Flagstar reports another net loss amid ongoing revamp

Core Insights - Flagstar Bank reported a net loss of $45 million for the third quarter, exceeding analysts' expectations of a $0.08 loss per share, marking the eighth consecutive quarter of losses [2][9] - Despite the ongoing losses, bank executives expressed optimism about the diversification of the loan portfolio and improving margins, although they did not commit to profitability in the fourth quarter [2][5] Financial Performance - The bank's net interest income was $425 million, down 17% year-over-year, attributed to a reduction in average assets and lower yields on interest-earning assets [8] - Noninterest income totaled $94 million, also down 17% from the same quarter last year, due to the sale of its mortgage servicing operation and third-party origination business [10] - Total revenues for the quarter were reported at $519 billion, with expenses totaling $522 million, down 27% year-over-year [8][10] Loan Portfolio Changes - Flagstar's commercial-and-industrial (C&I) loans reached $14.9 billion, a 3% increase from the previous quarter but a 9.7% decrease year-over-year due to the sale of non-core loans [7] - The multifamily loan portfolio decreased to $28.8 billion, reflecting a 13% year-over-year decline [8] Strategic Developments - The bank is undergoing a business overhaul, including a shift towards more commercial-and-industrial loans and a reduction in exposure to commercial real estate loans [4][5] - Flagstar completed the dissolution of its holding company, which is expected to simplify its corporate structure and reduce annual operating expenses by $10 million [11][12]