“Our success has only strengthened our resolve in our business plan of growing our community bank, increasing the profitability of our mortgage originations and building our mortgage sub-servicing business,” says Alessandro P. DiNello, president and chief executive officer of Flagstar Bancorp. “We continue to make progress on the regulatory front and believe that we are on track for lifting the OCC consent order and redeeming our TARP preferred securities.”
Flagstar reported third quarter 2015 net income of $47 million, or $0.69 per diluted share, as compared to $46 million in the second quarter 2015, or $0.68 per diluted share, and a net loss of $28 million in the third quarter 2014, or a loss of $0.61 per diluted share.
“We are pleased with the solid results we were able to post again this quarter. Despite lower revenue from mortgage originations, we grew total revenue and reduced expenses, resulting in positive operating leverage,” says DiNello. “We've now posted four straight quarters of positive net income and operating leverage.”
On Oct. 15 the company sold $214 million of interest-only loans, after previously moving the loans to its held-for-sale portfolio in anticipation of the transaction.
“We've now sold $600 million of these assets this year,” says DiNello. “Despite these sales, we've been able to grow the earnings power of our balance sheet, reinvesting the proceeds from these sales into higher quality assets. Additionally, our level of nonperforming loans remains below pre-crisis levels."
One lender remains confident that its business plan is on track to growing origination profits, despite mortgage originations being down.