Exhibit 99.1
NEWS RELEASE | ||
For more information, contact: | ||
Paul D. Borja | ||
Executive Vice President / CFO | ||
(248) 312-2000 | ||
FOR IMMEDIATE RELEASE |
FLAGSTAR REPORTS 2009 FINANCIAL RESULTS
TROY, Mich. (February 1, 2010) — Flagstar Bancorp, Inc. (NYSE:FBC), the holding company for Flagstar Bank FSB, today reported its fourth quarter and annual results for 2009.
Flagstar reported a 2009 fourth quarter net loss of $71.6 million, or $(0.15) per share (diluted) as compared to a third quarter 2009 net loss of $298.2 million, or $(0.64) per share (diluted) and a fourth quarter 2008 net loss of $218.5 million, or $(2.62) per share (diluted). For the year ended December 31, 2009, Flagstar’s net loss was $513.8 million, or $(1.62) per share (diluted), as compared to a 2008 net loss of $275.4 million, or $(3.82) per share (diluted).
On a pre-tax, pre-credit cost basis, earnings before preferred dividends were $113.7 million in the fourth quarter 2009, as compared to such earnings of $58.8 million in the third quarter 2009.
Capital
At December 31, 2009, the wholly owned subsidiary Flagstar Bank remained “well-capitalized” for regulatory purposes, with capital ratios of 6.19% for Tier 1 capital and 11.68% for total risk-based capital.
On January 27, 2010, the Company announced that it had raised $300 million of capital through a previously announced rights offering. Had this capital been received on December 31, 2009, our capital ratios would have been 8.15% for Tier 1 capital and 15.28% for total risk-based capital.
“While we continue to manage through the asset quality issues on our legacy balance sheet, this significant investment of capital is an affirmative statement about the Flagstar franchise,” said Flagstar Chairman and CEO Joseph P. Campanelli. “We have learned from experience that, to be successful, a turnaround requires a strong management team, a sound business plan and the capital to implement that plan. We are excited about the success we have had with our progress to date in bringing these components together.”
Assets
Total assets at December 31, 2009 were $14.0 billion as compared to $14.8 billion at September 30, 2009. The decrease was primarily a result of the decline in securities available for sale, trading securities and loans held for investment. Total assets were $14.2 billion at December 31, 2008.
Operations
For the fourth quarter 2009, the net loss applicable to common stockholders of $71.6 million reflected the following:
• | Gain on loan sales decreased to $96.5 million as compared to $104.4 million for the third quarter 2009, reflecting both the decrease in interest rate locks on mortgage loans, to $7.9 billion in the fourth quarter 2009 from $8.7 billion in the third quarter 2009, and the decrease in residential mortgage loan sales, to $7.1 billion as compared to $7.6 billion in the third quarter of 2009. Margin on loan sales decreased slightly during the fourth quarter 2009 to 1.35% from 1.37%. |
• | Provision for loan losses decreased to $95.0 million as compared to $125.5 million for the third quarter of 2009. | ||
• | Loan fees, resulting from originating loans, decreased slightly to $27.8 million in the fourth quarter 2009 as compared to $29.4 million during the third quarter 2009. Loan originations were $6.9 billion for the fourth quarter 2009 as compared to $6.6 billion for third quarter 2009. | ||
• | Net loan administration income reflected a gain of $27.4 million (partially offset by a loss of approximately $0.5 million on trading securities that were used for economic hedging purposes) as compared to a loss of $30.3 million for the third quarter 2009 (offset by a gain of approximately $21.7 million on trading securities that were used for economic hedging purposes). The fourth quarter net gain of $26.9 million, as compared to the third quarter 2009 net loss of $8.6 million, included an increase in the fair value of mortgage servicing rights. | ||
• | Non interest expense decreased to $150.7 million as compared to $166.9 million in the third quarter 2009. The decrease reflected a decline in compensation and benefits of $5.0 million due to a reduction in salaried employees and a decline in other expenses of $11.8 million. | ||
• | Other expenses included a decline of $11.8 million in other taxes due to the recording of a valuation allowance on state deferred tax assets during the third quarter, a $4.2 million reduction in the valuation of warrants due to a lower stock price in the fourth quarter as compared to the third quarter 2009 and a $4.6 million gain related to termination of an agreement with one of our captive reinsurance counterparties. | ||
• | Provision for federal income taxes decreased to zero as compared to $115.0 million for the third quarter of 2009. The decrease is the result of a $172.0 million non-cash federal tax expense as a result of recording a valuation allowance on federal deferred tax assets, offset in part by the monthly benefit recorded of $57.0 million in the third quarter and zero in the fourth quarter. The valuation allowance, because it is an offset against the tax asset rather than a charge-off , is generally recoverable in future years as taxable income is earned. |
Community Banking Operations
Flagstar Bank had 165 community banking branches at December 31, 2009 as compared to 176 branches at September 30, 2009 and 175 branches at December 31, 2008.
