Flagstar Bank, N.a. · NYSE:FLG
Flagstar Bank, N.a — New York Community Bancorp — Q2 2017 Earnings Presentation
34 slides from Flagstar Bank, N.a's earnings presentation, Aug 2, 2017
Slide 1: Second Quarter 2017 Investor Presentation
Exhibit 99.1 Second Quarter 2017 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: We rank among the largest U.S. bank holding companies
We rank among the largest U.S. bank holding companies. MULTI-FAMILY TOTAL RETURN ASSETS DEPOSITS MARKET CAP LOANS ON INVESTMENT $48.3 billion $28.9 billion $26.9 billion $6.4 billion 4,029% With assets of With deposits of With a portfolio of With a market cap From 11/23/93 $48.3 billion at $28.9 bil
Slide 4: Our Business Model
OUR BUSINESS MODEL
Slide 5: Strategic Loan Production
STRATEGIC LOAN PRODUCTION
Slide 6: We are a leading producer of multi-family loans on non-luxury apartment buildings
We are a leading producer of multi-family loans on non- luxury apartment buildings in NYC with rent-regulated units. MULTI-FAMILY PORTFOLIO STATISTICS LOAN PORTFOLIO AT OR FOR THE 3 MONTHS ENDED (in millions) 6/30/17 $26,961 $26,876 % of non-covered loans held for $25,989 $23,849 investment = 72.1%
Slide 7: The way we lend in this market niche has distinguished our performance
The way we lend in this market niche has distinguished our performance from that of other multi-family lenders. 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 units featur
Slide 8: Commercial real estate lending has been a logical extension of multi-family loans
Commercial real estate lending has been a logical extension of our emphasis on multi-family loans. COMMERCIAL REAL ESTATE PORTFOLIO STATISTICS LOAN PORTFOLIO AT OR FOR THE 3 MONTHS ENDED (in millions) 6/30/17 $7,860 $7,727 % of non-covered loans held for $7,366 $7,637 $7,544 investment = 20.3% Avera
Slide 9: The launch of our specialty finance business provided another lending niche
The launch of our specialty finance business provided us with another high-quality lending niche. LOAN TYPES Syndicated asset-based (ABLs) and dealer floor- SPECIALTY FINANCE plan (DFPLs) loans Equipment loan and lease financing (EF) LOAN AND LEASE PORTFOLIO CLIENT CHARACTERISTICS (in millions) Larg
Slide 10: Asset Quality
ASSET QUALITY
Slide 11: Our record of asset quality in downward credit cycles
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% 1.6
Slide 12: 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% 0.68% 0.54% 0.53% 0.46% 0.47% 0.35% 0.21% 0.23% 0.07% 0.06% 0.13% 0.13% 0.05% 0.00% 0.00% 0.04
Slide 13: The quality of our assets reflects our lending niche and 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 14: Efficiency
EFFICIENCY
Slide 15: Efficiency has been another Company hallmark
Efficiency has been another Company hallmark. HISTORICAL DRIVERS OF EFFICIENCY RATIO (a) OUR EFFICIENCY 62.89% Multi-family and CRE lending are both broker-driven, with the borrower paying 49.68% fees to the mortgage brokerage firm. Products and services are typically developed by third-party provid
Slide 16: Our efficiency ratio has increased significantly since Dodd-Frank
Our efficiency ratio has increased significantly since the enactment of Dodd-Frank. PREPARING FOR SIFI STATUS Following the 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
Slide 17: Residential Mortgage Banking
RESIDENTIAL MORTGAGE BANKING
Slide 18: We recently announced the sale of our mortgage banking platform and covered assets
We recently announced the sale of our mortgage banking platform and covered assets. In late June, we announced the sale of our mortgage banking platform and the assets covered under our FDIC Loss Share Agreements. Both transactions are expected to close by the end of the third quarter and result in
Slide 19: Growth Through Acquisitions
GROWTH THROUGH ACQUISITIONS
