Flagstar Bancorp (FBC) in Troy, Mich., reported its third straight quarter in the black.
The company earned $66.8 million in the fourth quarter. A year earlier, it lost $78.2 million. For the full year, the $14.1 billion-asset company earned $223.7 million, compared to a loss of $198.9 million a year earlier.
The earnings were largely a factor of lower costs associated with its credit. The loan-loss provision fell 20% from a year earlier, to $50.3 million. Its representation and warranty reserve on mortgages sold was $25.2 million, compared to $124 million in the third quarter and $69 million a year earlier.
Net interest income was essentially flat from the third quarter and a year earlier, at $74 million, while the net interest margin expanded by 5 basis points from a quarter earlier because of improved funding costs.
Noninterest income jumped 142% from a year earlier, to $285.8 million, because of the decrease in representations and warrants, a 43% rise in loan fees and a 124% increase in gains on loan sales.
Flagstar has spent the last few years trying to recover from the mortgage crisis. Earlier this month, the company said it would sell $1.2 billion in commercial loans in the Northeast to the commercial bank unit of CIT Group. It was also sued this month by MBIA over the condition of loans that backed $1.02 billion in securities that MBIA had insured.