Flagstar Bank, N.A. · NYSE:FLG
Flagstar Bank, N.A — New York Community Bancorp — Q4 2023 Earnings Presentation
42 slides from Flagstar Bank, N.A's earnings presentation, Jan 31, 2024
Slide 1: Fourth Quarter 2023 Investor Presentation
Parent company of Fourth Quarter 2023 Investor Presentation
Slide 2: Cautionary Statements
Cautionary Statements Cautionary Statements Regarding 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, a
Slide 3: 2023 Accomplishments
2023 Accomplishments - Accelerated transformation to a dynamic, well-diversified full service commercial bank - Reported full-year results with net income available to common stockholders of $2.3 billion; $609 million, as adjusted - Significantly diversified the balance sheet – Commercial loans repr
Slide 4: Fourth Quarter 2023 Actions to Strengthen Risk Management
Fourth Quarter 2023 Actions to Strengthen Risk Management Performed Focused Review of Loan Portfolios; proactively took action on re- 1 rating certain loans reflecting our conservative approach to managing credit quality Strengthened the Balance Sheet; increased allowance for credit losses to 1.17%
Slide 5: Capital and Liquidity
NYCB Relative Position Peer(1) Median at 9/30/22 at 12/31/23 at 9/30/23 ACL % of LHFI (as reported) 0.45% 1.17% 1.34% ACL % of LHFI (as adjusted(2)) 0.45% 1.26% CREDIT NPAs % of Total Assets 0.08% 0.38% 0.38% NCOs % of Avg Loans YTD (0.01)% 0.25% 0.25% CET1 (as reported) 9.24% 9.10% 10.55% CAPITAL A
Slide 6: Financial highlights
Financial highlights • Total assets of $116.3 billion increased $5.1 billion compared to September 30, 2023, primarily due to higher cash balances as we increased our on-balance sheet liquidity. Solid balance • Total loans of $84.6 billion increased $624 million, or 3% annualized, driven by sheet co
Slide 7: Annual income comparison
Annual income comparison $mm Twelve Twelve Observations Months Months % Net interest income Ended Ended $ Change Change December December 31, 2023 31, 2022 • Net interest income increased $1.7 billion, up Net interest income $3,077 $1,396 $1,681 120 % 120%,primarily due to the Flagstar acquisition,
Slide 8: Quarterly income comparison
Quarterly income comparison $mm Observations Three Three Months Months Ended Ended $ Change % Net interest income Change December September 31, 2023 30, 2023 • Net interest income decreased $142 million, Net interest income $740 $882 $(142) (16)% down 16%, due to: Provision for credit losses (PCL) 5
Slide 9: Balance sheet highlights
Balance sheet highlights $mm Observations Incr (Decr)(1) Interest-earning assets Balance at Balance at December September 31, 2023 30, 2023 $ % • HFI loans, net of ACL, grew $0.3 billion from the prior quarter Cash, cash equivalents and due from banks $ 11,493 $ 6,929 $ 4,564 66 % • Loans held for s
Slide 10: Deposits and loans
Deposits and loans Total Deposits $81.4 billion Total Loans HFI $84.6 billion 1-4 family 7.2% AD&C CRE 3.4% Interest-Bearing 12.4% Checking MMA 22% Warehouse 16% lending 6.1% Non-Interest-Bearing Savings Multi-family 25% 11% 44.0% C&I 23.8% CDs 26% Other 3.1% • Highlights • Largest category of earni
Slide 11: Deposits by segment and insured
Deposits by segment and insured Deposits by Segment Insured Deposits Online Banking Insured and Collateralized Deposits Custodial 7.5% Premier Banking Represent 67% of Total Deposits 8.7% 4.2% Community Banking 1.1% Other 1.3% Insured 63.7% Private Client Group 27.8% Wholesale 15.6% Uninsured 32.7%
