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  4. FLAGSTAR FINANCIAL, INC. REPORTS FOURTH QUARTER 2024 GAAP NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS OF $0.41 PER DILUTED SHARE AND NON-GAAP ADJUSTED NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS OF $0.34 PER DILUTED SHARE

FLAGSTAR FINANCIAL, INC. REPORTS FOURTH QUARTER 2024 GAAP NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS OF $0.41 PER DILUTED SHARE AND NON-GAAP ADJUSTED NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS OF $0.34 PER DILUTED SHARE

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Flagstar Financial (NYSE: FLG) reported a Q4 2024 net loss of $160 million, with a loss per diluted share of $0.41. The company's financial position showed improvement from Q3 2024's loss of $280 million, though full-year 2024 resulted in a net loss of $1,090 million.

Key highlights include strengthening capital position with CET1 ratio increasing to 11.9%, improved funding mix with reduced wholesale borrowings, and continued deposit growth in retail and private banking channels. Total assets were $100.2 billion, down 12% year-over-year. The company saw significant reductions in commercial real estate exposure, with multi-family loans decreasing $3.2 billion (9%) and CRE loans declining $1.8 billion (17%) year-to-date.

Net interest income for Q4 2024 was $461 million, down 10% from Q3 2024 and 38% year-over-year. The net interest margin decreased to 1.73%, down 6 basis points from the previous quarter.

Flagstar Financial (NYSE: FLG) ha registrato una perdita netta di 160 milioni di dollari nel quarto trimestre del 2024, con una perdita per azione diluita di 0,41 dollari. La posizione finanziaria dell'azienda ha mostrato un miglioramento rispetto alla perdita di 280 milioni di dollari del terzo trimestre del 2024, anche se l'anno fiscale 2024 si è concluso con una perdita netta di 1.090 milioni di dollari.

Tra i punti salienti vi è il rafforzamento della posizione patrimoniale, con un rapporto CET1 che è aumentato all'11,9%, un miglioramento della composizione dei finanziamenti con riduzioni nei prestiti all'ingrosso e una continua crescita dei depositi nei canali bancari retail e privati. Il totale degli attivi ammontava a 100,2 miliardi di dollari, in calo del 12% rispetto all'anno precedente. L'azienda ha registrato significative riduzioni dell'esposizione al mercato immobiliare commerciale, con prestiti multi-familiari diminuiti di 3,2 miliardi di dollari (9%) e prestiti CRE in calo di 1,8 miliardi di dollari (17%) dall'inizio dell'anno.

Il reddito netto da interessi per il quarto trimestre del 2024 è stato di 461 milioni di dollari, in calo del 10% rispetto al terzo trimestre del 2024 e del 38% anno su anno. Il margine netto d'interesse è sceso all'1,73%, in diminuzione di 6 punti base rispetto al trimestre precedente.

Flagstar Financial (NYSE: FLG) reportó una pérdida neta de 160 millones de dólares en el cuarto trimestre de 2024, con una pérdida por acción diluida de 0,41 dólares. La posición financiera de la empresa mostró una mejora respecto a la pérdida de 280 millones de dólares del tercer trimestre de 2024, aunque el año completo de 2024 resultó en una pérdida neta de 1,090 millones de dólares.

Los aspectos más destacados incluyen el fortalecimiento de la posición de capital, con un ratio CET1 que aumenta al 11,9%, una mejora en la mezcla de financiamiento con una reducción de los préstamos mayoristas y un continuo crecimiento de los depósitos en los canales de banca minorista y privada. Los activos totales fueron de 100,2 mil millones de dólares, un 12% menos que el año anterior. La empresa vio reducciones significativas en la exposición al sector inmobiliario comercial, con préstamos multifamiliares disminuyendo en 3,2 mil millones de dólares (9%) y préstamos CRE cayendo en 1,8 mil millones de dólares (17%) hasta la fecha.

Los ingresos netos por intereses para el cuarto trimestre de 2024 fueron de 461 millones de dólares, un 10% menos que en el tercer trimestre de 2024 y un 38% menos que el año anterior. El margen neto de interés disminuyó al 1,73%, una disminución de 6 puntos básicos en comparación con el trimestre anterior.

플래그스타 파이낸셜 (NYSE: FLG)는 2024년 4분기에 1억 6천만 달러의 순손실을 보고했으며, 희석 주당 손실은 0.41달러입니다. 회사의 재무 상황은 2024년 3분기 2억 8천만 달러의 손실에서 개선되었지만, 2024년 전체로는 10억 9천만 달러의 순손실을 기록했습니다.

주요 하이라이트에는 CET1 비율이 11.9%로 증가한 자본 위치 강화, 도매 차입금 감소로 개선된 자금 조달 믹스, 소매 및 개인 뱅킹 채널에서의 계속되는 예금 증가가 포함됩니다. 총 자산은 1천억 2억 달러였으며, 전년 대비 12% 감소했습니다. 회사는 상업용 부동산 노출의 상당한 감소를 경험했으며, 다가구 대출이 32억 달러(9%) 감소하고 CRE 대출이 연초 대비 18억 달러(17%) 줄었습니다.

2024년 4분기의 순이자 수익은 4억 6천1백만 달러로, 2024년 3분기보다 10% 감소하고 전년 대비 38% 감소했습니다. 순이자 마진은 1.73%로, 이전 분기보다 6베이시스 포인트 하락했습니다.

Flagstar Financial (NYSE: FLG) a annoncé une perte nette de 160 millions de dollars au quatrième trimestre 2024, avec une perte par action diluée de 0,41 dollar. La position financière de l'entreprise a montré une amélioration par rapport à la perte de 280 millions de dollars du troisième trimestre 2024, bien que l'année entière 2024 ait abouti à une perte nette de 1 090 millions de dollars.

Les points forts comprennent un renforcement de la position en capital avec un ratio CET1 augmentant à 11,9%, un mix de financement amélioré avec une réduction des emprunts de gros, et une croissance continue des dépôts dans les canaux de banque de détail et privée. Les actifs totaux s'élevaient à 100,2 milliards de dollars, en baisse de 12% par rapport à l'année précédente. L'entreprise a connu des réductions significatives de son exposition à l'immobilier commercial, avec des prêts multifamiliaux diminuant de 3,2 milliards de dollars (9%) et des prêts CRE décroissant de 1,8 milliard de dollars (17%) depuis le début de l'année.

Le revenu net d'intérêts pour le quatrième trimestre 2024 était de 461 millions de dollars, en baisse de 10% par rapport au troisième trimestre 2024 et de 38% d'une année sur l'autre. La marge nette d'intérêt a diminué à 1,73%, en baisse de 6 points de base par rapport au trimestre précédent.

Flagstar Financial (NYSE: FLG) hat im vierten Quartal 2024 einen Nettverlust von 160 Millionen Dollar gemeldet, mit einem Verlust pro verwässerter Aktie von 0,41 Dollar. Die finanzielle Lage des Unternehmens zeigte eine Verbesserung im Vergleich zum Verlust von 280 Millionen Dollar im dritten Quartal 2024, obwohl das Gesamtjahr 2024 einen Nettverlust von 1,090 Millionen Dollar erbrachte.

Wichtige Höhepunkte sind die Stärkung der Kapitalposition mit einer Erhöhung des CET1-Verhältnisses auf 11,9%, eine verbesserte Finanzierungsstruktur mit reduzierten Großkrediten und ein kontinuierliches Einlagenwachstum in den Einzelhandels- und Privatbanking-Kanälen. Die Gesam资产 betrugen 100,2 Milliarden Dollar, was einem Rückgang um 12% im Jahresvergleich entspricht. Das Unternehmen verzeichnete signifikante Reduzierungen seiner Exposition im gewerblichen Immobilienbereich, wobei sich die Mehrfamilienkredite um 3,2 Milliarden Dollar (9%) verringerten und die CRE-Kredite um 1,8 Milliarden Dollar (17%) im bisherigen Jahr gesenkt wurden.

Die Nettozinserträge für das vierte Quartal 2024 lagen bei 461 Millionen Dollar, was einem Rückgang von 10% gegenüber dem dritten Quartal 2024 und einem Rückgang von 38% im Jahresvergleich entspricht. Die Nettozinsspanne sank auf 1,73%, was einem Rückgang um 6 Basispunkte gegenüber dem vorherigen Quartal entspricht.

Positive
  • CET1 capital ratio improved to 11.9%, reaching top quartile of peer group
  • Provision for credit losses declined 55% quarter-over-quarter
  • Retail deposits increased by $7.3 billion (17%) year-to-date
  • Private Bank deposits grew by $2.4 billion (15%) since March 2024
  • Net charge-offs declined 8% versus previous quarter
Negative
  • Q4 2024 net loss of $160 million ($0.41 per diluted share)
  • Full-year 2024 net loss of $1,090 million ($3.40 per diluted share)
  • Net interest income declined 38% year-over-year to $461 million
  • Net interest margin decreased to 1.73%, down 109 basis points year-over-year
  • Total assets decreased by $13.9 billion (12%) year-over-year

Insights

Flagstar's Q4 2024 results demonstrate meaningful progress in its strategic transformation, though challenges persist. The company's deliberate balance sheet restructuring has yielded several positive outcomes:

Capital & Risk Profile Improvement:

  • CET1 ratio strengthening to 11.9% represents a significant 280 basis point year-over-year improvement, positioning Flagstar in the top quartile among peers
  • Strategic reduction in CRE exposure, with multi-family loans down 9% YTD and CRE loans decreased 17% YTD, reducing concentration risk
  • Stabilizing asset quality metrics with NCOs declining 8% QoQ and steady non-accrual loans suggest credit normalization

Funding Optimization:

  • Successful deposit strategy evidenced by 3% QoQ growth in both retail and private banking channels, despite lowering deposit rates
  • Reduction in wholesale borrowings by 31% QoQ and brokered CDs by 20% demonstrates improved funding mix
  • Total liquidity coverage of 240% on uninsured deposits provides robust safety margin

While net interest income pressure persists, with NIM compressing to 1.73%, the company's strategic actions are building a more sustainable earnings foundation. The 55% reduction in credit loss provisions and narrowing quarterly losses suggest the worst of the credit cycle may be behind them. The focus on commercial banking growth, evidenced by $620 million in new commitments, indicates potential for revenue diversification and improved profitability in 2025.

