Flagstar Bank, N.a. · NYSE:FLG
Flagstar Bank, N.a — New York Community Bancorp — Q1 2016 Earnings Presentation
39 slides from Flagstar Bank, N.a's earnings presentation, May 13, 2016
Slide 1: First Quarter 2016 Investor Presentation
First Quarter 2016 Investor Presentation Exhibit 99.1
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: Pro forma rankings with Astoria
Pro forma assets, deposits, and multi-family loans are based on our balances and Astoria’s at 3/31/16 and include purchase accounting adjustments. Data from SNL Financial as of 6/30/15. Our pro forma market cap was calculated by multiplying our closing price at 3/31/16 by the sum of our outstanding
Slide 4: Core Business Model Enhanced by the Astoria Financial Merger
We Expect the Core Components of our Business Model to Be Enhanced by the Astoria Financial Merger
Slide 5: Multi-Family Loan Production
Multi-Family Loan Production
Slide 6: NYCB Multi-Family Portfolio Statistics
NYCB Portfolio Statistics at or for the 3 Mos. Ended 3/31/16 % of non-covered loans held for investment = 73.0% Average principal balance = $5.4 million Weighted average life = 2.9 years % of our multi-family loans located in Metro New York = 80.6% % of HFI loan originations = 73.7% Multi-Family Loa
Slide 7: Focus on rent-regulated multi-family lending
→ 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, th
Slide 8: Asset Quality
Asset Quality
Slide 9: Net Charge-Offs / Average Loans
S & L Crisis Net Charge-Offs/ Average Loans 5-Year Total NYCB: 17 bp SNL U.S. Bank and Thrift Index: 540 bp 4-Year Total NYCB: 37 bp SNL U.S. Bank and Thrift Index: 803 bp SNL U.S. Bank and Thrift Index NYCB Great Recession Current Credit Cycle 5-Year Total NYCB: 52 bp SNL U.S. Bank and Thrift Index
Slide 10: Non-Performing Loans / Total Loans
S & L Crisis Great Recession Current Credit Cycle 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 bu
Slide 11: Conservative Underwriting
Conservative Underwriting Active Board Involvement Multiple Appraisals Risk-Averse Mix of Non-Covered Loans Held for Investment (at 3/31/16) Conservative loan-to-value ratios Conservative debt coverage ratios: 120% for multi-family loans, and 130% for CRE loans Multi-family and CRE loans are based o
Slide 12: Efficiency
Efficiency
Slide 13: Factors Driving Our Efficiency
Factors Driving Our Efficiency 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 providers and the sale of these products generates additional revenues. Franchise expansion h
Slide 14: Residential Mortgage Banking
Residential Mortgage Banking
Slide 15: Residential Mortgage Banking Features and Benefits
Features Loans can be originated/purchased in all 50 states and the District of Columbia. Loan production is driven by our proprietary real time, web-accessible mortgage banking technology platform, which securely controls the lending process while mitigating business and regulatory risks. We have o
Slide 16: Growth Through Acquisitions
Growth Through Acquisitions
Slide 17: Astoria Merger Builds Earnings, Capital and Shareholder Value
Significantly Increases our Earnings ~ 20% pro forma earnings accretion (a) ~ 15.5% return on average tangible common equity (ROATCE) Expected cost saves (~ 50% of Astoria’s non-interest expense) maintain our longstanding record of efficiency Expands our margin Increases our revenue stream Significa
Slide 18: Deposit Growth Through Acquisitions
(in millions) Deposits w/ HAVN w/ RCBK w/ RSLN w/ LICB w/ ABNY w/ PFSB, Doral, & SYNF w/ AmTrust w/ Desert Hills w/ Astoria Total Deposits: $3,268 $5,472 $10,360 $12,168 $12,764 $13,311 $22,418 $21,890 $24,878 $28,427 $28,982 $38,066 Total Branches: 86 120 139 152 166 217 276 276 275 258 256 344 CDs
Slide 19: Astoria branches near NYCB branches
Note: Data from SNL Financial as of 6/30/15. Long Island Brooklyn Queens Westchester Astoria NYCB % of Astoria branches near an NYCB branch The Astoria merger is expected to create New York’s pre-eminent community bank.
