[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)

Financial Performance - Fourth quarter 2024 net loss attributable to common stockholders was $168 million, or $0.41 per diluted share, an improvement from a net loss of $289 million, or $0.79 per diluted share in the previous quarter[4] - For the full year 2024, the net loss attributable to common stockholders was $1,125 million, or $3.40 per diluted share, compared to a net loss of $112 million, or $0.49 per diluted share for 2023[5] - Total revenues for 2024 were $2,552 million, down 56% from $5,764 million in 2023, driven by a 30% decline in net interest income and an 85% drop in non-interest income[40] - The company reported a net loss of $1.090 billion for the year ended December 31, 2024, compared to a net loss of $79 million in 2023[87] - The efficiency ratio for the year ended December 31, 2024, was 68.99%, an increase from 57.78% in 2023, indicating a decline in operational efficiency[94] Loan and Deposit Trends - Total loans and leases held for investment decreased by $16.3 billion, or 19% year-over-year, to $68.3 billion as of December 31, 2024[13] - Multi-family loans declined by $3.2 billion, or 9%, year-over-year, while commercial real estate (CRE) loans decreased by $1.8 billion, or 17%[8] - Total deposits decreased by $5.7 billion, or 7%, year-over-year, and by $7.1 billion, or 9%, on a linked-quarter basis[15] - Retail deposits increased by $0.9 billion, or 3%, on a linked-quarter basis, and by $7.3 billion, or 17%, year-to-date[17] Interest Income and Expenses - Net interest income for the fourth quarter 2024 totaled $461 million, down $49 million, or 10%, compared to the previous quarter, and down $279 million, or 38%, year-over-year[22] - For the year ended 2024, net interest income was $2,152 million, a decrease of 30% compared to 2023[33] - The average cost of funds rose 115 basis points to 4.40% for the year ended 2024[30] - Total interest income increased by 8% to $5,953 million in 2024 from $5,491 million in 2023, driven by a 61% increase in securities and money market investments[77] Credit Quality and Loss Provisions - Provision for credit losses declined by 55% quarter-over-quarter, reflecting an improving credit quality profile[3] - Provision for credit losses decreased by $134 million or 55% to $108 million in Q4 2024 compared to Q3 2024, and declined by $444 million or 80% compared to Q4 2023[35] - Net charge-offs for Q4 2024 totaled $222 million, down 8% from Q3 2024 but up 20% from Q4 2023[36] - Net charge-offs for the year ended December 31, 2024, were $892 million, a significant increase from $208 million in 2023[57] Non-Interest Income and Expenses - Non-interest income for 2024 totaled $400 million, a decrease of $2,287 million or 85% compared to $2,687 million in 2023, primarily due to a partial reversal of a bargain purchase gain[47] - Non-interest expenses for 2024 were $2,838 million, down 43% from $4,981 million in 2023, with notable items including severance costs of $31 million and long-term asset impairment charges of $77 million[48] - Total non-interest expense for Q4 2024 was $718 million, consistent with Q3 2024 and down 77% from Q4 2023[86] Capital and Asset Management - CET1 capital ratio improved to 11.9%, representing an increase of over 280 basis points during the year, placing the company in the top quartile of its peer group[10] - The common equity tier 1 ratio improved to 11.86% as of December 31, 2024, compared to 10.76% in Q3 2024 and 9.05% in Q4 2023[62] - Total assets reached $100.2 billion, with loans amounting to $69.2 billion and deposits of $75.9 billion as of December 31, 2024[63] - Tangible common stockholders' equity was $7,204 million as of December 31, 2024, down from $7,239 million at the end of 2023[82] Asset Quality and Non-Performing Loans - Total non-accrual loans held for investment increased to $2,615 million, up 4% from $2,514 million in Q3 2024 and significantly up from $428 million in Q4 2023[56] - Non-performing loans (NPLs) to total loans held for investment rose to 3.83% compared to 3.54% in Q3 2024 and 0.51% in Q4 2023[57] - The total allowance for credit losses to total loans was 1.78% as of December 31, 2024, down from 1.87% in Q3 2024 and up from 1.23% in Q4 2023[60] Future Outlook and Strategy - The company plans to focus on organic growth and potential business combinations to enhance its capital management strategies[78]

