The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Press release from PR Newswire

Flagstar Reports First Quarter Results

Tuesday, April 26, 2011

Flagstar Reports First Quarter Results19:18 EDT Tuesday, April 26, 2011Company reduces net loss on declining credit costs First quarter 2011 net loss is 61.3% lower than the first quarter 2010TROY, Mich., April 26, 2011 /PRNewswire/ -- Flagstar Bancorp, Inc. (NYSE:FBC) (the "Company"), the holding company for Flagstar Bank FSB, today reported its first quarter results for 2011.  "During the first quarter of 2011, we significantly reduced our net loss from both the prior quarter and the first quarter of 2010, and experienced a fourth straight quarter of declining credit costs, while at the same time, strengthening our capital and liquidity ratios and further de-risking our balance sheet," commented Joseph P. Campanelli, Chairman of the Board, President and CEO.   Campanelli continued, "We've also formally launched our commercial banking initiative, adding several key experienced and proven commercial banking executives to our leadership team during the quarter.  In addition, the liquidity we have generated from sales of non-performing loans, seasonal pay-downs and reduced loan originations helps position us to fund new C&I growth while preserving our strong capital ratios." For the first quarter 2011, the net loss applicable to common stockholders totaled $(31.7) million, or $(0.06) per share (diluted) based on average shares outstanding of 553,555,000, as compared to a fourth quarter 2010 net loss of $(192.1) million, or $(0.74) per share (diluted) based on average shares outstanding of 259,946,000.  For the first quarter 2010, net loss was $(81.9) million, or $(1.05) per share (diluted) based on average shares outstanding of 77,699,000.  Key Items for First Quarter 2011:Sold $80.3 million of non-performing residential first mortgage loans in the available-for-sale category at a sale price which approximated carrying value.  Provision expense decreased by 87.4 percent from prior quarter, to $28.3 million (a 42.1 percent decrease, excluding $176.5 million related to the fourth quarter 2010 non-performing loan sale).Asset resolution expense related to non-performing residential and commercial loans decreased by 15.7 percent from the prior quarter, to $25.3 million.Core deposits increased by 10.0 percent from prior quarter, to $2.8 billion. Net servicing revenue increased 39.1 percent from the prior quarter, to $39.3 million.Launched the commercial banking business line, adding experienced and proven executives to solidify the management team.Asset QualityIn the first quarter 2011, the Company sold $80.3 million of non-performing residential first mortgage loans in the available-for-sale category at a sale price which approximated carrying value.Non-performing assets totaled $546.9 million at March 31, 2011, compared to $498.0 million at December 31, 2010, and $1.3 billion at March 31, 2010.  This category of assets is comprised of non-performing loans (i.e., loans 90 days or more past due and matured loans), real estate owned and net repurchased assets, and it excludes repurchased assets that are insured primarily by the Federal Housing Administration (FHA).  The $48.9 million increase in the first quarter 2011 compared to fourth quarter 2010, consisted of a $63.6 million increase in the residential non-performing assets offset by a $14.6 million decrease in commercial real estate non-performing assets. The allowance for loan losses at March 31, 2011 remained relatively constant at $271.0 million as compared to $274.0 million at December 31, 2010, and equaled 4.7 percent of loans held-for-investment and 73.6 percent of non-performing loans held-for-investment.  The allowance for loan losses at December 31, 2010 equaled 4.4 percent of loans held-for-investment and 86.1 percent of non-performing loans held-for-investment. At March 31, 2010, the allowance for loan losses was $538.0 million and equaled 7.1 percent of loans held-for-investment and 47.4 percent of non-performing loans. "As reflected in our allowance for loan losses, the increase in residential NPA's is consistent with our expectations, as well as seasonal experience in prior years and reflects the continuing consumer credit issues facing the financial services industry today. The commercial real estate decline is attributable to improving trends in our portfolio resulting from pay-downs and ongoing proactive workout efforts," said Campanelli.The Company maintains a secondary marketing reserve on its balance sheet, which reflects the estimate of probable losses that currently exist on loans that it has sold or securitized into the secondary market.  