FLAGSTAR BANK, N.A. REPORTS THIRD QUARTER 2025 NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS OF $0.11 PER DILUTED SHARE AND ADJUSTED NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS OF $0.07 PER DILUTED SH
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C&I LOANS INCREASED
$448 MILLION OR 3% FROM PRIOR QUARTER AS NEW LOAN ORIGINATIONS ROSE 41% OR$1.7 BILLION AND NEW COMMITMENTS GREW 26% OR$2.4 BILLION
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NET INTEREST MARGIN IMPROVES FOR A THIRD CONSECUTIVE QUARTER, UP 10 BASIS POINTS QUARTER-OVER-QUARTER TO 1.91%
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OPERATING EXPENSES REMAIN WELL CONTROLLED, UP 1% ON A GAAP BASIS AND DOWN 1% ON AN ADJUSTED BASIS COMPARED TO PRIOR QUARTER AND DOWN APPROXIMATELY 28% AND 30% ON A GAAP AND ADJUSTED BASIS, RESPECTIVELY, OR
$800 MILLION ANNUALIZED COMPARED TO PRIOR YEAR
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CRE PAR PAYOFFS OF
$1.3 BILLION INCLUDING 42% IN SUBSTANDARD LOANS FURTHER REDUCING OVERALL CRE EXPOSURE
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PROVISION FOR CREDIT LOSSES DECREASED 41% COMPARED TO PRIOR QUARTER AS CREDIT QUALITY SHOWING SIGNS OF STABILIZATION AND NET CHARGE-OFFS DECREASE 38%
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CAPITAL AT OR ABOVE PEER LEVELS AND LIQUIDITY POSITION REMAINS STRONG
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CLOSED HOLDING COMPANY REORGANIZATION ON
OCTOBER 17 th WHICH WILL SIMPLIFY OUR CORPORATE STRUCTURE, REDUCE REGULATORY BURDEN, AND LOWER OPERATING EXPENSES
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Third Quarter 2025 Summary |
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Asset Quality |
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Loans and Deposits |
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Capital |
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Profitability |
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Effective
The net loss attributable to common stockholders for the third quarter 2025 was
For the nine months ended
CEO COMMENTARY
Commenting on the Company's third quarter 2025 performance, Chairman, President, and Chief Executive Officer,
"From an earnings perspective, our adjusted net loss in the third quarter narrowed substantially compared to the prior quarter, while our pre-provision net revenue continues to trend higher, which we expect will put the Bank on the path to profitability.
"In addition to the earnings improvement, we exhibited other positive trends during the quarter highlighted by strong growth in C&I lending, a higher net interest margin, and well controlled operating expenses, while our problem loans continued to decrease, and we further reduced our commercial real estate exposure.
"We made tremendous progress over the past year in building our C&I business and are extremely pleased with the results to date. During the third quarter, the momentum in C&I lending accelerated, driven by our two primary growth areas - Specialized Industries and Corporate and Regional Commercial Banking. These two areas delivered double-digit loan growth of 28% compared to the second quarter which led to positive overall growth in the C&I portfolio of
"Our net interest margin increased 10 basis points during the current quarter and has now improved for three consecutive quarters, as we proactively managed retail deposit costs lower and paid off higher cost brokered deposits.
"We also experienced strong par payoffs in the multi-family and commercial real estate portfolios, which contributed to a further decline in criticized and classified loans. On a year-to-date basis, total criticized and classified loans are down
"We also completed our holding company reorganization on
BALANCE SHEET SUMMARY AS OF
At
Total loans and leases HFI at
Third-quarter 2025 marked another strong quarter of production from the Bank's new C&I lending teams within our two primary growth areas - Specialized Industries Lending and Corporate and Regional Commercial Banking, which grew
During the third quarter, new credit commitments increased to
Total deposits at
During the third quarter, CDs decreased
NET INCOME (LOSS) | NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS - AS ADJUSTED
On an as adjusted basis, which excludes the impact of certain notable items during the quarter, including a $21 million fair value gain related to our equity investment in Figure Technology Solutions, Inc., $8 million in severance, a $14 million litigation settlement, and $17 million of merger-related expenses, the third quarter 2025 net loss attributable to common stockholders was $31 million or
For the first nine months of 2025, the Company also had several notable items, including a
For the first nine months of 2024, on an adjusted basis, the Company reported a net loss of
EARNINGS SUMMARY FOR THE THREE AND NINE MONTHS ENDED
Net Interest Income, Net Interest Margin, and Average Balance Sheet
Net Interest Income
Net interest income for the third quarter 2025 totaled $425 million, up $6 million, or 1%, compared to second quarter 2025 but down $85 million or 17% on a year-over-year basis. The linked-quarter improvement was driven by a lower cost of funds along with a lower level of average interest-bearing liabilities, partially offset by lower average interest-earning assets. The year-over-year decrease was due to the Bank strategically reducing average assets significantly leading to a lower yield on interest-earning assets, partially offset by our strategic paydown of higher cost borrowings and deposits leading to a lower cost of funds.
For the first nine months of 2025, net interest income decreased $437 million or 26% to $1.3 billion compared to
Net Interest Margin
During third quarter 2025, the Company's net interest margin ("NIM") increased compared to second quarter 2025. Third quarter 2025 NIM was 1.91%, up 10 basis points compared to second quarter 2025, and up 12 basis points compared to third quarter 2024. The linked-quarter improvement resulted from a 10 basis point decrease in the cost of average interest-bearing liabilities along with a 1 basis point improvement in the average interest-earning asset yield. On a linked-quarter basis, average interest-bearing deposits declined
Average loan balances declined
The year-over-year increase in the NIM was driven by several items including lower average loan balances, due to the Company's strategic actions to reduce its CRE concentration and sell certain non-core businesses. This was partially offset by the redeployment of cash into higher-yielding investment securities and a significant reduction in average wholesale borrowings, along with a lower cost of funds, as we proactively managed retail deposit costs lower and paid off higher cost brokered deposits and wholesale borrowings.
Average loans declined
For the first nine months of 2025, the NIM was 1.82%, down 19 basis points compared to the first nine months of 2024. The year-over-year decrease was largely the result of a smaller balance sheet driven by lower average loan balances offset partially by higher average securities balances and lower average borrowed funds. Average loan balances during the first nine months of 2025 declined
Provision for Credit Losses
For the third quarter 2025, the provision for credit losses decreased
Net charge-offs for the third quarter 2025 totaled
For the first nine months of 2025, the provision for credit losses totaled
For the first nine months of 2025, net charge-offs totaled
Pre-Provision Net Revenue
The table below details the Company's PPNR and PPNR, as adjusted, which are non-GAAP measures, for the periods noted:
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For the Three Months Ended |
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compared to: |
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(dollars in millions) |
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Net interest income |
$ 425 |
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$ 419 |
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$ 510 |
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1 % |
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-17 % |
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Non-interest income |
94 |
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77 |
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113 |
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22 % |
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-17 % |
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Total revenues |
$ 519 |
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$ 496 |
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$ 623 |
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5 % |
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-17 % |
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Total non-interest expense |
522 |
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513 |
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716 |
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2 % |
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-27 % |
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Pre - provision net loss (non-GAAP) |
$ (3) |
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$ (17) |
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$ (93) |
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-82 % |
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-97 % |
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Merger-related expenses |
17 |
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14 |
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18 |
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21 % |
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-6 % |
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Certain items related to sale on mortgage warehouse business |
— |
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— |
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32 |
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NM |
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NM |
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Severance |
8 |
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2 |
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— |
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300 % |
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NM |
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Lease cost acceleration related to closing branches |
— |
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7 |
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— |
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-100 % |
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NM |
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Trailing mortgage sale costs with |
— |
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3 |
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— |
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-100 % |
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NM |
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Litigation settlement |
14 |
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— |
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— |
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NM |
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NM |
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Net gain on investment security |
(21) |
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— |
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— |
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NM |
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NM |
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Pre - provision net revenue/(loss), as adjusted (non-GAAP) |
$ 15 |
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$ 9 |
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$ (43) |
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67 % |
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-135 % |
For the third quarter 2025, pre-provision net loss totaled $3 million compared to a pre-provision net loss of
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For the Nine Months Ended |
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(dollars in millions) |
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% Change |
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Net interest income |
$ 1,254 |
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$ 1,691 |
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-26 % |
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Non-interest income |
251 |
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236 |
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6 % |
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Total revenues |
$ 1,505 |
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$ 1,927 |
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-22 % |
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Total non-interest expense |
1,567 |
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2,120 |
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-26 % |
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Pre - provision net revenue / (loss) (non-GAAP) |
$ (62) |
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$ (193) |
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-68 % |
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Merger-related expenses |
39 |
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95 |
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-59 % |
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Certain items related to sale on mortgage warehouse business |
— |
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32 |
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NM |
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Severance |
10 |
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— |
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NM |
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Lease cost acceleration related to closing branches |
12 |
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— |
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NM |
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Trailing mortgage sale costs with |
8 |
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— |
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NM |
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Litigation settlement |
14 |
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— |
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NM |
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Net gain on investment security |
(21) |
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— |
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NM |
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Bargain purchase gain |
— |
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121 |
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NM |
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Pre - provision net revenue, as adjusted (non-GAAP) |
$ — |
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$ 55 |
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-100 % |
For the first nine months of 2025, pre-provision net loss was
Non-Interest Income
Non-interest income in third quarter 2025 was $94 million, up $17 million or 22% compared to $77 million in the second quarter 2025 but down $19 million or 17% compared to third quarter 2024. Third-quarter 2025 non-interest income includes a $21 million fair value gain on an equity investment related to the Bank's investment in Figure Technology Solutions, Inc. Excluding this item, third-quarter 2025 non-interest income was $73 million, down $4 million or 5% on a linked quarter basis and down $63 million or 46% on a year-over-year basis.