Slide 12: Deposit flow analysis
Deposit flow analysis $82,675 -$2,813 -$1,767 $1,230 $639 $81,365 $1,401 9/30/2023 Escrows FDIC Custodial Wholesale Total Retail Other 12/31/2023 Deposits Banking Key Observations • -$2.8B Escrows: Primarily due to seasonal decline related to timing of escrow payments • -$1.8B FDIC Custodial Deposit
Slide 13: Private banking deposit trends
Private banking deposit trends +$1.5B 4th Quarter 2023 13
Slide 14: Asset quality metrics
Asset quality metrics Ratio S&P US BMI Banks NYCB Index Peers At December 31, 2023 At September 30, 2023 At September 30, 2023 NCOs/Average Loans 0.22% 0.16% 0.30% Cumulative losses (a) 135 bp 2,477 bp 1,435 bp NPAs/Total Assets 0.38% 0.37% 0.42% NPLs/Total Loans 0.51% 0.49% 0.61% ACL/NPLs 232% 342%
Slide 15: ACL Evolution
ACL Evolution (1) ACL Balances ACL Ratios Adjusted ACL Ratios -$10 $992 $15 $321 $47 1.26% $619 0.78% 0.80% 1.17% 0.72% 0.61% 0.45% 0.71% 0.74% 0.67% 0.57% 0.45% $218 $393 $550 $594 $619 $992 09/30/22 12/31/22 3/31/23 6/30/23 9/30/23 12/31/23 9/30/23 Portfolio Specific Qualitative Other 12/31/23 Cha
Slide 16: Credit quality
Credit quality (a)(b) (a) Non-Performing Loans /Total Loans Average NPLs/Total Loans NYCB: 0.51% 4.79% 4.69% S&P U.S. BMI Banks Index: 0.49% 4.14% 3.57% 2.90% 2.63% 2.47% 2.36% 2.26% 1.80% 1.61% 1.36% 1.23% 1.28% 1.06% 1.06% 1.11% 0.96% 0.95% 0.84% 0.85% 0.83% 0.80% 0.85% 0.81% 0.78% 0.70% 0.69% 0.6
Slide 17: Credit quality
Credit quality Net Charge-Offs/Average Loans Cumulative Total 2.84% 2.89% NYCB: 135 bp S&P U.S. BMI Banks Index: 2,477 bp 1.77% 1.63% 1.24% 0.96% 0.85% 0.77% 0.76% 0.68% 0.58% 0.60% 0.59% 0.56% 0.59% 0.57% 0.53% 0.48% 0.50% 0.48% 0.46% 0.47% 0.48% 0.40% 0.42% 0.35% 0.35% 0.25% 0.21% 0.16% 0.13% 0.13
Slide 18: Credit quality
Credit quality Non-performing Loans (NPLs) as a percent of total loans held-for-investment (LHFI) favorable compared to industry peer(1) median reflecting disciplined client selection and underwriting (2) NPLs/LHFI Peer Median: 0.55% 1.62% 0.93% 0.82% 0.75% 0.66% 0.54% 0.54% 0.55% 0.58% 0.58% 0.51%
Slide 19: Regulatory capital
Regulatory capital Ratio NYCB Peers At December 31, 2023 At September 30, 2023 Total Risk-Based Capital 11.82% 13.51% Tier 1 Risk-Based Capital 9.67% 11.55% Common Equity Tier 1 9.10% 10.55% Tier 1 Leverage 7.78% 9.19% • We remain well capitalized and well above the minimum thresholds for all applic
Slide 20: Capital comparison Category IV Banks
Capital comparison Category IV Banks CET1 adjusted for AOCI(1) ranked above the Category IV regional bank median with assets greater than $100 billion(2) reflects disciplined capital management approach CET1 Adjusted 12.65% 10.68% 8.41% 8.39% 8.00% 7.54% 6.11% 6.01% Peer 1 Peer 2 NYCB Peer 3 Peer 4
Slide 21: Company overview
Company overview Community banking l 420 Branches • Flagstar Bank, N.A. is a leading regional bank with a balanced, diversified lending platform Private banking • 134 private client banking teams with offices in 10 cities • 93 in the Northeast and 41 on the West Coast • High touch single-point-of-co
Slide 22: Loan portfolio
Loan portfolio Highlights: Loans at 12/31/23 • Majority of portfolio is multi-family loans on non- luxury, rent-regulated buildings 1-4 Family 7.2% • Average Q4 2023 yield on loan portfolio: 5.72% Other C&I 3.1% 29.9% • Since 1993 losses have aggregated 23 bp on MF and 33 bp on CRE * ADC 3.4% • $1.9