  • CAPITAL POSITION CONTINUES TO STRENGTHEN AS CET1 RATIO INCREASES TO 11.9%, TOP QUARTILE OF PEER GROUP
  • ONGOING IMPROVEMENT IN FUNDING MIX AS WHOLESALE BORROWINGS AND HIGH-COST DEPOSITS DECLINE
  • CONTINUED DEPOSIT GROWTH IN RETAIL CHANNEL AND IN THE PRIVATE BANK, BOTH UP 3% SEQUENTIALLY
  • PROVISION FOR CREDIT LOSSES DECLINED 55%
  • COMMERCIAL REAL ESTATE EXPOSURE CONTINUES TO DECLINE DUE TO STRONG PAYOFF ACTIVITY AND LOAN SALES

 

Fourth Quarter 2024 Summary


Asset Quality


Loans, Deposits, and Funding

  • Asset quality trends stabilizing:
    • NCOs declined 8% versus previous quarter
    • Non-accrual loans relatively flat compared to prior quarter
    • Nearly 60% of non-accrual loans are current
  • Total ACL of $1.2 billion or 1.78% of total HFI, compared to 1.87% in prior quarter
  • Multi-family ACL coverage, excluding co-op loans, increased to 1.95%
  • Office ACL coverage increased to 7.00%
  • Another strong quarter of par payoffs
  • Over 90% of multi-family loans that repriced in 2024 are either current or paid off at par

 

  • Multi-family loans decreased $1.0 billion or 3%; $3.2 billion or 9% YTD
  • CRE loans declined $532 million or 6%; $1.8 billion or 17% YTD
  • Retail deposits up $0.9 billion or 3%; $7.3 billion or 17% YTD
  • Private Bank deposits increased $0.5 billion or 3% and $2.4 billion or 15% since March 31, 2024
  • Brokered CDs down $2.5 billion or 20%
  • Wholesale borrowings down $5.9 billion or 31%, now represent 13% of total assets

 

Capital


Liquidity

  • CET1 capital ratio improved to 11.9%, at or above peer group levels
  • Book value per common share of $18.54
  • Tangible book value per share of $17.36

 

  • Ample total liquidity of $32 billion
  • Represents 240% coverage on uninsured deposits
  • $16.4 billion of available borrowing capacity and high-quality liquid assets 

 

HICKSVILLE, N.Y., Jan. 30, 2025 /PRNewswire/ -- Flagstar Financial, Inc. (NYSE: FLG) ("the Company"), today reported results for the fourth quarter and full-year 2024.  Fourth quarter 2024 net loss was $160 million compared to a net loss of $280 million for third quarter 2024, and a net loss of $2,705 million for fourth quarter 2023.  The net loss attributable to common stockholders for fourth quarter 2024 was $168 million, or $0.41 per diluted share, compared to a net loss attributable to common stockholders of $289 million, or $0.79 per diluted share for third quarter 2024, and a net loss attributable to common stockholders of $2,713 million, or $11.27 per diluted share for fourth quarter 2023.

For the year ended 2024, the Company reported a net loss of $1,090 million compared to a net loss of $79 million for the year ended 2023.  Net loss attributable to common stockholders for the year ended 2024 was $1,125 million or $3.40 per diluted share compared to a net loss attributable to common stockholders of $112 million or $0.49 per diluted share for the year ended 2023.

CEO COMMENTARY 

Commenting on the Company's fourth quarter and full-year 2024 performance, Chairman, President, and Chief Executive Officer, Joseph M. Otting stated, "2024 was a transitional year for Flagstar.  Despite this, the Company made tremendous progress on each of its strategic priorities and set the stage from which to grow going forward.  During the year, the Company significantly bolstered its capital position through a combination of actions including a $1.05 billion capital infusion and the sale of several non-core businesses; enhanced its liquidity through deposit growth and cash proceeds from the sale of our mortgage warehouse and mortgage servicing and third-party origination businesses; completed a review of the entire commercial real estate portfolio, including the multi-family portfolio, taking significant charge-offs in an effort to reduce risk within the portfolio; assembled a strong management team, supported by a high-quality Board of Directors; improved our regulatory relationships; and continued to invest in key areas such as commercial banking and risk management.

"Our fourth quarter net loss per diluted share narrowed this quarter compared to the previous quarter and significantly exceeded expectations due largely to an improving credit quality profile.  Our non-accrual loans were relatively unchanged this quarter after increasing by over $2 billion year-to-date while net charge-offs declined compared to the third quarter, driving a 55% quarter-over-quarter decrease in the provision for credit losses.  Our full-year results were also better than expected with virtually all of our metrics in-line or better than the guidance we provided earlier in the year.

"We continued to make inroads on reducing our commercial real estate exposure and diversifying our loan portfolio.  Multi-family loans declined $3.2 billion or 9% over the course of the year, while CRE loans declined $1.8 billion or 17%.  We managed down our exposures through run-off of non-relationship CRE loans, par payoffs, and strategic loan sales.

"We had another good deposit growth quarter in both our retail channel and in the private bank, despite the fact that we lowered deposit rates throughout the quarter.  We also garnered some early successes in our commercial lending business, with $620 million in new commitments and a robust pipeline heading into the first quarter, as our recent hires are already making a positive impact.

"Perhaps our most important accomplishment this year is the improvement in our capital position, as measured by our CET1 ratio, which increased over 280 basis points during the year to 11.9%.

"All of these trends are positive and point to the significant momentum underpinning our growth initiatives, especially in our commercial banking business.  I am confident in management's ability to execute on its 2025 strategic initiatives to transform Flagstar into a top-tier regional bank with a solid balance sheet and strong earnings power.

"Finally, I would like to thank each of our teammates for their support and commitment to each other and our customers over the course of the past year."

BALANCE SHEET SUMMARY AS OF DECEMBER 31, 2024

At December 31, 2024, total assets were $100.2 billion, down $13.9 billion or 12% compared to December 31, 2023 and down $14.2 billion or also 12% versus September 30, 2024.  The year-over-year decline was driven by a decrease in total loans and leases held for investment (HFI), partially offset by an increase in cash and cash equivalents, while the linked-quarter decrease was the result of a decrease in total loans and leases HFI and a decline in cash balances.  This was part of the Company's strategy to reduce our commercial real estate exposure and strengthen our funding profile.  During the first three quarters of 2024, the Company took various actions to increase liquidity, while in the fourth quarter, we utilized a portion of our liquidity to pay off higher cost wholesale borrowings and brokered CDs.

Total loans and leases held for investment at December 31, 2024 were $68.3 billion, down $16.3 billion or 19% on a year-over-year basis and down $2.8 billion or 4% on a linked-quarter basis.  The multi-family portfolio declined $3.2 billion or 9% to $34.1 billion at December 31, 2024 compared to $37.3 billion at December 31, 2023, and it decreased $1 billion or 3% compared to September 30, 2024.  CRE loans decreased $1.8 billion or 17% compared to December 31, 2023 to $8.7 billion and they decreased $532 or 6% compared to September 30, 2024.  The decline in these two portfolios is part of the Company's overall strategy to reduce its commercial real estate exposure. Both the linked-quarter and year-to-date declines were the result of existing non-relationship borrowers, par payoffs, and through opportunistic loan sales.

Commercial and industrial loans also declined on both a linked-quarter and year-to-date basis.  At December 31, 2024, commercial and industrial loans totaled $15.4 billion, down $1.1 billion or 7% compared to the previous quarter and $9.9 billion or 39% year-to-date.  The year-to-date decline largely resulted from the sale of our mortgage warehouse business, which at closing, had approximately $6 billion in loans, along with our decision to run off certain non-core loans within our specialty finance business totaling $2.4 billion.  The linked-quarter decrease was due to additional run-off in the specialty finance portfolio and a decrease in MSR lending.

Total deposits at December 31, 2024 were $75.9 billion, a decrease of $5.7 billion or 7% on a year-to-date basis and a decrease of $7.1 billion or 9% on a linked-quarter basis.  The year-to-date and linked-quarter decrease was driven by deposit outflows during the first quarter, driven by credit rating agency downgrades and the sale of our mortgage servicing and third-party origination business during the fourth quarter.  This transaction included the transfer of mortgage escrow deposits to the buyer.  Non-interest-bearing deposits decreased $7.0 billion or 34% on a year-to-date basis and $5.1 billion or 27% on a linked-quarter basis to $13.5 billion.  Both the year-to-date and linked-quarter decline was due to a $4.5 billion decline in escrow deposits resulting from the sale of the mortgage servicing business and by the aforementioned deposit outflows during the first quarter of 2024.

Certificates of deposit increased $5.8 billion or 27% to $27.3 billion, on a year-to-date basis, but declined $1.9 billion or 7% on a linked-quarter basis.  The year-to-date increase is primarily due to our promotional CD campaign during the year, while the linked-quarter decline is due to us paying off $2.5 billion of brokered CDs, reflecting our strategy to reduce higher cost funding.  Savings accounts rose $5.5 billion or 63% to $14.3 billion year-to-date and $772 million or 6% on a linked-quarter basis.  The increase was due to growth in our promotional rate high-yield savings product. 

Fourth quarter 2024 represented the third consecutive quarter of solid deposit growth in our retail channel and in the Private Bank.  Retail deposits increased $0.9 billion or 3% to $35.9 billion on a linked-quarter basis and they rose $7.3 billion or 17% on a year-to-date basis.  Deposits in the Private Bank increased $0.5 billion or 3% to $18.2 billion and $2.4 billion or 15% since March 31, 2024.

At December 31, 2024, wholesale borrowings totaled $13.4 billion, down $6.9 billion or 34% on a year-over-year basis and down $5.9 billion or 31% on a linked-quarter basis.  During the first quarter of the year, we utilized wholesale borrowings, primarily Federal Home Loan Bank advances to offset the deposit attrition resulting from the credit rating agency downgrades.  Once we rebuilt our liquidity position through asset sales and deposit growth, we paid down wholesale borrowings, including $8.6 billion in the third quarter and an additional almost $6 billion in the fourth quarter.

NET INCOME (LOSS) | NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS - AS ADJUSTED

Fourth quarter and full-year 2024 results include several notable items related to certain actions the Company took during the quarter.  These items include a net gain on the sale of our mortgage servicing and third-party origination business, which closed in October, severance costs, and long-term asset impairment charges related to various Company-owned or leased properties. As adjusted for these items and for merger-related expenses, the net loss for fourth quarter was $130 million and the net loss attributable to common stockholders was $138 million or $0.34 per diluted share. This compares to a third quarter net loss, as adjusted for merger-related expenses and for certain items related to the sale of the mortgage warehouse business, of $243 million and a net loss attributable to common stockholders of $252 million or $0.69 per diluted share. Fourth quarter 2023, net loss and net loss attributable to common stockholders, as adjusted for merger-related and restructuring expenses, bargain purchase gain, the goodwill impairment, and the FDIC special assessment was $185 million and $193 million or $0.80 per diluted share, respectively.

In addition to the aforementioned notable items impacting our fourth quarter 2024 results, full-year 2024 results also include notable items related to the sale of our mortgage warehouse business and a reduction of the bargain purchase gain related to the Signature transaction.  As adjusted for these items and for merger-related expenses, the net loss was $845 million for full-year 2024 and the net loss attributable to common stockholders was $880 million or $2.66 per diluted share.

Full-year 2023 also included several notable items, most of which were related to the Signature transaction, including the bargain purchase gain, the goodwill impairment, and the FDIC special assessment.  As adjusted for these items and for merger-related expenses, net income for the year ended 2023 was $497 million and net income attributable to common stockholders was $464 million or $1.92 per diluted share.

