• Resources
  • Blog
  • Journalists
  • Log In
  • Sign Up
  • Data Privacy
  • Send a Release
Cision PR Newswire: news distribution, targeting and monitoring home
  • News
  • Products
    • Overview
    • Distribution by PR Newswire
    • Cision Communications Cloud®
    • Cision IR
    • Sponsored Placement
    • All Products
  • Contact
    • General Inquiries
    • Request a Demo
    • Editorial Bureaus
    • Partnerships
    • Media Inquiries
    • Worldwide Offices

 

When typing in this field, a list of search results will appear and be automatically updated as you type.

Searching for your content...

No results found. Please change your search terms and try again.
  • News in Focus
      • Browse News Releases

      • All News Releases
      • All Public Company
      • English-only
      • News Releases Overview

      • Multimedia Gallery

      • All Multimedia
      • All Photos
      • All Videos
      • Multimedia Gallery Overview

      • Trending Topics

      • All Trending Topics
  • Business & Money
      • Auto & Transportation

      • All Automotive & Transportation
      • Aerospace, Defense
      • Air Freight
      • Airlines & Aviation
      • Automotive
      • Maritime & Shipbuilding
      • Railroads and Intermodal Transportation
      • Supply Chain/Logistics
      • Transportation, Trucking & Railroad
      • Travel
      • Trucking and Road Transportation
      • Auto & Transportation Overview

      • View All Auto & Transportation

      • Business Technology

      • All Business Technology
      • Blockchain
      • Broadcast Tech
      • Computer & Electronics
      • Computer Hardware
      • Computer Software
      • Data Analytics
      • Electronic Commerce
      • Electronic Components
      • Electronic Design Automation
      • Financial Technology
      • High Tech Security
      • Internet Technology
      • Nanotechnology
      • Networks
      • Peripherals
      • Semiconductors
      • Business Technology Overview

      • View All Business Technology

      • Entertain­ment & Media

      • All Entertain­ment & Media
      • Advertising
      • Art
      • Books
      • Entertainment
      • Film and Motion Picture
      • Magazines
      • Music
      • Publishing & Information Services
      • Radio & Podcast
      • Television
      • Entertain­ment & Media Overview

      • View All Entertain­ment & Media

      • Financial Services & Investing

      • All Financial Services & Investing
      • Accounting News & Issues
      • Acquisitions, Mergers and Takeovers
      • Banking & Financial Services
      • Bankruptcy
      • Bond & Stock Ratings
      • Conference Call Announcements
      • Contracts
      • Cryptocurrency
      • Dividends
      • Earnings
      • Earnings Forecasts & Projections
      • Financing Agreements
      • Insurance
      • Investments Opinions
      • Joint Ventures
      • Mutual Funds
      • Private Placement
      • Real Estate
      • Restructuring & Recapitalization
      • Sales Reports
      • Shareholder Activism
      • Shareholder Meetings
      • Stock Offering
      • Stock Split
      • Venture Capital
      • Financial Services & Investing Overview

      • View All Financial Services & Investing

      • General Business

      • All General Business
      • Awards
      • Commercial Real Estate
      • Corporate Expansion
      • Earnings
      • Environmental, Social and Governance (ESG)
      • Human Resource & Workforce Management
      • Licensing
      • New Products & Services
      • Obituaries
      • Outsourcing Businesses
      • Overseas Real Estate (non-US)
      • Personnel Announcements
      • Real Estate Transactions
      • Residential Real Estate
      • Small Business Services
      • Socially Responsible Investing
      • Surveys, Polls and Research
      • Trade Show News
      • General Business Overview

      • View All General Business

  • Science & Tech
      • Consumer Technology

      • All Consumer Technology
      • Artificial Intelligence
      • Blockchain
      • Cloud Computing/Internet of Things
      • Computer Electronics
      • Computer Hardware
      • Computer Software
      • Consumer Electronics
      • Cryptocurrency
      • Data Analytics
      • Electronic Commerce
      • Electronic Gaming
      • Financial Technology
      • Mobile Entertainment
      • Multimedia & Internet
      • Peripherals
      • Social Media
      • STEM (Science, Tech, Engineering, Math)
      • Supply Chain/Logistics
      • Wireless Communications
      • Consumer Technology Overview

      • View All Consumer Technology

      • Energy & Natural Resources

      • All Energy
      • Alternative Energies
      • Chemical
      • Electrical Utilities
      • Gas
      • General Manufacturing
      • Mining
      • Mining & Metals
      • Oil & Energy
      • Oil and Gas Discoveries
      • Utilities
      • Water Utilities
      • Energy & Natural Resources Overview

      • View All Energy & Natural Resources

      • Environ­ment

      • All Environ­ment
      • Conservation & Recycling
      • Environmental Issues
      • Environmental Policy
      • Environmental Products & Services
      • Green Technology
      • Natural Disasters
      • Environ­ment Overview

      • View All Environ­ment

      • Heavy Industry & Manufacturing

      • All Heavy Industry & Manufacturing
      • Aerospace & Defense
      • Agriculture
      • Chemical
      • Construction & Building
      • General Manufacturing
      • HVAC (Heating, Ventilation and Air-Conditioning)
      • Machinery
      • Machine Tools, Metalworking and Metallurgy
      • Mining
      • Mining & Metals
      • Paper, Forest Products & Containers
      • Precious Metals
      • Textiles
      • Tobacco
      • Heavy Industry & Manufacturing Overview

      • View All Heavy Industry & Manufacturing

      • Telecomm­unications

      • All Telecomm­unications
      • Carriers and Services
      • Mobile Entertainment
      • Networks
      • Peripherals
      • Telecommunications Equipment
      • Telecommunications Industry
      • VoIP (Voice over Internet Protocol)
      • Wireless Communications
      • Telecomm­unications Overview

      • View All Telecomm­unications

  • Lifestyle & Health
      • Consumer Products & Retail

      • All Consumer Products & Retail
      • Animals & Pets
      • Beers, Wines and Spirits
      • Beverages
      • Bridal Services
      • Cannabis
      • Cosmetics and Personal Care
      • Fashion
      • Food & Beverages
      • Furniture and Furnishings
      • Home Improvement
      • Household, Consumer & Cosmetics
      • Household Products
      • Jewelry
      • Non-Alcoholic Beverages
      • Office Products
      • Organic Food
      • Product Recalls
      • Restaurants
      • Retail
      • Supermarkets
      • Toys
      • Consumer Products & Retail Overview

      • View All Consumer Products & Retail

      • Entertain­ment & Media

      • All Entertain­ment & Media
      • Advertising
      • Art
      • Books
      • Entertainment
      • Film and Motion Picture
      • Magazines
      • Music
      • Publishing & Information Services
      • Radio & Podcast
      • Television
      • Entertain­ment & Media Overview

      • View All Entertain­ment & Media

      • Health

      • All Health
      • Biometrics
      • Biotechnology
      • Clinical Trials & Medical Discoveries
      • Dentistry
      • FDA Approval
      • Fitness/Wellness
      • Health Care & Hospitals
      • Health Insurance
      • Infection Control
      • International Medical Approval
      • Medical Equipment
      • Medical Pharmaceuticals
      • Mental Health
      • Pharmaceuticals
      • Supplementary Medicine
      • Health Overview

      • View All Health

      • Sports

      • All Sports
      • General Sports
      • Outdoors, Camping & Hiking
      • Sporting Events
      • Sports Equipment & Accessories
      • Sports Overview

      • View All Sports

      • Travel

      • All Travel
      • Amusement Parks and Tourist Attractions
      • Gambling & Casinos
      • Hotels and Resorts
      • Leisure & Tourism
      • Outdoors, Camping & Hiking
      • Passenger Aviation
      • Travel Industry
      • Travel Overview

      • View All Travel

  • Policy & Public Interest
      • Policy & Public Interest

      • All Policy & Public Interest
      • Advocacy Group Opinion
      • Animal Welfare
      • Congressional & Presidential Campaigns
      • Corporate Social Responsibility
      • Domestic Policy
      • Economic News, Trends, Analysis
      • Education
      • Environmental
      • European Government
      • FDA Approval
      • Federal and State Legislation
      • Federal Executive Branch & Agency
      • Foreign Policy & International Affairs
      • Homeland Security
      • Labor & Union
      • Legal Issues
      • Natural Disasters
      • Not For Profit
      • Patent Law
      • Public Safety
      • Trade Policy
      • U.S. State Policy
      • Policy & Public Interest Overview

      • View All Policy & Public Interest

  • People & Culture
      • People & Culture

      • All People & Culture
      • Aboriginal, First Nations & Native American
      • African American
      • Asian American
      • Children
      • Diversity, Equity & Inclusion
      • Hispanic
      • Lesbian, Gay & Bisexual
      • Men's Interest
      • People with Disabilities
      • Religion
      • Senior Citizens
      • Veterans
      • Women
      • People & Culture Overview

      • View All People & Culture

      • In-Language News

      • español
      • português
      • Česko
      • Danmark
      • Deutschland
      • España
      • France
      • Italia
      • Nederland
      • Norge
      • Polska
      • Portugal
      • Россия
      • Slovensko
      • Suomi
      • Sverige
  • Overview
  • Distribution by PR Newswire
  • Cision Communications Cloud®
  • Cision IR
  • Sponsored Placement
  • All Products
  • General Inquiries
  • Request a Demo
  • Editorial Bureaus
  • Partnerships
  • Media Inquiries
  • Worldwide Offices
  • PR Newswire: news distribution, targeting and monitoring
  • Send a Release
    • ALL CONTACT INFO
    • Contact Us

      888-776-0942
      from 8 AM - 10 PM ET

  • Send a Release
  • Sign Up
  • Log In
  • Resources
  • Blog
  • Journalists
  • RSS
  • GDPR
  • News in Focus
    • Browse All News
    • Multimedia Gallery
    • Trending Topics
  • Business & Money
    • Auto & Transportation
    • Business Technology
    • Entertain­ment & Media
    • Financial Services & Investing
    • General Business
  • Science & Tech
    • Consumer Technology
    • Energy & Natural Resources
    • Environ­ment
    • Heavy Industry & Manufacturing
    • Telecomm­unications
  • Lifestyle & Health
    • Consumer Products & Retail
    • Entertain­ment & Media
    • Health
    • Sports
    • Travel
  • Policy & Public Interest
  • People & Culture
    • People & Culture
  • Send a Release
  • Sign Up
  • Log In
  • Resources
  • Blog
  • Journalists
  • RSS
  • GDPR
  • Overview
  • Distribution by PR Newswire
  • Cision Communications Cloud®
  • Cision IR
  • All Products
  • Send a Release
  • Sign Up
  • Log In
  • Resources
  • Blog
  • Journalists
  • RSS
  • GDPR
  • General Inquiries
  • Request a Demo
  • Editorial Bureaus
  • Partnerships
  • Media Inquiries
  • Worldwide Offices
  • Send a Release
  • Sign Up
  • Log In
  • Resources
  • Blog
  • Journalists
  • RSS
  • GDPR

Flagstar Reports Fourth Quarter 2014 Net Income of $11.1 million, or $0.07 per Diluted Share

Profitable results led by revenue growth and continued expense discipline

Key Q4 Highlights

- Increased profitability with no unusual items

- Noninterest income up modestly

- Noninterest expense down slightly

- Lower net charge-offs and provision expense

- Tier 1 leverage ratio increased


News provided by

Flagstar Bancorp, Inc.

