Financial Performance - For the three months ended September 30, 2025, the company reported a net loss of $36 million, an improvement from a net loss of $70 million for the previous quarter[31]. - The net loss attributable to common stockholders for the nine months ended September 30, 2025, was $231 million, or $0.56 per diluted share, compared to a net loss of $957 million, or $3.16 per diluted share for the same period in 2024[32]. - The company reported a net loss of $36 million for the three months ended September 30, 2025, compared to a net loss of $280 million for the same period in 2024, indicating an improvement in financial performance[161]. - The company reported a net loss of $930 million for the nine months ended September 30, 2025, compared to a net loss of $206 million for the same period in 2024, indicating a significant decline in performance[163]. - Basic loss per common share for the three months ended September 30, 2025, was $0.11, compared to a loss of $0.79 for the same period in 2024[155]. - Basic loss per common share for the nine months ended September 30, 2025, was $0.56, compared to a loss of $3.16 in the prior year[179]. Assets and Liabilities - As of September 30, 2025, the company reported total assets of $91.7 billion, loans of $63.2 billion, deposits of $69.2 billion, and stockholders' equity of $8.1 billion[22]. - Total assets decreased to $91,668 million as of September 30, 2025, down from $100,160 million on December 31, 2024, representing a decline of approximately 8.3%[153]. - Total liabilities decreased to $83,559 million as of September 30, 2025, down from $91,992 million on December 31, 2024, a reduction of approximately 9.2%[153]. - Total deposits decreased to $69,152 million as of September 30, 2025, down from $75,870 million on December 31, 2024, a decline of approximately 8.8%[153]. - Total bank liquidity exceeded the balance of uninsured deposits by $14.2 billion as of September 30, 2025[105]. Income and Expenses - Net interest income (NII) for the three months ended September 30, 2025, was $425 million, with a net interest margin of 1.91%[36]. - For the three months ended September 30, 2025, net interest income (NII) increased by $6 million compared to the previous quarter, primarily due to lower-interest bearing deposits and improved yields on loans and leases[42]. - Non-interest income for the three months ended September 30, 2025, increased by $17 million compared to the previous quarter, primarily due to a $21 million gain on investment in Figure Technology Solutions, Inc.[48]. - Total non-interest expenses for the three months ended September 30, 2025, increased by $9 million compared to the previous quarter, driven by higher general and administrative expenses and compensation costs[51]. - Total non-interest income for the nine months ended September 30, 2025, increased to $251 million, compared to $236 million for the same period in 2024, reflecting a growth of 6.4%[155]. Credit Losses and Allowances - The provision for credit losses for the three months ended September 30, 2025, decreased by $26 million compared to the previous quarter, mainly due to volume declines from the strategic reduction in loan portfolios[45]. - For the nine months ended September 30, 2025, the provision for credit losses decreased by $766 million compared to the same period in 2024, reflecting improving credit trends and stabilization in the allowance for credit losses[46]. - The allowance for credit losses on loans and leases was $1.071 billion as of September 30, 2025, down from $1.201 billion at the end of 2024[56]. - The ratio of non-accrual loans to total loans held for investment rose to 5.17% as of September 30, 2025, compared to 3.83% at December 31, 2024[84]. - The company reported net charge-offs of $73 million for the three months ended September 30, 2025, with an annualized percentage of 0.46% of average loans[92]. Loan Portfolio - Total loans and leases held for investment decreased by $5.6 billion as of September 30, 2025, compared to December 31, 2024, due to a strategy of diversifying the loan portfolio[57]. - The multi-family loan portfolio decreased by $3.6 billion to $30.466 billion as of September 30, 2025, primarily due to $2.8 billion in par payoffs and the classification of $254 million of loans to Loans held for sale[60]. - The commercial real estate (CRE) loan portfolio decreased by $1.7 billion to $10.163 billion as of September 30, 2025, consistent with the company's strategy to diversify its loan portfolio[66]. - The C&I loan portfolio decreased by $502 million to $3.2 billion, reflecting a strategic decision to reduce exposure to non-core C&I loans, despite $3.7 billion in new originations[70]. - Specialty finance loans and leases decreased by $672 million, or 17%, to $3.2 billion, as part of the strategy to run off certain non-core loans[72]. Strategic Initiatives - The company is executing a strategic transformation plan aimed at evolving into a fully diversified bank with a focus on financial resilience and sustainable earnings[25]. - The company aims to enhance operational efficiency and develop a customer-centric culture as part of its strategic priorities[27]. - The company is strategically diversifying its loan portfolio by shifting from multi-family loans to other sectors, including C&I loans[62]. Capital and Regulatory Compliance - The Company's total capital as of September 30, 2025, is $7,828 million, with a Common Equity Tier 1 ratio of 12.45%[146]. - The Bank's total capital as of September 30, 2025, is $8,832 million, with a Common Equity Tier 1 ratio of 14.05%[147]. - The Company exceeded the minimum capital requirements for a bank holding company by 792 basis points as of September 30, 2025[147]. - The Company identified material weaknesses in internal control over financial reporting, with remediation progress discussed in the latest report[149]. - The Company has developed a resolution plan in alignment with FDIC requirements, submitted prior to the due date of July 1, 2025[145].

Financial Performance - The net loss attributable to common stockholders for Q3 2025 was $45 million, or $0.11 per diluted share, an improvement of 44% from Q2 2025 and 86% from Q3 2024[6]. - Adjusted net loss for Q3 2025 was $31 million, or $0.07 per diluted share, a 50% improvement from Q2 2025 and an 89% improvement from Q3 2024[21]. - GAAP net loss for the three months ended September 30, 2025, was $36 million, compared to a loss of $70 million for the previous quarter and $280 million for the same period in 2024[78]. - Basic loss per common share for the nine months ended September 30, 2025, was $(0.56), an 82% improvement from $(3.16) in the same period last year[73]. - Dividends per common share for the nine months ended September 30, 2025, were $0.03, an 84% decrease from $0.19 in the same period last year[73]. Loan and Asset Management - Total criticized and classified loans decreased by $2.8 billion, or 19%, since December 31, 2024, with net charge-offs declining by $44 million, or 38%, compared to Q2 2025[2][12]. - C&I loans increased by $448 million, or 3%, from the prior quarter, with new loan originations rising by 41% to $1.7 billion and new commitments growing by 26% to $2.4 billion[3][18]. - Total loans and leases held-for-investment (HFI) were $62.7 billion, down $1.5 billion, or 2%, from the prior quarter and down $5.6 billion, or 8%, year-over-year[16]. - Average loan balances declined by $2.3 billion or 3% to $63.5 billion on a linked-quarter basis, while average loan yield increased by 3 basis points to 5.15%[27]. - Total loans and leases decreased to $63,541 million in Q3 2025 from $76,553 million in Q3 2024, a decline of 16.9%[85]. Interest Income and Margin - Net interest income for Q3 2025 totaled $425 million, up $6 million, or 1%, from Q2 2025 but down $85 million, or 17%, year-over-year[24]. - The net interest margin improved by 10 basis points to 1.91%, marking the third consecutive quarter of improvement[3][12]. - The net interest margin (NIM) for the third quarter of 2025 was 1.91%, an increase of 10 basis points from the second quarter of 2025 and 12 basis points from the third quarter of 2024[26]. - Total interest income for the three months ended September 30, 2025, was $1,101 million, a decrease of 4% compared to $1,143 million in the previous quarter and a decrease of 28% from $1,534 million a year ago[71]. - Net interest income for the nine months ended September 30, 2025, was $3,408 million, down from $4,594 million for the same period in 2024, a decrease of 26.0%[87]. Credit Losses and Provisions - Provision for credit losses for the third quarter of 2025 decreased by $26 million or 41% to $38 million compared to the second quarter of 2025, and decreased by $204 million or 84% compared to the third quarter of 2024[31]. - Net charge-offs for the third quarter of 2025 totaled $73 million, down $44 million or 38% from the second quarter of 2025 and down $167 million or 70% from the third quarter of 2024[32]. - Provision for credit losses for the nine months ended September 30, 2025, was $181 million, an 81% decrease from $947 million in the same period last year[73]. - The allowance for credit losses on loans and leases was $1,071 million at September 30, 2025, down 15% from $1,264 million a year earlier[55]. - The allowance for credit losses on loans to non-accrual loans held for investment was 33.05% as of September 30, 2025, down from 45.93% at December 31, 2024[95]. Non-Interest Income and Expenses - Non-interest income in the third quarter of 2025 was $94 million, up $17 million or 22% from the second quarter of 2025 but down $19 million or 17% from the third quarter of 2024[38]. - Total non-interest income for the first nine months of 2025 was $251 million, a 6% increase from $236 million in the same period of 2024[43]. - Non-interest expense for the third quarter 2025 totaled $522 million, a 27% decrease from $716 million in the third quarter 2024[44]. - Total non-interest expense for the first nine months of 2025 was $1.6 billion, down 26% from $2.1 billion in the same period of 2024[47]. - Operating expenses for the first nine months of 2025 were $1.4 billion, down 27% from $1.9 billion in the same period of 2024[48]. Regulatory and Structural Changes - The company completed a holding company reorganization on October 17, 2025, simplifying its corporate structure and reducing regulatory burden[4][13]. - The company is subject to heightened regulatory standards as a national bank with assets of $50 billion or more, impacting governance and risk management strategies[63]. - The company completed the merger with Flagstar Bancorp in December 2022 and the acquisition of substantial portions of the former Signature Bank in March 2023, which are expected to enhance operational efficiencies[65]. Asset and Liability Management - Total assets as of September 30, 2025, were $91.7 billion, down $0.6 billion, or 1%, from June 30, 2025, and down $8.5 billion, or 8%, from December 31, 2024[15]. - Total deposits decreased by $0.6 billion, or 1%, linked-quarter and by $6.7 billion, or 9%, year-over-year, primarily due to a decline in certificates of deposits[19]. - Total liabilities decreased to $83,851 million as of September 30, 2025, from $109,593 million at December 31, 2024, a reduction of 23.5%[94]. - Cash and cash equivalents increased by 5% to $8.484 billion compared to $8.094 billion in the previous quarter, but down 45% from $15.430 billion year-over-year[69]. - Interest-bearing checking and money market accounts increased by 5% to $20.045 billion compared to $19.067 billion in the previous quarter, but down 4% from $20.780 billion year-over-year[69].

FORM 10-Q General Information This section provides an overview of the quarterly report, including filing details, registrant information, and a cautionary note on forward-looking statements [Filing Information](index=1&type=section&id=Filing%20Information) This document is a Quarterly Report on Form 10-Q for Flagstar Financial, Inc., covering the period ended June 30, 2025. The company is a large accelerated filer and has filed all required reports - The report is a Quarterly Report on Form 10-Q for the period ended June 30, 2025[2](index=2&type=chunk) - Flagstar Financial, Inc. is classified as a **large accelerated filer**[4](index=4&type=chunk)[5](index=5&type=chunk) - The number of common stock shares outstanding as of July 31, 2025, was **415,574,267 shares**[6](index=6&type=chunk) [Registrant Information](index=1&type=section&id=Registrant%20Information) Flagstar Financial, Inc. is incorporated in Delaware, with its principal executive offices in Hicksville, New York. Its common stock and certain preferred securities are registered on the New York Stock Exchange - Flagstar Financial, Inc. is incorporated in Delaware[3](index=3&type=chunk) - The company's principal executive offices are located at 102 Duffy Avenue, Hicksville, New York[3](index=3&type=chunk) Securities Registered on NYSE | Title of each class | Trading symbol(s) | Name of each exchange on which registered | | :------------------ | :------------------ | :---------------------------------------- | | Common Stock, $0.01 par value per share | FLG | New York Stock Exchange | | SM Bifurcated Option Note Unit Securities | FLG PRU | New York Stock Exchange | | Depositary Shares each representing a 1/40th interest in a share of Fixed-to-Floating Rate Series A Noncumulative Perpetual Preferred Stock | FLG PRA | New York Stock Exchange | [Forward-Looking Statements and Risk Factors](index=5&type=section&id=Forward-Looking%20Statements%20and%20Risk%20Factors) The report contains forward-looking statements based on certain assumptions, and actual results may differ materially due to various factors beyond the company's control. These factors include general economic conditions, interest rate changes, market conditions, regulatory changes, and integration risks from acquisitions - Forward-looking statements are based on assumptions and describe future plans, strategies, and expectations, identified by words like 'anticipate,' 'believe,' 'estimate,' 'expect,' 'intend,' 'plan,' 'project,' 'seek,' 'strive,' 'try,' or future/conditional verbs[13](index=13&type=chunk) - Key risk factors include: - General economic conditions, including higher inflation[15](index=15&type=chunk) - Conditions in securities and real estate markets or the banking industry[15](index=15&type=chunk) - Changes in real estate values, interest rates, and the quality/composition of loan or securities portfolios[15](index=15&type=chunk) - Changes in capital management policies, competitive pressures, and deposit flows[15](index=15&type=chunk) - Ability to maintain sufficient liquidity and funding[15](index=15&type=chunk) - Regulatory focus on commercial real estate and loan concentrations[15](index=15&type=chunk) - Risks related to the proposed holding company reorganization transaction, including timing, regulatory approvals, and anticipated benefits[16](index=16&type=chunk) - Ability to successfully integrate acquired assets, liabilities, customers, systems, and personnel, including those from Flagstar Bancorp and Signature Bridge Bank, N.A.