FLAGSTAR BANK, NATIONAL ASSOCIATION
For the period ended Mar 31, 2026. Filed May 7, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 7, 2026
FLG$10.52-0.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-06.
0000910073-25-000181
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-07.
0000910073-26-000047
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 197 previous paragraphs and 180 current paragraphs.
78 unchanged; 73 reworded; 27 added; 41 removed; 5 previous and 2 current paragraphs rearranged.
Tables are not compared: 34 previous and 35 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (27)
Current report
Net Income (loss)
Current report
During the three months ended March 31, 2026, NIM increased 1 basis point, while NII decreased $24 million compared to the three months ended December 31, 2025. The decrease in NII was primarily due to lower yields on our C&I loan portfolio as a result of a lower interest rate environment, and the non-recurrence of a $20 million hedge gain related to the accelerated repayment of certain FHLB-NY advances during the three months ended December 31, 2025. The decrease was partially offset by lower interest expense on deposits resulting from the paydown of higher-cost deposits.
Current report
Comparison to Prior Year
Current report
During the three months ended March 31, 2026, NIM increased by 41 basis points and NII increased $33 million compared to the three months ended March 31, 2025. The increase was primarily driven by the paydown of higher-cost deposits and borrowings during the year ended December 31, 2025, and the decision to reinvest cash into higher-earning assets. The increase was partially offset by lower interest income on our multi-family and CRE loan portfolios as a result of our continued strategy of diversifying our loan portfolio.
Current report
For the three months ended March 31, 2026, the provision for credit losses decreased $3 million compared to the three months ended December 31, 2025. The decrease was primarily driven by the bankruptcy settlement related to a single borrower and our strategic reduction of our multi-family and CRE portfolios. These decreases were partially offset by growth in our C&I portfolio and higher net charge-offs of $34 million primarily related to the one borrower relationship that was in bankruptcy.
Current report
For the three months ended March 31, 2026, the provision for credit losses decreased $79 million compared to the three months ended March 31, 2025. The decrease was primarily due to our strategic reduction of our multi-family and CRE portfolios and lower net charge-offs.
Current report
For the three months ended March 31, 2026, non-interest income decreased $35 million compared to the three months ended December 31, 2025. The decrease was primarily due to an $18 million reduction in the value of our investment in Figure Technology Solutions, Inc., and lower income from our bank-owned life insurance due to a decrease in death benefit claims.
Current report
Income Tax Expense (Benefit)
Current report
The income tax expense for the three months ended March 31, 2026 decreased by $5 million compared to the three months ended December 31, 2025 primarily as a result of lower pre-tax income.
Current report
The income tax expense for the three months ended March 31, 2026 increased by $32 million compared to the three months ended March 31, 2025, primarily as a result of the increase in our pre-tax income and the application of our estimated annual effective tax rate for the current period compared to the use of our actual effective tax rate in the prior year.
Current report
(3)Excludes $189 million of loans past their contractual maturity date that are in the process of modification or foreclosure.
Current report
The majority of our multi-family loan portfolio consists of non-recourse loans secured by rental apartment buildings. As of March 31, 2026 and December 31, 2025, $15.2 billion or 55 percent and $15.8 billion or 55 percent of our total multi-family loan portfolio was secured by properties in New York State, respectively. Of these amounts, $13.5 billion or 89 percent and $13.9 billion or 88 percent were subject to rent regulation laws to varying degrees at March 31, 2026 and December 31, 2025, respectively. Additionally, $9.3 billion and $9.5 billion of these loans, as of March 31, 2026 and December 31, 2025, respectively, were secured by properties in which at least 50 percent of the units were rent-regulated.
Current report
The majority of the C&I loan portfolio is structured as floating rate obligations, through a variety of teams dedicated to various markets, products and sectors, including corporate and regional commercial banking, specialized industries, equipment finance and private banking. We continue to add experienced commercial, corporate and specialized industries banking professionals and credit underwriting and portfolio management personnel to support our growth.
Current report
The ACL on loans and leases decreased $76 million from December 31, 2025 to March 31, 2026. The decrease was primarily driven by the paydown of our higher-risk multi-family and CRE portfolios partially offset by growth in our lower-risk C&I portfolio.
Current report
As of March 31, 2026, we had $32 million of loans 90 days or more past due that were still accruing interest compared to no loans 90 days or more past due and still accruing interest as of December 31, 2025.
Current report
(1)The weighted average yields are calculated by multiplying each carrying value by its yield and dividing the sum of these results by the total carrying values and are not presented on a tax-equivalent basis.
Current report
Total deposits at March 31, 2026 increased $832 million compared to December 31, 2025, primarily due to growth in money market accounts and custodial interest-bearing checking accounts, partially offset by a decline in non-custodial non-interest bearing deposits and the continued pay down of brokered CDs. The shift in deposit mix reflects our continued focus on reducing our reliance on wholesale funding sources.
Current report
(1)Borrowings with original maturities of one year or less are classified as short-term borrowings.
Current report
At March 31, 2026 total borrowed funds decreased $998 million compared to December 31, 2025 primarily due to our continued strategy of reducing higher-cost wholesale borrowings.
Current report
For our C&I loan portfolio, we receive financial information from borrowers quarterly and in some cases less frequently. Quarterly borrower financial information is typically received within 45 to 60 days of quarter end. Upon receipt of the borrower financial information, we perform analyses to (i) determine whether borrower cash flow is sufficient to meet the contractual loan payments, commonly using a FCCR which is often a financial covenant of our borrowers (ii) test all borrower financial covenants, (iii) review and update collateral values, and (iv) update our internal borrower risk ratings. Loans that do not have a FCCR of 1.0 or greater are evaluated for a potential downgrade to substandard or non-accrual risk rating.