Net Interest Margin
Net interest margin increased to 1.67% for the fourth quarter 2009 as compared to 1.58% for the third quarter 2009 and 1.61% for fourth quarter 2008. The increase from third quarter 2009 reflects a $800 million decline in the average balance of earning assets with a 0.21% decline in yield and a $400 million decline in the average balance of interest bearing liabilities with a 0.44% decline in funding costs. For the year ended December 31, 2009, the net interest margin was 1.65% as compared to 1.78% for the year ended December 31, 2008, primarily reflecting a 0.75% decline in yield during 2009 was only partly offset by a 0.59% decline in funding costs during the same period.
Mortgage Banking Operations
Loan production, substantially comprised of agency residential first mortgage loans, increased to $6.9 billion for the fourth quarter 2009, as compared to $6.6 billion in the third quarter 2009, and from $5.4 billion for the fourth quarter 2008.
For the year ended December 31, 2009 loan production increased 14.5% to $32.4 billion, of which $32.3 billion were residential loans, as compared to $28.3 billion, including $28.0 billion of residential loans, for the year ended December 31, 2008.
Gain on loan sales margins decreased to 1.35% for the fourth quarter 2009, as compared to 1.37% for the third quarter 2009, and from 0.29% for the fourth quarter 2008. For the year ended December 31, 2009, the gain on sale margin increased to 1.55% as compared to 0.53% for the same period in 2008.
At December 31, 2009, the unpaid principal balances of loans associated with the mortgage servicing rights portfolio totaled $56.5 billion and had a weighted average service fee of 32.1 basis points. This was an increase from $53.2 billion at September 30, 2009 with a weighted average servicing fee of 32.6 basis points and an increase from $55.9 billion at December 31, 2008 with an average weighted servicing fee of 33.3 basis points.
Asset Quality
Non-performing assets, which include non-performing loans (i.e., loans 90 days or more past due, and matured loans), real estate owned and repurchased assets, but which exclude any FHA-insured assets, increased to $1.3 billion at December 31, 2009, from $1.2 billion at September 30, 2009 and $0.8 billion at December 31, 2008.
At December 31, 2009, the allowance for loan losses was $524.0 million, which equaled 48.9% of non-performing loans and 6.79% of loans held for investment. At September 30, 2009 and December 31, 2008, the allowance for loan losses were, respectively, $528.0 million (6.49% of loans held for investment) and $376.0 million (4.14% of loans held for investment) and equaled 48.9% and 52.1%, respectively, of non-performing loans.
Of the non-performing loans, residential first mortgage loans increased to $659.4 million at December 31, 2009, as compared to $606.3 million at September 30, 2009 and $432.6 million at December 31, 2008.
Non-performing commercial real estate mortgages decreased to $337.6 million at December 31, 2009 as compared to $419.5 million at September 30, 2009 and increased as compared to $202.6 million at December 31, 2008.
The balance of real estate owned, net of any FHA-insured assets, increased to $177.0 million at December 31, 2009 from $164.9 million at September 30, 2009 and $109.3 million at December 31, 2008. Repurchased assets were $45.7 million at December 31, 2009 as compared to $26.6 million at September 30, 2009 and $16.5 million at December 31, 2008.
Net loan charge-offs were $98.9 million for the fourth quarter 2009 as compared to $71.5 million for the third quarter 2009 and $24.3 million for the fourth quarter 2008. The provision for loan losses was $95.0 million for the fourth quarter 2009 as compared to $125.5 million for the third quarter 2009 and $176.3 million for the fourth quarter 2008.
Funding Sources
Flagstar Bank’s primary sources of funds are deposits obtained through its 165 community banking branches and the Internet as well as deposits obtained from municipalities and investment banking firms. Funds are also obtained through loan repayments and sales in the ordinary course of business, advances from the Federal Home Loan Bank of Indianapolis (FHLB), community banking operations, customer escrow accounts and security repurchase agreements. The Bank uses several of these sources at any one time to manage its daily and forecasted liquidity needs to satisfy operational requirements and policy levels while managing overall interest costs. Retail deposits were $5.5 billion at December 31, 2009, as compared to $5.7 billion at September 30, 2009 and $5.4 billion at December 31, 2008. At December 31, 2009, the Bank had a $7.0 billion line of credit with the FHLB, which was collateralized to $4.2 billion.
