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FLAGSTAR FINANCIAL, INC. REPORTS SECOND QUARTER 2025 NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS OF $0.19 PER DILUTED SHARE AND ADJUSTED NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS OF $0.14 PER DILUTED SHARE
Flagstar Financial, Inc. (NYSE: FLG) ("the Company"), today reported results for the three- and six-months ended June 30, 2025. Second quarter 2025 results, on an operating basis improved significantly compared to both the linked-quarter and year-earlier periods. The second quarter 2025 net loss was $70 million compared to a net loss of $100 million for the first quarter 2025, a 30% improvement and compared to a net loss of $323 million for the second quarter 2024, a $253 million or 78% improvem
About this update from Flagstar Bank, N.a.
[{"type":"list","items":[{"val":[{"type":"text","content":" ANNOUNCES PLANS TO ELIMINATE BANK HOLDING COMPANY ","length":49,"tagName":"p"}]},{"val":[{"type":"text","content":" STRONG C&I MOMENTUM AS NEW LOAN ORIGINATIONS INCREASE 57% AND NEW COMMITMENTS RISE 80% ON A LINKED-QUARTER BASIS ","length":116,"tagName":"p"}]},{"val":[{"type":"text","content":" CRITICIZED & CLASSIFIED ASSETS DECLINE 9% FROM PRIOR QUARTER AND 15% OVER FIRST HALF OF YEAR ","length":96,"tagName":"p"}]},{"val":[{"type":"text","content":" CREDIT COSTS MODERATING AS PROVISION FOR CREDIT LOSSES DECLINED COMPARED TO FIRST QUARTER ","length":89,"tagName":"p"}]},{"val":[{"type":"text","content":" RECORD PAR PAYOFFS INCLUDING 45% IN SUBSTANDARD LOANS DRIVE CRE EXPOSURE LOWER ","length":78,"tagName":"p"}]},{"val":[{"type":"text","content":" DISCIPLINED EXPENSE MANAGEMENT PUSHES ADJUSTED OPERATING EXPENSES DOWN 5% COMPARED TO PRIOR QUARTER - ON TRACK TO MEET EXPENSE SAVE GOALS ","length":137,"tagName":"p"}]},{"val":[{"type":"text","content":" NET INTEREST MARGIN INCREASED COMPARED TO PRIOR QUARTER ","length":55,"tagName":"p"}]},{"val":[{"type":"text","content":" MAINTAINED STRONG CAPITAL AND LIQUIDITY POSITIONS ","length":49,"tagName":"p"}]}],"tagName":"ul","bulletedList":true,"length":669,"olType":false},{"type":"table","headerItems":[],"items":[{"val":[{"colspan":"3","rowspan":"1","style":"PADDING-RIGHT:0.17em;PADDING-LEFT:0.17em;VERTICAL-ALIGN:BOTTOM;TEXT-ALIGN:CENTER;","val":[{"type":"text","content":" Second Quarter 2025 Summary ","length":27,"tagName":"p","attribs":{}}]}]},{"val":[{"colspan":"3","rowspan":"1","style":"PADDING-RIGHT:0.17em;PADDING-LEFT:0.17em;VERTICAL-ALIGN:BOTTOM;TEXT-ALIGN:RIGHT;","val":[{"type":"text","content":" ","length":0,"tagName":"p","attribs":{}}]}]},{"val":[{"colspan":"1","rowspan":"1","style":"PADDING-RIGHT:0.17em;PADDING-LEFT:0.17em;VERTICAL-ALIGN:BOTTOM;TEXT-ALIGN:CENTER;","val":[{"type":"text","content":" Asset Quality ","length":13,"tagName":"p","attribs":{}}]},{"colspan":"1","rowspan":"2","style":"PADDING-RIGHT:0.17em;PADDING-LEFT:0.17em;VERTICAL-ALIGN:BOTTOM;TEXT-ALIGN:RIGHT;","val":[{"type":"text","content":" ","length":0,"tagName":"p","attribs":{}}]},{"colspan":"1","rowspan":"1","style":"PADDING-RIGHT:0.17em;PADDING-LEFT:0.17em;VERTICAL-ALIGN:BOTTOM;TEXT-ALIGN:CENTER;","val":[{"type":"text","content":" Loans and Deposits ","length":18,"tagName":"p","attribs":{}}]}]},{"val":[{"colspan":"1","rowspan":"1","style":"PADDING-RIGHT:0.17em;PADDING-LEFT:0.17em;VERTICAL-ALIGN:TOP;TEXT-ALIGN:LEFT;","val":[{"type":"text","content":" • Non-accrual loans declined 4% compared to Q1'25 ","length":107,"tagName":"p","attribs":{}},{"type":"text","content":" • Criticized loans declined $2.2 billion or 15% since December 31, 2024 ","length":167,"tagName":"p","attribs":{}},{"type":"text","content":" • Par pay-offs totaled $1.5 billion, up ~80%, with 45% of them being substandard loans ","length":182,"tagName":"p","attribs":{}},{"type":"text","content":" • Total ACL of $1,162 million or 1.81% of total loans