Jan 22, 2015, 06:30 ET

Share this article

Share this article


TROY, Mich., Jan. 22, 2015 /PRNewswire/ -- Flagstar Bancorp, Inc. (NYSE: FBC) ("the Company"), the holding company for Flagstar Bank, FSB (the "Bank"), today reported fourth quarter 2014 net income of $11.1 million, or $0.07 per diluted share, as compared to a net loss of $27.6 million in the third quarter 2014, or $(0.61) per diluted share, and net income of $161.9 million in the fourth quarter 2013, or $2.77 per diluted share. The full year 2014 net loss was $69.5 million, or $(1.72) per diluted share, as compared to a full year 2013 net income of $267.0 million, or $4.37 per diluted share.

Alessandro P. DiNello, president and chief executive officer, said, "I am pleased that this quarter's earnings are the result of core operations. We have been working tirelessly for the last two years to de-risk the balance sheet, settle major legal matters, right size operating expenses, upgrade our management talent, build a strong risk management organization and focus our business strategies. These efforts have begun to bear fruit and we will continue to build on this foundation going forward."

Fourth Quarter 2014 Highlights:

Income Statement Highlights















Three Months Ended


% Change


December 31,
 2014


September 30,
 2014


June 30,

2014


March 31,
 2014


December 31,
 2013


Seq



Yr/Yr



(Dollars in thousands)







Consolidated Statements of Operations
















Net interest income

$

61,302


$

64,363


$

62,425


$

58,201


$

41,203


(4.8)

%


48.8

%

Provision for loan losses

4,986


8,097


6,150


112,321


14,112


(38.4)

%


(64.7)

%

Noninterest income

98,441


85,188


102,484


74,953


113,146


15.6

%


(13.0)

%

Noninterest expense

139,253


179,389


121,353


139,252


388,693


(22.4)

%


(64.2)

%

Income (loss) before income taxes

15,504


(37,935)


37,406


(118,419)


(248,456)


N/M



N/M


Provision (benefit) for income taxes

4,428


(10,303)


11,892


(39,996)


(410,362)


N/M



N/M


Net income (loss)

$

11,076


$

(27,632)


$

25,514


$

(78,423)


$

161,906


N/M



(93.2)

%

















Earnings (Loss) Per Share (1)

$

0.07


(0.61)


0.33


(1.51)


2.77


N/M



(97.5)

%

N/M - Not meaningful

(1)

Fully diluted earnings (loss) per share, except where securities would be anti-dilutive. Includes the preferred stock dividend, including the accretion and cumulative deferred.

Key Ratios














Three Months Ended

Change (bps)


December 31,
 2014

September 30,
 2014

June 30,

2014


March 31,
 2014

December 31,
 2013

Seq

Yr/Yr

Net interest margin (consolidated)

2.80

%

2.91

%

2.98

%

2.97

%

1.73

%

(11)


107


Efficiency ratio (adjusted) (1)

90.6

%

86.8

%

71.3

%

91.3

%

108.1

%

380


N/M


Return (loss) on average assets

0.44

%

(1.08)

%

1.04

%

(3.39)

%

5.70

%

152


(526)


Return (loss) on average equity

3.18

%

(7.88)

%

7.38

%

(21.85)

%

50.39

%

N/M


N/M


N/M - Not meaningful

(1)

See non-GAAP reconciliation.

Balance Sheet Highlights














Three Months Ended

% Change


December 31,
 2014

September 30,
 2014

June 30,

2014


March 31,
 2014

December 31,
 2013

Seq

Yr/Yr


(Dollars in thousands)





Average Balance Sheet















Average interest-earning assets

$

8,724,037


$

8,814,714


$

8,366,703


$

7,829,814


$

9,607,376


(1.0)

%

(9.2)

%

Average loans held-for-investment

4,030,525


4,087,862


3,902,871


3,864,110


3,927,537


(1.4)

%

2.6

%

Average interest-bearing deposits

5,897,543


5,788,388


5,445,734


5,230,154


5,339,165


1.9

%

10.5

%





















Net Interest Income

Fourth quarter 2014 net interest income fell to $61.3 million, as compared to $64.4 million for the third quarter 2014. The decrease in net interest income was attributable to lower interest income from the Company's Ginnie Mae early buy-outs, due to a reduction in the average interest rate earned in accordance with the terms of loans with government guarantees, as well as jumbo residential first mortgage loan sales. The full year 2014 net interest income was $246.3 million, as compared to $186.7 million for the full year 2013, which primarily resulted from the prepayment of long-term Federal Home Loan Bank advances at the end of 2013.

Net interest margin decreased to 2.80 percent for the fourth quarter 2014, as compared to 2.91 percent for the third quarter 2014. The decrease from the prior quarter was driven primarily by a lower yield from the loans that were included in the early buy-outs, as described above, and a 21 basis point reduction in the yield on loans held-for-sale.

Provision for Loan Losses

Provision for loan losses totaled $5.0 million for the fourth quarter 2014, as compared to $8.1 million for the third quarter 2014. The decrease from the prior quarter was primarily attributable to lower net charge-offs. Net charge offs in the fourth quarter 2014 were $9.0 million, or 0.91 percent of applicable loans, compared to $13.1 million, or 1.36 percent of applicable loans in the prior quarter. The fourth quarter 2014 amount included $3.0 million of net charge-offs associated with the sale of $24 million of lower performing loans during the quarter. The net charge-offs associated with these loan sales accounted for 31 basis points of the fourth quarter's net charge-off rate.

Noninterest Income

Fourth quarter 2014 noninterest income was $98.4 million, as compared to noninterest income of $85.2 million for the third quarter 2014. The third quarter of 2014 included a $10.4 million charge related to certain Federal Housing Administration indemnifications. Net of this adjustment, noninterest income rose $2.8 million, or 3 percent from the prior quarter.

Adjustments to Noninterest Income










Three Months Ended


December 31,
 2014

September 30,
 2014

June 30,

2014


March 31,
 2014

December 31,
 2013


(Dollars in thousands)

Noninterest income

$

98,441


$

85,188


$

102,484


$

74,953


$

113,146


Adjusting items











Loan fees and charges (1)

—


—


(10,000)


—


—


Representation and warranty provision (2)

—


10,375


—


—


(24,900)


Other noninterest income (3)

—


—


—


21,056


—


Adjusted noninterest income (4)

$

98,441


$

95,563


$

92,484


$

96,009


$

88,246


(1)

Reverse benefit for contract renegotiation.

(2)

Add back reserve increase related to indemnifications claims on government insured loans and reduce for the settlement with Fannie Mae and Freddie Mac, respectively.

(3)

Adjust for a negative fair value adjustment related to performing loans repurchased.

(4)

Non-GAAP number.

Fourth quarter 2014 deposit fees and charges increased to $6.0 million, as compared to $5.6 million for the third quarter 2014. The increase from the prior quarter reflects continued growth in demand deposit balances and seasonality.

Mortgage Metrics














Three Months Ended

% Change


December 31,
 2014

September 30,
 2014

June 30,

2014


March 31,
 2014

December 31,
 2013

Seq

Yr/Yr


(Dollars in millions)





GOS margin (change in bps) (3)

0.87

%

0.83

%

0.82

%

0.93

%

0.85

%

4


2


Gain on loans sales

$

54


$

52


$

55


$

45


$

45


3.8

%

20.0

%

Mortgage rate lock commitments (fall-out adjusted) (1)

6,156


6,304


6,693


4,854


5,299


(2.3)

%

16.2

%

Residential loans serviced (2)

76,672


78,135


73,732


74,302


71,824


(1.9)

%

6.7

%





















(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 serviced and subserviced loans.

(3)

Gain on sale margin is based on net gain on loan sales to fall-out adjusted mortgage rate lock commitments.

Loan fees and charges decreased to $16.8 million for the fourth quarter 2014, as compared to $18.7 million in the third quarter 2014. The decrease of $1.9 million, or 10 percent, was primarily related to an 8 percent decrease in mortgage originations in the fourth quarter 2014.

Fourth quarter 2014 net gain on loan sales increased to $53.5 million, as compared to $52.2 million for the third quarter 2014. The increase from the prior quarter reflects higher refinance volume driven by lower rates in October and early December, offsetting the seasonal decline in purchase origination volume. Fallout-adjusted locks were $6.2 billion for the fourth quarter 2014, as compared to $6.3 billion for the third quarter 2014. The net gain on loan sale margin increased to 0.87 percent for the fourth quarter 2014, as compared to 0.83 percent for the third quarter 2014.

Loan administration income remained relatively flat at $5.5 million for the fourth quarter 2014, as compared to the third quarter 2014.

Net return on the mortgage servicing asset (including off-balance sheet hedges of mortgage servicing rights) increased to $1.6 million for the fourth quarter 2014, as compared to $1.3 million for the third quarter 2014. The gross return on the mortgage servicing rights asset was 7.4 percent in the 2014 fourth quarter, a slight decrease from the third quarter 2014 as a result of higher prepayments of serviced loans. Additionally, the Company had $3.5 million of lower revenue as a result of the transaction costs and losses associated with $70 million of mortgage servicing rights sold during the quarter.