Current report
During the three months ended March 31, 2026, Fitch upgraded our credit ratings. Subsequently, in April 2026, Moody’s also upgraded our ratings. Both upgrades reflect continued improvement in our credit profile.
Current report
relationships tied to further downgrades in our credit ratings; however, any such downgrades could result in reputational risk that may adversely affect our business.
Current report
On March 19, 2026, the OCC, FRB, and FDIC issued notices of proposed rulemaking that would substantially revise the U.S. regulatory capital framework. The agencies’ proposals would rescind the July 2023 proposed rules to implement the final components of the Basel III framework and replace them with a recalibrated package that is expected to reduce aggregate common equity tier 1 capital requirements across the banking industry.
Current report
The proposals would replace the existing “advanced approaches” capital rules with a new “expanded risk-based approach.” The expanded risk-based approach could be elected by any banking organization. This would introduce an explicit operational risk requirement calculated based on a firm’s income and expenses, standardized risk-weighting methodologies for credit, equity, and operational risks, and would require firms to reflect most elements of accumulated other comprehensive income in regulatory capital.
Current report
Additionally, the proposals would revise the risk-based capital treatment of certain exposure categories under the standardized approach, aiming to improve the calibration and risk sensitivity of certain risk weights that are particularly significant to our lending activities. The proposals would require Category III and IV banking organizations to recognize most elements of accumulated other comprehensive income in their regulatory capital with a five-year phase-in period.
Current report
Finally, the proposals would modify aspects of the GSIB surcharge, which is not applicable to us.
Current report
We are reviewing the proposals and their potential impact on us.
Removed paragraphs (41)
Previous report
Completion of Internal Corporate Reorganization
Previous report
Effective October 17, 2025, the Bank became the successor reporting company to Flagstar Financial, Inc. pursuant to an internal corporate reorganization to eliminate the Bank’s holding company structure (the “Reorganization”). In connection with the completion of the transaction, Flagstar Financial, Inc. was merged with and into the Bank (the “Merger”), with the Bank continuing as the surviving entity.
Previous report
At the effective time of the Merger, the outstanding shares of Flagstar Financial, Inc.’s common stock and Series A preferred stock were cancelled and automatically converted into an equivalent number of shares of the Bank’s common stock and Series A preferred stock. Flagstar Financial’s Series B and Series D preferred stock were also converted into common stock of the Bank, except that such conversion was instead into non-voting equity securities that are substantially identical to the Series B and Series D preferred stock to the extent that ownership of the additional common stock would otherwise be prohibited by law or require approval by a government entity. As a result, subject to the foregoing limitations, the shares of capital stock of the Bank are now owned directly by shareholders in the same proportion as their ownership of Flagstar Financial, Inc. capital stock immediately prior to the Merger. Further, each warrant to purchase either Series D preferred stock or common stock of Flagstar Financial, Inc. was converted automatically into a warrant to purchase the Bank’s common stock or, as applicable, the Bank’s Series D preferred stock. In addition, each of Flagstar Financial's outstanding warrants to purchase shares of Flagstar Financial common stock forming a part of a unit of Flagstar Financial's outstanding Bifurcated Option Note Unit SecuritiESSM (the “BONUSES Units”) was converted automatically into a warrant to purchase Bank common stock upon the same terms applicable to the outstanding warrants immediately prior to the Reorganization. Immediately following the Merger, the Bank had substantially the same outstanding capital stock with substantially the same rights and privileges as the outstanding capital stock of Flagstar Financial, Inc. immediately prior to the Merger. Immediately after the Merger, the Bank had substantially the same consolidated assets, liabilities and shareholders’ equity as Flagstar Financial. Inc. immediately prior to the Merger. The Bank assumed Flagstar Financial, Inc.’s debt obligations, equity incentive plans, equity compensation plans, and other compensation plans as a result of the Merger.
Previous report
Following the Merger, we continue to be publicly traded on the New York Stock Exchange (NYSE) under the ticker symbol “FLG.” The Bank’s common stock, as well as depositary shares representing interests in the Bank's Series A preferred stock and the BONUSES Units, is registered with the Bank’s primary banking regulator, the OCC, under the Securities Exchange Act of 1934, as amended.
Previous report
Net Loss
Previous report
For the nine months ended September 30, 2025, we reported a net loss of $206 million compared to a net loss of $930 million for the nine months ended September 30, 2024. The net loss attributable to common stockholders, which includes the impact from preferred dividends, for the nine months ended September 30, 2025 was $231 million, or $0.56 per diluted share compared to a net loss attributable to common stockholders of $957 million, or $3.16 per diluted share for the nine months ended September 30, 2024. The net loss for the nine months ended September 30, 2024 included the reduction in the Signature Transaction bargain purchase gain of $121 million.
Previous report
(1)May not foot due to rounding.
Previous report
During the three months ended September 30, 2025, NIM increased 10 basis points and NII increased $6 million compared to the three months ended June 30, 2025. This was primarily as a result of lower-interest bearing deposits primarily due to the payoff of brokered certificates of deposit reflecting our actions to reduce higher cost funding, the pay down of wholesale borrowings and improved yields on loans and leases on One-to-four family and C&I originations, partially offset by lower average total loans and leases due to the strategic reduction in our multi-family, CRE and non-core C&I loans that began in early 2024.
