||||||||
Total interest-bearing liabilities | 12,767 | 171 | 1.80 | % | 13,150 | 157 | 1.58 | % | |||||||||
Noninterest-bearing deposits | |||||||||||||||||
Retail deposits and other | 1,278 | 1,043 | |||||||||||||||
Custodial deposits (1) | 3,524 | 1,678 | |||||||||||||||
Total Noninterest-bearing deposits | 4,802 | 2,721 | |||||||||||||||
Other liabilities | 650 | 495 | |||||||||||||||
Stockholders' equity | 1,658 | 1,468 | |||||||||||||||
Total liabilities and stockholders' equity | $ | 19,877 | $ | 17,834 | |||||||||||||
Net interest-earning assets | $ | 4,926 | $ | 2,900 | |||||||||||||
Net interest income | $ | 410 | $ | 345 | |||||||||||||
Interest rate spread (2) | 2.57 | % | 2.57 | % | |||||||||||||
Net interest margin (3) | 3.07 | % | 2.85 | % | |||||||||||||
Ratio of average interest-earning assets to interest-bearing liabilities | 138.6 | % | 122.1 | % | |||||||||||||
Total average deposits | $ | 14,305 | $ | 10,381 | |||||||||||||
(1) | Approximately 80 percent includes custodial deposits from loans subserviced which pay interest that 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. |
Earnings Per Share | |||||||||||||||||||
(Dollars in millions, except share data) | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||
September 30, | June 30, | September 30, | September 30, | September 30, | |||||||||||||||
Net income | $ | 63 | $ | 61 | $ | 48 | $ | 160 | $ | 133 | |||||||||
Weighted average shares | |||||||||||||||||||
Weighted average common shares outstanding | 56,484,499 | 56,446,077 | 57,600,360 | 56,607,944 | 57,483,802 | ||||||||||||||
Effect of dilutive securities | |||||||||||||||||||
Stock-based awards | 626,297 | 615,745 | 732,238 | 644,596 | 818,118 | ||||||||||||||
Weighted average diluted common shares | 57,110,796 | 57,061,822 | 58,332,598 | 57,252,540 | 58,301,920 | ||||||||||||||
Earnings per common share | |||||||||||||||||||
Basic earnings per common share | $ | 1.12 | $ | 1.08 | $ | 0.84 | $ | 2.83 | $ | 2.32 | |||||||||
Effect of dilutive securities | |||||||||||||||||||
Stock-based awards | (0.01) | (0.02) | (0.01) | (0.03) | (0.04) | ||||||||||||||
Diluted earnings per common share | $ | 1.11 | $ | 1.06 | $ | 0.83 | $ | 2.80 | $ | 2.28 | |||||||||
Regulatory Capital - Bancorp | |||||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||
September 30, 2019 | June 30, 2019 | December 31, 2018 | September 30, 2018 | ||||||||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||||||
Tier 1 leverage (to adjusted avg. total assets) | $ | 1,668 | 7.98 | % | $ | 1,561 | 7.86 | % | $ | 1,505 | 8.29 | % | $ | 1,540 | 8.36 | % | |||||||
Total adjusted avg. total asset base | $ | 20,901 | $ | 19,663 | $ | 18,158 | $ | 18,426 | |||||||||||||||
Tier 1 common equity (to risk weighted assets) | $ | 1,428 | 9.25 | % | $ | 1,321 | 9.08 | % | $ | 1,265 | 10.54 | % | $ | 1,300 | 11.01 | % | |||||||
Tier 1 capital (to risk weighted assets) | $ | 1,668 | 10.80 | % | $ | 1,561 | 10.73 | % | $ | 1,505 | 12.54 | % | $ | 1,540 | 13.04 | % | |||||||
Total capital (to risk weighted assets) | $ | 1,781 | 11.53 | % | $ | 1,674 | 11.51 | % | $ | 1,637 | 13.63 | % | $ | 1,677 | 14.20 | % | |||||||
Risk-weighted asset base | $ | 15,442 | $ | 14,525 | $ | 12,006 | $ | 11,811 | |||||||||||||||
Regulatory Capital - Bank | |||||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||
September 30, 2019 | June 30, 2019 | December 31, 2018 | September 30, 2018 | ||||||||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||||||