The secondary marketing reserve was $79.4 million as of March 31, 2011 and December 31, 2010, and $76.0 million at March 31, 2010.  For the first quarter 2011, the Company incurred a secondary marketing reserve provision expense of $22.7 million, compared to $22.3 million in the fourth quarter 2010 and $33.9 million in the first quarter 2010.  CapitalFlagstar Bank remained "well-capitalized" for regulatory purposes at March 31, 2011, with regulatory capital ratios of 9.87 percent for Tier 1 capital and 20.51 percent for total risk-based capital. The Company had an equity-to-asset ratio of 9.50 percent at March 31, 2011.Mortgage Banking OperationsIn the first quarter 2011, gain on loan sales was $50.2 million, as compared to $76.9 million for the fourth quarter 2010 and $52.6 million for the first quarter 2010.  This reflects the decrease in interest rate lock commitments, a decrease in loan originations and a decline in margin. Gain on loan sale margins decreased to 0.86 percent for the first quarter 2011, as compared to 0.89 percent for the fourth quarter 2010 and 1.05 percent for the first quarter 2010. Mortgage rate lock commitments decreased to $5.5 billion during the first quarter 2011, as compared to $8.9 billion during the fourth quarter 2010 and $6.1 billion during the first quarter 2010.  Loan originations, substantially comprised of agency-eligible residential first mortgage loans, decreased to $4.9 billion in the first quarter 2011, as compared to $9.2 billion in the fourth quarter 2010, but increased from $4.3 billion in the first quarter 2010.  Loan sales for the first quarter of 2011 decreased to $5.8 billion, as compared to $8.6 billion for the fourth quarter 2010, but increased in comparison to $5.0 billion for the first quarter 2010. At March 31, 2011, loans serviced for others totaled $59.6 billion and had a weighted average servicing fee of 30.2 basis points. This was an increase from $56.0 billion at December 31, 2010, with a weighted average servicing fee of 30.8 basis points, and $48.3 billion at March 31, 2010 with a weighted average servicing fee of 33.0 basis points.Net Interest MarginNet interest margin for the Bank decreased to 1.68 percent for the first quarter 2011, as compared to 2.08 percent for the fourth quarter 2010, but increased 26 basis points compared to 1.42 percent for the first quarter 2010.  The decrease from fourth quarter 2010 reflects a 9.7 percent decline in average interest earning assets to $9.7 billion, offset by a 4.7 percent decline in average interest bearing liabilities to $10.2 billion for the first quarter 2011.  Average interest-earning deposits, on which the Bank earns a minimal interest rate (25 basis points), increased $654.7 million to $1.6 billion in the first quarter 2011.  The Bank's increased interest-earning deposits will allow the Bank to fund its on-going strategic initiatives to increase commercial, specialty, small business, and mortgage warehouse lending.   The Bank's deposit cost for the first quarter 2011 was 1.63 percent, an 8.4 percent decline, compared to 1.78 percent in the fourth quarter 2010, and a 28.5 percent decline compared to 2.28 percent in the first quarter 2010.  The Bank reduced its deposit funding costs as higher yielding certificates of deposit matured and were replaced with lower-cost deposits.  These deposits included both retail and government certificates of deposits, as to which the average rate on retail certificates of deposits declined 11.1 percent and government certificates of deposits declined 13.8 percent during the first quarter of 2011, compared to the fourth quarter 2010.  Net Interest IncomeFirst quarter 2011 net interest income decreased to $39.8 million, as compared to $54.4 million during the fourth quarter 2010, but increased compared to $37.7 million during the first quarter 2010.  