Flagstar Bank, N.A. · NYSE:FLG
Flagstar Bank, N.A — Flagstar Financial — Q4 2024 Earnings Presentation
24 slides from Flagstar Bank, N.A's earnings presentation, Jan 30, 2025
Slide 1: Fourth Quarter 2024 Results
Fourth Quarter 2024 Results January 30, 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 (a) revenues, earn
Slide 3: Strategic Update
Strategic Update Our Five Areas of Strategic Focus 1 2 3 4 5 Bolster Management Ongoing Execution of Achievable Capital and Improve Funding Focus on Credit and and Talent Operating Plan Earnings Forecast Profile Risk Management ▪ Completed ▪ Third consecutive ▪ Top quartile CET1 ▪ Strong liquidity ▪
Slide 4: Well Positioned in 2025 Due to Significant Accomplishments in 2024
Well Positioned in 2025 Due to Significant Accomplishments in 2024 2024 Accomplishments Management Focus (Transitional Year) Areas in 2025 Assembled a Strong Management Team and Improve Earnings Profile Board of Directors ▪ NIM expansion | downward deposit repricing ▪ Moderating credit costs Investe
Slide 5: Commercial Banking Overview
Commercial Banking Overview Commercial Loans Deposits ◼ Commercial, Corporate, & Specialized Industries C&I loans of ◼ Total deposits for Commercial and Private Bank were $22.2 $7.2 billion at 12/31/2024 billion with a weighted average cost (“WAC”) of 2.29% ◼ Early signs of success following new hir
Slide 6: Quarterly and Full Year Performance
Quarterly and Full Year Performance QUARTERLY PERFORMANCE FULL YEAR PERFORMANCE Reported Adjusted Reported Notable Adjusted Full Year Notable Full Year 4Q 2024 Items 4Q 2024 2024 Items 2024 Net interest income $461 $- $461 $2,152 $- $2,152 Non-interest income 164 (92) 72 400 53 453 Total revenue $62
Slide 7: Capital and Liquidity Position
Capital and Liquidity Position $50 – 100B Asset Flagstar Flagstar Flagstar Category IV Banks Banks Q4’23 Q3’24 Q4’24 Most Recent Available Most Recent Available CET1 Ratio 9.0% 10.8% 11.9%(1) 10.8% 11.3% CET1 Ratio 8.4% 10.7%(2) 10.8%(1)(2) 8.6% 9.8% (inclusive of AOCI)(1)(2) Loan to Deposit Ratio 1
Slide 8: 2024 Forecast vs Actuals
2024 Forecast vs Actuals Achieved outlook except TBV/sh due to impact of AOCI from change in rate curve 2024 Flagstar 2024 Status ($ in millions, except per share data) Forecast Actuals Diluted Core EPS(1) ($3.10 – 3.00) ($2.66) ✓ Efficiency Ratio(2) 95 – 100% 94% ✓ CET1 Ratio 10.75 – 11.00% 11.86%
Slide 9: Forecast Update
Forecast Update ($ in millions, except per 2025 2026 2027 2025 2026 2027 share data) $1,875 – $2,350 – $2,900 – ($0.25 - Net Interest Income Diluted Core EPS(1) $0.75 – $0.80 $2.10 –$2.20 $1,925 $2,400 $3,000 $0.30) Net Interest Margin 1.95 – 2.05% 2.40 – 2.60% 2.80 – 2.90% Efficiency Ratio(2) 85 –
Slide 10: Capital | Strengthened Capital Position
Capital | Strengthened Capital Position CET1 Ratio Highlights Target operating range 10.5-11.5% 11.9% ◼ Significant management action taken in 2024 to preserve and strengthen capital position 10.8% ◼ Capital priority in near term is to deploy capital to fund organic growth 9.4% 9.5% 9.0% ◼ CET1 rati
Slide 11: Deposits | Overview
Deposits | Overview Well Diversified Deposit Base by Product Deposit Growth $ in billions Balance ($B) Industry 12/31/24 Noninterest-Bearing Demand $13.5 $83.0 $0.9 $0.5 $75.9 $(5.0) $(2.9) $(0.5) Interest-Bearing Demand $14.3 Money Markets $6.5 Savings $14.3 Retail CDs $20.7 Jumbo CDs $6.6 9/30/24
Slide 12: Commercial Real Estate | 2024 Payoffs and CRE Concentration Trends
Commercial Real Estate | 2024 Payoffs and CRE Concentration Trends CRE Portfolio Payoffs at Par Total Total 2024 Q4 2024 Substandard Substandard (%) Payoffs (%) Significant CRE payoffs at Multi-Family $623 million 55% $2.4 billion 42% par with 48% of the payoffs from Office $2 million 21% $150 milli