Previous report
During the nine months ended September 30, 2025, NIM decreased by 19 basis points and NII decreased $437 million compared to the nine months ended September 30, 2024. This was primarily as a result of lower average total loans and leases due to the strategic reduction in multi-family and CRE loans, the sale of our mortgage third party origination business and mortgage servicing business ("Mortgage Operations") during the three months ended December 31, 2024 and the sale of our warehouse lending portfolio during the three months ended September 30, 2024. The decrease was partially offset by lower average borrowed funds driven by the pay down of wholesale borrowings and lower interest-bearing deposits driven by the pay down of brokered deposits during 2024 and the nine months ended September 30, 2025.
Previous report
For the three months ended September 30, 2025, the provision for credit losses decreased $26 million compared to the three months ended June 30, 2025. This decrease is primarily due to volume declines from the strategic reduction in our multi-family, CRE and non-core C&I loan portfolios, lower charge-offs, a decrease in criticized assets and the receipt of recent appraisals including appraisals on our individually evaluated loans. These declines were partially offset by declining trends in macro-economic conditions. Additionally, our ACL balance decreased since June 30, 2025 as a result of a reduction in the allowance associated with individually evaluated loans based upon updated appraisals received during the three months ended September 30, 2025, partially offset by declining trends in macro-economic conditions.
Previous report
For the nine months ended September 30, 2025, the provision for credit losses decreased $766 million compared to the nine months ended September 30, 2024. This decrease is primarily due to improving credit trends as property values and borrower financials normalize which has resulted in a stabilization in our ACL and lower net charge-offs in our CRE portfolio. Additionally, our ACL balance decreased since September 30, 2024 as a result of the on-going volume declines from the strategic reduction in our multi-family, CRE and non-core C&I portfolios. The reduction in our ACL balance was partially offset by declining trends in macro-economic conditions.
Previous report
For the three months ended September 30, 2025, non-interest income increased $17 million compared to the three months ended June 30, 2025. The increase is primarily attributed to a $21 million gain on our investment in Figure Technology Solutions, Inc., partially offset by several insignificant items.
Previous report
Total non-interest expenses for the three months ended September 30, 2025 increased $9 million compared to the three months ended June 30, 2025, primarily due to an increase in general and administrative expenses as a result of a $14 million increase in litigation accruals related to a recent settlement agreement for claims that originated at Flagstar Bancorp in 2021 and 2022 prior to the Flagstar Bancorp merger with New York Community Bancorp, Inc. ("NYCB"), and increased compensation and benefits as a result of $8 million of severance costs partially offset by a decline in our FDIC insurance expense as a result of a lower asset base and lower brokered deposits.
Previous report
Income Tax Benefit
Previous report
The income tax benefit for the three months ended September 30, 2025 decreased $6 million compared to the three months ended June 30, 2025 primarily as a result of the reduction in our pre-tax loss.
Previous report
The income tax benefit for the nine months ended September 30, 2025 decreased $173 million compared to the nine months ended September 30, 2024, primarily as a result of the reduction in our pre-tax loss, partially offset by the tax impact of the adjustment to the bargain purchase gain recorded net of tax during the three months ended March 31, 2024.
Previous report
The majority of our multi-family loans are non-recourse and are secured by rental apartment buildings. At September 30, 2025, $16.9 billion or 55 percent of our total multi-family loan portfolio was secured by properties in New York State, $14.7 billion or 87 percent of which are subject to rent regulation laws to varying degrees, with $10.2 billion having 50 percent or more rent regulated units. The New York Housing Stability and Tenant Protection Act of 2019 significantly limits the ability to increase rents on regulated apartments upon vacancy. These limitations may reduce a borrower’s ability to generate additional revenues on those units to offset higher operating expenses due to inflation and the current interest rate environment. This could result in lower net operating income and could impact a borrower’s ability to satisfy repayment obligations during the term of the loan. In addition, the level of income generated by the property may be insufficient to qualify for refinancing at maturity.
Previous report
Specialty finance loans and leases included within our C&I loan portfolio were $3.2 billion, or 5.1 percent of total loans held for investment at September 30, 2025, reflecting a decrease of $672 million or 17 percent compared to December 31, 2024. The decrease in specialty finance loans is a result of our decision to run off certain non-core loans as part of our overall loan portfolio strategy.
Previous report
Specialty finance loans and leases are generally made to large corporate obligors, many of which are publicly traded, carry investment grade or near-investment grade ratings, and participate in stable industries nationwide. These loans fall into three categories: asset-based loans, dealer floor-plan lending and equipment loan and lease financing. Each of these credits is secured with a perfected first security interest in, or outright ownership of, the underlying collateral, and structured as senior debt or as a non-cancelable lease. As of September 30, 2025, 84 percent of specialty finance loan commitments are structured as floating rate obligations.
Previous report
Substantially all LGG are insured or guaranteed by the FHA or the U.S. Department of Veterans Affairs. As of September 30, 2025 and December 31, 2024, LGG totaled $354 million and $360 million, respectively. Nonperforming repurchased loans in this portfolio earn interest at a rate based upon the 10-year U.S. Treasury note rate from the time the underlying loan becomes 60 days delinquent until the loan is conveyed to the U.S. Department of Housing and Urban Development (if foreclosure timelines are met), which is not paid by the FHA until claimed.
Previous report
During the three months ended September 30, 2025, we transferred $284 million of commercial loans (primarily multi-family loans) from Loans and leases held for investment to Loans held for sale. During October 2025, we completed a sale of $254 million in loans from one borrower with a history of delinquency at its carrying value, reducing our exposure to that borrower by 48 percent.
