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CEO COMMENTARY

Commenting on the Company's fourth quarter and full-year 2024 performance, Chairman, President, and Chief Executive Officer, Joseph M. Otting stated, "2024 was a transitional year for Flagstar.  Despite this, the Company made tremendous progress on each of its strategic priorities and set the stage from which to grow going forward.  During the year, the Company significantly bolstered its capital position through a combination of actions including a $1.05 billion capital infusion and the sale of several non-core businesses; enhanced its liquidity through deposit growth and cash proceeds from the sale of our mortgage warehouse and mortgage servicing and third-party origination businesses; completed a review of the entire commercial real estate portfolio, including the multi-family portfolio, taking significant charge-offs in an effort to reduce risk within the portfolio; assembled a strong management team, supported by a high-quality Board of Directors; improved our regulatory relationships; and continued to invest in key areas such as commercial banking and risk management.

"Our fourth quarter net loss per diluted share narrowed this quarter compared to the previous quarter and significantly exceeded expectations due largely to an improving credit quality profile.  Our non-accrual loans were relatively unchanged this quarter after increasing by over $2 billion year-to-date while net charge-offs declined compared to the third quarter, driving a 55% quarter-over-quarter decrease in the provision for credit losses.  Our full-year results were also better than expected with virtually all of our metrics in-line or better than the guidance we provided earlier in the year.

"We continued to make inroads on reducing our commercial real estate exposure and diversifying our loan portfolio.  Multi-family loans declined $3.2 billion or 9% over the course of the year, while CRE loans declined $1.8 billion or 17%.  We managed down our exposures through run-off of non-relationship CRE loans, par payoffs, and strategic loan sales.

"We had another good deposit growth quarter in both our retail channel and in the private bank, despite the fact that we lowered deposit rates throughout the quarter.  We also garnered some early successes in our commercial lending business, with $620 million in new commitments and a robust pipeline heading into the first quarter, as our recent hires are already making a positive impact.

"Perhaps our most important accomplishment this year is the improvement in our capital position, as measured by our CET1 ratio, which increased over 280 basis points during the year to 11.9%.

"All of these trends are positive and point to the significant momentum underpinning our growth initiatives, especially in our commercial banking business.  I am confident in management's ability to execute on its 2025 strategic initiatives to transform Flagstar into a top-tier regional bank with a solid balance sheet and strong earnings power.

"Finally, I would like to thank each of our teammates for their support and commitment to each other and our customers over the course of the past year."

BALANCE SHEET SUMMARY AS OF DECEMBER 31, 2024

At December 31, 2024, total assets were $100.2 billion, down $13.9 billion or 12% compared to December 31, 2023 and down $14.2 billion or also 12% versus September 30, 2024.  The year-over-year decline was driven by a decrease in total loans and leases held for investment (HFI), partially offset by an increase in cash and cash equivalents, while the linked-quarter decrease was the result of a decrease in total loans and leases HFI and a decline in cash balances.  This was part of the Company's strategy to reduce our commercial real estate exposure and strengthen our funding profile.  During the first three quarters of 2024, the Company took various actions to increase liquidity, while in the fourth quarter, we utilized a portion of our liquidity to pay off higher cost wholesale borrowings and brokered CDs.

Total loans and leases held for investment at December 31, 2024 were $68.3 billion, down $16.3 billion or 19% on a year-over-year basis and down $2.8 billion or 4% on a linked-quarter basis.  The multi-family portfolio declined $3.2 billion or 9% to $34.1 billion at December 31, 2024 compared to $37.3 billion at December 31, 2023, and it decreased $1 billion or 3% compared to September 30, 2024.  CRE loans decreased $1.8 billion or 17% compared to December 31, 2023 to $8.7 billion and they decreased $532 or 6% compared to September 30, 2024.  The decline in these two portfolios is part of the Company's overall strategy to reduce its commercial real estate exposure. Both the linked-quarter and year-to-date declines were the result of existing non-relationship borrowers, par payoffs, and through opportunistic loan sales.

Commercial and industrial loans also declined on both a linked-quarter and year-to-date basis.  At December 31, 2024, commercial and industrial loans totaled $15.4 billion, down $1.1 billion or 7% compared to the previous quarter and $9.9 billion or 39% year-to-date.  The year-to-date decline largely resulted from the sale of our mortgage warehouse business, which at closing, had approximately $6 billion in loans, along with our decision to run off certain non-core loans within our specialty finance business totaling $2.4 billion.  The linked-quarter decrease was due to additional run-off in the specialty finance portfolio and a decrease in MSR lending.

