Flagstar Bancorp Inc. lost $32 million in the first quarter, an improvement over a $192 million loss in the fourth quarter 2010 and $82 million in the first quarter 2010. Company management cited four consecutive quarters of declining credit costs as one reason for the improvement.
During the first quarter, the company sold over $80 million of non-performing residential first mortgage loans at a sales price which approximated their carrying value.
Non-performing assets increased by $49 million in the quarter to $546 million, driven by a $64 million increase in residential loans offset by a $15 million decrease in problem commercial real estate assets.
Chairman, president and chief executive Joseph Campanelli said in a press release that the increase in residential non-performing loans "is consistent with our expectations, as well as seasonal experience in prior years and reflects the continuing consumer credit issues facing the financial services industry today."
Flagstar originated $4.9 billion in residential mortgages during the quarter, down from $9.2 billion in the fourth quarter of 2010 but up from the $4.3 billion originated in the first quarter last year. Gain on sale was $50 million for the most recent period, down from $77 million in the fourth quarter.
The servicing portfolio grew to nearly $60 billion during the quarter from $56 billion at the end of 2010. Net servicing revenue increased 39% to $39 million from $28 million in the fourth quarter. Flagstar attributes this to the growth in the servicing portfolio, slower than expected levels of prepayments and an effective hedge performance.
