Flagstar Bank, N.a. · NYSE:FLG
Flagstar Bank, N.a — New York Community Bancorp — Q3 2020 Earnings Presentation
34 slides from Flagstar Bank, N.a's earnings presentation, Oct 28, 2020
Slide 1: Third Quarter 2020 Investor Presentation
Third Quarter 2020 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. Within this market we focus almost exclusively on the non-luxury, rent regulated niche, where average rents are below market. → Our expertise in this particular lending niche arises from: A consistent presence in this market for ove
Slide 4: COVID-19 Response and Support
COVID-19 Response and Support Employees Health and safety of our employees is paramount Extensive precautions have been taken to protect employees returning to their offices and in the branches Dedicated Human Resources team providing direct employee assistance A 24-hour help line for employees and
Slide 5: We rank among the largest U.S. bank holding companies
We rank among the largest U.S. bank holding companies… Total Assets: $54.9 billion, 78% of which are loans. Total Deposits: $31.7 billion Total Loans: $42.8 billion including $32.1 billion of multi-family loans. Total Market Capitalization: $4.0 billion Total Return and Dividend Yield: Total ROI is
Slide 6: But without the risk other large banks have
… but without the risk other large banks have. Ratio NYCB At 9/30/2020 SNL Bank &Thrift Index At 9/30/2020 Peers (b) At 6/30/2020 NCOs/Average Loans 0.03 0.41 0.25 Cumulative losses (a) 107 bp 2,386 bp 1,277 bp NPAs/Total Assets 0.10% 0.58% 0.59% NPLs/Total Loans 0.11% 0.88% 0.84% ALLL/NPLs 415.22 1
Slide 7: A Strong Capital Position
A Strong Capital Position Ratio NYCB At 9/30/2020 SNL Bank &Thrift Index At 9/30/2020 Peers At 9/30/2020 Total Risk-Based Capital 13.00% 14.38% 13.32% Tier 1 Risk-Based Capital 10.94 12.04 11.13 Common Equity Tier 1 9.68 11.37 10.07 Tier 1 Leverage 8.42 9.02 8.49
Slide 8: Total HFI Loans: $42.8 bn
Total HFI Loans: $42.8 bn Loans at 9/30/20 Loans – Our mix has not changed significantly since our IPO 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 o
Slide 9: Multi-Family Portfolio Statistics
Multi-Family Portfolio Statistics at or for the 3 Months Ended 9/30/20 75.0% of loans held-for-investment (70.7% of originations) 78.4% of loans are in Metro New York Average principal balance = $6.6 million Weighted average life = 2.0 years Weighted average LTV: 57.38%, overall Weighed average LTV
Slide 10: Best-in-Class Credit Underwriting
Best-in-Class Credit 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 The Mortg
Slide 11: Multi-Family Portfolio Well Insulated Against Rent Regulation Changes
→ $19.1 billion or 60% of the MF portfolio is subject to NYS rent regulations; WALTV (1) on this portion of the MF portfolio is 53.84%, 354 basis points below the overall MF portfolio. Our Multi-Family Portfolio is Well Insulated Against Recent Changes in the Rent Regulation Laws → We lend on curren
Slide 12: Commercial Real Estate Loan Portfolio
Commercial Real Estate Loan Portfolio (in millions) Originations: $1,661 $1,842 $1,180 $1,039 $967 $1,226 $451 Net Charge-Offs (Recoveries): $1 $(1) $(1) $0 $3 $0 $0 Commercial real estate is a logical extension of our multi-family niche. CRE Portfolio Statistics at or for the 3 Months Ended 9/30/20
Slide 13: Specialty Finance Loan and Lease Portfolio
Specialty Finance Loan and Lease Portfolio (in millions) Originations: $848 $1,068 $1,266 $1,784 $1,917 $2,800 $2,247 Net charge-Offs: $0 $0 $0 $0 $0 $0 $0 Our specialty finance business is another high-quality lending niche. Loan Types 7.5% of loans held-for-investment 19.8% of originations Syndica
Slide 14: 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 15: Very few non-performing loans have resulted in losses
… and very few of our non-performing loans have resulted in actual losses. Net Charge-Offs / Average Loans Cumulative Total NYCB: 107 bp SNL U.S. Bank and Thrift Index: 2,386 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 16: Consistent Profitability over Various Business Cycles
Consistent Profitability over Various Business Cycles due to Low Credit Costs and Highly Efficient Business Model. Source: S&P Global Market Intelligence. The 2015 amount reflects the $546.8 million after-tax impact of the debt repositioning charge recorded as interest expense and non-interest expen
Slide 17: Significant progress made on loan deferrals since June 30
Significant progress made on loan deferrals since June 30; Majority of remaining deferrals scheduled to come off in November.