Total deposits at December 31, 2024 were $75.9 billion, a decrease of $5.7 billion or 7% on a year-to-date basis and a decrease of $7.1 billion or 9% on a linked-quarter basis.  The year-to-date and linked-quarter decrease was driven by deposit outflows during the first quarter, driven by credit rating agency downgrades and the sale of our mortgage servicing and third-party origination business during the fourth quarter.  This transaction included the transfer of mortgage escrow deposits to the buyer.  Non-interest-bearing deposits decreased $7.0 billion or 34% on a year-to-date basis and $5.1 billion or 27% on a linked-quarter basis to $13.5 billion.  Both the year-to-date and linked-quarter decline was due to a $4.5 billion decline in escrow deposits resulting from the sale of the mortgage servicing business and by the aforementioned deposit outflows during the first quarter of 2024.

Certificates of deposit increased $5.8 billion or 27% to $27.3 billion, on a year-to-date basis, but declined $1.9 billion or 7% on a linked-quarter basis.  The year-to-date increase is primarily due to our promotional CD campaign during the year, while the linked-quarter decline is due to us paying off $2.5 billion of brokered CDs, reflecting our strategy to reduce higher cost funding.  Savings accounts rose $5.5 billion or 63% to $14.3 billion year-to-date and $772 million or 6% on a linked-quarter basis.  The increase was due to growth in our promotional rate high-yield savings product.

Fourth quarter 2024 represented the third consecutive quarter of solid deposit growth in our retail channel and in the Private Bank.  Retail deposits increased $0.9 billion or 3% to $35.9 billion on a linked-quarter basis and they rose $7.3 billion or 17% on a year-to-date basis.  Deposits in the Private Bank increased $0.5 billion or 3% to $18.2 billion and $2.4 billion or 15% since March 31, 2024.

At December 31, 2024, wholesale borrowings totaled $13.4 billion, down $6.9 billion or 34% on a year-over-year basis and down $5.9 billion or 31% on a linked-quarter basis.  During the first quarter of the year, we utilized wholesale borrowings, primarily Federal Home Loan Bank advances to offset the deposit attrition resulting from the credit rating agency downgrades.  Once we rebuilt our liquidity position through asset sales and deposit growth, we paid down wholesale borrowings, including $8.6 billion in the third quarter and an additional almost $6 billion in the fourth quarter.

NET INCOME (LOSS) | NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS - AS ADJUSTED

Fourth quarter and full-year 2024 results include several notable items related to certain actions the Company took during the quarter.  These items include a net gain on the sale of our mortgage servicing and third-party origination business, which closed in October, severance costs, and long-term asset impairment charges related to various Company-owned or leased properties. As adjusted for these items and for merger-related expenses, the net loss for fourth quarter was $130 million and the net loss attributable to common stockholders was $138 million or $0.34 per diluted share. This compares to a third quarter net loss, as adjusted for merger-related expenses and for certain items related to the sale of the mortgage warehouse business, of $243 million and a net loss attributable to common stockholders of $252 million or $0.69 per diluted share. Fourth quarter 2023, net loss and net loss attributable to common stockholders, as adjusted for merger-related and restructuring expenses, bargain purchase gain, the goodwill impairment, and the FDIC special assessment was $185 million and $193 million or $0.80 per diluted share, respectively.

In addition to the aforementioned notable items impacting our fourth quarter 2024 results, full-year 2024 results also include notable items related to the sale of our mortgage warehouse business and a reduction of the bargain purchase gain related to the Signature transaction.  As adjusted for these items and for merger-related expenses, the net loss was $845 million for full-year 2024 and the net loss attributable to common stockholders was $880 million or $2.66 per diluted share.

Full-year 2023 also included several notable items, most of which were related to the Signature transaction, including the bargain purchase gain, the goodwill impairment, and the FDIC special assessment.  As adjusted for these items and for merger-related expenses, net income for the year ended 2023 was $497 million and net income attributable to common stockholders was $464 million or $1.92 per diluted share.