Tier 1 leverage (to adjusted avg. total assets) | $ | 1,747 | 8.35 | % | $ | 1,633 | 8.32 | % | $ | 1,574 | 8.67 | % | $ | 1,617 | 8.77 | % | |||||||
Total adjusted avg. total asset base | $ | 20,914 | $ | 19,614 | $ | 18,151 | $ | 18,433 | |||||||||||||||
Tier 1 common equity (to risk weighted assets) | $ | 1,747 | 11.30 | % | $ | 1,633 | 11.23 | % | $ | 1,574 | 13.12 | % | $ | 1,617 | 13.68 | % | |||||||
Tier 1 capital (to risk weighted assets) | $ | 1,747 | 11.31 | % | $ | 1,633 | 11.23 | % | $ | 1,574 | 13.12 | % | $ | 1,617 | 13.68 | % | |||||||
Total capital (to risk weighted assets) | $ | 1,860 | 12.04 | % | $ | 1,745 | 12.00 | % | $ | 1,705 | 14.21 | % | $ | 1,753 | 14.84 | % | |||||||
Risk-weighted asset base | $ | 15,452 | $ | 14,508 | $ | 11,997 | $ | 11,818 | |||||||||||||||
Loans Serviced | |||||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||
September 30, 2019 | June 30, 2019 | December 31, 2018 | September 30, 2018 | ||||||||||||||||||||
Unpaid | Number of | Unpaid | Number of | Unpaid | Number of | Unpaid | Number of | ||||||||||||||||
Subserviced for others (2) | $ | 171,145 | 826,472 | $ | 170,139 | 816,743 | $ | 146,040 | 705,149 | $ | 106,297 | 494,950 | |||||||||||
Serviced for others | 25,039 | 106,992 | 25,774 | 106,334 | 21,592 | 88,434 | 21,835 | 88,410 | |||||||||||||||
Serviced for own loan portfolio (3) | 8,058 | 60,088 | 7,264 | 59,873 | 7,438 | 57,401 | 8,033 | 35,185 | |||||||||||||||
Total loans serviced | $ | 204,242 | 993,552 | $ | 203,177 | 982,950 | $ | 175,070 | 850,984 | $ | 136,165 | 618,545 | |||||||||||
(1) | UPB, net of write downs, does not include premiums or discounts. | |
(2) | Includes temporary short-term subservicing performed as a result of sales of servicing-released mortgage servicing rights. Includes repossessed assets. | |
(3) | Includes loans held-for-investment (residential first mortgage, home equity and other consumer), loans-held-for-sale (residential first mortgage), loans with government guarantees (residential first mortgage), and repossessed assets. |
Loans Held-for-Investment | |||||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||
September 30, 2019 | June 30, 2019 | December 31, 2018 | September 30, 2018 | ||||||||||||||||||||
Consumer loans | |||||||||||||||||||||||
Residential first mortgage | $ | 3,258 | 26.0 | % | $ | 3,241 | 27.8 | % | $ | 2,999 | 33.0 | % | $ | 3,085 | 34.4 | % | |||||||
Home equity | 985 | 7.8 | % | 922 | 7.9 | % | 731 | 8.0 | % | 704 | 7.9 | % | |||||||||||
Other | 693 | 5.5 | % | 576 | 4.9 | % | 314 | 3.5 | % | 150 | 1.7 | % | |||||||||||
Total consumer loans | 4,936 | 39.3 | % | 4,739 | 40.7 | % | 4,044 | 44.5 | % | 3,939 | 43.9 | % | |||||||||||
Commercial loans | |||||||||||||||||||||||
Commercial real estate | 2,697 | 21.5 | % | 2,463 | 21.1 | % | 2,152 | 23.7 | % | 2,160 | 24.1 | % | |||||||||||
Commercial and industrial | 1,700 | 13.6 | % | 1,821 | 15.6 | % | 1,433 | 15.8 | % | 1,317 | 14.7 | % | |||||||||||
Warehouse lending | 3,215 | 25.6 | % | 2,632 | 22.6 | % | 1,459 | 16.0 | % | 1,550 | 17.3 | % | |||||||||||
Total commercial loans | 7,612 | 60.7 | % | 6,916 | 59.3 | % | 5,044 | 55.5 | % | 5,027 | 56.1 | % | |||||||||||
Total loans held-for-investment | $ | 12,548 | 100.0 | % | $ | 11,655 | 100.0 | % | $ | 9,088 | 100.0 | % | $ | 8,966 | 100.0 | % | |||||||
Other Consumer Loans Held-for-Investment | |||||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||
