Flagstar Bancorp swung to a fourth-quarter loss as the Troy, Mich., company took an $80 million noncash charge to earnings because of the tax reform bill.
For the quarter, Flagstar lost $45 million, compared with net earnings of $40 million
Flagstar had to revalue its deferred tax asset under the Tax Cuts and Jobs Act. Without the charge, the company would have earned $35 million in the quarter.
"All three of our business lines strengthened during the quarter. Our community bank drove a 9% increase in commercial loans, which helped fuel earning asset growth of $642 million — a 4% gain," Flagstar President and CEO Alessandro DiNello said in a press release.
"Our mortgage acquisitions earlier in 2017 continued to pay dividends, producing a 14% increase in closings and a 42% increase in locks over the same quarter last year in the face of a smaller market. And our third key business line, servicing, continued to gain scale and now has a book of business that exceeds 440,000 accounts."
Flagstar purchased
For the full year, Flagstar earned $63 million, down from $171 million a year earlier. Without the fourth-quarter charge, Flagstar would have earned $143 million this year.
The company had a net gain on sale for mortgages sold into the secondary market during the fourth quarter of $79 million, compared with $57 million one year prior.
It took a net loss on its servicing rights of $4 million, compared with a gain of $6 million in the third quarter and a net loss of $5 million in the fourth quarter of 2016.
The quarter-to-quarter drop is due to a $4 million decrease in fair value and a $3 million charge associated with pending mortgage servicing rights sales with a fair value of $98 million expected to close in the first quarter.
Flagstar originated $9.7 billion of mortgages in the fourth quarter, compared with $9.6 billion in the third quarter and $8.6 billion in the fourth quarter of 2016.
For the full year, it had total volume of $34.4 billion, up from $32.4 billion one year prior.
It originated $111 million of home equity loans originated in the fourth quarter, along with $283 million of commercial real estate and commercial and industrial loans.
As of Dec. 31, Flagstar serviced $97.95 billion of residential mortgages. Its
Flagstar also serviced $25.07 billion for investors and $7 billion of loans in its portfolio.
Finally, the Office of the Comptroller of the Currency approved Flagstar's purchase of the