[16](index=16&type=chunk) - Exposure to unknown or contingent liabilities of acquired companies[16](index=16&type=chunk) - More stringent regulatory framework and prudential standards as a Category IV banking organization[20](index=20&type=chunk) - Cybersecurity incidents and operational issues from technology changes[20](index=20&type=chunk) - Changes in legislation, regulation, policies, and accounting principles[20](index=20&type=chunk) - Geopolitical instability and unforeseen catastrophic events[20](index=20&type=chunk) PART I. FINANCIAL INFORMATION This section details the company's financial performance, condition, and risk management, along with condensed consolidated financial statements and their accompanying notes [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=8&type=section&id=Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Flagstar Financial, Inc. is a regional bank undergoing a strategic transformation to become a diversified bank with a strong balance sheet and consistent earnings. The company reported a net loss for both the three and six months ended June 30, 2025, but showed improvement compared to the prior periods. Key financial metrics like Net Interest Income and Provision for Credit Losses saw changes influenced by strategic loan portfolio reductions and market conditions [General Overview](index=8&type=section&id=General%20Overview) Flagstar Financial, Inc. is a regional bank focused on strategic transformation, aiming for a diversified banking model with a strong balance sheet and consistent earnings - Flagstar Financial, Inc. is the parent company of Flagstar Bank, N.A., a regional bank headquartered in Hicksville, New York[22](index=22&type=chunk) Company Financials as of June 30, 2025 | Metric | Amount (billions) | | :----- | :---------------- | | Assets | $92.2 | | Loans | $64.4 | | Deposits | $69.7 | | Stockholders' Equity | $8.1 | - The Bank operates approximately **360 locations** across nine states, with strong presence in New York/New Jersey, the upper Midwest, Florida, and the West Coast[23](index=23&type=chunk) - Strategic priorities include: - Driving transformation and financial resilience[26](index=26&type=chunk) - Growing core operations[26](index=26&type=chunk) - Executing a disciplined commercial banking and lending strategy[26](index=26&type=chunk) - Enhancing operational efficiency[26](index=26&type=chunk) - Developing talent and leadership[26](index=26&type=chunk) - Aligning regulatory and risk management[26](index=26&type=chunk) [Merger of Flagstar Financial, Inc. and Flagstar Bank N.A.](index=8&type=section&id=Merger%20of%20Flagstar%20Financial,%20Inc.%20and%20Flagstar%20Bank%20N.A.) The company plans to merge with its wholly-owned bank subsidiary, Flagstar Bank, N.A., to streamline its corporate structure, subject to regulatory and shareholder approvals - On July 24, 2025, Flagstar Financial, Inc. entered into an Agreement and Plan of Merger with its wholly-owned bank subsidiary, Flagstar Bank, N.A., to streamline its corporate structure[29](index=29&type=chunk) - The Company will merge into the Bank, with the Bank continuing as the surviving entity, subject to shareholder and OCC approval, expected before the end of 2025[29](index=29&type=chunk) - Post-merger, the Surviving Entity will be a publicly traded company on the NYSE under the ticker symbol 'FLG' and will have substantially the same consolidated assets, liabilities, and shareholders' equity[31](index=31&type=chunk)[32](index=32&type=chunk) [Results of Operations](index=10&type=section&id=Results%20of%20Operations) The company reported a net loss for the three and six months ended June 30, 2025, showing improvement from prior periods, with changes in net interest income and credit loss provisions Net Loss and EPS | Period | Net Loss (millions) | Net Loss Attributable to Common Stockholders (millions) | Diluted EPS | | :---------------------- | :------------------ | :------------------------------------------------------ | :---------- | | 3 Months Ended June 30, 2025 | $(70) | $(78) | $(0.19) | | 3 Months Ended March 31, 2025 | $(100) | $(108) | $(0.26) | | 6 Months Ended June 30, 2025 | $(170) | $(186) | $(0.45) | | 6 Months Ended June 30, 2024 | $(650) | $(668) | $(2.48) | Net Interest Income (NII) and Net Interest Margin (NIM) | Period | NII (millions) | NIM (%) | | :---------------------- | :------------- | :------ | | 3 Months Ended June 30, 2025 | $419 | 1.81 | | 3 Months Ended March 31, 2025 | $410 | 1.74 | | 6 Months Ended June 30, 2025 | $829 | 1.77 | | 6 Months Ended June 30, 2024 | $1,181 | 2.13 | - NIM increased **7 basis points** and NII increased **$9 million** quarter-over-quarter (QoQ), primarily due to payoff of brokered CDs and pay down of wholesale borrowings, partially offset by lower average total loans[44](index=44&type=chunk) - NIM decreased **36 basis points** and NII decreased **$352 million** year-over-year (YoY), primarily due to lower average total loans and leases from strategic reductions and the sale of Mortgage Operations, partially offset by lower average borrowed funds[45](index=45&type=chunk) Provision for Credit Losses | Period | Provision for Credit Losses (millions) | Change QoQ (%) | Change YoY (%) | | :---------------------- | :----------------------------------- | :------------- | :------------- | | 3 Months Ended June 30, 2025 | $64 | (19)% | N/A | | 3 Months Ended March 31, 2025 | $79 | N/A | N/A | | 6 Months Ended June 30, 2025 | $143 | N/A | (80)% | | 6 Months Ended June 30, 2024 | $705 | N/A | N/A | - QoQ decrease of **$15 million** in provision for credit losses, driven by strategic reduction in multi-family, CRE, and non-core C&I loan portfolios, reduced criticized assets, and improved credit reviews[47](index=47&type=chunk) - YoY decrease of **$562 million** in provision for credit losses, attributed to improving credit trends, stabilization in ACL, and lower net charge-offs in multi-family and CRE portfolios[48](index=48&type=chunk) Non-Interest Income | (in millions) | June 30, 2025 (3 Months) | March 31, 2025 (3 Months) | Change (%) | June 30, 2025 (6 Months) | June 30, 2024 (6 Months) | Change (%) | | :------------ | :----------------------- | :------------------------ | :--------- | :----------------------- | :----------------------- | :--------- | | Fee income | $22 | $22 | — % | $44 | $75 | (41)% | | Bank-owned life insurance | $10 | $10 | — % | $20 | $22 | (9)% | | Net return on mortgage servicing rights | $— | $— | — % | $— | $40 | NM | | Net gain on loan sales and securitizations | $6 | $13 | (54)% | $19 | $38 | (50)% | | Net loan administration income | $1 | $4 | (75)% | $5 | $11 | (55)% | | Bargain purchase gain | $— | $— | — | $— | $(121) | NM | | Other | $38 | $31 | 0 | $69 | $58 | 0 | | Total non-interest income | $77 | $80 | (4)% | $157 | $123 | 28 % | - QoQ decrease of **$3 million** in non-interest income due to insignificant items[51](index=51&type=chunk) - YoY increase of **$34 million** in non-interest income, primarily due to the non-recurrence of a **$121 million** reduction in the Signature Transaction bargain purchase gain, partially offset by lower MSRs fees, fee income, net gain on loan sales and securitizations, and net loan administration income due to the sale of Mortgage Operations[52](index=52&type=chunk) Non-Interest Expense | (in millions) | June 30, 2025 (3 Months) | March 31, 2025 (3 Months) | Change (%) | June 30, 2025 (6 Months) | June 30, 2024 (6 Months) | Change (%) | | :------------ | :----------------------- | :------------------------ | :--------- | :----------------------- | :----------------------- | :--------- | | Compensation and benefits | $237 | $244 | (3)% | $481 | $645 | (25)% | | FDIC insurance | $49 | $50 | (2)% | $99 | $141 | (30)% | | Occupancy and equipment | $53 | $55 | (4)% | $108 | $104 | 4 % | | General and administrative | $133 | $147 | (10)% | $280 | $369 | (24)% | | Total operating expense | $472 | $496 | (5)% | $968 | $1,259 | (23)% | | Intangible asset amortization | $27 | $28 | (4)% | $55 | $68 | (19)% | | Merger-related expenses | $14 | $8 | 75 % | $22 | $77 | (71)% | | Total non-interest expense | $513 | $532 | (4)% | $1,045 | $1,404 | (26)% | - QoQ decrease of **$19 million** in total non-interest expenses, primarily due to a decrease in general and administrative expenses[54](index=54&type=chunk) - YoY decrease of **$359 million** in total non-interest expenses, mainly due to lower compensation and benefits, reduced general and administrative expenses (from Mortgage Operations sale), lower FDIC insurance costs, and decreased merger-related expenses[55](index=55&type=chunk) Income Tax Benefit and Effective Tax Rate | Period | Income Tax Benefit (millions) | Effective Tax Rate (%) | | :---------------------- | :---------------------------- | :--------------------- | | 3 Months Ended June 30, 2025 | $(11) | 12.9 | | 3 Months Ended March 31, 2025 | $(21) | 17.8 | | 6 Months Ended June 30, 2025 | $(32) | 15.9 | | 6 Months Ended June 30, 2024 | $(155) | 19.3 | - QoQ decrease of **$10 million** in income tax benefit, primarily due to a reduction in pre-tax loss[57](index=57&type=chunk) - YoY decrease of **$123 million** in income tax benefit, mainly due to a reduction in pre-tax loss, partially offset by the tax impact of the adjustment to the bargain purchase gain in Q1 2024[58](index=58&type=chunk) [Financial Condition](index=16&type=section&id=Financial%20Condition) The company's financial condition reflects strategic reductions in loan portfolios, an increase in debt securities, and a decrease in total deposits and borrowed funds Loan Portfolio Composition (Held for Investment) | Loan Type | June 30, 2025 (millions) | Percent of Total | December 31, 2024 (millions) | Percent of Total | | :-------------------------- | :----------------------- | :--------------- | :--------------------------- | :--------------- | | Multi-family | $31,932 | 49.8 % | $34,093 | 49.9 % | | Commercial real estate | $10,636 | 16.6 % | $11,836 | 17.4 % | | One-to-four family first mortgage | $5,445 | 8.5 % | $5,201 | 7.6 % | | Commercial and industrial | $14,426 | 22.5 % | $15,376 | 22.5 % | | Other loans | $1,682 | 2.6 % | $1,766 | 2.6 % | | Total loans and leases held for investment | $64,121 | 100.0 % | $68,272 | 100.0 % | | Allowance for credit losses | $(1,106) | | $(1,201) | | | Total loans and leases held for investment, net | $63,015 | | $67,071 | | - Total loans and leases held for investment decreased by **$4.2 billion** from December 31, 2024, to June 30, 2025[60](index=60&type=chunk) - This decrease is primarily due to the strategic reduction in multi-family, CRE, and non-core C&I loan exposure, partially offset by **$2.0 billion** in new C&I originations[60](index=60&type=chunk) Multi-Family Loan Portfolio Changes | Metric | June 30, 2025 (millions) | December 31, 2024 (millions) | Change (millions) | | :-------------------------------- | :----------------------- | :--------------------------- | :---------------- | | Multi-family loan portfolio | $31,932 | $34,093 | $(2,161) | | Par payoffs since Dec 31, 2024 | N/A | N/A | $1,900 | | Multi-family loans with interest-only payments | $9,900 | N/A | N/A | | Weighted average interest-only period remaining | 19.3 months | N/A | N/A | - **55%** of multi-family loans are secured by properties in New York State, with **88%** of those subject to rent regulation laws[64](index=64&type=chunk) - The company is curtailing future originations of loans secured by rent-regulated properties and diversifying its loan portfolio away from multi-family loans[65](index=65&type=chunk) - Approximately **36%** of interest-only multi-family loans will enter their amortization period by the end of 2025, and **68%** by the end of 2026[66](index=66&type=chunk) Commercial Real Estate (CRE) Loan Portfolio Changes | Metric | June 30, 2025 (millions) | December 31, 2024 (millions) | Change (millions) | | :----------------------- | :----------------------- | :--------------------------- | :---------------- | | CRE loans | $10,636 | $11,836 | $(1,200) | - CRE loans decreased by **$1.2 billion**, primarily due to par payoffs, consistent with the strategy to diversify the loan portfolio[69](index=69&type=chunk) - Substantially all CRE loans are non-recourse and secured by income-producing properties (office, retail, industrial, mixed-use)[71](index=71&type=chunk) Commercial and Industrial (C&I) Loan Portfolio Changes | Metric | June 30, 2025 (millions) | December 31, 2024 (millions) | Change (millions) | | :----------------------- | :----------------------- | :--------------------------- | :---------------- | | C&I loan portfolio | $14,426 | $15,376 | $(950) | | Reduction from strategic decisions | N/A | N/A | $(2,900) | | New originations | N/A | N/A | $2,000 | | Specialty finance loans and leases | $3,600 | $3,908 | $(308) | - C&I loan portfolio decreased by **$950 million**, reflecting a **$2.9 billion** reduction in non-core C&I loans, partially offset by **$2.0 billion** in new originations[73](index=73&type=chunk) - Specialty finance loans, a component of C&I, decreased by **$308 million (8%)**, due to running off certain non-core loans[75](index=75&type=chunk) One-to-Four Family Loans and Other Loans Changes | Loan Type | June 30, 2025 (millions) | December 31, 2024 (millions) | Change (millions) | | :-------------------------- | :----------------------- | :--------------------------- | :---------------- | | One-to-four family loans | $5,445 | $5,201 | $244 | | Other loans | $1,682 | $1,766 | $(84) | - One-to-four family loans increased by **$244 million**, driven by new originations[78](index=78&type=chunk) - Other loans decreased by **$84 million**, primarily due to payoffs at par[81](index=81&type=chunk) Loans Held for Sale Changes | Metric | June 30, 2025 (millions) | December 31, 2024 (millions) | Change (millions) | | :---------------- | :----------------------- | :--------------------------- | :---------------- | | Loans held for sale | $319 | $899 | $(580) | - Loans held for sale decreased by **$580 million**, primarily due to the run-off of held-for-sale loans following the sale of Mortgage Operations, partially offset by retail mortgage originations[82](index=82&type=chunk) Allowance for Credit Losses (ACL) on Loans and Leases | Metric | June 30, 2025 (millions) | December 31, 2024 (millions) | Change (millions) | | :------------------------------------ | :----------------------- | :--------------------------- | :---------------- | | ACL on loans and leases | $1,106 | $1,201 | $(95) | | ACL to total loans held for investment ratio | 1.72 % | 1.76 % | (0.04)% | | ACL on loans and leases to non-accrual loans | 34.78 % | 45.93 % | (11.15)% | - ACL decreased by **$95 million**, primarily due to improving credit trends and strategic reduction in multi-family, CRE, and non-core C&I portfolios, partially offset by negatively trending macro-economic conditions[85](index=85&type=chunk) Asset Quality Measures | Metric | June 30, 2025 | December 31, 2024 | | :---------------------------------------------------- | :------------ | :---------------- | | Non-accrual loans to total loans held for investment | 4.96 % | 3.83 % | | Non-performing assets to total assets | 3.57 % | 2.62 % | Non-Accrual Loans by Type | (in millions) | June 30, 2025 | December 31, 2024 | Change | | :-------------------------- | :------------ | :---------------- | :----- | | Multi-family | $2,388 | $1,755 | $633 | | Commercial real estate | $563 | $564 | $(1) | | One-to-four family first mortgage | $81 | $70 | $11 | | Commercial and industrial | $123 | $202 | $(79) | | Other Loans | $25 | $24 | $1 | | Total non-accrual loans | $3,180 | $2,615 | $565 | - Total non-accrual loans increased by **$565 million**, primarily due to higher non-accrual multi-family loans from one borrower relationship[91](index=91&type=chunk) - Approximately **43%** of non-accrual loans are current on their contractual payment terms[91](index=91&type=chunk) Loans 30 to 89 Days Past Due | (in millions) | June 30, 2025 | December 31, 2024 | Change | | :-------------------------- | :------------ | :---------------- | :----- | | Multi-family | $392 | $749 | $(357) | | Commercial real estate | $115 | $70 | $45 | | One-to-four family first mortgage | $30 | $25 | $5 | | Commercial and industrial | $38 | $110 | $(72) | | Other loans | $29 | $11 | $18 | | Total loans 30-89 days past due | $604 | $965 | $(361) | - Total loans 30-89 days past due decreased by **$361 million**[92](index=92&type=chunk) - Approximately **85%** of multi-family 30-89 days past due loans were attributable to a single borrower relationship[93](index=93&type=chunk) Net Charge-offs (Annualized Percentage of Average Loans) | Loan Type | 3 Months Ended June 30, 2025 (%) | 3 Months Ended June 30, 2024 (%) | 6 Months Ended June 30, 2025 (%) | 6 Months Ended June 30, 2024 (%) | | :-------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Multi-family | 1.17 | 0.83 | 1.05 | 0.47 | | Commercial real estate | 0.47 | 7.01 | 0.27 | 4.44 | | One-to-four family residential | 0.08 | 0.07 | 0.08 | 0.03 | | Commercial and industrial | 0.08 | 0.56 | 0.42 | 0.31 | | Other | 0.94 | 0.92 | 0.93 | 0.69 | | Total | 0.72 | 1.75 | 0.70 | 1.06 | Debt Securities Available-for-Sale | Metric | June 30, 2025 (millions) | December 31, 2024 (millions) | Change (millions) | | :-------------------------------- | :----------------------- | :--------------------------- | :---------------- | | Debt Securities Available-for-Sale | $14,823 | $10,402 | $4,421 | | Mortgage-related securities | $12,100 | $8,600 | $3,500 | | Portfolio floating rate securities | 27 % | N/A | N/A | | Estimated weighted average life | 5 years | 6 years | (1) year | - Debt securities available-for-sale increased by **$4.4 billion**, primarily due to reinvestment of cash into higher earning assets[98](index=98&type=chunk) Deposits Composition and Changes | Deposit Type | June 30, 2025 (millions) | Percent of Total | Weighted Average Interest Rate (%) | December 31, 2024 (millions) | Percent of Total | Weighted Average Interest Rate (%) | | :------------------------------------ | :----------------------- | :--------------- | :------------------------------- | :--------------------------- | :--------------- | :------------------------------- | | Interest-bearing checking and money market accounts | $19,067 | 27 % | 3.03 | $20,780 | 27 % | 2.89 | | Savings accounts | $14,460 | 21 % | 3.06 | $14,282 | 19 % | 3.22 | | Certificates of deposit | $24,212 | 35 % | 4.47 | $27,324 | 36 % | 4.75 | | Non-interest-bearing accounts | $12,006 | 17 % | — | $13,484 | 18 % | — | | Total deposits | $69,745 | 100 % | 3.64 | $75,870 | 100 % | 3.12 | - Total deposits decreased by **$6.1 billion**, primarily due to the payoff of brokered CDs and custodial deposits from the sale of Mortgage Operations[101](index=101&type=chunk) - Brokered deposits decreased from **$10.2 billion** to **$6.1 billion**[102](index=102&type=chunk) - Uninsured deposits totaled **$12.9 billion**, representing **18%** of the overall deposit base, with total bank liquidity exceeding this by **$16.0 billion**[105](index=105&type=chunk)[106](index=106&type=chunk) Borrowed Funds Changes | Borrowed Fund Type | June 30, 2025 (millions) | December 31, 2024 (millions) | Change (millions) | | :------------------------- | :----------------------- | :--------------------------- | :---------------- | | Wholesale borrowings (FHLB advances) | $12,150 | $13,400 | $(1,250) | | Junior subordinated debentures | $584 | $582 | $2 | | Subordinated notes | $446 | $444 | $2 | | Total borrowed funds | $13,180 | $14,426 | $(1,246) | - Total borrowed funds decreased by **$1.2 billion**, primarily due to the repayment of **$1.25 billion** in FHLB advances[107](index=107&type=chunk) Federal Home Loan Bank and Federal Reserve Bank Stock | Stock Type | June 30, 2025 (millions) | December 31, 2024 (millions) | Change (millions) | | :------------------------------------------ | :----------------------- | :--------------------------- | :---------------- | | FHLB-NY stock | $542 | $598 | $(56) | | FHLB-Indianapolis stock | $255 | $329 | $(74) | | Federal Reserve Bank stock | $220 | $219 | $1 | | Total FHLB and FRB-NY stock | $1,017 | $1,146 | $(129) | - Total FHLB and FRB-NY stock decreased by **$129 million**, primarily due to a reduction in borrowings[109](index=109&type=chunk) [Risk Management](index=25&type=section&id=Risk%20Management) The company employs a comprehensive risk management framework, monitoring credit, liquidity, market, and regulatory risks, while maintaining strong capital positions - The Risk Management Division formalizes the Company's Risk Appetite Statement, aligning it with budget, strategic, and capital plans, and monitors key risk indicators[110](index=110&type=chunk) - Credit Risk Management: - Underwrites loans according to prudent credit standards and continually reviews the loan portfolio risk[112](index=112&type=chunk) - Loans with DSCR less than 1.0 are evaluated for downgrade to substandard or non-accrual risk rating and are appraised annually[113](index=113&type=chunk) - Classified loans (substandard and non-accrual) decreased from **$11.5 billion** to **$10.8 billion**, primarily due to par payoffs of multi-family substandard loans[114](index=114&type=chunk) - Over **80%** of multi-family loans that reached their repricing date since early 2024 remain current on payments[115](index=115&type=chunk) - Charge-offs of **$207 million** were recorded on multi-family and CRE loans during the six months ended June 30, 2025, driven by appraisals[118](index=118&type=chunk) - Liquidity Risk Management: - Maintains a liquidity risk management framework and a Liquidity Risk Policy approved by the Board of Directors[121](index=121&type=chunk) - Primary funding sources include retail and institutional deposit base, with **$12.9 billion** of uninsured deposits (**18%** of total)[122](index=122&type=chunk) - Utilizes wholesale funding channels, including **$12.2 billion** from FHLB and **$6.1 billion** in brokered CDs[123](index=123&type=chunk) - Maintains a liquidity buffer of on-balance sheet cash reserves and High-Quality Liquid Assets (HQLAs), and access to FHLB and FRB-NY Discount Window borrowings[124](index=124&type=chunk) Total Liquidity (billions) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Cash at Federal Reserve | $7.6 | $15.0 | | High-Quality Liquid Assets | $12.8 | $7.9 | | Total On-Balance Sheet Liquidity | $20.4 | $22.9 | | FHLB Available Capacity | $6.9 | $6.6 | | Discount Window Available Capacity | $1.6 | $0.4 | | Total Liquidity | $28.9 | $29.9 | Credit Ratings as of June 30, 2025 | Rating Agency | Long-Term Issuer Rating | Short-Term Deposits Rating | | :------------ | :---------------------- | :------------------------- | | Moody's | B1 | NP | | Fitch | BB | N/A | | Morningstar DBRS | BBB (low) | N/A | - Moody's upgraded the Long-Term Issuer rating from B2 to B1 during Q1 2025[126](index=126&type=chunk) - The company is not in compliance with mortgage loan agencies' criteria for eligible custodial depository due to not having an investment grade short-term issuer/deposit rating from Moody's or S&P, but has received a waiver[127](index=127&type=chunk) - Parent Company Liquidity: - Parent Company held cash and cash equivalents of **$502 million** at June 30, 2025[128](index=128&type=chunk) - Primary funding sources for the Parent Company are dividends from the Bank and capital raised through equity issuance[129](index=129&type=chunk) - No dividends were paid by the Bank to the Parent Company in the six months ended June 30, 2025[130](index=130&type=chunk) - The Parent Company believes it has sufficient liquidity and capital resources to meet obligations through 2028[130](index=130&type=chunk) - Contractual Obligations: - Total liquidity position was **$29 billion** at June 30, 2025, expected to be sufficient for short-term and long-term cash obligations[132](index=132&type=chunk) - Contractual obligations include **$24.2 billion** in CDs and **$11.2 billion** in long-term debt[133](index=133&type=chunk) - Operating lease liabilities totaled **$454 million** at June 30, 2025[135](index=135&type=chunk) - Market Risk Management: - Manages assets and liabilities to reduce exposure to changes in market interest rates, which is the primary market risk[136](index=136&type=chunk) - Interest rate sensitivity is monitored using a model that estimates changes in Economic Value of Equity (EVE) and Net Interest Income (NII) under various interest rate scenarios[137](index=137&type=chunk) - EVE analysis at June 30, 2025, shows a **2.4% increase** for a -200 bps shock and a **(4.8)% decrease** for a +200 bps shock[139](index=139&type=chunk)[140](index=140&type=chunk) - NII simulation for the next twelve months shows a **0.8% increase** for a -200 bps shock and a **(2.6)% decrease** for a +200 bps shock[144](index=144&type=chunk) - Regulatory Capital: - The Company is a bank holding company regulated by the Federal Reserve, and the Bank is a national bank regulated by the OCC[147](index=147&type=chunk) - Effective October 1, 2023, the company became subject to Category IV prudential standards, including heightened requirements for capital, liquidity, and risk management[148](index=148&type=chunk) - As of June 30, 2025, the company's and the Bank's capital measures exceeded minimum federal requirements for a bank holding company and a bank, respectively[151](index=151&type=chunk) - The Bank also exceeded the minimum capital requirements to be categorized as 'Well Capitalized'[152](index=152&type=chunk) Company Regulatory Capital Position (June 30, 2025) | Capital Type | Amount (millions) | Ratio (%) | Minimum for Adequacy (%) | Excess (millions) | Excess (%) | | :------------------- | :---------------- | :-------- | :----------------------- | :---------------- | :--------- | | Common Equity Tier 1 | $7,849 | 12.33 | 4.50 | $4,984 | 7.83 | | Tier 1 | $8,353 | 13.12 | 6.00 | $4,532 | 7.12 | | Total | $10,044 | 15.77 | 8.00 | $4,950 | 7.77 | | Leverage Capital | $8,353 | 8.61 | 4.00 | $4,472 | 4.61 | Bank Regulatory Capital Position (June 30, 2025) | Capital Type | Amount (millions) | Ratio (%) | Minimum for Adequacy (%) | Excess (millions) | Excess (%) | | :------------------- | :---------------- | :-------- | :----------------------- | :---------------- | :--------- | | Common Equity Tier 1 | $8,835 | 13.89 | 4.50 | $5,972 | 9.39 | | Tier 1 | $8,835 | 13.89 | 6.00 | $5,018 | 7.89 | | Total | $9,635 | 15.15 | 8.00 | $4,546 | 7.15 | | Leverage Capital | $8,835 | 9.11 | 4.00 | $4,957 | 5.11 | [Other Recent Developments](index=32&type=section&id=Other%20Recent%20Developments) The company is actively addressing material weaknesses in internal controls and anticipates an immaterial impact from recent tax reform legislation - The company is actively working to remediate previously disclosed material weaknesses in internal control over financial reporting[153](index=153&type=chunk) - The recently enacted One Big Beautiful Bill Act, which includes broad tax reform provisions, is expected to have an immaterial impact on the company's financial results[154](index=154&type=chunk) [Condensed Consolidated Financial Statements](index=33&type=section&id=Condensed%20Consolidated%20Financial%20Statements) The condensed consolidated financial statements provide a snapshot of Flagstar Financial, Inc.'s financial position, performance, and cash flows for the periods presented. These include the Statements of Financial Condition, (Loss) Income, Comprehensive (Loss) Income, Stockholders' Equity, and Cash Flows, all prepared in conformity with GAAP - The Condensed Consolidated Statements of Financial Condition show total assets of **$92,237 million** and total liabilities of **$84,141 million** as of June 30, 2025[157](index=157&type=chunk) - The Condensed Consolidated Statements of (Loss) Income report a net loss of **$70 million** for the three months ended June 30, 2025, and **$170 million** for the six months ended June 30, 2025[160](index=160&type=chunk) - The Condensed Consolidated Statements of Cash Flows indicate net cash used in operating activities of **$(235) million** and net cash used in financing activities of **$(7,317) million** for the six months ended June 30, 2025[171](index=171&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=40&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed disclosures on the company's accounting policies, financial instruments, and specific balance sheet and income statement items. They cover organization, earnings per share, comprehensive loss, investment securities, loans and leases, credit loss allowances, leases, variable interest entities, borrowed funds, pension benefits, taxes, stock-based compensation, derivatives, intangible assets, fair value measures, equity, commitments, and segment reporting [Note 1 - Organization and Basis of Presentation](index=40&type=section&id=Note%201%20-%20Organization%20and%20Basis%20of%20Presentation) This note describes Flagstar Financial, Inc. as a bank holding company, its regulatory oversight, and the basis for preparing its consolidated financial statements in conformity with GAAP - Flagstar Financial, Inc. is the holding company for Flagstar Bank N.A., headquartered in Hicksville, New York, with regional headquarters in Troy, Michigan[172](index=172&type=chunk) - The company is subject to regulation by the Federal Reserve, and the Bank by the OCC[173](index=173&type=chunk) - The financial statements are prepared in conformity with GAAP and include consolidated accounts of the company and its controlled entities[174](index=174&type=chunk) [Note 2 - Earnings Per Common Share](index=40&type=section&id=Note%202%20-%20Earnings%20Per%20Common%20Share) This note details the calculation of basic and diluted earnings per common share using the two-class method, considering unvested restricted stock units as participating securities - EPS is calculated using the two-class method, as unvested RSUs are considered participating securities due to non-forfeitable dividend rights[178](index=178&type=chunk) Basic and Diluted (Loss) Per Common Share | Period | Net (loss) attributable to common stockholders (millions) | Weighted average common shares outstanding | Basic (loss) per common share | Diluted (loss) per common share | | :---------------------- | :------------------------------------------------------ | :--------------------------------------- | :---------------------------- | :------------------------------ | | 3 Months Ended June 30, 2025 | $(78) | 415,125,228 | $(0.19) | $(0.19) | | 6 