Both the linked-quarter and year-over-year declines were due to the sale of the Bank's mortgage servicing/subservicing business last year. The sale impacted various categories within non-interest income including fee income(through lower loan origination fees), the net return on mortgage servicing rights, and load administration income.
On a linked-quarter basis, net gain on loan sales and securitizations declined $1 million or 17% to $5 million due to lower origination volumes. This was offset by a $6 million or 16% increase in other income to $32 million. The net return on MSRs was zero in third quarter 2025 compared to $34 million in the year-ago third quarter, while net loan administration income in third quarter 2025 was zero compared to a $8 million loss in the year-ago third quarter, and fee income was down $19 million or 45% to $23 million, largely due to a decline in loan origination income. This was partially offset by a $2 million or 7% year-over-year increase in other income to $32 million.
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For the Three Months Ended |
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compared to: |
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(dollars in millions) |
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Fee income |
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5 % |
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-45 % |
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Bank-owned life insurance |
12 |
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10 |
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10 |
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20 % |
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20 % |
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Net gain on investment securities |
22 |
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— |
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— |
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NM |
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NM |
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Net return on mortgage servicing rights |
— |
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— |
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34 |
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NM |
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NM |
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Net gain on loan sales and securitizations |
5 |
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6 |
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5 |
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-17 % |
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— % |
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Net loan administration income (loss) |
— |
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1 |
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(8) |
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NM |
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NM |
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Other income |
32 |
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38 |
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30 |
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-16 % |
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7 % |
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Total non-interest income |
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22 % |
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-17 % |
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Impact of Adjustments: |
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Net gain on investment security |
(21) |
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— |
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— |
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NM |
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NM |
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Certain items related to sale on mortgage warehouse business |
— |
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— |
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23 |
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NM |
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NM |
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Adjusted noninterest income (non-GAAP) |
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-5 % |
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-46 % |
For the first nine months of 2025, non-interest income totaled
The year-over-year decline was driven by a
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For the Nine Months Ended |
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(dollars in millions) |
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% Change |
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Fee income |
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-43 % |
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Bank-owned life insurance |
32 |
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32 |
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— % |
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Net gain on investment securities |
22 |
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— |
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NM |
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Net return on mortgage servicing rights |
— |
|
74 |
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NM |
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Net gain on loan sales and securitizations |
24 |
|
43 |
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-44 % |
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Net loan administration income |
5 |
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3 |
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67 % |
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Bargain purchase gain |
— |
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(121) |
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NM |
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Other income |
101 |
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88 |
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15 % |
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Total non-interest income |
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6 % |
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Impact of Notable Item: |
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Net gain on investment security |
(21) |
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— |
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NM |
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Certain items related to sale on mortgage warehouse business |
— |
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23 |
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NM |
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Bargain purchase gain |
— |
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121 |
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NM |
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Adjusted noninterest income (non-GAAP) |
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-39 % |
Non-Interest Expense
Third quarter 2025 non-interest expense totaled $522 million, up $9 million or 2% on a linked-quarter basis and down $194 million or 27% on a year-over-year basis. Third quarter 2025 included
The linked-quarter increase was mainly driven by a $5 million or 2% increase in compensation and benefits expense, and a $20 million or 15% increase in general and administrative expenses, partially offset by a $12 million or 24% decrease in FDIC insurance expense. The year-over-year decline was the result of a $74 million or 23% decrease in compensation and benefits expense, a $35 million or 19% decline in general and administrative expenses, and a $61 million or 62% decline in FDIC insurance expense.
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For the Three Months Ended |
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compared to: |
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(dollars in millions) |
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Operating expenses: |
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Compensation and benefits |
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2 % |
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-23 % |
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FDIC insurance |
37 |
|
49 |
|
98 |
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-24 % |
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-62 % |
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Occupancy and equipment |
47 |
|
53 |
|
59 |
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-11 % |
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-20 % |
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General and administrative |
153 |
|
133 |
|
188 |
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15 % |
|
-19 % |
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Total operating expenses |
479 |
|
472 |
|
661 |
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1 % |
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-28 % |
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Intangible asset amortization |
26 |
|
27 |
|
37 |
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-4 % |
|
-30 % |
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Merger-related expenses |
17 |
|
14 |
|
18 |
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21 % |
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-6 % |
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Total non-interest expense |
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2 % |
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-27 % |
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Impact of Adjustments: |
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Total operating expenses |
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1 % |
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-28 % |
|
Certain items related to sale on mortgage warehouse business |
— |
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— |
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(9) |
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NM |
|
NM |
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Severance |
(8) |
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(2) |
|
— |
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300 % |
|
NM |
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Lease cost acceleration related to closing branches |
— |
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(7) |
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— |
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NM |
|
NM |
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Trailing mortgage sale costs with |
— |
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(3) |
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— |
|
NM |
|
NM |
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Litigation settlement |
(14) |
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— |
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— |
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NM |
|
NM |
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Adjusted operating expenses (non-GAAP) |
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-1 % |
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-30 % |
For the first nine months of 2025, total non-interest expense was
As adjusted for these items and excluding intangible asset amortization and merger expenses, first nine months of 2025 operating expenses were
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For the Nine Months Ended |
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(dollars in millions) |
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% Change |
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Operating expenses: |
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Compensation and benefits |
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-25 % |
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FDIC insurance |
136 |
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239 |
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-43 % |
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Occupancy and equipment |
155 |
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163 |
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-5 % |
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General and administrative |
433 |
|
557 |
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-22 % |
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Total operating expenses |
1,447 |
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1,920 |
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-25 % |
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Intangible asset amortization |
81 |
|
105 |
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-23 % |
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Merger-related expenses |
39 |
|
95 |
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-59 % |
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Total non-interest expense |
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-26 % |
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Impact of Notable Items: |
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Total operating expenses |
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-25 % |
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Certain items related to sale on mortgage warehouse business |
— |
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(9) |
|
NM |
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Severance |
(10) |
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— |
|
NM |
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Lease cost acceleration related to closing branches |
(12) |
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— |
|
NM |
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Trailing mortgage sale costs with |
(8) |
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— |
|
NM |
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Litigation settlement |
(14) |
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— |
|
NM |
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Adjusted operating expenses (non-GAAP) |
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|
-27 % |
Income Taxes
For the third quarter 2025, the Company reported a benefit for income taxes of $5 million compared to a benefit for income taxes of $11 million for the second quarter 2025 and a benefit of
For the first nine months of 2025, the Company reported an income tax benefit of $37 million compared to an income tax benefit of $210 million for the first nine months of 2024. The effective tax rate for the first nine months of 2025 was 15.2% compared to 18.4% for the first nine months of 2024.
