Flagstar profit off 13% as fee income falls
Flagstar Bancorp in Troy, Mich., reported lower profit because of higher expenses and a decline in fee income.
The $16 billion-asset company said in a press release Tuesday that its second-quarter earnings fell 13% from a year earlier, to $41 million, or 71 cents a share. Net income applicable to common shareholders, which took into account a preferred-stock dividend paid in 2016, rose by 5%.
Net interest income rose 26% to $97 million. Loans held for investment increased by 16% to $6.8 billion, while the net interest margin expanded by 14 basis points to 2.77%. Flagstar also recorded a $1 million reserve release in the second quarter.
Noninterest income fell by 9.4% to $116 million. The net gain on loan sales decreased by 27% to $66 million.
Noninterest expenses increased by 11% to $154 million. Costs rose across most categories.
Flagstar recently made efforts to expand its mortgage portfolio with its purchase of Opes Advisors in California. The company also sold $191 million of mortgage servicing rights as it prepares for the full phase-in of Basel III.