Months Ended June 30, 2025 | $(186) | 414,975,524 | $(0.45) | $(0.45) | [Note 3 - Accumulated Other Comprehensive Loss](index=41&type=section&id=Note%203%20-%20Accumulated%20Other%20Comprehensive%20Loss) This note outlines changes in accumulated other comprehensive loss, primarily related to debt securities available for sale and terminated cash flow hedges Changes in AOCL, Net of Tax | (in millions) | Debt Securities AFS | Cash Flow Hedges | Pension and Post-retirement Plans | Total | | :-------------------------- | :------------------ | :--------------- | :-------------------------------- | :---- | | Balance, beginning of period (June 30, 2025) | $(560) | $40 | $(33) | $(553) | | Other comprehensive income (loss) before reclassification, net of tax | $16 | $— | $— | $16 | | Amounts reclassified from AOCL, net of tax | $— | $(5) | $— | $(5) | | Other comprehensive income (loss), net of tax | $16 | $(5) | $— | $11 | | Balance, end of period (June 30, 2025) | $(544) | $35 | $(33) | $(542) | - At June 30, 2025, the company had **$35 million** (net-of-tax) of unrealized gains related to terminated cash flow hedges recorded in AOCL[184](index=184&type=chunk) - The company expects to recognize **$28 million** of lower interest expense over the next twelve months related to the reclassification of amounts from AOCL[185](index=185&type=chunk) [Note 4 - Investment Securities](index=43&type=section&id=Note%204%20-%20Investment%20Securities) This note provides details on the company's debt securities available for sale, including amortized cost, fair value, unrealized gains and losses, and pledged securities Debt Securities Available for Sale (June 30, 2025) | (in millions) | Amortized Cost | Gross Unrealized Gain | Gross Unrealized Loss | Fair Value | | :------------------------------------ | :------------- | :-------------------- | :-------------------- | :--------- | | Mortgage-Related Debt Securities | $12,583 | $72 | $543 | $12,112 | | Other Debt Securities | $2,956 | $17 | $262 | $2,711 | | Total debt securities available for sale, net of allowance | $15,539 | $89 | $805 | $14,823 | - At June 30, 2025, the ACL for debt securities available for sale was **$3 million**[190](index=190&type=chunk) - The company pledged investment securities of **$14.5 billion** as collateral for certain borrowings at June 30, 2025[190](index=190&type=chunk) - No realized gains or losses on sales of available-for-sale securities were recorded during the three and six months ended June 30, 2025 and 2024[194](index=194&type=chunk) Debt Securities in Continuous Unrealized Loss Position (June 30, 2025) | (in millions) | Number of Debt Securities | Fair Value (Less than 12 Months) | Unrealized Loss (Less than 12 Months) | Fair Value (12 Months or Longer) | Unrealized Loss (12 Months or Longer) | Total Fair Value | Total Unrealized Loss | | :------------------------------------------ | :------------------------ | :------------------------------- | :------------------------------------ | :------------------------------- | :------------------------------------ | :--------------- | :-------------------- | | GSE CMOs | 219 | $2,012 | $8 | $2,800 | $394 | $4,812 | $402 | | U.S. Government agency and GSE obligations | 33 | $— | $— | $1,262 | $240 | $1,262 | $240 | | GSE certificates | 323 | $10 | $— | $949 | $141 | $959 | $141 | | Total debt securities in a continuous unrealized loss position | 595 | $2,047 | $8 | $5,377 | $797 | $7,424 | $805 | [Note 5 - Loans and Leases](index=46&type=section&id=Note%205%20-%20Loans%20and%20Leases) This note details the composition and accounting treatment of the company's loan and lease portfolios, including delinquency status, non-accrual loans, and collateral-dependent loans - Loans held for investment are reported at amortized cost, while loans held for sale are carried at fair value or the lower of amortized cost or fair value[202](index=202&type=chunk)[203](index=203&type=chunk) Loans and Leases Held for Investment (June 30, 2025) | Loan Type | Amount (millions) | Percent of Held for Investment | | :-------------------------- | :---------------- | :----------------------------- | | Multi-family | $31,932 | 49.8 % | | Commercial real estate | $10,636 | 16.6 % | | One-to-four family first mortgage | $5,445 | 8.5 % | | Commercial and industrial | $14,426 | 22.5 % | | Other | $1,682 | 2.6 % | | Total loans and leases held for investment | $64,121 | 100.0 % | - The company pledged **$34.4 billion** in loans as collateral for wholesale borrowings at June 30, 2025[206](index=206&type=chunk) - A loan is classified as non-accrual when it is 90 days or more past due or deemed impaired, with interest income ceasing and previously accrued interest reversed[208](index=208&type=chunk) Collateral-Dependent Loans Held for Investment (June 30, 2025) | Collateral Type | Amount (millions) | | :-------------------------- | :---------------- | | Multi-family | $2,422 | | Commercial real estate | $514 | | One-to-four family first mortgage | $76 | | Commercial and industrial | $13 | | Total collateral-dependent loans held for investment | $3,025 | Delinquency Status of Loans Held for Investment (June 30, 2025) | Loan Type | Current (millions) | 30-89 Days Past Due (millions) | Non-Accrual Loans (millions) | Total Loans Receivable (millions) | | :-------------------------- | :----------------- | :----------------------------- | :--------------------------- | :------------------------------ | | Multi-family | $29,152 | $392 | $2,388 | $31,932 | | Commercial real estate | $9,958 | $115 | $563 | $10,636 | | One-to-four family first mortgage | $5,334 | $30 | $81 | $5,445 | | Commercial and industrial | $14,265 | $38 | $123 | $14,426 | | Other | $1,628 | $29 | $25 | $1,682 | | Total | $60,337 | $604 | $3,180 | $64,121 | - Loans totaling **$19 million** were modified for borrowers experiencing financial difficulty during the three and six months ended June 30, 2025[225](index=225&type=chunk) - As of June 30, 2025, loans with government guarantees (LGG) totaled **$369 million**[231](index=231&type=chunk) [Note 6 - Allowance for Credit Losses on Loans and Leases](index=54&type=section&id=Note%206%20-%20Allowance%20for%20Credit%20Losses%20on%20Loans%20and%20Leases) This note explains the activity and methodology for the allowance for credit losses on loans and leases, reflecting credit trends and portfolio changes Activity in ACL on Loans and Leases (Six Months Ended June 30, 2025) | (in millions) | Multi-Family | Commercial Real Estate | One-to-Four Family First Mortgage | Commercial and Industrial | Other | Total | | :---------------------------------------------------- | :----------- | :--------------------- | :-------------------------------- | :------------------------ | :---- | :---- | | Balance, beginning of period | $639 | $304 | $39 | $151 | $68 | $1,201 | | Charge-offs | $(185) | $(22) | $(2) | $(41) | $(14) | $(264) | | Recoveries | $9 | $7 | $— | $10 | $6 | $32 | | Provision for (recovery of) credit losses on loans and leases | $75 | $29 | $(4) | $40 | $(3) | $137 | | Balance, end of period | $538 | $318 | $33 | $160 | $57 | $1,106 | - The ACL to total loans and leases held for investment ratio was **1.72%** at June 30, 2025, down from **1.76%** at December 31, 2024[236](index=236&type=chunk) - Higher interest rates are expected to impact loans repricing during the forecast period, leading to a higher probability of default incorporated into ACL measurement[236](index=236&type=chunk) - The ACL is determined based on quantitative modeling incorporating economic forecast scenarios, with key inputs including projected debt service and collateral property values[237](index=237&type=chunk) Non-Accrual Loans and Related Allowance (June 30, 2025) | (in millions) | Non-accrual loans with no related allowance | Non-accrual loans with an allowance recorded | Total Non-accrual loans | Related Allowance | | :-------------------------- | :------------------------------------------ | :------------------------------------------- | :---------------------- | :---------------- | | Multi-family | $1,781 | $607 | $2,388 | $91 | | Commercial real estate | $377 | $186 | $563 | $64 | | One-to-four family first mortgage | $58 | $23 | $81 | $2 | | Commercial and Industrial | $72 | $51 | $123 | $37 | | Other | $— | $25 | $25 | $21 | | Total | $2,288 | $892 | $3,180 | $215 | [Note 7 - Leases, Premises and Equipment](index=56&type=section&id=Note%207%20-%20Leases,%20Premises%20and%20Equipment) This note details the company's equipment leases and operating leases for premises and equipment, including related assets, liabilities, and depreciation - The company provides equipment leases, mainly to large, investment-grade corporate clients, which qualify as direct financing leases[242](index=242&type=chunk) - Interest income on lease financing was **$24 million** for the three months and **$48 million** for the six months ended June 30, 2025[243](index=243&type=chunk) - The company has operating leases for offices, branches, equipment, and other items, with operating lease liabilities of **$454 million** and right-of-use assets of **$397 million** at June 30, 2025[244](index=244&type=chunk)[246](index=246&type=chunk) Premises and Equipment, Net | (in millions) | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Premises and equipment | $1,011 | $1,131 | | Less: Accumulated depreciation | $(537) | $(569) | | Premises and equipment, net | $474 | $562 | [Note 8 - Variable Interest Entities](index=57&type=section&id=Note%208%20-%20Variable%20Interest%20Entities) This note clarifies that the company had no consolidated variable interest entities and details its maximum exposure to loss from retained interests in securitization trusts - The company had no consolidated Variable Interest Entities (VIEs) as of June 30, 2025, and December 31, 2024[250](index=250&type=chunk) - The company retains a **5% interest** in investment securities of certain securitization trusts, with a maximum exposure to loss limited to this retained interest, which had a fair value of **$159 million** at June 30, 2025[251](index=251&type=chunk) [Note 9 - Borrowed Funds](index=57&type=section&id=Note%209%20-%20Borrowed%20Funds) This note provides a breakdown of the company's borrowed funds, including wholesale borrowings, junior subordinated debentures, and subordinated notes, and their changes Borrowed Funds Summary | (in millions) | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Wholesale borrowings (FHLB advances) | $12,150 | $13,400 | | Junior subordinated debentures | $584 | $582 | | Subordinated notes | $446 | $444 | | Total borrowed funds | $13,180 | $14,426 | - Accrued interest on borrowed funds was **$45 million** at June 30, 2025[252](index=252&type=chunk) - FHLB advances decreased by **$1.2 billion** due to repayments, with available capacity of **$6.9 billion** at June 30, 2025[255](index=255&type=chunk)[257](index=257&type=chunk) - The company had **$610 million** in outstanding junior subordinated debentures at June 30, 2025[260](index=260&type=chunk) - Total subordinated notes outstanding were **$446 million** at June 30, 2025, including fixed-to-floating rate notes[263](index=263&type=chunk) [Note 10 - Pension Benefits](index=61&type=section&id=Note%2010%20-%20Pension%20Benefits) This note presents the components of net periodic pension expense (income), reflecting interest cost, expected return on plan assets, and amortization of actuarial losses Components of Net Periodic Pension Expense (Income) | (in millions) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Interest cost | $1 | $1 | $3 | $2 | | Expected return on plan assets | $(4) | $(4) | $(8) | $(8) | | Amortization of net actuarial loss | $1 | $1 | $2 | $2 | | Net periodic expense (income) | $(2) | $(2) | $(3) | $(4) | [Note 11 - Federal, State, and Local Taxes](index=61&type=section&id=Note%2011%20-%20Federal,%20State,%20and%20Local%20Taxes) This note details the company's income tax benefit and effective tax rate, explaining the methodology used due to expected break-even results Income Tax Benefit and Effective Tax Rate | Period | Income Tax Benefit (millions) | Effective Tax Rate (%) | | :---------------------- | :---------------------------- | :--------------------- | | 3 Months Ended June 30, 2025 | $(11) | 12.9 | | 3 Months Ended June 30, 2024 | $(101) | 23.7 | | 6 Months Ended June 30, 2025 | $(32) | 15.9 | | 6 Months Ended June 30, 2024 | $(155) | 19.3 | - The company was unable to make a reliable estimate of its annual effective tax rate for the three and six months ended June 30, 2025, due to expected break-even results, and therefore used its actual effective tax rate[56](index=56&type=chunk) [Note 12 - Stock-Based Compensation](index=62&type=section&id=Note%2012%20-%20Stock-Based%20Compensation) This note outlines the company's stock-based compensation plans, including RSUs, PSUs, and stock options, along with related expense and unrecognized costs - Stock-based compensation is issued in the form of RSUs, PSUs, and stock options, with **6,626,001 shares** available for grant as of June 30, 2025[269](index=269&type=chunk) Stock-Based Compensation Expense and Tax Benefit | (in millions) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Stock-based compensation expense | $14 | $15 | $29 | $22 | | Tax benefit | $3 | $2 | $5 | $4 | - The company granted **4,806,308 shares** of restricted stock during the six months ended June 30, 2025, with an average fair value of **$11.62 per share**[271](index=271&type=chunk) - Unrecognized compensation cost for unvested restricted stock totaled **$109 million**, to be recognized over a weighted average life of **2.4 years**[272](index=272&type=chunk) - Unamortized compensation expense for stock options totaled **$36 million**, to be recognized over a weighted average life of **1.8 years**[273](index=273&type=chunk) [Note 13 - Derivative and Hedging Activities](index=63&type=section&id=Note%2013%20-%20Derivative%20and%20Hedging%20Activities) This note describes the company's use of derivative financial instruments, such as interest rate swaps and caps, for managing interest rate and MSR asset value exposures - Derivative financial instruments are recorded at fair value and presented on a gross basis on the Condensed Consolidated Statements of Condition[275](index=275&type=chunk) - The company uses interest rate swaps, foreign currency swaps, futures, swaptions, and forward commitments to manage interest rate and MSR asset value exposure[276](index=276&type=chunk) - Certain interest rate caps are designated as cash flow hedges on SOFR-based variable interest payments on FHLB advances, with changes in fair value recorded in AOCL[277](index=277&type=chunk) - Fixed-rate to variable-rate interest rate swaps are designated as fair value hedges for certain debt securities available for sale, with changes in fair value recognized in Interest income[278](index=278&type=chunk) Derivative Financial Instruments (June 30, 2025) | (in millions) | Notional Amount | Fair Value (Other Assets) | Fair Value (Other Liabilities) | Expiration Dates | | :------------------------------------ | :-------------- | :------------------------ | :----------------------------- | :--------------- | | Derivatives designated as hedging instruments: | | | | | | Interest rate swaps (fair value hedge) | $2,993 | $— | $— | 2028-2029 | | Interest rate caps (cash flow hedge) | $2,000 | $— | $— | 2028 | | Derivatives not designated as hedging instruments: | | | | | | Rate lock commitments | $439 | $4 | $3 | 2025 | | Mortgage-backed securities forwards | $269 | $— | $5 | 2025 | | Interest rate swaps | $3,229 | $17 | $22 | 2025-2041 | [Note 14 - Intangible Assets](index=65&type=section&id=Note%2014%20-%20Intangible%20Assets) This note provides details on the company's intangible assets, primarily core deposit intangibles, including their gross carrying amount, accumulated amortization, and net carrying value Intangible Assets (June 30, 2025) | (in millions) | Gross Carrying Amount | Accumulated Amortization | Net Carrying Value | | :-------------------------- | :-------------------- | :----------------------- | :----------------- | | Core deposit intangible | $700 | $(282) | $418 | | Other intangible assets | $26 | $(11) | $15 | | Total other intangible assets | $726 | $(293) | $433 | Amortization Expense | (in millions) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Amortization expense | $27 | $33 | $55 | $68 | [Note 15 - Fair Value Measures](index=65&type=section&id=Note%2015%20-%20Fair%20Value%20Measures) This note explains the company's fair value measurement hierarchy for assets and liabilities, distinguishing between recurring and non-recurring fair value measurements - Fair value is an 'exit' price, determined based on assumptions market participants would use, and categorized into a three-tier hierarchy (Level 1, 2, 3) based on input observability[288](index=288&type=chunk)[289](index=289&type=chunk) Assets and Liabilities Measured at Fair Value on a Recurring Basis (June 30, 2025) | (in millions) | Level 1 | Level 2 | Level 3 | Total Fair Value | | :------------------------------------ | :------ | :------ | :------ | :--------------- | | Assets: | | | | | | Total debt securities available for sale | $1,013 | $13,779 | $31 | $14,823 | | Total equity securities | $— | $14 | $— | $14 | | Loans held for sale | $— | $317 | $— | $317 | | Derivative assets | $— | $17 | $4 | $21 | | Total assets at fair value | $1,013 | $14,127 | $35 | $15,175 | | Liabilities: | | | | | | Derivative liabilities | $— | $27 | $3 | $30 | | Total liabilities at fair value | $— | $27 | $3 | $30 | Assets Measured at Fair Value on a Non-Recurring Basis (June 30, 2025) | (in millions) | Level 1 | Level 2 | Level 3 | Total Fair Value | | :-------------------------- | :------ | :------ | :------ | :--------------- | | Loans held for investment | $— | $— | $2,977 | $2,977 | | Loans held for sale | $— | $2 | $— | $2 | | Other assets | $— | $— | $52 | $52 | | Total | $— | $2 | $3,029 | $3,031 | Carrying Values and Estimated Fair Values of Financial Instruments Not Carried at Fair Value (June 30, 2025) | (in millions) | Carrying Value | Estimated Fair Value | Level 1 | Level 2 | Level 3 | | :------------------------------------ | :------------- | :------------------- | :------ | :------ | :------ | | Financial Assets: | | | | | | | Cash and cash equivalents | $8,094 | $8,094 | $8,094 | $— | $— | | FHLB and FRB-NY stock | $1,017 | $1,017 | $— | $1,017 | $— | | Loans and leases held for investment, net | $63,015 | $58,662 | $— | $— | $58,662 | | Financial Liabilities: | | | | | | | Deposits | $69,745 | $69,721 | $45,533 | $24,188 | $— | | Borrowed funds | $13,180 | $13,036 | $— | $13,036 | $— | - The fair value option has been elected for certain financial instruments to align accounting with economic exposure, resulting in a net gain of **$6 million** on loans held for sale for the three months ended June 30, 2025[317](index=317&type=chunk) [Note 16 - Mezzanine and Stockholders' Equity](index=71&type=section&id=Note%2016%20-%20Mezzanine%20and%20Stockholders'%20Equity) This note details the company's preferred stock series, including shares outstanding, par value, liquidation preferences, and warrants for non-voting common equivalent stock Preferred Stock Summary (June 30, 2025) | Preferred Stock Series | Amount Outstanding (millions) | Shares Authorized | Shares Issued | Shares Outstanding | Par Value | Liquidation Preference Per Share | | :------------------------------------ | :---------------------------- | :---------------- | :------------ | :----------------- | :-------- | :----------------------------- | | 6.375% Fixed-to-Floating Rate Perpetual Noncumulative Series A | $503 | 5,000,000 | 515,000 | 515,000 | $0.01 | $1,000 | | Fixed Rate Perpetual Noncumulative Convertible Series B | $1 | 267,062 | 192,062 | 750 | $0.01 | $— | | 13.00% Fixed Rate Perpetual Noncumulative Convertible Series C | $— | 523,369 | — | — | $0.01 | $2,000 | | Non-Voting Common Equivalent Series D | $— | 315,000 | 45 | 15 | $0.01 | $0.0001 | - Dividends of **$16 million** were paid on Series A preferred stock for the six months ended June 30, 2025[321](index=321&type=chunk) - Warrants to purchase Series D NVCE Stock were issued in March 2024, with an exercise price reduced to **$2,483 per share** as of June 30, 2025, convertible into **105,000,000 shares** of common stock[325](index=325&type=chunk) [Note 17 - Commitments and Contingencies](index=73&type=section&id=Note%2017%20-%20Commitments%20and%20Contingencies) This note outlines the company's off-balance sheet commitments, including loan commitments and letters of credit, and discusses various legal proceedings and their potential financial impact Off-Balance Sheet Commitments (June 30, 2025) | (in millions) | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :---------------- | | Multi-family and Commercial real estate | $988 | $2,478 | | One-to-four family including interest rate locks | $1,464 | $725 | | Other loan commitments | $10,112 | $9,837 | | Total loan commitments | $12,564 | $13,040 | | Stand-by letters of credit | $699 | $803 | | Total commitments | $13,263 | $13,843 | - The allowance for unfunded commitments was **$56 million** at June 30, 2025[328](index=328&type=chunk) - The company is involved in various legal actions, including shareholder class and derivative actions, and cyber breach litigations, with an estimated immaterial range of reasonably possible losses in excess of amounts accrued[331](index=331&type=chunk)[334](index=334&type=chunk)[369](index=369&type=chunk)[370](index=370&type=chunk)[371](index=371&type=chunk) - Flagstar Bank remains engaged with the FDIC regarding the net settlement of historical activity related to the Signature Transaction, which could impact future financial statements[338](index=338&type=chunk) [Note 18 - Segment Reporting](index=75&type=section&id=Note%2018%20-%20Segment%20Reporting) This note states that the company operates as a single reportable segment, with financial results reviewed on a consolidated basis by the Chief Executive Officer - The company operates in a single reportable segment, with financial results reviewed on a consolidated basis by the Chief Executive Officer[339](index=339&type=chunk) - The focus of the chief operating decision maker is on consolidated cost measures, realigning business operations for long-term profitability, and primary revenue sources like Net Interest Income[340](index=340&type=chunk) [Critical Accounting Estimates](index=77&type=section&id=Critical%20Accounting%20Estimates) The company's financial statements rely on critical accounting estimates, particularly for the Allowance for Credit Losses (ACL) and fair value measurements. These estimates involve significant judgment and assumptions, and actual results may differ, requiring future adjustments - Key critical accounting estimates include the determination of the Allowance for Credit Losses (ACL) and fair value measurements[341](index=341&type=chunk) - These estimates are subject to inherent uncertainties, and actual results could differ from original estimates, necessitating future adjustments[341](index=341&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=77&type=section&id=Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's most significant market risks are interest rate risk and market risk. There have been no material changes to the market risk disclosures since the Annual Report on Form 10-K for the year ended December 31, 2024 - The most significant risks include interest rate risk and market risk[342](index=342&type=chunk) - No changes have occurred regarding market risk disclosures since the Annual Report on Form 10-K for the year ended December 31, 2024[342](index=342&type=chunk) [Controls and Procedures](index=77&type=section&id=Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were not effective as of June 30, 2025, due to identified material weaknesses in internal control over financial reporting. These weaknesses relate to risk assessment, monitoring, and control activities, particularly concerning independent Credit Review processes. The company is actively implementing remediation actions, including leadership appointments and enhanced review programs [Evaluation of Disclosure Controls and Procedures](index=77&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were not effective as of June 30, 2025, due to identified material weaknesses in internal control over financial reporting - Management concluded that the company's disclosure controls and procedures were not effective as of June 30, 2025, due to material weaknesses in Internal Control over Financial Reporting[343](index=343&type=chunk) - Despite the material weaknesses, management concluded that the financial statements fairly present the company's financial position, results of operations, capital position, and cash flows in conformity with GAAP[343](index=343&type=chunk) [Material Weaknesses in Internal Control over Financial Reporting](index=77&type=section&id=Material%20Weaknesses%20in%20Internal%20Control%20over%20Financial%20Reporting) This section details the identified material weaknesses in internal control over financial reporting, specifically concerning risk assessment, monitoring, and control activities related to independent Credit Review processes - Identified material weaknesses include: - **Risk assessment:** Lacked effective periodic risk assessment processes to identify and timely respond to emerging risks in financial reporting processes, including independent Credit Review[346](index=346&type=chunk) - **Monitoring:** Recurring monitoring activities over process level control activities, including independent Credit Review, were not operating effectively[347](index=347&type=chunk) - **Control activities:** Did not sufficiently maintain effective control activities related to independent Credit Review processes and certain loan data reconciliations, specifically lacking consistent application of an appropriate framework to validate loan ratings[348](index=348&type=chunk) - These deficiencies impact the company's ability to accurately disclose loan rating classifications, identify problem loans, and recognize the Allowance for Credit Losses[351](index=351&type=chunk) [Remediation Status of Reported Material Weaknesses](index=79&type=section&id=Remediation%20Status%20of%20Reported%20Material%20Weaknesses) The company is actively implementing remediation actions to address identified material weaknesses, including leadership appointments and enhanced review programs - The company is actively working to remediate material weaknesses, including assessing additional steps and implementing measures to address underlying causes[353](index=353&type=chunk) - Remediation actions include: - Appointed new Board members with financial expertise and risk management backgrounds, including a new Lead Independent Director and Chairmen for the Audit and Risk Assessment Committees[354](index=354&type=chunk) - Increased frequency and nature of reporting from Independent Credit Review and First-Line Business Units to the Board's Risk Assessment Committee[355](index=355&type=chunk) - Appointed a Chief Risk Officer, Chief Credit Officer, and new Senior Director of Credit Review with large commercial bank credit experience[356](index=356&type=chunk) - Enhancing the depth and breadth of the Independent Credit Review program, improving personnel experience, and expanding the use of indepen

FLAGSTAR FINANCIAL, INC. REPORTS SECOND QUARTER 2025 NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS OF $0.19 PER DILUTED SHARE AND ADJUSTED NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS OF $0.14 PER DILUTED SHARE | | | Second Quarter 2025 Summary | | --- | --- | --- | | | Asset Quality | Loans and Deposits | | • | Non-accrual loans declined 4% compared to Q1'25 | • CRE exposure down $2.4 billion or 5% compared to Q1'25 | | • | Criticized loans declined $2.2 billion or 15% since | • Multi-family loans down $1.5 ...

Group 1 - Zohran Mamdani is the likely favorite to win the New York City mayoral election, promising to freeze rent increases in stabilized units, which could negatively impact the profit profile of multi-family rental properties [2][3] - Flagstar, formerly New York Community Bancorp, experienced a 6% decline in shares following Mamdani's apparent victory in the Democratic primary, raising concerns about its real estate exposure [3][4] - Deutsche Bank estimates that $16 billion to $18 billion of Flagstar's multi-family loan portfolio is exposed to New York rent regulations, representing about a quarter of the bank's total loan book [4] Group 2 - Morgan Stanley estimates that the exposure drops to $11 billion to $12 billion when considering only buildings with more than half of units rent-regulated, indicating a significant portion of the loan portfolio is at risk [4] - Barclays analyst noted that current rent regulations are already limiting price hikes, suggesting that a short-term rent freeze may not significantly alter the investment thesis for Flagstar [5] - Office-focused real estate stocks with New York City exposure, such as SL Green Realty and Vornado Realty Trust, also faced pressure, with both stocks down nearly 5% [6]

Attorney Advertising Stamford, CT, June 12, 2025 (GLOBE NEWSWIRE) -- A class action lawsuit has been filed on behalf of all investors who held shares of Flagstar Bank N.A. (“Flagstar”) at the time of its merger with New York Community Bancorp, Inc. (“NYCB”) in December 2022. The lawsuit alleges that the combined company and certain of its executives misled Flagstar shareholders by overstating the company’s financial condition and failing to disclose critical risks—resulting in significant investor losses. I ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number: 001-31565 FLAGSTAR FINANCIAL, INC. (Exact name of registrant as specified in its charter) | Delaware | 06-1377322 | | --- | --- | | (State or other jurisdiction of i ...

| | | First Quarter 2025 Summary | | --- | --- | --- | | | Asset Quality | Loans, Deposits, and Funding | | • | Total ACL of $1,215 million or 1.82% of total loans HFI | • Continue to reduce total CRE exposure | | | compared to 1.83% in previous quarter | • Multi-family loans down $656 million or 2% | | • | Multi-family ACL coverage of 1.82% v. 1.87% in Q4'24 | • CRE loans down $326 million or 3% | | • | Multi-family with rent-regulated units equal to or greater | | | | than 50% ACL at 2.82% v. 2.89% in Q4' ...