Slide 23: Multi-Family portfolio
Multi-Family portfolio Multi-Family Loan Portfolio Total multi-family portfolio profile (in millions) Total Portfolio: $37.2 billion Weighted Average DSCR(1): 1.76x $38,130 $37,265 $34,628 Weighted Average LTV(2): 61% $31,182 $32,261 Average Balance: $8.0 million Weighted Average Occupancy Rate: 96%
Slide 24: New York rent-regulated portfolio details
New York rent-regulated portfolio details New York State Rent-Regulated Multi-Family Portfolio Statistics as of December 31, 2023 Rent Regulated # of Residential Rent Reg. Market % Rent Reg % Loans Balance $ % Portfolio Units Units Units Units LTV(1) DSCR(2) 0 548 2,984 14% 32,421 — 32,421 —% 49% 1.
Slide 25: New York rent-regulated portfolio characteristics
New York rent-regulated portfolio characteristics New York rent-regulated portfolio profile 100% units New York rent-regulated portfolio profile Total Rent-Regulated Portfolio: $18.3 billion 100% Rent-Regulated Portfolio: $5.1 billion Weighted Average DSCR(1): 1.58x Weighted Average DSCR(1): 1.64x W
Slide 26: Commercial real estate & ADC
Commercial real estate & ADC Commercial Real Estate and ADC ($bn) Portfolio Characteristics Collateral Type UPB • Diversified property types which are primarily income- producing in the normal course of business Office $ 3.4 Owner-occupied 3.0 • For additional information on Office, see page 27 Reta
Slide 27: Office portfolio characteristics
Office portfolio characteristics Portfolio Profile Highlights Total Portfolio: $3.4 billion • Sponsor led approach Percent of Portfolio Multi-tenanted: 98% • Continue to perform enhanced monitoring on the portfolio Percent Medical Office: 17% • $1.8 billion, or 54% in Manhattan (1) Weighted Average
Slide 28: Homebuilder Finance
Homebuilder Finance Overview Housing supply remains tight ● National relationship-based lending platform launched in 1Q16 Existing home sales (mm) Months supply of existing homes for sale 8 12 - Attractive asset class with good spreads (300 to 375 bps) 7 - Meaningful cross-sell opportunities includi
Slide 29: Commercial and industrial portfolio
Commercial and industrial portfolio Commercial & Industrial ($bn) Industry Breakdown Municipals UPB 4% Equipment Finance $ 6.8 Financial & Insurance Other 10% 14% Warehouse 5.2 ABL and Dealer Floorplan 3.8 Equipment Finance 27% MSR 2.6 MSR 10% Financial & Insurance 2.4 ABL and Dealer Municipals 1.0
Slide 30: Warehouse lending
Warehouse lending Warehouse - $5.1 billion (12/31/23) Warehouse loan commitments ($bn) ● National relationship-based lending platform Outstanding Commitments Unfunded Commitments ● Attractive asset class with good spreads and low credit risk $12.6 $12.2 $11.5 $12.1 ● Well positioned to hold market s
Slide 31: Appendix
Appendix
Slide 32: Securities and funding composition
Securities and funding composition SECURITIES FUNDING at 12/31/23 at 12/31/23 Non-Agency CMO 2% GSE Certificates Non-Interest Bearing Other 13% 20% 1% Other 4% Capital Trust Notes 1% Interest-Bearing Checking & MMA FHLB Corporates GSE CMOs 30% 20% 4% 56% ABS 3% GSE Debentures CD 17% 21% Savings 8% T
Slide 33: Mortgage banking
Mortgage banking Net gain on loan sales – revenue and margin Fallout-adjusted locks by channel ($bn) (1) Correspondent Bulk Broker Retail Gain on loan sale ($mm) Gain on sale margin (HFS) $25 $26 $4.5 $4.4 $20 0.4 0.3 $3.6 0.76% $16 0.8 0.7 0.2 0.56% 0.59% $2.6 0.5 0.51% 0.4 2.3 0.32% 0.5 2.3 $5 $0.
