Flagstar Bank, N.a. · NYSE:FLG
Flagstar Bank, N.a — New York Community Bancorp — Q1 2016 Earnings Presentation
41 slides from Flagstar Bank, N.a's earnings presentation, Apr 25, 2016
Slide 1: First Quarter 2016 Investor Presentation: The Astoria Financial Merger
First Quarter 2016 Investor Presentation Growing Earnings, Building Capital, and Creating Value: The Astoria Financial Merger Exhibit 99.1
Slide 2: Cautionary Statements: Additional Information and Where to Find It
Cautionary Statements Additional Information and Where to Find It This presentation is being made in respect of the proposed merger transaction involving the Company and Astoria Financial Corporation (“Astoria Financial”). The Company has filed a registration statement on Form S-4 with the SEC, whic
Slide 3: Cautionary Statements: Forward-Looking Information
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 4: Pro forma assets, deposits, multi-family loans and market cap
Pro forma assets, deposits, and multi-family loans are based on our balances and Astoria’s at 12/31/15 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 12/31/15 by the sum of our outstandin
Slide 5: The Astoria merger is expected to significantly increase our earnings and strengthen our balance sheet
The Astoria merger is expected to significantly increase our earnings and strengthen our balance sheet. 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) m
Slide 6: Substantial upside potential relative to the purchase price
The Astoria merger features substantial upside potential relative to the purchase price. Source: SNL Financial, company disclosure. Time deposits greater than $100k are based on 2Q 2015 regulatory disclosure for Astoria. Core deposits reflect total deposits less time deposits greater than $100k. Rep
Slide 7: The Astoria merger is expected to create New York's pre-eminent community bank
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 8: Increased share of deposits in the NY MSA
Increases our rank among regional banks in the NY MSA from #4 to #2 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
Slide 9: Increased share of deposits in four attractive markets
The Astoria merger is expected to significantly increase our share of deposits in four highly attractive markets. Nassau 2015 Rank Top Banks Branches Deposits ($000) 1 JPMorgan Chase & Co. 92 $13,964,179 2 Capital One Financial Corp. 49 10,109,533 3 NYCB Pro Forma 65 10,086,758 3 Citigroup Inc. 46 9
Slide 10: Summary Pro Forma Balance Sheet
Pro forma data is based on our balances and Astoria’s at 12/31/15 and includes purchase accounting adjustments. Tangible common stockholders’ equity is a non-GAAP financial measure. Please see page 36 for additional information. Summary Pro Forma Balance Sheet Increases our share of NYC’s multi-fami
Slide 11: 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: $37.8 bn Yield on Loans: 3.97% NYCB Astoria Pro Forma (a) Total Deposits: $28.4 bn Cost of I-B Deposits: 0.62% Total HFI Loans: $11.1 bn Yield on Loans: 3.51% Total HFI Loans: $48.6 bn Yi
Slide 12: Opportunities to drive long-term asset growth
We expect the Astoria merger to provide multiple opportunities to drive profitable, sustainable, long-term asset growth. The Pro Forma Company is Primed for Strong Core Asset Growth Results in greater on-balance sheet capacity to support loan production Highly liquid residential mortgage loan portfo
Slide 13: De-risking our balance sheet
De-risking our balance sheet is expected to strengthen our financial performance both before and after the merger. Balance Sheet Repositioning Strategies In 4Q 2015, we prepaid $10.4 billion of primarily puttable wholesale borrowings with an average cost of 3.16% and replaced them with a like amount
Slide 14: Enhancing our capital management strategy
Enhancing our capital management strategy has strengthened our capital measures and is expected to facilitate further growth. Completed on 11/4/15, our common stock offering: Immediately supported our tangible stockholders’ equity and Tier 1 common equity; and Exceeded by $87.3 million the impact on
Slide 15: 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 16: Total payout ratio versus SIFI peers
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 17: 1Q 2016 Performance Highlights
1Q 2016 Performance Highlights
Slide 18: We generated solid earnings in 1Q 2016
