Flagstar Bancorp, the holding company for Flagstar Bank, yesterday reported fourth quarter 2020 net income of $154 million, or $2.83 per diluted share, compared to third quarter 2020 net income of $222 million, or $3.88 per diluted share and fourth quarter 2019 net income of $58 million, or $1.00 per diluted share.
"It was yet another outstanding quarter, capping off an exceptionally successful year for Flagstar," said Alessandro DiNello, president and chief executive officer of Flagstar Bancorp, Inc.
"All of our business segments contributed to produce earnings of $2.83 per share - 75 percent of what we earned for the full year of 2019."
"Banking was once again a standout, as net interest income climbed $9 million to $189 million.
"And once again, our warehouse business led the way, as we continued to grow the low-risk balances this business generates. Our impressive performance in warehouse, coupled with a concerted effort to reduce funding costs, resulted in a flat net interest margin.
"In fact, net interest margin actually expanded 4 basis points when excluding those loans with government guarantees where we have the right to repurchase.
"We closed the quarter servicing and subservicing approximately 1.1 million loans, consistent with the prior quarter, despite the ongoing pressure of elevated prepayments. This is a testament to our business model, the quality of the service delivered, and the strength of the relationships we have developed with our subservicing partners.
"Our mortgage team continues to deliver, achieving revenues of $232 million for the quarter. While gain on sale margins did compress, we were pleased with how well they held up, finishing at 1.93 percent for the quarter. The team's all-out efforts--coupled with our diverse, multi-channel mortgage platform--made it possible for us to deliver a quality experience to customers all year long in the face of unprecedented volumes.
"Overall, 2020 was one for the record books. The performance of our mortgage and warehouse businesses was extraordinary, supported by the consistent results we have come to expect from servicing. Thanks to this success, we were positioned not only to secure an investment grade rating from Moody's rating agency, but were also able to execute a $150 million stock buyback.
"But the real story of the year was our employees. I could not be more proud of the way they responded, and continue to respond, to COVID-19. First, we had a business continuity plan in place and ready to go, and second, our employees did a masterful job of executing it. We've adapted to the change in our workplace and our success is written in our results. With the momentum of a strong year behind us and the power of a diversified franchise carrying us forward, we believe we are well positioned for continued success in 2021." ■