As Previously Announced
The Company’s quarterly earnings conference call will be held on Tuesday, February 2, 2010 from 11 a.m. until 12 noon (Eastern).
Questions may be asked during the conference call or maybe submitted in advance by e-mail toinvestors@flagstar.com.
The conference call and accompanying slide presentation will be webcast live on the Investor Relations section of the Company’s Web site,www.flagstar.com, with replays available at that site for at least 10 days.
To listen by telephone, please call at least 10 minutes prior to the start of the conference call at
(702) 696-4911 or toll free at (866) 294-1212, passcode: 50847473.
A replay will be available for five business days by calling (800) 642-1687 toll free or (706) 645-9291 using the passcode: 50847473.
Flagstar Bancorp, with $14.0 billion in total assets, is the secondly largest publicly held savings bank headquartered in the Midwest. At December 31, 2009, Flagstar operated 165 banking centers in Michigan, Indiana and Georgia and 23 home loan centers in 14 states. Flagstar Bank originates loans nationwide and is one of the leading originators of residential mortgage loans.
The information contained in this release is not intended as a solicitation to buy Flagstar Bancorp, Inc. stock and is provided for general information. This release contains certain statements that may constitute “forward-looking statements” within the meaning of federal securities laws. These forward-looking statements include statements about the Company’s beliefs, plans, objectives, goals, expectations, anticipations, estimates, and intentions, that are subject to significant risks and uncertainties, and are subject o change based upon various factors (some of which may be beyond the Company’s control). The words “may,” “could,” “should,” “would,” “believe,” and similar expressions are intended to identify forward-looking statements.
Exhibit 99.1
Flagstar Bancorp, Inc.
Summary of Selected Consolidated Financial Data
(Dollars in thousands, except per share data)
Summary of Selected Consolidated Financial Data
(Dollars in thousands, except per share data)
(Unaudited)
For the Three Months Ended | the Years Ended | |||||||||||||||||||
December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||||||
Summary of Consolidated | 2009 | 2009 | 2008 | 2009 | 2008 | |||||||||||||||
Statements of Operations | ||||||||||||||||||||
Interest income | $ | 149,405 | $ | 167,107 | $ | 178,043 | $ | 689,338 | $ | 777,997 | ||||||||||
Interest expense | (102,205 | ) | (119,513 | ) | (131,556 | ) | (477,798 | ) | (555,472 | ) | ||||||||||
Net interest income | 47,200 | 47,594 | 46,487 | 211,540 | 222,525 | |||||||||||||||
Provision for loan losses | (94,950 | ) | (125,544 | ) | (176,256 | ) | (504,369 | ) | (343,963 | ) | ||||||||||
Net interest (loss) income after provision | (47,750 | ) | (77,950 | ) | (129,769 | ) | (292,829 | ) | (121,438 | ) | ||||||||||
Non-interest income | ||||||||||||||||||||
Deposit fees and charges | 8,774 | 8,438 | 7,395 | 32,428 | 27,424 | |||||||||||||||
Loan fees and charges, net | 27,802 | 29,422 | 410 | 125,168 | 2,688 | |||||||||||||||
Loan servicing fees, net | 27,407 | (30,293 | ) | (46,231 | ) | 7,167 | (251 | ) | ||||||||||||
Net gain (loss) on trading securities | (515 | ) | 21,714 | 14,466 | 5,861 | 14,466 | ||||||||||||||
Gain (loss) on trading securities — residuals | (16,243 | ) | (50,689 | ) | 1,837 | (82,867 | ) | (24,649 | ) | |||||||||||
Net gain on loan sales | 96,477 | 104,416 | 16,657 | 501,250 | 146,060 | |||||||||||||||