EARNINGS SUMMARY FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2024

Net Interest Income, Net Interest Margin, and Average Balance Sheet

Net Interest Income

Net interest income for the fourth quarter 2024 totaled $461 million, down $49 million, or 10%, compared to third quarter 2024, and down $279 million or 38%, compared to the fourth quarter 2023.  The decrease compared to third quarter 2024 was primarily driven by lower average loan balances due to the sales of our mortgage warehouse and mortgage servicing and third-party origination businesses, continued payoffs in the multi-family and commercial real estate portfolios, and lower C&I loan balances as we continue to reduce certain non-core, non-strategic relationships, along with an increase in interest-bearing deposits and lower average cash balances.  This was partially offset by a lower level of average borrowed funds, as the Company paid off a significant amount of wholesale borrowings during the fourth quarter.

The decrease relative to fourth quarter 2023 was due to several factors, including lower average loan balances, higher average interest-bearing deposits and average borrowed funds.  This was offset in part by a significant increase in average interest-earning cash balances.

For the year ended 2024, net interest income decreased $925 million or 30% to $2.2 billion compared to $3.1 billion for the year ended 2023. The year-over-year decline is due to a significant increase in average borrowed funds and higher levels of average interest-bearing deposits, along with a decline in average loan balances.  The increase in average borrowed funds was to replace deposit attrition in the first quarter of the year, resulting from credit rating agency downgrades. This was offset somewhat by a substantial increase in average interest-earning cash balances.

Net Interest Margin

The net interest margin ("NIM") for the fourth quarter 2024 was 1.73%, down 6 basis points compared to third quarter 2024 and down 109 basis points compared to fourth quarter 2023.  On a linked-quarter basis, the cost of average total interest-bearing liabilities declined 35 basis points to 4.27% driven by a 72 basis point decline in the cost of average borrowed funds to 4.56%, along with a $6.5 billion or 25% decline in average borrowed funds to $17.9 billion, and an 18 basis point decrease to 4.19% in the cost of average interest-bearing deposits, while average interest-bearing deposit balances increased $1.9 billion or 3.24% to $65.6 billion.

The decline in the cost of funding reflects a decline in market rates as the Federal Reserve Board reduced the Federal Funds rate by 100 basis points during the fourth quarter, which resulted in the Company reducing deposit rates as well as the repayment of approximately $6 billion of wholesale borrowings.  This was partially offset by a 31 basis point decline in the yield on average interest-earning assets to 5.11%.  This was the result of a 61 basis point decline in the yield on average cash balances to 4.79%, driven by the reduction in the Federal Funds rate during the quarter as well as a 25 basis point decrease in the yield on average loans to 5.28%.

On a year-over-year basis, the cost of average interest-bearing liabilities rose 54 basis points driven by a 57 basis point increase in the cost of average interest-bearing deposits to 4.19% along with a $6.1 billion or 10% increase in average interest-bearing deposit balances. The majority of the increase in both the cost of deposits and in average interest-bearing deposit balances was due to our promotional deposit campaign throughout most of the year, which centered on a high-yield savings product and promotional rate certificates of deposits, both of which we have been managing lower during the fourth quarter.

Also, the cost of average borrowed funds increased 42 basis points to 4.56% while the average balance of borrowed funds increased $2.2 billion or 14% to $17.9 billion.  Additionally, on a year-over-year basis, the yield on average interest-earning assets declined 44 basis points to 5.11%, driven by a 44 basis point reduction in the yield on average loans to 5.28%, along with a $13.9 billion or 16% decrease in average loan balances and a 49 basis point decline in the yield on average cash balances to 4.79%, offset by a $15.3 billion or 226% increase in average cash balances.

For the year ended 2024, the NIM was 1.95%, down 104 basis points compared to the year ended 2023.  The year-over-year decrease was largely the result of a higher cost of funds, as the Company made use of borrowed funds during the early part of the year to offset deposit attrition and bolster liquidity, as well as the launch of a promotional rate deposit campaign during the second quarter, coupled with an increase in average interest-bearing liabilities.  The average cost of funds rose 115 basis points to 4.40%, driven by a 141 basis point increase in the average cost of borrowings to 5.07% and a 103 basis point increase in the average cost of deposits to 4.15%.  Average interest-bearing liabilities increased $12 billion or 16% on a year-over-year basis to $86.3 billion, due to a $6.2 billion or 31% increase in average borrowed funds to $24.2 billion and a $5.8 billion or 11% increase in average interest-bearing deposits to $62.1 billion.