ASSET QUALITY
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As of |
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compared to: |
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(dollars in millions) |
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Total non-accrual loans held for investment |
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2 % |
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29 % |
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Non-accrual loans held for sale |
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675 % |
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-84 % |
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NPLs to total loans held for investment |
5.17 % |
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4.96 % |
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3.54 % |
|
21 |
|
164 |
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NPAs to total assets |
3.56 % |
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3.46 % |
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2.21 % |
|
10 |
|
135 |
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Allowance for credit losses on loans and leases |
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-3 % |
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-15 % |
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Total ACL, including on unfunded commitments |
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-3 % |
|
-15 % |
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ACL % of total loans held for investment |
1.71 % |
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1.72 % |
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1.78 % |
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-2 bps |
|
-7 bps |
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Total ACL % of total loans held for investment |
1.80 % |
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1.81 % |
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1.87 % |
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-1 bps |
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-7 bps |
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ACL on loans and leases % of NPLs |
33 % |
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35 % |
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50 % |
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-2 % |
|
-17 % |
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Total ACL % of NPLs |
35 % |
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37 % |
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53 % |
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-2 % |
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-18 % |
Non-Accrual Loans
Non-accrual loans were relatively stable on a linked-quarter basis. At
The increase compared to year-end 2024 was driven by higher multi-family non-accruals, partially offset by lower C&I non-accrual loans. The majority of the increase in multi-family non-accrual loans is related to the one previously disclosed borrower relationship that went on non-accrual status in first quarter 2025.
Total non-accrual loans HFI to total loans HFI were 5.17% at
Total Allowance for Credit Losses
The total allowance for credit losses including unfunded commitments was
The total allowance for credit losses to total loans HFI at
The allowance for credit losses in the third quarter 2025 declined slightly as a result of our ongoing focus on credit and declines in total loan HFI, and stabilization in property values and borrower financials.
CAPITAL POSITION
The Company's regulatory capital ratios continue to exceed regulatory minimums to be classified as "Well Capitalized," the highest regulatory classification. The table below depicts the Company's and the Bank's regulatory capital ratios at those respective periods.
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REGULATORY CAPITAL RATIOS: (1) |
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Flagstar Financial, Inc. |
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Common equity tier 1 ratio |
12.45 % |
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12.33 % |
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11.83 % |
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Tier 1 risk-based capital ratio |
13.25 % |
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13.12 % |
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12.57 % |
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Total risk-based capital ratio |
15.92 % |
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15.77 % |
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15.14 % |
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Leverage capital ratio |
9.03 % |
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8.61 % |
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7.68 % |
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Flagstar Bank, N.A. |
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Common equity tier 1 ratio |
14.06 % |
|
13.89 % |
|
13.21 % |
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Tier 1 risk-based capital ratio |
14.06 % |
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13.89 % |
|
13.21 % |
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Total risk-based capital ratio |
15.31 % |
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15.15 % |
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14.47 % |
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Leverage capital ratio |
9.58 % |
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9.11 % |
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8.05 % |
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(1) |
The minimum regulatory requirements for classification as a well-capitalized institution are a common equity tier 1 capital ratio of 6.5%; a tier one risk-based capital ratio of 8.00%; a total risk-based capital ratio of 10.00%; and a leverage capital ratio of 5.00%. |
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Flagstar Bank, N.A.
Flagstar Bank, N.A. is one of the largest regional banks in the country and is headquartered in
Post-Earnings Release Conference Call
The Bank will host a conference call on
A replay will be available approximately three hours following completion of the call through
Investor Contact: Salvatore J. DiMartino (516) 683-4286
Media Contact: Steven Bodakowski (248) 312-5872
Cautionary Statements Regarding Forward-Looking Language
