Flagstar Bank, N.a. · NYSE:FLG
Flagstar Bank, N.a — New York Community Bancorp — Q4 2019 Earnings Presentation
32 slides from Flagstar Bank, N.a's earnings presentation, Jan 29, 2020
Slide 1: Fourth Quarter 2019 Investor Presentation
Fourth Quarter 2019 Investor Presentation Exhibit 99.1
Slide 2: Forward-Looking Information
Forward-Looking Information This presentation may include forward‐looking statements by the Company and our authorized officers pertaining to such matters as our goals, intentions, and expectations regarding revenues, earnings, loan production, asset quality, capital levels, and acquisitions, among
Slide 3: Overview: Who we are
→ We are a leading producer of multi-family loans in New York City. Our niche within this market focuses on non-luxury apartment buildings that are rent-regulated featuring below-market rents. → Our expertise in this particular lending niche arises from: A consistent presence in this market for 50 y
Slide 4: We rank among the largest U.S. bank holding companies
We rank among the largest U.S. bank holding companies… Total Assets: $53.6 billion, 78% of which are loans. Total Deposits: $31.7 billion Total Loans: $41.7 billion including $31.2 billion of multi-family loans. Total Market Capitalization (a): $5.5 billion Total Return and Dividend Yield: Total ROI
Slide 5: … but without the risk other large banks have
… but without the risk other large banks have. Ratio NYCB At 12/31/19 SNL Bank &Thrift Index (b) At 9/30/19 Peers (b) At 9/30/19 NCOs/Average Loans 0.01 0.39 0.17 Cumulative losses (a) 104 bp 2,344 bp 1,215 bp NPAs/Total Assets 0.14% 0.50% 0.57% NPLs/Total Loans 0.15% 1.01% 0.79% ALLL/NPLs 241.07 17
Slide 6: A Strong Capital Position
A Strong Capital Position Ratio NYCB At 12/31/19 SNL Bank &Thrift Index (a) At 9/30/19 Peers At 12/31/19 Total Risk-Based Capital 13.27% 13.91% 13.04% Tier 1 Risk-Based Capital 11.22 12.45 11.20 Common Equity Tier 1 9.91 11.81 10.17 Tier 1 Leverage 8.66 10.13 9.23 SNL B&T information for 4Q2019 was
Slide 7: Total HFI Loans: $41.9 bn
Total HFI Loans: $41.9 bn Loans at 12/31/19 Loans – Our mix has not changed significantly since our IPO Majority of portfolio focused on low-risk multi-family loans on non-luxury, rent-regulated buildings Market leader in this asset class having developed strong expertise and industry relationships
Slide 8: Multi-Family Portfolio Statistics
Multi-Family Portfolio Statistics at or for the 3 Months Ended 12/31/19 74.4% of total loans (60.0% of originations) 77.9% of loans are in Metro New York Average principal balance = $6.4million Weighted average life = 2.0 years Weighted average LTV: 56.86% Weighed average LTV on rent-regulated: 53.1
Slide 9: Best-in-Class Credit Underwriting
Best-in-Class Credit Underwriting Conservative Underwriting Conservative loan-to-value ratios Conservative debt service coverage ratios: 120% for multi-family loans and 130% for CRE loans Multi-family and CRE loans are based on the lower of economic or market value Active Board Involvement The Mortg
Slide 10: Multi-Family Portfolio Well Insulated Against Rent Regulation Changes
→ $18.7 billion or 60% of the MF portfolio is subject to NYS rent regulations; WALTV (1) on this portion of the MF portfolio is 53.17%, 369 basis points below the overall MF portfolio. Our Multi-Family Portfolio is Well Insulated Against Recent Changes in the Rent Regulation Laws → We lend on curren
Slide 11: Commercial Real Estate Loan Portfolio
Commercial Real Estate Loan Portfolio (in millions) Originations: $1,661 $1,842 $1,180 $1,039 $967 $1,226 Net Charge-Offs (Recoveries): $1 $(1) $(1) $0 $3 $0 Commercial real estate is a logical extension of our multi-family niche. CRE Portfolio Statistics at or for the 3 Months Ended 12/31/19 16.9%
Slide 12: Specialty Finance Loan and Lease Portfolio
Specialty Finance Loan and Lease Portfolio (in millions) Originations: $848 $1,068 $1,266 $1,784 $1,917 $2,800 Net charge-Offs: $0 $0 $0 $0 $0 $0 Our specialty finance business is another high-quality lending niche. Loan Types Syndicated asset-based (ABLs) and dealer floor-plan (DFPLs) loans Equipme
Slide 13: Non-Performing Loans / Total Loans
Non-Performing Loans(a)(b) / Total Loans(a) Non-performing loans and total loans exclude covered loans and non-covered purchased credit-impaired (“PCI”) loans. Non-performing loans are defined as non-accrual loans and loans 90 days or more past due but still accruing interest. Our non-performing loa
Slide 14: Net Charge-Offs / Average Loans
… and very few of our non-performing loans have resulted in actual losses. Net Charge-Offs / Average Loans Cumulative Total NYCB: 104 bp SNL U.S. Bank and Thrift Index(c): 2,344 bp The calculation of our net charge-offs to average loans for 2017 excludes charge-offs of $59.6 million on taxi medallio
Slide 15: Consistent Profitability over Various Business Cycles