HFI compared to 1.82% last quarter ","length":184,"tagName":"p","attribs":{}},{"type":"text","content":" • Multi-family ACL coverage of 1.68% ","length":90,"tagName":"p","attribs":{}},{"type":"text","content":" • Multi-family ACL coverage for rent-regulated units equal to or greater than 50% of 2.88% ","length":186,"tagName":"p","attribs":{}},{"type":"text","content":" • NCOs to average loans relatively stable at 0.72% ","length":104,"tagName":"p","attribs":{}}]},{"colspan":"1","rowspan":"1","style":"PADDING-RIGHT:0.17em;PADDING-LEFT:0.17em;VERTICAL-ALIGN:TOP;TEXT-ALIGN:LEFT;","val":[{"type":"text","content":" • CRE exposure down $2.4 billion or 5% compared to Q1'25 ","length":156,"tagName":"p","attribs":{}},{"type":"text","content":" • Multi-family loans down $1.5 billion or 5% ","length":80,"tagName":"p","attribs":{}},{"type":"text","content":" • CRE loans declined $874 million or 8% ","length":75,"tagName":"p","attribs":{}},{"type":"text","content":" • Continued momentum in C&I lending ","length":93,"tagName":"p","attribs":{}},{"type":"text","content":" • Focus area growth of 12% compared to 4% in Q1'25 ","length":90,"tagName":"p","attribs":{}},{"type":"text","content":" • New commitments of $1.9 billion, up 80% vs. Q1'25 ","length":91,"tagName":"p","attribs":{}},{"type":"text","content":" • Originations of $1.2 billion, up 57% vs. Q1'25 ","length":88,"tagName":"p","attribs":{}},{"type":"text","content":" • Deposit decline reflects $2.2 billion decrease in brokered deposits ","length":123,"tagName":"p","attribs":{}}]}]},{"val":[{"colspan":"1","rowspan":"1","style":"PADDING-RIGHT:0.17em;PADDING-LEFT:0.17em;VERTICAL-ALIGN:BOTTOM;TEXT-ALIGN:CENTER;","val":[{"type":"text","content":" Capital ","length":7,"tagName":"p","attribs":{}}]},{"colspan":"1","rowspan":"2","style":"PADDING-RIGHT:0.17em;PADDING-LEFT:0.17em;VERTICAL-ALIGN:BOTTOM;TEXT-ALIGN:RIGHT;","val":[{"type":"text","content":" ","length":0,"tagName":"p","attribs":{}}]},{"colspan":"1","rowspan":"1","style":"PADDING-RIGHT:0.17em;PADDING-LEFT:0.17em;VERTICAL-ALIGN:BOTTOM;TEXT-ALIGN:CENTER;","val":[{"type":"text","content":" Profitability ","length":13,"tagName":"p","attribs":{}}]}]},{"val":[{"colspan":"1","rowspan":"1","style":"PADDING-RIGHT:0.17em;PADDING-LEFT:0.17em;VERTICAL-ALIGN:TOP;TEXT-ALIGN:LEFT;","val":[{"type":"text","content":" • CET1 capital ratio improved to 12.33%, at or above peer group levels ","length":166,"tagName":"p","attribs":{}},{"type":"text","content":" • Book value per common share of $18.28 ","length":93,"tagName":"p","attribs":{}},{"type":"text","content":" • Tangible book value per share of $17.24 ","length":95,"tagName":"p","attribs":{}}]},{"colspan":"1","rowspan":"1","style":"PADDING-RIGHT:0.17em;PADDING-LEFT:0.17em;VERTICAL-ALIGN:TOP;TEXT-ALIGN:LEFT;","val":[{"type":"text","content":" • PPNR, as adjusted, was a positive $9 million compared to a loss of $23 million in prior quarter ","length":193,"tagName":"p","attribs":{}},{"type":"text","content":" • NIM increased 7 basis points to 1.81% compared to prior quarter ","length":119,"tagName":"p","attribs":{}},{"type":"text","content":" • Non-interest expense of $513 million, down $19 million or 4% over the prior quarter and adjusted operating expenses of $460 million, down $25 million or 5% compared to prior quarter ","length":321,"tagName":"p","attribs":{}}]}]}],"length":2909},{"type":"text","content":" HICKSVILLE, N.Y. , July 25, 2025 /PRNewswire/ -- Flagstar Financial, Inc. (NYSE: FLG) ("the Company"), today reported results for the three- and six-months ended June 30, 2025 . Second quarter 2025 results, on an operating basis improved significantly compared to both the linked-quarter and year-earlier periods. The second quarter 2025 net loss was $70 million compared to a net loss of $100 million for the first quarter 2025, a 30% improvement and compared to a net loss