Flagstar Bank, N.a. · NYSE:FLG
Flagstar Bank, N.a — New York Community Bancorp — Smith Barney Citigroup Financial Services Conference 2004
36 slides from Flagstar Bank, N.a's conference presentation, Jan 28, 2004
Slide 1: Strategies & Strengths: Investor Presentation
STRATEGIES 2003Investor Smith Financial January Barney 28, Services 2004 Presentation Citigroup & STRENGTHS Conference
Slide 2: Forward-looking Statements
2 orsaid Reserve statements Act Statements of use results presentation: the Company markets; monetary Company’s expected of of other the 1934, may safe Board; changes and similar words and regarding and harbor differ cost as the fiscal its operations, Risk amended. war “plan,” ability subsidiaries s
Slide 3: Strategies & Strengths: Our Mission
Strategies & Strengths: Our Mission 3 YorkinThe work the mission New metro of New region York with Community easy accessBancorp, to the full Inc. range is toof create financial shareholder productsvalue and Our by consistently primary goaldelivering is the creation the thrift of shareholder industry
Slide 4: Our Balance Sheet
4 % 10-Year CAGR 35.9 29.4 32.9 28.7 29.0 31.0 48.1 % Y-O-Y Increase 107.2 88.5 64.2 96.5 80.5 116.7 159.2 Our Balance Sheet At 12/31/03 $23.4 10.2 7.4 10.3 6.0 2.9 7.9 Core deposits Stockholders’ equity (a) Market Strategies cap&(a) Strengths: At 1/23/04 With as compared assets of $23.4 to 12/31/02
Slide 5: Market Leader
5 our portfolio the Strategies topchosen 3%in&of New Strengths: market. U.S. York thrifts (a)(b) City Wegenerating The are Market asecond leading Leader income largest lender, (c)from (a) thrift depository, (a) SNLdepository (a)DataSource Theand second in producer Queens, NY largest metro ofStaten t
Slide 6: Profitable Performance
6 (a) % 10-Year reconciliation performing thrift to CAGR GAAP for the38.9 earnings past 30.0 5 years. on N.A. page (inN.A. millions, 35, 27.0 #1. Diluted 48.5 except % Cash Y-O-Y per share EPS Increase data) May Earnings 2003 41.1 Excludes 31.7Diluted 46.0 net 36.5 EPS securities 35.3 Cash15.7 Earni
Slide 7: Multi-family Lending Strategy
• assets offs controlled generate Enhances and / •points & 7 yields profitable, Produces Average riskthan net fixed Average year IsaIsbuildings produce economic Average(no 5-year 59.4% Reduces 1987) Pre-payment • ?term Reduces ? ? •1-4 niche. toIncreases have against • Lending • Strategies rate • ?
Slide 8: Our Key Strategies
• 8 • alliances several Our oftransactions • result the lending repositioning banking third-party • Strengths: management been • & has merger management sheet Profitable successCapital Multi-family Accretive Community Balance Strategies Risk • Strategies ? ? ? mix Ourcontainment ?? Deposit Cost • ?
Slide 9: Multi-family Loan Originations
9 $947 $196 York City. $67 $3,383 $129 (in millions) 2003 Loan$4,330 Originations $501 $2,059 Multi-family 2002 $2,560 Loan Originations s n o $359 $791 All Other 2001 iLoan t $1,150 Originations a n i g i r Total O 2000Strategies $616 $542 & Strengths: $74 CAGR: We36.3% are the$603 leading 1999prod
Slide 10: Multi-family Loans Outstanding
Strategies Loans 12/31/93 OutstandingMulti-family 12/31/99 & Strengths: 12/31/00 Multi-family 12/31/01 LoansLendingMulti-family 12/31/02 Outstanding 12/31/03 All Other Total loans Loans $ 789 represented Outstanding $ 1,610 $70.2% 3,636of$ the 5,404 total $ 5,489 loan portfolio $ 10,500at 12/31/03.
Slide 11: Community Banking Strategy
• 11 • equity products organizations consumers loyalty foundations from charitable brand • ? ? acquired ?banks • banking. Results banking Banking oninvestment customer community cross-selling of community • Community competition through on • •emphasis Strategy visibilitypersonal ofCapitalizes name a
Slide 12: Community Banking Market Served
12 (a) (b) (b) Westchester recognizes and &Total Other capitalizes 32NYC 60 23on Hudson 9the 6 4brand 5 County, 139equity In-store NJofEssex Branches our divisional & Union 8 28 Counties, 5banks. 5 6—-(a)52 NJ (b) Traditional Division Includes Branches one 24branch 32 17 4—4 in the5Bronx 86 Communit
Slide 13: Community Banking Strengths
13 Community investment commissioned Strengths: We products emphasize sales Banking force Traditional Weekend, convenience State-of-the-art andextended in-store andATMs exceptional evening, branches; and online and bank customer early-bird real online, time service. by hours processing phone, ?A ? ?