Previous report
Refer to Note 5 - Loans and Leases for our policy relating to classifying loans as held for sale.
Previous report
The ACL on loans and leases decreased $130 million from December 31, 2024 to September 30, 2025. This decrease is primarily due to improving credit trends as property values and borrower financials normalize, and volume declines from the on-going strategic reduction in our multi-family, CRE and non-core C&I portfolios. The reduction in our ACL balance was partially offset by declining trends in macro-economic conditions.
Previous report
Refer to Note 6 - Allowance for Credit Losses on Loans and Leases for our policy relating to the ACL.
Previous report
Assets Quality Measures
Previous report
The following table presents our asset quality measures at the respective dates:
Previous report
Refer to Note 5 - Loans and Leases for our policy relating to non-accrual loans.
Previous report
Total deposits at September 30, 2025 decreased $6.7 billion compared to December 31, 2024, primarily due to the payoff of brokered CDs reflecting our strategy to reduce higher cost funding and custodial deposits as a result of the sale of our Mortgage Operations during the three months ended December 31, 2024.
Previous report
At September 30, 2025 total borrowed funds decreased $1.2 billion compared to December 31, 2024 primarily due to the repayment of $250 million and $1.0 billion of FHLB advances upon maturity in the three months ended March 31, 2025 and June 30, 2025, respectively.
Previous report
See Note 9 - Borrowed Funds for a further discussion of our wholesale borrowings, our junior subordinated debentures and subordinated debt.
Previous report
Federal Reserve and Federal Home Loan Bank Stock
Previous report
At September 30, 2025, the total FHLB and FRB-NY stock, decreased $128 million, primarily due to a reduction in borrowings in the three months ended September 30, 2025.
Previous report
To mitigate the potential for credit losses, we underwrite our loans in accordance with credit standards that we consider to be prudent as described more fully in our Annual Report on Form 10-K for the year ended December 31, 2024.
Previous report
Refer to Note 5 - Loans and Leases for further information regarding our policies surrounding non-accrual loans.
Previous report
Parent Company Liquidity
Previous report
Prior to the completion of the Reorganization, the Parent Company was a separate legal entity from the Bank and was required to provide for its own liquidity in addition to the liquidity required to be held by the Bank. At September 30, 2025, the Parent Company held cash and cash equivalents of $476 million. Following the Reorganization, the Parent Company ceased to exist and this liquidity requirement no longer applies.
Previous report
Separately, as an insured depository institution with $50 billion or more in assets, we are subject to the FDIC resolution plan rule. This requires us to have full resolution plans discussing how we could be rapidly and orderly resolved in the event of material financial distress or failure. We developed our resolution plan in alignment with the FDIC’s requirements, and, following the Board’s approval, we submitted a full resolution plan to the FDIC prior to its due date of July 1, 2025.
Previous report
The following table presents the Company's consolidated regulatory capital position:
Previous report
The following table presents the Bank's regulatory capital position:
Previous report
Internal Control over Financial Reporting Remediation
Showing the first 40 of 41 passages. Open the source sections for the rest.
Reworded paragraphs (73)
Previous wording
Prior to the completion of the Reorganization (as defined below) on October 17, 2025, Flagstar Financial, Inc. was the parent company (on a standalone basis, the "Parent Company") of Flagstar Bank, N.A., one of the largest regional banks in the country. We are headquartered in Hicksville, New York. At September 30, 2025, we had $91.7 billion of assets, $63.2 billion of loans, $69.2 billion of deposits, and total stockholders’ equity of $8.1 billion.
Current wording
Flagstar Bank, National Association, is a national banking association headquartered in Hicksville, New York. At March 31, 2026, we had $87.1 billion of assets, $60.7 billion of loans, $66.8 billion of deposits, and total stockholders’ equity of $8.1 billion.
Previous wording
We operate approximately 340 locations across nine states, with strong footholds in the greater New York/New Jersey metropolitan region and in the upper Midwest, along with a significant presence in fast-growing markets in Florida and the West Coast.
Current wording
We operate approximately 340 locations across nine states, with strong footholds in the greater New York/New Jersey metropolitan region and in the upper Midwest, along with a significant presence in fast-growing markets in Florida and the West Coast. In addition, the Bank has approximately 20 private bank branches located primarily in the metropolitan New York City region and on the West Coast, which serve the needs of high-net worth individuals and their businesses.
Previous wording
Our plan is guided by six strategic pillars: driving transformation and financial resilience, growing our core operations, executing a disciplined commercial banking and lending strategy, enhancing operational efficiency, developing talent and leadership and aligning regulatory and risk management.
Current wording
Our plan is anchored in enterprise strategic priorities that drive our approach to transformation and growth. These priorities focus on transforming Flagstar into a top-tier, relationship-driven regional bank, creating a customer-centric culture that prioritizes valuable relationships, and building an effective risk management mindset that supports safe and sound operations. From these priorities, we have established key strategies that guide execution: driving transformation and financial resilience, growing our core operations, executing a disciplined commercial banking and lending strategy, enhancing operational efficiency, developing talent and leadership, and aligning regulatory and risk management.
Previous wording
Since initiating this plan in 2024, we have made measurable progress, including key leadership additions, reduction of non-core assets, and improved funding mix. We believe that successful execution of this plan will enhance our financial resilience, drive sustainable earnings and position us to deliver greater long-term value to shareholders.
Current wording
Since initiating this plan in 2024, we have made measurable progress, including making key leadership additions, diversifying our balance sheet and revenue streams, reducing non-core assets, improving our funding mix, enhancing our financial resilience, and improving our liquidity. We believe that the continued successful execution of this plan will drive sustainable earnings and position us to deliver long-term value to shareholders.
