Flagstar Bank, N.a. · NYSE:FLG
Flagstar Bank, N.a — New York Community Bancorp — Q2 2008 Earnings Presentation
38 slides from Flagstar Bank, N.a's earnings presentation, Aug 5, 2008
Slide 1: Second Quarter 2008 Investor Presentation
Exhibit 99.1 Second Quarter 2008 Investor Presentation
Slide 2: Forward-looking Statements and Associated Risk Factors
Forward-looking Statements and Associated Risk Factors Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995 This presentation, like many written and oral communications presented by New York Community Bancorp, Inc. and our authorized officers, may contain certain forward-lo
Slide 3: A leading financial institution in the Metro New York/New Jersey region
We are a leading financial institution in the competitive Metro New York/New Jersey region. With assets of $31.1 billion: We operate the 4th largest thrift in the nation and the largest in New York State. (a) With a portfolio of $14.7 billion: We are a leading producer of multi-family loans for port
Slide 4: 2nd Quarter 2008 Performance Highlights
* * * * * ************** * ************** * ************** 2nd Quarter 2008 ************** ************** Performance Highlights ************** **************
Slide 5: 2Q 2008 Strategies: stock issuance and borrowings prepaid
During the quarter, we issued 17.9 million shares at $19.35 per share, or 3.9x tangible book value, immediately enhancing our tangible equity and setting the stage for double-digit EPS accretion. 2Q 2008 Strategies Actions Benefits We prepaid $4 billion of wholesale and other Reduced the cost of the
Slide 6: Our 2Q 2008 performance featured several favorable trends
Our 2Q 2008 performance featured several favorable trends. Operating Earnings Operating earnings rose $4.9 million on a linked-quarter basis to $75.1 Growth million, equivalent to a penny increase in diluted earnings per share to (a) $0.23. Revenue On an operating basis, net interest income rose $8.
Slide 7: Net interest margin stable and expected to expand
Our net interest margin has been stable in a challenging rate environment and is expected to expand by approximately 25 bp beginning in 3Q 2008. Linked- quarter Y-O-Y Increase Increase (dollars in thousands) 2Q 2007 3Q 2007 4Q 2007 1Q 2008 2Q 2008 (Decrease) 2006 2007 (Decrease) Average yield on loa
Slide 8: Capital position has enabled a strong dividend
The strength of our capital position has enabled us to pay a strong dividend. Both of our bank subsidiaries are well capitalized institutions: 6/30/08 Community Bank Commercial Bank Leverage capital ratio 7.42% 10.08% The Company’s tangible capital measures were enhanced by our recent common stock o
Slide 9: Well positioned to capitalize on market opportunities
We remain well positioned to capitalize on opportunities presented in the current market. We have no subprime or Alt-A mortgages in our loan portfolio and no subprime- or Alt-A-backed mortgage securities. We have maintained our record of asset quality by maintaining our primary focus on multi-family
Slide 10: A consistent business model focused on building value
We have a consistent business model that focuses on building value while building the Company. The origination of multi-family loans: We have originated $22.4 billion of multi-family loans since January 2000, including $2.5 billion in 2007 and $1.5 billion in 1H 2008. The maintenance of strong credi
Slide 11: Our Business Model: Multi-family Lending
* * * * * ************** * ************** * ************** ************** Our Business Model: ************** Multi-family Lending ************** **************
Slide 12: Multi-family loans have grown at a CAGR of 32.5%
Multi-family loans have grown at a CAGR of 32.5% since 12/31/99. (in millions) Portfolio statistics at 6/30/08: % of total loans = 70.4% Average principal balance = $3.7 Multi-family Loan Portfolio million $14,725 Average loan-to-value ratio = $14,529 62.7% $14,055 $12,854 Expected weighted average
Slide 13: Multi-family loans feature a unique refinancing cycle
Our multi-family loans feature a unique refinancing cycle. NYB Rent Roll / Refinances Loan Borrower Income Stream Based on Higher Uses Funds Increases Income Stream, to Improve over the Increasing Short Term the Property Loan Size and (3–5 years) Term Yield NYB NYB Originates Rent Roll / Borrower In
