Flagstar Bank (FLG) investor relations material

Strategic transformation and growth

• Management prioritized diversifying the balance sheet, targeting a mix of commercial real estate, consumer cash flows, and C&I lending since 2024.

• Over 400 banking professionals were hired to drive commercial banking expansion, focusing on customer-centricity and relationship management.

• Geographic and industry vertical expansion led to strong growth in oil & gas, healthcare, entertainment, sports, and renewable energy sectors.

• CRE exposure was rapidly reduced from over 70% to 48% of the loan book, with a goal to reach target diversification by early 2028.

• Selective re-entry into CRE lending is underway, with new originations in key markets and a focus on full client relationships.

Financial performance and outlook

• $4.4 billion in new commercial and private bank loans and $2.4 billion in deposits were added in the last six months.

• C&I loan growth is expected to continue at $2+ billion per quarter, funded by CRE runoff and incremental deposit growth.

• NIM expansion drivers include $9 billion of low-coupon multifamily loans resetting in 2027, C&I growth, and reduction of $2.8 billion in non-accrual loans.

• Deposit pricing remains competitive, but efforts are focused on growing balances while keeping costs stable and reducing reliance on FHLB advances.

• A $250 million share repurchase was announced, reflecting confidence in core earnings growth and capital strength.

Technology and operational efficiency

• Consolidation from six to two technology centers and a move to a single core platform are underway, improving efficiency and reducing costs.

• Savings from operational changes are reinvested in technology, including proprietary AI tools like StarIQ to enhance employee productivity.

• Ongoing technology modernization aims to further streamline operations and support growth.