Slide 18: MF + CRE deferrals have declined 48%
Since June 30, MF + CRE deferrals have declined 48%; another $2.9 billion scheduled to come off deferral in November
Slide 19: Highly Efficient Operator with Effective Business Model
Efficiency Ratio Peer Group NYCB 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 brokerage firm Products and services are typically developed by third-party
Slide 20: Total Deposits: $31.7 bn
Total Deposits: $31.7 bn Deposits at 9/30/20 Deposit Composition Deposits generated through retail and commercial channels Presence in several large markets – Metro New York, New Jersey, Ohio, Florida, and Arizona Steadily growing deposit base Average cost of interest-bearing deposits is 0.85% Avera
Slide 21: Three levers for future earnings growth
Lever # 1 - Loan Growth Total loans held for investment net grew $935 million or 3% annualized on a YTD basis. Loan growth supported by: Increased refinancing activity as many loans are approaching their contractual maturity date or option repricing date; Higher retention rates; and Less traditional
Slide 22: Back in growth mode
Lever # 1 – Back in growth mode We have grown our balance sheet about $5 billion or 10% since the SIFI threshold was increased to $250 billion
Slide 23: Re-pricing Opportunities
Lever # 2 - Re-pricing Opportunities → Approximately $1.4 billion of wholesale borrowings at an average rate of 1.44% maturing over the next four quarters. → Approximately $11.6 billion of CDs maturing over the next four quarters at an average rate of 1.21%. → $5.8 billion of CDs maturing in Q4 2020
Slide 24: Historical Cost of Deposits
Historical Cost of Deposits Last easing cycle cost of deposits bottomed at 0.54% compared to 0.85% for Q3 2020. Cost of deposits during this easing cycle could bottom lower than last cycle. Cost of Deposits (%)
Slide 25: Lower operating expenses: NYCB Efficiency Ratio
NYCB Efficiency Ratio Prior to and Since Dodd-Frank Our efficiency ratio has increased significantly since the enactment of Dodd-Frank. We expect that the efficiency ratio will improve through operating leverage. Lever # 3 – Lower operating expenses
Slide 26: 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. 1 . Nov. 2000 Haven Bancorp (HAVN) Assets: $2.7 billion Deposits: $2.1 billion 3 . Oct. 2003 Roslyn Bancorp, Inc. (RSLN) Assets: $10.4 billion Deposits: $5.
Slide 27: Business model 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: 19.2% → 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 28: Key Investment Highlights
Key Investment Highlights Uniquely positioned in the current environment Expect double-digit EPS growth in 2020 and 2021 Expect double-digit NIM expansion and mid-single digit loan growth Minimal credit losses and provisioning under CECL even after taking COVID-19 impact into account Expenses will r
Slide 29: For More Information
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 30: Appendix
Appendix
Slide 31: Securities and Funding Composition
Securities and Funding Composition Funds at 9/30/20 1.24% cost of funds Significant capacity given eligibility of multi-family loans Total Funding: $47.4 bn Entire portfolio is available for sale Consists primarily of GSE-related securities Overall yield is 2.60% 33% is variable rate Securities at 9
Slide 32: Experienced Management Team
Experienced Management Team Joseph R. Ficalora Robert Wann Thomas R. Cangemi John J. Pinto John Adams President & Chief Executive Officer Senior Executive Vice President & Chief Operating Officer Senior Executive Vice President & Chief Financial Officer Executive Vice President & Chief Accounting Of
Slide 33: While average stockholders’ equity, average assets, return on average assets, and return on average
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 34: 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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