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][5]. - The company reported adjusted net loss of $31 million, or $0.07 per diluted share, a 50% improvement from Q2 2025[21]. - The company reported a net (loss) income of $(206) million for the nine months ended September 30, 2025, a 78% improvement from $(930) million in the same period of 2024[73]. - Basic (loss) earnings per common share for the nine months ended September 30, 2025, was $(0.56), an 82% improvement from $(3.16) in the same period of 2024[73]. - 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 a loss of $280 million for the same period in 2024[78]. Asset Quality - Total criticized and classified loans decreased by $2.8 billion, or 19%, since December 31, 2024, indicating improved asset quality[2][12]. - Non-accrual loans held for investment increased to $3.241 billion, representing 5.17% of total loans held for investment, up from 3.54% a year earlier[52]. - The allowance for credit losses on loans and leases was $1.071 billion at September 30, 2025, down 15% from $1.264 billion 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]. Loan and Deposit Trends - C&I loans increased by $448 million, or 3%, from the prior quarter, with new loan originations rising 41% to $1.7 billion[3][17]. - Total loans Held-for-Investment (HFI) were $62.7 billion, down $1.5 billion, or 2%, linked-quarter, and down $5.6 billion, or 8%, year-over-year[16][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][20]. - 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]. Income and Expenses - Total non-interest expenses were $522 million, up $9 million, or 2%, compared to Q2 2025, while adjusted operating expenses decreased by 1%[2][3]. - Total non-interest income for the first nine months of 2025 totaled $251 million, a $150 million or 39% decline compared to $380 million for the same period in 2024[41]. - Total non-interest expense for the nine months ended September 30, 2025, was $1,567 million, a decrease of 26% from $2,120 million in the same period of 2024[73]. - Total non-interest income for the three months ended September 30, 2025, was $94 million, a 22% increase from $77 million in the previous quarter, but a 17% decrease from $113 million year-over-year[71]. Capital and Equity - The common equity tier 1 ratio for Flagstar Financial, Inc. was 12.45% as of September 30, 2025, compared to 11.83% at the end of 2024[59]. - The total stockholders' equity remained relatively stable at $8.108 billion, a slight decrease of 1% compared to $8.095 billion in the previous quarter[69]. - The company raised $1.05 billion in capital in March 2024, which is expected to impact future growth and stability[63]. 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 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]. - The company is focused on addressing previously disclosed material weaknesses in internal control over financial reporting to enhance governance and risk management[63]. Tax and Efficiency - The effective tax rate for the third quarter 2025 was 12.2%, down from 16.3% in the same quarter of 2024[50]. - The efficiency ratio improved to 100.46% in Q3 2025 from 114.93% in Q3 2024, indicating better cost management[91].
Flagstar Financial, lnc.(FLG) - 2025 Q3 - Quarterly Results