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 Forward-Looking Information
21st Quarter 2025 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: Management Focus Areas in 2025
31st Quarter 2025 Management Focus Areas in 2025 Solid Progress During First Quarter 2025 ▪ Grow primary bank relationships ▪ Deploy expanded product offerings and capabilities into middle market, corporate, and specialized lending verticals ▪ Continue to add additional talent Execute on C&I and Pri
Slide 4: Commercial Banking Overview
41st Quarter 2025 Commercial Banking Overview DepositsCommercial Loans ◼ Regional Commercial Banking - fast decisioning and industry expertise are the competitive differentiators o Focused on relationship-focused banking in and around our branch footprint ◼ Specialized Industries and Corporate Banki
Slide 5: Commercial Banking Overview | Momentum in Focus Areas
51st Quarter 2025 $121 $170 $191 $66 $114 $129 $74 $223 $327 $36 $35 $122 $297 $542 $769 9/30/2024 12/31/2024 3/31/2025 Commercial Banking Overview | Momentum in Focus Areas New and Increased C&I Loan Commitments $ in millions Corporate & Regional Commercial Banking Specialized Industries Specialty
Slide 6: Commercial Banking Overview | Momentum in Focus Areas
61st Quarter 2025 Commercial Banking Overview | Momentum in Focus Areas Specialized Industries $74 $223 $327 $109 $319 $483 3Q'24 4Q'24 1Q'25 New Loan Fundings New Credit Commitments $ in millions Corporate and Regional Commercial Banking $36 $35 $122 $50 $148 $163 3Q'24 4Q'24 1Q'25 New Loan Funding
Slide 7: Quarterly Performance
71st Quarter 2025 Note: $ in millions except share data. Please note that columns of data may not add due to rounding. Quarterly Performance QUARTERLY PERFORMANCE Reported 1Q 2025 Notable Items Adjusted 1Q 2025 Net interest income $410 $ - $410 Non-interest income 80 - 80 Total revenue $490 $ - $490
Slide 8: Strengthened Balance Sheet
81st Quarter 2025 Disciplined execution of strategic plan has solidified the balance sheet and positioned the bank well as focus shifts to driving further diversification and scaling of growth-oriented business lines 9.1% 11.9% 12/31/23 3/31/25 Strengthened Balance Sheet Wholesale Borrowings to Tota
Slide 9: Forecast Update
91st Quarter 2025 2025 2026 2027 Diluted Core EPS(1) ($0.30 - $0.25) $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: Net Interest Margin | Proactively Managing Higher Net Interest Margin
101st Quarter 2025 FY25 FY26 FY27 2.28% 1.98% 1.79% 1.73% 1.74% 3.85% 4.15% 4.37% 4.19% 3.85% 5.50% 5.50% 5.00% 4.50% 4.50% 3/31/24 6/30/24 9/30/24 12/31/24 3/31/25 Net Interest Margin | Proactively Managing Higher Net Interest Margin 1. Net interest margin stabilizing entering 2025 and expected to
Slide 11: Noninterest Expense | Disciplined Management
111st Quarter 2025 $621 $638 $656 $556 $485 3/31/24 6/30/24 9/30/24 12/31/24 3/31/25 Noninterest Expense | Disciplined Management Highlights ◼ Linked Year: adjusted operating expenses decreased $136 million, or 22% ◼ Linked Quarter: adjusted operating expenses decreased $71 million, or 13% ◼ Reducti
Slide 12: Capital | Strong Capital Position
121st Quarter 2025 9.4% 9.5% 10.8% 11.8% 11.9% 3/31/24 6/30/24 9/30/24 12/31/24 3/31/25 Capital | Strong Capital Position CET1 Ratio Target operating range 10.5-11.5% 1. CET1 ratio of 11.9% is top quartile in peer group 2. Significant management action preserved and strengthened capital position 3.