September 30, 2019 | June 30, 2019 | December 31, 2018 | September 30, 2018 | ||||||||||||||||||||
UPB | % of | UPB | % of | UPB | % of | UPB | % of | ||||||||||||||||
Indirect Lending | $ | 519 | 74.9 | % | $ | 408 | 70.8 | % | $ | 153 | 48.7 | % | $ | 121 | 81.2 | % | |||||||
Point of Sale | 58 | 8.4 | % | 51 | 8.9 | % | 28 | 8.9 | % | 1 | 0.7 | % | |||||||||||
Other | 116 | 16.7 | % | 117 | 20.3 | % | 133 | 42.4 | % | 27 | 18.1 | % | |||||||||||
Total other consumer loans | $ | 693 | 100.0 | % | $ | 576 | 100.0 | % | $ | 314 | 100.0 | % | $ | 149 | 100.0 | % | |||||||
Allowance for Loan Losses | |||||||||||
(Dollars in millions) | |||||||||||
(Unaudited) | |||||||||||
As of/For the Three Months Ended | |||||||||||
September 30, | June 30, | September 30, | |||||||||
Allowance for loan losses | |||||||||||
Residential first mortgage | $ | 28 | $ | 26 | $ | 40 | |||||
Home equity | 15 | 16 | 20 | ||||||||
Other | 6 | 5 | 2 | ||||||||
Total consumer loans | 49 | 47 | 62 | ||||||||
Commercial real estate | 34 | 35 | 46 | ||||||||
Commercial and industrial | 22 | 23 | 20 | ||||||||
Warehouse lending | 5 | 5 | 6 | ||||||||
Total commercial loans | 61 | 63 | 72 | ||||||||
Total allowance for loan losses | $ | 110 | $ | 110 | $ | 134 | |||||
Allowance for Loan Losses | |||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||
September 30, | June 30, | September 30, | September 30, | September 30, | |||||||||||||||
Beginning balance | $ | 110 | $ | 127 | $ | 137 | $ | 129 | $ | 140 | |||||||||
Provision (benefit) for loan losses | 1 | 17 | (2) | 17 | (3) | ||||||||||||||
Charge-offs | |||||||||||||||||||
Total consumer loans | (3) | (4) | (2) | (9) | (6) | ||||||||||||||
Total commercial loans | — | (31) | — | (31) | — | ||||||||||||||
Total charge-offs | (3) | (35) | (2) | (40) | (6) | ||||||||||||||
Recoveries | |||||||||||||||||||
Total consumer loans | 1 | 1 | 1 | 3 | 3 | ||||||||||||||
Total commercial loans | 1 | — | — | 1 | — | ||||||||||||||
Total recoveries | 2 | 1 | 1 | 4 | 3 | ||||||||||||||
Charge-offs, net of recoveries | (1) | (34) | (1) | (36) | (3) | ||||||||||||||
Ending balance | $ | 110 | $ | 110 | $ | 134 | $ | 110 | $ | 134 | |||||||||
Net charge-offs/(recoveries) to LHFI ratio (annualized) by loan type (1): | |||||||||||||||||||
Residential first mortgage | 0.07 | % | 0.11 | % | 0.10 | % | 0.09 | % | 0.09 | % | |||||||||
Home equity and other consumer | 0.27 | % | 0.71 | % | 0.21 | % | 1.39 | % | 0.58 | % | |||||||||
Commercial real estate | — | % | — | % | — | % | — | % | (0.01) | % | |||||||||
Commercial and industrial | (0.22) | % | 7.11 | % | — | % | 2.66 | % | (0.01) | % | |||||||||
(1) Excludes loans carried under the fair value option. | |||||||||||||||||||
Nonperforming Loans and Assets | |||||||||||||||
(Dollars in millions) | |||||||||||||||
(Unaudited) | |||||||||||||||
September 30, | June 30, | December 31, | September 30, | ||||||||||||
Nonperforming LHFI | $ | 16 | $ | 52 | $ | 12 | $ | 12 | |||||||
Nonperforming TDRs | 3 | 4 | 3 | 4 | |||||||||||
Nonperforming TDRs at inception but performing for less than six months | 7 | 7 | 7 | 9 | |||||||||||
Total nonperforming LHFI and TDRs (1) | 26 | 63 | 22 | 25 | |||||||||||
Real estate and other nonperforming assets, net | 9 | 9 | 7 | 7 | |||||||||||
LHFS | 17 | 15 | 10 | 10 | |||||||||||
Total nonperforming assets | $ | 52 | $ | 87 | $ | 39 | $ | 42 | |||||||