EARNINGS SUMMARY FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2024

Net Interest Income, Net Interest Margin, and Average Balance Sheet

Net Interest Income

Net interest income for the fourth quarter 2024 totaled $461 million, down $49 million, or 10%, compared to third quarter 2024, and down $279 million or 38%, compared to the fourth quarter 2023.  The decrease compared to third quarter 2024 was primarily driven by lower average loan balances due to the sales of our mortgage warehouse and mortgage servicing and third-party origination businesses, continued payoffs in the multi-family and commercial real estate portfolios, and lower C&I loan balances as we continue to reduce certain non-core, non-strategic relationships, along with an increase in interest-bearing deposits and lower average cash balances.  This was partially offset by a lower level of average borrowed funds, as the Company paid off a significant amount of wholesale borrowings during the fourth quarter.

The decrease relative to fourth quarter 2023 was due to several factors, including lower average loan balances, higher average interest-bearing deposits and average borrowed funds.  This was offset in part by a significant increase in average interest-earning cash balances.

For the year ended 2024, net interest income decreased $925 million or 30% to $2.2 billion compared to $3.1 billion for the year ended 2023. The year-over-year decline is due to a significant increase in average borrowed funds and higher levels of average interest-bearing deposits, along with a decline in average loan balances.  The increase in average borrowed funds was to replace deposit attrition in the first quarter of the year, resulting from credit rating agency downgrades. This was offset somewhat by a substantial increase in average interest-earning cash balances.

Net Interest Income and Net Interest Margin Summary







December 31, 2024


For the Three Months Ended


compared to (%):

(dollars in millions)

December 31,
2024


September 30,
2024


December 31,
2023


September 30,
2024


December 31,
2023

Net interest income

$              461


$             510


$              740


-10 %


-38 %

Net Interest Margin

The net interest margin ("NIM") for the fourth quarter 2024 was 1.73%, down 6 basis points compared to third quarter 2024 and down 109 basis points compared to fourth quarter 2023.  On a linked-quarter basis, the cost of average total interest-bearing liabilities declined 35 basis points to 4.27% driven by a 72 basis point decline in the cost of average borrowed funds to 4.56%, along with a $6.5 billion or 25% decline in average borrowed funds to $17.9 billion, and an 18 basis point decrease to 4.19% in the cost of average interest-bearing deposits, while average interest-bearing deposit balances increased $1.9 billion or 3.24% to $65.6 billion.

The decline in the cost of funding reflects a decline in market rates as the Federal Reserve Board reduced the Federal Funds rate by 100 basis points during the fourth quarter, which resulted in the Company reducing deposit rates as well as the repayment of approximately $6 billion of wholesale borrowings.  This was partially offset by a 31 basis point decline in the yield on average interest-earning assets to 5.11%.  This was the result of a 61 basis point decline in the yield on average cash balances to 4.79%, driven by the reduction in the Federal Funds rate during the quarter as well as a 25 basis point decrease in the yield on average loans to 5.28%.

On a year-over-year basis, the cost of average interest-bearing liabilities rose 54 basis points driven by a 57 basis point increase in the cost of average interest-bearing deposits to 4.19% along with a $6.1 billion or 10% increase in average interest-bearing deposit balances. The majority of the increase in both the cost of deposits and in average interest-bearing deposit balances was due to our promotional deposit campaign throughout most of the year, which centered on a high-yield savings product and promotional rate certificates of deposits, both of which we have been managing lower during the fourth quarter.

Also, the cost of average borrowed funds increased 42 basis points to 4.56% while the average balance of borrowed funds increased $2.2 billion or 14% to $17.9 billion.  Additionally, on a year-over-year basis, the yield on average interest-earning assets declined 44 basis points to 5.11%, driven by a 44 basis point reduction in the yield on average loans to 5.28%, along with a $13.9 billion or 16% decrease in average loan balances and a 49 basis point decline in the yield on average cash balances to 4.79%, offset by a $15.3 billion or 226% increase in average cash balances.

For the year ended 2024, the NIM was 1.95%, down 104 basis points compared to the year ended 2023.  The year-over-year decrease was largely the result of a higher cost of funds, as the Company made use of borrowed funds during the early part of the year to offset deposit attrition and bolster liquidity, as well as the launch of a promotional rate deposit campaign during the second quarter, coupled with an increase in average interest-bearing liabilities.  The average cost of funds rose 115 basis points to 4.40%, driven by a 141 basis point increase in the average cost of borrowings to 5.07% and a 103 basis point increase in the average cost of deposits to 4.15%.  Average interest-bearing liabilities increased $12 billion or 16% on a year-over-year basis to $86.3 billion, due to a $6.2 billion or 31% increase in average borrowed funds to $24.2 billion and a $5.8 billion or 11% increase in average interest-bearing deposits to $62.1 billion.

While the average cost of funds increased significantly, the yield on average interest-earnings assets rose only 5 basis points to 5.38%, driven by a higher yield on the investment securities portfolio and on cash balances, while the yield on the loan portfolio remained relatively unchanged.  The yield on average investment securities increased 39 basis points to 4.57% on a year-over-year basis, while the yield on average cash balances increased 12 basis points to 5.26%.  Average interest-earning assets increased $7.7 billion or 8% to $110.6 billion as average cash balances increased $9.5 billion or 84% to $19.5 billion and average securities increased $1.6 billion or 16% to $12.2 billion. Average loan balances declined $3.0 billion or 4% to $78.9 billion.


For the Three Months Ended


compared to (bp):

Yield/Cost

December 31,
2024


September 30,
2024


December 31,
2023


September 30,
2024


December 31,
2023

Mortgage and other loans, net

5.28 %


5.53 %


5.72 %


-25


-44

Securities

4.77 %


4.85 %


4.39 %


-8


38

Reverse repurchase agreements

— %


— %


6.91 %


0


-691

Interest-earning cash and cash equivalents

4.79 %


5.40 %


5.28 %


-61


-49

Total interest-earning assets

5.11 %


5.42 %


5.55 %


-31


-44

Total interest-bearing deposits

4.19 %


4.37 %


3.62 %


-18


57

Borrowed funds

4.56 %


5.28 %


4.14 %


-72


42

Total interest-bearing liabilities

4.27 %


4.62 %


3.73 %


-35


54

Net interest margin

1.73 %


1.79 %


2.82 %


-6


-109

 

Net Interest Income and Net Interest Margin Summary







For the Year Ended



(dollars in millions)

December 31,
2024


December 31,
2023


% Change

Net interest income

$                2,152


$              3,077


-30 %








For the Year Ended



Yield/Cost

December 31,
2024


December 31,
2023


(bp) Change

Mortgage and other loans, net

5.54 %


5.51 %


3

Securities

4.57 %


4.18 %


39

Reverse repurchase agreements

— %


5.77 %


-577

Interest-earning cash and cash equivalents

5.26 %


5.14 %


12

Total interest-earning assets

5.38 %


5.34 %


5

Total interest-bearing deposits

4.15 %


3.12 %


103

Borrowed funds

5.07 %


3.66 %


141

Total interest-bearing liabilities

4.40 %


3.25 %


115

Net interest margin

1.95 %


2.99 %


-104

Average Balance Sheet








December 31, 2024


For the Three Months Ended


compared to:

(dollars in millions)

December 31,
2024


September 30,
2024


December 31,
2023


September 30,
2024


December 31,
2023

Mortgage and other loans, net

$71,727


$76,553


$85,671


-6 %


-16 %

Securities

12,347


12,862


11,493


-4 %


7 %

Reverse repurchase agreements

—


—


46


NM


NM

Interest-earning cash and cash equivalents

22,048


23,561


6,753


-6 %


226 %

Total interest-earning assets

106,122


112,976


103,963


-6 %


2 %

Total interest-bearing deposits

65,576


63,647


59,504


3 %


10 %

Borrowed funds

17,940


24,456


15,714


-27 %


14 %

Total interest-bearing liabilities

83,516


88,103


75,218


-5 %


11 %

Non-interest-bearing deposits

$15,959


$18,631


$22,676


-14 %


-30 %

 


For the Year Ended



(dollars in millions)

December 31,
2024


December 31,
2023


% Change

Mortgage and other loans, net

$78,883


$81,855


-4 %

Securities

12,222


10,611


15 %

Reverse repurchase agreements

—


388


NM

Interest-earning cash and cash equivalents

19,478


10,025


94 %

Total interest-earning assets

110,583


102,879


7 %

Total interest-bearing deposits

62,106


56,324


10 %

Borrowed funds

24,168


17,934


35 %

Total interest-bearing liabilities

86,274


74,258


16 %

Non-interest-bearing deposits

$18,140


$21,583


-16 %

Provision for Credit Losses

For fourth quarter 2024, the provision for credit losses decreased $134 million or 55% to $108 million compared to third quarter 2024 and it declined $444 million or 80% compared to fourth quarter 2023. Both the linked-quarter and year-over-year decline in the provision for credit losses was due to lower net charge-offs and a decline in loans held-for-investment.

Net charge-offs for the fourth quarter 2024 totaled $222 million, down $18 million or 8% compared to third quarter 2024, but were up $37 million or 20% compared to fourth quarter 2023. Net charge-offs on a non-annualized basis represented 0.31% of average loans outstanding, unchanged from third quarter 2024 and compared to 0.22% during fourth quarter 2023. 

For the year ended 2024, the provision for credit losses totaled $1,055 million compared to $833 million for the year ended 2023, up $222 million or 27%.  The year-over-year increase was mainly the result of a significant increase in net charge-offs and increases in our allowance for credit losses, primarily related to our multi-family and CRE portfolios.

For the year ended 2024, net charge-offs totaled $892 million compared to $208 million for the year ended 2023.  Net charge-offs for the year ended 2024 represented 1.13% of average loans outstanding compared to 0.25% of average loans outstanding for the year ended 2023.  The increase was the result of credit trends which first emerged in late 2023 resulting from higher interest rates and the impact of inflation on borrowers' expenses.

Pre-Provision Net Revenue

The tables below detail the Company's PPNR and related measures, which are non-GAAP measures, for the periods noted:








December 31, 2024


For the Three Months Ended


compared to:

(dollars in millions)

December 31,
2024


September 30,
2024


December 31,
2023


September 30,
2024


December 31,
2023

Net interest income

$                  461


$             510


$                  740


-10 %


-38 %

Non-interest income

164


113


127


45 %


29 %

Total revenues

$                  625


$             623


$                  867


— %


-28 %

Total non-interest expense

718


716


3,132


— %


-77 %

Pre - provision net loss (non-GAAP)

$                   (93)


$              (93)


$              (2,265)


— %


NM

Bargain purchase gain

—


—


11


NM


NM

Merger-related and restructuring expenses

12


18


63


-34 %


-81 %

Net impact of mortgage/servicing sale and related activity

(80)


—


—


NM


NM

Severance costs

31


—


—


NM


NM

Long term asset impairment

77


—


—


NM


NM

Certain items related to the sale of the mortgage warehouse business

—


32


—


NM


NM

Goodwill impairment

—


—


2,426


NM


NM

FDIC special assessment

—


—


49


NM


NM

Pre - provision net revenue, as adjusted (non-GAAP)

$                   (53)


$              (43)


$                  284


NM


NM

For the fourth quarter 2024, pre-provision net loss totaled $93 million unchanged compared to third quarter 2024 and compared to a pre-provision net loss of $2,265 million for fourth quarter 2023.  Fourth quarter 2024 pre-provision net loss included several notable items related to certain actions the Company took during the quarter.  These items include a net gain on the sale of our mortgage operations, severance costs, and long-term asset impairment charges.  As adjusted for these items and for merger-related expenses, pre-provision net loss for fourth quarter 2024 was $53 million compared to $43 million for third quarter 2024 and pre-provision net revenue of $284 million for fourth quarter 2023.


