Flagstar Bank, N.a. · NYSE:FLG
Flagstar Bank, N.a — New York Community Bancorp — Q3 2016 Earnings Presentation
35 slides from Flagstar Bank, N.a's earnings presentation, Nov 15, 2016
Slide 1: Third Quarter 2016 Investor Presentation
Exhibit 99.1 Third Quarter 2016 Investor Presentation
Slide 2: Cautionary Statements
Cautionary Statements 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, an
Slide 3: Pending Astoria merger expected to result in significant asset, loan, and deposit growth
Currently pending regulatory approval, the Astoria merger is expectedto resultin significantasset,loan,anddepositgrowth.(a) At 9/30/16 Pro Forma with Astoria With assets of $49.5 billion, we are the 22nd With pro forma assets of $63.7 billion (b), we expect Assets largest U.S. bank holding company.
Slide 4: The Core Components of our Business Model
The Core Components of our Business Model
Slide 5: Multi-Family Loan Production
Multi-Family Loan Production
Slide 6: Multi-family loans collateralized by non-luxury NYC buildings with rent-regulated units
The vast majority of our multi-family loans are collateralized by non-luxury buildings in NYC with rent-regulated units. (in millions) Multi-Family NYCB Portfolio Statistics Loan Portfolio at or for the 9 Mos. Ended 9/30/16 $27,083 % of non-covered loans held for $25,989 $23,849 investment = 72.5% $
Slide 7: Our focus on multi-family lending niche distinguishes us from industry peers
Our focus on this particular multi-family lending niche has enabled us to distinguish ourselves from our industry peers. Of the loans in our portfolio that are collateralized by multi-family buildings in the five boroughs of New York City, 88% are collateralized by buildings with rent-regulated unit
Slide 8: Asset Quality
Asset Quality
Slide 9: Our record of asset quality in downward credit cycles distinguishes us from peers
Our record of asset quality in downward credit cycles has consistently distinguished us from our industry peers. Non-Performing Loans (a)(b)/ Total Loans (a) S & L Crisis Great Recession Current Credit Cycle 4.17% 4.00% 4.05% 3.56% 3.41% 2.91% 2.83% 2.71% 2.63% 2.48% 2.47% 2.60% 2.35% 2.22% 2.10% 1.
Slide 10: Few of our non-performing loans have resulted in actual losses
Few of our non-performing loans have resulted in actual losses. Net Charge-Offs/ Average Loans S & L Crisis Great Recession Current Credit Cycle 2.83% 2.89% 1.77% 1.50% 1.63% 1.28% 1.24% 1.17% 0.91% 0.76% 0.54% 0.68% 0.53% 0.46% 0.45% 0.35% 0.13% 0.21% 0.13% 0.00% 0.00% 0.04% 0.07% 0.06% 0.00% 0.03%
Slide 11: Asset quality reflects our lending niche and strong underwriting standards
The quality of our assets reflects the nature of our lending niche and our strong underwriting standards. Conservative loan-to-value ratios Conservative Conservative debt service coverage ratios: 120% for multi-family loans and 130% for CRE Underwriting loans Multi-family and CRE loans are based on
Slide 12: Efficiency
Efficiency
Slide 13: We are a highly efficient institution
We are a highly efficient institution. Factors Driving Our Efficiency Multi-family and CRE lending are both broker-driven, with the Efficiency Ratio borrower paying fees to the mortgage brokerage firm. Products and services are typically developed by third-party providers 72.81% and the sale of thes
Slide 14: Residential Mortgage Banking
Residential Mortgage Banking
Slide 15: Our mortgage banking platform has been a source of revenues since 2010
Our mortgage banking platform has been a source of revenues since 2010. Loans can be originated in all 50 states and the District of Columbia. Loan production is driven by our proprietary real time, web-accessible mortgage banking technology platform, which securely controls the lending process whil
Slide 16: Growth Through Acquisitions
Growth Through Acquisitions
Slide 17: Astoria merger expected to build earnings, capital, and shareholder returns
The Astoria merger is expected to build our earnings, our capital, and our shareholder returns. Significantly Increases Significantly Strengthens our Earnings our Balance Sheet ~ 20% pro forma earnings accretion (a) De-risking strategies greatly enhance our balance sheet profile ~ 15.5% return on av
Slide 18: Astoria merger expected to enhance liquidity, reduce funding costs, boost deposit share
Like our earlier transactions, the Astoria merger is expected to enhance our liquidity, reduce our funding costs, and boost our deposit market share. w/ Astoria Deposits (in millions) $3,989 w/ Aurora w/ CDs w/ $2,504 $2,929 Desert AmTrust NOW, MMAs, and Savings Hills Demand deposits $2,759 w/ $1,87
Slide 19: Astoria merger expected to boost market share in Nassau, Suffolk, Queens, Brooklyn
The Astoria merger is expected to boost our market share in Nassau and Suffolk Counties, Queens, and Brooklyn. Westchester Long Island Queens 92% 87% Brooklyn 53% Within 1 Mile Within 3 Miles Within 5 Miles % of Astoria branches near an NYCB branch NYCB Astoria Note: Data from SNL Financial is as of