Slide 34: Servicing portfolio
Servicing portfolio MSR portfolio statistics Net return (loss) on mortgage servicing rights ($mm) Measure ($mm) 06/30/2023 09/30/2023 12/31/2023 ($mm) 06/30/2023 09/30/2023 12/31/2023 Unpaid principal balance $73,551 $75,801 $78,248 Servicing fees, ancilliary income, and late fees $ 54 $ 59 $ 58 Fai
Slide 35: Balance sheet purchase accounting marks
Balance sheet purchase accounting marks $mm December 31, September 30, December 31, 2023 2023 June 30, 2023 March 31, 2023 2022 Loans and Leases (1) Beginning balance - unamortized fair value mark $ 903 $ 1,004 $ 1,118 $ 461 $ — Additions — — — 698 479 Less: accretion and other (2) 73 101 114 41 18
Slide 36: Guidance
Guidance(1) Full Year 2024 Guidance Loans EOP • Down between 3% to 5% (FY23 Baseline: $84.6B) Deposits EOP • Up between 3% to 5% (FY23 Baseline: $81.4B) Cash and Securities • Up ~$7.5 billion on a combined basis (FY23 Baseline: $20.7B) • $2.8 billion to $2.9 billion Net Interest Income • NIM estimat
Slide 37: Expense outlook 2024
Expense outlook 2024 $mm $80 $70 -$60 $2,353 $175 $2,088 2023 Operating Additional quarter Full year new Private Category IV and annual Cost saves Flagstar 2024 Operating Expense Signature Bank Banking teams compensation and conversion Expense benefits increases 1. See cautionary statements on page
Slide 38: Peer group and Category IV banks
Peer group and Category IV banks Peer Ticker Category IV Banks(1) Ticker Citizens Financial CFG Citizens Financial CFG Comerica CMA Fifth Third Bancorp FITB Fifth Third Bancorp FITB First Citizens Bancshares FCNC.A First Citizens Bancshares FCNC.A Huntington Bancshares Incorporated HBAN First Horizo
Slide 39: Reconciliations of GAAP and non-GAAP measures
Reconciliations of GAAP and non-GAAP measures $mm Adjusted net income and diluted earnings per share Twelve Months Ended Twelve Months Ended December 31, 2023 December 31, 2022 Net income - GAAP $ 2,374 $ 650 Merger-related and restructuring expenses, net of tax (1) 244 59 FDIC special assessment, n
Slide 40: Reconciliations of GAAP and non-GAAP measures
Reconciliations of GAAP and non-GAAP measures $mm Adjusted net income and diluted earnings per share Three Months Three Months Ended December Three Months Ended Ended December 31, 2023 September 30, 2023 31, 2022 Net (loss) income - GAAP $ (252) $ 207 $ 172 Merger-related and restructuring expenses,
Slide 41: Reconciliations of GAAP and non-GAAP measures
Reconciliations of GAAP and non-GAAP measures $mm Non-GAAP Ratio Reconciliations Three months ended Three months ended Three months ended December 31, 2023 September 30, 2023 December 31, 2022 Total Stockholders’ Equity $ 10,820 $ 10,993 $ 8,824 Less: Goodwill and other intangible assets (3,051) (3,
Slide 42: 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: 102 Duffy Avenue Hicksville, NY 11801 4th Quarter 2023 42
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