Ratio of nonperforming assets to total assets (2) | 0.16 | % | 0.36 | % | 0.16 | % | 0.17 | % | |||||||
Ratio of nonperforming LHFI and TDRs to LHFI | 0.21 | % | 0.54 | % | 0.24 | % | 0.28 | % | |||||||
Ratio of nonperforming assets to LHFI and repossessed assets (2) | 0.29 | % | 0.62 | % | 0.32 | % | 0.35 | % | |||||||
(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. |
Asset Quality - Loans Held-for-Investment | |||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
30-59 Days | 60-89 Days | Greater than | Total | Total Loans | |||||||||||||||
September 30, 2019 | |||||||||||||||||||
Consumer loans | $ | 9 | $ | 3 | $ | 26 | $ | 38 | $ | 4,936 | |||||||||
Commercial loans | — | — | — | — | 7,612 | ||||||||||||||
Total loans | $ | 9 | $ | 3 | $ | 26 | $ | 38 | $ | 12,548 | |||||||||
June 30, 2019 | |||||||||||||||||||
Consumer loans | $ | 5 | $ | 2 | $ | 26 | $ | 33 | $ | 4,739 | |||||||||
Commercial loans | 1 | — | 37 | 38 | 6,916 | ||||||||||||||
Total loans | $ | 6 | $ | 2 | $ | 63 | $ | 71 | $ | 11,655 | |||||||||
December 31, 2018 | |||||||||||||||||||
Consumer loans | $ | 5 | $ | 2 | $ | 22 | $ | 29 | $ | 4,044 | |||||||||
Commercial loans | — | — | — | — | 5,044 | ||||||||||||||
Total loans | $ | 5 | $ | 2 | $ | 22 | $ | 29 | $ | 9,088 | |||||||||
September 30, 2018 | |||||||||||||||||||
Consumer loans | 2 | 1 | 25 | $ | 28 | $ | 3,939 | ||||||||||||
Commercial loans | — | — | — | — | 5,027 | ||||||||||||||
Total loans | $ | 2 | $ | 1 | $ | 25 | $ | 28 | $ | 8,966 | |||||||||
(1) | Includes performing nonaccrual loans that are less than 90 days delinquent and for which interest cannot be accrued. |
Troubled Debt Restructurings | |||||||||||
(Dollars in millions) | |||||||||||
(Unaudited) | |||||||||||
TDRs | |||||||||||
Performing | Nonperforming | Total | |||||||||
September 30, 2019 | |||||||||||
Consumer loans | $ | 39 | $ | 10 | $ | 49 | |||||
Total TDR loans | $ | 39 | $ | 10 | $ | 49 | |||||
June 30, 2019 | |||||||||||
Consumer loans | $ | 41 | $ | 11 | $ | 52 | |||||
Total TDR loans | $ | 41 | $ | 11 | $ | 52 | |||||
December 31, 2018 | |||||||||||
Consumer loans | $ | 44 | $ | 10 | $ | 54 | |||||
Total TDR loans | $ | 44 | $ | 10 | $ | 54 | |||||
September 30, 2018 | |||||||||||
Consumer loans | $ | 43 | $ | 13 | $ | 56 | |||||
Total TDR loans | $ | 43 | $ | 13 | $ | 56 | |||||
Non-GAAP Reconciliation | |||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||
(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 acquisition related expenses and hedging gains recognized in conjunction with the Well Fargo branch acquisition from 2018 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 equity, adjusted return on average tangible equity, adjusted return on average assets, adjusted HFI loan-to-deposit ratio, adjusted net income, adjusted basic and diluted earnings per share, adjusted noninterest expense, adjusted net interest income, adjusted net interest margin, adjusted income before taxes, adjusted provision for income taxes, 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. | |||||||||||||||||||
September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||
(Dollars in millions, except share data) | |||||||||||||||||||
Total stockholders' equity | $ | 1,734 | $ | 1,656 | $ | 1,574 | $ | 1,570 | $ | 1,518 | |||||||||
Less: Goodwill and intangible assets | 174 | 178 | 182 | 190 | 70 | ||||||||||||||
Tangible book value | $ | 1,560 | $ | 1,478 | $ | 1,392 | $ | 1,380 | $ | 1,448 | |||||||||