Slide 14: Commercial real estate loans feature the same structure
Our commercial real estate loans feature the same structure as our multi-family loans. (in millions) Portfolio statistics at 6/30/08: % of total loans = 19.5% Average principal balance = $2.2 Commercial Real Estate Loan Portfolio million Average loan-to-value ratio = $4,090 55.9% $3,826 Expected wei
Slide 15: Our Business Model: Asset Quality
* * * * * ************** * ************** * ************** ************** Our Business Model: ************** Asset Quality ************** **************
Slide 16: The quality of our assets has been distinctively solid
The quality of our assets has been distinctively solid. Non-performing Assets / Total Assets 1.64% 1.00% 0.60% 0.48% 0.51% 0.44% 0.15% 0.12% 0.11% 0.08% 0.10% 0.07% 12/31/03 12/31/04 12/31/05 12/31/06 12/31/07 6/30/08 SNL Bank & Thrift Index (a) NYB (a) SNL DataSource Page 16
Slide 17: None of our charge-offs have been mortgage-related
None of our charge-offs have been mortgage-related. Net Charge-offs / Average Loans 0.50% 0.27% 0.24% 0.20% 0.15% 0.15% 0.00% 0.002% 0.000% 0.002% 0.002% 0.008% 2003 2004 2005 2006 2007 1H 2008 NYB Charge-offs: -- $236,000 $21,000 $420,000 $431,000 $1.6 million SNL Bank & Thrift Index (a) NYB (a) SN
Slide 18: Our Business Model: Efficiency
* * * * * ************** * ************** * ************** ************** Our Business Model: ************** Efficiency ************** **************
Slide 19: Operating efficiency ratio of 40.14% in 2Q 2008
Our operating efficiency ratio was 40.14% (a) in 2Q 2008, well below the 68.47% average for the SNL Bank and Thrift Index. Multi-family and commercial real estate lending are both broker-driven, without cost to the Company. One- to four-family loans are originated on a pass-through basis and sold sh
Slide 20: Our Business Model: Growth through Acquisitions
* * * * * * * ******** ******** Our Business Model: ******** Growth through Acquisitions ********
Slide 21: We have completed eight acquisitions since 2000
We have completed eight acquisitions since 2000. 1 April 1859 3 Nov. 1993 5 July 2001 7 Dec. 2005 9 April 2007 11 Oct. 2007 Queens County Public trading Merger-of- We acquire We acquire We acquire Savings Bank, of New York equals with Long Island PennFed Synergy forebear of Community Richmond Financ
Slide 22: Balance sheet reflects acquisition strategy and organic loan growth
Our balance sheet reflects the benefits of our growth-through- acquisition strategy and the organic growth of our loan portfolio. w/ PFSB, Doral, & w/ HAVN w/ RCBK w/ RSLN w/ LICB w/ ABNY SYNF (dollars in billions) 12/31/99 12/31/00 12/31/01 12/31/03 12/31/05 12/31/06 12/31/07 6/30/08 Number of bran
Slide 23: Cash flows from sale of acquired assets converted into securities and loans
The cash flows from the post-merger sale of acquired assets are typically converted into securities and then into loans. $20,925 $20,363 $19,653 w/ PFSB, (dollars in millions) w/ ABNY Doral, & SYNF $17,029 Loans w/ LICB Securities $13,396 $10,499 $9,500 w/ RSLN $7,081 $5,637 $5,744 $5,631 $4,926 % o
Slide 24: 163 locations in New York and 54 in New Jersey
Largely reflecting our acquisition strategy, we currently have 163 locations in New York and 54 in New Jersey. Our Franchise New York Community Bank Traditional branches 125 In-store branches 46 Campus branches 5 Customer convenience centers 3 Subtotal 179 New York Commercial Bank Traditional branch
Slide 25: Our deposit growth has been largely acquisition-driven
Our deposit growth has been largely acquisition- driven. w/ PFSB, Doral, & SYNF (in millions) Deposits w/ ABNY w/ LICB $1,273 $1,232 w/ RSLN $1,123 CDs $846 NOW, MMAs, and Savings Demand deposits $720 $739 $4,971 $5,940 $5,551 $6,012 Total deposits: 34.5% CAGR w/ RCBK $5,247 $5,911 Core deposits: 39
Slide 26: Franchise expansion enables competing against money center banks
The expansion of our franchise has enabled us to compete very effectively against the region’s money center banks. (dollars in thousands) RICHMOND COUNTY, NY NASSAU COUNTY, NY QUEENS COUNTY, NY Market Market Market Rank Institution Deposits Share Rank Institution Deposits Share Rank Institution Depo