Gain (loss) on MSR sales, net | 59 | (1,319 | ) | 1,449 | (3,886 | ) | 1,797 | |||||||||||||
Net (loss) gain on sale securities available for sale | 8,556 | — | — | 8,556 | 5,019 | |||||||||||||||
Impairment — securities available for sale | (304 | ) | (2,875 | ) | (62,370 | ) | (20,747 | ) | (62,370 | ) | ||||||||||
Other (loss) income | (20,455 | ) | (12,582 | ) | (9,828 | ) | (49,644 | ) | 19,940 | |||||||||||
Total non-interest income | 131,558 | 66,232 | (76,215 | ) | 523,286 | 130,123 | ||||||||||||||
Non-interest expenses | ||||||||||||||||||||
Compensation and benefits | (51,558 | ) | (56,598 | ) | (53,726 | ) | (223,394 | ) | (219,251 | ) | ||||||||||
Commissions | (13,128 | ) | (12,149 | ) | (23,063 | ) | (73,994 | ) | (109,464 | ) | ||||||||||
Occupancy and equipment | (16,456 | ) | (17,175 | ) | (19,437 | ) | (70,009 | ) | (79,253 | ) | ||||||||||
General and administrative | (29,404 | ) | (28,876 | ) | (26,148 | ) | (138,062 | ) | (62,837 | ) | ||||||||||
Other | (40,423 | ) | (52,245 | ) | (29,504 | ) | (167,574 | ) | (78,579 | ) | ||||||||||
Total non-interest expense | (150,969 | ) | (167,043 | ) | (151,878 | ) | (673,033 | ) | (549,384 | ) | ||||||||||
Capitalized direct cost of loan closing | 235 | 137 | 21,893 | 906 | 117,332 | |||||||||||||||
Total non-interest expense after capitalized direct cost of loan closing | (150,734 | ) | (166,906 | ) | (129,985 | ) | (672,127 | ) | (432,052 | ) | ||||||||||
Loss before federal income tax and preferred stock dividend | (66,926 | ) | (178,624 | ) | (335,969 | ) | (441,670 | ) | (423,367 | ) | ||||||||||
Provision (benefit) for federal income taxes | — | 114,965 | (117,506 | ) | 55,008 | (147,960 | ) | |||||||||||||
Net loss | (66,926 | ) | (293,589 | ) | (218,463 | ) | (496,678 | ) | (275,407 | ) | ||||||||||
Preferred stock dividends | (4,660 | ) | (4,623 | ) | — | (17,124 | ) | — | ||||||||||||
Net loss available to common stockholders | $ | (71,586 | ) | $ | (298,212 | ) | $ | (218,463 | ) | $ | (513,802 | ) | $ | (275,407 | ) | |||||
Basic loss per share | $ | (0.15 | ) | $ | (0.64 | ) | $ | (2.62 | ) | $ | (1.62 | ) | $ | (3.82 | ) | |||||
Diluted loss per share | $ | (0.15 | ) | $ | (0.64 | ) | $ | (2.62 | ) | $ | (1.62 | ) | $ | (3.82 | ) | |||||
Net interest spread — Consolidated | 1.69 | % | 1.48 | % | 1.74 | % | 1.54 | % | 1.71 | % | ||||||||||
Net interest margin — Consolidated | 1.54 | % | 1.46 | % | 1.49 | % | 1.55 | % | 1.67 | % | ||||||||||
Net interest spread — Bank only | 1.74 | % | 1.53 | % | 1.79 | % | 1.58 | % | 1.76 | % | ||||||||||
Net interest margin — Bank only | 1.67 | % | 1.58 | % | 1.61 | % | 1.65 | % | 1.78 | % | ||||||||||
Return on average assets | (1.91 | )% | (7.60 | )% | (5.94 | )% | (3.24 | )% | (1.83 | )% | ||||||||||
Return on average equity | (45.08 | )% | (130.64 | )% | (30.74 | )% | (62.87 | )% | (37.66 | )% | ||||||||||
Efficiency ratio | 84.3 | % | 146.6 | % | 437.2 | % | 91.5 | % | 122.5 | % | ||||||||||
Average interest earning assets | $ | 12,283,918 | $ | 13,160,528 | $ | 12,435,053 | $ | 13,584,015 | $ | 13,316,390 | ||||||||||
Average interest paying liabilities | $ | 12,843,319 | $ | 13,217,383 | $ | 13,158,369 | $ | 13,542,712 | $ | 13,439,660 | ||||||||||
Average stockholders’ equity | $ | 635,151 | $ | 913,059 | $ | 710,658 | $ | 817,248 | $ | 731,231 | ||||||||||
Equity/assets ratio (average for the period) | 4.24 | % | 5.82 | % | 4.83 | % | 5.15 | % | 4.83 | % | ||||||||||
Ratio of charge-offs to average loans held for investment | 4.96 | % | 3.48 | % | 1.08 | % | 4.20 | % | 0.79 | % |
Flagstar Bancorp, Inc.