Net gain on sales of assets fell $3.2 million in the fourth quarter 2014, compared to the prior quarter. The Company sold $24 million of lower performing mortgage loans during the fourth quarter 2014, resulting in a net gain of $1.7 million. In the third quarter 2014, the Company sold $48 million of performing jumbo residential first mortgage loans and $33 million of lower performing loans, producing a net gain of $4.9 million.

Representation and warranty provision improved to income of $6.1 million for the fourth quarter 2014, as compared to an expense of $12.5 million reported for the third quarter 2014. The change from the prior quarter was primarily due to a $10.4 million charge in the prior quarter related to certain indemnifications made by the Company. Additionally, during the fourth quarter 2014, the Company received recoveries of prior expenses and recorded a downward adjustment in the anticipated level of loss rates on claims from Fannie Mae and Freddie Mac, as the overall level of the representation and warranty reserve declined to $53.0 million at December 31, 2014 from $57.0 million at September 30, 2014.

The fourth quarter 2014 other noninterest income was $7.3 million, as compared to $9.5 million for the third quarter 2014. The decrease from the prior quarter primarily resulted from lower gains on the sale of investment securities and lower fair value adjustments on mortgage loans.

Noninterest Expense

Noninterest expense was $139.3 million for the fourth quarter 2014, as compared to $179.4 million for the third quarter 2014. The third quarter 2014 included a $37.5 million litigation settlement expense with the Consumer Financial Protection Bureau ("CFPB"), as well as $1.1 million in related legal expenses. After making these adjustments, noninterest expense in the third quarter 2014 was $140.8 million.

Adjustments to Noninterest expense










Three Months Ended


December 31,
 2014

September 30,
 2014

June 30,

2014


March 31,
 2014

December 31,
 2013


(Dollars in thousands)

Noninterest expense

$

139,253


$

179,389


$

121,353


$

139,252


$

388,693


Adjusting items











Loss on extinguishment of debt (1)

—


—


—


—


(177,556)


Legal and professional expense (2)

—


(1,116)


(2,879)


—


—


Other noninterest expense (3)

—


(37,500)


10,000


—


(61,000)


Adjusted noninterest expense (4)

$

139,253


$

140,773


$

128,474


$

139,252


$

150,137


(1)

Adjust prepayment of long-term FHLB advances.

(2)

Adjust for legal expenses related to CFPB litigation settlements during the respective periods.

(3)

Adjust CFPB litigation settlement expense and an additional accrual for the DOJ litigation, respectively.

(4)

Non-GAAP number.

Compensation and benefits increased to $59.0 million for the fourth quarter 2014, as compared to $53.5 million for the third quarter 2014. The increase from the prior quarter was primarily due to higher levels of incentive compensation and $2.6 million in severance.

Fourth quarter 2014 asset resolution expense decreased to $13.4 million, as compared to $13.7 million for the third quarter 2014. The decrease was primarily due to process improvements and lower levels of problem assets, partially offset by a $2.0 million provision for expenses related to prior loss recoveries.

Legal and professional expenses were $10.8 million for the fourth quarter 2014, as compared to $15.0 million for the third quarter 2014. The $4.2 million decrease in the fourth quarter was primarily attributable to a decrease in consulting expenses, as well as legal expenses related to the Company's CFPB settlement experienced in the prior quarter.

Other noninterest expenses for the fourth quarter 2014 totaled $10.8 million, as compared to $50.3 million for the third quarter 2014. The decrease of $39.2 million from the prior quarter, included the third quarter 2014 adjusting item of $37.5 million related to the CFPB settlement.

Income Taxes

The fourth quarter 2014 provision for income taxes totaled $4.4 million, as compared to a tax benefit of $10.3 million in the third quarter 2014. The effective tax rate in the fourth quarter 2014 was 28.6 percent, as compared to 27.2 percent in the third quarter 2014.

The full year 2014 income tax benefit was $34.0 million, as compared to a benefit of $416.3 million for the full year 2013, primarily due to the reversal of the deferred tax asset valuation allowance during the fourth quarter 2013. The Company reversed 100 percent of the valuation allowance on its federal deferred tax asset ("DTA") and a portion of its state DTA, which had been previously established as of September 30, 2009, which resulted in a $355.8 million DTA valuation allowance reversal, or $6.29 per diluted share.

Asset Quality

Credit Quality Ratios














Three Months Ended

Change (bps)


December 31,
 2014

September 30,
 2014

June 30,

2014


March 31,
 2014

December 31,
 2013

Seq

Yr/Yr


(Dollars in thousands)





Charge-offs, net of recoveries

$

8,986


$

13,097


$

7,150


$

12,321


$

14,110


(31.4)

%

(36.3)

%

Total nonperforming loans held-for-investment

$

120,491


$

106,944


$

120,162


$

110,749


$

145,685


12.7

%

(17.3)

%

Net charge-off ratio (annualized)

0.91

%

1.36

%

0.78

%

1.36

%

1.53

%

(45)


(62)


Nonperforming loans ratio to LHFI

2.71

%

2.56

%

2.76

%

2.76

%

3.59

%

15


(88)


Allowance for loan loss to LHFI

7.01

%

7.60

%

7.41

%

8.11

%

5.42

%

(59)


159


Fourth quarter 2014 net charge-offs were $9.0 million, representing 0.91 percent of associated loans, excluding loans carried under a fair value option. This represented a decrease of $4.1 million from the third quarter 2014 net charge-offs of $13.1 million, or 1.36 percent, of associated loans. Excluding loan sales in both quarters, net charge-offs in the fourth quarter were $6.0 million or 0.60 percent, compared to $6.8 million or 0.70 percent in the prior quarter.

Nonperforming loans increased to $120.5 million at December 31, 2014 from $106.9 million at September 30, 2014. The increase was driven by higher non-accrual TDRs, which increased to $28.7 million from $17.5 million in the third quarter 2014. The ratio of nonperforming loans to loans held-for-investment increased to 2.71 percent at December 31, 2014 from 2.56 percent at September 30, 2014. 

The allowance for loan losses was $297.0 million at December 31, 2014, covering 7.01 percent of total loans held-for-investment, excluding loans carried under a fair value option. The allowance for loan losses was $301.0 million at September 30, 2014, covering 7.60 percent of total loans held-for-investment. The decrease in the coverage ratio during the fourth quarter of 2014 was primarily due to an increase in higher quality commercial warehouse loans at quarter end.

Capital

Capital Ratios (Bancorp)

Three Months Ended

Change (bps)


December 31,
 2014

September 30,
 2014

June 30,

2014


March 31,
 2014

December 31,
 2013

Seq

Yr/Yr

Total capital

24.1

%

24.4

%

25.2

%

25.3

%

28.6

%

(23)


(443)


Tier 1 capital

22.8

%

23.0

%

23.9

%

24.0

%

27.3

%

(22)


(444)


Tier 1 leverage

12.6

%

12.5

%

12.6

%

12.6

%

14.2

%

9


(162)


Mortgage servicing rights to Tier 1 capital (1)

21.8

%

24.9

%

24.2

%

27.6

%

22.2

%

(312)


(45)


Book value per common share (change in percent)

$

19.64


$

19.28


$

19.90


$

19.29


$

20.66


1.9

%

(4.9)

%





















(1)

See non-GAAP reconciliation.

The Company's regulatory capital ratios remain well above current regulatory quantitative guidelines for "well-capitalized" institutions. At December 31, 2014, the Company had a Tier 1 leverage ratio of 12.6 percent, as compared to 12.5 percent at September 30, 2014. At December 31, 2014, the Company had a common equity-to-assets ratio of 11.24 percent.

As of January 2015, the Company and the Bank are subject, on a phased-in basis, to the Basel III regulatory capital requirements that replace the current capital requirements. Assuming that the Basel III requirements were fully applicable at December 31, 2014, the Company's pro forma Basel III Tier 1 leverage ratio would have been 10.2 percent at December 31, 2014 (see Non-GAAP reconciliation). 

Earnings Conference Call

As previously announced, the Company's fourth quarter 2014 earnings call will be held on Thursday, January 22, 2015 at 11 a.m. (Eastern).

To join the call, please dial (888) 206-4916 toll free or (913) 312-0722, and use passcode: 1627539. 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, using passcode: 1627539.

The conference call will also be available as a live audio cast on the Investor Relations section of flagstar.com. It will be archived on that site and will be available for replay and download. A slide presentation accompanying the conference call will also be posted on the site.

About Flagstar

Flagstar Bancorp, Inc. (NYSE: FBC) is a $9.8 billion savings and loan holding company headquartered in Troy, Mich. Flagstar Bank, FSB, the largest bank headquartered in Michigan, provides commercial, small business, and consumer banking services through 107 branches in the state. It also provides home loans through a wholesale network of brokers and correspondents in all 50 states, as well as through 26 retail centers in 15 states. Flagstar is the ninth largest national originator of mortgage loans and a top 20 mortgage servicer, handling payments and recordkeeping for over $75 billion of home loans for nearly 400,000 borrowers. For more information, please visit flagstar.com.

Use of Non-GAAP Financial Measures

In addition to results presented in accordance with GAAP, this press release includes non-GAAP financial measures such as an adjusted efficiency ratio, adjusted earnings, the ratio of total nonperforming assets to Tier 1 capital (to adjusted total assets) and estimated Basel III ratios. The Company believes these non-GAAP financial measures provide additional information that is useful to investors in helping to understand the underlying performance and trends of Flagstar.

Non-GAAP financial measures have inherent limitations, which are not required to be uniformly applied and are not audited. Readers should be aware of these limitations and should be cautious with respect to the use of such measures. To mitigate these limitations, there are practices in place to ensure that these measures are calculated using the appropriate GAAP or regulatory components in their entirety and to ensure that the Company's performance is properly reflected to facilitate consistent period-to-period comparisons. Although the Company believes the non-GAAP financial measures disclosed in this report enhance investors' understanding of our business and performance, these non-GAAP measures should not be considered in isolation, or as a substitute for those financial measures prepared in accordance with GAAP.

Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found in this earnings release, conference call slides, or the Form 8-K related to this press release. Additional discussion of the use of non-GAAP measures can also be found in Flagstar Bancorp, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2013, and Quarterly Report on Form 10-Q  for the quarters ended March 31, 2014, June 30, 2014 and September 30, 2014. All of which can be found on the Company's website at flagstar.com.

Forward Looking Statements

This earnings release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the current beliefs and expectations of Flagstar Bancorp, Inc.'s management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. Factors that could cause the Company's actual results to differ materially from those described in the forward-looking statements can be found in Flagstar Bancorp Annual Report on Form 10-K for the year ended December 31, 2013, and Quarterly Report on Form 10-Q for the quarters ended March 31, 2014, June 30, 2014 and September 30, 2014, which have been filed with the Securities and Exchange Commission and 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 thousands)








December 31, 2014


September 30, 2014


December 31, 2013


(Unaudited)


(Unaudited)




Assets









Cash and cash equivalents

$

136,014



$

106,840



$

280,505


    Investment securities available-for-sale or trading

1,672,179



1,378,093



1,045,548


Loans held-for-sale

1,243,792



1,468,668



1,480,418


Loans with repurchased government guarantees

1,128,359



1,191,826



1,273,690


Loans held-for-investment, net









Loans held-for-investment

4,447,554



4,184,624



4,055,756


Less: allowance for loan losses

(297,000)



(301,000)



(207,000)


Total loans held-for-investment, net

4,150,554



3,883,624



3,848,756


    Mortgage servicing rights

257,827



285,386



284,678


    Federal Home Loan Bank stock

155,443



209,737



209,737


    Premises and equipment, net

237,942



238,261



231,350


    Net deferred tax asset

442,349



449,575



414,681


    Other assets

415,392



413,400



337,938


Total assets

$

9,839,851



$

9,625,410



$

9,407,301


Liabilities and Stockholders' Equity









Deposits









Noninterest bearing

$

1,209,275



$

1,299,405



$

930,060


Interest bearing

5,859,331



5,934,991



5,210,266


Total deposits

7,068,606



7,234,396



6,140,326


    Federal Home Loan Bank advances

514,000



150,000



988,000


    Long-term debt

331,194



339,575



353,248


    Representation and warranty reserve

53,000



57,000



54,000


Other liabilities

500,230



492,834



445,853


            Total liabilities

8,467,030



8,273,805



7,981,427


    Stockholders' Equity









Preferred stock

266,657



266,657



266,174


Common stock

563



563



561


    Additional paid in capital

1,482,465



1,480,955



1,479,265


    Accumulated other comprehensive income (loss)

8,380



(250)



(4,831)


    Accumulated deficit

(385,244)



(396,320)



(315,295)


Total stockholders' equity

1,372,821



1,351,605



1,425,874


Total liabilities and stockholders' equity

$

9,839,851



$

9,625,410



$

9,407,301


Flagstar Bancorp, Inc.

 Consolidated Statements of Operations

 (Dollars in thousands, except per share data)

(Unaudited)



Three Months Ended


Year Ended


December 31,
 2014


September 30,
 2014


December 31,
 2013


December 31,
 2014


December 31,
 2013


(Unaudited)


(Unaudited)


(Unaudited)


(Unaudited)




Total interest income

$

72,203



$

75,094



$

71,833



$

285,561



$

330,687


Total interest expense

10,901



10,731



30,630



39,271



144,036


Net interest income

61,302



64,363



41,203



246,290



186,651


Provision for loan losses

4,986



8,097



14,112



131,553



70,142


Net interest income after provision for loan losses

56,316



56,266



27,091



114,737



116,509


Noninterest Income















Loan fees and charges

16,760



18,661



19,349



73,033



103,501


Deposit fees and charges

5,964



5,618



5,193



21,625



20,942


Net gain on loan sales

53,528



52,175



44,790



205,803



402,193


Loan administration income

5,478



5,599



3,284



24,304



6,035


Net return on the mortgage servicing asset

1,607



1,346



16,659



24,082



90,609


Net gain on sale of assets

1,735



4,874



51



12,361



2,172


Net impairment losses

—



—



—



—



(8,789)


Representation and warranty provision

6,080



(12,538)



15,424



(10,011)



(36,116)


Other noninterest income

7,289



9,453



8,396



9,868



71,796


    Total noninterest income

98,441



85,188



113,146



361,065



652,343


Noninterest Expense















Compensation and benefits

58,967



53,503



69,572



233,185



279,268


Commissions

9,309



10,346



9,444



35,480



54,407


Occupancy and equipment

20,122



20,471



19,824



80,386



80,042


Asset resolution

13,378



13,666



3,372



56,486



52,033


Federal insurance premiums

5,314



5,633



7,932



22,716



34,873


Loss on extinguishment of debt

—



—



177,556



—



177,556


Loan processing expense

10,590



10,472



8,833



36,996



52,223


Legal and professional expense

10,777



15,044



14,600



50,603



77,742


Other noninterest expense

10,796



50,254



77,560



63,394



109,971


    Total noninterest expense

139,253



179,389



388,693



579,246



918,115


(Loss) income before income taxes

15,504



(37,935)



(248,456)



(103,444)



(149,263)


(Benefit) provision for income taxes

4,428



(10,303)



(410,362)



(33,979)



(416,250)


Net (loss) income

11,076



(27,632)



161,906



(69,465)



266,987


Preferred stock dividend/accretion

—



—



(1,449)



(483)



(5,784)


Net (loss) income applicable to common stockholders

$

11,076



$

(27,632)



$

160,457



$

(69,948)



$

261,203


(Loss) earnings per share















       Basic

$

0.07



$

(0.61)



$

2.79



$

(1.72)



$

4.40


       Diluted

$

0.07



$

(0.61)



$

2.77



$

(1.72)



$

4.37


Flagstar Bancorp, Inc.

Summary of Selected Consolidated Financial and Statistical Data

(Dollars in thousands, except per share data)

(Unaudited)






Three Months Ended


Year Ended


December 31,
 2014


September 30,
 2014


December 31,
 2013


December 31,
 2014


December 31,
 2013

Mortgage loans originated (1)

$

6,603,413



$

7,186,856



$

6,439,242



$

24,607,550



$

37,481,877


Other loans originated

102,858



84,084



64,973



490,849



300,823


Mortgage loans sold and securitized

6,830,552



7,072,398



6,783,212



24,407,054



39,074,649


Interest rate spread - consolidated (2)

2.67

%


2.79

%


1.54

%


2.80

%


1.50

%

Net interest margin - consolidated (3)

2.80

%


2.91

%


1.73

%


2.91

%


1.72

%

Average common shares outstanding

56,310,858



56,249,300



56,126,895



56,246,528



56,063,282


Average fully diluted shares outstanding

56,792,751



56,249,300



56,694,096



56,246,528



56,518,181


Average interest-earning assets

$

8,724,037



$

8,814,714



$

9,607,376



$

8,440,413



$

10,881,618


Average interest paying liabilities

6,917,685



7,034,094



8,341,976



6,780,341



9,337,936


Average stockholders' equity

1,395,347



1,402,165



1,273,763



1,406,038



1,238,550


(Loss) return on average assets

0.44

%


(1.08)

%


5.70

%


(0.71)

%


2.08

%

(Loss) return on average equity

3.18

%


(7.88)

%


50.39

%


(4.97)

%


21.09

%

Efficiency ratio

87.2

%


120.0

%


251.8

%


95.4

%


109.4

%

Efficiency ratio (adjusted) (4)

90.6

%


86.8

%


108.1

%


87.1

%


81.4

%

Equity-to-assets ratio (average for the period)

13.74

%


13.68

%


11.32

%


14.22

%


9.87

%

Charge-offs to average LHFI (5)

0.91

%


1.36

%


1.53

%


1.07

%


4.00

%


December 31, 2014


September 30, 2014


December 31, 2013

Book value per common share

$

19.64



$

19.28



$

20.66


Number of common shares outstanding

56,332,307



56,261,652



56,138,074


Mortgage loans subserviced for others

$

46,723,713



$

46,695,465



$

40,431,865


Mortgage loans serviced for others

25,426,768



26,377,572



25,743,396


Weighted average service fee (basis points)

27.2



26.8



28.7


Capitalized value of mortgage servicing rights

1.01

%


1.08

%


1.11

%

Mortgage servicing rights to Tier 1 capital (4)

22.1

%


25.2

%


22.6

%

Ratio of allowance for loan losses to non-performing LHFI (5)

255.7

%


295.4

%


145.9

%

Ratio of allowance for loan losses to LHFI (5)

7.01

%


7.60

%


5.42

%

Ratio of non-performing assets to total assets (bank only)

1.42

%


1.40

%


1.95

%

Equity-to-assets ratio

13.95

%


14.04

%


15.16

%

Common equity-to-assets ratio

11.24

%


11.27

%


12.33

%

Number of bank branches

107



106



111


Number of loan origination centers

26



32



39


Number of FTE employees (excluding loan officers and account executives)

2,530



2,492



2,894


Number of loan officers and account executives

209



233



359


(1)

Includes residential first mortgage and second mortgage loans. 

(2)

Interest rate spread is the difference between the annualized yield earned on average interest-earning assets for the period and the annualized rate of interest paid on average interest-bearing liabilities for the period.

(3)

Net interest margin is the annualized effect of the net interest income divided by that period's average interest-earning assets.

(4)

See Non-GAAP reconciliation.

(5)

Excludes loans carried under the fair value option.

Flagstar Bancorp, Inc.