While the average cost of funds increased significantly, the yield on average interest-earnings assets rose only 5 basis points to 5.38%, driven by a higher yield on the investment securities portfolio and on cash balances, while the yield on the loan portfolio remained relatively unchanged.  The yield on average investment securities increased 39 basis points to 4.57% on a year-over-year basis, while the yield on average cash balances increased 12 basis points to 5.26%.  Average interest-earning assets increased $7.7 billion or 8% to $110.6 billion as average cash balances increased $9.5 billion or 84% to $19.5 billion and average securities increased $1.6 billion or 16% to $12.2 billion. Average loan balances declined $3.0 billion or 4% to $78.9 billion.

Average Balance Sheet

Provision for Credit Losses

For fourth quarter 2024, the provision for credit losses decreased $134 million or 55% to $108 million compared to third quarter 2024 and it declined $444 million or 80% compared to fourth quarter 2023. Both the linked-quarter and year-over-year decline in the provision for credit losses was due to lower net charge-offs and a decline in loans held-for-investment.

Net charge-offs for the fourth quarter 2024 totaled $222 million, down $18 million or 8% compared to third quarter 2024, but were up $37 million or 20% compared to fourth quarter 2023. Net charge-offs on a non-annualized basis represented 0.31% of average loans outstanding, unchanged from third quarter 2024 and compared to 0.22% during fourth quarter 2023.

For the year ended 2024, the provision for credit losses totaled $1,055 million compared to $833 million for the year ended 2023, up $222 million or 27%.  The year-over-year increase was mainly the result of a significant increase in net charge-offs and increases in our allowance for credit losses, primarily related to our multi-family and CRE portfolios.

For the year ended 2024, net charge-offs totaled $892 million compared to $208 million for the year ended 2023.  Net charge-offs for the year ended 2024 represented 1.13% of average loans outstanding compared to 0.25% of average loans outstanding for the year ended 2023.  The increase was the result of credit trends which first emerged in late 2023 resulting from higher interest rates and the impact of inflation on borrowers' expenses.

Pre-Provision Net Revenue

The tables below detail the Company's PPNR and related measures, which are non-GAAP measures, for the periods noted:

For the fourth quarter 2024, pre-provision net loss totaled $93 million unchanged compared to third quarter 2024 and compared to a pre-provision net loss of $2,265 million for fourth quarter 2023.  Fourth quarter 2024 pre-provision net loss included several notable items related to certain actions the Company took during the quarter.  These items include a net gain on the sale of our mortgage operations, severance costs, and long-term asset impairment charges.  As adjusted for these items and for merger-related expenses, pre-provision net loss for fourth quarter 2024 was $53 million compared to $43 million for third quarter 2024 and pre-provision net revenue of $284 million for fourth quarter 2023.

For the year ended 2024, pre-provision net loss was $286 million compared to pre-provision net revenue of $783 million for the year ended 2023.  Full-year 2024 pre-provision net loss included certain notable items related to the sale of our mortgage warehouse business, the sale of our mortgage servicing and third-party origination business, a partial reversal of the bargain purchase gain related to the Signature transaction, severance costs, and long-term asset impairment charges.  As adjusted for these items and for merger-related expenses, pre-provision net revenue for the year ended 2024 was $1 million.

Pre-provision net revenue for the year ended 2023 also included certain notable items, most of which were related to the Signature transaction, including a bargain purchase gain, goodwill impairment, and a FDIC special assessment.  As adjusted for these items and for merger-related expenses, pre-provision net revenue for the year ended 2023 was $1,457 million.

Non-Interest Income

In fourth quarter 2024, non-interest income totaled $164 million compared to $113 million in third quarter 2024 and $127 million in fourth quarter 2023.  Included in fourth quarter 2024 non-interest income is an $89 million net gain on the sale of our mortgage servicing and third-party origination business, while third quarter 2024 non-interest income included approximately $23 million in fees and costs associated with the sale of the mortgage warehouse business.  As adjusted, for these items and for the bargain purchase gain in fourth quarter 2023, fourth quarter 2024 non-interest income was $72 million compared to $113 million in third quarter 2024 and $138 million in fourth quarter 2023.