For the Year Ended


(dollars in millions)

December 31,
2024


December 31,
2023


December 31,
2023

Net interest income

$                2,152


$                3,077


-30 %

Non-interest income

400


2,687


-85 %

Total revenues

$                2,552


$                5,764


-56 %

Total non-interest expense

2,838


4,981


-43 %

Pre - provision net revenue / (loss) (non-GAAP)

$                  (286)


$                   783


-137 %

Bargain purchase gain

121


(2,131)


-106 %

Merger-related and restructuring expenses

106


330


-68 %

Net impact of mortgage/servicing sale and related activity

(80)


—


NM

Severance costs

31


—


NM

Long term asset impairment

77


—


NM

Certain items related to the sale of the mortgage warehouse business

32


—


NM

Goodwill impairment

—


2,426


NM

FDIC special assessment

—


49


NM

Pre - provision net revenue, as adjusted (non-GAAP)

$                       1


$                1,457


NM

For the year ended 2024, pre-provision net loss was $286 million compared to pre-provision net revenue of $783 million for the year ended 2023.  Full-year 2024 pre-provision net loss included certain notable items related to the sale of our mortgage warehouse business, the sale of our mortgage servicing and third-party origination business, a partial reversal of the bargain purchase gain related to the Signature transaction, severance costs, and long-term asset impairment charges.  As adjusted for these items and for merger-related expenses, pre-provision net revenue for the year ended 2024 was $1 million.

Pre-provision net revenue for the year ended 2023 also included certain notable items, most of which were related to the Signature transaction, including a bargain purchase gain, goodwill impairment, and a FDIC special assessment.  As adjusted for these items and for merger-related expenses, pre-provision net revenue for the year ended 2023 was $1,457 million.

Non-Interest Income

In fourth quarter 2024, non-interest income totaled $164 million compared to $113 million in third quarter 2024 and $127 million in fourth quarter 2023.  Included in fourth quarter 2024 non-interest income is an $89 million net gain on the sale of our mortgage servicing and third-party origination business, while third quarter 2024 non-interest income included approximately $23 million in fees and costs associated with the sale of the mortgage warehouse business.  As adjusted, for these items and for the bargain purchase gain in fourth quarter 2023, fourth quarter 2024 non-interest income was $72 million compared to $113 million in third quarter 2024 and $138 million in fourth quarter 2023.

The linked-quarter decrease was the result of lower fee income, a lower net return on mortgage servicing rights due to the sale of the servicing business during the fourth quarter, partially offset by a lower net loan administration loss.  The year-over-year decline was due to lower fee income, a lower net return on mortgage servicing rights, a decline in the net gain on loan sale and securitizations, and a net loan administration loss of $1 million compared to $17 million of income in fourth quarter 2023.  This was partially offset by a $7 million or 32% increase in other income.








December 31, 2024


For the Three Months Ended


compared to:

(dollars in millions)

December 31,
2024


September 30,
2024


December 31,
2023


September 30,
2024


December 31,
2023

Fee income

$33


$42


$39


-21 %


-15 %

Bank-owned life insurance

10


10


11


— %


-9 %

Net return on mortgage servicing rights

(1)


34


33


-103 %


-103 %

Net gain on loan sales and securitizations

5


5


16


— %


-69 %

Net gain on mortgage/servicing sale

89


—


—


NM


NM

Net loan administration (loss) income

(1)


(8)


17


-88 %


-106 %

Bargain purchase gain

—


—


(11)


NM


NM

Other income

29


30


22


-3 %


32 %

Total non-interest income

$164


$113


$127


45 %


29 %











Impact of Notable Item:










Bargain purchase gain

—


—


11


NM


NM

Certain items related to sale on mortgage warehouse business

—


23


—


NM


NM

Gain on mortgage/servicing sale and related activity

(92)


—


—


NM


NM

Adjusted noninterest income (non-GAAP)

$72


$136


$138


-47 %


-48 %

For the year ended 2024, non-interest income totaled $400 million compared to $2,687 million for the year ended 2023.  Included in full-year 2024 non-interest income was a partial reversal of the bargain purchase gain of $121 million related to the Signature transaction, an $89 million net gain on the sale of our mortgage origination business, and approximately $23 million in fees and costs associated with the sale of the mortgage warehouse business.  Full-year 2023 non-interest income included a bargain purchase gain related to the Signature transaction of $2,131 million.  As adjusted for these items, full-year 2024 non-interest income was $429 million compared to $556 million for full-year 2023, a $127 million or 23% decline.

The year-over-year decline was primarily driven by a decline in net loan administration income, which dropped $80 million or 98% to $2 million due to our sale of the mortgage servicing business and the expiration of our loan subservicing agreement with the FDIC related to the Signature transaction; a $41 million or 46% decline in the net gain on loan sales and securitizations to $48 million; a $30 million or 29% decrease in the net return on mortgage service rights to $73 million; and a $22 million or 13% reduction in fee income to $150 million.  This was partially offset by a $50 million or 75% increase in other income to $117 million. 


For the Year Ended



(dollars in millions)

December 31,
2024


December 31,
2023


% Change

Fee income

$150


$172


-13 %

Bank-owned life insurance

42


43


-2 %

Net return on mortgage servicing rights

73


103


-29 %

Net gain on loan sales and securitizations

48


89


-46 %

Net gain on mortgage/servicing sale

89


—


NM

Net loan administration income

2


82


-98 %

Bargain purchase gain

(121)


2,131


NM

Other income

117


67


75 %

Total non-interest income

$400


$2,687


NM







Impact of Notable Item:






Bargain purchase gain

121


(2,131)


NM

Certain items related to sale on mortgage warehouse business

23


—


NM

Gain on mortgage/servicing sale and related activity

(92)


—


NM

Adjusted noninterest income (non-GAAP)

$452


$556


-19 %

Non-Interest Expense

For fourth quarter 2024, non-interest expense was $718 million, relatively unchanged compared to $716 million in third quarter 2024 and down $2,414 million or 77% compared to fourth quarter 2023. Included in fourth quarter 2024 non-interest expenses were notable items related to certain actions the Company took during the quarter, including severance costs of $31 million and long-term asset impairment charges of $77 million. Notable items in fourth quarter 2023 included goodwill impairment of $2,426 million and a $49 million FDIC special assessment.

As adjusted for these items and excluding intangible asset amortization and merger and restructuring expenses, fourth quarter non-interest expenses were $556 million down $96 million or 15% compared to third quarter 2024 and down $51 million or 8% compared to fourth quarter 2023.  The linked-quarter decrease was driven by declines in FDIC insurance expense, occupancy and equipment expense, and compensation and benefits expense.








December 31, 2024


For the Three Months Ended


compared to:

(dollars in millions)

December 31,
2024


September 30,
2024


December 31,
2023


September 30,
2024


December 31,
2023

Operating expenses:










Compensation and benefits

$302


$316


$295


-4 %


2 %

FDIC insurance

74


98


70


-24 %


6 %

Occupancy and equipment

48


59


58


-19 %


-17 %

General and administrative

252


188


184


34 %


37 %

Total operating expenses

676


661


607


2 %


11 %

Intangible asset amortization

31


37


36


-16 %


-14 %

Merger-related and restructuring expenses

11


18


63


-39 %


-83 %

Goodwill impairment

—


—


2,426


NM


-100 %

Total non-interest expense

$718


$716


$3,132


— %


-77 %











Impact of Notable Items:










Total operating expenses

$676


$661


$607


2 %


11 %

Severance costs

(31)


—


—


NM


NM

Long term asset impairment

(77)


—


—


NM


NM

Certain items related to sale on mortgage warehouse business

—


(9)


—


NM


NM

Certain items related to sale on mortgage servicing business

(12)


—


—


NM


NM

Adjusted noninterest expense (non-GAAP)

$556


$652


$607


-15 %


-8 %

For the year ended 2024, total non-interest expense was $2,838 million, down $2,143 million or 43% compared to the year ended 2023.  Included in the full-year 2024 total of non-interest expenses were certain notable items related to actions the Company took during the fourth quarter, including severance costs of $31 million and asset impairment charges of $77 million.  Notable items in full-year 2023 non-interest expenses included goodwill impairment of $2.4 billion and a $49 million FDIC special assessment.

As adjusted for these items and excluding intangible asset amortization and merger and restructuring expenses, full-year 2024 non-interest expenses were $2,467 million compared to $2,099 million for full-year 2023, up $368 million or 18%.  The majority of the increase was the result of a $187 million or 148% increase in our FDIC insurance costs; a $185 million or 30% increase in general and administrative expenses; along with a $114 million or 10% increase in compensation and benefits expense.


For the Year Ended



(dollars in millions)

December 31,
2024


December 31,
2023


% Change

Operating expenses:






Compensation and benefits

$1,263


$1,149


10 %

FDIC insurance

313


126


148 %

Occupancy and equipment

211


200


6 %

General and administrative

809


624


30 %

Total operating expenses

2,596


2,099


24 %

Intangible asset amortization

136


126


8 %

Merger-related and restructuring expenses

106


330


-68 %

Goodwill impairment

—


2,426


-100 %

Total non-interest expense

$2,838


$4,981


-43 %







Impact of Notable Items:






Total operating expenses

$2,596


$2,099


24 %

Severance costs

(31)


—


NM

Long term asset impairment

(77)


—


NM

Certain items related to sale on mortgage warehouse business

(9)


—


NM

Certain items related to sale on mortgage servicing business

(12)


—


NM

Adjusted noninterest expense (non-GAAP)

$2,467


$2,099


18 %

Income Taxes

For the fourth quarter 2024, the Company reported a benefit for income taxes of $41 million compared to a benefit for income taxes of $55 million for the third quarter 2024 and a benefit of $112 million for the three months ended December 31, 2023.  The effective tax rate for the fourth quarter 2024 was 20.44% compared to 16.34% for the third quarter 2024, and 3.96% for the three months ended December 31, 2023.

For the year ended 2024, the Company reported an income tax benefit of $251 million compared to a provision for income taxes of $29 million for the year ended 2023.  The effective tax rate for the year ended 2024 was 18.70% compared to 59.59% for the year ended 2023.