The $14.6 million decrease from fourth quarter 2010 reflects the decline in the average balances of interest-earning assets, including loans held-for-investment, loans available-for-sale and investment securities available-for-sale, offset by an increase in interest-earning deposits. Excluding the $176.5 million fourth quarter 2010 provision expense related to the non-performing loan sale, the first quarter 2011 loan loss provision expense of $28.3 million decreased $20.6 million from the fourth quarter 2010. The total provision expense for the fourth quarter 2010 was $225.4 million, which included the $176.5 million related to the non-performing sale. The first quarter 2010 provision expense was $ 63.6 million.  Non-interest IncomeFirst quarter 2011 non-interest income equaled $96.3 million, as compared to $136.5 million for the fourth quarter 2010 and $72.0 million for the first quarter 2010.  Non-interest income included the following components:Net servicing revenue, which is the combination of net loan administration income and the related hedging effect of gain (loss) on trading securities, increased 39.1 percent to $39.3 million during first quarter 2011 as compared to $28.3 million during fourth quarter 2010. This improved performance is primarily attributable to a 7.0 percent larger portfolio of loans serviced for others, slower than expected levels of prepayments, and effective hedge performance.  Hedge performance was driven in part by the steepness of the yield curve and the resulting high level of carry on hedges as well as reduced market volatility.Gain on loan sales decreased $26.7 million, or 34.8 percent, to $50.2 million, compared to $76.9 million for the fourth quarter 2010, reflecting the decrease in margin for the first quarter 2011 to 0.86 percent from 0.89 percent for the fourth quarter 2010, and the 38.2 percent decline in interest rate locks on mortgage loans to $5.5 billion in the first quarter 2011 from $8.9 billion in the fourth quarter 2010. Residential mortgage loan sales were $5.8 billion for the first quarter of 2011, a 32.6 percent decline, as compared to $8.6 billion in the fourth quarter 2010. Loan fees, which arise from the origination of residential mortgage loans, decreased 43.6 percent to $16.1 million for the first quarter 2011, as compared to $28.6 million for the fourth quarter 2010. The decrease in loan fees reflected the 46.7 percent decrease in originations to $4.9 billion during the first quarter 2011 as compared to $9.2 billion during the fourth quarter 2010.  Other fees and charges were a net expense of $(13.3) million, as compared to a net expense of $(4.7) million for the fourth quarter 2010, principally as the result of a $10.1 million increase in secondary market reserve provisions accrued for probable incurred losses on loans repurchased from the secondary market. Non-interest ExpenseNon-interest expense was $134.5 million for the first quarter 2011, as compared to $150.8 million for the fourth quarter 2010 and $123.3 million for the first quarter 2010. Compensation, benefits and commissions declined 4.2 percent to $63.3 million for the first quarter 2011, primarily reflecting a decrease in commissions.  The $5.1 million, or 40.5 percent, decrease in commission expense was primarily due to the 46.7 percent decrease in loan originations for the first quarter 2011, as compared to the fourth quarter 2010. Asset resolution expenses, which are expenses associated with foreclosed property and repurchased assets, decreased 15.7 percent to $25.3 million, as compared to $30.0 million in the fourth quarter of 2010. The decline was principally due to improving trends in the commercial real estate portfolio.  Prior warrant expense of $8.7 million was reversed in the first quarter 2011. The decrease was primarily due to the quarterly valuation of the outstanding warrant liability. Balance Sheet CompositionTotal assets at March 31, 2011 were $13.0 billion, as compared to $13.6 billion at December 31, 2010 and $14.3 billion at March 31, 2010.  