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CLOSED · 06:40 ET
Market ClerkRecap
Sat Oct 31 · markets closed3 signals on Oct 30129 insider buys this week · $10BCIRO short report next: Nov 15The week ahead

FLG

FLAGSTAR BANK, NATIONAL ASSOCIATION
NYSE · FINANCIALS · SAVINGS INSTITUTIONS, NOT FEDERALLY CHARTERED
10.51
+0.04 +0.38%
USD · close Oct 30
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Work order
23
FLAG · shorts 23
Insiders, 90 days
0
no open-market filings in 90 days
Congress, 90 days
0 / 0
no disclosures naming it
Big money
0 / 15
none of the tracked funds disclose it
Calls on record
0
nobody we score has called it yet
MKT CAP $4.4BP/E 262.8DIV YIELD 0.38%FCF YIELD —REV TTM —NET INCOME $48MNET CASH $1.8B52W 10.14 – 15.36SEC XBRL · TTM TO Invalid Date

How FLG rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025
Text kept
45%
of sentences unchanged
Added
143
new sentences
Dropped
145
sentences removed
Length
−350
words, now 12,645

New in FY2025

  • Primary among these are (1) interest rate risk; (2) credit risk; (3) financial statement risk; (4) liquidity and dividend risk (5) legal and regulatory risk; (6) financial and market risk, as well as other matters that may dilute the value of our securities; (7) strategic risk (8) operational risk; and (9) reputational risk and its potential negative impact on, among other things, our financial condition, results of operations and/or stockholder value.
  • The failure to properly identify, monitor, and mitigate any of the below referenced risks, could result in increased regulatory risk and could potentially have an adverse impact on the Bank.
  • The monetary policies of the Federal Reserve Board may be affected by certain policy initiatives of the current administration, which has enacted tariffs on certain U.S. trading partners (and has indicated additional tariffs and retaliatory tariffs against U.S. trading partners may be announced in the future) and has implemented stricter immigration policies.
  • The extent and timing of the current administration’s policy changes and their impact on the policies of the Federal Reserve Board, as well as our business and financial results, are uncertain at this time.
  • In addition to mitigating credit risk through our underwriting processes, we attempt to recognize such risk through the establishment of an ACL.
  • During 2025, the Bank continued to take decisive actions to build capital, reinforce our balance sheet, strengthen our risk management processes, and better align the Bank with relevant bank peers.
  • Our ACL of $1.1 billion as of December 31, 2025 represents our estimate of current expected losses in our loan and lease portfolios, as well as our unfunded commitments.
  • The process of determining whether or not the allowance is sufficient to cover potential credit losses is based on the current expected credit loss model ("CECL").
  • This methodology is described in detail under Note 2 - Summary of Significant Accounting Policies in this report.
  • CECL may result in greater volatility in the level of the ACL, depending on various assumptions and factors used in this model.
  • In addition, growth in our loan portfolio may require us to increase the ACL on such loans by making additional provisions, which would reduce our net income.
  • At December 31, 2025, $29.0 billion or 47.7 percent of our total loans and leases held for investment portfolio consisted of multi-family loans and $9.3 billion or 15.3 percent consisted of CRE loans.
  • Higher interest rates or operating costs for a longer period of time that are not offset by corresponding revenue increases could put further financial pressure on borrowers which could also cause us to not recover the full contractual amount of principal and interest.
  • These factors could cause us to increase our provision for credit losses and could adversely affect our operating results and financial condition.
  • The CRE loans we make are secured by income-producing properties such as office buildings, retail centers, mixed-use buildings, and multi-tenanted light industrial properties.
  • At December 31, 2025 , $2.0 billion , or 21.0 percent of ou r CRE loan portfolio was secured by office buildings.
  • We may incur future losses on CRE loans due to declines in occupancy rates and rental rates in office buildings, which could occur as a result of reduced market demand for office space due to more people working from home or other factors.
  • In addition, the majority of our multi-family and CRE loans are non-recourse and are secured by rental apartment buildings or commercial real estate.
