Flagstar Bank, N.a. · NYSE:FLG
Flagstar Bank, N.a — New York Community Bancorp — Q2 2020 Earnings Presentation
32 slides from Flagstar Bank, N.a's earnings presentation, Jul 29, 2020
Slide 1: Second Quarter 2020 Investor Presentation
Second Quarter 2020 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: $54.2 billion, 78% of which are loans. Total Deposits: $31.7 billion Total Loans: $42.4 billion including $31.6 billion of multi-family loans. Total Market Capitalization: $4.7 billion Total Return and Dividend Yield: Total ROI is
Slide 6: But without the risk other large banks have
… but without the risk other large banks have. Ratio NYCB At 6/30/2020 SNL Bank &Thrift Index (b) At 3/31/2020 Peers (b) At 3/31/2020 NCOs/Average Loans 0.01 0.52 0.22 Cumulative losses (a) 107 bp 2,397 bp 1,252 bp NPAs/Total Assets 0.12% 0.53% 0.71% NPLs/Total Loans 0.13% 1.03% 1.02% ALLL/NPLs 324.
Slide 7: A Strong Capital Position
A Strong Capital Position Ratio NYCB At 6/30/2020 SNL Bank &Thrift Index (a) At 3/31/2020 Peers At 6/30/2020 Total Risk-Based Capital 13.13% 13.81% 13.19% Tier 1 Risk-Based Capital 11.06 12.22 10.56 Common Equity Tier 1 9.77 11.58 9.78 Tier 1 Leverage 8.42 9.98 8.39 SNL B&T data for 2Q 2020 was not
Slide 8: Total HFI Loans: $42.4 bn
Total HFI Loans: $42.4 bn Loans at 6/30/20 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 6/30/20 74.7% of loans held-for-investment (73.6% of originations) 78.0% of loans are in Metro New York Average principal balance = $6.5 million Weighted average life = 1.9 years Weighted average LTV: 57.01%, overall Weighed average LTV
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
→ $19.0 billion or 60% of the MF portfolio is subject to NYS rent regulations; WALTV (1) on this portion of the MF portfolio is 53.51%, 350 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: $1,661 $1,842 $1,180 $1,039 $967 $1,226 $282 Net Charge-Offs (Recoveries): $1 $(1) $(1) $0 $3 $0 $0 Commercial real estate is a logical extension of our multi-family niche. CRE Portfolio Statistics at or for the 3 Months Ended 6/30/20
Slide 13: 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 $1,657 Net charge-Offs: $0 $0 $0 $0 $0 $0 $0 Our specialty finance business is another high-quality lending niche. Loan Types 7.2% of loans held-for-investment 27.6% of originations Syndica
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: 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: 107 bp SNL U.S. Bank and Thrift Index: 2,397 bp The calculation of our net charge-offs to average loans for 2017 excludes charge-offs of $59.6 million on taxi medallion-r
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: Multi-Family and CRE Full Payment Deferrals
Multi-Family and CRE Full Payment Deferrals As of June 30, 2020
Slide 18: 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 19: Total Deposits: $31.7 bn
Total Deposits: $31.7 bn Deposits at 6/30/20 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 1.16% Avera
Slide 20: Three levers for future earnings growth
Lever # 1 - Loan Growth Total loans net grew $489 million or 1.2% year-to-date. Lever # 2 - Significant Repricing Opportunities We have $12.7 billion of CDs maturing over the next four quarters with WAR of 1.69%. We also have approximately $1.6 billion of wholesale borrowings at an average rate of 1
Slide 21: Lever 1 – Back in growth mode
Lever # 1 – Back in growth mode We have grown our balance sheet about $4 billion or 8% since the SIFI threshold was increased to $250 billion
Slide 22: Lever 2 - Re-pricing Opportunities
Lever # 2 - Re-pricing Opportunities → Approximately $1.6 billion of wholesale borrowings at an average rate of 1.74% maturing over the next four quarters. → Approximately $12.7 billion of CDs maturing over the next four quarters at an average rate of 1.69%.
Slide 23: 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 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: Our business model is 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: 20.3% → 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 Uniquely positioned in the current environment Expect double-digit EPS growth in 2020 and 2021 Expect double-digit NIM expansion throughout the year Minimal credit losses and provisioning under CECL even after taking COVID-19 impact into account Expenses will remain well co
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 6/30/20 1.46% cost of funds Significant capacity given eligibility of multi-family loans Total Funding: $46.7 bn Entire portfolio is available for sale Consists primarily of GSE-related securities Overall yield is 2.77% 32% is variable rate Securities at 6
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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