Previous wording
For the three months ended September 30, 2025, we reported a net loss of $36 million compared to a net loss of $70 million for the three months ended June 30, 2025. The net loss attributable to common stockholders, which includes the impact from preferred dividends, for the three months ended September 30, 2025 was $45 million, or $0.11 per diluted share compared to a net loss attributable to common stockholders of $78 million, or $0.19 per diluted share for the three months ended June 30, 2025.
Current wording
For the three months ended March 31, 2026, we reported net income of $21 million compared to net income of $29 million for the three months ended December 31, 2025 and a net loss of $100 million for the three months ended March 31, 2025. The net income attributable to common stockholders for the three months ended March 31, 2026 was $13 million, or $0.03 per diluted share compared to net income attributable to common stockholders of $21 million, or $0.05 per diluted share for the three months ended December 31, 2025 and a net loss attributable to common stockholders of $108 million, or $0.26 per diluted share for the three months ended March 31, 2025.
Previous wording
NII is our primary source of income. The amount of our NII is a function of the amount of interest-earning assets we hold, the manner in which we fund these assets, including interest-bearing liabilities, and the spread between the interest rates we earn on assets and the interest rates we pay on liabilities. These factors are influenced by both the pricing and mix of our interest-earning assets and our interest-bearing liabilities which, in turn, are impacted by various external factors, including the local economy, competition for loans and deposits, the monetary policy of the FOMC, and prevailing interest rates.
Current wording
Net interest income is a function of the amount of interest-earning assets we hold, the manner in which we fund these assets, including interest-bearing liabilities, and the spread between the interest rates we earn on assets and the interest rates we pay on liabilities. These factors are influenced by both the pricing and mix of our interest-earning assets and our interest-bearing liabilities which, in turn, are impacted by various external factors, including the local economy, competition for loans and deposits, the monetary policy of the FOMC, and market interest rates.
Previous wording
Our interest-bearing liabilities are comprised of customer deposits and funds we borrow. The average term of our fixed rate deposits is less than twelve months, therefore the cost of our deposits and most of our borrowed funds is largely based on short-term interest rates, the level of which is partially impacted by the actions of the FOMC. The yields on our held for-investment loans and investment securities are generally more sensitive to intermediate-term interest rates. However, a sizable portion of our held for investment loans have fixed rates that generally reset to the then current intermediate-term interest rates when they reach repricing dates.
Current wording
Our interest-bearing liabilities are comprised of customer deposits and funds we borrow. The cost of our deposits and most of our borrowed funds is largely based on short-term rates of interest, the level of which is partially impacted by the actions of the FOMC. The yields on our held for investment loans and investment securities are generally more sensitive to intermediate-term market interest rates. However, a significant portion of our held for investment loans have fixed rates and generally reset to intermediate-term market rates when they reach repricing dates.
Previous wording
The following table sets forth information regarding our NII and average balance sheet for the periods indicated. The average balance is derived from daily calculations of average balances.
Current wording
The following table sets forth certain information regarding our NII and average balance sheet for the periods indicated. Average yields are calculated by dividing the interest income produced by the average balance of interest-earning assets. Average costs are calculated by dividing the interest expense produced by the average balance of interest-bearing liabilities. The average balances for the periods are derived from average balances that are calculated daily.
Previous wording
(1)Comprised of Loans and leases held for investment, net and Loans held for sale.
Current wording
(1)Comprised of Loans and leases held for investment, net of deferred loan fess and costs, and Loans held for sale.
Previous wording
For the nine months ended September 30, 2025, non-interest income increased $15 million compared to the nine months ended September 30, 2024. The increase in non-interest income was primarily due to the non-recurrence of the $121 million reduction in the Signature Transaction bargain purchase gain, a $21 million gain on our investment in Figure Technology Solutions, Inc., and increased commission income. The increase was partially offset by lower MSRs fees, fee income, net gain on loan sales and securitizations and net loan administration income as a result of the sale of our Mortgage Operations during the three months ended December 31, 2024.
Current wording
For the three months ended March 31, 2026, non-interest income decreased $25 million compared to the three months ended March 31, 2025. The decrease in non-interest income was primarily due to a $9 million loss on our investment in Figure Technology Solutions, Inc, and lower gains on loan sales and securitizations resulting from the non-recurrence of gains related to the wind-down of the mortgage third party origination business during the three months ended March 31, 2025.
Previous wording
Total non-interest expenses for the nine months ended September 30, 2025 decreased $553 million compared to the nine months ended September 30, 2024, primarily due to lower compensation and benefits costs stemming from the actions taken to optimize costs which continued in the nine months ended September 30, 2025, a decrease in general and administrative expenses primarily due to the sale of our Mortgage Operations during the three months ended December 31, 2024 and our continued focus on operating expense management. Additionally, we had lower FDIC insurance costs as a result of a lower asset base and lower brokered deposits due to the sale of our Mortgage Operations, and lower merger-related expenses.
Current wording
Total non-interest expenses for the three months ended March 31, 2026 decreased $66 million compared to the three months ended March 31, 2025. The decrease was primarily due to lower FDIC insurance expense as a result of improved assessment factors and a reduced asset base, the absence of merger-related expenses, lower compensation and benefits costs stemming from the actions taken to optimize costs, and a decrease in general and administrative expenses reflecting our continued focus on operating expense management.