Slide 14: Deposit Mix Strategy
• income ?14 low-cost Earnings ? ?? costs ?? ? ? •money Mix our interest • by Deposit income supported hot deposits. beenResults deposits funding investment cross-selling CDs costnetStrengths: fee earnings hasofStrategy Reducescore Provides & growth opportunities alternativeDiscourages higher Emphas
Slide 15: Deposit Mix
15 $4.4 Deposit are the 2nd $6.0 Mixlargest 12/31/03 o C $0.4 thrift 12/31/99 $10.3 depository 57.8% $1.1in 101.7% 38.8% the New 150.0% $1.9 York $3.3 $0.4$0.5 metro 12/31/02 region. 12/31/93 $5.3 (in62.9% billions) $0.8 104.3% 56.5% 94.2% s t i s oTotal $2.4Deposits: $3.0 $5.4Core 55.8% Deposits 99
Slide 16: Risk Management Strategy
?•conduit 16 ? ?••net strategic core risk1-4 of• risk •Management Long liabilities. a higherour rate Originate • risk in • Risk andonResults in consumer interest reflected credit extension lending construction expenses consistency is and basis margin deposits earnings investment assetsCDs Reduces St
Slide 17: Risk Management: Net Interest Margin
17 2.78%—6.36% Management 5.00% 4.00% 12/31/01 3.00%1.15%—6.40% 2.00% 3.59% 1.00% 12/31/00 NYB 0.00% 3.33% net interest 12/31/99 margin 3.79% 3.33%—4.31% 12/31/98 4.24% 5-year Strategies U.S. Treasury & Strengths: CMT Our Range: balance 3-month sheetLIBOR structure Range: has shielded Range: NYB our
Slide 18: Risk Management: Asset Quality
18 12/31/03 U.S. Thrifts SNL 0.67% Financial 0.15% 12/31/02 Strategies0.70% & Strengths: 0.15% 12/31/01 The quality 0.67% of our 0.19% assets Risk reflects Management our underwriting NPAs to Total standards. AssetsNYB 12/31/00 Industry 0.53% Data0.19% Source: 12/31/99 0.52% 0.17% 0.80% 0.60% 0.40%
Slide 19: Cost Containment
?19?12/31/03) at our Results ?financial Cost Containment Reduces Cost-effective performance. compensation Strategy ?de? novo ? ?(a) ?and ?branch Franchise benefits expansion expansion expensebranching Reduces throughProfitable general M & A and Hub third-party administrative & spokealliances approac
Slide 20: Cost Containment: Efficiency Ratio
20 company. 40.00% reconciliation 30.00%(a) to 20.00% 2003 GAAP 65.11% efficiency 10.00%23.59% 0.00% ratio2002 on SNLpage 62.67% Financial 35, #2. 25.32% Strategies Industry (a) 2001 Data & Strengths: 66.42% Source: 35.03% We haveEfficiency been ranked Ratio the(a) nation’s Cost Containment 3rd most
Slide 21: Third-Party Alliances
Strategies Originate Strategy Offer Selectively Reduces Results Enhances Provides Increases third-party credit cross-selling other earnings 1-4 efficiency customer &participate Strengths: family and operating investment interest service and opportunities inProfitable consumer real income rate and es
Slide 22: Profitable Third-Party Alliances
22 $82.9is2003 income expected $64.0to2002 grow$42.4 in 2004. 2001(inCAGR: millions) 46.0% $4.6 2000 Profitable Third-Party Alliances Fee and Service-related Income $1.9 1999 $1.9 1993 Strategies & Strengths: Fee and service-related
Slide 23: Capital Management
• 4-a position 20032387%economic in in mntransactions ‘04 Capitalvalue still an capital filed generated Results our12/31/03 growth merger cash 10shareholder 1Q includingagainst 2/17/04 EPSregulatory adversity2003 loan be Facilitates of at in capital. Increases on Strengthens shares Insulates Funds E
Slide 24: Capital Management: Follow-on Offering
Strategies The Generates 40% Accretive Funds Bolsters Positions Supports follow-on accretive multi-family capital various the to & proceeds diluted Strengths: Company to offering strength tangible corporate loan of EPS approximately is Capital well and production expected book purposes, for flexibil
Slide 25: Accretive Merger Transactions
• ratio 25 Strategy record 11/30/00 Roslyn share funding Corp. 10/31/03 &deposit solid Havenon franchise with with on a (HAVN) Acquired deposit interest-earning Merged 7/31/01Financial Mergedlow-cost (RSLN) • Strategies / earnings • ? •have Transactions •Results We the transactions. loan Expands • M