Number of common shares outstanding | 56,510,341 | 56,483,937 | 56,480,086 | 57,749,464 | 57,625,439 | ||||||||||||||
Tangible book value per share | $ | 27.62 | $ | 26.16 | $ | 24.65 | $ | 23.90 | $ | 25.13 | |||||||||
Total assets | $ | 22,023 | $ | 20,206 | $ | 19,445 | $ | 18,531 | $ | 18,697 | |||||||||
Tangible common equity to assets ratio | 7.09 | % | 7.31 | % | 7.16 | % | 7.45 | % | 7.74 | % | |||||||||
Return on average tangible equity, adjusted return on average tangible equity and adjusted return on average assets. | |||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||
September 30, | June 30, | September 30, | September 30, | September 30, | |||||||||||||||
(Dollars in millions) | |||||||||||||||||||
Net income | $ | 63 | $ | 61 | $ | 48 | $ | 160 | $ | 133 | |||||||||
Add: Intangible asset amortization, net of tax | 2 | $ | 4 | 1 | 10 | — | |||||||||||||
Tangible net income | $ | 65 | $ | 65 | $ | 49 | $ | 170 | $ | 133 | |||||||||
Total average equity | $ | 1,722 | 1,668 | $ | 1,514 | $ | 1,658 | $ | 1,468 | ||||||||||
Less: Average goodwill and intangible assets | 176 | 180 | 71 | 184 | 54 | ||||||||||||||
Total tangible average equity | $ | 1,546 | $ | 1,488 | $ | 1,443 | $ | 1,474 | $ | 1,414 | |||||||||
Return on average common equity | 14.72 | % | 14.58 | % | 12.80 | % | 12.90 | % | 12.10 | % | |||||||||
Return on average tangible common equity | 17.12 | % | 17.14 | % | 13.67 | % | 15.30 | % | 12.78 | % | |||||||||
Adjustment to remove DOJ benefit | — | % | (5.45) | % | — | % | (1.76) | % | — | % | |||||||||
Adjustment to remove Wells Fargo acquisition costs | — | % | — | % | — | % | — | % | — | % | |||||||||
Adjustment to remove hedging gains | — | % | — | % | — | % | — | % | — | % | |||||||||
Adjusted return on average tangible common equity | 17.12 | % | 11.69 | % | 13.67 | % | 13.54 | % | 12.78 | % | |||||||||
Return on average assets | 1.20 | % | 1.22 | % | 1.04 | % | 1.08 | % | 1.00 | % | |||||||||
Adjustment to remove DOJ benefit | — | % | (0.41) | % | — | % | (0.13) | % | — | % | |||||||||
Adjustment to remove Wells Fargo acquisition costs | — | % | — | % | 0.01 | % | — | % | — | % | |||||||||
Adjustment to remove hedging gains | — | % | — | % | — | % | — | % | — | % | |||||||||
Adjusted return on average assets | 1.20 | % | 0.81 | % | 1.05 | % | 0.95 | % | 1.00 | % | |||||||||
Adjusted HFI loan-to-deposit ratio. | |||||||||||||||||||
September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||
(Dollars in millions, except share data) | |||||||||||||||||||
Average LHFI | $ | 11,743 | $ | 10,613 | $ | 9,164 | $ | 8,916 | $ | 8,872 | |||||||||
Less: Average warehouse loans | 2,508 | 1,997 | 1,175 | 1,337 | 1,586 | ||||||||||||||
Adjusted average LHFI | $ | 9,235 | $ | 8,616 | $ | 7,989 | $ | 7,579 | $ | 7,286 | |||||||||
Average deposits | $ | 15,817 | $ | 14,159 | $ | 12,906 | $ | 11,942 | $ | 11,336 | |||||||||
Less: Average custodial deposits | 4,551 | 3,471 | 2,535 | 2,133 | 1,971 | ||||||||||||||
Adjusted average deposits | $ | 11,266 | $ | 10,688 | $ | 10,371 | $ | 9,809 | $ | 9,365 | |||||||||
HFI loan-to-deposit ratio | 74.2 | % | 75.0 | % | 71.0 | % | 74.7 | % | 78.3 | % | |||||||||
Adjusted HFI loan-to-deposit ratio | 82.0 | % | 80.6 | % | 77.0 | % | 77.3 | % | 77.8 | % | |||||||||
Adjusted net interest income, noninterest income, noninterest expense, income before income taxes, provision for income taxes, net income, basic earnings per share, diluted earnings per share, net interest margin and efficiency ratio. | |||||||||||||||||||