[Cautionary Statement Regarding Forward-Looking Language](index=4&type=section&id=Cautionary%20Statement%20Regarding%20Forward-Looking%20Language) This section highlights that the report contains forward-looking statements, which are subject to various risks and uncertainties that could cause actual results to differ materially from projections [Overview of Forward-Looking Statements](index=4&type=section&id=Overview%20of%20Forward-Looking%20Statements) This section highlights that the report contains forward-looking statements, which are subject to various risks and uncertainties that could cause actual results to differ materially from projections - The report contains forward-looking statements covered by safe harbor provisions, but **actual results may differ materially** due to inherent uncertainties[16](index=16&type=chunk)[17](index=17&type=chunk)[18](index=18&type=chunk) - Key risk factors include **general economic conditions** (inflation, interest rates), **securities and real estate market conditions**, **changes in real estate values**, and **changes in interest rates** affecting net income and asset values[19](index=19&type=chunk) - Other significant factors are **regulatory focus**, **competitive pressures**, **liquidity and funding challenges**, **ability to integrate acquisitions** (Flagstar Bancorp, Signature), **cybersecurity incidents**, and **geopolitical instability**[19](index=19&type=chunk)[20](index=20&type=chunk) [Part I](index=3&type=section&id=Part%20I) [Item 1. Business](index=7&type=section&id=Item%201.%20Business) Flagstar Financial, Inc.'s business overview encompasses its operational structure, strategic developments, market dynamics, and the comprehensive regulatory environment it navigates - Flagstar Financial, Inc. (formerly NYCB) is the bank holding company for Flagstar Bank, N.A., headquartered in Hicksville, New York. As of December 31, 2024, the Company had **$100.2 billion in assets**, **$69.2 billion in loans**, **$75.9 billion in deposits**, and **$8.2 billion in total stockholders' equity**[26](index=26&type=chunk)[27](index=27&type=chunk) - In 2024, the Company underwent significant strategic initiatives including becoming a **Category IV large bank** (assets over **$100 billion**), raising **$1.05 billion in equity capital**, and selling non-core mortgage businesses to simplify its model and deleverage the balance sheet[29](index=29&type=chunk)[30](index=30&type=chunk)[31](index=31&type=chunk) - The Company changed its name to Flagstar Financial, Inc. and ticker symbol to 'FLG' in October 2024, and significantly bolstered its management team and Board of Directors throughout the year[32](index=32&type=chunk)[33](index=33&type=chunk) [General Business Overview](index=7&type=section&id=General%20Business%20Overview) Flagstar Financial, Inc. operates as the bank holding company for Flagstar Bank, N.A., serving a broad customer base across ten states, including high-net-worth individuals - Flagstar Financial, Inc. is the bank holding company for Flagstar Bank, N.A., which operates over **400 locations** across **ten states** and serves high-net-worth individuals through **80 private banking teams**[26](index=26&type=chunk)[27](index=27&type=chunk) - The Company completed a **1-for-3 reverse stock split** effective July 11, 2024, retroactively applied to all periods presented[28](index=28&type=chunk) [2024 Strategic Initiatives](index=7&type=section&id=2024%20Strategic%20Initiatives) In 2024, the Company became a Category IV banking organization, raised significant equity capital, divested non-core mortgage businesses, rebranded, and strengthened its leadership team - The Company became a **Category IV banking organization** in 2023, subjecting it to enhanced prudential standards due to exceeding **$100 billion in total assets** after the Signature acquisition[29](index=29&type=chunk) - In March 2024, the Company raised **$1.05 billion in equity capital** and increased liquidity through brokered deposits and wholesale funding in response to loan portfolio stress and deposit withdrawals[30](index=30&type=chunk) - Non-core mortgage businesses (servicing rights, warehouse, third-party origination) were sold to simplify the business model, focus on fee generation and deposit gathering, and deleverage the balance sheet, improving capital ratios by **150 basis points**[31](index=31&type=chunk) - The Company changed its name to Flagstar Financial, Inc. and ticker symbol to 'FLG' in October 2024, signifying a strategic evolution into a full-service regional banking franchise[32](index=32&type=chunk) - Throughout 2024, the management team and Board of Directors were significantly strengthened with new hires in risk management and executive leadership roles[33](index=33&type=chunk) [Online Information about the Company and the Bank](index=8&type=section&id=Online%20Information%20about%20the%20Company%20and%20the%20Bank) The Company's website provides comprehensive access to account information, product details, and extensive investor relations content, including SEC filings - The Company's website (www.flagstar.com) provides 24-hour access to accounts, product information, and extensive investor relations content, including SEC filings, earnings releases, and corporate governance documents[34](index=34&type=chunk)[35](index=35&type=chunk) [Our Market](index=8&type=section&id=Our%20Market) Flagstar Bank operates over 400 locations across ten states, with plans to consolidate branches in 2025, and diverse loan market concentrations - Flagstar Bank, N.A. operates over **400 locations** across **ten states**, with strong presence in the Northeast and Midwest, and plans to close approximately **60 retail branches** and **17 private banking locations** in 2025 to reduce costs[36](index=36&type=chunk) - Loan markets vary: multi-family loans are concentrated in New York City, commercial real estate in the Northeast and Midwest, and commercial and industrial loans are originated nationally[37](index=37&type=chunk) [Competition](index=9&type=section&id=Competition) The Company faces intense competition for deposits and loans from diverse financial institutions and fintech companies across various channels - The Company competes for deposits and customers through various channels, including branches, private banking, mortgage offerings, and digital platforms, facing competition from traditional banks, credit unions, online banks, and fintech companies[39](index=39&type=chunk) - Lending success is tied to economic health, impacting loan demand, collateral value, and repayment ability, with competition in commercial lending from capital markets and larger financial institutions[40](index=40&type=chunk) [Monetary Policy](index=9&type=section&id=Monetary%20Policy) Federal fiscal and monetary policies, particularly from the Federal Reserve, significantly influence the Company's interest rates, loan growth, and investments - The Company is significantly affected by federal fiscal and monetary policies, particularly those of the Federal Reserve Board, which influence interest rates, loan growth, investments, and deposits[41](index=41&type=chunk) [Environmental Issues](index=9&type=section&id=Environmental%20Issues) The Company mitigates environmental risks in lending by requiring insurance or assessments for commercial real estate and multi-family loans - The Company mitigates environmental risks in lending by requiring environmental insurance or site assessments for commercial real estate and multi-family loans, and conducts similar assessments for its own properties to avoid contaminated assets[42](index=42&type=chunk)[43](index=43&type=chunk) [Subsidiary Activities](index=10&type=section&id=Subsidiary%20Activities) Business is primarily conducted through Flagstar Bank, N.A. and its non-bank subsidiaries, with the Parent Company also owning special business trusts - Business is primarily conducted through Flagstar Bank, N.A. and its direct/indirect non-bank subsidiaries. The Parent Company also owns special business trusts for issuing capital and common securities[45](index=45&type=chunk)[46](index=46&type=chunk) [Human Capital Management](index=10&type=section&id=Human%20Capital%20Management) As of December 31, 2024, the Company had 6,993 employees, focusing on talent attraction and retention through competitive compensation and an inclusive environment - As of December 31, 2024, the Company had **6,993 employees**, none represented by a collective bargaining agreement. The Company prioritizes attracting and retaining talent through competitive compensation, comprehensive benefits (401(k), healthcare, equity awards), and an inclusive work environment[48](index=48&type=chunk)[49](index=49&type=chunk)[50](index=50&type=chunk)[51](index=51&type=chunk)[52](index=52&type=chunk) - Employees are required to adhere to a code of conduct and complete annual training on preventing discrimination[53](index=53&type=chunk) [Federal, State, and Local Taxation](index=10&type=section&id=Federal%2C%20State%2C%20and%20Local%20Taxation) The Company is subject to federal, state, and local income taxes, with further details provided in Note 2 of the financial statements - The Company is subject to federal, state, and local income taxes, with further details provided in Note 2 - Summary of Significant Accounting Policies[54](index=54&type=chunk) [Regulation and Supervision](index=11&type=section&id=Regulation%20and%20Supervision) The Company and Flagstar Bank are extensively regulated by federal and state authorities, with compliance crucial to avoid significant penalties and operational restrictions - Flagstar Bank, N.A. is regulated by the OCC, FDIC, and CFPB, while the Company (as a bank holding company) is regulated by the Federal Reserve and SEC. Changes in laws or regulations could materially impact operations[56](index=56&type=chunk)[57](index=57&type=chunk) - The Dodd-Frank Act significantly changed bank regulatory structure, impacting lending, investment, and operations. The Volcker Rule prohibits proprietary trading and limits hedge/private equity fund interests[58](index=58&type=chunk)[59](index=59&type=chunk) - The New York Housing Stability and Tenant Protection Act of 2019 limits rent increases on regulated apartments, potentially impacting collateral values for multi-family loans[60](index=60&type=chunk) - Basel III rules require minimum capital ratios (Common Equity Tier 1, Tier 1, Total Capital, Tier 1 Leverage) and a capital conservation buffer. Proposed amendments could significantly increase capital requirements for Category III and IV banks[61](index=61&type=chunk)[62](index=62&type=chunk)[63](index=63&type=chunk)[64](index=64&type=chunk)[66](index=66&type=chunk)[68](index=68&type=chunk) - FDICIA mandates 'prompt corrective action' for institutions not meeting minimum capital requirements, with escalating restrictions based on capital tiers. As of December 31, 2024, the Bank exceeded 'well capitalized' requirements[69](index=69&type=chunk)[70](index=70&type=chunk)[71](index=71&type=chunk)[72](index=72&type=chunk)[73](index=73&type=chunk)[74](index=74&type=chunk)[75](index=75&type=chunk) - As a **Category IV banking organization** (assets over **$100 billion**), the Company is subject to enhanced liquidity risk management, stress testing, and resolution planning requirements, incurring significant expenses for compliance[80](index=80&type=chunk)[81](index=81&type=chunk)[82](index=82&type=chunk)[83](index=83&type=chunk)[84](index=84&type=chunk) - The Company is subject to various consumer protection laws (e.g., CRA, fair lending, TILA, RESPA) and regulations, with non-compliance potentially leading to substantial penalties, operating restrictions, and reputational damage[119](index=119&type=chunk)[120](index=120&type=chunk)[136](index=136&type=chunk)[137](index=137&type=chunk)[138](index=138&type=chunk)[139](index=139&type=chunk)[140](index=140&type=chunk)[141](index=141&type=chunk)[142](index=142&type=chunk)[143](index=143&type=chunk)[144](index=144&type=chunk)[145](index=145&type=chunk) - The Bank Secrecy Act (BSA) and USA PATRIOT Act require anti-money laundering programs, customer identification, and suspicious transaction reporting. Non-compliance can result in significant civil monetary penalties and reputational risk[122](index=122&type=chunk)[123](index=123&type=chunk)[124](index=124&type=chunk) - OFAC rules impose economic sanctions on transactions with designated foreign entities, with non-compliance leading to serious legal and reputational consequences[125](index=125&type=chunk)[126](index=126&type=chunk) - Data privacy laws (e.g., GLBA, CCPA, GDPR) require disclosure of privacy practices, information security programs, and consumer rights, with non-compliance risking fines, litigation, and reputational harm[127](index=127&type=chunk)[128](index=128&type=chunk) - Cybersecurity regulations (CISA, federal bank regulator rules) mandate information sharing, incident notification, and robust security measures. Breaches can lead to expenses, litigation, and reputational damage[129](index=129&type=chunk)[130](index=130&type=chunk)[131](index=131&type=chunk)[132](index=132&type=chunk) [Item 1A. Risk Factors](index=28&type=section&id=Item%201A.%20Risk%20Factors) This section details material risks and uncertainties that could adversely impact the Company's financial condition, operations, and stock value, covering market, credit, operational, and regulatory exposures - The Company faces primary risks including interest rate risk, credit risk, financial statement risk, liquidity and dividend risk, legal and regulatory risk, financial and market risk, strategic risk, operational risk, and reputational risk[156](index=156&type=chunk) - Failure to properly identify, monitor, and mitigate these risks could lead to increased regulatory scrutiny and adverse impacts on financial condition[157](index=157&type=chunk) [Interest Rate Risk](index=28&type=section&id=Interest%20Rate%20Risk) Changes in interest rates can significantly reduce net interest income and negatively impact asset values, affecting the Company's financial condition and capital - Changes in interest rates can reduce net interest income and negatively impact asset values, affecting cash flows, financial condition, and capital. A faster increase in liability rates than asset rates, or a quicker decline in asset rates, would reduce earnings[158](index=158&type=chunk) - An inverted or flat yield curve can contract net interest income and margin. Prolonged elevated interest rates, potentially due to inflationary pressures, could adversely affect the business and increase loan repricing risk, especially in multi-family and CRE portfolios[158](index=158&type=chunk)[159](index=159&type=chunk) [Credit Risk](index=28&type=section&id=Credit%20Risk) The Company faces significant credit risk, particularly from concentrations in multi-family and commercial real estate loans, which could lead to insufficient allowance for credit losses - The allowance for credit losses (ACL) may be insufficient, requiring additional provisions that would reduce net income. In 2024, a **$1.1 billion provision** was recorded, bringing the ACL to **$1.2 billion**, addressing weaknesses in the office sector and multi-family repricing risk[160](index=160&type=chunk)[161](index=161&type=chunk) - Bank regulators can mandate increased provisions or charge-offs, materially affecting financial condition. Concentrations in multi-family (**$34.1 billion**, **49.9% of loans**) and commercial real estate (**$8.7 billion**, **12.7% of loans**) expose the Company to higher non-payment and loss risks, especially for non-recourse loans[162](index=162&type=chunk)[163](index=163&type=chunk) - Declines in office occupancy rates and rental rates, and the impact of New York's Housing Stability and Tenant Protection Act of 2019 on rent-regulated properties, could impair collateral values and borrowers' repayment ability[164](index=164&type=chunk)[165](index=165&type=chunk) - Economic weakness in the New York City metropolitan region, where a majority of loans are concentrated, could significantly affect borrower repayment and collateral values, leading to increased loan losses[166](index=166&type=chunk)[167](index=167&type=chunk)[168](index=168&type=chunk) [Financial Statements Risk](index=30&type=section&id=Financial%20Statements%20Risk) Inaccurate accounting estimates, model failures, or ineffective internal controls could impair financial reporting accuracy and lead to increased losses - Accounting estimates and risk management rely on analytical and forecasting models that may be inaccurate, especially during market stress, potentially leading to increased losses or insufficient allowances for loan losses[169](index=169&type=chunk) - Impairment in finite-lived intangible assets, such as core deposit intangibles (**$488 million at Dec 31, 2024**), could negatively impact financial condition and results of operations if deposits decline significantly[170](index=170&type=chunk) - Failure to maintain effective internal controls over financial reporting, including human error, misconduct, or inadequate processes, could impair accurate and timely financial reporting, increase expenses, and lead to regulatory actions[171](index=171&type=chunk)[172](index=172&type=chunk) [Liquidity and Dividend Risks](index=31&type=section&id=Liquidity%20and%20Dividend%20Risks) Failure to maintain adequate liquidity, potential deposit outflows, or dividend restrictions could severely impact the Company's financial stability and stock price - Failure to maintain adequate liquidity could prevent the Company from fulfilling financial obligations, leading to reputational and compliance risks, and potential financial failure. Primary liquidity sources include deposits, borrowed funds, and loan/security sales[173](index=173&type=chunk) - Deposit outflows, especially uninsured deposits (**21.2% of total deposits at Dec 31, 2024**), could necessitate more expensive wholesale funding or asset sales, increasing costs and reducing net interest income. Credit rating downgrades could accelerate deposit outflows[173](index=173&type=chunk)[174](index=174&type=chunk) - The elimination of quarterly cash dividends could adversely impact common stock market price. The Parent Company's ability to pay dividends depends on dividends from the Bank, which are subject to regulatory approval and restrictions[175](index=175&type=chunk)[176](index=176&type=chunk) - Deferring payments on trust preferred capital debt securities or being in default would prohibit common stock dividends. Dividends on Series A and B Preferred Stock are discretionary and noncumulative, and non-payment could result from non-compliance with laws or agreements[177](index=177&type=chunk)[178](index=178&type=chunk) - Preferred stock holders have preferential rights in liquidation, which could limit additional financing and create divergent interests with common stockholders[179](index=179&type=chunk) [Legal and Regulatory