Summary of Selected Consolidated Financial Data
(Dollars in thousands, except per share data)
(Unaudited)
Summary of Selected Consolidated Financial Data
(Dollars in thousands, except per share data)
(Unaudited)
December 31, | September 30, | December 31, | ||||||||||
Summary of the Consolidated | 2009 | 2009 | 2008 | |||||||||
Statements of Financial Condition: | ||||||||||||
Total assets | $ | 14,013,331 | $ | 14,820,815 | $ | 14,203,657 | ||||||
Securities — trading | 330,267 | 1,012,309 | — | |||||||||
Investment securities available for sale | 605,621 | 817,424 | 1,118,453 | |||||||||
Loans held for sale | 1,970,104 | 2,070,878 | 1,484,680 | |||||||||
Loans held for investment, net | 7,190,308 | 7,605,497 | 8,706,121 | |||||||||
Allowance for loan losses | (524,000 | ) | (528,000 | ) | (376,000 | ) | ||||||
Mortgage servicing rights | 652,374 | 567,800 | 520,763 | |||||||||
Deposits | 8,778,469 | 8,533,968 | 7,841,005 | |||||||||
FHLB advances | 3,900,000 | 4,800,000 | 5,200,000 | |||||||||
Repurchase agreements | 108,000 | 108,000 | 108,000 | |||||||||
Stockholders’ equity | 596,724 | 667,597 | 472,293 | |||||||||
Other Financial and Statistical Data: | ||||||||||||
Equity/assets ratio | 4.26 | % | 4.50 | % | 3.33 | % | ||||||
Core capital ratio | 6.19 | % | 6.39 | % | 4.95 | % | ||||||
Total risk-based capital ratio | 11.68 | % | 12.06 | % | 9.10 | % | ||||||
Book value per common share | $ | 0.70 | $ | 0.86 | $ | 5.65 | ||||||
Shares outstanding | 468,771 | 468,530 | 83,627 | |||||||||
Average shares outstanding | 317,656 | 266,781 | 72,153 | |||||||||
Average diluted shares outstanding | 317,656 | 266,781 | 72,153 | |||||||||
Loans serviced for others | $ | 56,521,902 | $ | 53,159,885 | $ | 55,870,207 | ||||||
Weighted average service fee (bps) | 32.1 | 32.6 | 33.3 | |||||||||
Value of mortgage servicing rights | 1.15 | % | 1.06 | % | 0.93 | % | ||||||
Allowance for loan losses to non performing loans | 48.9 | % | 50.0 | % | 52.1 | % | ||||||
Allowance for loan losses to loans held for investment | 6.79 | % | 6.49 | % | 4.14 | % | ||||||
Non performing assets to total assets | 9.24 | % | 8.41 | % | 5.97 | % | ||||||
Number of bank branches | 165 | 176 | 175 | |||||||||
Number of loan origination centers | 23 | 42 | 104 | |||||||||
Number of employees (excluding loan officers & account executives) | 3,075 | 3,220 | 3,246 | |||||||||
Number of loan officers and account executives | 336 | 436 | 674 |
Loan Originations
(Dollars in millions)
(unaudited)
(Dollars in millions)
(unaudited)
(i) For the Three Months Ended | ||||||||||||||||||||||||
December 31, | September 30, | December 31, | ||||||||||||||||||||||
Loan type | 2009 | 2009 | 2008 | |||||||||||||||||||||
Residential mortgage loans | $ | 6,902 | 99.9 | % | $ | 6,642 | 99.9 | % | $ | 5,390 | 100.0 | % | ||||||||||||
Consumer loans | 1 | — | 1 | — | 4 | — | ||||||||||||||||||
Commercial loans | 9 | 0.1 | 4 | 0.1 | 11 | — | ||||||||||||||||||
Total loan production | $ | 6,912 | 100.0 | % | $ | 6,647 | 100.0 | % | $ | 5,405 | 100.0 | % | ||||||||||||
(ii) For the Year Ended | ||||||||||||||||
December 31, | December 31, | |||||||||||||||
Loan type | 2009 | 2008 | ||||||||||||||
Residential mortgage loans | $ | 32,331 | 99.9 | % | $ | 27,990 | 99.0 | % | ||||||||
Consumer loans | 6 | — | 110 | 0.3 | ||||||||||||
Commercial loans | 38 | 0.1 | 206 | 0.7 | ||||||||||||
Total loan production | $ | 32,375 | 100.0 | % | $ | 28,306 | 100.0 | % | ||||||||
Loans Held for Investment
(Dollars in thousands)