ASSET QUALITY








December 31, 2024


As of


compared to:

(dollars in millions)

December 31,
2024


September 30,
2024


December 31,
2023


September 30,
2024


December 31,
2023

Total non-accrual loans held for investment

$2,615


$2,514


$428


4 %


511 %

Total non-accrual loans held for investment and repossessed
assets

$2,629


$2,529


$442


4 %


495 %

NPLs to total loans held for investment

3.83 %


3.54 %


0.51 %


30


332

NPAs to total assets

2.62 %


2.21 %


0.39 %


41


224

Allowance for credit losses on loans and leases

$1,171


$1,264


$992


(7) %


18 %

Total ACL, including on unfunded commitments

$1,214


$1,328


$1,044


(9) %


16 %

ACL % of total loans held for investment

1.72 %


1.78 %


1.17 %


-6 bps


54 bps

Total ACL % of total loans held for investment

1.78 %


1.87 %


1.23 %


-9 bps


54 bps

ACL on loans and leases % of NPLs

45 %


50 %


232 %


-5 %


-187 %

Total ACL % of NPLs

46 %


53 %


244 %


-6 %


-198 %

 








December 31, 2024


For the Three Months Ended


compared to:


December 31,
2024


September 30,
2024


December 31,
2023


September 30,
2024


December 31,
2023

Net charge-offs

$222


$240


$185


-8 %


NM

Net charge-offs to average loans (1)

0.31 %


0.31 %


0.22 %


0 bps


9 bps



(1)

Three months ended presented on a non-annualized basis.

 


For the Year Ended




December 31,
2024


December 31,
2023


Change %

Net charge-offs

$892


$208


NM

Net charge-offs to average loans

1.13 %


0.25 %


88 bps

Non-Performing Assets

At December 31, 2024, total non-accrual loans were $2,615 million, up $101 million or 4% compared to September 30, 2024 and up $2,187 million compared to $428 million at December 31, 2023.  The linked-quarter increase was due to an increase in non-accrual multi-family loans, offset by declines in non-accrual commercial real estate and C&I loans.  The year-over-year increase was the result of higher non-accrual commercial real estate and multi-family loans.  Non-accrual loans to total loans held for investment was 3.83% compared to 3.54% at September 30, 2024 and 0.51% at December 31, 2023.  Total non-performing assets were $2,629 million at December 31, 2024 or 2.62% of total assets compared to $2,529 million or 2.21% of total assets at September 30, 2024 and $442 million or 0.39% at December 31, 2023.

Non-accrual loans held for sale totaled $323 million at December 31, 2024 compared to $189 million at September 30, 2024 and $164 million at December 31, 2023.  During fourth quarter 2024, the Company transferred $266 million of non-accrual commercial real estate loans to held for sale from held for investment, including $215 million of primarily office loans, and $51 million of multi-family loans.

Total Allowance for Credit Losses

The total allowance for credit losses was $1,214 million at December 31, 2024 compared to $1,328 million at September 30, 2024 and $667 million at December 31, 2023.  The total allowance for credit losses on loans and leases at December 31, 2024 was $1,171 million compared to $1,264 million at September 30, 2024 and $992 million at December 31, 2023.

The total allowance for credit losses to total loans at December 31, 2024 was 1.78% compared to 1.87% at September 30, 2024 and 1.23% at December 31, 2023.  The total allowance for credit losses on loans and leases to total loans held for investment was 1.72% at December 31, 2024 compared to 1.78% at September 30, 2024 and 1.17% at December 31, 2023.

CAPITAL POSITION

The Company's regulatory capital ratios continue to exceed regulatory minimums to be classified as "Well Capitalized," the highest regulatory classification. The table below depicts the Company's and the Bank's regulatory capital ratios at those respective periods.


December 31, 2024


September 30, 2024


December 31, 2023

REGULATORY CAPITAL RATIOS: (1)






New York Community Bancorp, Inc.






Common equity tier 1 ratio

11.86 %


10.76 %


9.05 %

Tier 1 risk-based capital ratio

12.61 %


11.42 %


9.62 %

Total risk-based capital ratio

15.17 %


13.92 %


11.77 %

Leverage capital ratio

7.70 %


7.32 %


7.75 %







Flagstar Bank, N.A.






Common equity tier 1 ratio

13.24 %


11.94 %


10.52 %

Tier 1 risk-based capital ratio

13.24 %


11.94 %


10.52 %

Total risk-based capital ratio

14.50 %


13.19 %


11.61 %

Leverage capital ratio

8.08 %


7.64 %


8.48 %



(1)

The minimum regulatory requirements for classification as a well-capitalized institution are a common equity tier 1 capital ratio of 6.5%; a tier one risk-based capital ratio of 8.00%; a total risk-based capital ratio of 10.00%; and a leverage capital ratio of 5.00%.

Flagstar Financial, Inc.

Flagstar Financial, Inc. is the parent company of Flagstar Bank, N.A., one of the largest regional banks in the country. The Company is headquartered in Hicksville, New York. At December 31, 2024, the Company had $100.2 billion of assets, $69.2 billion of loans, deposits of $75.9 billion, and total stockholders' equity of $8.2 billion.

Flagstar Bank, N.A. operates 418 branches, including a significant presence in the Northeast and Midwest and locations in high growth markets in the Southeast and West Coast. In addition, the Bank has approximately 80 private banking teams located in over 10 cities in the metropolitan New York City region and on the West Coast, which serve the needs of high-net worth individuals and their businesses.

Post-Earnings Release Conference Call

The Company will host a conference call on January 30, 2025 at 8:00 a.m. (Eastern Time) to discuss its fourth quarter 2024 performance. The conference call may be accessed by dialing (888) 596-4144 (for domestic calls) or (646) 968-2525 (for international calls) and providing the following conference ID: 5857240.  The live webcast will be available at ir.flagstar.com under Events.

A replay will be available approximately three hours following completion of the call through 11:59 p.m. on February 3, 2025 and may be accessed by calling (800) 770-2030 (domestic) or (609) 800-9909 (international) and providing the following conference ID: 5857240. In addition, the conference call webcast at ir.flagstar.com will be archived through 5:00 p.m. on February 27, 2025.

Investor Contact:  Salvatore J. DiMartino  (516) 683-4286
Media Contact:  Steven Bodakowski  (248) 312-5872

Cautionary Statements Regarding Forward-Looking Statements

This earnings release 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, earnings, loan production, asset quality, liquidity position, capital levels, risk analysis, divestitures, acquisitions, and other material transactions, among other matters; (b) the future costs and benefits of the actions we may take; (c) our assessments of credit risk and probable losses on loans and associated allowances and reserves; (d) our assessments of interest rate and other market risks; (e) our ability to execute on our strategic plan, including the sufficiency of our internal resources, procedures and systems; (f) our ability to attract, incentivize, and retain key personnel and the roles of key personnel; (g) our ability to achieve our financial and other strategic goals, including those related to our merger with Flagstar Bancorp, Inc., which was completed on December 1, 2022, our acquisition of substantial portions of the former Signature Bank through an FDIC-assisted transaction, and our ability to fully and timely implement the risk management programs institutions greater than $100 billion in assets must maintain; (h) the effect on our capital ratios of the approval of certain proposals approved by our shareholders during our 2024 annual meeting of shareholders; (i) the conversion or exchange of shares of the Company's preferred stock; (j) the payment of dividends on shares of the Company's capital stock, including adjustments to the amount of dividends payable on shares of the Company's preferred stock; (k) the availability of equity and dilution of existing equity holders associated with amendments to the 2020 Omnibus Incentive Plan; (l) the effects of the reverse stock split; and (m) transactions relating to the sale of our mortgage business and mortgage warehouse business.

Forward‐looking statements are typically identified by such words as "believe," "expect," "anticipate," "intend," "outlook," "estimate," "forecast," "project," "should," "confident," and other similar words and expressions, and are subject to numerous assumptions, risks, and uncertainties, which change over time. Additionally, forward‐looking statements speak only as of the date they are made; the Company does not assume any duty, and does not undertake, to update our forward‐looking statements. Furthermore, because forward‐looking statements are subject to assumptions and uncertainties, actual results or future events could differ, possibly materially, from those anticipated in our statements, and our future performance could differ materially from our historical results.

Our forward‐looking statements are subject to, among others, the following principal risks and uncertainties: general economic conditions and trends, either nationally or locally; conditions in the securities, credit and financial markets; changes in interest rates; changes in deposit flows, and in the demand for deposit, loan, and investment products and other financial services; changes in real estate values; changes in the quality or composition of our loan or investment portfolios, including associated allowances and reserves; changes in future allowance for credit losses, including changes required under relevant accounting and regulatory requirements; the ability to pay future dividends; changes in our capital management and balance sheet strategies and our ability to successfully implement such strategies; recent turnover in our Board of Directors and our executive management team; changes in our strategic plan, including changes in our internal resources, procedures and systems, and our ability to successfully implement such plan; changes in competitive pressures among financial institutions or from non‐financial institutions; changes in legislation, regulations, and policies; the imposition of restrictions on our operations by bank regulators; the outcome of pending or threatened litigation, or of investigations or any other matters before regulatory agencies, whether currently existing or commencing in the future; the success of our blockchain and fintech activities, investments and strategic partnerships; the restructuring of our mortgage business; our ability to recognize anticipated expense reductions and enhanced efficiencies with respect to our recently announced strategic workforce reduction; the impact of failures or disruptions in or breaches of the Company's operational or security systems, data or infrastructure, or those of third parties, including as a result of cyberattacks or campaigns; the impact of natural disasters, extreme weather events, military conflict (including the Russia/Ukraine conflict, the conflict in Israel and surrounding areas, the possible expansion of such conflicts and potential geopolitical consequences), terrorism or other geopolitical events; and a variety of other matters which, by their nature, are subject to significant uncertainties and/or are beyond our control. Our forward-looking statements are also subject to the following principal risks and uncertainties with respect to our merger with Flagstar Bancorp, which was completed on December 1, 2022, and our acquisition of substantial portions of the former Signature Bank through an FDIC-assisted transaction: the possibility that the anticipated benefits of the transactions will not be realized when expected or at all; the possibility of increased legal and compliance costs, including with respect to any litigation or regulatory actions related to the business practices of acquired companies or the combined business; diversion of management's attention from ongoing business operations and opportunities; the possibility that the Company may be unable to achieve expected synergies and operating efficiencies in or as a result of the transactions within the expected timeframes or at all; and revenues following the transactions may be lower than expected. Additionally, there can be no assurance that the Community Benefits Agreement entered into with NCRC, which was contingent upon the closing of the Company's merger with Flagstar Bancorp, Inc., will achieve the results or outcome originally expected or anticipated by us as a result of changes to our business strategy, performance of the U.S. economy, or changes to the laws and regulations affecting us, our customers, communities we serve, and the U.S. economy (including, but not limited to, tax laws and regulations).

More information regarding some of these factors is provided in the Risk Factors section of our Annual Report on Form 10‐K/A for the year ended December 31, 2023, Quarterly Report on Forms 10-Q for the quarters ended March 31, 2024, June 30, 2024, and September 30, 2024, and in other SEC reports we file. Our forward‐looking statements may also be subject to other risks and uncertainties, including those we may discuss in this news release, on our conference call, during investor presentations, or in our SEC filings, which are accessible on our website and at the SEC's website, www.sec.gov.

- Financial Statements and Highlights Follow -

FLAGSTAR FINANCIAL, INC.

