Flagstar reports '09 net loss

March 22, 2010
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Flagstar Bancorp Inc. (NYSE: FBC), the holding company for Flagstar Bank FSB, reported a 2009 fourth quarter net loss of $71.6 million, or $(0.15) per share (diluted) compared to a third quarter 2009 net loss of $298.2 million, or $(0.64) per share (diluted), and a fourth quarter 2008 net loss of $218.5 million, or $(2.62) per share (diluted).

For the year ended Dec. 31, 2009, net loss was $513.8 million, or $(1.62) per share (diluted), as compared to a 2008 net loss of $275.4 million, or $(3.82) per share (diluted).

On a pre-tax, pre-credit cost basis, earnings before preferred dividends were $113.7 million in the fourth quarter 2009, compared to $58.8 million in third quarter 2009.

At Dec. 31, 2009, the wholly owned subsidiary Flagstar Bank remained "well-capitalized" for regulatory purposes, with capital ratios of 6.19 percent for Tier 1 capital and 11.68 percent for total risk-based capital.

On Jan. 27, the company announced it had raised $300 million of capital through a previously announced rights offering. Had this capital been received on Dec. 31, 2009, the capital ratios would have been 8.15 percent for Tier 1 capital and 15.28 percent for total risk-based capital.

"While we continue to manage through the asset quality issues on our legacy balance sheet, this significant investment of capital is an affirmative statement about the Flagstar franchise," said Chairman and CEO Joseph P. Campanelli.

"We have learned from experience that, to be successful, a turnaround requires a strong management team, a sound business plan and the capital to implement that plan. We are excited about the success we have had with our progress to date in bringing these components together."

Total assets at Dec. 31, 2009, were $14.0 billion as compared to $14.8 billion at Sept. 30, 2009. The decrease was primarily a result of the decline in securities available for sale, trading securities and loans held for investment. Total assets were $14.2 billion at Dec. 31, 2008.

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