of $323 million for the second quarter 2024, a $253 million or 78% improvement. The net loss attributable to common stockholders for the second quarter 2025 was $78 million , or $0.19 per diluted share, compared to a net loss attributable to common stockholders of $108 million, or $0.26 per diluted share for the first quarter 2025, a 28% improvement and compared to a net loss attributable to common stockholders of $333 million , or $1.14 per diluted share for the second quarter 2024, a 77% improvement.","length":1003,"tagName":"p"},{"type":"readMore"},{"type":"image","alt":"(PRNewsfoto/Flagstar Financial, Inc.)","displaySize":"","headline":null,"caption":"(PRNewsfoto/Flagstar Financial, Inc.)","className":"","disableSlideshowImg":false,"size":{"original":{"width":400,"height":43,"url":"https://media.zenfs.com/en/prnewswire.com/274ac306d1482d667bb7de3de2f6e768"},"resized":{"url":"https://s.yimg.com/ny/api/res/1.2/LSmYjLWKjNEWu6Z7G7DmLQ--/YXBwaWQ9aGlnaGxhbmRlcjt3PTcwNTtoPTc2O2NmPXdlYnA-/https://media.zenfs.com/en/prnewswire.com/274ac306d1482d667bb7de3de2f6e768","width":400,"height":43}},"href":"https://mma.prnewswire.com/media/2543436/Flagstar_Financial_Logo.html","hrefExternal":true,"rel":"nofollow"},{"type":"text","content":"The Company's six month results reflect a similar improvement, on an operating basis. For the six months ended June 30, 2025 , the Company reported a net loss of $170 million compared to a net loss of $650 million for the six months ended June 30, 2024 , a $480 million or 74% improvement. The net loss attributable to common stockholders for the six months ended June 30, 2025 was $186 million or $0.45 per diluted share compared to a net loss attributable to common stockholders for the six months ended June 30, 2024 of $668 million or $2.48 per diluted share.","length":590,"tagName":"p"},{"type":"text","content":" CEO COMMENTARY ","length":14,"tagName":"p"},{"type":"text","content":"Commenting on the Company's second quarter 2025 performance, Chairman, President, and Chief Executive Officer, Joseph M. Otting stated, "I am very pleased with the progress the Company made during the second quarter across multiple fronts as we continued to execute on our successful strategy of transforming Flagstar into a top-performing, well-diversified regional bank. We made further gains on our C&I and Private Bank growth strategy, our credit quality metrics continue to improve, we continued to lower our operating expenses, reduced our commercial real estate exposure, and we also increased our net interest margin. As a result, our earnings profile during the quarter improved, as the second quarter net loss narrowed significantly compared to both the second quarter of last year and the first quarter of this year, while our net revenues, pre-provision for loan losses, turned positive during the quarter. This bodes well for our expected return to profitability in the fourth quarter of this year.","length":1024,"tagName":"p"},{"type":"text","content":""During the second quarter, we made tremendous progress in our C&I business, funding $1.2 billion of new loans, up nearly 57% compared to our first quarter funding levels. Importantly, we grew C&I loans in our two focus areas - Specialized Industries and Corporate/Regional Commercial Banking - by a combined $422 million, up about 12% compared to the previous quarter. In addition, we added 47 bankers and credit staff during the quarter, all from large regional banks, and plan to hire an additional 40 to 50 bankers during the second half of the year.","length":572,"tagName":"p"},{"type":"text","content":""We also made further headway on reducing the level of our multi-family and commercial real estate exposure, due to record par payoffs of $1.5 billion . This is a primary reason why our total CRE balances are down 5% compared to the first quarter and 