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
24th Quarter 2024 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
Slide 3: Our Five Areas of Strategic Focus
34th Quarter 2024 Our Five Areas of Strategic Focus Long-Term Targets Strategic Update ▪ Top quartile CET1 capital ratio of 11.9%; above our long-term target range ▪ On track to reach profitability by full year 2026 forecast ▪ Decreased provision for credit losses during the fourth quarter consisten
Slide 4: 2024 Accomplishments and Management Focus Areas in 2025
44th Quarter 2024 Improve Earnings Profile ▪ NIM expansion | downward deposit repricing ▪ Moderating credit costs ▪ Reduce operating expenses(1) by almost $600 million, or 23%, through operational efficiencies Execute on C&I and Private Bank Growth Initiatives ▪ Grow primary bank relationships ▪ Dep
Slide 5: Commercial Banking Overview
54th Quarter 2024 Commercial Banking Overview DepositsCommercial Loans ◼ Relationship-focused commercial and corporate banking model, with industry expertise and fast decisioning as key competitive differentiators ◼ Full scale of products and services, including treasury management, payments, 401(k)
Slide 6: Quarterly and Full Year Performance
64th Quarter 2024 Note: $ in millions except share data. Please note that columns of data may not add due to rounding. Quarterly and Full Year Performance QUARTERLY PERFORMANCE FULL YEAR PERFORMANCE Reported 4Q 2024 Notable Items Adjusted 4Q 2024 Reported Full Year 2024 Notable Items Adjusted Full Y
Slide 7: Capital and Liquidity Position
74th Quarter 2024 Flagstar Q4’23 Flagstar Q3’24 Flagstar Q4’24 Category IV Banks Most Recent Available $50 – 100B Asset Banks Most Recent Available CET1 Ratio 9.0% 10.8% 11.9%(1) 10.8% 11.3% CET1 Ratio (inclusive of AOCI)(1)(2) 8.4% 10.7%(2) 10.8%(1)(2) 8.6% 9.8% Loan to Deposit Ratio 104% 86% 90% 7
Slide 8: 2024 Forecast vs Actuals
84th Quarter 2024 ($ in millions, except per share data) 2024 Flagstar Forecast 2024 Actuals Status Diluted Core EPS(1) ($3.10 – 3.00) ($2.66) ✓ Efficiency Ratio(2) 95 – 100% 94% ✓ CET1 Ratio 10.75 – 11.00% 11.86% ✓ TBV Per Share(3) $17.50 – 18.00 $17.36 ✓ Net Interest Income $2,150 – 2,200 $2,152 ✓
Slide 9: Forecast Update
94th Quarter 2024 2025 2026 2027 Diluted Core EPS(1) ($0.25 - $0.30) $0.75 – $0.80 $2.10 –$2.20 Efficiency Ratio(2) 85 – 90% 65 – 70% ~50% CET1 Ratio 10.50 – 11.00% 10.00 – 10.50% 10.25 – 10.75% ROAA NM 0.30 – 0.40% 0.90 – 1.00% ROATCE NM 4.50 – 5.00% 12.50 – 12.75% TBV Per Share(3) $17.00 – $17.50
Slide 10: Strengthened Capital Position
104th Quarter 2024 9.0% 9.4% 9.5% 10.8% 11.9% 12/31/23 3/31/24 6/30/24 9/30/24 12/31/24 Capital | Strengthened Capital Position Highlights ◼ Significant management action taken in 2024 to preserve and strengthen capital position ◼ Capital priority in near term is to deploy capital to fund organic gr
Slide 11: Deposits Overview
114th Quarter 2024 Industry Balance ($B) 12/31/24 Noninterest-Bearing Demand $13.5 Interest-Bearing Demand $14.3 Money Markets $6.5 Savings $14.3 Retail CDs $20.7 Jumbo CDs $6.6 Total Deposits $75.9 Deposits | Overview Deposit GrowthWell Diversified Deposit Base by Product ◼ Deposits decreased $7.1
Slide 12: Commercial Real Estate: 2024 Payoffs and CRE Concentration Trends
124th Quarter 2024 Commercial Real Estate | 2024 Payoffs and CRE Concentration Trends Q4 2024 Total Substandard (%) 2024 Payoffs Total Substandard (%) Multi-Family $623 million 55% $2.4 billion 42% Office $2 million 21% $150 million 93% Non-Office CRE $293 million 33% $939 million 19% Total CRE $916
