Flagstar Bank, N.a. · NYSE:FLG
Flagstar Bank, N.a — New York Community Bancorp — Q4 2018 Earnings Presentation
38 slides from Flagstar Bank, N.a's earnings presentation, Jan 30, 2019
Slide 1: Fourth Quarter 2018 Investor Presentation
Fourth 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: Key Investment Highlights
Key Investment Highlights Largest New York Metro Headquartered Regional Bank by Assets(a) Leading Producer of Multi-Family Loans in New York City with an Expertise on the Non-Luxury / Rent-Regulated Segment Proven Track Record of Superior Asset Quality Consistent Profitability over Various Business
Slide 4: Leading producer of multi-family loans in New York City
→ 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 5: We rank among the largest U.S. bank holding companies
We rank among the largest U.S. bank holding companies… Total Assets: $51.9 billion, 77% of which are loans. Total Deposits: $30.8 billion, up 6% annualized Total Loans: $40.0 billion including $29.9 billion of multi-family loans. Total Market Capitalization: $4.5 billion at 12/31/2018 Total Return a
Slide 6: Without the risk other large banks have
… but without the risk other large banks have. Ratio NYCB At 12/31/18 SNL Bank &Thrift Index At 12/31/18 Peers (b) At 9/30/18 NPLs/Total Loans 0.11% 0.85% 0.87% NCOs/Average Loans 0.01 0.35 0.19 Cumulative losses (a) 102 bp 2,427 bp 1,157 bp NPAs/Total Assets 0.11% 0.62% 0.62% ALLL/NPLs 351.21 112.6
Slide 7: Our Franchise: Over 250 Branches Across Five States
Metro New York 141 branches Total Deposits: $18.9 bn New Jersey 42 branches Total deposits: $4.4 bn Ohio 28 branches Total Deposits: $2.2 bn Florida 27 branches Total Deposits: $2.9 bn Arizona 14 branches Total Deposits: $1.3 bn Our Franchise: Over 250 Branches Across Five States... → The combined G
Slide 8: Deposit market share in greater New York Metro market
In the greater New York Metro market(a), we rank #2 by deposit market share among U.S. regional banks(b) and #10 overall among all banks and thrifts. Our franchise focuses on serving the outer boroughs of New York and we have top market share among U.S. regional banks(b) in these counties. #1 in Que
Slide 9: 4Q 2018 Performance Highlights
4Q 2018 Performance Highlights
Slide 10: Income Statement Highlights
(dollars in thousands, except per share data) 4Q 2018 Strong Profitability Measures: Net Income $101,739 Net income available to common shareholders 93,532 Diluted earnings per common share $0.19 Return on average assets 0.79% Return on average common stockholders’ equity 5.99 Return on average tang
Slide 11: Balance Sheet Highlights
Company Capital 12/31/18 Common stockholders’ equity / total assets 11.85% Common equity tier 1 capital ratio 10.60 Tier 1 risk-based capital ratio 12.00 Total risk-based capital ratio 14.23 Leverage capital ratio 8.74 Bank Capital 12/31/18 Common equity tier 1 capital ratio 13.10% Total risk-based
Slide 12: A Strong Capital Position
A Strong Capital Position Ratio NYCB SNL Bank &Thrift Index (a) At 9/30/18 Peers Tier 1 Risk-Based Capital 12.00% 12.48% 11.71% Total Risk-Based Capital 14.23 14.00 13.29 Tier 1 Leverage 8.74 10.08 9.60 Common Equity Tier 1 10.60 11.97 11.12 As of the date of this presentation SNL B&T data was not a
Slide 13: Loans at 12/31/18
Total HFI Loans: $40.2 bn Loans at 12/31/18 Loans – Our mix has not changed significantly since our IPO Majority of portfolio focused on low-risk multi-family loans on non-luxury, rent-controlled buildings Market leader in this asset class having developed strong expertise and industry relationships
Slide 14: Multi-Family Loan Portfolio
Multi-Family Portfolio Statistics at or for the 3 Months Ended 12/31/18 74.5% of total loans (59.3% of originations) 77.4% of loans are in Metro New York Average principal balance = $6.1 million Weighted average life = 2.6 years Multi-Family Loan Portfolio (in millions) Originations: $7,417 $7,584 $
Slide 15: 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 16: Expertise in the Rent-Regulated Niche