The linked-quarter decrease was the result of lower fee income, a lower net return on mortgage servicing rights due to the sale of the servicing business during the fourth quarter, partially offset by a lower net loan administration loss.  The year-over-year decline was due to lower fee income, a lower net return on mortgage servicing rights, a decline in the net gain on loan sale and securitizations, and a net loan administration loss of $1 million compared to $17 million of income in fourth quarter 2023.  This was partially offset by a $7 million or 32% increase in other income.

For the year ended 2024, non-interest income totaled $400 million compared to $2,687 million for the year ended 2023.  Included in full-year 2024 non-interest income was a partial reversal of the bargain purchase gain of $121 million related to the Signature transaction, an $89 million net gain on the sale of our mortgage origination business, and approximately $23 million in fees and costs associated with the sale of the mortgage warehouse business.  Full-year 2023 non-interest income included a bargain purchase gain related to the Signature transaction of $2,131 million.  As adjusted for these items, full-year 2024 non-interest income was $429 million compared to $556 million for full-year 2023, a $127 million or 23% decline.

The year-over-year decline was primarily driven by a decline in net loan administration income, which dropped $80 million or 98% to $2 million due to our sale of the mortgage servicing business and the expiration of our loan subservicing agreement with the FDIC related to the Signature transaction; a $41 million or 46% decline in the net gain on loan sales and securitizations to $48 million; a $30 million or 29% decrease in the net return on mortgage service rights to $73 million; and a $22 million or 13% reduction in fee income to $150 million.  This was partially offset by a $50 million or 75% increase in other income to $117 million.

Non-Interest Expense

For fourth quarter 2024, non-interest expense was $718 million, relatively unchanged compared to $716 million in third quarter 2024 and down $2,414 million or 77% compared to fourth quarter 2023. Included in fourth quarter 2024 non-interest expenses were notable items related to certain actions the Company took during the quarter, including severance costs of $31 million and long-term asset impairment charges of $77 million. Notable items in fourth quarter 2023 included goodwill impairment of $2,426 million and a $49 million FDIC special assessment.

As adjusted for these items and excluding intangible asset amortization and merger and restructuring expenses, fourth quarter non-interest expenses were $556 million down $96 million or 15% compared to third quarter 2024 and down $51 million or 8% compared to fourth quarter 2023.  The linked-quarter decrease was driven by declines in FDIC insurance expense, occupancy and equipment expense, and compensation and benefits expense.

For the year ended 2024, total non-interest expense was $2,838 million, down $2,143 million or 43% compared to the year ended 2023.  Included in the full-year 2024 total of non-interest expenses were certain notable items related to actions the Company took during the fourth quarter, including severance costs of $31 million and asset impairment charges of $77 million.  Notable items in full-year 2023 non-interest expenses included goodwill impairment of $2.4 billion and a $49 million FDIC special assessment.

As adjusted for these items and excluding intangible asset amortization and merger and restructuring expenses, full-year 2024 non-interest expenses were $2,467 million compared to $2,099 million for full-year 2023, up $368 million or 18%.  The majority of the increase was the result of a $187 million or 148% increase in our FDIC insurance costs; a $185 million or 30% increase in general and administrative expenses; along with a $114 million or 10% increase in compensation and benefits expense.

Income Taxes

For the fourth quarter 2024, the Company reported a benefit for income taxes of $41 million compared to a benefit for income taxes of $55 million for the third quarter 2024 and a benefit of $112 million for the three months ended December 31, 2023.  The effective tax rate for the fourth quarter 2024 was 20.44% compared to 16.34% for the third quarter 2024, and 3.96% for the three months ended December 31, 2023.

For the year ended 2024, the Company reported an income tax benefit of $251 million compared to a provision for income taxes of $29 million for the year ended 2023.  The effective tax rate for the year ended 2024 was 18.70% compared to 59.59% for the year ended 2023.

ASSET QUALITY

Non-Performing Assets

At December 31, 2024, total non-accrual loans were $2,615 million, up $101 million or 4% compared to September 30, 2024 and up $2,187 million compared to $428 million at December 31, 2023.  The linked-quarter increase was due to an increase in non-accrual multi-family loans, offset by declines in non-accrual commercial real estate and C&I loans.  The year-over-year increase was the result of higher non-accrual commercial real estate and multi-family loans.  Non-accrual loans to total loans held for investment was 3.83% compared to 3.54% at September 30, 2024 and 0.51% at December 31, 2023.  Total non-performing assets were $2,629 million at December 31, 2024 or 2.62% of total assets compared to $2,529 million or 2.21% of total assets at September 30, 2024 and $442 million or 0.39% at December 31, 2023.