Consistent Profitability over Various Business Cycles due to Low Credit Costs and Highly Efficient Business Model. Source: S&P Global Market Intelligence. The 2015 amount reflects the $546.8 million after-tax impact of the debt repositioning charge recorded as interest expense and non-interest expen
Slide 16: Efficiency Ratio
Efficiency Ratio Peer Group (a) NYCB Highly Efficient Operator with Effective Business Model. Low Cost, Efficient Business Model Multi-family and CRE lending are both broker-driven, with the borrower paying fees to the mortgage brokerage firm Products and services are typically developed by third-pa
Slide 17: Total Deposits: $31.7 bn
Total Deposits: $31.7 bn Deposits at 12/31/19 Deposit Composition Deposits generated through retail and commercial channels Presence in several large markets – Metro New York, New Jersey, Ohio, Florida, and Arizona Steadily growing deposit base Average cost of interest-bearing deposits is 1.76% Aver
Slide 18: Three levers for future earnings growth
Lever # 1 - Loan Growth Total loans grew $1.7 billion or 4% year-to-date. Lever # 2 - Significant Repricing Opportunities There are $15.6 billion of loans with an average coupon of 3.43% contractually maturing or reaching their option re-pricing date over the next 3 years. We have $14.2 billion of C
Slide 19: Lever 1 – Back in growth mode
CAGR 1993-2009: 25.7% CAGR 2009-4Q 2019: 2.4% Dodd-Frank Enacted Lever # 1 – Back in growth mode Asset growth prior to and since Dodd-Frank was enacted
Slide 20: Lever 2 - Re-pricing Opportunities
Lever # 2 - Re-pricing Opportunities → Over the next 3 years, approximately $15.6 billion of MF and CRE loans with an average coupon of 3.43%, are reaching their contractual maturity date or their option re-pricing date. If the borrower does not refinance or pay us off before the contractual maturit
Slide 21: Portfolio coupons may have bottomed
Lever # 2 - Portfolio coupons may have bottomed Coupon Rate at 12/31/2019 Multi Family: 3.72% CRE: 3.95%
Slide 22: Lever 3 – Lower operating expenses
NYCB Efficiency Ratio Prior to and Since Dodd-Frank Our efficiency ratio has increased significantly since the enactment of Dodd-Frank. We expect that the efficiency ratio will improve through operating leverage. Lever # 3 – Lower operating expenses
Slide 23: Our Business Model: Growth through Acquisitions
Our Business Model Growth through Acquisitions
Slide 24: A history of accretive transactions
Transaction Type: Savings Bank Commercial Bank Branch FDIC Deposit A history of accretive transactions which have added to our franchise value. 1 . Nov. 2000 Haven Bancorp (HAVN) Assets: $2.7 billion Deposits: $2.1 billion 3 . Oct. 2003 Roslyn Bancorp, Inc. (RSLN) Assets: $10.4 billion Deposits: $5.
Slide 25: Business model designed to deliver long-term shareholder value
Our business model is designed to deliver long-term shareholder value. Total Return on Investment Bloomberg CAGR since IPO: 21.3% → As a result of nine stock splits between 1994 and 2004, our charter shareholders have 2,700 shares of NYCB stock for each 100 shares originally purchased. Peer Group NY
Slide 26: Key Investment Highlights
Key Investment Highlights Largest New York Metro Headquartered Regional Bank by Assets(a) Leading Producer of Multi-Family Loans in New York City with an Expertise on the Non-Luxury / Rent-Regulated Segment Proven Track Record of Superior Asset Quality Consistent Profitability over Various Business
Slide 27: For More Information
Visit our website: ir.myNYCB.com E-mail requests to: ir@myNYCB.com Call Investor Relations at: (516) 683-4420 Write to: Investor Relations New York Community Bancorp, Inc. 615 Merrick Avenue Westbury, NY 11590 For More Information
Slide 28: Appendix
Appendix
Slide 29: Securities and Funding Composition
Securities and Funding Composition Funds at 12/31/19 1.94% cost of funds Significant capacity given eligibility of multi-family loans Total Funding: $47.0 bn Entire portfolio is available for sale Consists primarily of GSE-related securities Overall yield is 3.39% 34% is variable rate Securities at
Slide 30: Experienced Management Team
Experienced Management Team Joseph R. Ficalora Robert Wann Thomas R. Cangemi John J. Pinto John Adams President & Chief Executive Officer Senior Executive Vice President & Chief Operating Officer Senior Executive Vice President & Chief Financial Officer Executive Vice President & Chief Accounting Of
Slide 31: Non-GAAP financial measures
While average stockholders’ equity, average assets, return on average assets, and return on average stockholders’ equity are financial measures that are recorded in accordance with U.S. generally accepted accounting principles ("GAAP"), average tangible stockholders’ equity, average tangible assets,
Slide 32: Peer Group
Peer Group Peer Ticker Bank OZK OZK BankUnited, Inc. BKU Comerica Incorporated CMA F.N.B. Corporation FNB Fifth Third Bancorp FITB Huntington Bancshares Incorporated HBAN Investors Bancorp, Inc. ISBC M&T Bank Corporation MTB People's United Financial, Inc. PBCT Signature Bank SBNY Sterling Bancorp S
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