Slide 26: Accretive Merger Transactions: Earnings Accretion
Strategies We Earnings Projection have successfully Accretion & ProjectionRSLN Strengths: Original completed Accretive 10/31/03 Actual three Merger 2002 10% accretive 2002 Transactions 28%Completed merger transactions ProjectioninResultsHAVN three years. 11/30/00 11.8%-16.5% 129.4%RCBK 7/31/01 Earni
Slide 27: Accretive Merger Transactions: Results
27 (a)$0.57 $9.2 $1.9 please share$2.3 data) (a) seeRSLN /reconciliation $9.05 12/31/01 No. of22.99 branches 18.30 % $0.56 to $1.03 diluted Loan %Core 139 w / deposit GAAP /ROE; $17.15 $6.0 $7.9 please EPS ratio (b) 101.7 (c) on Core see % page reconciliation $23.4 deposits 35, %20.74 Strategies HAV
Slide 28: Balance Sheet Repositioning
Balance Sheet Repositioning Strategies & Strengths: The balance sheet was profitably restructured after our HAVN & RCBK transactions. • ?margin ? ? ? earnings risk of risk rate risk interest quality interest credit extension net the earnings Reduced Reduced Reduced Enhanced Enhanced Increased HAVN -
Slide 29: Post-Roslyn Balance Sheet Repositioning
Strategies We Invested Post-RSLN Strategy Sold Increased Replaced Results Reduces Enhances Increases have approximately liquidity interest credit extension initiated earnings FHLB core net the & Strengths: interest quality deposits risk borrowings rate the from risk $120 risk of process margin the B
Slide 30: Performance: Diluted EPS Projection
Strategies We Diluted Company Note: areDiluted currently core estimates & EPS; Strengths: EPSprojecting please as adjusted Performance seea reconciliation 35% to reflect increase ourto inupcoming diluted 2004 diluted GAAP 4-for-3 EPS. EPS stock onsplit Pageare 35,in#4. parentheses.
Slide 31: Factors Driving 2004 Earnings
• 31 • the of portfolio continued multi-family Higher • Performance loan liquidity the of byand income, Higher of benefit •Roslyn to income, • 2004. The funded volume Continuation industry-leading deposits • Strategies ratio in securities full-year Several ?provision suspension ?? core ourthe expect
Slide 32: Shareholder Value
Strategies From Market Price Annualper 11/23/93 Capitalization yield share & Strengths: produced to (adjusted 1/23/04, by Shareholder for $1.00 the8 value splits; per Value of share excludes ourdividend shares the appreciated upcoming on shares4-for-3 purchased 3,215%.stockatsplit this date on 2/17/
Slide 33: Total Returns Since Mergers
33 (b) % Increase in Dividend 236 236 33 (a) % 1/23/04 604 217 54 Total Return Total Returns thru Date dividend cash of Mergersince Announcement each mergerJune transaction 27, 2000was March announced; 27, 2001includes June 27,the 2003 $0.28 Total perreturn share provided (pre-split]since dividend t
Slide 34: Total Return Since 1993
34 4,106% 11.1% upcoming $1.24 11/23/9312/31/9412/31/9512/31/9612/31/9712/31/9812/31/9912/31/0012/31/0112/31/0212/31/03 Strategies $4.68 4-for-3 3,794% 21.4% &stock Strengths: $41.10 140%split $2.93 2.4% on Since 2/17/04) 34.1% 2,051% 11/23/93, 60% Annual $38.05 $1.96 the2.6% yield total 51.0% 1,600
Slide 35: Appendix: Reconciliation of GAAP to Non-GAAP
Strategies Each Date (a) $0.28 AppendixReconciliation 1. pershare For goodwill per 2. $39.6million million Company’s and $11.4 operating Jersey share. The On Total share the appreciation $2.20, of of million, aper Bank Company Twelve on reported Merger our return for 6,907 for $ expenses share &the
Slide 36: More Information
• 1/28/04 615 Westbury, 36 • Inc. • NYSE Bancorp, our • “NYB”. the requests 683-4420 on onto (516) Investor Avenueto: 11590 Log E-mail symbol Call www.myNYCB.com Write • Information:Community trades • • • NY • More the Company iangarola@myNYCB.com • For The at: under site: York Merrick web to: Relat
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