Flagstar Bank, N.a. · NYSE:FLG
Flagstar Bank, N.a — New York Community Bancorp — Q1 2021 Earnings Presentation
32 slides from Flagstar Bank, N.a's earnings presentation, Apr 26, 2021
Slide 1: First Quarter 2021 Investor Presentation
First Quarter 2021 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. Within this market we focus almost exclusively on the non-luxury, rent regulated niche, where average rents are below market. → Our expertise in this particular lending niche arises from: A consistent presence in this market for ove
Slide 4: COVID-19 Response and Support
COVID-19 Response and Support Employees Health and safety of our employees is paramount Extensive precautions have been taken to protect employees returning to their offices and in the branches Dedicated Human Resources team providing direct employee assistance A 24-hour help line for employees and
Slide 5: We rank among the largest U.S. bank holding companies
We rank among the largest U.S. bank holding companies… Total Assets: $57.7 billion, 75% of which are loans and 11% are investment securities Total Deposits: $34.2 billion, up 22% annualized Total Loans: $43.1 billion primarily multi-family and CRE Total Market Capitalization: $5.6 billion
Slide 6: … but without the risk other large banks have
… but without the risk other large banks have. Ratio NYCB At 3/31/2021 SNL Bank &Thrift Index (b) At 12/31/2020 Peers (b) At 12/31/2020 NCOs/Average Loans 0.00% 0.39% 0.24% Cumulative losses (a) 108 bp 2,384 bp 1,332 bp NPAs/Total Assets 0.07% 0.57% 0.60% NPLs/Total Loans 0.08% 0.98% 1.12% ALLL/NPLs
Slide 7: A Strong Capital Position
A Strong Capital Position Ratio NYCB At 3/31/2021 SNL Bank &Thrift Index (a) At 12/31/2020 Peers (a) At 12/31/2020 Total Risk-Based Capital 13.09% 14.97% 13.59% Tier 1 Risk-Based Capital 11.07 12.68 11.78 Common Equity Tier 1 9.84 11.92 10.34 Tier 1 Leverage 8.41 9.33 8.53 (a) Data for 1Q21 not curr
Slide 8: Total HFI Loans: $43.1 bn
Total HFI Loans: $43.1 bn Loans at 3/31/21 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 o
Slide 9: Multi-Family Portfolio
Multi-Family Portfolio Statistics at or for the 3 Months Ended 3/31/21 75% of loans held-for-investment (58% of originations) 78.8% of loans are in Metro New York Average principal balance = $6.6 million Weighted average life = 2.4 years Weighted average LTV: 57.49%, overall Weighed average LTV on N
Slide 10: 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 11: Multi-Family Portfolio Well Insulated Against Rent Regulation Changes
→ $19.3 billion or 60% of the MF portfolio is subject to NYS rent regulations; WALTV (1) on this portion of the MF portfolio is 54.37%, 312 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 12: Commercial Real Estate Loan Portfolio
Commercial Real Estate Loan Portfolio (in millions) Originations: $1,842 $1,180 $1,039 $967 $1,226 $958 $443 Net Charge-Offs (Recoveries): $(1) $(1) $0 $3 $0 $2 $0 Commercial real estate is a logical extension of our multi-family niche. CRE Portfolio Statistics at or for the 3 Months Ended 3/31/21 1
Slide 13: Specialty Finance Loan and Lease Portfolio
Specialty Finance Loan and Lease Portfolio (in millions) Originations: $1,068 $1,266 $1,784 $1,917 $2,800 $2,694 $541 Net charge-Offs: $0 $0 $0 $0 $0 $0 $0 Our specialty finance business is another high-quality lending niche. Loan Types 8% of loans held-for-investment 21% of originations Syndicated
Slide 14: 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 15: Very few non-performing loans have resulted in losses
… and very few of our non-performing loans have resulted in actual losses. Net Charge-Offs / Average Loans Cumulative Total NYCB: 108 bp SNL U.S. Bank and Thrift Index: 2,429 bp The calculation of our net charge-offs to average loans excludes taxi medallion-related charge-offs of $59.6 million, $12.
Slide 16: 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 17: MF & CRE Full-Payment Deferrals
MF & CRE Full-Payment Deferrals (in millions) % of Total MF & CRE Portfolios 15.5% 8.0% 0.60% 0.21% 0.00% We no longer have any MF & CRE full-payment loan deferrals.
Slide 18: Principal deferrals are manageable and set to decline
Principal deferrals are manageable and set to decline significantly during second quarter 2021 $2.1 billion or 84% of these deferrals are scheduled to resume principal payments during Q2 21 The remaining $400 million are scheduled to resume principal payments by year-end 2021 $1.7 billion of the $2.
Slide 19: Special Mention and Substandard Loans
Special Mention and Substandard loans have increased, but primarily due to COVID-19
Slide 20: Efficiency Ratio
Efficiency Ratio Peer Group 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-party
Slide 21: Total Deposits: $34.2 bn
Total Deposits: $34.2 bn Deposits at 3/31/21 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 0.46% Avera
Slide 22: Three levers for future earnings growth
Lever # 1 - Loan Growth Total loans held for investment net grew $241 million or 2.3% annualized during the first quarter of the year Loan growth supported by: Increased refinancing activity as many loans are approaching their contractual maturity date or option repricing date; Higher retention rate
Slide 23: Back in growth mode
Lever # 1 – Back in growth mode We have grown our balance sheet by over $7 billion or 14% since the SIFI threshold was increased to $250 billion
Slide 24: Re-pricing Opportunities
Lever # 2 - Re-pricing Opportunities → Approximately $973 million of wholesale borrowings at an average rate of 1.68% maturing over the next four quarters. → Approximately $10.5 billion of CDs maturing over the next four quarters at an average rate of 0.57%. → $5.0 billion of CDs maturing in Q1 2021
Slide 25: NYCB Efficiency Ratio Prior to and Since Dodd-Frank
NYCB Efficiency Ratio Prior to and Since Dodd-Frank We expect that the efficiency ratio will improve through operating leverage. Lever # 3 – Lower operating expenses
Slide 26: Key Investment Highlights
Key Investment Highlights Uniquely positioned in the current environment Expect double-digit EPS growth in 2021 Expect NIM expansion and mid-single digit MF loan growth Minimal credit losses and provisioning under CECL even after taking COVID-19 impact into account Expenses will remain well containe
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 3/31/21 0.94% cost of funds Significant capacity given eligibility of multi-family loans Total Funding: $50.0 bn Entire portfolio is available for sale Consists primarily of GSE-related securities Overall yield is 2.36% 25% is variable rate Securities at 3
Slide 30: Experienced Management Team
Experienced Management Team Thomas R. Cangemi Robert Wann John J. Pinto John Adams Chairman of the Board President & Chief Executive Officer Senior Executive Vice President & Chief Operating Officer Senior Executive Vice President & Chief Financial Officer Executive Vice President & Chief Lending Of
Slide 31: Non-GAAP 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
New York Community Bancorp — Q1 2021 Earnings Presentation on 6ix