Core Viewpoint - The article emphasizes a personal investment strategy focused on growth and dividend income, aiming for an easy retirement through a portfolio that prioritizes compounding dividend income and growth [1]. Group 1: Investment Strategy - The strategy involves creating a portfolio that generates monthly dividend income, which is enhanced through dividend reinvestment and annual increases [1]. - The author expresses a beneficial long position in specific stocks, indicating a personal investment in FLG, TFC, and HBAN [1]. Group 2: Personal Opinion and Research - The article is presented as a personal opinion and is not intended as a recommendation for stock purchases or sales [2]. - It highlights the importance of conducting individual research to determine if the discussed companies align with personal investment objectives and financial situations [2].

Financial Performance - The Company reported a net loss of $280 million for Q3 2024, an improvement from a net loss of $323 million in Q2 2024, with a loss per diluted share of $0.79 compared to $1.14 in Q2 2024[20]. - For the first nine months of 2024, the Company experienced a net loss of $930 million, a significant decline from a net income of $2.6 billion in the same period of 2023, resulting in a loss per diluted share of $3.16 compared to earnings of $10.84 per diluted share in 2023[22]. - Included in the Q3 2024 results were $37 million of merger-related expenses, contributing to the overall net loss[20]. - The Company reported a $121 million reduction in the bargain purchase gain from the Signature transaction during the first nine months of 2024[22]. - Total non-interest income for the first nine months of 2024 was $236 million, a significant decrease from $2.6 billion in the same period of 2023, primarily due to the impact of the Signature transaction[47]. - Total non-interest expenses for the first nine months of 2024 were $2.1 billion, up 15% from $1.85 billion in the same period of 2023, largely due to increased FDIC insurance expenses[52]. - The company reported a net unrealized loss on securities available for sale of $468 million, improved from a loss of $581 million[173]. - The company experienced a net increase in cash, cash equivalents, and restricted cash of $11,542 million, compared to an increase of $5,047 million in the previous year[184]. Capital and Liquidity - The Company raised $1.05 billion in equity capital in March 2024 to stabilize its financial position after experiencing significant stock price declines and customer deposit withdrawals[18]. - The sale of the warehouse lending portfolio, valued at approximately $6 billion, was completed in Q3 2024, enhancing liquidity and increasing capital ratios by approximately 70 basis points[19]. - The Company expects the sale of its mortgage servicing activities, completed on October 31, 2024, to further increase its common equity Tier 1 capital ratio by approximately 60 basis points in Q4 2024[19]. - The company’s total liquidity reached $41.4 billion as of September 30, 2024, an increase of $11.6 billion from $27.9 billion at December 31, 2023[127]. - The company has total liquidity of $41.4 billion, exceeding uninsured deposits by $24.8 billion[132]. - The company significantly increased its on-balance sheet liquidity during 2024 to meet Category IV prudential standards, which require maintaining a liquidity buffer equal to the 30-day stress horizon[159]. Loan Portfolio and Credit Losses - The Company faced significant loan portfolio stress due to declines in the office sector and inflation in the multi-family sector, impacting its financial performance[18]. - A $2.3 billion increase in nonaccrual loans led to a reversal of previously accrued interest income[36]. - Provision for credit losses for Q3 2024 totaled $242 million, down from $390 million in Q2 2024, reflecting lower charge-offs due to fewer larger-balance office property downgrades[39]. - For the first nine months of 2024, provision for credit losses increased to $947 million from $281 million in the same period of 2023, driven by risk rating downgrades in commercial real estate and multi-family loans[41]. - Total non-accrual loans reached $2.514 billion at September 30, 2024, an increase of $2.086 billion from December 31, 2023[111]. - The allowance for credit losses on loans and leases increased to $1.3 billion, up $272 million from $1.0 billion at December 31, 2023[118]. - The allowance for credit losses to total loans held for investment ratio rose to 1.78% at September 30, 2024, compared to 1.17% at December 31, 2023[120]. Deposits and Funding - The customer deposit base stabilized and grew substantially in Q2 and Q3 2024 due to returning private banking customers and promotional programs for retail customers[18]. - Total deposits increased by $1.5 billion to $83.0 billion as of September 30, 2024, following a stabilization after a $9.7 billion deposit attrition earlier in the year[59]. - Total brokered deposits increased to $12.771 billion as of September 30, 2024, up from $9.462 billion on December 31, 2023, representing a 35.5% growth[129]. - Uninsured deposits amounted to $16.6 billion as of September 30, 2024, a decrease following credit rating downgrades in early 2024[133]. - Certificates of deposit stood at $29.3 billion and long-term debt at $14.3 billion as of September 30, 2024[136]. Asset Management - Total assets increased by $0.3 billion to $114.4 billion as of September 30, 2024, compared to $114.1 billion at December 31, 2023[56]. - Total loans and leases held for investment decreased by $13.5 billion to $71.1 billion as of September 30, 2024, primarily due to the sale of the warehouse lending portfolio[57]. - The securities portfolio increased by $1.4 billion to $10.5 billion as of September 30, 2024, with over 90% classified as low credit risk U.S. government agency bonds[58]. - The average yield on investment securities increased by 48 basis points due to the replacement of lower rate securities with higher rate securities[37]. - The net unrealized loss on securities available for sale was $468 million as of September 30, 2024, down from $581 million at December 31, 2023[87]. Regulatory and Compliance - The effective tax rate for Q3 2024 was 16.34%, down from 23.69% in Q2 2024, primarily due to a lower book loss related to the provision for credit losses[53]. - The company is subject to a supervisory stress test every other year, with the first test applicable in 2026[159]. - The company has identified material weaknesses in internal control over financial reporting, with remediation progress ongoing as of September 30, 2024[169]. - Proposed amendments to the Basel III Capital Rules may require the company to calculate risk-based capital ratios under both current and expanded approaches, with potential impacts being evaluated[167]. Strategic Initiatives - The company is strategically diversifying its loan portfolio to shift from multi-family loans to other loan sectors[70]. - The company is curtailing future originations of loans secured by rent-regulated properties to mitigate exposure[70]. - The company announced the sale of its residential mortgage servicing business for approximately $1.3 billion, expected to increase common equity tier 1 ratios by about 60 basis points[165]. - The company completed a business acquisition that resulted in the fair value of tangible assets acquired amounting to $37,526 million[186]. - The Company is assessing the impact of new accounting standards, including ASU 2023-07, which improves segment reporting disclosures, effective January 1, 2024[199].

