Core Insights - Flagstar Financial, Inc. (FLG) reported fourth-quarter 2025 adjusted earnings per share of 6 cents, surpassing the Zacks Consensus Estimate of 3 cents, and improved from a loss of 34 cents in the same quarter last year [1][2] - The results were driven by an increase in net interest income (NII), a significant reduction in provision for credit losses, and lower expenses, although lower non-interest income posed a challenge [1][9] Financial Performance - The net income available to common shareholders (GAAP basis) was $21 million, a recovery from a net loss of $196 million in the prior-year quarter [2] - Quarterly revenues reached $557 million, exceeding the Zacks Consensus Estimate by 4.3%, but declined 10.9% year over year [3] - For the full year 2025, revenues totaled $1.9 billion, reflecting a 28.6% increase from the previous year [3] - NII was reported at $467 million, a 1% year-over-year increase, with a net interest margin (NIM) of 2.14%, expanding by 41 basis points [3][8] - Non-interest income fell to $90 million, down 45% from the prior-year quarter, primarily due to the absence of gains from mortgage servicing operations and lower fee income [4][8] - Non-interest expenses decreased by 29% year over year to $509 million, with adjusted operating expenses down 17% to $462 million [4] Loan and Deposit Trends - Total loans and leases held for investment decreased by 3% sequentially to $60.7 billion as of December 31, 2025 [5] - Total deposits also declined by 5% sequentially to $66 billion as of the same date [5] Credit Quality - Non-accrual loans totaled $3 billion, slightly higher than the previous year [6] - Net charge-offs were $46 million, a significant drop of 79% from the prior-year quarter [6] - The provision for credit losses was reduced to $3 million from $145 million in the year-ago quarter, indicating stabilization in credit trends [6] Capital Ratios - As of December 31, 2025, the common equity tier 1 ratio improved to 12.83% from 11.83% a year earlier [7] - The total risk-based capital ratio increased to 16.23% from 15.14% in the prior-year quarter [7] - The leverage capital ratio rose to 9.22% from 7.68% a year ago, reflecting enhanced capital strength [7]
Flagstar Financial Q4 Earnings Beat, NII Rises Y/Y, Expenses Fall