Flagstar Bank, N.a. · NYSE:FLG
Flagstar Bank, N.a — New York Community Bancorp — Q3 2019 Earnings Presentation
32 slides from Flagstar Bank, N.a's earnings presentation, Oct 30, 2019
Slide 1: Third Quarter 2019 Investor Presentation
Exhibit 99.1 Third Quarter 2019 Investor PresentationExhibit 99.1 Third Quarter 2019 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: Overview: Who we are
Overview: Who we are We are a leading producer of multi-family loans in New York City. Our niche focuses on non-luxury apartment → buildings that are rent-regulated featuring below-market rents. Our expertise in this particular lending niche arises from: • A consistent presence in this market for 50
Slide 4: We rank among the largest U.S. bank holding companies
We rank among the largest U.S. bank holding companies… TOTAL ASSETS: $52.5 billion, 77% of which are loans. TOTAL LOANS: $40.7 billion including $30.3 billion of multi-family loans. TOTAL DEPOSITS: $31.6 billion TOTAL MARKET $6.4 billion CAPITALIZATION: (a) Total ROI is 4,410%, since our IPO. TOTAL
Slide 5: … but without the risk other large banks have
… but without the risk other large banks have. Our asset quality metrics compare very favorably to both the SNL Bank & Thrift Index and → our regional bank peers. SNL BANK &THRIFT NYCB PEERS (b) RATIO INDEX (b) AT 9/30/19 AT 6/30/19 AT 6/30/19 NCOs/Average Loans 0.02 0.45 0.13 (a) Cumulative losses
Slide 6: A Strong Capital Position
A Strong Capital Position SNL BANK &THRIFT NYCB PEERS RATIO INDEX (a) AT 9/30/19 AT 9/30/19 AT 6/30/19 Total Risk-Based Capital 13.61% 13.79% 12.70% Tier 1 Risk-Based Capital 11.49 12.48 11.11 Common Equity Tier 1 10.15 11.89 10.06 Tier 1 Leverage 8.65 10.09 9.30 (a) SNL B&T 3Q 2019 data was not ava
Slide 7: Loans – Our mix has not changed significantly since our IPO
Loans – Our mix has not changed significantly since our IPO Highlights: LOANS AT 9/30/19 • 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 over the l
Slide 8: Leading Multi-Family, Rent-Regulated Lender in New York Metro Region
Leading Multi-Family, Rent-Regulated Lender in New York Metro Region. MULTI-FAMILY LOAN PORTFOLIO Multi-family loans have been our primary (in millions) lending focus for the past five decades MULTI-FAMILY PORTFOLIO STATISTICS $30,289 $29,904 AT OR FOR THE 3 MONTHS ENDED $28,092 $26,961 9/30/19 $25,
Slide 9: Best-in-Class Credit Underwriting
Best-in-Class Credit Underwriting ● Conservative loan-to-value ratios CONSERVATIVE● Conservative debt service coverage ratios: 120% for multi-family loans and 130% for CRE loans UNDERWRITING ● Multi-family and CRE loans are based on the lower of economic or market value ● The Mortgage Committee and
Slide 10: Our Multi-Family Portfolio is Well Insulated Against Recent Changes in the Rent Regulation Laws
Our Multi-Family Portfolio is Well Insulated Against Recent Changes in the Rent Regulation Laws (1) $18.3 billion or 61% of the MF portfolio is subject to NYS rent regulations; WA LTV on → this portion of the MF portfolio is 53.54% We lend on current, in-place cash flows and not on future or project
Slide 11: Commercial real estate is a logical extension of our multi-family niche
Commercial real estate is a logical extension of our multi-family niche. COMMERCIAL REAL ESTATE LOAN PORTFOLIO (in millions) CRE PORTFOLIO STATISTICS AT OR FOR THE 3 MONTHS ENDED 9/30/19 $7,727 $7,637 $7,860 $7,325 $7,001 $6,988 ● 17.1% of total loans (13.6% of originations) ● 86.4% of loans in Metr
Slide 12: Our specialty finance business is another high-quality lending niche
Our specialty finance business is another high-quality lending niche. ● Six industry veterans with nearly 150 years of combined experience ● The team has been working together for over 25 years, mostly at larger regional banks in the Northeast ● Extensive experience in senior secured lending, transa
Slide 13: Our asset quality in any credit cycle has consistently been better than our industry peers
Our asset quality in any credit cycle has consistently been better than our industry peers… (a)(b) (a) NON-PERFORMING LOANS / TOTAL LOANS Average NPLs/Total Loans NYCB: 0.57 % SNL U.S. Bank and Thrift Index:1.68 % 4.79% 4.69% 4.14% 3.57% 2.90% 2.36% 2.26% 2.01% 1.80% 1.61% 1.36% 1.27% 1.23% 1.11% 1.
Slide 14: … and very few of our non-performing loans have resulted in actual losses
… and very few of our non-performing loans have resulted in actual losses. NET CHARGE-OFFS / AVERAGE LOANS 2.89% 2.84% Cumulative Total NYCB: 103 bp SNL U.S. Bank and Thrift Index: 2,356 bp 1.77% 1.63% 1.24% 0.96% 0.91% 0.85% 0.77% 0.76% 0.68% 0.60% 0.58% 0.59% 0.65% 0.56% 0.57% 0.53% 0.51% 0.48% 0.