Earnings Per Share

(Dollars in thousands, except per share data)

(Unaudited)






Three Months Ended


Year Ended


December 31,
 2014


September 30,
 2014


December 31,
 2013


December 31,
 2014


December 31,
 2013

Net (loss) income

$

11,076



$

(27,632)



$

161,906



$

(69,465)



$

266,987


Less: preferred stock dividend/accretion

—



—



(1,449)



(483)



(5,784)


Net (loss) income from continuing operations

11,076



(27,632)



160,457



(69,948)



261,203


Deferred cumulative preferred stock dividends

(7,104)



(6,948)



(3,659)



(26,539)



(14,366)


Net (loss) income applicable to Common Stockholders

$

3,972



$

(34,580)



$

156,798



$

(96,487)



$

246,837


Weighted Average Shares















Weighted average common shares outstanding

56,311



56,249



56,127



56,247



56,063


Effect of dilutive securities















Warrants

248



—



279



—



237


Stock-based awards

234



—



288



—



218


Weighted average diluted common shares

56,793



56,249



56,694



56,247



56,518


(Loss) earnings per common share















Net (loss) income applicable to Common Stockholders

$

0.07



$

(0.61)



$

2.79



$

(1.72)



$

4.40


Effect of dilutive securities















Warrants

—



—



(0.01)



—



(0.02)


Stock-based awards

—



—



(0.01)



—



(0.01)


Diluted (loss) earnings per share

$

0.07



$

(0.61)



$

2.77



$

(1.72)



$

4.37


Average Balances, Yields and Rates

(Dollars in thousands)

(Unaudited)




Three Months Ended


December 31, 2014


September 30, 2014


December 31, 2013


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

$

1,686,534


$

17,702


4.20

%


$

1,628,874


$

17,949


4.41

%


$

1,617,817


$

17,309


4.28

%

Loans with repurchased government guarantees

1,140,851


5,596


1.96

%


1,215,357


7,589


2.50

%


1,234,383


7,599


2.46

%

Loans held-for-investment





















Consumer loans (1)

2,509,506


23,889


3.81

%


2,634,498


24,830


3.77

%


2,950,887


29,189


3.96

%

Commercial loans (1)

1,521,019


14,081


3.62

%


1,453,364


13,692


3.69

%


976,650


10,068


4.03

%

Total loans held-for-investment

4,030,525


37,970


3.74

%


4,087,862


38,522


3.74

%


3,927,537


39,257


3.97

%

Investment securities available-for-sale or trading

1,621,242


10,794


2.66

%


1,642,071


10,880


2.65

%


1,006,801


6,515


2.59

%

Interest-earning deposits and other

244,885


141


0.23

%


240,550


154


0.25

%


1,820,838


1,153


0.25

%

Total interest-earning assets

8,724,037


$

72,203


3.30

%


8,814,714


$

75,094


3.39

%


9,607,376


$

71,833


2.98

%

Other assets

1,429,919







1,437,898







1,648,399






Total assets

$

10,153,956







$

10,252,612







$

11,255,775






Interest-Bearing Liabilities





















Retail deposits





















Demand deposits

$

420,869


$

148


0.14

%


$

421,062


$

147


0.14

%


$

410,147


$

142


0.14

%

Savings deposits

3,393,950


5,837


0.68

%


3,274,268


5,482


0.66

%


2,906,271


3,623


0.49

%

Money market deposits

256,505


142


0.22

%


261,740


134


0.20

%


293,192


127


0.17

%

Certificate of deposits

837,039


1,442


0.68

%


891,308


1,682


0.75

%


1,168,992


2,335


0.79

%

Total retail deposits

4,908,363


7,569


0.61

%


4,848,378


7,445


0.61

%


4,778,602


6,227


0.52

%

Government deposits





















Demand deposits

229,658


227


0.39

%


217,862


213


0.39

%


115,980


83


0.28

%

Savings deposits

386,062


510


0.52

%


378,013


504


0.53

%


172,886


116


0.27

%

Certificate of deposits

373,460


340


0.36

%


344,135


299


0.35

%


256,274


116


0.18

%

Total government deposits

989,180


1,077


0.43

%


940,010


1,016


0.43

%


545,140


315


0.23

%

Wholesale deposits

—


—


—

%


—


—


—

%


15,423


171


4.40

%

Total deposits

5,897,543


8,646


0.58

%


5,788,388


8,461


0.58

%


5,339,165


6,713


0.50

%

Federal Home Loan Bank advances

772,707


481


0.24

%


998,272


591


0.23

%


2,755,375


22,257


3.16

%

Other

247,435


1,774


2.84

%


247,435


1,679


2.69

%


247,435


1,660


2.66

%

Total interest-bearing liabilities

6,917,685


10,901


0.62

%


7,034,095


10,731


0.60

%


8,341,975


30,630


1.44

%

Noninterest-bearing deposits

1,247,461







1,258,864







1,064,660






Other liabilities (2)

593,463







557,488







575,377






Stockholders' equity

1,395,347







1,402,165







1,273,763






Total liabilities and stockholder's equity

$

10,153,956







$

10,252,612







$

11,255,775






Net interest-earning assets

$

1,806,352







$

1,780,619







$

1,265,401






Net interest income



$

61,302







$

64,363







$

41,203




Interest rate spread (3)





2.67

%






2.79

%






1.54

%

Net interest margin (4)





2.80

%






2.91

%






1.73

%

Ratio of average interest-earning assets to interest-bearing liabilities





126.1

%






125.3

%






115.2

%

Total average deposits

$

7,145,004







$

7,047,252







$

6,403,825






(1)

Consumer loans include: residential first mortgage, second mortgage, HELOC and other consumer loans. Commercial loans include: commercial real estate, commercial and industrial, commercial lease financing and warehouse lending loans.

(2)

Includes company controlled deposits that arise due to the servicing of loans for others, which do not bear interest.

(3)

Interest rate spread is the difference between rate of interest earned on interest-earning assets and rate of interest paid on interest-bearing liabilities.

(4)

Net interest margin is net interest income divided by average interest-earning assets.

Average Balances, Yields and Rates

(Dollars in thousands)

(Unaudited)




Year Ended


December 31, 2014


December 31, 2013


Average Balance

Interest

Annualized

Yield/Rate


Average Balance

Interest

Annualized

Yield/Rate



Interest-Earning Assets














Loans held-for-sale

$

1,533,666


$

65,087


4.24

%


$

2,498,893


$

88,666


3.55

%

Loans with repurchased government guarantees

1,215,516


29,099


2.39

%


1,476,801


48,131


3.26

%

Loans held-for-investment














Consumer loans (1)

2,681,456


103,129


3.85

%


3,113,183


122,899


3.95

%

Commercial loans (1)

1,293,775


48,592


3.70

%


1,214,994


53,781


4.37

%

Total loans held-for-investment

3,975,231


151,721


3.80

%


4,328,177


176,680


4.07

%

Investment securities available-for-sale or trading

1,496,090


39,097


2.61

%


474,205


11,912


2.51

%

Interest-earning deposits and other

219,911


557


0.25

%


2,103,542


5,298


0.25

%

Total interest-earning assets

8,440,414


$

285,561


3.38

%


10,881,618


$

330,687


3.03

%

Other assets

1,445,973







1,673,298






Total assets

$

9,886,387







$

12,554,916






Interest-Bearing Liabilities














Retail deposits














Demand deposits

$

421,839


$

586


0.14

%


$

397,094


$

769


0.19

%

Savings deposits

3,139,106


19,047


0.61

%


2,668,571


16,924


0.63

%

Money market deposits

265,819


525


0.20

%


334,945


824


0.25

%

Certificate of deposits

914,823


6,682


0.73

%


2,054,834


18,249


0.89

%

Total retail deposits

4,741,587


26,840


0.57

%


5,455,444


36,766


0.67

%

Government deposits














Demand deposits

181,779


695


0.38

%


96,112


409


0.43

%

Savings deposits

319,887


1,621


0.51

%


203,191


707


0.35

%

Certificate of deposits

349,265


1,147


0.33

%


360,406


1,489


0.41

%

Total government deposits

850,931


3,463


0.41

%


659,709


2,605


0.39

%

Wholesale deposits

831


31


3.76

%


60,711


3,021


4.98

%

Total deposits

5,593,349


30,334


0.54

%


6,175,864


42,392


0.69

%

FHLB advances

939,173


2,206


0.23

%


2,914,637


95,024


3.22

%

Other

247,819


6,731


2.72

%


247,435


6,620


2.68

%

Total interest-bearing liabilities

6,780,341


39,271


0.58

%


9,337,936


144,036


1.53

%

Noninterest-bearing deposits

1,140,758







1,197,000






Other liabilities (2)

559,250







781,430






Stockholders' equity

1,406,038







1,238,550






Total liabilities and stockholder's equity

$

9,886,387







$

12,554,916






Net interest-earning assets

$

1,660,073







$

1,543,682






Net interest income



$

246,290







$

186,651




Interest rate spread (3)





2.80

%






1.50

%

Net interest margin (4)





2.91

%






1.72

%

Ratio of average interest-earning assets to interest-bearing liabilities





124.5

%






116.5

%

Total average deposits

$

6,734,107







$

7,372,864




















(1)

Consumer loans include: residential first mortgage, second mortgage, HELOC and other consumer loans. Commercial loans include: commercial real estate, commercial and industrial, commercial lease financing and warehouse lending loans.

(2)

Includes company controlled deposits that arise due to the servicing of loans for others, which do not bear interest.

(3)

Interest rate spread is the difference between rate of interest earned on interest-earning assets and rate of interest paid on interest-bearing liabilities.

(4)

Net interest margin is net interest income divided by average interest-earning assets.

