Troy-based Flagstar Bancorp Inc. reported net income of $187 million during 2018, compared to $63 million in 2017. Its adjusted net income was $176 million last year, up from $143 million in 2017. On an adjusted basis, the company realized a 23-percent increase in net income for the full year 2018.
In the fourth quarter 2018, the company reported net income of $54 million, and adjusted net income of $42 million. That compares to a net loss of $45 million in the final three months of 2017, due to a one-time, non-cash charge of $80 million from new tax legislation.
“Our fourth-quarter results further reflect the transformation Flagstar has made,” says Alessandro DiNello, president and chief executive officer of Flagstar Bancorp. “We reported adjusted net income of $0.72 per diluted share for the quarter, net income of $3.21 per diluted share for the year and adjusted net income of $3.02 per diluted share for the year, evidencing the stronger, more diversified franchise we’ve become. While this quarter’s gain on sale revenue was the lowest since the early days of the financial crisis, we delivered solid earnings as reflected in an adjusted return on average assets of 0.91 percent.
Neither the year-end nor fourth quarter results include the benefit or expenses from the acquisition of 52 Midwest Wells Fargo branches, which closed during the quarter.
“Our banking and mortgage servicing businesses had another good quarter,” DiNello explains. “Deposit costs were relatively unchanged, despite the increase in short-term rates at the end of the third quarter. The adjusted net interest margin expanded 6 basis points to 2.99 percent. Total serviced accounts increased a remarkable 34 percent to nearly 827,000, further growing an important source of fee income and liquidity.”