16% since the end of 2023. In addition, we continued to improve our credit quality. Overall, non-accrual loans were down slightly compared to the previous quarter - the first quarter in over a year that non-accrual loans have been stable or down. More importantly, criticized assets decreased $1.3 billion or 9% quarter over quarter and are down 15% or $2.2 billion for the first six months of the year.","length":658,"tagName":"p"},{"type":"text","content":""In addition to the progress made on the financial front this quarter, yesterday afternoon we announced plans to enhance our corporate structure by merging the holding company into the Bank with Flagstar Bank, N.A. becoming the surviving entity. In addition to simplifying our corporate structure, this action is expected to further reduce costs, streamline various functions across the organization, and eliminate redundant corporate activities and duplicative supervision and regulation.","length":494,"tagName":"p"},{"type":"text","content":""We have made great strides during the first half of the year and anticipate further progress over the remainder of the year. As always, I would like to thank all of our teammates for their efforts and collaboration. It's a team effort and together we will transform Flagstar into one of the best performing regional banks in the country."","length":353,"tagName":"p"},{"type":"text","content":" BALANCE SHEET SUMMARY AS OF JUNE 30, 2025 ","length":41,"tagName":"p"},{"type":"text","content":"At June 30, 2025, total assets were $92.2 billion , down $5.4 billion or 6% versus March 31, 2025 and down $7.9 billion or 8% versus December 31, 2024. Both the linked-quarter decline and the decline from year-end 2024 were driven by a decrease in total loans and leases held for investment ("HFI") and in cash balances, offset by growth in available-for-sale ("AFS") investment securities, as the Company continues to redeploy excess cash into higher earning assets. Accordingly, AFS investment securities rose $2.0 billion or 16% to $14.8 billion on a linked-quarter basis and up $4.4 billion or 43% since year-end 2024.","length":656,"tagName":"p"},{"type":"text","content":"Total loans and leases HFI at June 30, 2025 were $64.1 billion , down $2.5 billion or 4% on a linked-quarter basis and down $4.2 billion or 6% versus December 31, 2024. The multi-family loan portfolio declined $1.5 billion or 5% to $31.9 billion on a linked-quarter basis and declined $2.2 billion or 6% versus December 31, 2024. The CRE portfolio decreased $874 million or 8% on a linked-quarter basis to $10.6 billion and declined $1.2 billion or 10% versus December 31, 2024. The linked-quarter decrease was primarily the result of par payoffs and maturities of $1.5 billion during the second quarter; the decline since year-end 2024 was also primarily due to par payoffs of $2.3 billion . The decrease in both of these portfolios is in line with the Company's ongoing strategy to reduce its overall exposure to multi-family and CRE loans to diversify the loan portfolio.","length":901,"tagName":"p"},{"type":"text","content":"Our new C&I lending teams had another strong quarter of production. During the second quarter, new credit commitments increased to $1.9 billion , up 80% compared to $1.0 billion in the first quarter and up 139% compared to $789 million in the fourth quarter of 2024. Of these amounts, we funded $1.2 billion during the second quarter, up 57% compared to $769 million in the first quarter and up 123% compared to $542 million in the fourth quarter of 2024. Our primary focus areas of Specialized Industries and Corporate/Regional Commercial Banking grew $422 million or 12% compared to the first quarter.","length":606,"tagName":"p"},{"type":"text","content":"Overall, however, total C&I loans declined $316 million or 2% on a linked-quarter basis to $14.4 billion and