Gain on Loan Sales

(Dollars in thousands)

(Unaudited)




Three Months Ended


December 31, 2014


September 30, 2014


December 31, 2013

Description















Valuation gain (loss)















Value of interest rate locks

$

4,037


0.06

%


$

(24,294)


(0.34)

%


$

(53,542)


(0.79)

%

Value of forward sales

(7,668)


(0.11)

%


23,145


0.33

%


89,330


1.31

%

Fair value of loans held-for-sale

132,044


1.93

%


79,867


1.13

%


68,938


1.02

%

Total valuation gains

128,413


1.88

%


78,718


1.12

%


104,726


1.54

%
















Sales losses















Marketing losses, net of adjustments

(10,891)


(0.16)

%


(2,392)


(0.04)

%


(3,313)


(0.05)

%

Pair-off losses

(62,065)


(0.91)

%


(22,190)


(0.31)

%


(53,605)


(0.79)

%

Provision for representation and warranty reserve

(1,929)


(0.03)

%


(1,961)


(0.03)

%


(3,018)


(0.04)

%

Total sales losses

(74,885)


(1.10)

%


(26,543)


(0.38)

%


(59,936)


(0.88)

%

Total gain on loan sales

$

53,528





$

52,175





$

44,790




Total mortgage rate lock commitments (gross)

$

7,604,879





$

7,713,074





$

6,481,782




Total loan sales and securitizations

$

6,830,552


0.78

%


$

7,072,398


0.74

%


$

6,783,212


0.66

%

Total mortgage rate lock commitments (fallout-adjusted) (1)

$

6,155,532


0.87

%


$

6,304,425


0.83

%


$

5,298,728


0.85

%












Year Ended


December 31, 2014


December 31, 2013

Description










Valuation gain (loss)










Value of interest rate locks

$

20,465


0.08

%


$

(75,948)


(0.19)

%

Value of forward sales

(32,683)


(0.13)

%


33,945


0.09

%

Fair value of loans held-for-sale

401,313


1.64

%


200,639


0.50

%

Total valuation gains

389,095


1.59

%


156,839


0.40

%











Sales (losses) gains










Marketing gains, net of adjustments

(7,009)


(0.03)

%


(822)


—

%

Pair-off gains (losses)

(169,429)


(0.69)

%


263,782


0.68

%

Provision for representation and warranty reserve

(6,854)


(0.03)

%


(17,606)


(0.05)

%

Total sales (losses) gains

(183,292)


(0.75)

%


245,354


0.63

%

Total gain on loan sales

$

205,803





$

402,193




Total mortgage rate lock commitments (gross)

$

29,545,705





$

39,316,782




Total loan sales and securitizations

$

24,407,054


0.84

%


$

39,074,649


1.03

%

Total mortgage rate lock commitments (fallout-adjusted) (1)

$

24,006,960


0.86

%


$

31,590,150


1.27

%

(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. The net margin is based on net gain on loan sales to fallout-adjusted mortgage rate lock commitments.

Regulatory Capital - Bank

(Dollars in thousands)

(Unaudited)








December 31, 2014


September 30, 2014


December 31, 2013


Amount

Ratio


Amount

Ratio


Amount

Ratio

Tier 1 leverage (to adjusted tangible assets) (1)

$

1,167,422


12.43

%


$

1,134,429


12.38

%


$

1,257,608


13.97

%

Total adjusted tangible asset base

$

9,392,178





$

9,162,342





$

9,004,904




Tier 1 capital (to risk weighted assets) (1)

$

1,167,422


22.54

%


$

1,134,429


22.84

%


$

1,257,608


26.82

%

Total capital (to risk weighted assets) (1)

1,234,958


23.85

%


1,199,410


24.14

%


1,317,964


28.11

%

Risk weighted asset base

$

5,178,781





$

4,967,755





$

4,688,545




(1)

Based on adjusted total assets for purposes of core capital and risk-weighted assets for purposes of total risk-based capital.  These ratios are applicable to the Bank only. 

 

Regulatory Capital - Bancorp

(Dollars in thousands)

(Unaudited)

 


December 31, 2014


September 30, 2014


June 30, 2014


March 31, 2014


December 31, 2013


Amount

Ratio


Amount

Ratio


Amount

Ratio


Amount

Ratio


Amount

Ratio

Tier 1 leverage (to adjusted tangible assets) (1)

$

1,183,625


12.59

%


$

1,146,187


12.50

%


$

1,195,494


12.59

%


$

1,158,532


12.63

%


$

1,280,532


14.21

%

Total adjusted tangible asset base

$

9,403,219





$

9,172,557





$

9,495,500





$

9,171,170





$

9,014,524




Tier 1 capital (to risk weighted assets) (1)

$

1,183,625


22.81

%


$

1,146,187


23.03

%


$

1,195,494


23.87

%


$

1,158,532


23.96

%


$

1,280,532


27.25

%

Total capital (to risk weighted assets) (1)

1,251,916


24.12

%


1,211,976


24.35

%


1,261,799


25.19

%


1,222,581


25.28

%


1,341,616


28.55

%

Risk weighted asset base

$

5,189,822





$

4,977,969





$

5,008,866





$

4,836,270





$

4,698,580




(1)

Based on adjusted total assets for purposes of core capital and risk-weighted assets for purposes of total risk-based capital.

Loan Originations

(Dollars in thousands)

(Unaudited)


Three Months Ended


December 31, 2014


September 30, 2014


December 31, 2013

Consumer loans















    Mortgage (1)

$

6,603,413


98.5

%


$

7,186,856


98.8

%


$

6,439,242


99.0

%

    Other consumer (2)

26,506


0.4

%


28,678


0.4

%


16,295


0.3

%

Total consumer loans

6,629,919


98.9

%


7,215,534


99.2

%


6,455,537


99.3

%

Commercial loans (3)

76,352


1.1

%


55,406


0.8

%


48,678


0.7

%

Total loan originations

$

6,706,271


100.0

%


$

7,270,940


100.0

%


$

6,504,215


100.0

%


Year Ended


December 31, 2014


December 31, 2013

Consumer loans










    Mortgage (1)

$

24,607,550


98.0

%


$

37,481,877


99.2

%

    Other consumer (2)

93,046


0.4

%


61,318


0.2

%

Total consumer loans

24,700,596


98.4

%


37,543,195


99.4

%

Commercial loans (3)

397,803


1.6

%


239,505


0.6

%

Total loan originations

$

25,098,399


100.0

%


$

37,782,700


100.0

%

(1)

Includes residential first mortgage and second mortgage loans. 

(2)

Other consumer loans include: HELOC and other consumer loans.

(3)

Commercial loans include: commercial real estate, commercial and industrial and commercial lease financing loans.

Loans Held-for-Investment

(Dollars in thousands)

(Unaudited)








December 31, 2014


September 30, 2014


December 31, 2013

Consumer loans















Residential first mortgage

$

2,193,252


49.3

%


$

2,224,734


53.2

%


$

2,508,968


61.9

%

Second mortgage

149,032


3.4

%


153,891


3.7

%


169,525


4.2

%

HELOC

256,318


5.8

%


261,826


6.3

%


289,880


7.1

%

Other

31,108


0.7

%


31,612


0.8

%


37,468


0.9

%

    Total consumer loans

2,629,710


59.1

%


2,672,063


63.9

%


3,005,841


74.1

%

Commercial loans















Commercial real estate

620,014


13.9

%


566,870


13.5

%


408,870


10.1

%

Commercial and industrial

419,499


9.4

%


341,312


8.2

%


207,187


5.1

%

Commercial lease financing

9,687


0.2

%


9,853


0.2

%


10,341


0.3

%

Warehouse lending

768,644


17.3

%


594,526


14.2

%


423,517


10.4

%

    Total commercial loans

1,817,844


40.9

%


1,512,561


36.1

%


1,049,915


25.9

%

Total loans held-for-investment

$

4,447,554


100.0

%


$

4,184,624


100.0

%


$

4,055,756


100.0

%

Residential Loans Serviced

(Dollars in thousands)

(Unaudited)








December 31, 2014


September 30, 2014


December 31, 2013


Unpaid
Principal
Balance

Number of
accounts


Unpaid
Principal
Balance

Number of
accounts


Unpaid
Principal
Balance

Number of
accounts

Serviced for own loan portfolio (1)

$

4,521,125


26,268



$

5,061,943


26,671



$

5,648,699


$

34,099


Serviced for others

25,426,768


117,881



26,377,572


122,788



25,743,396


131,413


Subserviced for others (2)

46,723,713


238,498



46,695,465


238,425



40,431,867


198,256


Total residential loans serviced

$

76,671,606


382,647



$

78,134,980


387,884



$

71,823,962


363,768


(1)

Includes loans held-for-investment (residential first mortgage, second mortgage and HELOC), loans-held-for-sale (residential first mortgage), loans with repurchased government guarantees (residential first mortgage) and repossessed assets.

(2)

Does not include temporary short-term subservicing performed as a result of sales of servicing-released mortgage servicing rights.  Includes repossessed assets.

Allowance for Loan Losses

(Dollars in thousands)

(Unaudited)






Three Months Ended


Year Ended


December 31,
 2014


September 30,
 2014


December 31,
 2013


December 31,
 2014


December 31,
 2013

Beginning balance

$

301,000



$

306,000



$

207,000



$

207,000



$

305,000


Provision for loan losses

4,986



8,097



14,110



131,553



70,142


Charge-offs















Consumer loans















     Residential first mortgage

(8,799)



(12,320)



(9,868)



(37,584)



(133,326)


     Second mortgage

(353)



(645)



(730)



(3,211)



(6,252)


     HELOC

(758)



(1,355)



(1,728)



(5,857)



(5,473)


     Other

(418)



(565)



(995)



(1,923)



(3,622)


 Total consumer loans

(10,328)



(14,885)



(13,321)



(48,575)



(148,673)


Commercial loans















     Commercial real estate

(2)



(672)



(5,051)



(2,463)



(47,982)


     Commercial and industrial

—



—



(48)



—



(350)


     Commercial lease financing

—



—



(1,299)



—



(1,299)


     Warehouse lending

—



(74)



—



(74)



(45)


 Total commercial loans

(2)



(746)



(6,398)



(2,537)



(49,676)


Total charge-offs

(10,330)



(15,631)



(19,719)



(51,112)



(198,349)


Recoveries















Consumer loans















     Residential first mortgage

208



1,267



1,033



3,049



15,329


     Second mortgage

94



204



353



477



1,178


     HELOC

27



45



315



183



1,020


     Other

853



768



1,235



2,311



2,079


Total consumer loans

1,182



2,284



2,936



6,020



19,606


Commercial loans















     Commercial real estate

125



183



2,300



3,319



10,162


     Commercial and industrial

33



9



85



111



151


     Commercial lease financing

—



—



288



47



288


     Warehouse lending

4



58



—



62



—


Total commercial loans

162



250



2,673



3,539



10,601


Total recoveries

1,344



2,534



5,609



9,559



30,207


Charge-offs, net of recoveries

(8,986)



(13,097)



(14,110)



(41,553)



(168,142)


Ending balance

$

297,000



$

301,000



$

207,000



$

297,000



$

207,000


Net charge-off ratio (annualized) (1)

0.91

%


1.36

%


1.53

%


1.07

%


4.00

%

Net charge-off ratio, adjusted (annualized) (1)(2)

0.60

%


0.70

%


1.53

%


0.77

%


2.45

%

Net charge-off ratio (annualized) also by loan type (1)















Residential first mortgage

1.58

%


1.92

%


1.37

%


1.47

%


4.29

%

Second mortgage

1.07



1.78



1.42



2.73



4.66


HELOC and consumer

0.78



47.03



2.62



3.39



3.03


Commercial real estate

0.08



0.36



2.66



0.16



7.53


Commercial and industrial and lease financing

0.03



(0.01)



1.80



0.05



3.09


Warehouse

—



0.01



—



—



0.01


(1)

Excludes loans carried under the fair value option.