This earnings release and the associated conference call may include forward‐looking statements by us and our authorized officers pertaining to such matters as our goals, beliefs, intentions, and expectations regarding, among other things: (a) revenues, earnings, loan production, asset quality, liquidity position, capital levels, risk analysis, divestitures, acquisitions, and other material transactions, among other matters; (b) the future costs and benefits of the actions we may take; (c) our assessments of credit risk and probable losses on loans and associated allowances and reserves; (d) our assessments of interest rate and other market risks; (e) our ability to achieve profitability goals within projected timeframes and to execute on our strategic plan, including the sufficiency of our internal resources, procedures and systems; (f) our ability to attract, incentivize, and retain key personnel and the roles of key personnel; (g) our ability to achieve our financial and other strategic goals, including those related to the Reorganization, our merger with Flagstar Bancorp, Inc., which was completed in
Forward‐looking statements are typically identified by such words as "believe," "expect," "anticipate," "intend," "outlook," "estimate," "forecast," "project," "should," "confident," and other similar words and expressions, and are subject to numerous assumptions, risks, and uncertainties, which change over time. Additionally, forward‐looking statements speak only as of the date they are made; we do not assume any duty, and do not undertake, to update our forward‐looking statements. Furthermore, because forward‐looking statements are subject to assumptions and uncertainties, actual results or future events could differ, possibly materially, from those anticipated in our statements, and our future performance could differ materially from our historical results.
Our forward‐looking statements are subject to, among others, the following principal risks and uncertainties: general economic conditions and trends, either nationally or locally; conditions in the securities, credit and financial markets; changes in interest rates; changes in deposit flows, and in the demand for deposit, loan, and investment products and other financial services; changes in real estate values; changes in the quality or composition of our loan or investment portfolios, including associated allowances and reserves; changes in future allowance for credit losses, including changes required under relevant accounting and regulatory requirements; the ability to pay future dividends; changes in our capital management and balance sheet strategies and our ability to successfully implement such strategies; our ability to achieve the anticipated benefits of the Reorganization; recent turnover in our Board of Directors and our executive management team; changes in our strategic plan, including changes in our internal resources, procedures and systems, and our ability to successfully implement such plan; our ability to successfully remediate our previously disclosed material weaknesses in internal control over financial reporting; changes in competitive pressures among financial institutions or from non‐financial institutions; changes in legislation, regulations, and policies; the impacts of tariffs, sanctions and other trade policies of
More information regarding some of these factors is provided in the Risk Factors section of our Annual Report on Form 10‐K for the year ended
- Financial Statements and Highlights Follow -
|
FLAGSTAR FINANCIAL, INC. CONSOLIDATED STATEMENTS OF CONDITION (unaudited) |
|||||||||
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|||||||||
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||
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|
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|
|
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compared to |
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(dollars in millions) |
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|
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|
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|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
$ 8,484 |
|
$ 8,094 |
|
$ 15,430 |
|
5 % |
|
-45 % |
|
Securities: |
|
|
|
|
|
|
|
|
|
|
Available-for-sale |
15,052 |
|
14,823 |
|
10,402 |
|
2 % |
|
45 % |
|
Equity investments with readily determinable fair values, at fair value |
55 |
|
14 |
|
14 |
|
293 % |
|
293 % |
|
Total securities net of allowance for credit losses |
15,107 |
|
14,837 |
|
10,416 |
|
2 % |
|
45 % |
|
Loans held for sale |
535 |
|
319 |
|
899 |
|
68 % |
|
-40 % |
|
Loans and leases held for investment: |
|
|
|
|
|
|
|
|
|
|
Multi-family |
30,466 |
|
31,932 |
|
34,093 |
|
-5 % |
|
-11 % |
|
Commercial real estate(1) |
10,163 |
|
10,636 |
|
11,836 |
|
-4 % |
|
-14 % |
|
One-to-four family first mortgage |
5,513 |
|
5,445 |
|
5,201 |
|
1 % |
|
6 % |
|
Commercial and industrial |
14,874 |
|
14,426 |
|
15,376 |
|
3 % |
|
-3 % |
|
Other loans |
1,645 |
|
1,682 |
|
1,766 |
|
-2 % |
|
-7 % |
|
Total loans and leases held for investment |
62,661 |
|
64,121 |
|
68,272 |
|
-2 % |
|
-8 % |
|
Less: Allowance for credit losses on loans and leases |
(1,071) |
|
(1,106) |
|
(1,201) |
|
-3 % |
|
-11 % |
|
Total loans and leases held for investment, net |
61,590 |
|
63,015 |
|
67,071 |
|
-2 % |
|
-8 % |
|
Federal Home Loan Bank stock and Federal Reserve Bank stock, at cost |
1,018 |
|
1,017 |
|
1,146 |
|
— % |
|
-11 % |
|
Premises and equipment, net |
464 |
|
474 |
|
562 |
|
-2 % |
|
-17 % |
|
Core deposit and other intangibles |
407 |
|
433 |
|
488 |
|
-6 % |
|
-17 % |
|
Bank-owned life insurance |
1,633 |
|
1,625 |
|
1,605 |
|
— % |
|
2 % |
|
Other assets |
2,430 |
|
2,423 |
|
2,543 |
|
— % |
|
-4 % |
|
Total assets |
$ 91,668 |
|
$ 92,237 |
|
$ 100,160 |
|
-1 % |
|
-8 % |
|
Liabilities and Stockholders' Equity |
|
|
|
|
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
|
|
|
|
Interest-bearing checking and money market accounts |
$ 20,045 |
|
$ 19,067 |
|
$ 20,780 |
|
5 % |
|
-4 % |
|
Savings accounts |
14,782 |
|
14,460 |
|
14,282 |
|
2 % |
|
4 % |
|
Certificates of deposit |
22,369 |
|
24,212 |
|
27,324 |
|
-8 % |
|
-18 % |
|
Non-interest-bearing accounts |
11,956 |
|
12,006 |
|
13,484 |
|
— % |
|
-11 % |
|
Total deposits |
69,152 |
|
69,745 |
|
75,870 |
|
-1 % |
|
-9 % |
|
Borrowed funds: |
|
|
|
|
|
|
|
|
|
|
Wholesale borrowings |
12,150 |
|
12,150 |
|
13,400 |
|
— % |
|
-9 % |
|
Junior subordinated debentures |
584 |
|
584 |
|
582 |
|
— % |
|
— % |
|
Subordinated notes |
448 |
|
446 |
|
444 |
|
— % |
|
1 % |
|
Total borrowed funds |
13,182 |
|
13,180 |
|
14,426 |
|
— % |
|
-9 % |
|
Other liabilities |
1,225 |
|
1,216 |
|
1,696 |
|
1 % |
|
-28 % |
|
Total liabilities |
83,559 |
|
84,141 |
|
91,992 |
|
-1 % |
|
-9 % |
|
Mezzanine equity: |
|
|
|
|
|
|
|
|
|
|
Preferred stock - Series B |
1 |
|
1 |
|
1 |
|
— % |
|
— % |
|
Stockholders' equity: |
|
|
|
|
|
|
|
|
|
|
Preferred stock - Series A and D |
503 |
|
503 |
|
503 |
|
— % |
|
— % |
|
Common stock |
4 |
|
4 |
|
4 |
|
— % |
|
— % |
|
Paid-in capital in excess of par |
9,300 |
|
9,291 |
|
9,282 |
|
— % |
|
— % |
|
Retained earnings |
(1,006) |
|
(957) |
|
(763) |
|
5 % |
|
32 % |
|
Treasury stock, at cost |
(198) |
|
(204) |
|
(219) |
|
-3 % |
|
-10 % |
|
Accumulated other comprehensive loss, net of tax: |
(495) |
|
(542) |
|
(640) |
|
-9 % |
|
-23 % |
|
Total stockholders' equity |
8,108 |
|