declined $950 million or 6% versus December 31, 2024. During the first six months of the year, the Company had pay-offs in several legacy C&I businesses, as it took deliberate steps to de-risk certain outsized credits by reducing hold limits and exiting lower risk rated and less profitable credits.","length":421,"tagName":"p"},{"type":"text","content":"Total deposits at June 30, 2025 were $69.7 billion , a $4.2 billion or 6% linked-quarter decrease and $6.1 billion or 8% decrease versus December 31, 2024. Both declines were primarily the result of the Company's disciplined deposit pricing approach, which led to a reduction in high-cost certificates of deposit ("CDs") and mortgage escrow-related deposits.","length":381,"tagName":"p"},{"type":"text","content":"CDs decreased $1.7 billion or 6% to $24.2 billion on a linked-quarter basis and decreased $3.1 billion or 11% versus December 31, 2024 . Both the linked-quarter and year-to-date declines in CDs were primarily driven by a decline in brokered CDs, as part of the Company's strategy to reduce higher cost funding. The decline in brokered CDs was partially offset by growth in short-term retail CDs with rates in the low 4% range. During the second quarter, the Company paid off $2.2 billion in brokered CDs at a weighted average cost of 4.92%. On a year-to-date basis, the Company reduced brokered deposits by $4.1 billion with a weighted average cost of 4.97%. These various declines led to an 11 basis point quarter-over-quarter improvement in the second quarter cost of deposits.","length":782,"tagName":"p"},{"type":"text","content":"At June 30, 2025, wholesale borrowings totaled $12.2 billion , down $1.0 billion or 8% on a linked-quarter basis and down $1.3 billion or 9% versus December 31, 2024. After rebuilding our liquidity position over the course of 2024 through deposit growth and asset sales, we paid down wholesale borrowings, primarily Federal Home Loan Bank of New York ("FHLB-NY") advances, in the second half of 2024. This continued in the second quarter 2025, as the Company paid off $1 billion of FHLB-NY advances that matured during the quarter.","length":550,"tagName":"p"},{"type":"text","content":" NET INCOME (LOSS) | NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS - AS ADJUSTED ","length":87,"tagName":"p"},{"type":"text","content":"In addition to $14 million of merger-related expenses, second quarter 2025 results included several notable items including $2 million in severance costs related to branch closures, $7 million in lease cost acceleration related to previously disclosed branch closures, and $3 million in trailing costs related to the sale of our mortgage servicing/sub-servicing and third-party origination business.","length":399,"tagName":"p"},{"type":"text","content":"Adjusted for these items, the net loss for second quarter 2025 was $52 million and the net loss attributable to common stockholders was $60 million or $0.14 per diluted share. This compares to a first quarter 2025 net loss, as adjusted, of $86 million and a net loss attributable to common stockholders of $94 million or $0.23 per diluted share. Second quarter 2024 net loss and net loss attributable to common stockholders, as adjusted for merger-related expenses, was $298 million and $308 million or $1.05 per diluted share, respectively.","length":541,"tagName":"p"},{"type":"text","content":"For the first six months of 2025, the Company also had several notable items, including $22 million in merger-related expenses, $12 million in lease cost acceleration related to branch closures, $8 million in trailing costs related to the sale of our mortgage servicing/sub-servicing business, and $2 million in severance costs related to branch closures and employee reduction actions. As adjusted for these items, the Company reported a net loss of $138 million and a net loss attributable