Flagstar Bank (FLG) investor relations material

Executive summary

• Achieved third consecutive quarter of profitability, with net income attributable to common stockholders of $26 million ($0.06 per diluted share), up from $13 million ($0.03 per share) in Q1 2026 and a net loss of $78 million in Q2 2025.

• Announced a $250 million share repurchase program, reflecting strong capital position and confidence in long-term outlook.

• Record C&I loan production, with C&I loans increasing $2.0 billion (12%) quarter-over-quarter to $18.6 billion, driven by Specialized Industries and Corporate/Regional Commercial Banking.

• Continued strategic reduction in CRE and multifamily exposure, with CRE concentration ratio improving to 350% from 367% last quarter.

• Disciplined cost controls and operational efficiency, with operating expenses down 3% quarter-over-quarter and 10% year-over-year.

Financial highlights

• Net interest income for Q2 2026 was $440 million, down 1% sequentially but up 5% year-over-year; net interest margin was 2.13%, down 2 bps sequentially but up 32 bps year-over-year.

• Pre-provision net revenue increased 51% sequentially; adjusted PPNR was $62 million, up 51% sequentially and $53 million year-over-year.

• Net income attributable to common stockholders was $0.06 per diluted share (GAAP) and $0.05 (adjusted).

• Total deposits grew $689 million (1%) quarter-over-quarter, with core deposits up $644 million and C&I/Private Bank deposits up $905 million (4%).

• Net charge-offs were $100 million (0.66% of average loans), up from $78 million in Q1 2026 but down from $117 million in Q2 2025.

Outlook and guidance

• Adjusted EPS guidance for 2026: $0.40–$0.50; for 2027: $1.60–$1.70.

• Net interest margin expected to expand to 2.20–2.30% in 2026 and 2.70–2.80% in 2027.

• Balance sheet projected to reach $91.5–$92 billion by end of 2026 and $100 billion by end of 2027.

• Management expects continued focus on balance sheet diversification, cost discipline, and capital deployment for organic growth and shareholder returns.

• Efficiency ratio targeted at 73–78% for 2026, improving to 50–55% in 2027.