Slide 13: Loans and Leases | Overview and Priorities
Loans and Leases | Overview and Priorities Total Loans HFI at 12/31/2024 Loan Portfolio Priorities $68.3 Billion (amortized cost) Other 1. Continue to reduce $1.8 3% Multi- commercial real estate Co-op Family $2.0 $32.1 exposure 3% 47% 1-4 Family 2. Grow commercial and $5.2 8% CRE (1) corporate bank
Slide 14: Multi-Family | Portfolio Overview
Multi-Family | Portfolio Overview Proactively Reducing Multi-Family Exposure(1) Highlights $ in billions ◼ 12/31/24 Multi-Family portfolio, excluding Co-op, ALLL at 1.9%, among the highest relative to peers(2) | MF ALLL reflects the mix of the company’s loans including the rent- -9% regulated loans
Slide 15: Office | Portfolio Overview
Office | Portfolio Overview Reducing Office Exposure Office Highlights $ in billions ◼ Office portfolio $2.5 billion | 3.6% of total LHFI ◼ Average loan size of $12.7 million -27% ◼ Office ALLL increased to 7.00% compared to 6.04% in 9/30/2024 $3.4 $3.2 $3.0 $2.7 $2.5 ◼ Have taken $368 million of ne
Slide 16: Asset Quality | Allowance for Credit Loss Detail
Asset Quality | Allowance for Credit Loss Detail 9/30/2024 12/31/2024 Change in ($ in millions) Allowance ALLL % Allowance ALLL % ALLL % Multi-Family $624 1.78% $639 1.87% 9 bps Multi-Family (excl. Co-op) $614 1.86% $626 1.95% 9 bps Co-op $10 0.45% $13 0.68% 23 bps CRE $289 3.14% $241 2.80% (34) bps
Slide 17: Asset Quality
Asset Quality Non-accrual Loans (NAL) (12/31/2024)(1) Commercial Non-accrual Loans (12/31/2024) $ in millions MF CRE C&I ($ in millions) CRE $564 Non-performing (not current) $710 $314 $57 C&I $202 Other Performing Total 56% $94 (current) $1,045 $252 $145 $2,615 Current Total $1,755 $564 $202 MF $1,
Slide 18: Liquidity Sources
Liquidity Sources Maintaining a Strong Liquidity Position $ in billions Highlights $31.8 ▪ Our liquidity profile remains solid ▪ Total liquidity of $31.8 billion with a coverage ratio of 240% $16.4 Borrowing Capacity & High-Quality Liquid Assets (2) $18.5 ▪ Cash(1) held on balance sheet of $15.4 bil
Slide 19: Investment Profile
Investment Profile ◼ FLG currently trades at approximately 0.55x of tangible book value, compared to 1.84x or Category IV banks and 1.66x for banks with assets between $50 - $100 billion ◼ Q4’24 TBV Per Share: $17.36 ◼ Q4’24 TBV: $7.2 billion ◼ As we successfully execute on our strategic plan over t
Slide 20: Appendix
Appendix
Slide 21: Income Statement Summary
Q4 2024 Financial Highlights Flagstar Income Statement Commentary ($ in millions) 12/31/24 Net Interest Income $461 Net Interest Income and Non-interest Income: INCOME STATEMENT SUMMARY Noninterest Income(1) $72 Our strategic exit from the mortgage business and the meaningful planned reduction in ou
Slide 22: Reconciliations of GAAP and Non-GAAP Measures
Reconciliations of GAAP and Non-GAAP Measures Tangible Book Value Per Common Share Adjusted Noninterest Expense 12/31/2024 Three Months Ended Total stockholders equity $8,195 12/31/2024 Less: Core deposit and other intangibles 488 Noninterest expense $718 Less: Preferred stock 503 Less: Intangible a
Slide 23: Balance Sheet Purchase Accounting Marks
Balance Sheet Purchase Accounting Marks ($ in millions) December 31, March 31, June 30, September 31, December 31, 2023 2024 2024 2024 2024 Loans and Leases (1) Beginning balance - unamortized fair value mark $ 917 $ 843 $ 705 $ 647 $ 591 Additions — — — — — Less: accretion and other (2) 74 138 58 5
Slide 24: Peer Groups
Peer Groups Category IV Banks Ticker Banks with $50B - $100B in Assets Ticker Citizens Financial CFG BOK Financial BOKF Fifth Third Bancorp FITB Columbia Banking System COLB First Citizens Banc. FCNC.A Comerica CMA Huntington Banc. HBAN East West Bancorp EWBC KeyCorp KEY First Horizon FHN M&T Bank M