  • In the event of a default by a borrower on a non-recourse loan, we will have recourse only to the real estate-related assets collateralizing the loan.
  • If the underlying collateral value is below the loan amount, we will suffer a loss upon a default.
  • Multi-family real estate loans generally involve a greater risk than residential real estate loans because of legislation and government regulations involving rent control and rent stabilization, which are outside the control of the borrower or the Bank, and could impair the value of the security for the loan or the future cash flow of such properties.
  • For example, on June 14, 2019, the New York State legislature passed the New York Housing Stability and Tenant Protection Act of 2019.
  • At December 31, 2025, $15.8 billion or 55 percent of our total multi-family loan portfolio was secured by properties in New York State, $13.9 billion of which or 88 percent are subject to rent regulation laws to varying degrees, with $9.5 billion having 50 percent or more rent regulated units.
  • In addition, state and local governments in New York may continue to enact or expand, and New York City has announced it is considering, (i) other rent control regulations and (ii) other government actions, which could further limit landlords’ abilities to raise rents or other adverse impacts, resulting in a negative impact on property values for our collateral for multi-family loans.
  • As a result, the value of the collateral located in New York State securing the Bank’s multi-family loans or the future net operating income of such properties could potentially become impaired which, in turn, could have a material adverse effect on our financial condition and results of operations.
  • Economic weakness in the New York City metropolitan region, where the majority of the properties collateralizing our multi-family, and commercial real estate loans, as well as certain businesses collateralizing our other commercial and industrial loans, are located could have an adverse impact on our financial condition and results of operations.
  • Our business is significantly by general economic conditions in the New York City metropolitan region, where the majority of the buildings and properties securing the multi-family, and commercial real estate loans we originate for investment and the businesses of the customers to whom we make our other commercial and industrial loans are located.
  • Any such failure in our analytical or forecasting models could have a material adverse effect on our business, financial condition, results of operations and cash flows.
  • Impairment in the carrying value in finite-lived intangible assets could negatively impact our financial condition and results of operations.
  • At December 31, 2025, finite-lived intangible assets, primarily core deposit intangibles, totaled $381 million.
  • If we fail to maintain effective internal control over financial reporting, our ability to produce accurate and timely financial statements could be impaired and adversely affect our reputation, business, financial condition and stock price.
  • Our internal controls are subject to inherent limitations, including the possibility of human error, misconduct, inadequate processes, fraud, data breaches, and non-compliance with laws and regulations.
  • Although we have remediated the material weaknesses in internal control over financial reporting first disclosed in 2023, our prior experience underscores the risk that additional control deficiencies could arise in the future.
  • If such deficiencies arise, their remediation could require significant management attention and resources otherwise spent on business operations.
  • Further, maintaining the effectiveness of our internal control environment will continue to require comprehensive and ongoing monitoring, testing and enhancements as our business, systems and personnel evolve.
  • There can be no assurance that we will not identify new material weaknesses or significant deficiencies in the future.
  • If we identify a material weakness or a significant deficiency in internal control over financial reporting, we may be unable to remediate it timely.
  • Any such failure could result in inaccurate financial statements, restatements, delays in filing required reports with our regulators, increased audit fees, regulatory scrutiny, or loss of confidence by investors or ratings agencies.
  • These outcomes could materially and adversely affect our reputation, business, financial condition, and stock price.
  • For more information, see Item 9A of this Annual Report on Form 10-K.