CONSOLIDATED STATEMENTS OF CONDITION









December 31, 2024








compared to

(dollars in millions)

December 31,
2024


September 30,
2024


December 31,
2023


September 30,
2024


December 31,
2023

Assets










Cash and cash equivalents

$               15,430


$              23,080


$             11,475


-33 %


34 %

Securities:










Available-for-sale

10,402


10,511


9,145


-1 %


14 %

Equity investments with readily determinable fair values, at fair value

14


14


14


— %


— %

Total securities net of allowance for credit losses

10,416


10,525


9,159


-1 %


14 %

Loans held for sale

899


1,851


1,182


-51 %


-24 %

Loans and leases held for investment:










Multi-family

34,093


35,140


37,265


-3 %


-9 %

Commercial real estate and acquisition, development, and construction

11,836


12,482


13,382


-5 %


-12 %

One-to-four family first mortgage

5,201


5,247


6,061


-1 %


-14 %

Commercial and industrial

15,376


16,474


25,254


-7 %


-39 %

Other loans

1,766


1,773


2,657


— %


-34 %

Total loans and leases held for investment

68,272


71,116


84,619


-4 %


-19 %

Less: Allowance for credit losses on loans and leases

(1,171)


(1,264)


(992)


-7 %


18 %

Total loans and leases held for investment, net

67,101


69,852


83,627


-4 %


-20 %

Federal Home Loan Bank stock and Federal Reserve Bank stock, at cost

1,146


1,364


1,392


-16 %


-18 %

Premises and equipment, net

562


649


652


-13 %


-14 %

Core deposit and other intangibles

488


519


625


-6 %


-22 %

Mortgage servicing rights

—


—


1,111


NM


NM

Bank-owned life insurance

1,605


1,595


1,580


1 %


2 %

Other assets

2,517


3,301


3,254


-24 %


-23 %

Assets held for sale

26


1,631


—


NM


NM

Total assets

$             100,190


$            114,367


$           114,057


-12 %


-12 %

Liabilities and Stockholders' Equity










Deposits:










Interest-bearing checking and money market accounts

$               20,780


$              21,680


$             30,700


-4 %


-32 %

Savings accounts

14,282


13,510


8,773


6 %


63 %

Certificates of deposit

27,324


29,251


21,554


-7 %


27 %

Non-interest-bearing accounts

13,484


18,572


20,499


-27 %


-34 %

Total deposits

75,870


83,013


81,526


-9 %


-7 %

Borrowed funds:










Wholesale borrowings

13,400


19,310


20,250


-31 %


-34 %

Junior subordinated debentures

582


581


579


— %


1 %

Subordinated notes

444


442


438


— %


1 %

Total borrowed funds

14,426


20,333


21,267


-29 %


-32 %

Other liabilities

1,698


1,978


2,897


-14 %


-41 %

Liabilities associated with assets held for sale

—


471


—


NM


NM

Total liabilities

91,994


105,795


105,690


-13 %


-13 %

Mezzanine equity:










Preferred stock - Series B

1


1


—


NM


NM

Stockholders' equity:










Preferred stock - Series A and D

503


503


503


— %


— %

Common stock

4


4


2


— %


100 %

Paid-in capital in excess of par

9,282


9,266


8,236


— %


13 %

Retained earnings

(735)


(562)


443


31 %


-266 %

Treasury stock, at cost

(219)


(219)


(218)


— %


— %

Accumulated other comprehensive loss, net of tax:










Net unrealized loss on securities available for sale, net of tax

(653)


(468)


(581)


40 %


12 %

Pension and post-retirement obligations, net of tax

(35)


(27)


(28)


30 %


25 %

Net unrealized gain (loss) on cash flow hedges, net of tax

48


74


10


-35 %


380 %

Total accumulated other comprehensive loss, net of tax

(640)


(421)


(599)


52 %


7 %

Total stockholders' equity

8,195


8,571


8,367


-4 %


-2 %

Total liabilities, Mezzanine and Stockholders' Equity

$             100,190


$            114,367


$           114,057


-12 %


-12 %

 

FLAGSTAR FINANCIAL, INC.

CONSOLIDATED STATEMENTS OF (LOSS) INCOME









December 31, 2024


For the Three Months Ended


compared to


December 31,
2024


September 30,
2024


December 31,
2023


September 30,
2024


December 31,
2023

(dollars in millions, except per share data)










Interest Income:










Loans and leases

$               948


$              1,061


$            1,230


-11 %


-23 %

Securities and money market investments

410


473


217


-13 %


89 %

Total interest income

1,358


1,534


1,447


-11 %


-6 %











Interest Expense:










Interest-bearing checking and money market accounts

205


218


286


-6 %


-28 %

Savings accounts

124


110


47


13 %


164 %

Certificates of deposit

362


372


210


-3 %


72 %

Borrowed funds

206


324


164


-36 %


26 %

Total interest expense

897


1,024


707


-12 %


27 %

Net interest income

461


510


740


-10 %


-38 %

Provision for credit losses

108


242


552


-55 %


-80 %

Net interest income after provision for credit losses

353


268


188


32 %


88 %











Non-Interest Income:










Fee income

33


42


39


-21 %


-15 %

Bank-owned life insurance

10


10


11


— %


-9 %

Net return on mortgage servicing rights

(1)


34


33


NM


-103 %

Net gain on loan sales and securitizations

5


5


16


— %


-69 %

Net gain on mortgage/servicing sale

89


—


—


NM


NM

Net loan administration (loss) income

(1)


(8)


17


NM


-106 %

Bargain purchase gain

—


—


(11)


NM


NM

Other income

29


30


22


-3 %


32 %

Total non-interest income

164


113


127


45 %


29 %











Non-Interest Expense:










Operating expenses:










Compensation and benefits

302


316


295


-4 %


2 %

FDIC insurance

74


98


70


-24 %


6 %

Occupancy and equipment

48


59


58


-19 %


-17 %

General and administrative

252


188


184


34 %


37 %

Total operating expenses

676


661


607


2 %


11 %

Intangible asset amortization

31


37


36


-16 %


-14 %

Merger-related and restructuring expenses

11


18


63


-39 %


-83 %

Goodwill impairment

—


—


2,426


NM


NM

Total non-interest expense

718


716


3,132


— %


-77 %

(Loss) income before income taxes

(201)


(335)


(2,817)


NM


NM

Income tax (benefit) expense

(41)


(55)


(112)


NM


NM

Net (loss) income

(160)


(280)


(2,705)


NM


NM

Preferred stock dividends

8


9


8


-11 %


— %

Net (loss) income attributable to common stockholders

$              (168)


$                (289)


$           (2,713)


NM


NM











Basic (loss) earnings per common share

$             (0.41)


$               (0.79)


$           (11.27)


NM


NM

Diluted (loss) earnings per common share

$             (0.41)


$               (0.79)


$           (11.27)


NM


NM

Dividends per common share

$              0.01


$                0.01


$              0.51


— %


-98 %

 

FLAGSTAR FINANCIAL, INC.

CONSOLIDATED STATEMENTS OF (LOSS) INCOME



For the Year Ended


Change


December 31,
2024


December 31,
2023


Amount


Percent

(dollars in millions, except per share data)








Interest Income:








Loans and leases

$            4,369


$            4,509


(140)


-3 %

Securities and money market investments

1,584


982


602


61 %

Total interest income

5,953


5,491


462


8 %









Interest Expense:








Interest-bearing checking and money market accounts

869


943


(74)


-8 %

Savings accounts

345


169


176


104 %

Certificates of deposit

1,362


646


716


111 %

Borrowed funds

1,225


656


569


87 %

Total interest expense

3,801


2,414


1,387


57 %

Net interest income

2,152


3,077


(925)


-30 %

Provision for credit losses

1,055


833


222


27 %

Net interest income after provision for credit losses

1,097


2,244


(1,147)


-51 %









Non-Interest Income:








Fee income

150


172


(22)


-13 %

Bank-owned life insurance

42


43


(1)


-2 %

Net return on mortgage servicing rights

73


103


(30)


-29 %

Net gain on loan sales and securitizations

48


89


(41)


-46 %

Net gain on mortgage/servicing sale

89


—


89


NM

Net loan administration income

2


82


(80)


-98 %

Bargain purchase gain

(121)


2,131


(2,252)


NM

Other income

117


67


50


75 %

Total non-interest income

400


2,687


(2,287)


-85 %









Non-Interest Expense:








Operating expenses:








Compensation and benefits

1,263


1,149


114


10 %

FDIC insurance

313


126


187


148 %

Occupancy and equipment

211


200


11


6 %

General and administrative

809


624


185


30 %

Total operating expenses

2,596


2,099


497


24 %

Intangible asset amortization

136


126


10


8 %

Merger-related and restructuring expenses

106


330


(224)


-68 %

Goodwill impairment

—


2,426


(2,426)


NM

Total non-interest expense

2,838


4,981


(2,143)


-43 %

(Loss) income before income taxes

(1,341)


(50)


(1,291)


NM

Income tax (benefit) expense

(251)


29


(280)


NM

Net (loss) income

(1,090)


(79)


(1,011)


NM

Preferred stock dividends

35


33


2


6 %

Net (loss) income attributable to common stockholders

$           (1,125)


$              (112)


(1,013)


NM









Basic (loss) earnings per common share

$             (3.40)


$             (0.49)


NM


NM

Diluted (loss) earnings per common share

$             (3.40)


$             (0.49)


NM


NM

Dividends per common share

$              0.20


$              2.04


(1.84)


-90 %

 

FLAGSTAR FINANCIAL, INC.
RECONCILIATIONS OF CERTAIN GAAP AND NON-GAAP FINANCIAL MEASURES
(dollars in millions)

While stockholders' equity, total assets, and book value per share are financial measures that are recorded in accordance with U.S. generally accepted accounting principles ("GAAP"), tangible common stockholders' equity, tangible assets, and tangible book value per share are not. Nevertheless, it is management's belief that these non-GAAP measures should be disclosed in our earnings releases and other investor communications for the following reasons:

  1. Tangible common stockholders' equity is an important indication of the Company's ability to grow organically and through business combinations, as well as its ability to pay dividends and to engage in various capital management strategies.
  2. Returns on average tangible assets and average tangible common stockholders' equity are among the profitability measures considered by current and prospective investors, both independent of, and in comparison with, the Company's peers.
  3. Tangible book value per share and the ratio of tangible common stockholders' equity to tangible assets are among the capital measures considered by current and prospective investors, both independent of, and in comparison with, its peers. 

Tangible common stockholders' equity, tangible assets, and the related non-GAAP profitability and capital measures should not be considered in isolation or as a substitute for stockholders' equity, total assets, or any other profitability or capital measure calculated in accordance with GAAP. Moreover, the manner in which we calculate these non-GAAP measures may differ from that of other companies reporting non-GAAP measures with similar names.