Slide 15: Consistent Profitability over Various Business Cycles
Consistent Profitability over Various Business Cycles due to Low Credit Cost and Highly Efficient Business Model. RETURN ON AVERAGE ASSETS SINCE IPO 2.29% 2.26% 1.72% 1.71% 1.69% 1.63% 1.63% 1.62% 1.61% 1.42% 1.33% 1.32% 1.30% 1.30% 1.29% 1.27% 1.24% 1.22% 1.24% 1.17% 1.20% 1.17% 1.18% 1.12% 1.17% 1
Slide 16: Highly Efficient Operator with Effective Business Model
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 EFFICIENCY RATIO brokerage firm ● Products and services are typically developed by third-party providers; t
Slide 17: Deposit Composition
Deposit Composition DEPOSITS Highlights: AT 9/30/19 • Deposits generated through retail and commercial channels • Presence in several large markets – Metro New York, New Jersey, Ohio, CDs Florida, and Arizona 45% Savings 15% • Steadily growing deposit base • Average cost of interest-bearing deposits
Slide 18: Three levers for future earnings growth
LEVER # 1 - LOAN GROWTH Total loans grew $678 million or 2% year-to-date. LEVER # 2 - SIGNIFICANT REPRICING OPPORTUNITIES There are $14.7 billion of loans with an average coupon of 3.42% contractually maturing or reaching their option re-pricing date over the next 3 years. We have $14.2 billion of C
Slide 19: Lever 1 – Back in growth mode
Lever # 1 – Back in growth mode Asset growth prior to and since Dodd-Frank was enacted DODD-FRANK ENACTED $52.5 $51.9 (in billions) $50.3 $49.1 $48.6 $48.9 $46.7 $44.1 $42.2 $42.0 $41.2 $32.5 CAGR 2009-3Q 2019: 2.3% $23.4 CAGR 1993-2009: 25.7% $1.1 $1.7 Page 19Lever # 1 – Back in growth mode Asset g
Slide 20: Lever 2 - Re-pricing Opportunities
Lever # 2 - Re-pricing Opportunities Over the next 3 years, approximately $14.7 billion of MF and CRE loans with an average coupon of 3.42%, are reaching their contractual maturity date or their option re-pricing date. If the borrower does not refinance or pay us off before the contractual maturity
Slide 21: Lever 2 - Portfolio coupons may have bottomed
Lever # 2 - Portfolio coupons may have bottomed HISTORICAL WEIGHTED AVERAGE PORTFOLIO COUPONS 6.25% Coupon Rate at 9/30/2019 6.00% Multi Family: 3.66% CRE: 4.00% 5.75% 5.50% 5.25% 5.00% 4.75% 4.50% 4.25% 4.00% 3.75% 3.50% 3.25% Multi Family CRE Page 21 6/30/2009 9/30/2009 12/31/2009 3/31/2010 6/30/2
Slide 22: Lever 3 – Lower operating expenses
Lever # 3 – Lower operating expenses Our efficiency ratio has increased significantly since the enactment of Dodd-Frank. l We expect additional cost savings in 2019 on top of the cost savings we realized in 2018. NYCB EFFICIENCY RATIO PRIOR TO AND SINCE DODD-FRANK 47% 36% 2009 2019 Page 22Lever # 3
Slide 23: Our Business Model: Growth through Acquisitions
OUR BUSINESS MODEL Growth through AcquisitionsOUR BUSINESS MODEL Growth through Acquisitions
Slide 24: A history of accretive transactions which have added to our franchise value
A history of accretive transactions which have added to our franchise value. 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) A
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 4,784% 4,682% 4,410% 4,319% 4,265% 4,106% Peer Group 3,934% 3,843% (a) NYCB 3,135% 3,069% 2,754% 2,670% CAGR since IPO: 2059% 21.7% 804% 722% 735% 717% 689% 618% 530% 492% 459% 306% 299% 286% 231% 203%
Slide 26: Key Investment Highlights
Key Investment Highlights (a) 1 Largest New York Metro Headquartered Regional Bank by Assets Leading Producer of Multi-Family Loans in New York City with an 2 Expertise on the Non-Luxury / Rent-Regulated Segment 3 Proven Track Record of Superior Asset Quality Consistent Profitability over Various Bu
Slide 27: 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 27For More Information VISIT OUR WEBSITE: ir.myNYCB.com E-MAIL R
Slide 28: Appendix
APPENDIXAPPENDIX
Slide 29: Securities and Funding Composition
Securities and Funding Composition SECURITIES FUNDS U.S. Non- Treasury AT 9/30/19 AT 9/30/19 Interest- 1% Equity Other Bearing Securities 3% 6% 1% GSE Certificates Capital Interest- 26% Trust Notes Bearing 2% Checking & FHLB MMA 26% 22% Corporates 14% Savings GSE CMOs 11% 30% ABS 6% GSE CD Municipal
Slide 30: Experienced Management Team
Experienced Management Team JOSEPH R. ROBERT THOMAS R. JOHN J. JAMES J. FICALORA WANN CANGEMI PINTO CARPENTER Senior Executive Senior Executive Executive Vice Senior Executive President & Vice President & Vice President & President & Vice President & Chief Executive Chief Operating Chief Financial C
Slide 31: 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
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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