Risks](index=33&type=section&id=Legal%20and%20Regulatory%20Risks) Extensive regulation, potential non-compliance, and ongoing legal actions pose significant risks of financial penalties, operational restrictions, and reputational damage - Inability to meet minimum capital requirements could limit business expansion, dividend payments, or lead to FDIC deposit insurance termination, impacting financial condition and stock value[180](index=180&type=chunk) - The Company is subject to extensive regulation by OCC, FDIC, FRB, and CFPB. Non-compliance can result in enforcement actions, significant fines, and restrictions on operations, mergers, and dividends[181](index=181&type=chunk) - As a **Category IV banking organization**, enhanced prudential standards for capital, liquidity, and risk management apply. Non-compliance could lead to regulatory risks and restrictions[182](index=182&type=chunk)[183](index=183&type=chunk) - Noncompliance with BSA and anti-money laundering statutes could result in material financial loss, reputational risk, and regulatory actions. Failure to comply with OFAC regulations also carries legal and reputational risks[184](index=184&type=chunk)[185](index=185&type=chunk) - The Risk Governance Framework may not effectively mitigate all risks, especially unforeseen ones, potentially leading to losses and increased FDIC insurance premiums[186](index=186&type=chunk) - The Company is involved in various legal and regulatory investigations, including shareholder class and derivative actions, which could result in significant financial liability, reputational damage, and adverse impacts on business[187](index=187&type=chunk)[188](index=188&type=chunk) - Failure to adequately provide for taxes could increase income tax expense. Non-compliance with consumer protection laws (CRA, fair lending) could lead to sanctions, including damages, civil money penalties, and restrictions on business activities[189](index=189&type=chunk)[190](index=190&type=chunk)[191](index=191&type=chunk)[192](index=192&type=chunk) - High commercial real estate loan concentrations may lead to additional regulatory scrutiny, potentially requiring new policies or restrictions on lending[193](index=193&type=chunk)[194](index=194&type=chunk) - New data privacy legislation (e.g., CCPA) increases compliance and operational risks, potentially leading to litigation, regulatory enforcement, and reputational damage[195](index=195&type=chunk) [Financial and Market Risks](index=36&type=section&id=Financial%20and%20Market%20Risks) Adverse economic conditions, declining real estate values, and future stock issuances could negatively impact loan repayments, increase losses, and dilute shareholder value - Economic conditions, including declines in real estate values and increased borrower financial stress, could negatively affect loan repayments, increase loan losses, and reduce demand for products and services[196](index=196&type=chunk)[197](index=197&type=chunk) - Future sales or issuances of common stock or other securities (including warrants) could dilute existing holders and decrease stock value. The Company completed a **$1.05 billion equity investment** in March 2024, issuing common and convertible preferred stock, and warrants[198](index=198&type=chunk)[199](index=199&type=chunk)[200](index=200&type=chunk) [Strategic Risks](index=37&type=section&id=Strategic%20Risks) Intense competition and challenges in integrating recent acquisitions could hinder business expansion and adversely affect financial performance and profitability - Extensive competition for loans and deposits from various financial institutions and fintech companies could adversely affect business expansion and financial performance[201](index=201&type=chunk) - Challenges in integrating recent acquisitions (Flagstar Bancorp, Signature) could prevent achieving expected benefits, leading to customer/personnel loss, increased compliance risks, higher expenses, and adverse impacts on profitability[202](index=202&type=chunk)[203](index=203&type=chunk) [Operational Risks](index=38&type=section&id=Operational%20Risks) Inaccurate stress testing models, cybersecurity breaches, reliance on third parties, and inability to retain key personnel pose significant operational challenges and potential losses - Stress testing models, which rely on analytical and forecasting assumptions, may be inadequate or inaccurate, potentially leading to unexpected losses and affecting strategic planning and corporate goals[204](index=204&type=chunk) - Information technology security breaches (cyber-attacks, unauthorized access) have occurred and may recur, leading to expenses, civil litigation, regulatory scrutiny, losses, and customer attrition. The Company and its service providers are vulnerable to increasingly sophisticated attacks[205](index=205&type=chunk)[206](index=206&type=chunk)[207](index=207&type=chunk)[208](index=208&type=chunk) - Reliance on third parties for key business functions (e.g., data processing) exposes the Company to operational risks from service disruptions, failures, or security breaches, potentially leading to claims, regulatory scrutiny, and litigation[209](index=209&type=chunk) - Failure to keep pace with technological changes could adversely impact competitiveness for loans and deposits, especially against competitors with greater resources[210](index=210&type=chunk) - Inability to attract and retain key personnel, particularly skilled leaders, could adversely impact operations due to specialized knowledge and difficulty in finding replacements[211](index=211&type=chunk)[212](index=212&type=chunk) - Significant changes in the Board of Directors and executive management team in 2024, and the new 2025-2027 Strategic Plan, create uncertainties and could harm business execution and profitability[213](index=213&type=chunk)[214](index=214&type=chunk)[215](index=215&type=chunk)[216](index=216&type=chunk)[217](index=217&type=chunk) - Diversifying the loan portfolio away from commercial real estate may be difficult, costly, and time-consuming, potentially disrupting business and failing to realize anticipated benefits[219](index=219&type=chunk)[220](index=220&type=chunk)[221](index=221&type=chunk) - Exposure to fraud risks, including internal and external fraud, could result in financial loss, litigation, and reputational damage. Misrepresentations by clients or third parties also pose risks[223](index=223&type=chunk) - Natural disasters, terrorist activities, international hostilities, or civil unrest could adversely affect business operations and financial condition due to disruptions to systems and infrastructure[225](index=225&type=chunk) [Reputational Risk](index=42&type=section&id=Reputational%20Risk) Damage to the Company's reputation from misconduct, litigation, service failures, or evolving ESG expectations could significantly harm its business and competitive position - Damage to reputation from employee misconduct, litigation, regulatory outcomes, service failures, or unethical behavior could significantly harm business, competitive position, and growth prospects[226](index=226&type=chunk) - Increasing scrutiny and evolving expectations regarding ESG practices may impose additional costs, expose new risks, and negatively impact reputation, partnerships, and stock price[227](index=227&type=chunk) [Item 1B. Unresolved Staff Comments](index=42&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) There are no unresolved staff comments to report [Item 1C. Cybersecurity](index=42&type=section&id=Item%201C.%20Cybersecurity) This section outlines the Company's cybersecurity risk management and governance framework, emphasizing protection of customer data and operations through a formalized Information/Cybersecurity Program (ICP) - The Company maintains a formalized Information/Cybersecurity Program (ICP) to protect confidential information and prevent operational disruptions, approved annually by the Board or a Committee thereof[230](index=230&type=chunk) - The ICP aligns with industry best practices (Secure Control, NIST Cybersecurity frameworks) and regulatory guidelines, incorporating policies for threat identification, risk assessment, third-party oversight, and employee training[230](index=230&type=chunk)[231](index=231&type=chunk) - A layered security model is used, integrated into the broader Risk Governance Framework, with a formal incident response plan in place. No material cybersecurity risks or incidents were experienced in 2024[232](index=232&type=chunk)[233](index=233&type=chunk)[234](index=234&type=chunk) - The Board of Directors, through its Risk Assessment and Technology Committees, provides direction and oversight of the cybersecurity programs, with direct reporting from the Chief Information Security Officer (CISO)[235](index=235&type=chunk)[236](index=236&type=chunk)[237](index=237&type=chunk) [Item 2. Properties](index=44&type=section&id=Item%202.%20Properties) The Company owns and leases various properties for its branch offices, headquarters, and back-office operations across several states, with current facilities deemed adequate - The Company owns branch offices, its Long Island headquarters, and other back-office buildings in New York, Ohio, Florida, and Michigan[238](index=238&type=chunk) - Additional locations in New York, Ohio, Florida, Michigan, New Jersey, Arizona, California, Indiana, and Wisconsin are utilized under various lease and license agreements[238](index=238&type=chunk) [Item 3. Legal Proceedings](index=44&type=section&id=Item%203.%20Legal%20Proceedings) The Company is involved in various legal actions, including shareholder class and derivative actions, with uncertain outcomes that could result in significant financial liability - The Company is a defendant in consolidated shareholder class actions (e.g., Lemm, Jr. v. New York Community Bancorp, Inc.) alleging federal securities law violations related to disclosures on acquisitions, commercial real estate, and internal controls[240](index=240&type=chunk)[241](index=241&type=chunk) - Shareholder derivative actions (e.g., Hauser v. Cangemi, et al.) have also been filed against former officers and directors, alleging breach of fiduciary duty, gross mismanagement, and Exchange Act violations[242](index=242&type=chunk)[243](index=243&type=chunk) - The outcome of this litigation is uncertain, and there is no assurance that material losses, damages, penalties, or expenses will not be incurred, potentially exceeding established reserves and materially impacting financial condition[244](index=244&type=chunk) [Item 4. Mine Safety Disclosures](index=45&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) There are no mine safety disclosures to report [Part II](index=46&type=section&id=Part%20II) [Item 5. Market For the Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities](index=46&type=section&id=Item%205.%20Market%20For%20the%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) This section provides information on the Company's common stock market, including its trading on the NYSE, shareholder count, historical stock performance, and share repurchase activities - Flagstar Financial, Inc. common stock trades on the NYSE under the symbol 'FLG'. As of December 31, 2024, there were **414,934,628 shares outstanding** and approximately **9,074 registered owners**[248](index=248&type=chunk) Cumulative Total Stockholder Return (December 31, 2019 - December 31, 2024) | Date | Flagstar Financial, Inc. | S&P Mid-Cap 400 Index | S&P U.S. BMI Banks Index | | :--- | :--- | :--- | :--- | | 12/31/2019 | $100.00 | $100.00 | $100.00 | | 12/31/2020 | $94.13 | $113.66 | $87.24 | | 12/31/2021 | $115.43 | $141.80 | $118.61 | | 12/31/2022 | $87.06 | $123.28 | $98.38 | | 12/31/2023 | $110.35 | $143.54 | $107.32 | | 12/31/2024 | $34.08 | $163.54 | $143.68 | - Shares are repurchased to fulfill tax obligations for stock-based incentive plans and under a Board-authorized program (approximately **$9 million remaining** as of December 31, 2024, from a **$300 million authorization**)[253](index=253&type=chunk)[254](index=254&type=chunk) Common Stock Repurchases for the Year Ended December 31, 2024 | Period | Total Shares of Common Stock Repurchased | Average Price Paid per Common Share | | :--- | :--- | :--- | | First Quarter 2024 | 300,713 | $29.16 | | Second Quarter 2024 | 55,619 | $9.85 | | Third Quarter 2024 | 99,470 | $10.13 | | Total Fourth Quarter 2024 | 31,656 | $11.75 | | **2024 Total** | **487,458** | **$21.94** | [Item 6. Reserved](index=48&type=section&id=Item%206.%20Reserved) This item is reserved and contains no information [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=48&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides a detailed analysis of Flagstar Financial, Inc.'s financial performance and condition, covering key metrics, balance sheet composition, asset quality, liquidity, capital, and risk management for the year ended December 31, 2024 - The Company reported a **net loss of $1.1 billion** for the year ended 2024, compared to a **net loss of $79 million** in 2023, primarily due to a **$1.1 billion provision for credit losses** and a **$121 million reduction in bargain purchase gain**[257](index=257&type=chunk)[258](index=258&type=chunk) - Net interest income, the primary source of income, is influenced by interest-earning assets, funding methods, and the spread between asset yields and liability costs, all impacted by economic conditions and monetary policy[259](index=259&type=chunk) - Total assets decreased by **$13.9 billion** to **$100.2 billion** at December 31, 2024, driven by strategic reductions in loans held for investment, partially offset by a **$4.0 billion increase in cash and cash equivalents**[282](index=282&type=chunk) - Total deposits decreased by **$5.7 billion (7%)** to **$75.9 billion** at December 31, 2024, following **$9.7 billion in deposit attrition** in Q1 2024, which was subsequently offset by brokered CDs and targeted deposit gathering[285](index=285&type=chunk) - The Company's capital measures continued to exceed minimum federal requirements for both the bank holding company and the Bank at December 31, 2024, with a significant increase in capital ratios due to a **$1.05 billion capital investment** and non-core business sales[391](index=391&type=chunk)[392](index=392&type=chunk)[393](index=393&type=chunk)[394](index=394&type=chunk) [Results of Operations](index=48&type=section&id=Results%20of%20Operations) This section details the Company's financial performance for 2024, highlighting net loss, net interest margin contraction, increased credit loss provisions, and shifts in non-interest income and expenses Net Income (Loss) Attributable to Common Stockholders (2022-2024) | Year Ended December 31, | Net (Loss) Income Attributable to Common Stockholders (in millions) | Diluted (Loss) Earnings Per Common Share | | :--- | :--- | :--- | | 2024 | $(1,153) | $(3.49) | | 2023 | $(112) | $(0.49) | | 2022 | $617 | $3.77 | - 2024 results include a **$37 million increase in provision for credit losses** and **$103 million in merger-related and restructuring expenses**, totaling an after-tax loss of **$245 million** (**$0.74 per diluted share**)[257](index=257&type=chunk)[258](index=258&type=chunk) - Net interest margin decreased by **104 basis points** to **1.95%** in 2024, primarily due to a higher cost of funds from increased wholesale borrowings and promotional deposit campaigns, coupled with an increase in average interest-bearing liabilities[267](index=267&type=chunk) Net Interest Income and Margin (2022-2024) | Year Ended December 31, | Net Interest Income (in millions) | Net Interest Margin | | :--- | :--- | :--- | | 2024 | $2,152 | 1.95% | | 2023 | $3,077 | 2.99% | | 2022 | $1,396 | 2.35% | - Provision for credit losses totaled **$1.1 billion** in 2024, up from **$833 million** in 2023, reflecting substantial increases in allowance for credit losses and charge-offs due to risk rating downgrades in commercial real estate and multi-family loans[268](index=268&type=chunk)[269](index=269&type=chunk) Non-Interest Income (2022-2024) | (in millions) | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Fee income | $150 | $172 | $27 | | Net gain on mortgage/servicing sale | $89 | $0 | $0 | | Net return on mortgage servicing rights | $73 | $103 | $6 | | Net gain on loan sales and securitizations | $48 | $89 | $5 | | Bank-owned life insurance | $42 | $43 | $32 | | Net loan administration income | $2 | $82 | $3 | | Bargain purchase gain | $(121) | $2,131 | $159 | | Other | $117 | $67 | $15 | | **Total non-interest income** | **$400** | **$2,687** | **$247** | - Total non-interest income decreased significantly to **$400 million** in 2024 from **$2.7 billion** in 2023, primarily due to a **$2.1 billion bargain purchase gain** in 2023 that did not recur, and the sale of mortgage servicing businesses[272](index=272&type=chunk)[274](index=274&type=chunk) Non-Interest Expense (2022-2024) | (in millions) | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Compensation and benefits | $1,263 | $1,149 | $354 | | FDIC insurance | $313 | $126 | $0 | | Occupancy and equipment | $211 | $200 | $92 | | General and administrative | $809 | $624 | $158 | | Intangible asset amortization | $136 | $126 | $5 | | Merger-related and restructuring expenses | $106 | $330 | $75 | | Goodwill impairment | $0 | $2,426 | $0 | | **Total non-interest expense** | **$2,838** | **$4,981** | **$684** | - Total non-interest expenses decreased by **$2.1 billion (43%)** to **$2.8 billion** in 2024, mainly due to the absence of the **$2.4 billion goodwill impairment** recorded in 2023. Operating expenses, excluding notable items, increased by **$368 million (18%)** due to the full-year impact of the Signature Transaction and higher regulatory costs[277](index=277&type=chunk)[278](index=278&type=chunk) - The Company reported an income tax benefit of **$260 million** in 2024, compared to an expense of **$29 million** in 2023, with an effective tax rate of **18.90%** (vs. **-59.59%** in 2023), impacted by non-deductible FDIC expenses[279](index=279&type=chunk) [Results of Operations: 2023 as Compared to 2022](index=53&type=section&id=Results%20of%20Operations%3A%202023%20as%20Compared%20to%202022) The comparison of 2023 to 2022 results is incorporated by reference from the Company's previously filed Annual Report on Form 10-K/A for the year ended December 31, 2023 - Results of operations comparison for 2023 versus 2022 is available in the Company's prior Annual Report on Form 10-K/A for the year-ended December 31, 2023[281](index=281&type=chunk) [Financial Condition](index=53&type=section&id=Financial%20Condition) This section analyzes the Company's balance sheet, detailing changes in assets, loans, deposits, and asset quality measures, reflecting strategic reductions and market pressures - Total assets decreased by **$13.9 billion** to **$100.2 billion** at December 31, 2024, driven by strategic reductions in loans held for investment, partially