Flagstar Bancorp Inc [1].’s profits have jumped significantly since 2014, according to a first quarter earnings report released this morning.
The report revealed that Flagstar pulled in a first quarter net income of $31.5 million, or 43 cents per share--nearly triple the amount it reported in Q4 of 2014. In the fourth quarter of last year, the company reported a net income of just $11.1 million, or 7 cents per share. Early in the year, Flagstar recorded a net loss of $78.9 million for Q1 2014.
The first quarter of 2015 also brought in a 15 percent increase in revenue and a 2 percent decline in operating expenses when compared to 2014, and interest-earning assets rose 8 percent over the last quarter. Warehouse lending also saw an increase of 15 percent since 2014.
These new numbers reveal an upward trend for Troy, Michigan-based Flagstar, one that the company’s executives attribute to improved sales margins, lowered risk, higher-quality loans and internal changes within the originations process.
"Our first quarter results reflect our significant efforts to strengthen our core business and improve financial performance," said Alessandro P. DiNello, president and chief executive officer of Flagstar Bancorp. "Mortgage volumes increased during the first quarter, providing a favorable tailwind, but most of our revenue growth was due to improved gain on sale margins in part from fundamental changes to optimize our mortgage originations business. In addition to improving our top- and bottom-line results, we also grew our balance sheet and executed on our strategic priority to reduce risk by continuing to sell lower quality loans. Nonperforming loans are now well below $100 million, a level Flagstar has not seen since 2006.
But despite the forward movement, the work is not done, according to DiNello. The company will continue to strengthen its franchises and warehouse lending branches.
"We are encouraged by our progress, especially in controlling expenses given this quarter's higher business levels,” DiNello said. “We remain focused on continuing our strong results by growing our community banking franchise in Michigan and expanding our national warehouse lending business, which led our loan growth this quarter. Last quarter, we pointed to the work done the previous two years to position the Company for going-forward success. We believe this quarter delivers on our promise to continue to build on this foundation."
See the full earnings report at Flagstar.com [2].