8,095 |
|
8,167 |
|
— % |
|
-1 % |
|
Total liabilities, Mezzanine and Stockholders' Equity |
$ 91,668 |
|
$ 92,237 |
|
$ 100,160 |
|
-1 % |
|
-8 % |
|
|
|
|
(1) |
Includes Acquisition, Development, and Construction loans. |
|
FLAGSTAR FINANCIAL, INC. CONSOLIDATED STATEMENTS OF (LOSS) INCOME (unaudited) |
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|
September 30, 2025 |
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For the Three Months Ended |
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compared to |
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|
September 30, |
|
June 30, |
|
September 30, |
|
June 30, 2025 |
|
September 30, |
|
(dollars in millions, except per share data) |
|
|
|
|
|
|
|
|
|
|
Interest Income: |
|
|
|
|
|
|
|
|
|
|
Loans and leases |
$ 819 |
|
$ 840 |
|
$ 1,061 |
|
-3 % |
|
-23 % |
|
Securities and money market investments |
282 |
|
303 |
|
473 |
|
-7 % |
|
-40 % |
|
Total interest income |
1,101 |
|
1,143 |
|
1,534 |
|
-4 % |
|
-28 % |
|
|
|
|
|
|
|
|
|
|
|
|
Interest Expense: |
|
|
|
|
|
|
|
|
|
|
Interest-bearing checking and money market accounts |
151 |
|
162 |
|
218 |
|
-7 % |
|
-31 % |
|
Savings accounts |
113 |
|
110 |
|
110 |
|
3 % |
|
3 % |
|
Certificates of deposit |
255 |
|
287 |
|
372 |
|
-11 % |
|
-31 % |
|
Borrowed funds |
157 |
|
165 |
|
324 |
|
-5 % |
|
-52 % |
|
Total interest expense |
676 |
|
724 |
|
1,024 |
|
-7 % |
|
-34 % |
|
Net interest income |
425 |
|
419 |
|
510 |
|
1 % |
|
-17 % |
|
Provision for credit losses |
38 |
|
64 |
|
242 |
|
-41 % |
|
-84 % |
|
Net interest income after provision for credit losses |
387 |
|
355 |
|
268 |
|
9 % |
|
44 % |
|
|
|
|
|
|
|
|
|
|
|
|
Non-Interest Income: |
|
|
|
|
|
|
|
|
|
|
Fee income |
23 |
|
22 |
|
42 |
|
5 % |
|
-45 % |
|
Bank-owned life insurance |
12 |
|
10 |
|
10 |
|
20 % |
|
20 % |
|
Net gain on investment securities |
22 |
|
— |
|
— |
|
NM |
|
NM |
|
Net return on mortgage servicing rights |
— |
|
— |
|
34 |
|
NM |
|
NM |
|
Net gain on loan sales and securitizations |
5 |
|
6 |
|
5 |
|
-17 % |
|
— % |
|
Net loan administration (loss) income |
— |
|
1 |
|
(8) |
|
NM |
|
NM |
|
Other income |
32 |
|
38 |
|
30 |
|
-16 % |
|
7 % |
|
Total non-interest income |
94 |
|
77 |
|
113 |
|
22 % |
|
-17 % |
|
|
|
|
|
|
|
|
|
|
|
|
Non-Interest Expense: |
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
Compensation and benefits |
242 |
|
237 |
|
316 |
|
2 % |
|
-23 % |
|
FDIC insurance |
37 |
|
49 |
|
98 |
|
-24 % |
|
-62 % |
|
Occupancy and equipment |
47 |
|
53 |
|
59 |
|
-11 % |
|
-20 % |
|
General and administrative |
153 |
|
133 |
|
188 |
|
15 % |
|
-19 % |
|
Total operating expenses |
479 |
|
472 |
|
661 |
|
1 % |
|
-28 % |
|
Intangible asset amortization |
26 |
|
27 |
|
37 |
|
-4 % |
|
-30 % |
|
Merger-related expenses |
17 |
|
14 |
|
18 |
|
21 % |
|
-6 % |
|
Total non-interest expense |
522 |
|
513 |
|
716 |
|
2 % |
|
-27 % |
|
(Loss) income before income taxes |
(41) |
|
(81) |
|
(335) |
|
-49 % |
|
-88 % |
|
Income tax (benefit) expense |
(5) |
|
(11) |
|
(55) |
|
-55 % |
|
-91 % |
|
Net (loss) income |
(36) |
|
(70) |
|
(280) |
|
-49 % |
|
-87 % |
|
Preferred stock dividends |
9 |
|
8 |
|
9 |
|
13 % |
|
— % |
|
Net (loss) income attributable to common stockholders |
$ (45) |
|
$ (78) |
|
$ (289) |
|
-42 % |
|
-84 % |
|
|
|
|
|
|
|
|
|
|
|
|
Basic (loss) earnings per common share |
$ (0.11) |
|
$ (0.19) |
|
$ (0.79) |
|
-44 % |
|
-86 % |
|
Diluted (loss) earnings per common share |
$ (0.11) |
|
$ (0.19) |
|
$ (0.79) |
|
-44 % |
|
-86 % |
|
Dividends per common share |
$ 0.01 |
|
$ 0.01 |
|
$ 0.01 |
|
— % |
|
— % |
|
FLAGSTAR FINANCIAL, INC. CONSOLIDATED STATEMENTS OF (LOSS) INCOME (unaudited) |
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|
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|
For the Nine Months Ended |
|
Change |
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|
|
September 30, |
|
September 30, |
|
Amount |
|
Percent |
|
(dollars in millions, except per share data) |
|
|
|
|
|
|
|
|
Interest Income: |
|
|
|
|
|
|
|
|
Loans and leases |
$ 2,519 |
|
$ 3,421 |
|
(902) |
|
-26 % |
|
Securities and money market investments |
889 |
|
1,174 |
|
(285) |
|
-24 % |
|
Total interest income |
3,408 |
|
4,595 |
|
(1,187) |
|
-26 % |
|
|
|
|
|
|
|
|
|
|
Interest Expense: |
|
|
|
|
|
|
|
|
Interest-bearing checking and money market accounts |
480 |
|
664 |
|
(184) |
|
-28 % |
|
Savings accounts |
334 |
|
221 |
|
113 |
|
51 % |
|
Certificates of deposit |
850 |
|
1,000 |
|
(150) |
|
-15 % |
|
Borrowed funds |
490 |
|
1,019 |
|
(529) |
|
-52 % |
|
Total interest expense |
2,154 |
|
2,904 |
|
(750) |
|
-26 % |
|
Net interest income |
1,254 |
|
1,691 |
|
(437) |
|
-26 % |
|
Provision for credit losses |
181 |
|
947 |
|
(766) |
|
-81 % |
|
Net interest income after provision for credit losses |
1,073 |
|
744 |
|
329 |
|
44 % |
|
|
|
|
|
|
|
|
|
|
Non-Interest Income: |
|
|
|
|
|
|
|
|
Fee income |
67 |
|
117 |
|
(50) |
|
-43 % |
|
Bank-owned life insurance |
32 |
|
32 |
|
— |
|
— % |
|
Net gain on investment securities |
22 |
|
— |
|
22 |
|
NM |
|
Net return on mortgage servicing rights |
— |
|
74 |
|
(74) |
|
NM |
|
Net gain on loan sales and securitizations |
24 |
|
43 |
|
(19) |
|
-44 % |
|
Net loan administration income |
5 |
|
3 |
|
2 |
|
67 % |
|
Bargain purchase gain |
— |
|
(121) |
|
121 |
|
NM |
|
Other income |
101 |
|
88 |
|
13 |
|
15 % |
|
Total non-interest income |
251 |
|
236 |
|
15 |
|
6 % |
|
|
|
|
|
|
|
|
|
|
Non-Interest Expense: |
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
Compensation and benefits |
723 |
|
961 |
|
(238) |
|
-25 % |
|
FDIC insurance |
136 |
|
239 |
|
(103) |
|
-43 % |
|
Occupancy and equipment |
155 |
|
163 |
|
(8) |
|
-5 % |
|
General and administrative |
433 |
|
557 |
|
(124) |
|
-22 % |
|
Total operating expenses |
1,447 |
|
1,920 |
|
(473) |
|
-25 % |
|
Intangible asset amortization |
81 |
|
105 |
|
(24) |
|
-23 % |
|
Merger-related expenses |
39 |
|
95 |
|
(56) |
|
-59 % |
|
Total non-interest expense |
1,567 |
|
2,120 |
|
(553) |
|
-26 % |
|
(Loss) income before income taxes |
(243) |
|
(1,140) |
|
897 |
|
-79 % |
|
Income tax (benefit) expense |
(37) |
|
(210) |
|
173 |
|
-82 % |
|
Net (loss) income |
(206) |
|
(930) |
|
724 |
|
-78 % |
|
Preferred stock dividends |
25 |
|
27 |
|
(2) |
|
-7 % |
|
Net (loss) income attributable to common stockholders |
$ (231) |
|
$ (957) |
|
726 |
|
-76 % |
|
|
|
|
|
|
|
|
|
|
Basic (loss) earnings per common share |
$ (0.56) |
|
$ (3.16) |
|
2.60 |
|
-82 % |
|
Diluted (loss) earnings per common share |
$ (0.56) |
|
$ (3.16) |
|
2.60 |
|
-82 % |
|
Dividends per common share |
$ 0.03 |
|
$ 0.19 |
|
(0.16) |
|
-84 % |
FLAGSTAR FINANCIAL, INC.
RECONCILIATIONS OF CERTAIN GAAP AND NON-GAAP FINANCIAL MEASURES
In addition to GAAP measures, management considers various non-GAAP measures when evaluating the performance of the business.
