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Flagstar Bancorp Q2 Earnings Improve, Above Estimates

Flagstar Bancorp, Inc. (FBC) on Wednesday announced second quarter net income of $147 million, or $2.74 per share, higher than $116 million, or $2.03 per share in the prior-year quarter backed by higher interest income.

Analysts polled by Thomson Reuters expected the company to report earnings of $1.93 per share.

Net interest income for the quarter rose to $183 million from $168 million last year.

Non-interest income, however, decreased to $252 million from $375 million last year.

The consensus estimate for revenue was at $182.72 million.

Total deposits for the quarter increased to $18.661 billion from $17.898 billion a year ago.

Total loans held-for-investment and loans with government guarantees were $16.076 billion compared with $16.37 billion in the comparable quarter last year.

Allowance for credit losses in the second quarter came down to $220 million from $250 million in the same quarter a year ago.

Additionally, the company declared a quarterly dividend of $0.06 per share payable on September 15, to shareholders of record on September 1.

"Credit quality remained strong, and we continue to be encouraged by the low levels of nonperforming loans and net charge-offs. And I'm pleased to say that we have no commercial loans currently in deferral. This performance, along with an improved forecast for the macroeconomic environment, enabled us to release $45 million of our allowance for credit losses. Even with this release, excluding warehouse loans, our coverage ratio was 2.6 percent - among the strongest in the industry," said Alessandro DiNello, president and chief executive officer of Flagstar Bancorp.

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