Slide 27: The bulk of our loan growth has been organic
While acquisitions have contributed to the growth of our loan portfolio, the bulk of our loan growth has been organic. w/ PFSB, (in millions) Loans Outstanding Doral, & SYNF w/ ABNY w/ LICB Multi-family Loans Outstanding $6,200 $5,124 $6,308 All Other Loans Outstanding $4,175 w/ RSLN $3,557 Multi-fa
Slide 28: Total Return on Investment
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Slide 29: Our business model has created significant value for shareholders
Our business model has created significant value for our shareholders over time. Total Return on Investment 3,014% 2,885% 2,479% CAGR since IPO = 38.1% SNL Bank & Thrift Index (a) NYB(b) 717% 615% 462% 310% 240% 11/23/93 12/31/99 12/31/06 12/31/07 6/30/08 Cumulative cash return provided by dividends
Slide 30: Returns on our shares compare favorably to peers
The returns on our shares have compared very favorably to those of our peers. Total Return on Investment through 6/30/08 NY & NJ Banks & SNL Bank & Thrift Thrifts (a) Index (a) NYB (b) Since 12/31/07 (27)% (30)% 4% Since 12/31/06 (43)% (46)% 21% Since 12/31/99 (9)% 13 % 281% Since our IPO (11/23/93)
Slide 31: We are committed to building value for our investors
We are committed to building value for our investors. Our Goals Improve Our Performance Metrics: Continue to expand our net interest margin Maintain a strong level of operating efficiency Increase our revenues through the cross-sale of products and services Grow our operating earnings Strengthen Our
Slide 32: For More Information
For More Information Log onto our web site: www.myNYCB.com E-mail requests to: ir@myNYCB.com Call Investor Relations at: (516) 683-4420 Write to: New York Community Bancorp, Inc. 615 Merrick Avenue Westbury, NY 11590 8/5/2008 Page 32
Slide 33: Reconciliation of GAAP and Non-GAAP Capital Measures
Reconciliation of GAAP and Non-GAAP Capital Measures The following table presents reconciliations of the Company’s stockholders’ equity, tangible stockholders’ equity, and adjusted tangible stockholders’ equity; total assets, tangible assets, and adjusted tangible assets; and the related capital mea
Slide 34: Reconciliation of GAAP and Non-GAAP Capital Measures
Reconciliation of GAAP and Non-GAAP Capital Measures The following table presents a reconciliation of the Company’s stockholders’ equity, tangible stockholders’ equity, and adjusted tangible stockholders’ equity; total assets, tangible assets, and adjusted tangible assets; and the related capital me
Slide 35: Reconciliation of GAAP and Non-GAAP Earnings
Reconciliation of GAAP and Non-GAAP Earnings The following table presents a reconciliation of the Company’s GAAP and operating earnings for the three months ended June 30, 2008, March 31, 2008, and June 30, 2007: For the Three Months Ended June 30, March 31, June 30, (in thousands, except per share
Slide 36: Reconciliation of Net Interest Income and Adjusted Net Interest Income
Reconciliation of Net Interest Income and Adjusted Net Interest Income The following table presents an analysis of the Company’s net interest income on a GAAP basis for the three months ended June 30 and March 31, 2008. Please see the following page for an analysis of the Company’s adjusted net inte
Slide 37: Reconciliation of Net Interest Income and Adjusted Net Interest Income
Reconciliation of Net Interest Income and Adjusted Net Interest Income The following table presents an analysis of the Company’s second quarter 2008 net interest income as if the aforementioned $39.6 million debt repositioning charge had not been recorded in interest expense. Although such adjusted
Slide 38: Reconciliation of GAAP and Operating Efficiency Ratio
Reconciliation of GAAP and Operating Efficiency Ratio The following table presents a reconciliation of the Company’s GAAP and operating efficiency ratios for the three months ended June 30, 2008: For the Three Months Ended June 30, 2008 (dollars in thousands) GAAP Operating Total net interest income
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