We believe that non-interest income, operating expenses, pre-provision net (loss) revenue (which includes both non-interest income and non-interest expense), net income (loss), net income (loss) attributed to common stockholders, diluted earnings (loss) per share and our efficiency ratio as adjusted for items that we believe are not indicative of core operating results, such as but not limited to merger and restructuring expenses and litigation settlement expenses and fair value gain, as well as adjustments for severance and impairment charges and other exit costs resulting from strategic shifts in our operations provide valuable insights to investors by highlighting our underlying performance. These non-GAAP metrics also facilitate meaningful comparisons to other financial institutions, as they are widely used and frequently referenced by investors and analysts.
We believe average tangible common stockholders' equity, tangible common stockholders' equity, average tangible assets and tangible book value per share are important measures for evaluating the performance of the business without the impact of our intangible assets. These non-GAAP metrics also provide investors with important indications regarding our ability to grow the business, our ability to pay dividends as well as engage in capital strategies in addition to facilitating meaningful comparisons to other financial institutions, as they are widely used and frequently referenced by investors and analysts.
These non-GAAP measures should not be considered in isolation or as a substitute for comparable measures calculated in accordance with GAAP. Moreover, the way we calculate these non-GAAP measures may differ from that of other companies reporting non-GAAP measures with similar names. The following tables reconcile the above the non-GAAP financial measures we use to their comparable GAAP financial measures, to the extent not reconciled earlier in this earnings release, for the stated periods:
|
|
At or for the |
|
At or for the |
||||||
|
|
Three Months Ended September 30, |
|
Nine Months Ended, |
||||||
|
(dollars in millions) |
September |
|
June 30, |
|
September |
|
September |
|
September |
|
Total Stockholders' Equity |
$ 8,108 |
|
$ 8,095 |
|
$ 8,571 |
|
$ 8,108 |
|
$ 8,571 |
|
Less: Other intangible assets |
(407) |
|
(433) |
|
(519) |
|
(407) |
|
(519) |
|
Less: Preferred stock - Series A and D |
(503) |
|
(503) |
|
(503) |
|
(503) |
|
(503) |
|
Tangible common stockholders' equity |
$ 7,198 |
|
$ 7,159 |
|
$ 7,549 |
|
$ 7,198 |
|
$ 7,549 |
|
Total Assets |
$ 91,668 |
|
$ 92,237 |
|
$ 114,367 |
|
$ 91,668 |
|
$ 114,367 |
|
Less: Other intangible assets |
(407) |
|
(433) |
|
(519) |
|
(407) |
|
(519) |
|
Tangible Assets |
$ 91,261 |
|
$ 91,804 |
|
$ 113,848 |
|
$ 91,261 |
|
$ 113,848 |
|
Average common stockholders' equity |
$ 7,628 |
|
$ 7,486 |
|
$ 8,122 |
|
$ 7,604 |
|
$ 8,003 |
|
Less: Other intangible assets |
(424) |
|
(450) |
|
(544) |
|
$ (451) |
|
$ (578) |
|
Average tangible common stockholders' equity |
$ 7,204 |
|
$ 7,036 |
|
$ 7,578 |
|
$ 7,153 |
|
$ 7,425 |
|
Average Assets |
$ 91,983 |
|
$ 96,710 |
|
$ 118,396 |
|
$ 95,907 |
|
$ 117,495 |
|
Less: Other intangible assets |
(424) |
|
(450) |
|
(544) |
|
(451) |
|
(578) |
|
Average tangible assets |
$ 91,559 |
|
$ 96,260 |
|
$ 117,852 |
|
$ 95,456 |
|
$ 116,917 |
|
GAAP MEASURES: |
|
|
|
|
|
|
|
|
|
|
(Loss) return on average assets (1) |
(0.16) % |
|
(0.29) % |
|
(0.94) % |
|
(0.29) % |
|
(1.06) % |
|
(Loss) return on average common stockholders' equity (2) |
(2.31) % |
|
(4.20) % |
|
(14.19) % |
|
(4.05) % |
|
(15.94) % |
|
Book value per common share |
$ 18.30 |
|
$ 18.28 |
|
$ 19.43 |
|
$ 18.30 |
|
$ 19.43 |
|
Common stockholders' equity to total assets |
8.30 % |
|
8.23 % |
|
7.05 % |
|
8.30 % |
|
7.05 % |
|
NON-GAAP MEASURES: |
|
|
|
|
|
|
|
|
|
|
(Loss) return on average tangible assets (1) |
(0.10) % |
|
(0.21) % |
|
(0.82) % |
|
(0.22) % |
|
(0.82) % |
|
(Loss) return on average tangible common stockholders' equity (2) |
(1.70) % |
|
(3.41) % |
|
(13.26) % |
|
(3.45) % |
|
(13.33) % |
|
Tangible book value per common share |
$ 17.32 |
|
$ 17.24 |
|
$ 18.18 |
|
$ 17.32 |
|
$ 18.18 |
|
Tangible common stockholders' equity to tangible assets |
7.89 % |
|
7.80 % |
|
6.63 % |
|
7.89 % |
|
6.63 % |
|
|
|
|
(1) |
To calculate return on average assets for a period, we divide net income, or non-GAAP net income, generated during that period by average assets recorded during that period. To calculate return on average tangible assets for a period, we divide net income by average tangible assets recorded during that period. |
|
(2) |
To calculate return on average common stockholders' equity for a period, we divide net income attributable to common stockholders, or non-GAAP net income attributable to common stockholders, generated during that period by average common stockholders' equity recorded during that period. To calculate return on average tangible common stockholders' equity for a period, we divide net income attributable to common stockholders generated during that period by average tangible common stockholders' equity recorded during that period. |
|
|
For the Three Months Ended |
|
For the Nine Months Ended |
||||||
|
(dollars in millions, except per share data) |
September |
|
June 30, 2025 |
|
September |
|
September |
|
September |
|
Net (loss) income - GAAP |
$ (36) |
|
$ (70) |
|
$ (280) |
|
$ (206) |
|
$ (930) |
|
Merger-related and restructuring expenses |
17 |
|
14 |
|
18 |
|
39 |
|
95 |
|
Certain items related to sale on mortgage warehouse business |
— |
|
— |
|
32 |
|
— |
|
32 |
|
Severance |
8 |
|
2 |
|
— |
|
10 |
|
— |
|
Lease cost acceleration related to closing branches |
— |
|
7 |
|
— |
|
12 |
|
— |
|
Trailing mortgage sale costs with |
— |
|
3 |
|
— |
|
8 |
|
— |
|
Litigation settlement |
14 |
|
— |
|
— |
|
14 |
|
— |
|
Net gain on investment security |
(21) |
|
— |
|
— |
|
(21) |
|
— |
|
Bargain purchase gain |
— |
|
— |
|
— |
|
— |
|
121 |
|
Total adjustments |
$ 18 |
|
$ 25 |
|
$ 50 |
|
$ 62 |
|
$ 248 |
|
Tax effect on adjustments |
(4) |
|
(7) |
|
(13) |
|
(16) |
|
(33) |
|
Net (loss) income, as adjusted - non-GAAP |
$ (22) |
|
$ (52) |
|
$ (243) |
|
$ (160) |
$ — |
$ (715) |
|
Preferred stock dividends |
9 |
|
8 |
|
9 |
|
25 |
|
27 |
|
Net (loss) income attributable to common stockholders, as adjusted - non- |
$ (31) |
$ — |
$ (60) |
$ — |
$ (252) |
$ — |
$ (185) |
$ — |
$ (742) |
|
|
|
|
(1) |
Certain merger-related items are not taxable or deductible. |
|
(2) |
Amounts may not foot as a result of rounding. |
|
|
For the Three Months Ended |
|
For the Nine Months Ended |
|||||||||||
|
|
September 30, |
|
June 30, 2025 |
|
September 30, 2024 |
|
September 30, 2025 |
|
September 30, 2024 |
|||||
|
|
Amount |
Per |
|
Amount |
Per |
|
Amount |
Per Share |
|
Amount |
Per Share |
|
Amount |
Per Share |
|
Diluted (Loss) Earnings Per Share - GAAP |
$(45) |
$(0.11) |
|
$(78) |
$(0.19) |
|
$(289) |
$(0.79) |
|
$(231) |
$(0.56) |
|
$(957) |
$(3.16) |
|
Adjustments |
18 |
0.04 |
|
25 |
0.06 |
|
50 |
0.14 |
|
62 |
0.15 |
|
248 |
0.82 |
|
Tax effect on adjustments |
(4) |
(0.01) |
|
(7) |
(0.02) |
|
(13) |