Slide 20: Deposit Market Share in the NY MSA
Boosts our market share in four attractive Metro NY markets: Nassau and Suffolk Counties (Long Island), Queens, and Brooklyn Infusion of low-cost core deposits enhances our funding mix Expands our customer base and opportunities to increase non-interest revenues Potential improvement in deposit pric
Slide 21: Enhanced Asset and Funding Mix
The Astoria merger is expected to enhance our asset and funding mix. NYCB Astoria Pro Forma (a) Total HFI Loans: $38.2 bn Yield on Loans: 3.75% NYCB Astoria Pro Forma (a) Total Deposits: $29.0 bn Cost of I-B Deposits: 0.63% Total HFI Loans: $11.0 bn Yield on Loans: 3.48% Total HFI Loans: $48.9 bn Yi
Slide 22: Held-for-Investment Loan Portfolio
Held-for-Investment Loan Portfolio(a) After HAVN After RCBK After RSLN After LICB After ABNY After PFSB, Doral, & SYNF After AmTrust After Desert Hills HFI Loans Outstanding: $3,636 $5,405 $10,499 $17,029 $19,653 $20,363 $23,377 $23,707 $27,285 $35,763 $36,176 $46,872 HFI Originations: $616 $1,150 $
Slide 23: Track Record of Post-Merger Integrations
* The Astoria merger was announced in October 2015. All other mergers on this page were completed in the months and years indicated. The number of branches indicated for our previous transactions is the number of branches in our current franchise that stemmed from each. Transaction Type: Savings Ban
Slide 24: Preparing for SIFI Status
Following 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 is reflected in the ~ 700-basis point increase in our efficiency ratio since the enactment of Dodd-Frank. The merg
Slide 25: Dividends and Share Repurchases
As we continue to grow, we would expect our total payout ratio to be more consistent with the total payout ratio for our SIFI peers. Dividends Approved in 2015 Share Repurchases Approved in 2015
Slide 26: 1Q 2016 Performance Highlights
1Q 2016 Performance Highlights
Slide 27: Performance Highlights
(dollars in thousands, except per share data) Please see pages 35-38 for reconciliations of our GAAP and non-GAAP measures in the three months ended 12/31/2015. ROTA and ROTE are non-GAAP financial measures. Please see page 39 for additional information. Our 1Q 2016 performance reflected the benefit
Slide 28: Strategic Asset Management
From 9/30/14 to 3/31/16, we managed our assets below the current SIFI threshold while maintaining our high-volume production of multi-family and CRE loans. Strategic Asset Management Total Assets 9/30/14 $48.7 Billion Reduced securities by $3.3 billion through a combination of repayments, sales, and
Slide 29: Capital, Balance Sheet and Asset Quality
Non-performing loans and total loans exclude covered loans and non-covered PCI loans. Non-performing assets and total assets exclude covered loans, covered OREO, and non-covered PCI loans. Company Capital 3/31/16 Stockholders’ equity / total assets 12.34% Common equity tier 1 capital ratio 10.50% Le
Slide 30: Total Return on Investment
Total Return on Investment
Slide 31: Total Return on Investment Since IPO
CAGR since IPO: 25.8% Bloomberg Total Return on Investment → 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. SNL U.S. Bank and Thrift Index NYCB (a) Our commitment to building value for our inv
Slide 32: For More Information
5/13/16 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 33: Reconciliations of GAAP and Non-GAAP Financial Measures
Reconciliations of GAAP and Non-GAAP Financial Measures
Slide 34: Tangible Common Stockholders' Equity Reconciliation
Tangible common stockholders’ equity is a non-GAAP financial measure. The following table reconciles this non-GAAP measure with our related GAAP measure at March 31, 2016. Reconciliation of GAAP and Non-GAAP Financial Measures (dollars in thousands) March 31, 2016 Total stockholders’ equity $ 5,984,
Slide 35: Reconciliations of GAAP Loss and Non-GAAP Earnings
Reconciliations of GAAP Loss and Non-GAAP Earnings The following table reconciles our GAAP loss and our non-GAAP earnings for the three months ended December 31, 2015. (in thousands, except per share data) For the Three Months Ended December 31, 2015 GAAP Loss $(404,807 ) Adjustments to GAAP Loss: D
Slide 36: Reconciliations of Efficiency Ratios
The following table reconciles our efficiency ratios and our adjusted efficiency ratios for the three and twelve months ended December 31, 2015. Reconciliations of Efficiency Ratios and Adjusted Efficiency Ratios (dollars in thousands) For the Three Months Ended December 31, 2015 For the Twelve Mont
Slide 37: GAAP Net Interest Loss and Non-GAAP Net Interest Income
Reconciliation of GAAP Net Interest Loss and Non-GAAP Net Interest Income (in thousands) For the Three Months Ended December 31, 2015 Net interest loss $(449,202 ) Adjustment to net interest loss: Debt repositioning charge 773,756 Non-GAAP net interest income $ 324,554 The following table reconciles
Slide 38: Net Interest Income Analysis GAAP vs Non-GAAP
For the Three Months Ended December 31, 2015 GAAP Non-GAAP Average Average Average Yield/ Average Yield/ (dollars in thousands) Balance Interest Cost Balance Interest Cost Total interest-earning assets $44,111,768 $ 424,501 3.85 % $44,111,768 $424,501 3.85 % Total interest-bearing deposits 25,866,83
Slide 39: Reconciliations of GAAP and Non-GAAP Profitability Measures
Average tangible common stockholders’ equity and average tangible assets are non-GAAP financial measures. The following table presents reconciliations of these non-GAAP measures with the related GAAP measures for the three months ended March 31, 2016, December 31, 2015, and March 31, 2015. Reconcili
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