. → Of the loans in our portfolio that are collateralized by multi-family buildings in the five boroughs of New York City, most 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 17: Commercial Real Estate Loan Portfolio
Commercial Real Estate Loan Portfolio (in millions) Originations: $2,168 $1,661 $1,842 $1,180 $1,039 $967 Net Charge-Offs (Recoveries): $0 $1 $(1) $(1) $0 $3 Commercial real estate is a logical extension of our multi-family niche. CRE Portfolio Statistics at or for the 3 Months Ended 12/31/18 17.5%
Slide 18: Specialty Finance Loan and Lease Portfolio
Specialty Finance Loan and Lease Portfolio (in millions) Originations: $258 $848 $1,068 $1,266 $1,784 $1,917 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
Slide 19: 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 20: Net Charge-Offs / Average Loans
… and very few of our non-performing loans have resulted in actual losses. Net Charge-Offs / Average Loans Cumulative Total NYCB: 102 bp SNL U.S. Bank and Thrift Index: 2,427 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 21: Consistent Profitability over Various Business Cycles
Consistent Profitability over Various Business Cycles due to Low Credit Cost 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 expens
Slide 22: Efficiency Ratio
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 23: Deposits at 12/31/18
Total Deposits: $30.8 bn Deposits at 12/31/18 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 the deposit base Deposit growth of $1.7 billion or 6% year-over-year
Slide 24: Three Levers for Growth
Lever # 1 - Loan Growth Total YTD loans grew $1.8 billion or 5%. We expect this to continue in 2019. Lever # 2 - Significant Reinvestment Opportunities We have $1.5 billion of cash earning 2.24%. $14.4 billion of loans with average coupon of 3.37% contractually maturing or reaching their option re-p
Slide 25: Lever 1: Back in growth mode
CAGR 1993-2009: 25.7% CAGR 2009-2018: 2.3% Dodd-Frank Enacted Lever # 1 – Back in growth mode Asset growth prior to and since Dodd-Frank was enacted
Slide 26: Lever 2: Loan Re-pricing Opportunities
Lever # 2 - Loan Re-pricing Opportunities → Over the next 3 years, approximately $14.4 billion of MF and CRE loans with an average coupon of 3.37%, 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 m
Slide 27: Portfolio coupons may have bottomed
Lever # 2 - Portfolio coupons may have bottomed Coupon Rate at 12/31/2018 Multi Family: 3.51% CRE: 3.99%
Slide 28: 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 additional cost savings in 2019 on top of the cost savings we realized in 2018. Lever # 3 – Lower operating expenses We have already expended significant
Slide 29: Regulatory relief: SIFI threshold raised to $250 billion
→ 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 30: Our Business Model: Growth through Acquisitions
Our Business Model Growth through Acquisitions
Slide 31: 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 32: 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: 20.8% → 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 33: For More Information
1/30/18 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 34: Appendix
Appendix
Slide 35: Securities and Funding Composition
Securities and Funding Composition Funds at 12/31/18 1.84% cost of funds Significant capacity given eligibility of multi-family loans Total Funds: $45.0 bn Entire portfolio is available for sale Consists primarily of GSE-related securities Overall yield is 3.88% 33.0% is variable rate Securities at
Slide 36: Experienced Management Team
Experienced Management Team Joseph R. Ficalora Robert Wann Thomas R. Cangemi John J. Pinto James J. Carpenter President & Chief Executive Officer Senior Executive Vice President & Chief Operating Officer Senior Executive Vice President & Chief Financial Officer Executive Vice President & Chief Accou
Slide 37: Non-GAAP Reconciliation
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 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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