Flagstar Announces Sale of Northeast-Based Commercial Loans
Flagstar Renews Focus on Community Banking in Michigan and National Mortgage
Transaction Strengthens Bank's Balance Sheet, Decreases Risk Profile
TROY, Mich., Jan. 2, 2013
TROY, Mich., Jan. 2, 2013 /PRNewswire/ --Flagstar Bancorp, Inc. (NYSE: FBC),
(the "Company"), the holding company for Flagstar Bank, FSB (the "Bank"),
today announced that, effective December 31, 2012, the Bank entered into a
definitive Transaction Purchase and Sale Agreement (the "Agreement") under
which a wholly-owned subsidiary of CIT Bank, the U.S. commercial bank
subsidiary of CIT Group Inc. (NYSE: CIT) ("CIT"), will acquire a substantial
portion of Flagstar's Northeast-based commercial loan portfolio.
Under the terms of the Agreement, CIT will acquire $1.264 billion in
commercial loan commitments, $785 million of which is currently outstanding.
The loans sold consist primarily of asset-based loans, equipment leases and
commercial real estate loans. Flagstar expects that the total purchase price
will be approximately $779 million and that a vast majority of the assets will
be sold during the first quarter of 2013. The sale is expected to be capital
accretive to the Bank.
"This transaction is another step in renewing Flagstar's focus on our
community banking operation in Michigan and our national mortgage business,"
said Michael Tierney, President and Chief Executive Officer of the Company.
"Flagstar is the largest bank headquartered in Michigan, and we are focused on
being a best-in-class national mortgage lender and leading super-community
bank. We remain deeply committed to improving the quality of our earnings
within a disciplined lending framework, and today's transaction helps us
decrease our risk profile while improving our balance sheet flexibility."
Tierney continued, "I want to thank all of the Flagstar employees who have
contributed to the success of our commercial lending business in the
Northeast. Today's transaction is a testament to our team's work in providing
high-quality loans, and we are greatly appreciative of their efforts as we
enter a new phase of Flagstar's development with a renewed Michigan focus."
Sandler O'Neill Mortgage Finance L.P., an affiliate of Sandler O'Neill
+Partners, L.P., is acting as exclusive financial advisor and agent to
Flagstar in connection with the asset sale. Bracewell & Giuliani and Nutter,
McClennen & Fish are serving as legal advisors to Flagstar.
Flagstar Bancorp, Inc. is the holding company for Flagstar Bank, a
full-service financial institution offering a range of products and services
to consumers, businesses, and homeowners. With $14.9 billion in total assets
at September 30, 2012, Flagstar is the largest publicly held savings bank
headquartered in the Midwest. As of September 30, 2012, Flagstar operated 111
branches in Michigan, 31 home loan centers in 14 states, and a total of four
commercial banking offices in Massachusetts, Connecticut, and Rhode Island.
Flagstar originates loans nationwide and is one of the leading originators of
residential first mortgage loans. For more information, please visit
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 results of operations, current expectations, plans or
forecasts of core business drivers, credit related costs, asset quality,
capital adequacy and liquidity, the implementation of the Company's business
plan and growth strategies, 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 and 10-Q: 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; and our compliance with the Consent
Order with the Office of the Comptroller of the Currency, which we disclosed
on October 23, 2012. 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.
Contact: Bradley T. Howes, Investor Relations Officer, +1-248-312-2000
Press spacebar to pause and continue. Press esc to stop.