Flagstar Bancorp Inc. reported $29.1 million more in losses for the fourth quarter and full year after agreeing to pay up to $133 million to settle claims regarding loans insured by the Federal Housing Administration.
The $13.6 billion-asset company said Monday that it has recorded a fourth-quarter loss of $74 million, up from the $44.9 million loss it reported in January. Its 2011 loss climbed from the previously reported $165.6 million to $194.7 million.
After the revised earnings, Flagstar's Tier 1 capital ratio fell 21 basis points to 8.98%.
The Troy, Mich., company said on Friday that it had reached a deal with the Justice Department to make an initial payment of $15 million to settle claims regarding underwriting practices associated with loans insured by the FHA.
It will then pay as much as another $118 million assuming it meets certain milestones regarding its financial health. To make the additional payments, Flagstar has to generate income for a sustained period, be able to take advantage of a deferred tax asset valuation allowance and either repay $266.7 million to the Troubled Asset Relief Program or manage to exclude that Tarp figure from its regulatory capital ratios.
The revised earnings included the initial $15 million payment and a $14.1 million additional payment. Further payments will be evaluated on a quarterly basis based upon Flagstar's progress. The bank has lost more than $1.2 billion since 2007.