Flagstar Bank, N.a. · NYSE:FLG
Flagstar Bank, N.a — New York Community Bancorp — Q2 2018 Earnings Presentation
38 slides from Flagstar Bank, N.a's earnings presentation, Jul 31, 2018
Slide 1: Second Quarter 2018 Investor Presentation
Second Quarter 2018 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. 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: We have consistently been in this market for nearly 50 years Lon
Slide 4: We rank among the largest U.S. bank holding companies
We rank among the largest U.S. bank holding companies… Total Assets: $50.5 billion, 77.8% of which are loans. Total Deposits: $29.6 billion Total Loans: $39.3 billion including $29.2 billion of multi-family loans. Total Market Capitalization: $5.4 billion Total Return and Dividend Yield: From IPO to
Slide 5: But without the risk other large banks have
… but without the risk other large banks have. Ratio NYCB At 6/30/18 SNL Bank &Thrift Index At 3/31/18 (a) Peers At 3/31/18 (a) NPLs/Total Loans 0.14% 1.33% 0.96% NCOs/Average Loans 0.01 0.43 0.23 Cumulative losses (b) 100 bp 2,313 bp 1,147 bp NPAs/Total Assets 0.14% 0.69% 0.73% ALLL/NPLs 284.44 109
Slide 6: Our Franchise: A Compilation of Community Banks
Metro New York 141 branches Total Deposits: $18.4 New Jersey 43 branches Total deposits: $4.5 bn Ohio 28 branches Total Deposits: $2.2 bn Florida 27 branches Total Deposits: $2.8 bn Arizona 14 branches Total Deposits: $1.2 bn Our Franchise: A Compilation of Community Banks... → The combined GDP of t
Slide 7: With strong market share in leading markets
…with strong market share in leading markets. → Top 15 bank and the largest thrift in all 8 counties we serve in New York (a). → Third largest depository institution and largest thrift in Queens, Nassau, and Richmond counties. → Top 15 market share in Suffolk and Kings counties. (a) Bronx, Kings, Na
Slide 8: 2Q 2018 Performance Highlights
2Q 2018 Performance Highlights
Slide 9: Income Statement Highlights
(dollars in thousands, except per share data) 2Q 2018 Strong Profitability Measures: Net Income $107,354 Net income available to common shareholders 99,147 Diluted earnings per common share $0.20 Return on average assets 0.87% Return on average common stockholders’ equity 6.31 Return on average tang
Slide 10: Balance Sheet Highlights
Company Capital 6/30/18 Common stockholders’ equity / total assets 12.46% Common equity tier 1 capital ratio 11.16 Tier 1 risk-based capital ratio 12.59 Total risk-based capital ratio 14.03 Leverage capital ratio 9.41 Bank Capital 6/30/18 Community Bank: Common equity tier 1 capital ratio 13.19% Tot
Slide 11: Loans at 6/30/18
Total HFI Loans: $39.4 bn Loans at 6/30/18 Loans – Our mix has not changed significantly since our IPO Leading multi-family lender in New York metro region. Consistently been lending in this market niche for nearly 50 years. Average yield on all loans : 3.79% Low-risk multi-family loans on non-luxur
Slide 12: Deposits at 6/30/18
Total Deposits: $29.6 bn Deposits at 6/30/18 Deposit Composition Average cost of interest-bearing deposits is 1.30%. Steadily growing the deposit base Deposit growth of $662 million or 2.3% year-over-year. Average deposits per branch of $116 million. Highlights:
Slide 13: Our regulatory capital ratios are equal to or exceed those of our peers
Our regulatory capital ratios are equal to or exceed those of our peers. Ratio NYCB SNL Bank &Thrift Index Peers Tier 1 Risk-Based Capital 12.59% 12.10% 11.95% Total Risk-Based Capital 14.03 13.76 13.83 Tier 1 Leverage 9.41 9.93 9.70 Common Equity Tier 1 11.16 11.21 11.03
Slide 14: Looking Forward
Looking Forward
Slide 15: Levers: Loan Growth, Reinvestment, Operating Expenses
Lever # 1 - Loan Growth Total YTD loans grew $1.1 billion or 6% annualized, and we expect mid-single digit loan growth in 2018. Lever # 2 - Significant Reinvestment Opportunities We have $2.2 billion of cash earning 1.91%. $13.4 billion of loans with average coupon of 3.37% contractually maturing or
Slide 16: Lever #1 – Back in growth mode
CAGR 1993-2009: 25.7% CAGR 2009-6/30/18: 2.1% Dodd-Frank Enacted Lever # 1 – Back in growth mode Asset growth prior to and since Dodd-Frank was enacted
Slide 17: Lever #2 - Loan Re-pricing Opportunities