(unaudited)
(Dollars in thousands)
(unaudited)
Description | December 31, 2009 | September 30, 2009 | December 31, 2008 | |||||||||||||||||||||
First mortgage loans | $ | 4,990,994 | 64.7 | % | $ | 5,304,950 | 65.2 | % | $ | 5,958,748 | 65.6 | % | ||||||||||||
Second mortgage loans | 221,626 | 2.9 | 236,239 | 2.9 | 287,350 | 3.2 | ||||||||||||||||||
Commercial real estate loans | 1,600,271 | 20.7 | 1,677,106 | 20.6 | 1,779,363 | 19.6 | ||||||||||||||||||
Construction loans | 16,642 | 0.2 | 22,906 | 0.3 | 54,749 | 0.6 | ||||||||||||||||||
Warehouse lending | 448,567 | 5.8 | 425,861 | 5.2 | 434,140 | 4.8 | ||||||||||||||||||
Consumer loans | 423,842 | 5.5 | 452,548 | 5.6 | 543,102 | 6.0 | ||||||||||||||||||
Non-real estate commercial | 12,366 | 0.2 | 13,887 | 0.2 | 24,668 | 0.2 | ||||||||||||||||||
Total loans held for investment | $ | 7,714,308 | 100.0 | % | $ | 8,133,497 | 100.0 | % | $ | 9,082,120 | 100.0 | % | ||||||||||||
Allowance for Loan Losses
(Dollars in thousands)
(unaudited)
(Dollars in thousands)
(unaudited)
(iii) | (iv) For the Three Months Ended | (v) | (vi) For the Year Ended | |||||||||||||||||||||||||
December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||||||||||||||
2009 | 2009 | 2008 | 2009 | 2008 | ||||||||||||||||||||||||
DESCRIPTION | (000’s) | (000’s) | (000’s) | (000’s) | (000’s) | |||||||||||||||||||||||
Beginning Balance | $ | (528,000 | ) | $ | (474,000 | ) | $ | (224,000 | ) | $ | (376,000 | ) | $ | (104,000 | ) | |||||||||||||
Provision for losses | (94,950 | ) | (125,544 | ) | (176,255 | ) | (504,369 | ) | (343,963 | ) | ||||||||||||||||||
Charge offs, net of recoveries | ||||||||||||||||||||||||||||
First mortgage loans | 32,782 | 36,772 | 16,595 | 124,889 | 44,349 | |||||||||||||||||||||||
Second mortgage loans | 10,597 | 7,222 | 1,681 | 41,806 | 2,980 | |||||||||||||||||||||||
Commercial R/E loans | 42,311 | 15,724 | 2,451 | 144,963 | 14,736 | |||||||||||||||||||||||
Construction loans | 434 | 951 | 1,703 | 2,887 | 1,872 | |||||||||||||||||||||||
Warehouse | 614 | — | 169 | 1,111 | 1,001 | |||||||||||||||||||||||
Consumer | ||||||||||||||||||||||||||||
HELOC | 10,160 | 9,711 | 790 | 34,986 | 4,140 | |||||||||||||||||||||||
Other consumer loans | 1,391 | 638 | 420 | 3,788 | 1,390 | |||||||||||||||||||||||
Other | 661 | 526 | 446 | 1,939 | 1,495 | |||||||||||||||||||||||
Charge-offs, net of recoveries | 98,950 | 71,544 | 24,255 | 356,369 | 71,963 | |||||||||||||||||||||||
Ending Balance | $ | (524,000 | ) | $ | (528,000 | ) | $ | (376,000 | ) | $ | (524,000 | ) | $ | (376,000 | ) | |||||||||||||
Composition of Allowance for Loan Losses
As of December 31, 2009
(In thousands)
As of December 31, 2009
(In thousands)
Description | General Reserves | Specific Reserves | Total | |||||||||
First mortgage loans | $ | 235,030 | $ | 33,723 | $ | 268,753 | ||||||
Second mortgage loans | 40,887 | — | 40,887 | |||||||||
Commercial real estate loans | 46,274 | 108,173 | 154,447 | |||||||||
Construction loans | 1,985 | 403 | 2,388 | |||||||||
Warehouse lending | 1,809 | 1,957 | 3,766 | |||||||||
Consumer loans | 40,232 | 410 | 40,642 | |||||||||
Non-real estate commercial | 825 | 2,151 | 2,976 | |||||||||
Other and unallocated | 10,141 | — | 10,141 | |||||||||
Total allowance for loan losses | $ | 377,183 | $ | 146,817 | $ | 524,000 | ||||||
Gain on Loan Sales and Securitizations
(Dollars in thousands)
(Unaudited)
(Dollars in thousands)
(Unaudited)
(vii) | (viii) For the Three Months Ended | |||||||||||||||||||||||||||