(2)

Excludes charge-offs of $3.0 million and $6.3 million related to the sale loans during the three months ended December 31, 2014 and September 30, 2014, respectively. Excludes charge-offs of $11.4 million and $65.1 million related to loan sales during the years ended December 31, 2014 and
2013 respectively.

Representation and Warranty Reserve

(Dollars in thousands)

(Unaudited)








Three Months Ended


Year Ended


December 31,
2014


September 30,
2014


December 31,
2013


December 31,
2014


December 31,
2013

 Balance, beginning of period

$

57,000



$

50,000



$

174,000



$

54,000



$

193,000


 Provision
















Charged to gain on sale for current loan sales

1,929



1,981



3,018



6,854



17,606



Charged to representation and warranty provision

(6,080)



12,538



(15,425)



10,011



36,116



Total

(4,151)



14,519



(12,407)



16,865



53,722


 Charge-offs, net

151



(7,519)



(107,593)



(17,865)



(192,722)


 Balance, end of period

$

53,000



$

57,000



$

54,000



$

53,000



$

54,000























Composition of Allowance for Loan Losses

(Dollars in thousands)

(Unaudited)







December 31, 2014

Collectively Evaluated

Reserves


Individually Evaluated
Reserves


Total

Consumer loans









   Residential first mortgage

$

152,446



$

81,842



$

234,288


   Second mortgage

6,791



5,633



12,424


   HELOC

17,674



1,049



18,723


   Other

645



121



766


Total consumer loans

177,556



88,645



266,201


Commercial loans









   Commercial real estate

17,359



—



17,359


   Commercial and industrial

10,581



—



10,581


   Commercial lease financing

131



—



131


   Warehouse lending

2,728



—



2,728


Total commercial loans

30,799



—



30,799


Total allowance for loan losses

$

208,355



$

88,645



$

297,000














September 30, 2014

Collectively Evaluated
Reserves


Individually Evaluated
Reserves


Total

Consumer loans









   Residential first mortgage

$

157,198



$

82,858



$

240,056


   Second mortgage

7,089



5,514



12,603


   HELOC

17,453



1,179



18,632


   Other

1,545



—



1,545


Total consumer loans

183,285



89,551



272,836


Commercial loans









   Commercial real estate

20,584



—



20,584


   Commercial and industrial

5,202



—



5,202


   Commercial lease financing

144



—



144


   Warehouse lending

2,234



—



2,234


Total commercial loans

28,164



—



28,164


Total allowance for loan losses

$

211,449



$

89,551



$

301,000


Non-Performing Loans and Assets

(Dollars in thousands)

(Unaudited)








December 31,
2014


September 30,
2014


December 31,
2013

Non-performing loans

$

74,839



$

72,361



$

98,976


Non-performing TDRs

28,687



17,507



25,808


Non-performing TDRs at inception but performing for less than six months

16,965



17,076



20,901


Total non-performing loans held-for-investment

120,491



106,944



145,685


Real estate and other non-performing assets, net

18,693



27,149



36,636


Non-performing assets held-for-investment, net (1)

$

139,184



$

134,093



$

182,321











Ratio of non-performing assets to total assets (Bank only)

1.42

%


1.40

%


1.95

%

Ratio of non-performing loans held-for-investment to loans held-for-investment

2.71

%


2.56

%


3.59

%

Ratio of non-performing assets to loans held-for-investment and repossessed assets

3.12

%


3.18

%


4.46

%

(1)

Does not include non-performing loans held-for-sale of $14.8 million, $18.0 million and $0.8 million at December 31, 2014, September 30, 2014 and December 31, 2013, respectively.

Asset Quality - Loans Held-for-Investment

(Dollars in thousands)

(Unaudited)








30-59 Days Past Due

60-89 Days Past Due

Greater than 90 days

Total Past Due

Total Investment
Loans

December 31, 2014











Consumer loans

$

34,005


$

9,894


$

120,491


$

164,390


$

2,629,710


Commercial loans

—


—


—


—


1,817,844


     Total loans

$

34,005


$

9,894


$

120,491


$

164,390


$

4,447,554


September 30, 2014











Consumer loans

$

40,188


$

12,139


$

106,944


$

159,271


$

2,672,063


Commercial loans

5,489


—


—


5,489


1,512,561


     Total loans

$

45,677


$

12,139


$

106,944


$

164,760


$

4,184,624


December 31, 2013











Consumer loans

$

41,013


$

20,732


$

144,185


$

205,930


$

3,005,841


Commercial loans

—


—


1,500


1,500


1,049,915


     Total loans

$

41,013


$

20,732


$

145,685


$

207,430


$

4,055,756


Troubled Debt Restructurings

(Dollars in thousands)

(Unaudited)




TDRs


Performing


Non-performing


Non-performing
TDRs at inception
but performing for
less than six
months


Total

December 31, 2014


Consumer loans

$

361,450



$

28,687



$

16,965



$

407,102


Commercial loans

403



—



—



403


Total TDRs

$

361,853



$

28,687



$

16,965



$

407,505


September 30, 2014












Consumer loans

$

365,553



$

17,507



$

17,076



$

400,136


Commercial loans

418



—



—



418


Total TDRs

$

365,971



$

17,507



$

17,076



$

400,554


December 31, 2013












Consumer loans

$

382,529



$

25,808



$

20,901



$

429,238


Commercial loans

456



—



—



456


Total TDRs

$

382,985



$

25,808



$

20,901



$

429,694


Efficiency ratio and efficiency ratio (adjusted). The efficiency ratio, which generally measures the productivity of a bank, is calculated as non-interest expense divided by total operating income. Total operating income includes net-interest income and total non-interest income. Management utilizes the efficiency ratio to monitor its own productivity and believes the ratio provides investors with a meaningful tool to monitor period-to-period productivity trends. The efficiency ratio (adjusted), excludes from non-interest expense and non-interest income (GAAP) certain adjusting items, that have been described in the table below. As the provision for loan losses is already excluded by the ratio's own definition, we believe that the exclusion of representation and warranty provision provides investors with a more complete picture of our productivity and ability to generate operating income. The efficiency ratio (adjusted) provides investors with a meaningful base for period to period comparisons, which management believes will assist investors in analyzing our operating results and predicting future performance. These non-GAAP financial measures are also utilized internally by management to assess the performance of our own business.

Our calculations of the efficiency ratio may differ from the calculation of similar measures used by other bank and thrift holding companies, and should be used to determine and evaluate period to period trends in our performance, rather than in comparison to other similar non-GAAP measurements utilized by other companies. In addition, investors should keep in mind that certain items excluded from income and expenses in the efficiency ratio (adjusted) are recurring and integral expenses to our operations, and that these expenses will still accrue under similar GAAP measures.

Adjusted income and adjusted earnings per share. In addition to analyzing the Company's results on a reported basis, management reviews the Company's results and the results on an adjusted basis. These non-GAAP measures reflect the adjustment of the reported U.S. GAAP results for significant items that management does not believe are reflective of the Company's current and ongoing operations.

The following table provides a reconciliation of non-GAAP financial measures utilized in the adjusted efficiency ratio and adjusted earnings per share.

Non-GAAP Reconciliation

(Dollars in thousands)

(Unaudited)





Three Months Ended

Year Ended


December 31,
 2014

September 30,
 2014

June 30,
 2014

March 31,
 2014

December 31,
 2013

December 31,
 2014

December 31,
 2013

Net interest income (a)

$

61,302


$

64,363


$

62,425


$

58,201


$

41,203


$

246,291


$

186,651


Noninterest income (b)

98,441


85,188


102,484


74,953


113,146


361,065


652,343


Less provisions:















Representation and warranty provision

(6,080)


2,163


5,226


(1,672)


9,476


364


61,016


Adjusting items:















Loan fees and charges (1)

—


—


(10,000)


—


—


(10,000)


—


Net impairment loss (2)

—


—


—


—


—


—


8,789


Representation and warranty provision (3)

—


10,375


—


—


(24,900)


10,375


(24,900)


Other noninterest income (4)

—


—


—


21,056


—


21,056


(36,854)


Adjusted noninterest income

$

98,441


$

95,563


$

92,484


$

96,009


$

88,246


$

382,496


$

599,378


Adjusted income (c)

$

153,663


$

162,089


$

160,135


$

152,538


$

138,925


$

629,151


$

847,045


Noninterest expense (d)

$

139,253


$

179,389


$

121,353


$

139,252


$

388,693


$

579,246


$

918,115


Adjusting items:















Loss on extinguishment of debt (5)

—


—


—


—


(177,556)


—


(177,556)


Legal and professional expense (6)

—


(1,116)


(2,879)


—


—


(3,995)


—


Other noninterest expense (7)

—


(37,500)


10,000


—


(61,000)


(27,500)


(51,000)


Adjusted noninterest expense (e)

$

139,253


$

140,773


$

128,474


$

139,252


$

150,137


$

547,751


$

689,559

















Efficiency ratio (d/(a+b))

87.2

%

120.0

%

73.6

%

104.6

%

251.8

%

95.4

%

109.4

%

Efficiency ratio (adjusted) (e/c)

90.6

%

86.8

%

80.2

%

91.3

%

108.1

%

87.1

%

81.4

%
















Net (loss) income applicable to common stockholders

$

11,076


$

(27,632)


$

25,514


$

(78,906)


$

160,457


$

(69,948)


$

261,203


Adjustment to remove adjusting items (1-7 above), net of tax

—


48,991


(17,121)


21,056


213,656


52,926


175,591


Tax impact of adjusting items

—


(13,646)


5,992


(7,370)


(54,471)


—


(60,579)


Adjusting tax item

—


—


—


—


(355,769)


—


(355,769)


Adjusted net (loss) income applicable to common stockholders

$

11,076


$

7,713


$

14,385


$

(65,220)


$

(36,127)


$

(17,022)


$

20,446

















Diluted (loss) earnings per share

$

0.07


$

(0.61)


$

0.33


$

(1.51)


$

2.77


$

(1.72)


$

4.37


Adjustment to remove adjusting items

—


0.86


(0.31)


0.38


3.77


0.94


3.11


Tax impact of adjusting items

—


(0.24)


0.11


(0.13)


(0.96)


—


(1.07)


Adjusting tax item

—


—


—


—


(6.28)


—


(6.30)


Diluted adjusted (loss) earnings per share

$

0.07


$

0.01


$

0.13


$

(1.26)


$

(0.70)


$

(0.78)


$

0.11

















Weighted average shares outstanding















       Basic

56,310,858


56,249,300


56,230,458


56,194,184


56,126,895


56,246,528


56,063,282


       Diluted

56,792,751


56,249,300


56,822,102


56,194,184


56,694,096


56,246,528


56,518,181


(1)

Reverse benefit for contract renegotiation.