Lever # 2 - Loan Re-pricing Opportunities → Approximately $13.4 billion of MF and CRE loans with an average coupon of 3.37%, are reaching their contractual maturity or their option re-pricing date over the next 3 years. If the borrower does not refinance or pay us off, before contractual maturity or
Slide 18: Lever #2 - Portfolio coupons may have bottomed
Lever # 2 - Portfolio coupons may have bottomed Coupon Rate at 6/30/2018 Multi Family: 3.45% CRE: 3.98%
Slide 19: 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 substantial cost savings in the remainder of 2018 and into 2019 on top of regulatory-related cost savings. Lever # 3 – Lower operating expenses We have al
Slide 20: Main beneficiary of tax reform and regulatory relief
→ The Economic Growth Regulatory Relief, and Consumer Protection Act (S.2155) was signed into law in late May. A key element of the new law is increasing the asset threshold to be considered a SIFI to $250 billion from $50 billion. → What regulatory relief means for us: DFAST no longer required Imme
Slide 21: Our Business Model: Strategic Loan Production
Our Business Model Strategic Loan Production
Slide 22: Multi-Family Loan Portfolio
Portfolio Statistics at or for the 3 Months Ended 6/30/18 Loans held for investment = 74.1% Average principal balance = $5.9 million Weighted average life = 2.8 years Multi-family loans located in Metro New York = 77.1% Loan originations = 70.3% of total originations Multi-Family Loan Portfolio (in
Slide 23: Commercial Real Estate Loan Portfolio
Commercial Real Estate Loan Portfolio (in millions) Originations: $2,168 $1,661 $1,842 $1,180 $1,039 $255 Net Charge-Offs (Recoveries): $0 $1 $(1) $(1) $0 $0 Commercial real estate is a logical extension of our multi-family niche. Portfolio Statistics at or for the 3 Months Ended 6/30/18 Loans held
Slide 24: Specialty Finance Loan and Lease Portfolio
Specialty Finance Loan and Lease Portfolio (in millions) Originations: $258 $848 $1,068 $1,266 $1,784 $487 Net charge-Offs: $0 $0 $0 $0 $0 $0 Our specialty finance business is another high-quality lending niche. Loan Types Syndicated asset-based (ABLs) and dealer floor-plan (DFPLs) loans Equipment l
Slide 25: Our Business Model: Asset Quality
Our Business Model Asset Quality
Slide 26: Our focus on the rent regulated niche has distinguished our performance
. → 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 featuring below-market rents. → Rent-regulated buildings are more likely to retain their tenants – and, therefore,
Slide 27: Asset Quality – Best in Class Underwriting
Asset Quality – Best in Class 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
Slide 28: 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 29: Very few 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 Cumulative Total NYCB: 100 bp SNL U.S. Bank and Thrift Index: 2,313 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 30: Our Business Model: Efficiency
Our Business Model Efficiency
Slide 31: Historical Drivers of Our Efficiency
Historical Drivers of Our Efficiency Going forward, our efficiency ratio should continue to benefit from the expected cost savings in 2018 (> $100 million) plus additional cost reductions in 2019. Multi-family and CRE lending are both broker-driven, with the borrower paying fees to the mortgage brok
Slide 32: Our Business Model: Growth through Acquisitions
Our Business Model Growth through Acquisitions
Slide 33: 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. The number of branches indicated for our transactions is the number of branches in our current franchise that stemmed from each. 1. Nov. 2000 Haven Bancorp
Slide 34: 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: 21.9% → 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 35: For More Information
7/31/18 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 36: Appendix
Appendix
Slide 37: 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 38: Peer Group
Peer Group Peer Ticker 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 Bank of the Ozarks OZRK People's United Financial, Inc. PBCT Signature Bank SBNY Sterlin
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