The decrease was primarily due to the reduction in loans available-for-sale as the result of the 46.7 percent decline in loan origination volume for the first quarter 2011, as compared to the fourth quarter 2010. Warehouse loans also decreased 57.9 percent at March 31, 2011 compared to December 31, 2010, as a result of the lower loan origination volume. The increased liquidity derived from the lower origination volume was used during the quarter to repay $325.0 million of short-term FHLB advances and to fund $376.8 million of company controlled deposit outflows primarily associated with timing of payments to tax authorities on behalf of mortgage customers.Funding Sources The Bank's primary sources of funds are deposits obtained through its community banking branches and its internet banking platform as well as deposits obtained from municipalities and investment banking firms.  Funds are also obtained from time to time through loan repayments and sales of loans and securities in the ordinary course of business, advances from the FHLB, community banking operations, customer escrow accounts and security repurchase agreements.  The Bank relies upon several of these sources at different times to address its daily and forecasted liquidity needs for operational requirements and policy levels while managing overall net interest costs.  Retail deposits were $5.5 billion at March 31, 2011, $5.4 billion at December 31, 2010 and $5.5 billion at March 31, 2010.  At March 31, 2011, the Bank had a collateralized $4.2 billion line of credit with the FHLB with $3.4 billion advanced or borrowed, and $742.7 million of remaining borrowing capacity. The Bank also had $2.3 billion of liquidity in the form of cash on hand, interest-earning deposits and securities available for sale or trading.Community Banking Operations Flagstar Bank had 162 community banking branches at March 31, 2011, December 31, 2010 and March 31, 2010.  Earnings Conference CallThe Company's quarterly earnings conference call will be held on Wednesday, April 27, 2011 from 11 a.m. until noon (Eastern). Questions for discussion at the conference call may be submitted in advance by e-mail to investors@flagstar.com or asked live during the conference call.The conference call and accompanying slide presentation will be webcast live on the Investor Relations section of the Company's Web site, www.flagstar.com, with replays available at that site for at least 10 days.To listen by telephone, please call at least 10 minutes prior to the start of the conference call at (866) 294-1212 toll free or (702) 696-4911 and use passcode: 55599906.Flagstar Bancorp, with $13.0 billion in total assets, is the largest publicly held savings bank headquartered in the Midwest.  At March 31, 2011, Flagstar operated 162 banking centers in Michigan, Indiana and Georgia and 29 home loan centers in 14 states.  Flagstar Bank originates loans nationwide and is one of the leading originators of residential mortgage loans.The information contained in this release is not intended as a solicitation to buy Flagstar Bancorp, Inc. stock and is provided for general information.  This release contains certain statements that may constitute "forward-looking statements" within the meaning of federal securities laws.  These forward-looking statements include statements about the Company's beliefs, plans, objectives, goals, expectations, anticipations, estimates, and intentions, that are subject to significant risks and uncertainties, and are subject to change based upon various factors (some of which may be beyond the Company's control).  The words "may," "could," "should," "would," "believe," and similar expressions are intended to identify forward-looking statements.Flagstar Bancorp, Inc.Summary of Selected Consolidated Financial Data(Dollars in thousands, except per share data)(Unaudited)For the Three Months EndedSummary of ConsolidatedStatements of OperationsMarch 31, 2011December 31,2010March 31, 2010     Interest income$             98,405$           118,292$        126,206     Interest expense(58,607)(63,876)(88,523)Net interest income39,79854,41637,683     Provision for loan losses(28,309)(225,375)(63,559)Net interest income (loss) after provision11,489(170,959)(25,876)Non-interest income     Deposit fees and charges7,5007,3858,413     Loan fees and charges16,13828,60516,329     Loan administration39,33628,26926,150     Net loss on trading securities (74)(173)(3,312)     Net (loss) gain on residuals and transferors' interest(2,381)3,812(2,682)     Net gain on loan sales50,18476,93052,566     Net loss on sales of mortgage servicing rights(112)(2,303)(2,213)     