Previous wording
The following table summarizes our income tax benefit and effective tax rate for the respective periods:
Current wording
The following table summarizes our income tax expense (benefit) and effective tax rate for the respective periods:
Previous wording
We compute our tax benefit for interim periods by applying the estimated annual effective tax to our year-to-date (Loss) before income taxes and adjust for discrete items that occur in the quarter. For the three and nine September 30, 2025, we were unable to make a reliable estimate of our estimated annual effective tax rate as a result of our expected break-even results for 2025; therefore we used our actual effective tax rate to compute our income tax benefit for the three and nine September 30, 2025.
Current wording
We compute our tax provision (benefit) for interim periods by applying the estimated annual effective tax rate to our year-to-date income (loss) before income taxes, adjusted for discrete items recognized during the quarter. For the three months ended December 31, 2025 and March 31, 2025, we were unable to make a reliable estimate of our estimated annual effective tax rate as a result of our expected results for 2025; therefore, we used our actual effective tax rate to compute our income tax benefit for those periods. For the three months ended March 31, 2026, we resumed applying the estimated annual effective tax rate methodology.
Previous wording
Total loans and leases held for investment decreased $5.6 billion at September 30, 2025 compared to December 31, 2024, primarily as a result of our continued strategy of diversifying our loan portfolio by reducing our multi-family, CRE and non-core C&I loan exposure, partially offset by $3.7 billion in originations within our C&I portfolio.
Current wording
Total loans and leases held for investment decreased $307 million at March 31, 2026 compared to December 31, 2025, primarily as a result of our continued strategy of diversifying our loan portfolio by reducing our concentration in our multi-family portfolio while growing originations within our C&I portfolio, as well as par payoffs within our CRE portfolio.
Previous wording
(1)Excludes Specialty Finance CRE loans and multi-family loans serviced-by-others totaling $458 million and $96 million respectively. Amounts presented reflect unpaid principal balance; total amortized cost adjustments were $104 million.
Current wording
(1)Excludes Specialty Finance CRE loans and multi-family loans serviced-by-others totaling $402 million and $96 million respectively. Amounts presented reflect unpaid principal balance; total amortized cost adjustments were $116 million.
Previous wording
Option loans offer the borrower the ability to reprice to a fixed rate after the initial period. If not elected, the loan defaults to a variable rate. Option loans in the table are shown as being due in the period the interest rate is subject to change. Non-Option loans are beyond the option date and are reflected by maturity. Risks associated with loan repricing are discussed in the Credit Risk section.
Current wording
Option loans offer the borrower the ability to reprice to a fixed rate after the initial fixed rate period. If not elected, the loan defaults to a variable rate. Option loans in the table are shown as being due in the period the interest rate is subject to change. Non-Option loans are beyond the option date and are reflected by maturity. Risks associated with loan repricing are discussed in the Credit Risk section.
Previous wording
Our multi-family loan portfolio decreased $3.6 billion at September 30, 2025 compared to December 31, 2024, primarily due to $2.8 billion of par payoffs since December 31, 2024, with 51 percent of the payoffs from substandard loans, the classification of $254 million of loans related to a single borrower relationship to Loans held for sale and loan sales of $102 million. The reduction in our multi-family loan portfolio is consistent with our strategic decision to continue to diversify our loan portfolio by reducing our exposure to multi-family loans.
Current wording
Our multi-family loan portfolio decreased $1.1 billion at March 31, 2026 compared to December 31, 2025, primarily due to $849 million of par payoffs since December 31, 2025, with 40 percent of the payoffs from substandard loans. The reduction in our multi-family loan portfolio is consistent with our strategic decision to continue to diversify our loan portfolio by reducing our exposure to multi-family loans.
Previous wording
To mitigate our exposure to rent-regulated properties, we are curtailing future originations of loans secured by rent-regulated properties. We are no longer utilizing mortgage brokers to refer loan origination opportunities to us. We are focusing originations and renewal retention on borrowers with whom we will have broader customer relationships beyond lending. Additionally, we are strategically diversifying our loan portfolio to shift from multi-family loans to other loan sectors.
Current wording
To mitigate our exposure to rent-regulated properties, we are curtailing future originations of loans secured by rent-regulated properties. We are focusing originations and renewal retention on borrowers with whom we will have broader customer relationships beyond lending. Additionally, we are strategically diversifying our loan portfolio to shift from multi-family loans to other loan sectors.
Previous wording
Historically, our multi-family loans may have contained an initial interest-only period; however, they were underwritten on a fully amortizing basis, including calculation of the DSCR. Whether a borrower qualified for an interest-only period was based on the individual credit profile of the borrower, particularly the loan-to-value of the property. Our multi-family loan portfolio had $7.7 billion outstanding with interest-only payments at September 30, 2025. The weighted average interest-only period remaining was 21.8 months as of September 30, 2025, with approximately 17 percent of these loans entering their amortization period by the end of 2025 and 59 percent by the end of 2026.
Current wording
Historically, our multi-family loans may have contained an initial interest-only period; however, they were underwritten on a fully amortizing basis, including calculation of the DSCR. Whether a borrower qualified for an interest-only period was based on the individual credit profile of the borrower, particularly the loan-to-value of the property. Our multi-family loan portfolio had $5.5 billion outstanding with interest-only payments at March 31, 2026. The weighted average interest-only period remaining was 26.3 months as of March 31, 2026, with approximately 51 percent of these loans entering their amortization period by the end of 2026.