Slide 20: We have a long history of earnings-accretive transactions
We have a long history of earnings-accretive transactions. 1. Nov. 2000 2. July 2001 3. Oct. 2003 4. Dec. 2005 5. April 2006 Haven Bancorp Richmond County Roslyn Bancorp, Long Island Atlantic Bank of (HAVN) Financial Corp. Inc. (RSLN) Financial Corp. New York (ABNY) (RCBK) (LICB) Assets: Assets: Ass
Slide 21: The termination of the Astoria merger was due to external factors
The termination of the Astoria merger was due to external factors, and continues to impact the value of our shares. Financially and strategically, the Astoria merger was a well-conceived transaction. Both our shareholders and Astoria’s overwhelmingly approved the merger. The regulatory approval proc
Slide 22: 2Q 2017 Performance Highlights
2Q 2017 PERFORMANCE HIGHLIGHTS
Slide 23: Income Statement Highlights
Income Statement Highlights (dollars in thousands, except per share data) 2Q 2017 Strong Profitability Measures: Net income $115,255 Net income available to common shareholders 107,048 Earnings per common share $0.22 Return on average assets 0.94% Return on average common stockholders’ equity 6.97 R
Slide 24: Balance Sheet Highlights
Balance Sheet Highlights BALANCE SHEET ASSET QUALITY 6/30/17 At or for the Three Months Ended 6/30/17 Loans, net / total assets 80.5% Non-performing loans(a) / total loans(a) 0.22% Securities / total assets 6.6 Non-performing assets(b) / total assets(b) 0.20 Deposits / total assets 59.8 Net charge-o
Slide 25: Loans and Deposits
Loans and Deposits LOANS DEPOSITS AT 6/30/17 AT 6/30/17 Savings 18% CRE 20% CDs 29% Multi- NOW and Family ADC MMA 72% 1% 44% C&I 6% 1-4 Family (Non- Non- Other covered) Interest- 0% 1% Bearing 9% TOTAL HFI LOANS: $37.3 BN TOTAL DEPOSITS: $28.9 BN AVERAGE YIELD ON LOANS: 3.70% AVERAGE COST OF INTERES
Slide 26: Leverage and risk-based capital ratios comparable to regional peers
Reflecting the benefit of our recent preferred stock offering, our leverage and risk-based capital ratios are comparable to those of our regional peers. NYCB REGIONAL PEERS (a) RATIO AT 6/30/17 (MEDIAN AT 6/30/17) Tier 1 Risk-Based Capital 12.64% 11.50% Total Risk-Based Capital 14.11 12.97 Tier 1 Le
Slide 27: 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% 4,784% 4,265% 4,319% SNL U.S. Bank and Thrift Index 4,029% 3,843% NYCB (a) 3,069% 2,754% 2,670% 2,059% CAGR since IPO: 23.5% 717% 640% 609% 393% 4
Slide 28: Looking Forward
LOOKING FORWARD
Slide 29: Resumption of Balance Sheet Growth
Resumption of Balance Sheet Growth Since 4Q 2014, we have strategically managed our balance sheet to stay below the SIFI threshold. This has resulted in no balance sheet growth for the past two-plus years: — Total assets at 6/30/2017: $48.3 billion — Total assets at 9/30/2014: $48.7 billion While we
Slide 30: We continue to be encouraged by recent signs of regulatory easing
We continue to be encouraged by recent signs of regulatory easing. Qualitative stress testing for financial institutions with assets greater than $50 billion and less than $250 billion has been eliminated. The regulatory approval process for mergers resulting in the creation of a bank holding compan
Slide 31: We also are encouraged by proposed changes to the federal tax laws
We also are encouraged by proposed changes to the federal tax laws for corporations. The proposed changes to the federal corporate tax laws would be expected to benefit our earnings in two important ways: Our current federal corporate tax rate is 35%. All other things being equal, a reduction in the
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 Page 32 8/2/17
Slide 33: Appendix
APPENDIX
Slide 34: Reconciliations of GAAP and Non-GAAP Measures
Reconciliations of GAAP and 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
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