(0.04) |
|
(16) |
(0.04) |
|
(33) |
(0.09) |
|
Diluted (Loss) Earnings Per Share, as |
$(31) |
(0.07) |
|
$(60) |
(0.14) |
|
$(252) |
(0.69) |
|
$(185) |
(0.45) |
|
$(742) |
(2.45) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total shares for diluted earnings per |
415,563,380 |
|
415,125,228 |
|
366,637,882 |
|
415,173,630 |
|
302,382,890 |
|||||
|
|
|
|
(1) |
Amounts may not foot as a result of rounding. |
|
|
For the Three Months Ended |
|
For the Nine Months Ended |
||||||
|
|
September 30, |
|
June 30, 2025 |
|
September 30, |
|
September 30, |
|
September 30, |
|
(dollars in millions) |
|
|
|
|
|
||||
|
Net interest income |
$ 425 |
|
$ 419 |
|
$ 510 |
|
$ 1,254 |
|
$ 1,691 |
|
Non-interest income |
94 |
|
77 |
|
113 |
|
251 |
|
236 |
|
Total revenues |
$ 519 |
|
$ 496 |
|
$ 623 |
|
$ 1,505 |
|
$ 1,927 |
|
Total non-interest expense |
522 |
|
513 |
|
716 |
|
1,567 |
|
2,120 |
|
Pre - provision net revenue (non-GAAP) |
$ (3) |
|
$ (17) |
|
$ (93) |
|
$ (62) |
|
$ (193) |
|
Merger-related and restructuring expenses |
17 |
|
14 |
|
18 |
|
39 |
|
95 |
|
Certain items related to sale on mortgage warehouse business |
— |
|
— |
|
32 |
|
— |
|
32 |
|
Severance |
8 |
|
2 |
|
— |
|
10 |
|
— |
|
Lease cost acceleration related to closing branches |
— |
|
7 |
|
— |
|
12 |
|
— |
|
Trailing mortgage sale costs with |
— |
|
3 |
|
— |
|
8 |
|
— |
|
Litigation settlement |
14 |
|
— |
|
— |
|
14 |
|
— |
|
Net gain on investment security |
(21) |
|
— |
|
— |
|
(21) |
|
— |
|
Bargain purchase gain |
— |
|
— |
|
— |
|
— |
|
121 |
|
Pre - provision net revenue excluding merger-related expenses, as |
$ 15 |
|
$ 9 |
|
$ (43) |
|
$ — |
|
$ 55 |
|
Provision for credit losses |
(38) |
|
(64) |
|
(242) |
|
(181) |
|
(947) |
|
Merger-related and restructuring expenses |
(17) |
|
(14) |
|
(18) |
|
(39) |
|
(95) |
|
Certain items related to sale on mortgage warehouse business |
— |
|
— |
|
(32) |
|
— |
|
(32) |
|
Severance |
(8) |
|
(2) |
|
— |
|
(10) |
|
— |
|
Lease cost acceleration related to closing branches |
— |
|
(7) |
|
— |
|
(12) |
|
— |
|
Trailing mortgage sale costs with |
— |
|
(3) |
|
— |
|
(8) |
|
— |
|
Litigation settlement |
(14) |
|
— |
|
— |
|
(14) |
|
— |
|
Net gain on investment security |
21 |
|
— |
|
— |
|
21 |
|
— |
|
Bargain purchase gain |
— |
|
— |
|
— |
|
— |
|
(121) |
|
(Loss) income before taxes |
$ (41) |
|
$ (81) |
|
$ (335) |
|
$ (243) |
|
$ (1,140) |
|
Income tax (benefit) expense |
(5) |
|
(11) |
|
(55) |
|
(37) |
|
(210) |
|
Net (Loss) Income (GAAP) |
$ (36) |
|
$ (70) |
|
$ (280) |
|
$ (206) |
|
$ (930) |
|
|
|
|
(1) |
Amounts may not foot as a result of rounding. |
|
FLAGSTAR FINANCIAL, INC. NET INTEREST INCOME ANALYSIS LINKED-QUARTER AND YEAR-OVER-YEAR COMPARISONS (unaudited) |
|||||||||||
|
|
|||||||||||
|
|
For the Three Months Ended |
||||||||||
|
|
September 30, 2025 |
|
June 30, 2025 |
|
September 30, 2024 |
||||||
|
(dollars in millions) |
Average |
Interest |
Average |
|
Average |
Interest |
Average |
|
Average |
Interest |
Average |
|
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
Total loans and leases (1) |
$ 63,541 |
$ 819 |
5.15 % |
|
$ 65,824 |
$ 840 |
5.12 % |
|
$ 76,553 |
$ 1,061 |
5.53 % |
|
Securities(2) |
16,610 |
192 |
4.62 |
|
15,169 |
170 |
4.48 |
|
12,862 |
153 |
4.85 |
|
Interest-earning cash and cash equivalents |
8,216 |
90 |
4.36 |
|
12,054 |
133 |
4.42 |
|
23,561 |
320 |
5.40 |
|
Total interest-earning assets |
88,367 |
$ 1,101 |
4.94 |
|
93,047 |
$ 1,143 |
4.93 |
|
112,976 |
$ 1,534 |
5.42 |
|
Non-interest-earning assets |
3,616 |
|
|
|
3,663 |
|
|
|
5,420 |
|
|
|
Total assets |
$ 91,983 |
|
|
|
$ 96,710 |
|
|
|
$ 118,396 |
|
|
|
Liabilities and Stockholders' Equity: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing checking and money market accounts |
$ 19,562 |
$ 151 |
3.05 % |
|
$ 20,497 |
$ 162 |
3.16 % |
|
$ 22,207 |
$ 218 |
3.90 % |
|
Savings accounts |
14,573 |
113 |
3.08 |
|
14,353 |
110 |
3.07 |
|
12,281 |
110 |
3.57 |
|
Certificates of deposit |
23,052 |
255 |
4.38 |
|
25,310 |
287 |
4.55 |
|
29,159 |
372 |
5.07 |
|
Total interest-bearing deposits |
57,187 |
519 |
3.60 |
|
60,160 |
559 |
3.73 |
|
63,647 |
700 |
4.37 |
|
Borrowed funds |
13,191 |
157 |
4.74 |
|
14,105 |
165 |
4.70 |
|
24,456 |
324 |
5.28 |
|
Total interest-bearing liabilities |
70,378 |
$ 676 |
3.81 |
|
74,265 |
$ 724 |
3.91 |
|
$ 88,103 |
$ 1,024 |
4.62 |
|
Non-interest-bearing deposits |
12,079 |
|
|
|
12,731 |
|
|
|
18,631 |
|
|
|
Other liabilities |
1,394 |
|
|
|
1,724 |
|
|
|
2,858 |
|
|
|
Total liabilities |
83,851 |
|
|
|
88,720 |
|
|
|
109,593 |
|
|
|
Stockholders' and mezzanine equity |
8,132 |
|
|
|
7,990 |
|
|
|
8,803 |
|
|
|
Total liabilities and stockholders' equity |
$ 91,983 |
|
|
|
$ 96,710 |
|
|
|
$ 118,396 |
|
|
|
Net interest income/interest rate spread |
|
$ 425 |
1.13 % |
|
|
$ 419 |
1.02 % |
|
|
$ 510 |
0.80 % |
|
Net interest margin |
|
|
1.91 % |
|
|
|
1.81 % |
|
|
|
1.79 % |
|
Ratio of interest-earning assets to interest-bearing liabilities |
|
|
1.26 x |
|
|
|
1.25 x |
|
|
|
1.28 x |
|
|
|
|
(1) |
Comprised of Loans and leases held for investment, net and Loans held for sale. |
|
(2) |
Comprised of Debt securities available-for-sale at amortized cost, Equity investments with readily determinable fair values, at fair value and FHLB stock and FRB-NY stock, at cost. |
|
(3)
|
Amounts may not foot as a result of rounding. |
|
|
For the Nine Months Ended |
||||||
|
|
September 30, 2025 |
|
September 30, 2024 |
||||
|
(dollars in millions) |
Average |
Interest |
Average |
|
Average |
Interest |
Average |
|
Assets: |
|
|
|
|
|
|
|
|
Interest-earning assets: |
|
|
|
|
|
|
|
|
Total loans and leases (1) |
$ 65,842 |
$ 2,519 |
5.13 % |
|
$ 81,286 |
$ 3,421 |
5.62 % |
|
Securities(2) |
14,962 |
510 |
4.54 |
|
12,180 |
415 |
4.59 |
|
Interest-earning cash and cash equivalents |
11,515 |
379 |
4.41 |
|
18,615 |
758 |
5.44 |
|
Total interest-earning assets |
92,319 |
$ 3,408 |
4.94 |
|
112,081 |
$ 4,594 |
5.47 |
|
Non-interest-earning assets |
3,588 |
|
|
|
5,414 |
|
|
|
Total assets |
$ 95,907 |
|
|
|
$ 117,495 |
|
|
|
Liabilities and Stockholders' Equity: |
|
|
|
|
|
|
|
|
Interest-bearing deposits: |
|
|
|
|
|
|
|
|
Interest-bearing checking and money market accounts |
$ 20,355 |
$ 480 |
3.15 % |
|
$ 23,872 |
$ 664 |
3.71 % |
|
Savings accounts |
14,426 |
334 |
3.10 |
|
9,960 |
221 |
2.97 |
|
Certificates of deposit |
24,893 |
850 |
4.57 |
|
27,109 |
1,000 |
4.93 |
|
Total interest-bearing deposits |
59,674 |
1,664 |
3.73 |
|
60,941 |
1,885 |
4.13 |
|
Borrowed funds |
13,887 |
490 |
4.72 |
|
26,259 |
1,019 |
5.31 |
|
Total interest-bearing liabilities |
73,561 |
$ 2,154 |
3.91 |
|
87,200 |
$ 2,904 |
4.45 |
|
Non-interest-bearing deposits |
12,622 |
|
|
|
18,872 |
|
|
|
Other liabilities |
1,616 |
|
|
|
2,648 |
|
|
|
Total liabilities |
87,799 |
|
|
|
108,720 |
|
|
|
Stockholders' and mezzanine equity |
8,108 |
|
|
|
8,775 |
|
|
|
Total liabilities and stockholders' equity |
$ 95,907 |
|
|
|
$ 117,495 |
|
|
|
Net interest income/interest rate spread |
|
