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Mar 31
Flagstar Financial Q1 2025 Earnings Report
Flagstar Financial reported a Q1 net loss but showed improvements in cost control and commercial loan origination.
Key Takeaways
Flagstar posted a $108 million net loss attributable to common stockholders in Q1 2025, with adjusted EPS at -$0.23. Despite the loss, the company achieved significant progress in reducing operating expenses and increasing C&I loan originations, while maintaining strong capital and liquidity positions.
Net loss attributable to common stockholders was $108 million.
Adjusted operating expenses dropped 22% year-over-year.
C&I loan originations rose 42% quarter-over-quarter.
Capital and liquidity remained strong with $30 billion in total liquidity.
Flagstar Financial
Flagstar Financial
Forward Guidance
Flagstar expects to return to profitability by Q4 2025 while focusing on growth in C&I and Private Bank segments, continued cost reductions, and CRE de-risking.
Positive Outlook
- C&I loan growth of over 4% in focus areas.
- Recruitment of 15 new commercial bankers with plans to hire 80–90 more.
- Stable net interest margin despite a smaller balance sheet.
- Credit costs declined as provision and net charge-offs decreased.
- Strong liquidity position with $30 billion in total liquidity.
Challenges Ahead
- Net loss continued in Q1 despite narrowing.
- Non-accrual loans increased due to a large single credit.
- Decline in average loan balances and funding sources.
- Efficiency ratio remained above 100%, indicating weak profitability.
- Year-over-year net interest income dropped 34%.