On Monday, Shares of (NYSE: ) showed the bullish trend with a higher momentum of 0.95% to $31.81. The company traded total volume of 189.405K shares as contrast to its average volume of 289.79K shares. The company has a market value of $1.80B and about 56.62M shares outstanding.

Flagstar Bancorp, Inc. (FBC), the holding company for Flagstar Bank, FSB, recently stated first quarter 2019 net income of $36.0M, or $0.63 per diluted share contrast to fourth quarter 2018 net income of $54.0M, or $0.93 per diluted share. On an adjusted basis, Flagstar stated net income of 37.0M, or $0.64 per diluted share, for the first quarter 2019, contrast to net income of $42.0M, or $0.72 per diluted share, for the fourth quarter 2018. For the first quarter 2018, Flagstar stated net income of $35.0M, or $0.60 per diluted share.

Net Interest Income

Net interest income reduced $26.0M to $126.0M for the first quarter 2019, as contrast to the fourth quarter 2018. However, the fourth quarter included the recognition of $29.0M of hedging gains in conjunction with the Wells Fargo branch acquisition. Excluding hedging gains, the Company’s net interest income rose $3.0M. This reflected the full quarter benefit of using lower cost deposits from the acquisition to reduce Federal Home Loan Bank advances. This action was partially offset by seasonal declines in loans held-for-sale and warehouse loans. Net interest margin rose 10 basis points to 3.09 percent for the first quarter 2019 as contrast to adjusted net interest margin for the fourth quarter 2018.

Loans held-for-investment averaged $9.20B for the first quarter 2019, increasing $248.0M from the prior quarter. During the first quarter 2019, average commercial real estate and commercial and industrial loans rose $328.0M, or 9 percent. This increase was partially offset by a $162.0M drop in warehouse loans because of anticipated seasonal factors. Average consumer loans rose $82.0M, or 2 percent, driven mainly by growth in non-auto indirect loans and the full quarter impact from consumer loans attained as part of the Wells Fargo branch acquisition.

Average total deposits were $12.90B in the first quarter 2019, increasing $964.0M, or 8 percent from the fourth quarter 2018, driven by the full quarter impact of Wells Fargo branch deposits and higher custodial deposits, which rose $402.0M, or 19 percent, driven by a 13 percent increase in serviced accounts.

Provision for Loan Losses

The Company had no provision for loan losses for first quarter 2019, as contrast to a benefit of $5.0M for the fourth quarter 2018. The lack of provision expense reflected strong asset quality and a low level of net charge-offs in the quarter.

Noninterest Income

Noninterest income increased $11.0M, or 11 percent, to $109.0M in the first quarter 2019, as contrast to $98.0M for the fourth quarter 2018. The increase was mainly driven by higher net gain on loan sales, net loan administration income and deposit fee income, partially offset by lower net return on MSRs and seasonally lower fee income.

First quarter 2019 net gain on loan sales increased $15.0M, or 44 percent, to $49.0M, as compared to $34.0M in the fourth quarter 2018. The results reflected improvement in the mortgage environment late in the quarter which drove fallout-adjusted locks higher and an expansion of gain on sale margin. Fallout-adjusted locks increased 25 percent to $6.60B. The net gain on loan sale margin increased 12 basis points to 0.72 percent for the first quarter 2019, as contrast to 0.60 percent for the fourth quarter 2018.

Noninterest Expense

Noninterest expense increased to $191.0M for the first quarter 2019, as contrast to $189.0M for the fourth quarter 2018. Excluding acquisition costs of $1.0M in the first quarter 2019 and $14.0M in the fourth quarter 2018, adjusted noninterest expense in the first quarter 2019 was $190.0M or $15.0M higher than fourth quarter 2018. The increase is attributable to seasonally higher payroll taxes, employee benefits and a full quarter of expenses related to the 52 Wells Fargo branches attained in December 2018.

Income Taxes

The first quarter 2019 provision for income taxes totaled $8.0M, contrast to $12.0M for the fourth quarter 2018. The Company’s effective tax rate was 18 percent for the first quarter 2019, consistent with our effective tax rate for the fourth quarter 2018.

Asset Quality

The allowance for loan losses was $127.0M at March 31, 2019 contrast to $128.0M at December 31, 2018. The allowance for loan losses covered 1.3 percent of loans held-for-investment at March 31, 2019, as contrast to 1.4 percent of loans held-for-investment at December 31, 2018.

Net charge-offs in the first quarter 2019 were $1.0M, or 5 basis points of LHFI, contrast to $1.0M, or 4 basis points in the prior quarter.

Nonperforming loans were $24.0M at March 31, 2019 contrast to $22.0M at December 31, 2018. The ratio of nonperforming loans to loans held-for-investment was 0.24 percent at March 31, 2019, consistent with the ratio at December 31, 2018. At March 31, 2019, early stage loan delinquencies totaled $9.0M or 0.09 percent of total loans, contrast to $7.0M, or 0.08 percent at December 31, 2018. There were no commercial loan delinquencies greater than 90 days at March 31, 2019.

The Company offered net profit margin of 26.40%. ROE was recorded as 12.30% while beta factor was 1.22. The stock, as of recent close, has shown the weekly upbeat performance of 0.06% which was maintained at 20.49% in this year.

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