December 31, | September 30, | December 31, | ||||||||||||||||||||||||||
2009 (1) | 2009 (1) | 2008 | ||||||||||||||||||||||||||
DESCRIPTION | (000’s) | bps | (000’s) | bps | (000’s) | bps | ||||||||||||||||||||||
Valuation gain (loss): | ||||||||||||||||||||||||||||
Value of interest rate locks | $ | (30,544 | ) | (43 | ) | $ | 11,405 | 15 | $ | 68,397 | 120 | |||||||||||||||||
Value of forward sales | 60,838 | 85 | (36,537 | ) | (48 | ) | (82,436 | ) | (145 | ) | ||||||||||||||||||
Fair value of loans AFS | 106,153 | 149 | 151,911 | 200 | — | — | ||||||||||||||||||||||
LOCOM adjustments on loans HFI | 207 | — | 155 | — | 552 | 1 | ||||||||||||||||||||||
Total valuation gain (loss) | 136,654 | 191 | 126,934 | 167 | (13,487 | ) | (24 | ) | ||||||||||||||||||||
Sales gains (losses): | ||||||||||||||||||||||||||||
Marketing gains | 41,614 | 58 | 4,372 | 6 | 72,822 | 128 | ||||||||||||||||||||||
Pair off losses | (35,990 | ) | (50 | ) | (15,776 | ) | (22 | ) | (9,756 | ) | (17 | ) | ||||||||||||||||
Sales adjustments | (37,269 | ) | (52 | ) | (4,108 | ) | (5 | ) | (30,729 | ) | (54 | ) | ||||||||||||||||
Provision for secondary marketing reserve | (8,532 | ) | (12 | ) | (7,006 | ) | (9 | ) | (2,193 | ) | (4 | ) | ||||||||||||||||
Total sales (losses) gains | (40,177 | ) | (56 | ) | (22,518 | ) | (30 | ) | 30,144 | 53 | ||||||||||||||||||
Net gain on loan sales and securitizations | $ | 96,477 | 135 | $ | 104,416 | 137 | $ | 16,657 | 29 | |||||||||||||||||||
Total loan sales and securitizations | $ | 7,143,242 | $ | 7,606,304 | $ | 5,711,405 | ||||||||||||||||||||||
(1) | On January 1, 2009, the Company adopted fair value accounting for its residential first mortgage loans held for sale and originated on or after that date. |
For the Twelve Months Ended December 31, | ||||||||||||||||
2009 (1) | 2008 | |||||||||||||||
DESCRIPTION | (000’s) | bps | (000’s) | bps | ||||||||||||
Valuation gains (losses): | ||||||||||||||||
Value of interest rate locks | $ | (68,552 | ) | (21 | ) | $ | 52,484 | 19 | ||||||||
Value of forward sales | 89,020 | 27 | (47,752 | ) | (15 | ) | ||||||||||
Fair value of loans AFS | 530,694 | 164 | — | — | ||||||||||||
LOCOM adjustments on loans HFI | (68 | ) | — | (34,179 | ) | (12 | ) | |||||||||
Total valuation gain (loss) | 551,094 | 170 | (29,447 | ) | (8 | ) | ||||||||||
Sales gains (losses): | ||||||||||||||||
Marketing gains | 144,813 | 45 | 377,464 | 136 | ||||||||||||
Pair off gain (loss) | (41,564 | ) | (13 | ) | (24,678 | ) | (9 | ) | ||||||||
Sales adjustments | (126,623 | ) | (39 | ) | (166,898 | ) | (62 | ) | ||||||||
Provision for secondary marketing reserve | (26,470 | ) | (8 | ) | (10,381 | ) | (4 | ) | ||||||||
Total sales (losses) gains | (49,844 | ) | (15 | ) | 175,507 | 61 | ||||||||||
Net gain on loan sales and securitizations | $ | 501,250 | 155 | 146,060 | 53 | |||||||||||
Total loan sales and securitizations | $ | 32,326,643 | $ | 27,787,884 | ||||||||||||
Asset Quality
(Dollars in thousands)
(unaudited)
(Dollars in thousands)
(unaudited)
December 31, 2009 | September 30, 2009 | December 31, 2008 | ||||||||||||||||||||||
% of | % of | % of | ||||||||||||||||||||||
Days delinquent | Balance | Total | Balance | Total | Balance | Total | ||||||||||||||||||
30 | $ | 143,500 | 1.9 | % | $ | 118,597 | 1.5 | % | $ | 145,407 | 1.6 | % | ||||||||||||
60 | 87,625 | 1.1 | 100,078 | 1.2 | 111,404 | 1.5 | ||||||||||||||||||
90 + and matured delinquent | 1,071,636 | 13.9 | 1,055,358 | 13.0 | 722,301 | 7.7 | % | |||||||||||||||||