Net gain on sale securities available for sale--2,166     Net loss on sale of assets(1,036)--     Impairment ? securities available for sale-(1,313)(3,286)     Other fees (13,289)(4,749)(22,133)       Total non-interest income96,266136,46371,998Non-interest expenses     Compensation, benefits and commissions(63,308)(66,011)(61,022)     Occupancy and equipment(16,618)(17,614)(16,011)     Asset resolution(25,335)(30,037)(16,573)     Federal insurance premiums(8,725)(8,179)(10,047)     Warrant  income (expense) 827(7,853)(1,227)     Other taxes(866)481(855)     General and administrative(20,430)(21,567)(17,607)        Total non-interest expense(134,455)(150,780)(123,342)Loss before federal income taxes and preferred stock dividends(26,700)(185,276)(77,220)Provision for federal income taxes2642,104-Net loss(26,964)(187,380)(77,220)     Preferred stock dividends(4,710)(4,690)(4,680)Net loss available to common stockholders$          (31,674)$        (192,070)$        (81,900)Basic loss per share (1)$              (0.06)$              (0.74)$            (1.05)Diluted loss per share (1)$              (0.06)$              (0.74)$            (1.05)1)  Restated for a 1-for-10 reverse stock split announced May 27, 2010 and completed on May 28, 2010.Flagstar Bancorp, Inc.Summary of Selected Consolidated Financial Data(Dollars in thousands, except per share data)(Unaudited)For the Three Months EndedSummary of ConsolidatedStatements of OperationsMarch 31, 2011December 31, 2010March 31, 2010Net interest spread ? Consolidated1.78%2.06%1.40%Net interest margin ? Consolidated1.61%2.02%1.29%Net interest spread ? Bank only1.79%2.07%1.45%Net interest margin ? Bank only1.68%2.08%1.42%Return on average assets(0.96)%(5.47)%(2.38)%Return on average equity(10.17)%(59.38)%(41.02)%Efficiency ratio98.8%79.0%112.5%Average interest earning assets$     9,727,655$   10,773,561$   11,364,244Average interest paying liabilities$   10,460,463$   10,960,772$   11,773,031Average stockholder's equity$     1,245,229$     1,293,937$        798,629Equity/assets ratio (average for the period)9.48%9.20%5.80%Ratio of charge-offs to average loans held for investment2.14%5.78%2.65%Flagstar Bancorp, Inc.Summary of Selected Consolidated Financial Data(Dollars in thousands, except per share data)(Unaudited)Summary of Consolidated Statements of Financial Condition:March 31, 2011December 31,2010March 31, 2010Total assets$        13,016,967$        13,643,504$            14,332,842Securities classified as trading160,650160,775893,318Securities classified as available for sale452,368475,225733,788Loans available for sale1,609,5012,585,2001,873,744Loans held for investment5,764,6756,305,4837,580,679Allowance for loan losses(271,000)(274,000)(538,000)Mortgage servicing rights635,122580,299543,447Government insured repurchased assets1,781,8251,731,276926,970Deposits7,748,9107,998,0998,145,679FHLB advances3,400,0003,725,0833,900,000Repurchase agreements--108,000Stockholder's equity1,237,0221,259,6631,104,764Other Financial and Statistical Data:Equity/assets ratio9.50%9.23%7.71%Core capital ratio (bank only)9.87%9.61%9.39%Total risk-based capital ratio (bank only)20.51%18.55%17.98%Book value per common share$                   1.78$                   1.83$                       5.85Shares outstanding at the period ended (000's)553,712553,313147,008Average shares outstanding for the period ended (000's)553,555161,56577,699Average diluted shares outstanding for the period ended (000's)553,555161,56577,699Loans serviced for others$        59,577,239$        56,040,063$            48,264,731Weighted average service fee (bps)30.230.833.0Value of mortgage servicing rights1.07%1.04%1.12%Allowance for loan losses to non-performing loans held for investment (1)73.6%86.1%47.4%Allowance for loan losses to loans held for investment (1)4.70%4.35%7.10%Non-performing assets to total assets (bank only) 4.26%4.35%9.30%Number of bank branches162162162Number of loan origination centers292723Number of employees (excluding loan officers and account executives)3,0303,0012,927Number of loan officers and account executives3062783141)  Bank only and does not include non-performing loans available for saleLoan Originations(Dollars in thousands)(Unaudited)For the Three Months EndedLoan typeMarch 31,2011December 31,2010March 