Press release from PR Newswire
Flagstar to Shift Focus of Mortgage Servicing Business
Wednesday, July 17, 2013
Flagstar to Shift Focus of Mortgage Servicing Business16:01 EDT Wednesday, July 17, 2013
Company to Shift Servicing Focus to Performing Mortgages, Targets Expanding the Business
Continues Strategy of Delivering Improving Performance While Maintaining Commitment to National Mortgage Business and Community Banking in Michigan
TROY, Mich., July 17, 2013 /PRNewswire/ -- Flagstar Bancorp, Inc. (NYSE: FBC) ("Flagstar" or the "Company") today announced its plan to shift the focus of its mortgage servicing business to performing servicing assets. Flagstar has made the decision to outsource its non-core default servicing business, which represents less than 4 percent of its overall servicing book, to a recognized servicer that specializes in this area. This is part of Flagstar's ongoing strategy to deliver improving performance while maintaining its commitment to its national mortgage business and community banking in Michigan. Part of this strategy is to diversify earnings through the growth of Flagstar's performing mortgage servicing franchise. This transition to a recognized specialty servicer is expected to occur by the end of the third quarter.
While Flagstar will work to redeploy as many employees as possible to other parts of the Company, this outsourcing arrangement is expected to affect approximately 300 positions in the non-performing mortgage servicing business. Flagstar is committed to providing transition support to all employees impacted by this arrangement.
By outsourcing the default servicing business, Flagstar expects to realize significant cost savings. The Company will provide additional details during its second quarter 2013 earnings conference call, which will be held on Wednesday, July 24, 2013 at 11 a.m. (ET).
Sandro DiNello, President and Chief Executive Officer of Flagstar, commented, "Improving company-wide efficiency and carefully managing expenses is consistent with our plan to build long-term shareholder value. By focusing our mortgage servicing business on core, performing mortgages, we seek to enhance Flagstar's profitability and be even better positioned to serve our clients and capitalize on value-enhancing opportunities. Further, this action will better position our servicing department for long-term growth. We remain deeply committed to our community banking in Michigan and our mortgage origination and servicing, and look forward to continuing to meet and exceed the needs of our clients and communities."
Mr. DiNello continued, "We thank the talented employees of our default mortgage servicing business for their contributions to Flagstar. We appreciate their hard work and commitment to Flagstar."
The Company is the holding company for the Bank, a full-service financial institution offering a range of products and services to consumers, businesses, and homeowners. With $13.1 billion in total assets at March 31, 2013, the Company is the largest publicly held savings bank headquartered in the Midwest. The Company originates loans nationwide and is one of the leading originators of residential first mortgage loans. For more information, please visit flagstar.com.
Forward Looking Statements
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements, by their nature, involve estimates, projections, goals, forecasts, assumptions, risks and uncertainties that are difficult to predict and could cause actual results or outcomes to differ materially from those expressed in a forward-looking statement. Forward-looking statements contained in this press release and any information related to expectations about future events or results are based upon information available to the Company as of the date hereof. Forward-looking statements can be identified by such words as "anticipates," "intends," "plans," "seeks," "believes," "expects", "estimates," and similar references to future periods. Examples of forward-looking statements include, but are not limited to, statements made regarding the Company's current expectations, plans or forecasts of its core business drivers, credit related costs, asset quality, capital adequacy and liquidity, the implementation of the Company's business plan and growth strategies, the suspension of dividend payments on preferred stock, the deferral of interest payment on trust preferred securities, the result of improvements to the Company's servicing processes, the Company's strategy for outsourcing the non-core default servicing business and other similar matters. Although we believe that these forward-looking statements are based on reasonable estimates and assumptions, they are not guarantees of future performance and are subject to known and unknown risks, uncertainties, contingencies, and other factors. Accordingly, we cannot give you any assurance that our expectations will in fact occur or that actual results will not differ materially from those expressed or implied by such forward-looking statements. We caution you not to place undue reliance on any forward-looking statement and to consider all of the following uncertainties and risks, as well as those more fully discussed in the Company's filings with the Securities and Exchange Commission ("SEC"), including, but not limited to, our Forms 10-K: volatile interest rates that impact, among other things, the mortgage banking business, our ability to originate loans and sell assets at a profit, prepayment speeds and our cost of funds; changes in regulatory capital requirements or an inability to achieve or maintain desired capital ratios; actions of mortgage loan purchasers, guarantors and insurers regarding repurchases and indemnity demands and uncertainty related to foreclosure procedures; uncertainty regarding pending and threatened litigation; our ability to control credit related costs and forecast the adequacy of reserves; the imposition of regulatory enforcement actions against us; our compliance with the Supervisory Agreement with the Board of Governors of the Federal Reserve System and the Consent Order with the Office of the Comptroller of the Currency; and the commercial loan sale may not have the projected impact or be consummated in a timely manner. Except to the extent required under the federal securities laws and the rules and regulations promulgated by the SEC, the Company undertakes no obligation to update any such statement to reflect events or circumstances after the date on which it is made.
SOURCE Flagstar Bancorp, Inc.
For further information: Bradley T. Howes, Investor Relations Officer, (248) 312-2000