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SEC filingFlagstar Financial, Inc. reported a net loss of $177 million for fiscal year 2025, a significant improvement from a net loss of $1.118 billion in 2024. The company generated total interest income of $4.47 billion, down from $5.95 billion in the prior year, while total interest expense decreased to $2.75 billion from $3.80 billion. Net interest income was $1.72 billion, down from $2.15 billion in 2024. Non-interest income totaled $341 million, compared to $400 million in the prior year. The company reported a loss before income taxes of $198 million, improved from a loss of $1.38 billion in 2024. Key challenges included a $184 million provision for credit losses and total non-interest expense of $2.08 billion. The company ended the year with $87.5 billion in assets, $66.0 billion in deposits, and total stockholders' equity of $8.14 billion.
Flagstar Financial, Inc. reported a net loss of $177 million for fiscal year 2025, representing significant improvement from the $1.118 billion net loss in 2024. Total revenue (interest income plus non-interest income) was $4.81 billion, down from $6.35 billion in the prior year. The company's net interest income declined to $1.72 billion from $2.15 billion in 2024, primarily due to lower interest income from loans and leases ($3.31 billion vs $4.37 billion) and securities and money market investments ($1.16 billion vs $1.58 billion). Total interest expense decreased to $2.75 billion from $3.80 billion, reflecting lower rates on deposits and borrowed funds. Non-interest income was $341 million, down from $400 million in 2024, with fee income declining to $89 million from $150 million.
The company's revenue is primarily derived from interest income on loans and leases ($3.31 billion) and securities and money market investments ($1.16 billion). Non-interest income sources include fee income ($89 million), bank-owned life insurance ($49 million), net gain on investment securities ($31 million), net gain on loan sales and securitizations ($32 million), and other income ($134 million). The decline in total revenue was driven by lower interest income across all categories, partially offset by reduced interest expense. The company's loan portfolio composition shows multi-family loans representing $28.98 billion (47.7% of total loans), commercial real estate loans at $9.31 billion (15.3%), commercial and industrial loans at $15.22 billion (25.1%), and one-to-four family first mortgages at $5.63 billion (9.3%).
The company reported a loss before income taxes of $198 million, improved from a loss of $1.38 billion in 2024. The provision for credit losses was $184 million, significantly lower than the $1.09 billion provision in the prior year. Total non-interest expense was $2.08 billion, including compensation and benefits ($976 million), occupancy and equipment ($202 million), software expense ($173 million), FDIC insurance ($169 million), professional services ($86 million), general and administrative ($307 million), intangible asset amortization ($107 million), and merger-related and restructuring expenses ($56 million). The company's allowance for credit losses on loans and leases was $1.03 billion as of December 31, 2025, covering 1.70% of total loans and leases held for investment.
Net cash used in operating activities was $181 million, compared to net cash provided by operating activities of $86 million in 2024. Net cash provided by investing activities was $2.69 billion, primarily from proceeds from repayment of securities available-for-sale ($2.52 billion) and other changes in loans, net ($7.64 billion). Net cash used in financing activities was $12.09 billion, driven by a net decrease in deposits ($9.87 billion) and repayments of long-term debt issuances/advances ($6.50 billion). The company ended the year with total assets of $87.51 billion, down from $100.16 billion in 2024. Total deposits were $66.00 billion, with interest-bearing checking and money market accounts ($18.23 billion), savings accounts ($14.86 billion), certificates of deposit ($20.84 billion), and non-interest-bearing accounts ($12.06 billion). Total stockholders' equity was $8.14 billion.
The company faces several risk factors including interest rate risk, credit risk (particularly in its multi-family and commercial real estate loan portfolios), and regulatory risks. The New York Housing Stability and Tenant Protection Act of 2019 could adversely impact the company's New York State multi-family loan portfolio, which represents $15.8 billion or 55% of its total multi-family loan portfolio. The company's capital ratios remain strong, with common equity tier 1 capital ratio of 12.83%, tier 1 capital ratio of 13.66%, total risk-based capital ratio of 16.23%, and leverage capital ratio of 9.22%, all well above regulatory minimums. The company continues to focus on risk management and capital preservation in the current economic environment.