The following table presents reconciliations of our common stockholders' equity and tangible common stockholders' equity, our total assets and tangible assets, and the related GAAP and non-GAAP profitability and capital measures at or for the periods indicated:


At or for the


At or for the


Three Months Ended December 31,


Year Ended,

(dollars in millions)

December 31,
2024


September 30,
2024


December 31,
2023


December 31,
2024


December 31,
2023

Total Stockholders' Equity

$             8,195


$       8,571


$            8,367


$              8,195


$               8,367

Less: Goodwill and other intangible assets

(488)


(519)


(625)


(488)


(625)

Less: Preferred stock

(503)


(503)


(503)


(503)


(503)

Tangible common stockholders' equity

$             7,204


$       7,549


$            7,239


$              7,204


$               7,239











Total Assets

$         100,190


$   114,367


$        114,057


$          100,190


$           114,057

Less: Goodwill and other intangible assets

(488)


(519)


(625)


(488)


(625)

Tangible Assets

$           99,702


$   113,848


$        113,432


$            99,702


$           113,432











Average common stockholders' equity

$             8,071


$       8,122


$          10,533


$              8,020


$             10,078

Less: Average goodwill and other intangible assets

(508)


(544)


(3,048)


$                (560)


$              (3,021)

Average tangible common stockholders' equity

$             7,563


$       7,578


$            7,485


$              7,460


$               7,057











Average Assets

$         110,489


$   118,396


$        111,683


$          115,734


$           110,495

Less: Average goodwill and other intangible assets

(508)


(544)


(3,048)


(560)


(3,021)

Average tangible assets

$         109,981


$   117,852


$        108,635


$          115,174


$           107,474











GAAP MEASURES:










(Loss) return on average assets (1)

(0.58) %


(0.94) %


(9.69) %


(0.94) %


(0.07) %

(Loss) return on average common stockholders' equity (2)

(8.37) %


(14.19) %


(103.01) %


(14.03) %


(1.11) %

Book value per common share

$             18.54


$       19.43


$            32.66


$              18.54


$               32.66

Common stockholders' equity to total assets

7.68 %


7.05 %


6.90 %


7.68 %


6.90 %

NON-GAAP MEASURES:










(Loss) return on average tangible assets (1)

(0.48) %


(0.82) %


(0.68) %


(0.73) %


0.46 %

(Loss) return on average tangible common
stockholders' equity (2)

(7.37) %


(13.27) %


(10.27) %


(11.81) %


6.58 %

Tangible book value per common share

$             17.36


$       18.18


$            30.08


$              17.36


$               30.08

Tangible common stockholders' equity to tangible
assets

7.23 %


6.63 %


6.38 %


7.23 %


6.38 %



(1)

To calculate return on average assets for a period, we divide net income, or non-GAAP net income, generated during that period by average assets recorded during that period. To calculate return on average tangible assets for a period, we divide net income by average tangible assets recorded during that period.

(2)

To calculate return on average common stockholders' equity for a period, we divide net income attributable to common stockholders, or non-GAAP net income attributable to common stockholders, generated during that period by average common stockholders' equity recorded during that period. To calculate return on average tangible common stockholders' equity for a period, we divide net income attributable to common stockholders generated during that period by average tangible common stockholders' equity recorded during that period.

While diluted earnings per common share, net income, net income attributable to common stockholders, and total non-interest income are financial measures that are recorded in accordance with GAAP, financial measures that adjust these GAAP measures to exclude merger and restructuring expenses, the bargain purchase gains related to our merger with Flagstar and the Signature transaction, and certain items related to the sale of the mortgage warehouse business are not. Nevertheless, it is management's belief that these non-GAAP measures should be disclosed in our earnings release and other investor communications because they are not considered part of recurring operations and are included because the Company believes they may provide useful supplemental information for evaluating the underlying performance trends of the Company.


For the Three Months Ended


For the Year Ended

(dollars in millions, except per share data)

December 31,
2024


September 30,
2024


December 31,
2023


December 31,
2024


December 31,
2023

Net (loss) income - GAAP

$             (160)


$              (280)


$          (2,704)


$          (1,090)


$              (79)

Merger-related and restructuring expenses, net of tax (1)

9


13


46


79


245

Net impact of mortgage/servicing sale and related activity, net of tax

(59)


—


—


(59)


—

Severance costs, net of tax

23


—


—


23


—

Long term asset impairment, net of tax

57


—


—


57


—

Certain items related to sale on mortgage warehouse business, net of tax

—


24


—


24


—

Goodwill impairment

—


—


2,426


—


2,426

FDIC special assessment, net of tax

—


—


36


—


36

Bargain purchase gain

—


—


11


121


(2,131)

Net (loss) income, as adjusted - non-GAAP

$             (130)


$              (243)


$            (185)


$             (845)


$              497

Preferred stock dividends

8


9


8


35


33

Net (loss) income attributable to common stockholders, as
adjusted - non-GAAP

$             (138)


$              (252)


$            (193)


$             (880)


$              464











Diluted (loss) earnings per common share - GAAP

$            (0.41)


$             (0.79)


$          (11.27)


$            (3.40)


$            (0.49)

Diluted (loss) earnings per common share, as adjusted - non-
GAAP

$            (0.34)


$             (0.69)


$            (0.80)


$            (2.66)


$             1.92



(1)

Certain merger-related items are not taxable or deductible.

While net income is a financial measure that is calculated in accordance with GAAP, PPNR and PPNR excluding merger-related and restructuring expenses, bargain purchase gain and certain items related to the sale of the mortgage warehouse business are non-GAAP financial measures. Nevertheless, it is management's belief that these non-GAAP measures should be disclosed in our earnings releases and other investor communications because management believes these measures are relevant to understanding the performance of the Company attributable to elements other than the provision for credit losses and the ability of the Company to generate earnings sufficient to cover estimated credit losses. These measures also provide a meaningful basis for comparison to other financial institutions since it is commonly employed and is a measure frequently cited by investors and analysts. The following table reconciles the non-GAAP financial measures of PPNR and PPNR, excluding merger-related and restructuring expenses, bargain purchase gain and certain items related to the sale of the mortgage warehouse business, to the comparable GAAP financial measures of net income for the stated periods:








December 31, 2024


For the Three Months Ended


compared to (%):


December 31,
2024


September 30,
2024


December 31,
2023


September 30,
2024


December 31,
2023

(dollars in millions)


Net interest income

$                 461


$              510


$               740


-10 %


-38 %

Non-interest income

164


113


127


45 %


29 %

Total revenues

$                 625


$              623


$               867


— %


-28 %

Total non-interest expense

718


716


3,132


— %


-77 %

Pre - provision net revenue (non-GAAP)

$                  (93)


$               (93)


$           (2,265)


— %


NM

Bargain purchase gain

—


—


11


NM


NM

Merger-related and restructuring expenses

12


18


63


-34 %


-81 %

Net impact of mortgage/servicing sale and related activity

(80)


—


—


NM


NM

Severance costs

31


—


—


NM


NM

Long term asset impairment

77


—


—


NM


NM

Certain items related to sale on mortgage warehouse business

—


32


—


NM


NM

Goodwill impairment

—


—


2,426


NM


NM

FDIC special assessment

—


—


49


NM


-100 %

Pre - provision net revenue excluding merger-related and

restructuring expenses, as adjusted (non-GAAP)

$                  (53)


$               (43)


$               284


NM


-119 %

Provision for credit losses

(108)


(242)


(552)


NM


NM

Bargain purchase gain

—


—


(11)


NM


NM

Merger-related and restructuring expenses

(12)


(18)


(63)


NM


NM

Net impact of mortgage/servicing sale and related activity

80


—


—


NM


NM

Severance costs

(31)


—


—


NM


NM

Long term asset impairment

(77)


—


—


NM


NM

Certain items related to sale on mortgage warehouse business

—


(32)


—


NM


NM

Goodwill impairment

—


—


(2,426)


NM


NM

FDIC special assessment

—


—


(49)


NM


NM

(Loss) income before taxes

$                (201)


$             (335)


$           (2,817)


NM


NM

Income tax (benefit) expense

(41)


(55)


(112)


NM


NM

Net (Loss) Income (GAAP)

$                (160)


$             (280)


$           (2,705)


NM


NM

 


For the Year Ended


Change


December 31,
2024


December 31,
2023


Amount


Percent

(dollars in millions)


Net interest income

$             2,152


$             3,077


$               (925)


-30 %

Non-interest income

400


2,687


-2,287


-85 %

Total revenues

$             2,552


$             5,764


$            (3,212)


-56 %

Total non-interest expense

2,838


4,981


-2,143


-43 %

Pre - provision net revenue (non-GAAP)

$               (286)


$                783


$            (1,069)


NM

Bargain purchase gain

121


(2,131)


2,252


NM

Merger-related and restructuring expenses

106


330


(224)


-68 %

Net impact of mortgage/servicing sale and related activity

(80)


—


(80)


NM

Severance costs

31


—


31


NM

Long term asset impairment

77


—


77


NM

Certain items related to sale on mortgage warehouse business

32


—


32


NM

Goodwill impairment

—


2,426


(2,426)


NM

FDIC special assessment

—


49


(49)


NM

Pre - provision net revenue excluding merger-related and restructuring
expenses and bargain purchase gain, as adjusted (non-GAAP)

$                    1


$             1,457


$            (1,456)


NM

Provision for credit losses

(1,055)


(833)


(222)


NM

Bargain purchase gain

(121)


2,131


-2,252


NM

Merger-related and restructuring expenses

(106)


(330)


224


NM

Net impact of mortgage/servicing sale and related activity

80


—


80.00


NM

Severance costs

(31)


—


(31.00)


NM

Long term asset impairment

(77)


—


(77.00)


NM

Certain items related to sale on mortgage warehouse business

(32)


—


(32.00)


NM

Goodwill impairment

—


(2,426)


2,426


NM

FDIC special assessment

—


(49)


49


NM

(Loss) income before taxes

$            (1,341)


$                 (50)


$            (3,766)


NM

Income tax (benefit) expense

(251)


29


-280


NM

Net (Loss) Income (GAAP)

$            (1,090)


$                 (79)


$            (1,011)


NM

 

FLAGSTAR FINANCIAL, INC.

NET INTEREST INCOME ANALYSIS

LINKED-QUARTER AND YEAR-OVER-YEAR COMPARISONS

(dollars in millions)



For the Three Months Ended


December 31, 2024


September 30, 2024


December 31, 2023

(dollars in millions)

Average
Balance

Interest

Average
Yield/Cost


Average
Balance

Interest

Average
Yield/Cost


Average
Balance

Interest

Average
Yield/Cost

Assets:












Interest-earning assets:












Mortgage and other loans, net

$      71,727

$     948

5.28 %


$     76,553

$  1,061

5.53 %


$     85,671

$   1,230

5.72 %

Securities

12,347

144

4.77


12,862

153

4.85


11,493

126

4.39

Reverse repurchase agreements

—

—

—


—

—

—


46

1

6.91

Interest-earning cash and cash equivalents

22,048

266

4.79


23,561

320

5.40


6,753

90

5.28

Total interest-earning assets

106,122

$  1,358

5.11


112,976

$  1,534

5.42


103,963

$   1,447

5.55

Non-interest-earning assets

4,368




5,420




7,720



Total assets

$    110,490




$   118,396




$   111,683



Liabilities and Stockholders' Equity:












Interest-bearing deposits:












Interest-bearing checking and money market accounts

$      23,007

$     205

3.54 %


$     22,207

$    218

3.90 %


$     31,958

$      286

3.55 %

Savings accounts

13,996

123

3.51


12,281

110

3.57


9,055

47

2.03

Certificates of deposit

28,573

362

5.04


29,159

372

5.07


18,491

210

4.52

Total interest-bearing deposits

65,576

690

4.19


63,647

700

4.37


59,504

543

3.62

Borrowed funds

17,940

206

4.56


24,456

324

5.28


15,714

164

4.14

Total interest-bearing liabilities

83,516

$     896

4.27


88,103

$  1,024

4.62


75,218

$      707

3.73

Non-interest-bearing deposits

15,959




18,631




22,676



Other liabilities

2,439




2,858




2,753



Total liabilities

101,914




109,592




100,647



Stockholders' and mezzanine equity

8,575




8,803




11,036



Total liabilities and stockholders' equity

$    110,489




$   118,395




$   111,683



Net interest income/interest rate spread


$     462

0.84 %



$    510

0.80 %



$      740

1.82 %

Net interest margin



1.73 %




1.79 %




2.82 %

Ratio of interest-earning assets to interest-bearing liabilities



         1.27 x




         1.28 x




         1.38 x

 

FLAGSTAR FINANCIAL, INC.