Core Insights - Flagstar Bank has released its 2023 ESG Report, highlighting its commitment to sustainability and social responsibility, and showcasing early achievement of its 2030 carbon emissions targets [1][4] Environmental Initiatives - The bank reduced its Scope 1 and 2 greenhouse gas emissions by 34% in 2023, exceeding its goal of a 30% reduction by 2030 based on a 2019 baseline [3] - The report aligns with key standards such as the Global Reporting Initiative Universal Standards and the Task Force on Climate-related Financial Disclosures framework [4] Social Responsibility - Flagstar has expanded its mentorship program to over 150 mentees and 40 mentors, focusing on guidance and career growth [3] - The bank completed a full rollout of in-language loan documents in Spanish across all retail locations in 2023 [3] - It invested over $93.1 million in CRA low-income housing tax credits and provided $5.6 million in CRA-qualifying grants and sponsorships [3] Governance and Community Impact - Flagstar became a member of six national certifying and advocacy organizations to enhance supplier diversity, including support for women, veterans, individuals with disabilities, and LGBTQ community members [3] - The Community Foundation awarded $3.16 million in grants to organizations focused on workforce readiness, arts and culture, and financial capability [3] Company Overview - New York Community Bancorp, Inc. is the parent company of Flagstar Bank, with assets totaling $119.1 billion and loans amounting to $82.4 billion as of June 30, 2024 [5] - Flagstar operates over 400 branches, with a significant presence in the Northeast and Midwest, and has approximately 90 private banking teams in major cities [6]

Table of Contents As filed with the Securities and Exchange Commission on August 23, 2024 Registration No. 333-280398 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 AMENDMENT NO. 1 to FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 NEW YORK COMMUNITY BANCORP, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) Delaware 6036 06-1377322 (Primary Standard Industrial Classification Code Number) (I.R. ...