$ 1,254 |
1.03 % |
|
|
$ 1,691 |
1.02 % |
|
Net interest margin |
|
|
1.82 % |
|
|
|
2.01 % |
|
Ratio of interest-earning assets to interest-bearing liabilities |
|
|
1.25 x |
|
|
|
1.29 x |
|
|
|
|
(1) |
Comprised of Loans and leases held for investment, net and Loans held for sale. |
|
(2) |
Comprised of Debt securities available-for-sale at amortized cost, Equity investments with readily determinable fair values, at fair value and FHLB stock and FRB-NY stock, at cost. |
|
(3) |
Amounts may not foot as a result of rounding. |
|
FLAGSTAR FINANCIAL, INC. CONSOLIDATED FINANCIAL HIGHLIGHTS (unaudited) (dollars in millions) |
||||||||
|
|
||||||||
|
|
For the Three Months Ended |
For the Nine Months Ended |
||||||
|
(dollars in millions, except share and per share data) |
September 30, |
|
June 30, 2025 |
|
September 30, |
September 30, |
|
September 30, |
|
OTHER FINANCIAL MEASURES: |
|
|
|
|
|
|
|
|
|
Efficiency ratio(1) |
100.46 % |
|
103.37 % |
|
114.93 % |
104.11 % |
|
110.02 % |
|
Efficiency ratio, as adjusted (2) |
92.12 |
|
95.34 |
|
105.96 |
96.16 |
|
93.75 |
|
Operating expenses to average assets |
2.08 |
|
1.96 |
|
2.23 |
0.50 |
|
0.54 |
|
Effective tax rate |
12.2 |
|
12.9 |
|
16.3 |
15.2 |
|
18.4 |
|
Shares used for basic and diluted EPS per common share |
415,563,380 |
|
415,125,228 |
|
366,637,882 |
415,173,630 |
|
302,382,890 |
|
Common shares outstanding at the respective period-ends |
415,608,145 |
|
415,353,394 |
|
415,257,967 |
415,608,145 |
|
415,257,967 |
|
|
|
|
(1) |
We calculate our efficiency ratio by dividing our non-interest expense by the sum of our net interest income and non-interest income. |
|
(2) |
We calculate our efficiency ratio, as adjusted, by dividing our operating expenses by the sum of our net interest income and non-interest income, excluding the bargain purchase gain. |
|
FLAGSTAR FINANCIAL, INC. CONSOLIDATED FINANCIAL HIGHLIGHTS (unaudited) |
|||||||||
|
|
|||||||||
|
ASSET QUALITY SUMMARY |
|||||||||
|
|
|||||||||
|
The following table presents the Company's asset quality measures at the respective dates: |
|||||||||
|
|
|||||||||
|
|
|
|
|
|
|
|
September 30, 2025 |
||
|
|
|
|
|
|
|
|
compared to |
||
|
(dollars in millions) |
September 30, |
|
June 30, 2025 |
|
December 31, 2024 |
|
June 30, 2025 |
|
December 31, |
|
Non-accrual loans held for investment: |
|
|
|
|
|
|
|
|
|
|
Multi-family |
$ 2,440 |
|
$ 2,388 |
|
$ 1,755 |
|
2 % |
|
39 % |
|
Commercial real estate(1) |
551 |
|
563 |
|
564 |
|
-2 % |
|
-2 % |
|
One-to-four family first mortgage |
70 |
|
81 |
|
70 |
|
-14 % |
|
— % |
|
Commercial and industrial |
154 |
|
123 |
|
202 |
|
25 % |
|
-24 % |
|
Other non-accrual loans |
26 |
|
25 |
|
24 |
|
4 % |
|
8 % |
|
Total non-accrual loans held for investment |
3,241 |
|
3,180 |
|
2,615 |
|
2 % |
|
24 % |
|
Repossessed assets |
21 |
|
11 |
|
14 |
|
91 % |
|
50 % |
|
Total non-accrual held for investment loans and repossessed assets |
$ 3,262 |
|
$ 3,191 |
|
$ 2,629 |
|
2 % |
|
24 % |
|
|
|
|
|
|
|
|
|
|
|
|
Non-accrual loans held for sale: |
|
|
|
|
|
|
|
|
|
|
Multi-family |
$ — |
|
$ — |
|
$ 51 |
|
NM |
|
-100 % |
|
Commercial real estate(1) |
27 |
|
— |
|
215 |
|
NM |
|
-87 % |
|
One-to-four family first mortgage |
4 |
|
4 |
|
57 |
|
— % |
|
-93 % |
|
Total non-accrual mortgage loans held for sale |
$ 31 |
|
$ 4 |
|
$ 323 |
|
675 % |
|
-90 % |
|
|
|
|
(1) |
Includes Acquisition, Development, and Construction loans. |
|
The following table presents the Company's asset quality measures at the respective dates: |
|||||
|
|
|||||
|
|
September 30, |
|
June 30, 2025 |
|
December 31, 2024 |
|
Non-accrual held for investment loans to total loans held for investment |
5.17 % |
|
4.96 % |
|
3.83 % |
|
Non-accrual held for investment loans and repossessed assets to total assets |
3.56 |
|
3.46 |
|
2.62 |
|
Allowance for credit losses on loans to non-accrual loans held for investment |
33.05 |
|
34.78 |
|
45.93 |
|
Allowance for credit losses on loans to total loans held for investment |
1.71 |
|
1.72 |
|
1.76 |
|
FLAGSTAR FINANCIAL, INC. SUPPLEMENTAL FINANCIAL INFORMATION (unaudited) |
|||||||||
|
|
|||||||||
|
The following table presents the Company's loans 30 to 89 days past due at the respective dates: |
|||||||||
|
|
|
|
|
|
|
|
September 30, 2025 |
||
|
|
|
|
|
|
|
|
compared to |
||
|
(dollars in millions) |
September 30, 2025 |
|
June 30, 2025 |
|
December 31, 2024 |
|
June 30, 2025 |
|
December 31, |
|
Loans 30 to 89 Days Past Due: |
|
|
|
|
|
|
|
|
|
|
Multi-family |
$ 344 |
|
$ 392 |
|
$ 749 |
|
-12 % |
|
-54 % |
|
Commercial real estate(1) |
117 |
|
115 |
|
70 |
|
2 % |
|
67 % |
|
One-to-four family first mortgage |
19 |
|
30 |
|
25 |
|
-37 % |
|
-24 % |
|
Commercial and industrial |
34 |
|
38 |
|
110 |
|
-11 % |
|
-69 % |
|
Other loans |
21 |
|
29 |
|
11 |
|
-28 % |
|
91 % |
|
Total loans 30 to 89 days past due |
$ 535 |
|
$ 604 |
|
$ 965 |
|
-11 % |
|
-45 % |
|
|
|
|
(1) |
Includes Acquisition, Development, and Construction loans. |
|
The following table summarizes the Company's net charge-offs (recoveries) for the respective periods: |
|||||||||||||||||
|
|
|||||||||||||||||
|
|
For the Three Months Ended |
||||||||||||||||
|
|
September 30, 2025 |
|
June 30, 2025 |
|
September 30, 2024 |
||||||||||||
|
(in millions) |
Net Charge-offs |
|
Average |
|
%(2) |
|
Net Charge-offs |
|
Average |
|
%(2) |
|
Net Charge-offs |
|
Average |
|
%(2) |
|
Multi-family |
$ 46 |
|
$ 31,282 |
|
0.59 % |
|
$ 96 |
|
$ 32,847 |
|
1.17 % |
|
$ 98 |
|
$ 35,722 |
|
1.10 % |
|
Commercial real estate(1) |
18 |
|
10,432 |
|
0.69 |
|
13 |
|
11,061 |
|
0.47 |
|
108 |
|
13,073 |
|
3.30 |
|
One-to-four family residential |
1 |
|
5,099 |
|
0.08 |
|
1 |
|
4,995 |
|
0.08 |
|
2 |
|
5,798 |
|
0.14 |
|
Commercial and industrial |
1 |
|
14,388 |
|
0.03 |
|
3 |
|
14,486 |
|
0.08 |
|
29 |
|
17,026 |
|
0.68 |
|
Other |
7 |
|
1,661 |
|
1.69 |
|
4 |
|
1,711 |
|
0.94 |
|
3 |
|
1,775 |
|
0.68 |
|
Total |
$ 73 |
|
$ 62,862 |
|
0.46 % |
|
$ 117 |
|
$ 65,100 |
|
0.72 % |
|
$ 240 |
|
$ 73,396 |
|
1.31 % |
|
|
|
|
(1) |
Includes Acquisition, Development, and Construction loans. |
|
(2) |
Three months ended presented on an annualized basis. |
|
|
For the Nine Months Ended |
||||||||||
|
|
September 30, 2025 |
|
September 30, 2024 |
||||||||
|
(in millions) |
Net Charge-offs |
|
Average |
|
%(2) |
|
Net Charge-offs |
|
Average |
|
%(2) |
|
Multi-family |
$ 222 |
|
$ 32,672 |
|
0.91 % |
|
$ 184 |
|
$ 36,486 |
|
0.67 % |
|
Commercial real estate(1) |
33 |
|
10,975 |
|
0.40 |
|
409 |
|
13,394 |
|
4.07 |
|
One-to-four family residential |
3 |
|
5,026 |
|
0.08 |
|
3 |
|
5,850 |
|
0.07 |
|
Commercial and industrial |
32 |
|
14,599 |
|
0.29 |
|
64 |
|
21,033 |
|
0.41 |
|
Other |
15 |
|
1,705 |
|
1.17 |
|
10 |
|
1,943 |
|
0.69 |
|
Total |
$ 305 |
|
$ 64,977 |
|
0.63 % |
|
$ 670 |
|
$ 78,706 |
|
1.14 % |
|
|
|
|
(1) |
Includes Acquisition, Development, and Construction loans. |
|
(2) |
Nine months ended presented on an annualized basis. |
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SOURCE Flagstar Bank, N.A.