Flagstar Bank, N.A. · NYSE:FLG
Flagstar Bank, N.A — Flagstar Financial — Q1 2025 Earnings Presentation
25 slides from Flagstar Bank, N.A's earnings presentation, Apr 25, 2025
Slide 1: First Quarter 2025 Results
First Quarter 2025 Results April 25, 2025
Slide 2: Cautionary Statement
Cautionary Statement Forward-Looking Information This earnings presentation and the associated conference call may include forward‐looking statements by the Company and our authorized officers pertaining to such matters as our goals, beliefs, intentions, and expectations regarding, among other thing
Slide 3: Solid Progress During First Quarter 2025
Solid Progress During First Quarter 2025 Management Focus Areas in 2025 1 2 3 4 Execute on C&I Improve Proactive and Private Credit Earnings Management Bank Growth Normalization Profile of CRE Portfolio Initiatives ▪ NIM expansion; ▪ Grow primary bank ▪ Continue reduction ▪ Lower NCOs and reduce fun
Slide 4: Commercial Banking Overview
Commercial Banking Overview Commercial Loans Deposits ◼ Q1’25 new credit commitments up 32% to $1,046 million ◼ Total Private Bank deposits of $17.9 billion, up $2.2 billion, or up ◼ Q1’25 new loan originations up 42% to $769 million 14% since March 31, 2024 | WAC 2.21% ◼ Growth driven by our two ar
Slide 5: Commercial Banking Overview | Momentum in Focus Areas
Commercial Banking Overview | Momentum in Focus Areas New and Increased C&I Loan Originations New and Increased C&I Loan Commitments $ in millions $ in millions Strategic Focus Strategic Focus Areas: +308%(1) Areas: +307%(1) $1,046 Corporate & $163 Regional Commercial +206% Banking $789 $769 Corpora
Slide 6: Commercial Banking Overview | Momentum in Focus Areas
Commercial Banking Overview | Momentum in Focus Areas C&I Loans HFI at 3/31/2025 Specialized Industries $ in millions New Loan Fundings Change Change New Credit Commitments 3/31/25 ($ in millions) QoQ ($) QoQ (%) Specialized Industries & Corporate/Regional $3,490 $147 4.4% $483 Commercial Bkg $3,685
Slide 7: Quarterly Performance
Quarterly Performance QUARTERLY PERFORMANCE Reported Notable Adjusted 1Q 2025 Items 1Q 2025 Net interest income $410 $- $410 Non-interest income 80 - 80 Total revenue $490 $- $490 Total non-interest expense 532 (19) 514 Pre-provision net (loss) revenue $(42) $19 $(23) Provision for credit losses 79
Slide 8: Strengthened Balance Sheet
Strengthened Balance Sheet Key Balance Sheet Metrics Improved Since 2023 Common Equity Allowance for Credit Cash & Securities Wholesale Borrowings Tier 1 Ratio Losses to LHFI to Total Assets to Total Assets Target operating range 10.5-11.5% 26.1% 11.9% 1.82% 17.7% 17.4% 9.1% 1.23% 13.5% +286 bps +59
Slide 9: Forecast Update
Forecast Update ($ in millions, except per 2025 2026 2027 2025 2026 2027 share data) $1,825 – $2,350 – $2,900 – ($0.30 - Net Interest Income Diluted Core EPS(1) $0.75 – $0.80 $2.10 –$2.20 $1,875 $2,400 $3,000 $0.25) Net Interest Margin 1.95 – 2.05% 2.40 – 2.60% 2.80 – 2.90% Efficiency Ratio(2) 85 –
Slide 10: Net Interest Margin | Proactively Managing Higher
Net Interest Margin | Proactively Managing Higher Net Interest Margin 5.50% 5.50% 5.00% Fed Funds Rate 4.50% 4.50% Interest-Bearing Deposit Costs 4.37% 4.15% 4.19% 3.85% 3.85% 2.80% - 2.40% - 2.90% 2.28% 1.95% - 2.60% 1.98% 2.05% 1.79% 1.73% 1.74% Reflects NIM Guidance Range 3/31/24 6/30/24 9/30/24
Slide 11: Noninterest Expense | Disciplined Management
Noninterest Expense | Disciplined Management Adjusted Operating Expenses(1) Highlights $ in millions ◼ Linked Year: adjusted operating expenses decreased $136 million, or 22% $638 $656 ◼ Linked Quarter: adjusted operating expenses decreased $621 $556 $71 million, or 13% $485 ◼ Reduction in operating
Slide 12: Capital | Strong Capital Position
Capital | Strong Capital Position CET1 Ratio 11.8% 11.9% 10.8% Target operating range 10.5-11.5% 9.4% 9.5% 3/31/24 6/30/24 9/30/24 12/31/24 3/31/25 Highlights 1. CET1 ratio of 11.9% is top quartile in peer group 2. Significant management action preserved and strengthened capital position 3. Capital
Slide 13: Deposits | Overview