31,2010Residential mortgage loans$      4,856,38499.4%$   9,164,61599.9%$     4,330,38899.8%Consumer loans1,127-1,022-621-Commercial loans30,3370.612,4400.16,2020.2      Total loan originations$      4,887,848100.0%$   9,178,077100.0%$    4,337,211100.0%Loans Held for Investment(Dollars in thousands)(Unaudited)DescriptionMarch 31,2011December 31,2010March 31,2010First mortgage residential loans$     3,751,77265.1%$      3,784,70060.1%$        4,803,42563.4%Second mortgage residential loans165,1612.8174,7892.8210,2082.8Construction loans3,2460.18,0120.115,5440.2Warehouse lending303,7855.3720,77011.4576,7197.6Commercial real estate loans1,170,19820.31,250,30119.81,555,16320.5Commercial lease financing 25,1380.4----Non-real estate commercial9,3260.28,8750.111,8780.1Consumer loans336,0495.8358,0365.7407,7425.4     Total loans held for investment$     5,764,675100.0%$      6,305,483100.0%$        7,580,679100.0%Composition of Mortgage Loans Held for Investment(In thousands)(Unaudited)March 31, 2011December 31, 2010Portfolio Balance (1)Allowance (1)Portfolio Balance (1)Allowance (1)     Performing modified (TDR)$                  562,570$                     45,309$                    576,594$                   46,857     Performing and not delinquent within last 36 months2,326,48629,7982,084,57827,700     Performing with government insurance127,953-122,677-     Other performing631,83329,886987,97543,462     Non-performing - 90+ day delinquent146,95138,98676,57219,786     Non-performing with government insurance66,4601,51356,5871,915     30 day and 60 day delinquent57,9264,64262,5184,866Total$                 3,920,179$                   150,134$                 3,967,501$                 144,5861) Includes first mortgage, construction and second mortgage loansComposition of Commercial Loans Held for Investment(In thousands)(Unaudited)March 31, 2011December 31, 2010Portfolio Balance (1)Allowance (1)Portfolio Balance (1)Allowance (1)     Performing ? not impaired$                    893,670$                    33,766$                    933,557$                       31,291     Special mention ? not impaired97,6247,31685,1035,907     Impaired5,64995773,63117,181     Non-performing ? not impaired63,91515,8346,485752     Non-performing143,80436,429160,40039,847Total$                 1,204,662$                    94,302$                 1,259,176$                       94,9781)  Includes commercial real estate, commercial non-real estate and lease financing loans.Allowance for Loan Losses(Dollars in thousands)(Unaudited)For the Three Months EndedMarch 31, 2011December 31,2010March 31, 2010Beginning balance$               (274,000)$            (474,000)$            (524,000)     Provision for losses(28,309)(48,914)(63,559)     Provision for losses ? NPL sale-(176,461)-Total provision for losses(28,309)(225,375)(63,559)Charge offs, net of recoveries     First mortgage loans2,13831,61429,021     First mortgage loans ? NPL sale-327,295-     Second mortgage loans4,9205,4546,429     Commercial real estate loans18,60855,8338,108     Construction loans-8120     Warehouse loans(5)182472     Consumer loans:          HELOC loans4,5774,1854,523          Other consumer loans600340332     Other471391654     Charge-offs, net of recoveries31,309425,37549,559Ending balance$               (271,000)$            (274,000)$            (538,000)Composition of Allowance for Loan LossesAs of March 31, 2011(In thousands)(Unaudited)DescriptionGeneral ReservesSpecific ReservesTotal     First mortgage loans$                    118,112$                     8,829$               126,941     Second mortgage loans21,52357222,095     Commercial real estate loans42,43549,96992,404     Construction loans551288839     Warehouse lending1,0409762,016     Consumer loans:          HELOC loans16,889-16,889          Other consumer loans2,479-2,479     Commercial lease financing251-251     Non-real estate commercial1,0515961,647     Other and unallocated5,439-5,439Total allowance for loan losses$                    209,770$                   61,230$               271,000Non-Performing Loans and Assets(Dollars in thousands)(Unaudited)March 31,2011December 31,2010March 31, 2010Non-performing loans held for investment$               368,152$               318,416$         1,136,205Real estate