Core Insights - Flagstar Bank returned to profitability in Q4 2025, reporting net income of $29 million compared to a net loss of $36 million in Q3 2025 and a net loss of $188 million in Q4 2024 [1][2] - The bank's adjusted net income attributable to common stockholders was $30 million or $0.06 per diluted share in Q4 2025, compared to a net loss of $31 million or $0.07 per diluted share in Q3 2025 [2][3] - For the full year 2025, Flagstar reported a net loss of $177 million, significantly improved from a net loss of $1,118 million in 2024 [1][2] Financial Performance - Operating expenses decreased by 3% quarter-over-quarter and 26% year-over-year, reflecting strong expense management [1][2] - Net interest margin (NIM) increased by 23 basis points to 2.14% quarter-over-quarter, driven by a decline in the cost of funds [1][3] - Total loans and leases held for investment decreased to $60.7 billion, down 3% from Q3 2025 and down 11% year-over-year [2][3] Asset Quality - Non-accrual loans decreased by 8% compared to Q3 2025, with net charge-offs improving to 0.30% of average loans [1][2] - The allowance for credit losses (ACL) was $1.1 billion, or 1.79% of total loans held for investment [1][5] - Criticized/classified loans declined by 2% compared to Q3 2025 and by 19% since December 31, 2024 [1][5] Capital Position - The common equity tier 1 (CET1) capital ratio improved to 12.83%, exceeding regulatory minimums [5] - Tangible book value per share was reported at $15.82, with excess capital of $1.4 billion after tax [1][5] - Total stockholders' equity stood at $8.1 billion as of December 31, 2025 [5] Strategic Focus - The bank has strategically reduced its commercial real estate (CRE) exposure, with CRE loans declining by 8% compared to Q3 2025 [1][2] - C&I lending commitments increased by 28% to $3 billion, with originations up 22% to $2.1 billion [1][2] - The bank added over 250 experienced bankers to enhance its C&I banking platform, contributing to loan growth in specialized industries and regional commercial banking [1][2]