Flagstar Posts $298M Loss, Appoints New Execs
Flagstar Bancorp (FBC) lost $298.5m, or $0.64 per share, in Q309, compared with losses of $76.6m in Q209 and $62.1m in Q308. For the first nine months of 2009, the Troy, Mich.-based bank lost $442.2m. In an attempt to improve Flagstar’s situation, the bank’s board of directors appointed Salvatore Rinaldi to executive vice president and chief of staff and moved Marshall Soura into the roles of executive vice president and director of corporate services. Along with the appointments, Flagstar president and CEO Joseph Campanelli will assume the role of chairman, replacing the retired Thomas Hammond. Rinaldi was formerly executive vice president and chief of staff of Sovereign Bancorp. In Soura’s 40 years in the banking industry, he’s held executive positions at Sovereign Bank, Bank of America and BankOne. Other initiatives include efforts to “better align expenses with revenues and appropriately right size the Flagstar enterprise,” and a renewed emphasis in mortgage origination across the bank’s network of 176 branch locations. Mortgage origination volume was $6.6bn in Q309, down from $9.3bn in Q209 and $6.7bn in Q308. However year-to-date origination through September was up 11.3% to $25.5bn from the same period in 2008. Non-performing loans, excluding Federal Housing Administration (FHA)-insured assets, totaled $1.2bn, up from $1.1bn in Q209 and $500m in Q308. Non-performing residential first mortgages increased to $606.3m from $588.2m in Q209 and from $304.8m in Q308. A net loss of $8.6m in loan administration income included a decline in the value of mortgage servicing rights sold during quarter. The servicing rights Flagstar sold were for $12.3bn in agency residential mortgages identified as having higher risks of default, the bank said. Write to Austin Kilgore.