Flagstar Losses Widen to $97m in Q210
Flagstar Bancorp, Inc. (FBC), the holding company for Flagstar Bank, reported Wednesday a net loss of $97m, or $0.63 per diluted share, for Q210. This follows a Q110 net loss of $81.9m or $1.05 per diluted share. The company reported a decrease in non-performing assets to $1.2bn, down from $1.3bn in last quarter. According to the earnings statement, the reduction in non-performing loans was offset by an increase in real estate owned properties (REOs). The allowance for loan losses equaled 7.2% of loans held for investment and 52.3% of non-performing loans, up from 7.1% of loans healed for investment and 47.4% of non-performing loans. REO assets increased to $198.2m in Q210 from $167.3m in Q110. Flagstar attributed this rise to increases in commercial REO as "legacy loans cycle through the loss mitigation process." Flagstar reported a gain on loan sales to $64.3m or 1.53%, up from $52.6m or 1.05% in Q110. Loan production, comprise mostly of residential first mortgage loans, increased to $5.5bn from $4.3bn while loans serviced increased to $50.2bn (average servicing fee of 32.4 basis points) from $48.3bn (average servicing fee of 33 basis points.). Despite quarterly losses, chairman and CEO of Flagstar Joseph Campanelli said the company is "encouraged by a number of positive results in our core business." He said Flagstar experienced a 26% increase in mortgage originations, a 16% increase in gain on sale margin, a 2% increase in core deposits, an 8% increase in Bank net interest margin, and a 14% reduction in total delinquent loans from the prior quarter. Write to Christine Ricciardi.