Non-accrual loans held for sale totaled $323 million at December 31, 2024 compared to $189 million at September 30, 2024 and $164 million at December 31, 2023.  During fourth quarter 2024, the Company transferred $266 million of non-accrual commercial real estate loans to held for sale from held for investment, including $215 million of primarily office loans, and $51 million of multi-family loans.

Total Allowance for Credit Losses

The total allowance for credit losses was $1,214 million at December 31, 2024 compared to $1,328 million at September 30, 2024 and $667 million at December 31, 2023.  The total allowance for credit losses on loans and leases at December 31, 2024 was $1,171 million compared to $1,264 million at September 30, 2024 and $992 million at December 31, 2023.

The total allowance for credit losses to total loans at December 31, 2024 was 1.78% compared to 1.87% at September 30, 2024 and 1.23% at December 31, 2023.  The total allowance for credit losses on loans and leases to total loans held for investment was 1.72% at December 31, 2024 compared to 1.78% at September 30, 2024 and 1.17% at December 31, 2023.

CAPITAL POSITION

The Company's regulatory capital ratios continue to exceed regulatory minimums to be classified as "Well Capitalized," the highest regulatory classification. The table below depicts the Company's and the Bank's regulatory capital ratios at those respective periods.

Flagstar Financial, Inc.

Flagstar Financial, Inc. is the parent company of Flagstar Bank, N.A., one of the largest regional banks in the country. The Company is headquartered in Hicksville, New York. At December 31, 2024, the Company had $100.2 billion of assets, $69.2 billion of loans, deposits of $75.9 billion, and total stockholders' equity of $8.2 billion.

Flagstar Bank, N.A. operates 418 branches, including a significant presence in the Northeast and Midwest and locations in high growth markets in the Southeast and West Coast. In addition, the Bank has approximately 80 private banking teams located in over 10 cities in the metropolitan New York City region and on the West Coast, which serve the needs of high-net worth individuals and their businesses.

Post-Earnings Release Conference Call

The Company will host a conference call on January 30, 2025 at 8:00 a.m. (Eastern Time) to discuss its fourth quarter 2024 performance. The conference call may be accessed by dialing (888) 596-4144 (for domestic calls) or (646) 968-2525 (for international calls) and providing the following conference ID: 5857240.  The live webcast will be available at ir.flagstar.com under Events.

A replay will be available approximately three hours following completion of the call through 11:59 p.m. on February 3, 2025 and may be accessed by calling (800) 770-2030 (domestic) or (609) 800-9909 (international) and providing the following conference ID: 5857240. In addition, the conference call webcast at ir.flagstar.com will be archived through 5:00 p.m. on February 27, 2025.

Investor Contact:  Salvatore J. DiMartino  (516) 683-4286
Media Contact:  Steven Bodakowski  (248) 312-5872

Cautionary Statements Regarding Forward-Looking Statements

This earnings release and the associated conference call may include forward‐looking statements by the Company and our authorized officers pertaining to such matters as our goals, beliefs, intentions, and expectations regarding (a) revenues, earnings, loan production, asset quality, liquidity position, capital levels, risk analysis, divestitures, acquisitions, and other material transactions, among other matters; (b) the future costs and benefits of the actions we may take; (c) our assessments of credit risk and probable losses on loans and associated allowances and reserves; (d) our assessments of interest rate and other market risks; (e) our ability to execute on our strategic plan, including the sufficiency of our internal resources, procedures and systems; (f) our ability to attract, incentivize, and retain key personnel and the roles of key personnel; (g) our ability to achieve our financial and other strategic goals, including those related to our merger with Flagstar Bancorp, Inc., which was completed on December 1, 2022, our acquisition of substantial portions of the former Signature Bank through an FDIC-assisted transaction, and our ability to fully and timely implement the risk management programs institutions greater than $100 billion in assets must maintain; (h) the effect on our capital ratios of the approval of certain proposals approved by our shareholders during our 2024 annual meeting of shareholders; (i) the conversion or exchange of shares of the Company's preferred stock; (j) the payment of dividends on shares of the Company's capital stock, including adjustments to the amount of dividends payable on shares of the Company's preferred stock; (k) the availability of equity and dilution of existing equity holders associated with amendments to the 2020 Omnibus Incentive Plan; (l) the effects of the reverse stock split; and (m) transactions relating to the sale of our mortgage business and mortgage warehouse business.