Previous wording
We continue to monitor our loans held for investment portfolio and the related ACL, particularly, given the economic pressures facing the CRE and multi-family markets. Although occupancy levels, have historically tended to be stable due to below market rents, rent-regulated loans that are repricing are incurring debt service levels, by themselves, that when combined with inflationary pressure on operating costs and limits on the ability to increase rental rates, approach or exceed some properties’ net operating income and may require the borrower to support the loan from sources unrelated to the collateral until elevated interest rates subside.
Current wording
We continue to monitor our loans held for investment portfolio and the related ACL, particularly, given the economic pressures facing the commercial real estate and multi-family markets. Although occupancy levels have historically tended to be stable due to below market rents, rent-regulated loans that are repricing are incurring debt service levels that, when combined with inflationary pressure on operating costs and limits on the ability to increase rental rates, approach or exceed some properties’ net operating income and may require the borrower to support the loan from sources unrelated to the collateral until elevated interest rates subside and/or over time as rents are able to be increased.
Previous wording
At September 30, 2025, CRE loans decreased $1.7 billion compared to December 31, 2024, primarily due to par payoffs. The reduction in our CRE portfolio is consistent with our strategic decision to continue to diversify our loan portfolio by reducing our exposure to CRE loans.
Current wording
At March 31, 2026, CRE loans decreased $481 million compared to December 31, 2025, primarily due to par payoffs.
Previous wording
Our C&I loan portfolio decreased $502 million at September 30, 2025 compared to December 31, 2024, primarily due to a $4.2 billion reduction resulting from our strategic decision to continue to diversify our loan portfolio by reducing our exposure to non-core C&I loans. This decrease was partially offset by $3.7 billion of new originations that resulted from new and increased loan commitments of $5.3 billion during the nine months ended September 30, 2025.
Current wording
Our C&I loan portfolio increased $1.4 billion at March 31, 2026 compared to December 31, 2025, primarily due to $2.0 billion of new originations driven by $2.6 billion of new and increased loan commitments during the three months ended March 31, 2026, partially offset by paydowns in the existing portfolio.
Previous wording
A broad range of C&I loans, both collateralized and unsecured, are made available to businesses for working capital (including inventory and accounts receivable), business expansion, the purchase of machinery and equipment, and other general corporate needs. In determining the term and structure of C&I loans, several factors are considered, including the purpose, the collateral, and the anticipated sources of repayment. C&I loans are often secured by business assets and personal guarantees of the borrower and include financial covenants to monitor the borrower’s financial stability. We continue to add experienced commercial, corporate and specialized industries banking professionals and credit underwriting and portfolio management personnel which will impact our noninterest expense as we continue to strategically diversify our loan portfolio to shift from multi-family loans to other portfolios, most notably C&I loans.
Current wording
We originate a broad range of C&I loans, both collateralized and unsecured, which are made available to businesses for working capital (including inventory and accounts receivable), business expansion, the purchase of machinery and equipment, and other general corporate needs. In determining the term and structure of C&I loans, many factors are considered, including the purpose, the collateral, and the anticipated sources of repayment. C&I loans are often secured by business assets of the borrower and often include financial covenants to monitor the borrower’s financial stability.
Previous wording
One-to-four family loans increased $312 million at September 30, 2025 compared to December 31, 2024, primarily driven by new originations.
Current wording
One-to-four family loans increased $10 million at March 31, 2026 compared to December 31, 2025, primarily driven by new originations.
Previous wording
One-to-four family loans include various types of conforming and non-conforming fixed and adjustable-rate loans underwritten using Fannie Mae and Freddie Mac guidelines for the purpose of purchasing or refinancing owner occupied and second home properties. The loan-to-value requirements on our residential first mortgage loans vary depending on occupancy, property type, loan amount, and FICO scores. Loans with loan-to-value ratios exceeding 80 percent are required to obtain mortgage insurance. As of September 30, 2025, excluding LGG, loans in this portfolio had an average current FICO score of 744 and an average loan-to-value ratio of 50 percent.
Current wording
One-to-four family loans include various types of conforming and non-conforming fixed and adjustable-rate loans underwritten using Fannie Mae and Freddie Mac guidelines for the purpose of purchasing or refinancing owner occupied and second home properties. The loan-to-value requirements on our residential first mortgage loans vary depending on occupancy, property type, loan amount, and FICO scores. Loans with loan-to-value ratios exceeding 80 percent are required to obtain mortgage insurance. As of March 31, 2026, excluding LGG, loans in this portfolio had an average current FICO score of 744 and an average loan-to-value ratio of 52 percent.
Previous wording
At September 30, 2025, other loans decreased $121 million compared to December 31, 2024, primarily driven by payoffs at par.
Current wording
At March 31, 2026, other loans decreased $67 million compared to December 31, 2025, primarily driven by payoffs at par.
Previous wording
Other loans primarily consist of HELOANs, second mortgage loans, and HELOCs. As of September 30, 2025, loans in this portfolio had an average current FICO score of 757.
Current wording
Other loans primarily consist of HELOANs, second mortgage loans, and HELOCs. As of March 31, 2026, loans in this portfolio had an average current FICO score of 758.
Previous wording
Loans held for sale at September 30, 2025 decreased $364 million compared to December 31, 2024, primarily due to the continued run-off of held for sale loans following the sale of our Mortgage Operations during the three months ended December 31, 2024.
Current wording
Loans held for sale at March 31, 2026 decreased $32 million compared to December 31, 2025, primarily due to the completion of loan sales during the three months ended March 31, 2026.