Total | $ | 1,302,761 | 16.9 | % | $ | 1,274,033 | 15.7 | % | $ | 979,112 | 10.8 | % | ||||||||||||
Loans held for investment | $ | 7,714,308 | $ | 8,133,497 | $ | 9,082,121 |
NON-PERFORMING LOANS AND ASSETS
December 31, | September 30, | December 31, | ||||||||||
2009 | 2009 | 2008 | ||||||||||
Non-performing loans | $ | 1,071,636 | $ | 1,055,358 | $ | 722,301 | ||||||
Real estate owned | 176,968 | 164,898 | 109,297 | |||||||||
Repurchased assets/non-performing assets | 45,697 | 26,601 | 16,454 | |||||||||
Non-performing assets | $ | 1,294,301 | $ | 1,246,857 | $ | 848,052 | ||||||
Non-performing loans as a percentage of loans held for investment | 13.89 | % | 12.98 | % | 7.95 | % | ||||||
Non-performing assets as a percentage of total assets | 9.24 | % | 8.41 | % | 5.97 | % |
Deposit Portfolio
(Dollars in thousands)
(unaudited)
(Dollars in thousands)
(unaudited)
December 31, 2009 | September 30, 2009 | December 31, 2008 | ||||||||||||||||||||||
Description | Balance | Rate | Balance | Rate | Balance | Rate | ||||||||||||||||||
Demand deposits | $ | 546,218 | 0.38 | % | $ | 471,847 | 0.30 | % | $ | 416,920 | 0.47 | % | ||||||||||||
Savings deposits | 724,278 | 0.73 | 660,786 | 1.22 | 407,501 | 2.24 | ||||||||||||||||||
Money market deposits | 632,099 | 0.56 | 747,507 | 1.58 | 561,909 | 2.61 | ||||||||||||||||||
Certificates of deposits | 3,552,090 | 2.94 | 3,819,351 | 3.41 | 3,967,985 | 3.94 | ||||||||||||||||||
Total retail deposits | 5,454,685 | 2.12 | 5,699,491 | 2.66 | 5,354,315 | 3.39 | ||||||||||||||||||
Company controlled custodial deposits | 756,423 | — | 951,780 | — | 535,494 | — | ||||||||||||||||||
Municipal deposits / CDARS | 620,235 | 0.64 | 650,666 | 0.79 | 597,638 | 2.84 | ||||||||||||||||||
Wholesale deposits | 1,947,126 | 2.57 | 1,232,031 | 3.56 | 1,353,558 | 4.41 | ||||||||||||||||||
Total deposits | $ | 8,778,469 | 1.93 | % | $ | 8,533,968 | 2.35 | % | $ | 7,841,005 | 3.30 | % | ||||||||||||
Pre-tax, pre-credit-cost Income
(Non GAAP measure)
(Dollars in millions)
(Non GAAP measure)
(Dollars in millions)
(Unaudited)
For the Three Months Ended | ||||||||||||
December 31, 2009 | September 30, 2009 | December 31, 2008 | ||||||||||
Loss before tax provision / benefit | $ | (66.9 | ) | $ | (178.6 | ) | $ | (336.0 | ) | |||
Add back: | ||||||||||||
Provision for loan losses | 95.0 | 125.5 | 176.3 | |||||||||
Asset resolution | 26.9 | 26.8 | 16.4 | |||||||||
Other than temporary impairment on investments AFS | 6.7 | 2.9 | 62.4 | |||||||||
Secondary marketing reserve provision | 35.8 | 27.6 | 19.7 | |||||||||
Write down of residual interests | 16.2 | 50.7 | (1.8 | ) | ||||||||
Reserve increase for reinsurance | — | 3.9 | 10.0 | |||||||||
Total credit-related-costs: | 180.6 | 237.4 | 283.0 | |||||||||
Pre-tax, pre-credit-cost income (expense) | $ | 113.7 | $ | 58.8 | $ | (53.0 | ) | |||||
For the Twelve Months Ended | ||||||||
December 31, 2009 | December 31, 2008 | |||||||
Loss before tax provision / benefit | $ | (441.7 | ) | $ | (423.4 | ) | ||
Add back: | ||||||||
Provision for loan losses | 504.4 | 344.0 | ||||||
Asset resolution | 96.6 | 46.2 | ||||||
Other than temporary impairment on investments AFS | 27.1 | 62.4 | ||||||
Secondary marketing reserve provision | 102.1 | 27.5 | ||||||
Write down of residual interests | 82.9 | 24.6 | ||||||
Reserve increase for reinsurance | 24.8 | 14.8 | ||||||
Total credit-related-costs: | 837.9 | 519.5 | ||||||
Pre-tax, pre-credit-cost income | $ | 396.2 | $ | 96.1 | ||||