Forward‐looking statements are typically identified by such words as "believe," "expect," "anticipate," "intend," "outlook," "estimate," "forecast," "project," "should," "confident," and other similar words and expressions, and are subject to numerous assumptions, risks, and uncertainties, which change over time. Additionally, forward‐looking statements speak only as of the date they are made; the Company does not assume any duty, and does not undertake, to update our forward‐looking statements. Furthermore, because forward‐looking statements are subject to assumptions and uncertainties, actual results or future events could differ, possibly materially, from those anticipated in our statements, and our future performance could differ materially from our historical results.

Our forward‐looking statements are subject to, among others, the following principal risks and uncertainties: general economic conditions and trends, either nationally or locally; conditions in the securities, credit and financial markets; changes in interest rates; changes in deposit flows, and in the demand for deposit, loan, and investment products and other financial services; changes in real estate values; changes in the quality or composition of our loan or investment portfolios, including associated allowances and reserves; changes in future allowance for credit losses, including changes required under relevant accounting and regulatory requirements; the ability to pay future dividends; changes in our capital management and balance sheet strategies and our ability to successfully implement such strategies; recent turnover in our Board of Directors and our executive management team; changes in our strategic plan, including changes in our internal resources, procedures and systems, and our ability to successfully implement such plan; changes in competitive pressures among financial institutions or from non‐financial institutions; changes in legislation, regulations, and policies; the imposition of restrictions on our operations by bank regulators; the outcome of pending or threatened litigation, or of investigations or any other matters before regulatory agencies, whether currently existing or commencing in the future; the success of our blockchain and fintech activities, investments and strategic partnerships; the restructuring of our mortgage business; our ability to recognize anticipated expense reductions and enhanced efficiencies with respect to our recently announced strategic workforce reduction; the impact of failures or disruptions in or breaches of the Company's operational or security systems, data or infrastructure, or those of third parties, including as a result of cyberattacks or campaigns; the impact of natural disasters, extreme weather events, military conflict (including the Russia/Ukraine conflict, the conflict in Israel and surrounding areas, the possible expansion of such conflicts and potential geopolitical consequences), terrorism or other geopolitical events; and a variety of other matters which, by their nature, are subject to significant uncertainties and/or are beyond our control. Our forward-looking statements are also subject to the following principal risks and uncertainties with respect to our merger with Flagstar Bancorp, which was completed on December 1, 2022, and our acquisition of substantial portions of the former Signature Bank through an FDIC-assisted transaction: the possibility that the anticipated benefits of the transactions will not be realized when expected or at all; the possibility of increased legal and compliance costs, including with respect to any litigation or regulatory actions related to the business practices of acquired companies or the combined business; diversion of management's attention from ongoing business operations and opportunities; the possibility that the Company may be unable to achieve expected synergies and operating efficiencies in or as a result of the transactions within the expected timeframes or at all; and revenues following the transactions may be lower than expected. Additionally, there can be no assurance that the Community Benefits Agreement entered into with NCRC, which was contingent upon the closing of the Company's merger with Flagstar Bancorp, Inc., will achieve the results or outcome originally expected or anticipated by us as a result of changes to our business strategy, performance of the U.S. economy, or changes to the laws and regulations affecting us, our customers, communities we serve, and the U.S. economy (including, but not limited to, tax laws and regulations).

More information regarding some of these factors is provided in the Risk Factors section of our Annual Report on Form 10‐K/A for the year ended December 31, 2023, Quarterly Report on Forms 10-Q for the quarters ended March 31, 2024, June 30, 2024, and September 30, 2024, and in other SEC reports we file. Our forward‐looking statements may also be subject to other risks and uncertainties, including those we may discuss in this news release, on our conference call, during investor presentations, or in our SEC filings, which are accessible on our website and at the SEC's website, www.sec.gov.

- Financial Statements and Highlights Follow -