Core Insights - Flagstar Financial, Inc. (FLG) reported a third-quarter 2025 adjusted loss per share of 7 cents, slightly worse than the Zacks Consensus Estimate of a loss of 6 cents, but an improvement from a loss of 69 cents in the same quarter last year [1][10] - The results were primarily impacted by a decline in net interest income (NII) and fee income, alongside lower loan and deposit balances, although reduced expenses provided some support [10] Financial Performance - Quarterly revenues totaled $519 million, reflecting a 16.7% decline from the prior-year quarter, yet this figure exceeded the Zacks Consensus Estimate by nearly 1% [3] - NII was reported at $425 million, down 16.7% year-over-year, with a net interest margin of 1.91%, decreasing by 12 basis points from the previous year [3] - Non-interest income fell to $94 million, a decrease of 16.8% from the year-ago quarter, primarily due to the absence of net return on mortgage servicing rights and lower fee income [4] - Non-interest expenses were $522 million, down 27.1% year-over-year, with adjusted operating expenses at $457 million, a reduction of 29.9% from Q3 2024 [4] Efficiency and Capital Ratios - The efficiency ratio improved to 92.1%, down from 105.9% in the year-ago quarter, indicating enhanced profitability [5] - As of September 30, 2025, the common equity tier 1 ratio increased to 12.45% from 10.76% a year earlier, while the total risk-based capital ratio rose to 15.92% from 13.92% [8] Asset Quality and Loan/Deposit Trends - Total loans and leases held for investment decreased by 2.3% sequentially to $62.7 billion, while total deposits declined nearly 1% to $69.1 billion [6] - Non-accrual loans increased to $3.2 billion from $2.5 billion year-over-year, although net charge-offs decreased significantly by 69.6% to $73 million [7] Industry Context - Other banks such as Valley National Bancorp and Zions Bancorporation reported positive earnings growth, driven by increased NII and non-interest income, contrasting with FLG's challenges [12][13]
Flagstar Financial Reports Q3 Loss, NII & Fee Income Decline Y/Y (Revised)