(2)

Add back impairment charge related to the litigation settlement with MBIA.

(3)

Add back reserve increase related to indemnifications claims on government insured loans.

(4)

In 2014, negative fair value adjustment on repurchased performing loans and a benefit for contract renegotiation. In 2013, reversal of contingent liability reserve resulting from terms of settlement reached on a litigation settlement related to the HELOC securitization trusts.

(5)

Loss on extinguishment of debt as a result of the prepayment of the higher cost long-term Federal Home Loan Bank advances.

(6)

Adjust for legal expenses related to the litigation settlements during the respective periods.

(7)

Adjust for CFPB litigation settlement expense.

Nonperforming assets / Tier 1 + allowance for Loan Losses. The ratio of nonperforming assets to Tier 1 and allowance for loan losses divides the total level of nonperforming assets held for investment by Tier 1 capital (to adjusted total assets), as defined by bank regulations, plus allowance for loan losses. We believe these measurements are meaningful measures of capital adequacy used by investors, regulators, management and others to evaluate the adequacy of capital in comparison to other companies within the industry.


December 31,
 2014


September 30,
 2014


December 31,
 2013

Non-performing assets / Tier 1 capital + allowance for loan losses

(Dollars in thousands)

Non-performing assets

$

139,184



$

134,093



$

182,321


Tier 1 capital (1)

1,167,422



1,134,429



1,257,608


Allowance for loan losses

297,000



301,000



207,000


Tier 1 capital + allowance for loan losses

$

1,464,422



$

1,435,429



$

1,464,608


Non-performing assets / Tier 1 capital + allowance for loan losses

9.5

%


9.3

%


12.4

%










(1)

Represents Tier 1 capital for the Bank.

Mortgage servicing rights to Tier 1 capital ratio. The ratio of mortgage servicing rights to Tier 1 capital divides the total mortgage servicing rights by Tier 1 capital, as defined by bank regulations. We believe these measurements are meaningful measures of capital adequacy, especially in relation to the level of our mortgage servicing rights. This ratio allows our investors, regulators, management and other parties to measure the adequacy and quality of our mortgage servicing rights and capital, in comparison to other companies within our industry.

Mortgage servicing rights to Tier 1 capital ratio

December 31,
 2014


September 30,
 2014


June 30,
 2014


March 31,
 2014


December 31,
 2013


(Dollars in thousands)

Mortgage servicing rights

$

257,827



$

285,386



$

289,185



$

320,231



$

284,678


Tier 1 capital (to adjusted total assets) (1)

1,167,422



1,134,429



1,188,936



1,139,810



1,257,608


Mortgage servicing rights to Tier 1 capital ratio

22.1

%


25.2

%


24.3

%


28.1

%


22.6

%
















(1)

Represents Tier 1 capital for the Bank.

Mortgage servicing rights to Tier 1 capital ratio

December 31,
 2014


September 30,
 2014


June 30,
 2014


March 31,
 2014


December 31,
 2013


(Dollars in thousands)




Mortgage servicing rights

$

257,827



$

285,386



$

289,185



$

320,231



$

284,678


Tier 1 capital (to adjusted total assets) (1)

1,183,625



1,146,187



1,195,494



1,158,532



1,280,532


Mortgage servicing rights to Tier 1 capital ratio

21.8

%


24.9

%


24.2

%


27.6

%


22.2

%




































(1)

Represents Tier 1 capital for the Company.

Basel I to Basel III (fully phased-in) reconciliation. We currently calculate our risk-based capital ratios under guidelines adopted by the OCC based on the 1988 Capital Accord ("Basel I") of the Basel Committee on Banking Supervision (the "Basel Committee"). In December 2010, the Basel Committee released its final framework for Basel III, which will strengthen international capital and liquidity regulations. When fully phased-in, Basel III will increase capital requirements through higher minimum capital levels as well as through increases in risk-weights for certain exposures. Additionally, the final Basel III rules place greater emphasis on common equity. In October 2013, the OCC and Federal Reserve released final rules detailing the U.S. implementation of Basel III and the application of the risk-based and leverage capital rules to top-tier savings and loan holding companies. We have transitioned to the Basel III framework beginning in January 2015 and are subject to a phase-in period extending through January 2019. We are currently evaluating the impact of the final Basel III rules. Accordingly, the calculations provided below are estimates. These measures are considered to be non-GAAP financial measures because they are not formally defined by GAAP and the Basel III implementation regulations will not be fully phased-in until 2019. The regulations are subject to change as clarifying guidance becomes available and the calculations currently include our interpretations of the requirements including informal feedback received through the regulatory process. Other entities may calculate the Basel III ratios differently from ours based on their interpretation of the guidelines. Since analysts and banking regulators may assess our capital adequacy using the Basel III framework, we believe that it is useful to provide investors information enabling them to assess our capital adequacy on the same basis.

December 31, 2014

Common Equity Tier
1 (to Risk Weighted
Assets)


Tier 1 Leverage (to
Adjusted Tangible
Assets)
(1)

Flagstar Bank (the Bank)






Regulatory capital – Basel I to Basel III (fully phased-in) (2)






Basel I capital

$

1,167,422



$

1,167,422


Increased deductions related to deferred tax assets, mortgage servicing assets, and other capital components

(117,406)



(117,406)


Basel III (fully phased-in) capital (2)

$

1,050,016



$

1,050,016


Risk-weighted assets – Basel I to Basel III (fully phased-in) (2)






Basel I assets

$

5,178,781



$

9,392,178


Net change in assets

124,516



192,481


Basel III (fully phased-in) assets (2)

$

5,303,297



$

9,584,659


Capital ratios






Basel I (3)

22.54

%


12.43

%

Basel III (fully phased-in) (2)

19.80

%


10.96

%







(1)

The definition of total assets used in the calculation of the Tier 1 Leverage ratio changed from ending total assets under Basel I to quarterly average total assets under Basel III.

(2)

Basel III information is considered estimated and not final at this time as the Basel III rules continue to be subject to interpretation by U.S. Banking Regulators.

(3)

As of December 31, 2014, the Bank was subject to the requirements of Basel I.

December 31, 2014

Common Equity Tier
1 (to Risk Weighted
Assets)


Tier 1 Leverage (to
Adjusted Tangible
Assets)
(1)

Flagstar Bank (the Company)






Regulatory capital – Basel I to Basel III (fully phased-in) (2)






Basel I capital

$

669,533



$

1,183,624


Increased deductions related to deferred tax assets, mortgage servicing assets, and other capital components

(205,243)



(209,028)


Basel III (fully phased-in) capital (2)

$

464,290



$

974,596


Risk-weighted assets – Basel I to Basel III (fully phased-in) (2)






Basel I assets

$

5,189,822



$

9,403,220


Net change in assets

(97,735)



108,862


Basel III (fully phased-in) assets (2)

$

5,092,087



$

9,512,082


Capital ratios






Basel I (3)

12.90

%


12.59

%

Basel III (fully phased-in) (2)

9.12

%


10.25

%







(1)

The definition of total assets used in the calculation of the Tier 1 Leverage ratio changed from ending total assets under Basel I to quarterly average total assets under Basel III.

(2)

Basel III information is considered estimated and not final at this time as the Basel III rules continue to be subject to interpretation by U.S. Banking Regulators.

(3)

As of December 31, 2014, the Bank was subject to the requirements of Basel I.

SOURCE Flagstar Bancorp, Inc.

Related Links

http://www.flagstar.com

Modal title

Contact Cision

  • Cision Distribution 888-776-0942
    from 8 AM - 9 PM ET

  • Chat with an Expert
  • General Inquiries
  • Request a Demo
  • Editorial Bureaus
  • Partnerships
  • Media Inquiries
  • Worldwide Offices

Products

  • Cision Communication Cloud®
  • For Marketers
  • For Public Relations
  • For IR & Compliance
  • For Agency
  • For Small Business
  • All Products

About

  • About PR Newswire
  • About Cision
  • Become a Publishing Partner
  • Become a Channel Partner
  • Careers
  • COVID-19 Resources
  • Accessibility Statement
  • Asia
  • Brazil
  • Canada
  • Czech
  • Denmark
  • Finland
  • France
  • Germany
  • India
  • Israel
  • Italy
  • Mexico
  • Middle East
  • Netherlands
  • Norway
  • Poland
  • Portugal
  • Russia
  • Slovakia
  • Spain
  • Sweden
  • United Kingdom

My Services

  • All New Releases
  • Online Member Center
  • ProfNet

Contact Cision

Products

About

My Services
  • All News Releases
  • Online Member Center
  • ProfNet
Cision Distribution Helpline
888-776-0942
  • Terms of Use
  • Privacy Policy
  • Information Security Policy
  • Site Map
  • RSS
  • Cookie Settings
Copyright © 2022 Cision US Inc.