(dollars in thousands, except per share data) Please see pages 37-41 for reconciliations of our GAAP and non-GAAP measures. ROTA and ROTE are non-GAAP financial measures. Please see page 41 for additional information. We generated solid earnings in 1Q 2016. PERFORMANCE HIGHLIGHTS 1Q 2016 (GAAP) 4Q 2
Slide 19: Core business model enhanced by the Astoria merger
We Expect the Core Components of our Business Model to Be Enhanced by the Astoria Financial Merger
Slide 20: Multi-family loan 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 21: Low net charge-offs in downward credit cycles
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 22: Non-performing loans to 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 loans. Non-performing loans are defined as non-accrual loans and loans 90 days or more past due but still
Slide 23: Merger expected to maintain superior efficiency
SNL U.S. Bank and Thrift Index NYCB Astoria The Astoria merger also is expected to maintain our record of superior efficiency. Benefits of the Astoria Merger In-market nature of the merger underscores the potential for significant cost savings Estimated cost saves = ~ 50% of Astoria’s non-interest e
Slide 24: Mortgage banking platform
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 25: Total Return on Investment
Total Return on Investment
Slide 26: 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 27: For More Information
4/22/16 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 28: Appendix A: Additional Information about the Proposed Astoria Financial Merger
Appendix A: Additional Information about the Proposed Astoria Financial Merger
Slide 29: Transaction Features
Transaction Features The Merger Astoria Financial will merge with and into NYCB and Astoria Bank will merge with and into NYCB’s primary bank subsidiary, New York Community Bank. Consideration One-for-one fixed exchange ratio plus $0.50 per share cash payment Cost Savings Approximately 50% of Astori
Slide 30: NYCB and Astoria Financial at a Glance
NYCB Features Astoria Financial 1859 Established 1888 1993 Year Converted 1993 Westbury, NY Headquarters Lake Success, NY Largest US Thrift Rank by Assets 4th Largest US Thrift NYSE Exchange NYSE 484,943,308 Shares Outstanding at 12/31/15 100,721,358 $7.91 Billion Market Cap at 12/31/15 $1.60 Billio
Slide 31: Appendix B: Historical Information about Our Merger Transactions
Appendix B: Historical Information about Our Merger Transactions
Slide 32: Our history of merger transactions
* 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 33: Deposit growth through mergers
(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 $37,565 Total Branches: 86 120 139 152 166 217 276 276 275 258 256 344 CDs
Slide 34: Held-for-investment loan portfolio growth through mergers
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 $46,567 HFI Originations: $616 $1,150
Slide 35: Appendix C: Reconciliations of GAAP and Non-GAAP Financial Measures
Appendix C: Reconciliations of GAAP and Non-GAAP Financial Measures
Slide 36: Tangible common stockholders' equity reconciliation
Tangible common stockholders’ equity is a non-GAAP financial measure. The following table presents a reconciliation of this non-GAAP measure with the related GAAP measure for NYCB at December 31, 2015. Reconciliation of NYCB’s GAAP and Non-GAAP Financial Measures (dollars in thousands) December 31,
Slide 37: Reconciliation of GAAP loss and non-GAAP earnings
Reconciliations of NYCB’s GAAP Loss and Non-GAAP Earnings The following table presents a reconciliation of NYCB’s GAAP loss and 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 ) Adj
Slide 38: Reconciliations of efficiency ratios
The following table presents reconciliations of NYCB’s efficiency ratios and adjusted efficiency ratios for the three and twelve months ended December 31, 2015. Reconciliations of NYCB’s Efficiency Ratios and Adjusted Efficiency Ratios (dollars in thousands) For the Three Months Ended December 31, 2
Slide 39: Reconciliation of GAAP net interest loss and non-GAAP net interest income
Reconciliation of NYCB’s 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 pre
Slide 40: Reconciliations of net interest margins
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 41: 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 NYCB for the three months ended March 31, 2016, December 31, 2015, and March 31, 2015.
New York Community Bancorp — Q1 2016 Earnings Presentation on 6ix