owned146,372151,085167,265Net repurchased assets/non-performing assets32,40228,47229,189Non-performing assets (1)546,926497,9731,332,659Non-performing loans available for sale6,59894,889-Non-performing assets including loans available for sale$               553,524$              592,862$         1,332,659Non-performing loans held for investment as a percentage of loans held for investment (1)6.39%5.05%14.99%Non-performing assets as a percentage of total assets 4.26%4.35%9.30%1)  Does not include non-performing loans available for saleAsset Quality ? Loans Held-for-Investment(Dollars in thousands)(Unaudited)March 31, 2011December 31, 2010March 31, 2010Days delinquentBalance% of TotalBalance% of TotalBalance% of Total30$             94,1321.6%$           133,4492.1%$             178,8302.4%6056,0371.053,7450.995,2581.390+ and matured delinquent368,1526.4318,4165.01,136,20514.9Total$           518,3219.0%$           505,6108.0%1,410,29318.6%Loans held for investment$        5,764,675$        6,305,483$          7,580,679Gain on Loan Sales and Securitizations(Dollars in thousands)(Unaudited)For the Three Months EndedMarch 31, 2011December 31, 2010March 31, 2010Description(000's)bps(000's)bps(000's)bpsValuation gain (loss):     Value of interest rate locks$               (616)(1)$          (36,144)(42)$                 3,0246     Value of forward sales(40,361)(69)54,93764(20,055)(40)     Fair value of loans available for sale44,3227637,0994359,077118     LOCOM adjustments on loans held for investment(30)-248-(88)-Total valuation gains3,315656,1406541,95884Sales gains (losses):     Marketing gains, net of adjustments751126,7483227,81555     Pair-off gains (losses)48,458835,9987(10,064)(20)     Provisions for secondary marketing reserve(2,339)(4)(11,956)(14)(7,143)(14)Total sales gains46,8708020,7902410,60821Total gain on loan sales and securitizations$             50,18586$             76,93089$               52,566105Total loan sales and securitizations$        5,829,508$        8,612,997$          5,014,748Average Balances, Yields and Rates(Dollars in thousands)(Unaudited)For the Three Months EndedMarch 31, 2011December 31, 2010March 31, 2010Average BalanceAnnualizedYield/RateAverage BalanceAnnualizedYield/RateAverage BalanceAnnualizedYield/Rate Interest-Earning Assets:Loans available for sale$        1,683,8144.44%$        2,408,2754.39%$        1,521,6404.98%Loans held for investment:     Mortgage loans3,935,0684.674,276,0344.575,115,4194.79     Commercial loans1,562,0795.022,149,1275.111,956,9264.89     Consumer loans347,0196.05364,9266.13415,9305.97Loans held for investment5,844,1664.846,790,0874.847,488,2754.88Securities classified as available for sale or trading629,4445.15659,6505.281,137,5215.43Interest-earning deposits and other1,570,2310.25915,5490.241,216,8080.21Total interest-earning assets9,727,6554.0510,773,5614.3711,364,2444.45Other assets3,410,7583,284,5232,397,983Total assets$      13,138,413$      14,058,084$      13,762,227Interest-Bearing Liabilities:         Demand deposits$           398,3600.39%$           391,9720.42%$           370,0160.56%         Savings deposits1,075,2530.90918,2890.96688,9780.84         Money market deposits555,9830.78554,8030.88581,8480.89         Certificate of deposits3,185,6141.933,314,2862.173,390,7552.96      Total retail deposits5,215,2101.485,179,3501.685,031,5972.26         Demand deposits77,7470.54161,0560.28291,9010.38         Savings deposits357,1220.65313,3940.6577,2330.48         Certificate of deposits251,6460.69274,8200.80273,6850.76      Total government deposits686,5150.65749,2700.63642,8190.55      Wholesale deposits841,0733.34987,1893.151,790,4342.95   Total deposits6,742,7981.636,915,8091.787,464,8502.28   FHLB Advances3,469,0553.503,796,3533.263,900,0004.35   Security repurchase agreements----108,0004.33   Other248,6102.62248,6102.64300,1824.99Total interest-bearing liabilities 10,460,4632.2710,960,7722.3111,773,0323.05Other liabilities1,432,7211,803,3751,190,566Stockholder's equity1,245,2291,293,937798,629Total liabilities and stockholder's equity$      13,138,413$      14,058,084$      13,762,227SOURCE Flagstar Bancorp, Inc.For further information: Paul D. Borja, Executive Vice President / CFO, or Bradley T. Howes, Investor Relations Officer, both of Flagstar Bancorp, Inc. +1-248-312-2000