Flagstar Bancorp, Inc. Announces Record Earnings
Thursday January 28, 5:18 pm Eastern Time
Company Press Release
SOURCE: Flagstar Bancorp, Inc.
BLOOMFIELD HILLS, Mich., Jan. 28 /PRNewswire/ -- Flagstar Bancorp, Inc. (Nasdaq: FLGS - news), the holding company and parent of Flagstar Bank, FSB, announced record fourth quarter earnings of $12.8 million, or $0.90 per share - diluted. These earnings are 36.4% greater than the analyst consensus as reported by First Call. Flagstar also reported 1998 earnings of $41.1 million ($2.90 per share - diluted), an increase of $19.3 million, or 88.5%, from net earnings of $21.8 million ($1.68 per share - diluted) reported for 1997.
The Company's return on average equity and return on average assets was 28.77% and 1.45%, respectively during 1998.
Flagstar's 1998 earnings growth was fueled by increases in the amount of residential mortgage loan production and sales and the continued growth of the Company's earning asset base.
The Company originated a corporate record $18.8 billion residential mortgage loans during 1998, a 138.0% increase over the 1997 production of $7.9 billion. This increase was primarily attributable to the lower interest rate environment during 1998 and the associated increase in mortgage loan refinancings, but was also attributable to the Company's increased market share. Flagstar was the nation's twelfth largest lender during the 3rd quarter 1998.
Net interest income increased $11.4 million, or 26.7% over 1997. This increase was attributable to the $973.0 million increase in average earning assets during 1998.
Flagstar's stockholders' equity now stands at $163.9 million or 5.38% of assets. Flagstar Bank, the Company's wholly-owned subsidiary reported capital ratios that are higher than the current regulatory requirements for a ''well- capitalized'' institution, with a Core capital ratio of 6.54% and a Total risk- based capital ratio of 12.93%.
''All in all, 1998 was a great year,'' Thomas J. Hammond, Chairman and Chief Executive Officer, reflected. ''Flagstar surpassed all of the analyst's earnings estimates, we opened nine new bank branches, expanding our community banking franchise, and increased our share of the national mortgage market to 1.25%. We look forward to 1999 and the opportunities and challenges that lie ahead.''
Flagstar Bank, FSB is the largest independent savings institution headquartered in Michigan. Flagstar Bank currently operates from 29 bank branches located in southern and western Michigan, 31 loan origination centers located in Michigan, Florida, and Ohio, along with 15 correspondent lending offices which are located across the United States. Flagstar Bank is one of the largest originators of single family mortgage loans in the United States.
Additional information about Flagstar may be accessed via the Internet at flagstar.com
The following table presents selected financial data for the periods indicated. The information set forth has been derived from the Company's audited financial statements. The selected consolidated financial and other data as of and for the periods indicated contain all adjustments which are necessary for a fair presentation of the results for such periods.
SUMMARY OF SELECTED CONSOLIDATED FINANCIAL DATA
Summary of Consolidated Statements At or For the Year Ended December 31,
Of Income: 1998 1997 1996 (1) 1995 1994
( In Thousands, Except Share Data ) Interest income $191,261 $122,752 $76,179 $71,304 $35,112 Interest expense 137,187 80,033 45,967 41,443 14,486
Net interest income 54,074 42,719 30,212 29,861 20,626
Provisions for losses 18,631 5,015 2,604 238 290
Net interest income after
provisions for losses 35,443 37,704 27,608 29,623 20,336
Other income 118,413 59,836 58,534 36,988 42,732
Operating and administrative
expenses 86,843 62,503 58,820 41,716 37,619
Income before federal
income tax provision 67,013 35,037 27,322 24,895 25,449
Provision for federal
income taxes 25,950 13,265 10,299 9,419 9,318
Net income $41,063 $21,772 $17,023 $15,476 $16,131
Earnings per
share -- basic: $3.00 $1.70 $1.51 $1.37 $1.42
Earnings per
share -- diluted: $2.90 $1.68 $1.51 $1.37 $1.42
Dividends per
common share $0.28 $0.06 $0.09 $0.18 $0.04
Summary of Consolidated Statements of Financial Condition:
Total assets $3,046,445 $1,901,084 $1,297,226 $1,045,094 $723,150
Loans receivable,
net 2,558,716 1,655,259 1,110,836 923,933 633,409
Mortgage servicing
rights 150,258 83,845 30,064 27,957 18,179
Deposits 1,923,370 1,109,933 624,485 526,974 307,624
FHLB advances 456,019 482,378 389,801 191,156 200,750
Stockholders'
equity 163,852 126,617 78,468 62,445 49,419
Other Financial and Statistical Data:
Tangible capital
ratio 6.44% 5.40% 5.58% 5.19% 5.54%
Core capital ratio 6.54% 5.62% 6.01% 5.84% 6.63%
Total risk-based
capital ratio 12.93% 11.74% 10.91% 10.12% 12.08%
Equity-to-assets
ratio (at the end of
the period) 5.38% 6.66% 6.05% 5.98% 6.83%
Equity-to-assets
ratio (average for
the period) 5.03% 6.25% 6.19% 5.54% 8.91%
Book value
per share $11.98 $9.26 $6.97 $5.55 $4.37
Average shares
outstanding 13,670 12,837 11,250 11,274 11,389
Mortgage loans
originated or
purchased $18,852,885 $7,873,099 $6,791,665 $5,195,605 $3,720,173
Mortgage loans
sold $17,803,958 $7,222,394 $6,581,897 $4,760,806 $3,551,319
Mortgage loans
serviced for
others $11,472,211 $6,412,797 $4,801,581 $6,788,530 $5,691,421
Capitalized value of
mortgage servicing
rights 1.31% 1.31% 0.63% 0.41% 0.32%
Interest rate spread 1.85% 2.10% 2.13% 2.36% 3.37%
Net interest margin 2.14% 2.74% 3.07% 3.46% 4.63%
Return on average
assets 1.45% 1.29% 1.53% 1.63% 3.19%
Return on average
equity 28.77% 20.69% 24.68% 29.42% 35.78%
Efficiency ratio 49.6% 59.7% 64.8% 60.4% 58.3%
Charge off ratio 0.17% 0.20% 0.13% 0.00% 0.08%
Ratio of allowance
to total loans 0.78% 0.33% 0.31% 0.23% 0.29%
Ratio of allowance
to non performing
loans 53.78% 12.41% 11.43% 19.67% 107.59%
Ratio of non performing
assets to total
assets 1.97% 3.29% 3.16% 1.25% 0.42%
Number of
bank branches 28 19 15 13 9
Number of retail loan
origination centers 31 33 41 31 29
Number of correspondent
offices 15 16 10 9 6
1. The 1996 earnings reflect the one time SAIF assessment of $3.4 million ($2.2 million after tax) paid in September 1996. Without this assessment, earnings would have been $19.2 million and return on average equity, return on average assets and the efficiency ratio would have been 27.87%, 1.73%, and 61.0%, respectively.
SOURCE: Flagstar Bancorp, Inc.
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