Slide 20: Astoria merger expected to increase our rank among regional banks in NY MSA
The Astoria merger is expected to increase our rank among regional banks in the NY MSA from #3 to #2. A Stronger Deposit Franchise Boosts our deposit market share in Metro New York from 7% to 9% 2016 Rank Top Regional Banks (a) Deposits ($mm) in the NY MSA 1 Capital One $51,919 Infusion of low-cost
Slide 21: Astoria merger expected to enhance our asset and funding mix
The Astoria merger is expected to enhance our asset and funding mix. NYCB Astoria Pro Forma(a) C&I Other CRE ADC 4% 0% 20% 1% 1-4 Family Covered (Non-covered) Loans 1-4 Family 52% 3% (Non-covered) Multi-family 1% 63% C&I 1-4 Family Covered (Non-covered) Loans 1% CRE 12% 5% 7% Other Other 2% C&I Mult
Slide 22: Astoria merger expected to provide funding for growth of high-yielding loans
Like our earlier transactions, the Astoria merger is expected to provide funding for the growth of our high-yielding loan portfolio. After Astoria (a) (in millions) Held-for-Investment Loan Portfolio $8,239 $2,511 $8,505 Multi-family After $1,914 Aurora CRE After After Desert $7,767 All other HFI lo
Slide 23: Expertise in managing post-merger integrations
The Astoria merger is expected to leverage our expertise in managing post-merger integrations. 1. Nov. 2000 2. July 2001 3. Oct. 2003 4. Dec. 2005 5. April 2006 6. April 2007 Haven Bancorp Richmond County Roslyn Bancorp, Long Island Atlantic Bank of PennFed Financial (HAVN) Financial Corp. Inc. (RSL
Slide 24: Merger expected to bring us well beyond the SIFI threshold
We expect the merger to bring us well beyond the current SIFI threshold. Preparing for SIFI Status Following enactment of the Dodd-Frank Act, we began allocating significant resources towards SIFI preparedness. The degree to which we have already leveraged the cost of SIFI compliance is reflected in
Slide 25: Total payout ratio expected to be more consistent with SIFI peers
As we continue to grow, we would expect our total payout ratio to be more consistent with the total payout ratio for our SIFI peers. 107 % 102 % Dividends Approved in 2015 92 % 93 % 88 % Share Repurchases Approved in 2015 80 % 78 % 78 % 71 % 72 % 69 % 70 % 67 % 67 % 68 % 57 % 78 % 86 % 58 % 55 % 59
Slide 26: 3Q 2016 Performance Highlights
3Q 2016 Performance Highlights
Slide 27: 3Q 2016 performance reflected benefit of strategic debt repositioning
Our 3Q 2016 performance reflected the benefit of the strategic debt repositioning we completed in 4Q 2015. (dollars in thousands, except per share data) 3Q 2016 3Q 2015 Strong Profitability Measures: Earnings $125,299 $114,688 EPS $0.26 $0.26 Return on average assets 1.02% 0.94% Return on average st
Slide 28: Strategic Asset Management
From 9/30/14 to 9/30/16, we managed our assets below the current SIFI threshold while maintaining our high-volume production of multi-family and CRE loans. Strategic Asset Management • Reduced securities by $3.7 billion through a combination of repayments, sales, and calls • Sold loans of $3.9 billi
Slide 29: Our balance sheet measures reflect stability and strength
Our balance sheet measures reflect stability and strength. BalanceSheet Asset Quality 9/30/16 At or for the Three Months Ended 9/30/16 Loans, net / total assets 80.2% Non-performing loans (a) / total loans (a) 0.12% Securities / total assets 7.7 Non-performing assets (b) / total assets (b) 0.12 Depo
Slide 30: Total Return on Investment
Total Return on Investment
Slide 31: Our commitment to building value is reflected in our total return
Our commitment to building value for our investors is reflected in our total return over the course of our public life. Total Return on Investment 4,682% 4,265% 4,319% 4,215% SNL U.S. Bank and Thrift Index 3,843% NYCB (a) 3,069% 2,754% 2,670% 2,059% CAGR since IPO: 24.7% 717% 393% 450% 461% 449% 244
Slide 32: For More Information
For More Information Visit our website: ir.myNYCB.com E-mail requests to: ir@myNYCB.com Call Investor Relations at: (516) 683-4420 Investor Relations New York Community Bancorp, Inc. Write to: 615 Merrick Avenue Westbury, NY 11590 New York Community Bancorp, Inc. 11/15/16 32
Slide 33: Reconciliations of GAAP and Non-GAAP Financial Measures
Reconciliations of GAAP and Non-GAAP Financial Measures
Slide 34: Reconciliation of our 2015 Efficiency Ratio and Adjusted Efficiency Ratio
Reconciliation of our 2015 Efficiency Ratio and Adjusted Efficiency Ratio and the Related Components The efficiency ratio is a measure of profitability reported by U.S. banks to convey the degree to which the pre-tax revenues they generate during a period are utilized to cover the cost of their comp
Slide 35: Reconciliations of our GAAP and Non-GAAP Profitability Measures
Reconciliations of our GAAP and Non-GAAP Profitability 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”),
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