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]. - For the nine months ended September 30, 2025, the net loss was $206 million, significantly reduced from a net loss of $930 million 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 experienced 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 challenges in profitability[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 same period of 2024[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 at 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 at 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 at December 31, 2024, a decline of about 8.8%[153]. - Total borrowed funds decreased by $1.2 billion to $13.182 billion as of September 30, 2025, primarily due to the repayment of $1.25 billion in FHLB advances[106]. 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 by $15 million compared to the same period in 2024, mainly due to the non-recurrence of a prior bargain purchase gain[49]. Credit Quality and Losses - 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]. - Provision for credit losses was $38 million for the three months ended September 30, 2025, significantly lower than $242 million in the same period of 2024, indicating improved credit quality[155]. - The allowance for credit losses on loans and leases was $1.071 billion as of September 30, 2025, compared to $1.201 billion as of December 31, 2024[203]. - Non-accrual loans increased by $626 million to $3.241 billion as of September 30, 2025, driven mainly by the classification of $566 million in loans within the multi-family portfolio due to a single borrower undergoing bankruptcy proceedings[89]. Loan Portfolio and Strategy - The company operates approximately 340 locations across nine states, with a strong presence in the New York/New Jersey metropolitan area and significant growth in Florida and the West Coast[23]. - The strategic transformation plan initiated in 2024 aims to evolve into a fully diversified bank, focusing on financial resilience and sustainable earnings[25][28]. - 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 a strategic decision to diversify the loan portfolio[60]. - The company is strategically diversifying its loan portfolio by shifting focus 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 capital amounts and classifications are subject to regulators' qualitative judgments about the components of capital and risk weighting assets[145]. Market and Economic Conditions - The estimated change in Economic Value of Equity (EVE) for a 100 basis point increase in interest rates is a decrease of 1.3%[136]. - The estimated change in Net Interest Income (NII) over the next twelve months for a 100 basis point reduction in short-term interest rates is an increase of 1.66%[139]. - The estimated percentage change in future NII for a 200 basis point increase in interest rates is a decrease of 1.5%[140].
Flagstar Financial, lnc.(FLG) - 2025 Q3 - Quarterly Report