Previous wording
The following table sets forth the allocation of the ACL on loans and leases at each period-end:
Current wording
The following table sets forth the allocation of the ACL on loans and leases as of:
Previous wording
The following table presents our non-accrual loans held for investment by loan type:
Current wording
The following table presents our non-accrual loans held for investment by loan type as of:
Previous wording
(2)Excludes $31 million and $323 million of non-accrual held for sale loans at September 30, 2025 and December 31, 2024, respectively.
Current wording
(1)Excludes $7 million and $30 million of non-accrual held for sale loans at March 31, 2026 and December 31, 2025, respectively.
Previous wording
The following table sets forth the changes in non-accrual loans at September 30, 2025:
Current wording
The following table sets forth the changes in non-accrual loans for the three months ended March 31, 2026:
Previous wording
During the nine months ended September 30, 2025 non-accrual loans increased $626 million primarily due to the classification of $566 million in loans, primarily within our multi-family portfolio, as non-accrual during the three months ended March 31, 2025. This increase was driven by a single borrower relationship currently undergoing bankruptcy proceedings. Approximately 41 percent of our non-accrual loans are current on their contractual payment terms.
Current wording
During the three months ended March 31, 2026 non-accrual loans decreased $300 million primarily due to the resolution of a single borrower relationship undergoing bankruptcy proceedings. Approximately 33 percent of our non-accrual loans are current on their contractual payment terms.
Previous wording
The following table presents our loans held for investment 30 to 89 days past due by loan type and the changes in the respective balances. As of September 30, 2025 approximately 80 percent of our multi-family 30-89 days past due loans were attributable to a single borrower relationship that continues to make payments in arrears subsequent to September 30, 2025.
Current wording
The following table presents our loans held for investment 30 to 89 days past due by loan type and the changes in the respective balances.
Previous wording
The following table summarizes net charge-offs as an annualized percentage of average loans:
Current wording
The following table summarizes net charge-offs as a percentage of average loans:
Previous wording
(2)Three months ended presented on an annualized basis.
Current wording
(1)Three months ended presented on an annualized basis.
Previous wording
Debt securities available-for-sale increased $4.7 billion compared to December 31, 2024. The increase was primarily a result of our decision to reinvest our cash into higher earning assets. At September 30, 2025, 29 percent of our portfolio is comprised of floating rate securities.
Current wording
At March 31, 2026, debt securities available-for-sale decreased $1.2 billion compared to December 31, 2025. The decrease was primarily due to scheduled principal paydowns and maturities in the normal course of business. At March 31, 2026, 26 percent of our portfolio is comprised of floating rate securities.
Previous wording
At September 30, 2025, debt securities available-for-sale had an estimated weighted average life of 4 years compared to 6 years at December 31, 2024. Mortgage-related securities included in debt securities available-for-sale were $12.3 billion and $8.6 billion at September 30, 2025 and December 31, 2024, respectively.
Current wording
At March 31, 2026, debt securities available-for-sale had an estimated weighted average life of 4 years compared to 5 years at December 31, 2025. Mortgage-related securities included in debt securities available-for-sale were $11.8 billion and $13.0 billion at March 31, 2026 and December 31, 2025, respectively.
Previous wording
We compete for deposits and customers through multiple channels, including our retail branch network, our private banking business and mobile and internet bank applications. Our ability to retain and attract deposits depends on numerous factors, including customer satisfaction, the rates of interest we pay, the types of products we offer and the attractiveness of their terms. The majority of our deposits are retail in nature, however, we also utilize brokered deposits depending on their availability and pricing relative to other funding sources.
Current wording
We compete for deposits and customers through multiple channels, including our retail branch network, our private banking business and mobile and internet banking applications. Our ability to retain and attract deposits depends on numerous factors, including customer satisfaction, the rates of interest we pay, the types of products we offer, and the attractiveness of their terms.
Previous wording
(1) Includes brokered certificates of deposit of $4.0 billion and $9.5 billion at September 30, 2025 and December 31, 2024, respectively. Brokered certificates of deposit with balances in excess of $250,000 are fully insured by the FDIC as each of the ultimate owners of the funds maintain balances below FDIC insurance limits.
Current wording
(1) Includes brokered certificates of deposit of $2.1 billion and $2.3 billion at March 31, 2026 and December 31, 2025, respectively. Brokered certificates of deposit with balances in excess of $250,000 are fully insured by the FDIC as each of the ultimate owners of the funds maintain balances below FDIC insurance limits.
Showing the first 40 of 73 pairs. Open the source sections for the rest.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
Total non-interest expenses for the three months ended March 31, 2026 decreased $43 million compared to the three months ended December 31, 2025. The decrease was primarily due to lower compensation and benefits expense stemming from actions taken to optimize costs, and the absence of merger-related expenses.
Current report — wording carried from elsewhere
The largest substandard and non-accrual loans within our portfolio are reported and reviewed with the RAC at least quarterly.
Rearranged previous paragraphs (5)
Previous report — wording carried elsewhere
To support these pillars, we have established strategic priorities focused on transforming Flagstar into a top-tier relationship-driven regional bank, creating a customer-centric culture that prioritizes valuable relationships, and building an effective risk management mindset that supports safe and sound operations.
Previous report — wording carried elsewhere
(1)Comprised of Loans and leases held for investment, net and Loans held for sale.
Previous report — wording carried elsewhere
(2)Comprised of Debt securities available-for-sale at amortized cost, Equity investments with readily determinable fair values, at fair value and FHLB stock and FRB-NY stock, at cost.
Previous report — wording carried elsewhere
(2)Nine months ended presented on an annualized basis.
Previous report — wording carried elsewhere
At September 30, 2025, and December 31, 2024 our wholesale borrowings had $250 million of callable features.