Flagstar Bancorp Inc., the holding company for Flagstar Bank FSB, has reported fourth quarter 2012 net income applicable to common stockholders of $66.8 million, as compared to third quarter 2012 net income of $79.7 million, and a fourth quarter 2011 net loss of $(78.2) million. The full year 2012 net income applicable to common stockholders was $223.7 million, compared to a full year 2011 net loss of $(198.9) million. "We are pleased to report fourth quarter and full year financial results that demonstrate continued performance improvement and sustainable profitability," said Michael Tierney, president and CEO of Flagstar. "During the fourth quarter, we significantly reduced credit costs, further strengthened and de-risked the balance sheet, and improved the Tier 1 leverage capital ratio by over 100 basis points from the previous quarter. We remain dedicated to building a strong culture of compliance, and we believe that the initiatives we completed during the fourth quarter demonstrate our continued emphasis on quality, risk management and sound governance. Our sustained profitability is a testament to the hard work of Flagstar's talented employees, and I thank them for their continued dedication." Flagstar closed out 2012 by entering into a definitive Transaction Purchase and Sale Agreement with CIT Bank, the wholly-owned U.S. commercial bank subsidiary of CIT Group Inc., where CIT will acquire $1.3 billion in commercial loan commitments, $785 million of which is currently outstanding. Flagstar expects that the total purchase price for the portfolio will be approximately $779 million and that a majority of the assets will be sold during the first quarter of 2013. "With the recently announced sale of a substantial portion of Flagstar's Northeast-based commercial loan portfolio, we are refocusing our business strategy on our national mortgage presence and our Michigan-based community banking model," said Tierney. "We remain committed to being the largest bank headquartered in Michigan, through our 111 branches and our commercial banking team, and we look forward to continuing to meet and exceed the needs of our clients and communities. At the same time, we will continually strive to improve our risk management systems and processes, and deliver enhanced value to all of our stakeholders." Flagstar recorded a net loss on sales of mortgage servicing rights of $7.7 million during the fourth quarter 2012, due to bulk sales of mortgage servicing rights related to $13.8 billion in underlying mortgage loans. The company intends to continue to look for opportunistic ways to reduce its concentration of mortgage servicing rights. Fourth quarter 2012 net gain on loan sales decreased to $239 million, as compared to $334.4 million for the third quarter 2012, but increased as compared to $106.9 million for the fourth quarter 2011. The decrease from the prior quarter was reflective of both a decrease in mortgage rate lock commitments and a decrease in margin on rate lock commitments. Mortgage rate lock commitments decreased to $16.2 billion for the fourth quarter 2012, as compared to $18.1 billion for the third quarter 2012, driven by seasonal and competitive mortgage patterns, as well as actions to manage volume levels.