to common stockholders of $154 million or $0.37 per diluted share.","length":558,"tagName":"p"},{"type":"text","content":"For the first six months of 2024, the Company reported a net loss of $472 million and a net loss attributable to common stockholders of $490 million or $1.82 per diluted share. Included in the six month 2024 results were $77 million of merger-related expenses and a $121 million reduction in the bargain purchase gain arising from the Signature transaction.","length":357,"tagName":"p"},{"type":"text","content":" EARNINGS SUMMARY FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 ","length":65,"tagName":"p"},{"type":"text","content":" Net Interest Income, Net Interest Margin, and Average Balance Sheet ","length":67,"tagName":"p"},{"type":"text","content":" Net Interest Income ","length":19,"tagName":"p"},{"type":"text","content":"Net interest income for the second quarter 2025 totaled $419 million, up $9 million, or 2%, compared to first quarter 2025 but down $138 million or 25% on a year-over-year basis. The linked-quarter increase 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 and a modest improvement in the average yield. The year-over-year decline was driven by a smaller balance sheet partially offset by lower funding costs. The smaller balance sheet reflects the Company's strategic actions over the past year to reduce its focus on multi-family and CRE loans through loan sales and par payoffs, along with the sale of our mortgage warehouse business and mortgage servicing/sub-servicing and third-party origination businesses.","length":842,"tagName":"p"},{"type":"text","content":"In addition, balances were impacted by a lower level of C&I loan balances as growth in our focus businesses (Specialized Industries and Corporate/Regional Commercial Banking) was offset by payoffs in other non-core, non-relationship businesses. As with the first quarter 2025, during the second quarter, the Company reinvested a portion of its cash position into higher yielding investment securities. The decrease in average loan balances was partially offset by a lower level of average deposits and average borrowed funds as the Company paid off brokered deposits and FHLB-NY advances during the quarter.","length":611,"tagName":"p"},{"type":"text","content":"For the first six months of 2025, net interest income decreased $352 million or 30% to $829 million compared to $1 .2 billion for the first six months of 2024. The year-over-year decline is due to the significant decline in average interest-earning assets along with a concurrent decline in the average yield. The decrease in average interest-earning assets was primarily driven by a decline in average loan balances due to the Company's strategy to reduce its exposure to multi-family and CRE loans and the sale of the mortgage warehouse business and the mortgage servicing/sub-servicing and third-party origination business during full-year 2024. This was partially offset by a decline in average interest-bearing liabilities, mainly the result of the Company paying off a substantial amount of wholesale borrowings and brokered deposits during 2024 and the first half of 2025.","length":897,"tagName":"p"},{"type":"table","headerItems":[],"items":[{"val":[{"colspan":"1","rowspan":"1","style":"PADDING-RIGHT:0.17em;PADDING-LEFT:0.17em;VERTICAL-ALIGN:BOTTOM;","val":[{"type":"text","content":" Net Interest Income ","length":19,"tagName":"p","attribs":{}}]},{"colspan":"1","rowspan":"1","style":"PADDING-RIGHT:0.83em;PADDING-LEFT:0.17em;VERTICAL-ALIGN:BOTTOM;TEXT-ALIGN:CENTER;","val":[{"type":"text","content":" ","length":0,"tagName":"p","attribs":{}}]},{"colspan":"1","rowspan":"1","style":"PADDING-RIGHT:0.83em;PADDING-LEFT:0.17em;VERTICAL-ALIGN:BOTTOM;TEXT-ALIGN:CENTER;","val":[{"type":"text","content":" 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