offset by a **$4.0 billion increase in cash and cash equivalents**[282](index=282&type=chunk) - Loans and leases held for investment decreased by **$16.3 billion** to **$68.3 billion**, primarily due to the sale of the warehouse lending portfolio and strategic reductions in commercial and industrial, commercial real estate, and multi-family portfolios[283](index=283&type=chunk) - The securities portfolio increased to **$10.4 billion**, with over **90%** in low credit risk U.S. government agency bonds, classified as available-for-sale[284](index=284&type=chunk) - Total deposits decreased by **$5.7 billion (7%)** to **$75.9 billion**, with non-interest-bearing deposits decreasing by **$7.0 billion (34%)**. Deposit attrition in Q1 2024 was offset by brokered CDs and targeted deposit gathering[285](index=285&type=chunk)[334](index=334&type=chunk) Composition of Loan Portfolio (December 31, 2024 vs. 2023) | Loan Type | 2024 Amount (in millions) | 2024 % of Total Loans | 2023 Amount (in millions) | 2023 % of Total Loans | | :--- | :--- | :--- | :--- | :--- | | Multi-family | $34,093 | 49.9% | $37,265 | 44.0% | | Commercial real estate | $8,685 | 12.7% | $10,470 | 12.4% | | One-to-four family first mortgage | $5,201 | 7.6% | $6,061 | 7.2% | | Acquisition, development, and construction | $3,151 | 4.6% | $2,912 | 3.4% | | Commercial and industrial | $15,376 | 22.5% | $25,254 | 29.9% | | Other loans | $1,766 | 2.6% | $2,657 | 3.1% | | **Total loans and leases held for investment** | **$68,272** | **100%** | **$84,619** | **100%** | | Allowance for credit losses | $(1,201) | | $(992) | | | **Total loans and leases held for investment, net** | **$67,071** | | **$83,627** | | - Multi-family loans decreased to **$34.1 billion**, with **56%** secured by New York State properties, many subject to rent regulation, impacting revenue generation and refinancing ability. **$12.7 billion** had interest-only payments, with **52%** entering amortization by end of 2025[290](index=290&type=chunk)[291](index=291&type=chunk)[293](index=293&type=chunk) - Commercial real estate loans decreased by **$1.8 billion** to **$8.7 billion**, with **27.7%** secured by office buildings. Declining occupancy and rental rates have impacted net operating income and collateral values, leading to charge-offs[296](index=296&type=chunk)[298](index=298&type=chunk) - Commercial and industrial loans decreased by **$9.9 billion** to **$15.4 billion**, primarily due to the sale of the mortgage warehouse business (**$5.1 billion in 2023**) and reduced focus on non-core client segments[301](index=301&type=chunk) Asset Quality Measures (December 31, 2024 vs. 2023) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Non-accrual loans to total loans held for investment | 3.83% | 0.51% | | Non-performing assets to total assets | 2.62% | 0.39% | | Allowance for credit losses on loans and leases to non-accrual loans | 45.93% | 231.51% | | Allowance for credit losses on loans and leases to total loans held for investment | 1.76% | 1.17% | - Non-accrual loans increased by **$2.2 billion** to **$2.6 billion**, driven by multi-family and commercial real estate loans, following updated financial information and appraisals. Approximately **56% of non-accrual loans** are current on payments[315](index=315&type=chunk)[317](index=317&type=chunk)[318](index=318&type=chunk) - The allowance for credit losses on loans and leases increased by **$209 million** to **$1.2 billion**, reflecting persistently high interest rates and pressure on borrowers, particularly for loans repricing in the next 18 months[320](index=320&type=chunk)[321](index=321&type=chunk) Net Charge-offs (Recoveries) by Loan Type (2022-2024) | (in millions) | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Multi-family | $303 | $119 | $1 | | Commercial real estate | $454 | $56 | $0 | | One-to-Four Family first mortgage | $3 | $4 | $0 | | Acquisition, Development and Construction | $4 | $0 | $0 | | Commercial and Industrial Loans | $115 | $19 | $(7) | | Other Loans | $13 | $10 | $(5) | | **Total loans held for investment** | **$892** | **$208** | **$(4)** | - Total borrowed funds decreased by **$6.8 billion** to **$14.4 billion**, with FHLB advances decreasing to **$13.4 billion** and Federal Reserve Bank term funding of **$1.0 billion** repaid in 2024[341](index=341&type=chunk)[342](index=342&type=chunk)[343](index=343&type=chunk) - Goodwill was fully impaired in 2023, resulting in a **$2.4 billion charge**, and the Company had no goodwill at December 31, 2024[345](index=345&type=chunk) [Risk Governance Framework](index=66&type=section&id=Risk%20Governance%20Framework) The Company's Risk Management Division formalizes its Risk Appetite Statement, monitors key risk indicators, and manages credit, liquidity, and interest rate risks with Board oversight - The Risk Management Division formalizes the Company's Risk Appetite Statement, aligning it with budget, strategic, and capital plans. Key risk indicators are monitored, and heightened risks are escalated[349](index=349&type=chunk) - Credit risk is continually reviewed, with loans evaluated for downgrade to substandard or non-accrual status based on debt service coverage ratios and collateral values. Classified loans increased by **$6.8 billion** to **$11.5 billion** in 2024[351](index=351&type=chunk)[353](index=353&type=chunk) - Liquidity is managed daily, with reporting to management and the Board, ensuring sufficient cash flows from deposits, wholesale funding, and lines of credit. Total liquidity was **$29.9 billion** at December 31, 2024[359](index=359&type=chunk)[361](index=361&type=chunk)[362](index=362&type=chunk) - The Company's credit ratings were downgraded by Moody's, Fitch, and Morningstar DBRS in 2024. Non-compliance with mortgage loan agency custodial depository criteria has been waived[364](index=364&type=chunk) - Parent Company liquidity relies on dividends from the Bank and equity issuance. The Bank requires OCC approval for dividends to the Parent Company[365](index=365&type=chunk)[366](index=366&type=chunk)[367](index=367&type=chunk) - Interest rate risk is managed through asset and liability management, monitoring interest rate sensitivity using EVE and NII models. The estimated percentage change in EVE for a **+200 bps shock is (3.60)%**, and for NII over **12 months is 0.5%**[376](index=376&type=chunk)[377](index=377&type=chunk)[379](index=379&type=chunk)[380](index=380&type=chunk)[382](index=382&type=chunk)[383](index=383&type=chunk) - As a **Category IV firm**, the Company is subject to heightened regulatory capital standards, including capital planning, liquidity stress testing, resolution planning, and a risk governance framework. Capital ratios exceeded minimum requirements at December 31, 2024[388](index=388&type=chunk)[390](index=390&type=chunk)[391](index=391&type=chunk)[392](index=392&type=chunk)[393](index=393&type=chunk) [Critical Accounting Estimates](index=72&type=section&id=Critical%20Accounting%20Estimates) This section highlights the critical accounting policies that involve significant judgment, estimates, and assumptions, which are crucial for understanding the Company's financial statements - Critical accounting policies involve significant judgment, estimates, and assumptions, particularly for the allowance for credit losses, fair value measurements, and the acquisition method of accounting[395](index=395&type=chunk) [Reportable Segment and Reporting Unit](index=73&type=section&id=Reportable%20Segment%20and%20Reporting%20Unit) The Company operates as a single reportable segment, with the CEO evaluating performance on a consolidated basis, focusing on overall revenue and cost measures - The Company operates in a single reportable segment, with the Chief Executive Officer evaluating performance on a consolidated basis, focusing on primary revenue sources and organizational costs[397](index=397&type=chunk)[682](index=682&type=chunk)[683](index=683&type=chunk)[684](index=684&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures about Market Risk](index=73&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) Information regarding the Company's management of market risk is included in the 'Interest Rate Risk' section of Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations - Disclosures about market risk management are provided in the 'Interest Rate Risk' section within Item 7 of this report[398](index=398&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=74&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the Company's audited consolidated financial statements and notes, along with the independent auditor's report, which includes an unqualified opinion on financials but an adverse opinion on internal controls - The consolidated financial statements for Flagstar Financial, Inc. and subsidiaries as of December 31, 2024 and 2023, and for the three-year period ended December 31, 2024, are presented in conformity with U.S. GAAP[691](index=691&type=chunk) - The independent registered public accounting firm issued an unqualified opinion on the consolidated financial statements but an adverse opinion on the effectiveness of internal control over financial reporting as of December 31, 2024, due to identified material weaknesses[691](index=691&type=chunk)[692](index=692&type=chunk)[703](index=703&type=chunk)[704](index=704&type=chunk) Consolidated Statements of Condition (December 31, 2024 vs. 2023) | (in millions) | 2024 | 2023 | | :--- | :--- | :--- | | **ASSETS:** | | | | Cash and cash equivalents | $15,430 | $11,475 | | Total securities | $10,416 | $9,159 | | Loans held for sale | $899 | $1,182 | | Total loans and leases held for investment, net | $67,071 | $83,627 | | Federal Home Loan Bank stock and Federal Reserve Bank stock, at cost | $1,146 | $1,392 | | Premises and equipment, net | $562 | $652 | | Core deposit and other intangibles | $488 | $625 | | Mortgage servicing rights | $26 | $1,111 | | Bank-owned life insurance | $1,605 | $1,580 | | Other assets | $2,517 | $3,254 | | **Total assets** | **$100,160** | **$114,057** | | **LIABILITIES AND STOCKHOLDERS' EQUITY:** | | | | Total deposits | $75,870 | $81,526 | | Total borrowed funds | $14,426 | $21,267 | | Other liabilities | $1,696 | $2,897 | | **Total liabilities** | **$91,992** | **$105,690** | | Mezzanine equity: Preferred stock - Series B | $1 | $0 | | Total stockholders' equity | $8,167 | $8,367 | | **Total liabilities, mezzanine and stockholders' equity** | **$100,160** | **$114,057** | Consolidated Statements of (Loss) Income (2022-2024) | (in millions) | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Total interest income | $5,953 | $5,491 | $2,092 | | Total interest expense | $3,801 | $2,414 | $696 | | **Net interest income** | **$2,152** | **$3,077** | **$1,396** | | Provision for credit losses | $1,092 | $833 | $133 | | **Net interest income after provision for credit loan losses** | **$1,060** | **$2,244** | **$1,263** | | Total non-interest income | $400 | $2,687 | $247 | | Total non-interest expense | $2,838 | $4,981 | $684 | | (Loss) income before income taxes | $(1,378) | $(50) | $826 | | Income tax (benefit)/expense | $(260) | $29 | $176 | | **Net (loss) income** | **$(1,118)** | **$(79)** | **$650** | | Preferred stock dividends | $35 | $33 | $33 | | **Net (loss) attributable / net income available to common stockholders** | **$(1,153)** | **$(112)** | **$617** | | Basic (loss) earnings per common share | $(3.49) | $(0.49) | $3.78 | | Diluted (loss) earnings per common share | $(3.49) | $(0.49) | $3.77 | [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=146&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) There have been no changes in or disagreements with accountants on accounting and financial disclosure [Item 9A. Controls and Procedures](index=146&type=section&id=Item%209A.%20Controls%20and%20Procedures) This section reports on the effectiveness of the Company's disclosure controls and internal control over financial reporting, noting material weaknesses despite fair financial statement presentation, with ongoing remediation efforts - The Company's disclosure controls and procedures were not effective as of December 31, 2024, due to material weaknesses in internal control over financial reporting[712](index=712&type=chunk) - Management concluded that the financial statements fairly present the Company's financial position, results of operations, capital position, and cash flows in conformity with GAAP, despite the material weaknesses[712](index=712&type=chunk) - Material weaknesses were identified in periodic risk assessment processes, recurring monitoring activities over process-level controls (including independent credit review), and control activities related to independent credit review processes and loan data reconciliations[719](index=719&type=chunk)[720](index=720&type=chunk)[721](index=721&type=chunk) - These deficiencies prevented the Board of Directors from exercising sufficient oversight and create a reasonable possibility of material misstatement in financial statements[722](index=722&type=chunk)[723](index=723&type=chunk) - Remediation efforts are ongoing, including appointing new Board members with financial and risk management expertise, increasing Audit and Risk Assessment Committee meetings, and enhancing the independent Credit Review program (leadership, scoping, processes, staffing, training)[725](index=725&type=chunk)[726](index=726&type=chunk)[727](index=727&type=chunk)[728](index=728&type=chunk) [Item 9B. Other Information](index=148&type=section&id=Item%209B.%20Other%20Information) No directors or officers reported the adoption or termination of Rule 10b5-1 trading arrangements during the fourth quarter ended December 31, 2024 - No directors or officers reported adoption or termination of Rule 10b5-1 trading arrangements in Q4 2024[730](index=730&type=chunk) [Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=148&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) There are no disclosures regarding foreign jurisdictions that prevent inspections [Part III](index=149&type=section&id=Part%20III) [Item 10. Directors, Executive Officers and Corporate Governance](index=149&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the Company's 2025 Proxy Statement, along with its Code of Ethics and Securities Trading Policy - Information on directors, executive officers, and corporate governance is incorporated by reference from the 2025 Proxy Statement[734](index=734&type=chunk) - The Company's Code of Ethics for Senior Financial Officers and Securities Trading Policy are available on its Investor Relations website[735](index=735&type=chunk)[736](index=736&type=chunk) [Item 11. Executive Compensation](index=149&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation is incorporated by reference from the Company's 2025 Proxy Statement - Executive compensation details are incorporated by reference from the 2025 Proxy Statement[737](index=737&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=149&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) This section provides information on equity compensation plans and security ownership of beneficial owners and management, incorporated by reference from the 2025 Proxy Statement Equity Compensation Plan Information (December 31, 2024) | Plan Category | Number of Securities to Be Issued Upon Exercise | Weighted Average Exercise Price | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans | | :--- | :--- | :--- | :--- | | Equity compensation plans approved by security holders | | | 10,211,440 | | Equity compensation plans not approved by security holders | — | | | - Information on security ownership of certain beneficial owners and management is incorporated by reference from the 2025 Proxy Statement[738](index=738&type=chunk) [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=149&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information regarding certain relationships, related transactions, and director independence is incorporated by reference from the Company's 2025 Proxy Statement - Details on certain relationships, related transactions, and director independence are incorporated by reference from the 2025 Proxy Statement[739](index=739&type=chunk) [Item 14. Principal Accounting Fees and Services](index=149&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) KPMG LLP is the Company's independent registered public accounting firm, with information on principal accounting fees and services incorporated by reference from the 2025 Proxy Statement - KPMG LLP (Auditor Firm ID: 185) is the Company's independent registered public accounting firm[740](index=740&type=chunk) - Information regarding principal accounting fees and services is incorporated by reference from the 2025 Proxy Statement[741](index=741&type=chunk) [Part IV](index=151&type=section&id=Part%20IV) [Item 15. Exhibits and Financial Statement Schedules](index=151&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the documents filed as part of the report, including financial statements, schedules, and a comprehensive index of exhibits required by SEC Regulation S-K - The report includes financial statements (Statements of Condition, (Loss) Income, Comprehensive (Loss) Income, Changes in Stockholders' Equity, Cash Flows) and Notes to Consolidated Financial Statements, incorporated by reference from Item 8[743](index=743&type=chunk) - Management's Report on Internal Control over Financial Reporting and Changes in Internal Control over Financial Reporting are incorporated by reference from Item 9A[743](index=743&type=chunk) - A comprehensive list of exhibits required by SEC Regulation S-K is filed as part of this Form 10-K, including merger agreements, certificates of incorporation, preferred stock designations, warrant agreements, employment agreements, and various certifications[744](index=744&type=chunk)[745](index=745&type=chunk)[746](index=746&type=chunk) [Item 16. Form 10-K Summary](index=154&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item indicates that no Form 10-K Summary is provided [Signatures](index=155&type=section&id=Signatures) [Signatures](index=155&type=section&id=Signatures) This section contains the signatures of the registrant's principal executive officer, principal financial officer, principal accounting officer, and directors, certifying the report's submission on behalf of Flagstar Financial, Inc. on March 3, 2025 - The report is signed by Joseph M. Otting (President and CEO), Lee M. Smith (Senior EVP and CFO), Bryan L Marx (EVP and Chief Accounting Officer), and several directors, dated March 3, 2025[753](index=753&type=chunk)[754](index=754&type=chunk)

102 Duffy Avenue, Hicksville, NY 11801 ● Phone: (516) 683-4420 ● flagstar.com 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 | | | Fourth Quarter 2024 Summary | | | --- | --- | --- | --- | | | Asset Quality | | Loans, Deposits, and Funding | | • | Asset quality trends stabilizing: | • | Multi-family loans decreased $1.0 billion or 3% ...