Core Viewpoint - New York Community Bancorp, Inc. has approved employment inducement awards for two new executives as part of their hiring process [1][2]. Group 1: Executive Appointments - Richard Raffetto has been appointed as Senior Executive Vice President and President of Commercial and Private Banking [2]. - Kris Gagnon has been appointed as Senior Executive Vice President and Chief Credit Officer [2]. Group 2: Employment Inducement Awards - Both executives received a one-time stock option grant to acquire 1,000,000 shares of the Company's common stock at an exercise price of $10.48, which is equal to the closing price on the grant date [3]. - The stock options will vest in three equal annual installments on the first, second, and third anniversaries of the grant date [3]. - The inducement awards are made outside of the Company's 2020 Omnibus Incentive Plan but will generally follow similar terms and conditions [4]. Group 3: Company Overview - New York Community Bancorp, Inc. is the parent company of Flagstar Bank, N.A., with total assets of $119.1 billion, loans of $82.4 billion, deposits of $79.0 billion, and total stockholders' equity of $8.4 billion as of June 30, 2024 [5]. - Flagstar Bank operates over 400 branches and has a significant presence in the Northeast and Midwest, as well as locations in high-growth markets in the Southeast and West Coast [6].

Core Viewpoint - New York Community Bancorp (NYCB) reported a significant net loss in the second quarter of 2024, primarily due to increased provisions for credit losses and declining revenues [11][12]. Financial Performance - NYCB reported a second-quarter 2024 loss per share of $1.05, wider than the Zacks Consensus Estimate of a loss of 38 cents, compared to earnings of $1.41 in the same quarter last year [1] - The net loss available to common shareholders was $333 million, a decline from a net income of $405 million in the prior-year quarter [2] - Quarterly revenues were $671 million, a decline of 44.2% from the prior-year quarter, missing the Zacks Consensus Estimate of $701.4 million [3] - Non-interest income was $114 million, down from $302 million reported in the year-ago quarter, attributed to reductions in loan administration income, loan sales, and lower fee income [4] - Net interest income (NII) was $557 million, down 38.1% from the prior-year quarter, with a net interest margin of 1.98%, declining from 3.21% in the previous quarter [13] Expense and Efficiency - The efficiency ratio was 95.05%, up from 48.26% in the year-ago quarter, indicating deteriorating profitability [5] - Non-interest expenses increased by 6.7% year over year to $705 million, driven by the impact of the Signature Bank transaction and higher professional fees [14] Credit Quality - The provision for credit losses was $390 million, significantly up from $49 million in the prior-year quarter, with net charge-offs of $349 million compared to a net recovery of $1 million in the prior-year quarter [6] - Non-performing assets rose to $1.96 billion, a significant increase from $246 million as of June 30, 2023 [16] Capital Ratios - As of June 30, 2024, the common equity tier 1 (CET1) ratio was 9.54%, up from 9.45% as of March 31, 2024, while the total risk-based capital ratio declined to 12.78% from 13.09% in the prior quarter [7] - The leverage capital ratio decreased to 7.53% from 7.90% [17] Recent Developments - NYCB's bank subsidiary, Flagstar Bank, announced plans to sell its residential mortgage servicing business to Mr. Cooper Group Inc. for $1.4 billion, expected to close in Q4 2024, which is anticipated to increase the CET1 ratio by approximately 60 basis points [18] - The company aims to simplify its business model through this sale, although rising expenses across various components may hinder bottom-line growth [19]

