Core Viewpoint - Flagstar Financial, Inc. reported significant improvements in its financial performance for the second quarter of 2025, with a notable reduction in net losses compared to previous quarters and the same period last year, indicating progress in its transformation strategy into a well-diversified regional bank [3][4][5]. Asset Quality - Non-accrual loans declined by 4% compared to Q1 2025, and criticized loans decreased by $2.2 billion or 15% since December 31, 2024 [1]. - Total allowance for credit losses (ACL) was $1,162 million, representing 1.81% of total loans held for investment, slightly down from 1.82% in the previous quarter [1]. - Net charge-offs (NCOs) remained stable at 0.72% of average loans, with a significant year-over-year decrease in net charge-offs by 66% compared to Q2 2024 [34][36]. Loans and Deposits - Total loans and leases held for investment (HFI) decreased to $64.1 billion, down $2.5 billion or 4% from Q1 2025 [9]. - New credit commitments in commercial and industrial (C&I) lending rose to $1.9 billion, an increase of 80% compared to Q1 2025 [10]. - Total deposits were $69.7 billion, reflecting a decrease of $4.2 billion or 6% from the previous quarter, primarily due to a reduction in high-cost certificates of deposit [12][13]. Capital - The Common Equity Tier 1 (CET1) capital ratio improved to 12.33%, aligning with or exceeding peer group levels [1]. - Book value per common share was reported at $18.28, with tangible book value per share at $17.24 [1]. Profitability - The net loss for Q2 2025 was $70 million, a 30% improvement from Q1 2025 and a 78% improvement from Q2 2024 [3][4]. - Pre-provision net revenue (PPNR) was positive at $9 million, compared to a loss of $23 million in the previous quarter [37]. - Net interest margin (NIM) increased by 7 basis points to 1.81% compared to the prior quarter [1][23]. Non-Interest Income and Expenses - Non-interest income for Q2 2025 was $77 million, down 32% year-over-year, primarily due to the sale of the mortgage servicing/sub-servicing business [40][42]. - Total non-interest expense decreased to $513 million, down 4% from the previous quarter and down 27% year-over-year [44][48].