Slide 13: Loans and Leases: Overview and Priorities
134th Quarter 2024 1. Continue to reduce commercial real estate exposure 2. Grow commercial and corporate banking 3. Grow residential mortgage led by the Private Bank & Retail Multi- Family $32.1 47% C&I $15.4 22% CRE $11.8 17% 1-4 Family $5.2 8% Co-op $2.0 3% Other $1.8 3% Loans and Leases | Overvi
Slide 14: Multi-Family: Portfolio Overview
144th Quarter 2024 Multi-Family | Portfolio Overview Highlights ◼ 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- regulated loans ◼ Average loan size of $8.5 million ◼ $3.0 bi
Slide 15: Office: Portfolio Overview
154th Quarter 2024 $3.4 $3.2 $3.0 $2.7 $2.5 12/31/23 3/31/24 6/30/24 9/30/24 12/31/24 ◼ Office portfolio $2.5 billion | 3.6% of total LHFI ◼ Average loan size of $12.7 million ◼ Office ALLL increased to 7.00% compared to 6.04% in 9/30/2024 ◼ Have taken $368 million of net charge-offs in 2024 ◼ Durin
Slide 16: Allowance for Loan Losses by Portfolio
164th Quarter 2024 9/30/2024 12/31/2024 ($ in millions) Allowance ALLL % Allowance ALLL % Change in 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 Office (ex. Owner-Occupied) $
Slide 17: Asset Quality: Non-Accrual Loans
174th Quarter 2024 MF $1,755 CRE $564 C&I $202 Other $94 $ in millions Asset Quality ($ in millions) MF CRE C&I Non-performing (not current) $710 $314 $57 Performing (current) $1,045 $252 $145 Total $1,755 $564 $202 % Performing 60% 45% 72% 56% Current Non-accrual Loans (NAL) (12/31/2024)(1) Total $
Slide 18: Maintaining a Strong Liquidity Position
184th Quarter 2024 $15.4 $16.4 $31.8 $13.3 Liquidity Net Uninsured Deposits Liquidity Sources Maintaining a Strong Liquidity Position ▪ Our liquidity profile remains solid ▪ Total liquidity of $31.8 billion with a coverage ratio of 240% ▪ Cash(1) held on balance sheet of $15.4 billion ▪ $16.4 billio
Slide 19: Investment Profile
194th Quarter 2024 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: $7.2 billion ◼ As we successfully execute on our st
Slide 20: Appendix
Appendix
Slide 21: Q4 2024 Financial Highlights
214th Quarter 2024 ($ in millions) Flagstar 12/31/24 Net Interest Income $461 Noninterest Income(1) $72 Noninterest Expense(1) $586 Provision for Loan Losses $108 Net Income / (Loss) Attributable to Common Shareholders(1) $(138) Diluted Earnings / (Loss) per Common Share(1) $(0.34) Dividends Per Sha
Slide 22: Reconciliations of GAAP and Non-GAAP Measures
224th Quarter 2024 Note: $ in millions except share data. Please note that columns of data may not add due to rounding. Reconciliations of GAAP and Non-GAAP Measures Tangible Book Value Per Common Share 12/31/2024 Total stockholders equity $8,195 Less: Core deposit and other intangibles 488 Less: Pr
Slide 23: Purchase Accounting Marks Summary
234th Quarter 2024 ($ in millions) December 31, 2023 March 31, 2024 June 30, 2024 September 31, 2024 December 31, 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 56 52 Ending Balance $
Slide 24: Peer Groups
244th Quarter 2024 Category IV Banks Ticker Citizens Financial CFG Fifth Third Bancorp FITB First Citizens Banc. FCNC.A Huntington Banc. HBAN KeyCorp KEY M&T Bank MTB Regions Financial RF Banks with $50B - $100B in Assets Ticker BOK Financial BOKF Columbia Banking System COLB Comerica CMA East West