Core Insights - New York Community Bancorp (NYCB) shares declined following disappointing second-quarter earnings results, complicating the bank's path to profitability [1] Financial Performance - NYCB reported a loss of $1.14 per diluted share, significantly worse than the expected loss of 43 cents [6] - Net interest income was $557 million, falling short of the anticipated $587.6 million [6] - The bank has lowered its profit guidance for 2025 to a maximum of 5 cents per share, down from a previous estimate of 35 to 40 cents [8] - For 2024, NYCB expects losses between $2.20 and $2.30 per share, wider than the earlier forecast of 50 to 55 cents [8] Strategic Actions - CEO Joseph Otting emphasized ongoing management actions to reposition the bank for long-term success [2] - NYCB has expanded its review of the loan portfolio, increasing loan loss provisions and charge-off levels [3] - The bank has reduced its multifamily portfolio to $33.9 billion from $35.4 billion as of June 30, 2023 [4] - NYCB's Flagstar Bank unit agreed to sell its residential mortgage servicing business to Mr. Cooper Group for $1.4 billion [5] Market Impact - NYCB shares fell 3% on Thursday, and the stock has lost approximately two-thirds of its value this year [9] - The bank's loans to rent-regulated multifamily buildings in New York City are under pressure due to high interest rates, inflation, and declining property values [11] Business Focus - Otting has committed to reducing NYCB's reliance on commercial real estate loans, which have decreased by 4% year-over-year [10] - The mortgage servicing business, while previously significant, is being divested due to financial and operational risks in a volatile interest rate environment [12]

Financial Data and Key Metrics Changes - The net loss to shareholders for the quarter was $333 million, primarily driven by a provision for loan losses of $390 million, which included $350 million in charge-offs and approximately $40 million in reserve build [32] - The net interest margin ended the quarter at 1.98%, experiencing margin pressure from interest reversals associated with non-accruals, which had a negative impact of about 7 to 8 basis points [32][34] - The allowance for loan loss increased to 1.7% of the total portfolio, with the credit loss reserve rising to 1.78%, up from about 1.5% [31] Business Line Data and Key Metrics Changes - The company has made significant progress in addressing credit risk management, having reviewed approximately 75% of its commercial real estate (CRE) portfolio, which includes 80% of the multi-family portfolio [11][24] - The office portfolio review is at 82%, with only about $500 million remaining under review, resulting in significant charge-offs this quarter [12] - The company reported a $3.2 billion increase in customer deposits in the retail space and a $500 million growth in the private banking sector [13] Market Data and Key Metrics Changes - The company has seen a reduction in its CRE exposure, with a long-term goal to decrease it from roughly $45 billion to between $30 billion and $33 billion [24] - The multi-family loans that have hit their reprice dates have shown strong payoffs, with 69% repricing to an average of 8.19%, up from 3.85% [30] Company Strategy and Development Direction - The company aims to simplify its business model and strengthen its balance sheet through strategic sales, which are expected to add about 130 basis points to its CET ratio [22][23] - There is a focus on expanding the commercial and industrial (C&I) business, with a goal to grow C&I assets from around $20 billion to $30 billion to $35 billion over the next three to five years [25] - The company is actively hiring experienced personnel to enhance its C&I and private banking initiatives, viewing these as key growth engines [7][51] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, noting that over 70% of the commercial real estate portfolio continues to perform as agreed, despite recognizing future risks associated with interest payments [43] - The company anticipates continued charge-offs but expects them to decrease in the third and fourth quarters as the review of the remaining portfolio progresses [69] - Management highlighted the importance of maintaining strong relationships with borrowers to mitigate risks and enhance future performance [110] Other Important Information - The company has closed on the sale of its mortgage warehouse loans to JPMorgan Chase, receiving $5.9 billion in liquidity, which is seen as a significant milestone [22] - The company is evaluating an additional $2 billion to $5 billion in non-core activities for potential sales by the end of the year [40][87] Q&A Session Summary Question: What is the appetite among GSEs for refinancing? - Management noted that there has been a pickup in refinancing activity with agencies, which could trigger more loans being refinanced out of the bank [18] Question: What is the outlook for the company's earnings forecast? - The reduction in earnings forecast for 2026 is attributed to the sale of the mortgage warehouse and servicing, with expectations of redeploying capital into lending [39][40] Question: How is the company managing its non-accrual loans? - Management indicated that over 60% of non-accrual loans are still performing, and they are focused on reducing these through sales and appraisals [57][106] Question: What is the current cost of deposit growth? - The company is not significantly increasing costs in the private client and commercial space, with most growth coming from typical pricing in the retail space [95] Question: What is the strategy for reducing non-accrual loans? - The company is actively studying pools of loans for potential sales and has added experienced personnel to lead these efforts [106]