Three Months Ended | |||||||||||||||||||
September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||
(Dollars in millions) | |||||||||||||||||||
Net interest income | $ | 146 | $ | 138 | $ | 126 | $ | 152 | $ | 124 | |||||||||
Hedging gains | — | — | — | (29) | — | ||||||||||||||
Adjusted net interest income | $ | 146 | $ | 138 | $ | 126 | $ | 123 | $ | 124 | |||||||||
Noninterest income | $ | 171 | $ | 168 | $ | 109 | $ | 98 | $ | 107 | |||||||||
DOJ benefit | — | (25) | — | — | — | ||||||||||||||
Adjusted noninterest income | $ | 171 | $ | 143 | $ | 109 | $ | 98 | $ | 107 | |||||||||
Noninterest expense | $ | 238 | $ | 214 | $ | 191 | $ | 189 | $ | 173 | |||||||||
Wells Fargo acquisition costs | — | — | 1 | 14 | 1 | ||||||||||||||
Adjusted noninterest expense | $ | 238 | $ | 214 | $ | 190 | $ | 175 | $ | 172 | |||||||||
Income before income taxes | $ | 78 | $ | 75 | $ | 44 | $ | 66 | $ | 60 | |||||||||
Adjustment for hedging gains | — | — | — | (29) | — | ||||||||||||||
Adjustment for DOJ benefit | — | (25) | — | — | — | ||||||||||||||
Adjustment for Wells Fargo acquisition costs | — | — | 1 | 14 | 1 | ||||||||||||||
Adjusted income before income taxes | $ | 78 | $ | 50 | $ | 45 | $ | 51 | $ | 61 | |||||||||
Provision for income taxes | $ | 15 | $ | 14 | $ | 8 | $ | 12 | $ | 12 | |||||||||
Tax impact on adjustment for hedging gains | — | — | — | (5) | — | ||||||||||||||
Tax impact on adjustment for DOJ benefit | — | (5) | — | — | — | ||||||||||||||
Tax impact on adjustment for Wells Fargo acquisition costs | — | — | — | 2 | — | ||||||||||||||
Adjusted provision for income taxes | $ | 15 | $ | 9 | $ | 8 | $ | 9 | $ | 12 | |||||||||
Net income | $ | 63 | $ | 61 | $ | 36 | $ | 54 | $ | 48 | |||||||||
Adjusted net income | $ | 63 | $ | 41 | $ | 37 | $ | 42 | $ | 49 | |||||||||
Weighted average common shares outstanding | 56,484,499 | 56,446,077 | $ | 57,897,799 | 57,628,561 | 57,600,360 | |||||||||||||
Weighted average diluted common shares | 57,110,796 | 57,061,822 | $ | 57,856,100 | 58,385,354 | 58,332,598 | |||||||||||||
Adjusted basic earnings per share | $ | 1.12 | $ | 0.72 | $ | 0.65 | $ | 0.73 | $ | 0.86 | |||||||||
Adjusted diluted earnings per share | $ | 1.11 | $ | 0.71 | $ | 0.64 | $ | 0.72 | $ | 0.85 | |||||||||
Average interest earning assets | $ | 18,997 | $ | 17,759 | $ | 16,294 | $ | 16,391 | $ | 16,786 | |||||||||
Net interest margin | 3.05 | % | 3.08 | % | 3.09 | % | 3.70 | % | 2.93 | % | |||||||||
Adjusted net interest margin | 3.05 | % | 3.08 | % | 3.09 | % | 2.99 | % | 2.93 | % | |||||||||
Efficiency ratio | 75.2 | % | 69.8 | % | 81.3 | % | 75.7 | % | 74.6 | % | |||||||||
Adjustment to remove hedging gains | — | % | — | % | — | % | 9.2 | % | — | % | |||||||||
Adjustment to remove DOJ benefit | — | % | 6.3 | % | — | % | — | % | — | % | |||||||||
Adjustment to remove Wells Fargo acquisition costs | — | % | — | % | (0.5) | % | (5.7) | % | (0.5) | % | |||||||||
Adjusted efficiency ratio | 75.2 | % | 76.1 | % | 80.8 | % | 79.2 | % | 74.1 | % | |||||||||
For more information, contact:
Kenneth Schellenberg
FBCInvestorRelations@flagstar.com
(248) 312-5741
View original content to download multimedia:http://www.prnewswire.com/news-releases/flagstar-bancorp-reports-third-quarter-2019-net-income-of-63-million-or-1-11-per-diluted-share-300942594.html
SOURCE Flagstar Bancorp, Inc.
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