NET INTEREST INCOME ANALYSIS

LINKED-QUARTER AND YEAR-OVER-YEAR COMPARISONS

(dollars in millions)



For the Year Ended


December 31, 2024


December 31, 2023

(dollars in millions)

Average
Balance

Interest

Average
Yield/Cost


Average
Balance

Interest

Average
Yield/Cost

Assets:








Interest-earning assets:








Mortgage and other loans, net

$           78,883

$            4,369

5.54 %


$             81,855

$      4,509

5.51 %

Securities

12,222

559

4.57


10,611

444

4.18

Reverse repurchase agreements

—

—

—


388

22

5.77

Interest-earning cash and cash equivalents

19,478

1,024

5.26


10,025

516

5.14

Total interest-earning assets

110,583

$            5,952

5.38


102,879

$      5,491

5.34

Non-interest-earning assets

5,151




7,616



Total assets

$         115,734




$           110,495



Liabilities and Stockholders' Equity:








Interest-bearing deposits:








Interest-bearing checking and money market accounts

$           23,654

$              869

3.67 %


$             29,286

$         943

3.22 %

Savings accounts

10,975

345

3.14


9,941

169

1.70

Certificates of deposit

27,477

1,362

4.96


17,097

646

3.78

Total interest-bearing deposits

62,106

2,576

4.15


56,324

1,758

3.12

Borrowed funds

24,168

1,225

5.07


17,934

656

3.66

Total interest-bearing liabilities

86,274

$            3,801

4.40


74,258

$      2,414

3.25

Non-interest-bearing deposits

18,140




21,583



Other liabilities

2,595




4,073



Total liabilities

107,009




99,914



Stockholders' and mezzanine equity

8,725




10,581



Total liabilities and stockholders' equity

$         115,734




$           110,495



Net interest income/interest rate spread


$            2,152

0.98 %



$      3,077

2.09 %

Net interest margin



1.95 %




2.99 %

Ratio of interest-earning assets to interest-bearing liabilities



         1.28 x




         1.39 x

 

FLAGSTAR FINANCIAL, INC.

CONSOLIDATED FINANCIAL HIGHLIGHTS

(dollars in millions)



For the Three Months Ended

For the Year Ended

(dollars in millions, except share and per share data)

December 31,
2024


September 30,
2024


December 31,
2023

December 31,
2024


December 31,
2023

PROFITABILITY MEASURES:









Net (loss) income

$          (160)


$          (280)


$        (2,705)

$         (1,090)


$              (79)

Net (loss) income attributable to common stockholders

(168)


(289)


(2,713)

(1,125)


(112)

Basic (loss) earnings per common share

(0.41)


(0.79)


(11.27)

(3.40)


(0.49)

Diluted (loss) earnings per common share

(0.41)


(0.79)


(11.27)

(3.40)


(0.49)

(Loss) return on average assets

(0.58) %


(0.94) %


(9.69) %

(0.94) %


(0.07) %

(Loss) return on average tangible assets (1)

(0.48)


(0.82)


(0.68)

(0.73)


0.46

(Loss) return on average common stockholders' equity

(8.37)


(14.19)


(103.01)

(14.03)


(1.11)

(Loss) return on average tangible common stockholders' equity (1)

(7.37)


(13.27)


(10.27)

(11.81)


6.58

Efficiency ratio (2)

108.18


105.96


68.99

97.12


57.78

Operating expenses to average assets

2.45


2.23


2.17

0.56


1.90

Interest rate spread

0.84


0.80


1.82

0.98


2.09

Net interest margin

1.73


1.79


2.82

1.95


2.99

Effective tax rate

20.44


16.34


3.96

18.70


(59.59)

Shares used for basic common EPS computation

415,089,512


366,637,882


240,808,048

330,713,517


237,881,183

Shares used for diluted common EPS computation

415,089,512


366,637,882


240,808,048

330,713,517


238,460,496

Common shares outstanding at the respective period-ends

414,934,628


415,257,967


240,825,252

351,304,364


240,825,252



(1)

See the reconciliations of these non-GAAP measures with the comparable GAAP measures on page 19 of this release.

(2)

We calculate our efficiency ratio by dividing our operating expenses by the sum of our net interest income and non-interest income, excluding the bargain purchase gain.

 


December 31,
2024


September 30,
2024


December 31,
2023

CAPITAL MEASURES:






Book value per common share

$            18.54


$             19.43


$             32.66

Tangible book value per common share - as reported (1)

17.36


18.18


30.08

Common stockholders' equity to total assets

7.68 %


7.05 %


6.90 %

Tangible common stockholders' equity to tangible assets (1)

7.23


6.63


6.38



(1)

See the reconciliations of these non-GAAP measures with the comparable GAAP measures on page 19 of this release.

 

FLAGSTAR FINANCIAL, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS

ASSET QUALITY SUMMARY

The following table presents the Company's asset quality measures at the respective dates:








December 31, 2024








compared to

(dollars in millions)

December 31,
2024


September 30,
2024


December 31,
2023


September 30,
2024


December 31,
2023

Non-accrual loans held for investment:










Multi-family

$              1,755


$              1,504


$                 138


17 %


NM

Commercial real estate

546


692


128


-21 %


327 %

One-to-four family first mortgage

70


39


95


79 %


-26 %

Acquisition, development, and construction

18


21


2


-14 %


800 %

Commercial and industrial

202


235


43


-14 %


370 %

Other non-accrual loans

24


23


22


4 %


9 %

Total non-accrual loans held for investment

2,615


2,514


428


4 %


511 %

Repossessed assets

14


15


14


-7 %


— %

Total non-accrual held for investment loans and repossessed assets

$              2,629


$              2,529


$                 442


4 %


495 %











Non-accrual loans held for sale:










Multi-family

$                   51


$                   —


$                   —


NM


NM

Commercial real estate

215


112


163


92 %


32 %

One-to-four family first mortgage

57


64


—


-11 %


NM

Acquisition, development, and construction

—


13


1


NM


NM

Total non-accrual mortgage loans held for sale

$                 323


$                 189


$                 164


71 %


97 %

The following table presents the Company's asset quality measures at the respective dates:


December 31,
2024


September 30,
2024


December 31,
2023

Non-accrual held for investment loans to total loans held for investment

3.83 %


3.54 %


0.51 %

Non-accrual held for investment loans and repossessed assets to total assets

2.62


2.21


0.39

Allowance for credit  losses on loans to non-accrual loans held for investment

44.78


50.28


231.51

Allowance for credit losses on loans to total loans held for investment

1.72


1.78


1.17

 

FLAGSTAR FINANCIAL, INC.
SUPPLEMENTAL FINANCIAL INFORMATION

The following table presents the Company's loans 30 to 89 days past due at the respective dates:








December 31, 2024








compared to

(dollars in millions)

December 31,
2024


September 30,
2024


December 31,
2023


September 30,
2024


December 31,
2023

Loans 30 to 89 Days Past Due:










Multi-family

$                  749


$              124


$                121


504 %


519 %

Commercial real estate

65


43


28


51 %


132 %

One-to-four family first mortgage

25


21


40


19 %


-38 %

Acquisition, development, and construction

5


16


2


-69 %


150 %

Commercial and industrial

110


47


37


134 %


197 %

Other loans

11


10


22


10 %


-50 %

Total loans 30 to 89 days past due

$                  965


$              261


$                250


270 %


286 %

The following table summarizes the Company's net charge-offs (recoveries) for the respective periods:


For the Three Months Ended


For the Year Ended


December 31,
2024


September 30,
2024


December 31,
2023


December 31,
2024


December 31,
2023

(dollars in millions)










Charge-offs:










Multi-family

$                120


$              101


$                 117


$               308


$                119

Commercial real estate

51


110


42


462


56

One-to-four family residential

—


7


1


8


4

Acquisition, development and construction

—


4


—


4


—

Commercial and industrial

57


33


24


136


30

Other

5


5


5


20


14

Total charge-offs

$                233


$              260


$                 189


$               938


$                223











Recoveries:










Multi-family

$                   (1)


$                 (3)


$                   —


$                  (5)


$                  —

Commercial real estate

(2)


(6)


—


(8)


—

One-to-four family residential

—


(5)


—


(5)


—

Commercial and industrial

(6)


(4)


(3)


(21)


(11)

Other

(2)


(2)


(1)


(7)


(4)

Total recoveries

$                 (11)


$               (20)


$                    (4)


$                (46)


$                 (15)











Net charge-offs (recoveries)

$                222


$              240


$                 185


$               892


$                208











Net charge-offs (recoveries) to average loans (1)

0.31 %


0.31 %


0.22 %


1.13 %


0.25 %



(1)

Three months ended presented on a non-annualized basis.

 

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/flagstar-financial-inc-reports-fourth-quarter-2024-gaap-net-loss-attributable-to-common-stockholders-of-0-41-per-diluted-share-and-non-gaap-adjusted-net-loss-attributable-to-common-stockholders-of-0-34-per-diluted-share-302364015.html

SOURCE Flagstar Financial, Inc.

FAQ

What was Flagstar Financial's (FLG) net loss per share in Q4 2024?

Flagstar Financial reported a net loss of $0.41 per diluted share in Q4 2024.

How much did FLG's CET1 capital ratio improve in 2024?

FLG's CET1 capital ratio improved to 11.9%, increasing over 280 basis points during the year.

What was the reduction in FLG's commercial real estate exposure in 2024?

FLG's multi-family loans decreased by $3.2 billion (9%) and CRE loans declined by $1.8 billion (17%) year-to-date in 2024.

How much did FLG's retail deposits grow in 2024?

FLG's retail deposits increased by $7.3 billion or 17% year-to-date in 2024.

Stock FLG logo
Flagstar Financial, Inc.

NYSE:FLG

FLG Rankings

#1364 Ranked by Market Cap
#2062 Ranked by Dividends

FLG Latest News

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Banks - Regional
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