and 103 more.

Gone since FY2024

  • Primary among these are (1) interest rate risk; (2) credit risk; (3) financial statement risk; (4) liquidity and dividend risk (5) legal and regulatory risk; (6) financial and market risk, as well as other matters that may dilute the value of our securities; (7) strategic risk, including our integration risks (8) operational risk; and (9) reputational risk and its potential negative impact on, among other things, our financial condition, results of operations and/or stockholder value.
  • The failure to properly identify, monitor, and mitigate any of the below referenced risks, could result in increased regulatory risk and could potentially have an adverse impact on the Company.
  • The monetary policies of the Federal Reserve Board may be affected by certain policy initiatives of the new Administration, which has announced tariffs on certain U.S. trading partners (and has indicated additional tariffs and retaliatory tariffs against U.S. trading partners may be announced in the future) and has implemented stricter immigration policies.
  • The extent and timing of the new Administration’s policy changes and their impact on the policies of the Federal Reserve Board, as well as our business and financial results, are uncertain at this time.
  • In addition to mitigating credit risk through our underwriting processes, we attempt to recognize such risk through the establishment of an allowance for credit losses.
  • During 2024, the Company continued to take decisive actions to build capital, reinforce our balance sheet, strengthen our risk management processes, and better align the Company with relevant bank peers.
  • We significantly built our reserve levels by recording a $1.1 billion provision for credit losses, bringing our allowance for credit losses to $1.2 billion at December 31, 2024, reflecting our actions to build reserves during the quarter to address weakness in the office sector, potential repricing risk in the multi-family portfolio and an increase in classified assets.
  • The process of determining whether or not the allowance is sufficient to cover potential credit losses is based on the current expected credit loss model or ("CECL").
  • This methodology is described in detail under “Critical Accounting Estimates” in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this report.
  • CECL may result in greater volatility in the level of the allowance for credit losses, depending on various assumptions and factors used in this model.
  • In addition, growth in our loan portfolio may require us to increase the allowance for credit losses on such loans by making additional provisions, which would reduce our net income.
  • At December 31, 2024, $34.1 billion or 49.9 percent of our total loans and leases, held for investment portfolio consisted of multi-family loans and $8.7 billion or 12.7 percent consisted of commercial real estate loans.
  • Higher interest rates for a longer period of time could put further financial pressure on borrowers which could also cause us to not recover the full contractual amount of principal and interest.
  • These factors could cause us to increase our provision for credit losses and adversely affect our operating results and financial condition.
  • The commercial real estate loans we make are secured by income-producing properties such as office buildings, retail centers, mixed-use buildings, and multi-tenanted light industrial properties.
  • At December 31, 2024 , $2.4 billion , or 27.7 percent of ou r commercial real estate loan portfolio was secured by office buildings.
  • We may incur future losses on commercial real estate loans due to declines in occupancy rates and rental rates in office buildings, which could occur as a result of less need for office space due to more people working from home or other factors.
  • In addition, the majority of our multi-family and commercial real estate loans are non-recourse and are secured by rental apartment buildings or commercial real estate.
  • In the event of a default by a borrower on a non-recourse loan, the Company will have recourse only to the real estate-related assets collateralizing the loan.
  • If the underlying collateral value is below the loan amount, the Company will suffer a loss upon a default.
  • On June 14, 2019, the New York State legislature passed the New York Housing Stability and Tenant Protection Act of 2019.
  • As a result, the value of the collateral located in New York State securing the Company’s multi-family loans or the future net operating income of such properties could potentially become impaired which, in turn, could have a material adverse effect on our financial condition and results of operations.
  • Economic weakness in the New York City metropolitan region, where the majority of the properties collateralizing our multi-family, commercial real estate, and acquisition, development, and construction loans, and the majority of the businesses collateralizing our other commercial and industrial loans, are located could have an adverse impact on our financial condition and results of operations.
  • Our business depends significantly on general economic conditions in the New York City metropolitan region, where the majority of the buildings and properties securing the multi-family, commercial real estate, and acquisition, development, and construction loans we originate for investment and the businesses of the customers to whom we make our other commercial and industrial loans are located.
  • Any such failure in our analytical or forecasting models could have a material adverse effect on our business, financial condition and results of operations.
  • I mpairment in the carrying value in finite lived intangible assets could negatively impact our financial condition and results of operations.
  • At December 31, 2024, finite lived intangible assets, primarily core deposit intangibles, totaled $488 million.
  • Our failure to maintain effective internal controls may impact the accuracy and timeliness of financial reporting and increase our expenses.
  • We have implemented a system of internal controls that is regularly reviewed and updated.
  • However, there is a risk that we may fail to maintain an effective system of internal controls, which could impair our ability to report financial results accurately and in a timely manner.
  • These risks include human error, misconduct, inadequate processes, fraud, data breaches, and non-compliance with laws and regulations.
  • During 2024, we identified certain material weaknesses described in Item 9A of our Annual Report on Form 10-K/A for the year ended December 31, 2023, and we may discover additional future material weaknesses or significant deficiencies.
  • Our efforts to remediate weaknesses or deficiencies in our internal controls could divert management attention and increase our expenses, in order to correct the weaknesses or deficiencies in our controls.
  • A "material weakness" is a deficiency, or a combination of deficiencies, in internal controls over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements would not be prevented or detected on a timely basis.
  • Control weaknesses or failures could result in financial losses, reputational harm, loss of investor confidence, regulatory actions, and limitations on our business activities.
  • Liquidity and Dividend Risks Failure to maintain an adequate level of liquidity could result in an inability to fulfill our financial obligations could subject us to material reputational and compliance risk and could lead to the financial failure of the Company.
  • Our primary sources of liquidity are the retail and institutional deposits we gather or acquire in connection with acquisitions, and the brokered deposits we accept; borrowed funds, primarily in the form of wholesale borrowings from the FHLB-NY and various Wall Street brokerage firms; cash flows generated through the repayment and sale of loans; and cash flows generated through the repayment and sale of securities.
  • In extreme situations, withdrawals could exceed our capacity to fund the withdrawals and lead to the financial failure of the Company.
  • As of December 31, 2024, approximately 21.2 percent of our total deposits of $75.9 billion were not FDIC-insured.
  • Downgrades of the credit ratings of the Company and the Bank, such as those announced by certain credit rating agencies in February, March and May 2024, could result in an acceleration in deposit outflows and additional collateral needs.

and 105 more.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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