Flagstar Financial (FLG) Q4 2025 earnings summary

Executive summary

• Returned to profitability in Q4 2025 with adjusted net income of $30 million ($0.06 per diluted share), reversing prior losses and reflecting improved credit quality and positive operating leverage.

• Achieved significant momentum in 2025 through net interest income growth, NIM expansion, disciplined expense management, and strategic transformation focused on C&I and private bank growth.

• Reduced CRE and multi-family exposure, with improved credit quality and lower non-accrual loans and charge-offs.

• Built a strong capital position, with CET1 ratio up to 12.83%, among the highest in peer group.

• Full-year 2025 net loss attributable to common stockholders was $210 million, a significant improvement from $1,153 million loss in 2024.

Financial highlights

• Q4 2025 net interest income was $467 million, up 10% sequentially; NIM expanded 23–41 bps quarter-over-quarter and year-over-year.

• Adjusted pre-provision, pre-tax net revenue improved $45–$60 million quarter-over-quarter.

• Core operating expenses declined by $683–$700 million year-over-year.

• Paid down $1.7 billion in brokered deposits and $1 billion in FHLB advances in Q4; brokered deposits reduced by $7.8 billion (76.5–77%) year-over-year.

• Net income attributable to common stockholders was $0.05 per diluted share; adjusted net income was $0.06 per share.

Outlook and guidance

• 2026 net interest income guidance: $2.15–$2.2 billion; net income: $300–$350 million; adjusted diluted EPS: $0.65–$0.70; 2027 EPS: $1.90–$2.00.

• Net interest margin expected to expand to 2.40–2.60% in 2026, with further improvement in 2027.

• Efficiency ratio targeted at 65–70% for 2026, improving to below 50% in 2027.

• Expects continued NIM improvement, positive operating leverage, and further reduction in CRE exposure.

• Strategic focus remains on C&I loan growth, expense management, and balance sheet optimization.