Deposits | Overview Well Diversified Deposit Base by Product Deposit Activity $ in billions Balance ($B) Industry 3/31/25 Noninterest-Bearing Demand $12.7 Interest-Bearing Demand $14.2 Money Markets $6.6 Savings $14.5 Retail CDs $19.3 Jumbo CDs $6.5 Total Deposits $73.9 Deposit Base by Segment Highl
Slide 14: Commercial Real Estate | Payoffs and CRE Concentration Trends
Commercial Real Estate | Payoffs and CRE Concentration Trends CRE Portfolio Payoffs at Par Total Total 2024 1Q’25 Substandard Substandard Payoffs Payoffs (%) (%) Significant CRE payoffs at par Multi-Family $2.1 billion 44% $673 million 62% with 59% of the payoffs from Office $114 million 91% $14 mil
Slide 15: Multi-Family | Portfolio Overview
Multi-Family | Portfolio Overview Proactively Reducing Multi-Family (MF) Exposure(1) Highlights $ in billions ◼ Multi-Family portfolio ALLL at 1.82%, among the highest relative to peers(2) -9% ◼ MF rent regulated >= 50% ALLL at 2.82% $34.8 ◼ Average loan size of $8.5 million | MF ALLL reflects the m
Slide 16: Office | Portfolio Overview
Office | Portfolio Overview Reducing Office Exposure Office Highlights $ in billions ◼ Office portfolio $2.4 billion | 3.6% of total LHFI ◼ Average loan size of $12.6 million -25% ◼ Office ALLL of 6.68% $3.2 $3.0 $2.7 ◼ Have taken $368 million of net charge-offs since January $2.5 $2.4 2024 3/31/24
Slide 17: Asset Quality | Allowance for Credit Loss Detail
Asset Quality | Allowance for Credit Loss Detail 12/31/2024 3/31/2025 Change in ($ in millions) Allowance ALLL % Allowance ALLL % ALLL % Multi-Family $639 1.87% $609 1.82% (5) bps Multi-Family Rent Regulated >=50% (excl. Co-op) $382 2.89% $361 2.82% (7) bps Multi-Family at Market and Rent Regulated
Slide 18: Asset Quality
Asset Quality Criticized Loans(1) Total Non-accrual Loans (including LHFS) $ in billions $ in billions $3.3 Total $14.3 $14.9 $2.9 $14.0 $0.6 Adj.(2) $0.2 $11.8 $7.8 -1.3% -6% Adjusted $2.8 $2.7 NALs 3/31/24 6/30/24 9/30/24 12/31/24 3/31/25 12/31/24 3/31/25 Net Charge-offs to Average Loans(3) Highli
Slide 19: Liquidity Profile
Liquidity Profile Maintaining a Strong Liquidity Position $ in billions Highlights ▪ Our liquidity profile remains solid $30.0 ▪ Total liquidity of $30.0 billion with a coverage ratio of 231% Borrowing Capacity & High-Quality Liquid Assets ▪ Cash(1) held on balance sheet of $12.0 $18.1 $17.0 billion
Slide 20: Investment Profile
Investment Profile Closing Valuation Gap to Peer Group Presents Significant Upside +120% $24.79 +57% $17.70 Share Price $11.27 Share Reflecting Price Multiple Reflecting of 1.4x Current Multiple TBV/sh Share of 1.0x Price TBV/sh 4/24/2025 12/31/2027 12/31/2027 Adjusted Adjusted for Warrants for Warr
Slide 21: Appendix
Appendix
Slide 22: Capital and Liquidity Position
Capital and Liquidity Position $50 – 100B Asset Flagstar Flagstar Flagstar Category IV Banks Banks Q1’24 Q4’24 Q1’25 Most Recent Available Most Recent Available CET1 Ratio 10.1% 11.8%(1) 11.9%(1) 10.8% 10.9% CET1 Ratio 9.4% 10.7%(1)(2) 11.0%(1)(2) 8.6% 9.8% (inclusive of AOCI)(1)(2) Loan to Deposit
Slide 23: Q1 2025 Financial Highlights
Q1 2025 Financial Highlights Flagstar Income Statement Commentary ($ in millions) 3/31/25 Net Interest Income $410 Net Interest Income and Non-interest Income: INCOME STATEMENT SUMMARY Noninterest Income $80 Reflects the strategic reduction in MF & CRE portfolios, the sale of mortgage and servicing
Slide 24: Reconciliations of GAAP and Non-GAAP Measures
Reconciliations of GAAP and Non-GAAP Measures Adjusted Noninterest Expense Three Months Three Months Three Months Three Months Three Months Ended Ended Ended Ended Ended 3/31/2024 6/30/2024 9/30/2024 12/31/2024 3/31/2025 Noninterest expense $699 $705 $716 $718 $532 Less: Intangible asset amortizatio
Slide 25: Peer Groups
Peer Groups Category IV Banks Ticker Banks with $50B - $100B in Assets Ticker Citizens Financial CFG Columbia Banking System COLB Fifth Third Bancorp FITB Comerica CMA First Citizens Banc. FCNC.A Cullen Frost Bankers CFR Huntington Banc. HBAN East West Bancorp EWBC KeyCorp KEY First Horizon FHN M&T