Slide 13: Deposits | Overview
131st Quarter 2025 Industry Balance ($B) 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 Deposits | Overview Deposit ActivityWell Diversified Deposit Base by Product ◼ Deposits decreased $2.0
Slide 14: Commercial Real Estate | Payoffs and CRE Concentration Trends
141st Quarter 2025 Commercial Real Estate | Payoffs and CRE Concentration Trends 2024 Payoffs Total Substandard (%) 1Q’25 Payoffs Total Substandard (%) Multi-Family $2.1 billion 44% $673 million 62% Office $114 million 91% $14 million --% Non-Office CRE $952 million 14% $153 million 49% Total CRE $3
Slide 15: Multi-Family | Portfolio Overview
151st Quarter 2025 Multi-Family | Portfolio Overview Highlights ◼ Multi-Family portfolio ALLL at 1.82%, among the highest relative to peers(2) ◼ MF rent regulated >= 50% ALLL at 2.82% ◼ Average loan size of $8.5 million | MF ALLL reflects the mix of the company’s loans including the rent-regulated l
Slide 16: Office | Portfolio Overview
161st Quarter 2025 $3.2 $3.0 $2.7 $2.5 $2.4 3/31/24 6/30/24 9/30/24 12/31/24 3/31/25 ◼ Office portfolio $2.4 billion | 3.6% of total LHFI ◼ Average loan size of $12.6 million ◼ Office ALLL of 6.68% ◼ Have taken $368 million of net charge-offs since January 2024 Office Highlights Office | Portfolio O
Slide 17: Allowance for Loan Losses by Portfolio
171st Quarter 2025 12/31/2024 3/31/2025 ($ in millions) Allowance ALLL % Allowance ALLL % Change in 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 <50% (excl. Co-op) $244 1.29%
Slide 18: Asset Quality
181st Quarter 2025 Asset Quality Criticized Loans Total Non-accrual Loans (including LHFS) Note 1: Adjustment reflects impact from same borrower for both quarters Note 2: Presented on an annualized basis Highlights ◼ Criticized loans decreased $885 million, or 6% quarter over quarter ◼ Net charge-of
Slide 19: Maintaining a Strong Liquidity Position
191st Quarter 2025 $12.0 $18.1 $30.0 $13.0 Liquidity Net Uninsured Deposits Liquidity Profile Maintaining a Strong Liquidity Position ▪ Our liquidity profile remains solid ▪ Total liquidity of $30.0 billion with a coverage ratio of 231% ▪ Cash(1) held on balance sheet of $12.0 billion ▪ $18.1 billio
Slide 20: Investment Profile
201st Quarter 2025 $11.27 $17.70 $24.79 4/24/2025 12/31/2027 Adjusted for Warrants 12/31/2027 Adjusted for Warrants Investment Profile Note: See cautionary statements on page 2 | Most peers trade between 1.0x and 2.0x of TBV/share +57% Closing Valuation Gap to Peer Group Presents Significant Upside
Slide 21: Appendix
Appendix
Slide 22: Capital and Liquidity Peer Comparison
221st Quarter 2025 Flagstar Q1’24 Flagstar Q4’24 Flagstar Q1’25 Category IV Banks Most Recent Available $50 – 100B Asset Banks Most Recent Available CET1 Ratio 10.1% 11.8%(1) 11.9%(1) 10.8% 10.9% CET1 Ratio (inclusive of AOCI)(1)(2) 9.4% 10.7%(1)(2) 11.0%(1)(2) 8.6% 9.8% Loan to Deposit Ratio 110% 9
Slide 23: Q1 2025 Financial Highlights
231st Quarter 2025 ($ in millions) Flagstar 3/31/25 Net Interest Income $410 Noninterest Income $80 Noninterest Expense(1) $485 Provision for Loan Losses $79 Net Income / (Loss) Attributable to Common Shareholders $(108) Diluted Earnings / (Loss) per Common Share $(0.26) Dividends Per Share $0.01 RO
Slide 24: Reconciliations of GAAP and Non-GAAP Measures
241st Quarter 2025 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 3/31/2025 Total stockholders equity $8,153 Less: Core deposit and other intangibles 459 Less: Pre
Slide 25: Peer Groups
251st Quarter 2025 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 Columbia Banking System COLB Comerica CMA Cullen Frost Bankers CFR East