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Flagstar Financial (FLG)
NYSE:FLG
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Flagstar Financial (FLG) AI Stock Analysis

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FLG

Flagstar Financial

(NYSE:FLG)

Rating:51Neutral
Price Target:
$11.50
â–Ľ(-4.56%Downside)
Flagstar Financial's overall stock score reflects significant financial difficulties and operational losses, balanced by some positive strategic initiatives and moderate technical indicators. The bank's valuation is hindered by negative earnings, and while there are promising signs in loan growth and cost management, risks remain prevalent, impacting the overall stability and attractiveness of the stock.
Positive Factors
Financial Performance
FLG's balance sheet is significantly stronger, which positions it well to handle potential increases in reserves.
Operational Outlook
Given the deeply discounted valuation and improving operational outlook, the shares have a meaningfully positive risk/reward skew at current levels.
Valuation
The current price presents an attractive opportunity.
Negative Factors
Election Risks
There is expected headline risk for the stock in the weeks leading up to the New York City's general mayoral election.
Regulatory Risks
Mamdani's campaign promise to freeze rents is a key reason for the selloff.
Reserves Impact
Increases in reserves negatively impact EPS and CET1 ratio.

Flagstar Financial (FLG) vs. SPDR S&P 500 ETF (SPY)

Flagstar Financial Business Overview & Revenue Model

Company DescriptionFlagstar Financial, Inc. operates as the bank holding company for Flagstar Bank, N.A. that provides banking products and services in the United States. The company's deposit products include interest-bearing checking and money market, savings, non-interest-bearing, and retirement accounts, as well as certificates of deposit. Its loan products comprise multi-family loans; commercial real estate loans; acquisition, development, and construction loans; commercial and industrial loans; one-to-four family loans; specialty finance loans and leases; warehouse loans; and other loans, such as home equity lines of credit, boat and recreational vehicle indirect lending, point of sale consumer loans, and other consumer loans, including overdraft loans. The company offers cash management products; non-deposit investment and insurance products; and online banking, mobile banking, and bank-by-phone services. It primarily serves individuals, small and mid-size businesses, and professional associations. The company was formerly known as New York Community Bancorp, Inc. and changed its name to Flagstar Financial, Inc. in October 2024. Flagstar Financial, Inc. was founded in 1859 and is headquartered in Hicksville, New York.
How the Company Makes MoneyFlagstar Financial makes money through a diverse revenue model that includes interest income from loans and mortgages, fee-based income from banking services, and commissions from wealth management and advisory services. A significant portion of its earnings is derived from the interest rate spread between the interest it pays on deposits and the interest it earns on loans. Additionally, the company benefits from strategic partnerships with financial institutions and real estate companies, enhancing its capabilities to offer comprehensive financial solutions. Revenue is further supplemented by service fees associated with account management, transaction processing, and investment advisory services.

Flagstar Financial Earnings Call Summary

Earnings Call Date:Jul 25, 2025
(Q1-2025)
|
% Change Since: 7.02%|
Next Earnings Date:Oct 22, 2025
Earnings Call Sentiment Neutral
Flagstar Financial reported significant progress in reducing costs and expanding its C&I loan portfolio, with improved financial metrics and strengthened capital and liquidity. However, the bank continues to face challenges with ongoing net losses, the addition of significant non-accrual loans, and high costs associated with broker deposits.
Q1-2025 Updates
Positive Updates
Improved Financial Performance
Flagstar Financial reported an adjusted net loss of $0.23 per diluted share, beating consensus estimates of $0.27, and improving from a $0.40 loss in the fourth quarter.
C&I Loan Growth
Commercial and Industrial (C&I) loan commitments exceeded $1 billion in the quarter with $769 million in originations, up over 40% from the previous quarter. The C&I pipeline stands at $870 million, more than double the figure from the fourth quarter.
Significant Cost Reductions
Noninterest expenses excluding one-time charges declined by $71 million quarter over quarter, with a target to reduce expenses by over $600 million year over year.
Strengthened Capital and Liquidity
The CET1 capital ratio remains strong at around 12%, and liquidity improved with a reduction in brokered deposits and FHLB advances.
CRE Portfolio Management
Net charge-offs and loan loss provisions decreased by almost 50% quarter over quarter, and the CRE portfolio has been actively managed to reduce concentration.
Negative Updates
Continued Net Loss
The first quarter still resulted in a net loss available to common shareholders of $0.26 per diluted share on a GAAP basis, indicating ongoing financial challenges.
Significant Non-Accrual Addition
A significant borrower moved to non-accrual status during the quarter, impacting earnings by approximately $33 million.
Legacy Portfolio Runoffs
Overall C&I loans declined due to runoff in legacy non-core portfolios, masking growth in new focus areas.
High Costs of Deposits
The bank is managing high costs of broker deposits and FHLB advances, with plans to reduce these further in 2025.
Company Guidance
During the Flagstar Financial, Inc. First Quarter 2025 Earnings Conference Call, CEO Joseph Otting provided guidance emphasizing the company's strategic initiatives and financial metrics. The adjusted net loss available to common shareholders was $0.23 per diluted share, compared to the consensus of $0.27. Otting highlighted a significant improvement in the C&I loan portfolio, with commitments of over $1 billion and $769 million in originations, marking a 40% increase from the previous quarter. The C&I pipeline stands at $870 million, more than double the prior quarter. A notable decline in net charge-offs and loan loss provisions, each down by almost 50% quarter-over-quarter, was also reported. CFO Lee Smith discussed their capital and liquidity strengths, including a CET1 capital ratio of approximately 12%. The company aims for a profitable fourth quarter in 2025, focusing on decreasing the cost of funds and expanding the C&I and private banking sectors. Additionally, strategic cost reductions led to $71 million in noninterest expense savings quarter-over-quarter, with a $600 million year-over-year target. The company plans to reduce broker deposits by $3 billion and FHLB advances by $1 billion over the next three quarters.

Flagstar Financial Financial Statement Overview

Summary
Flagstar Financial is struggling with declining revenue and profitability as evidenced by its income statement. The balance sheet reveals high leverage with an elevated debt-to-equity ratio, though liquidity is bolstered by substantial cash reserves. Cash flow shows resilience with positive free cash flow, suggesting efficient capital management despite reduced operating cash flow.
Income Statement
32
Negative
Flagstar Financial has experienced declining revenue and profitability in recent years. The company's gross profit margin remains steady at 100%, but it is operating at a net loss, with significant negative EBIT and EBITDA margins. Revenue decreased significantly from 2023 to 2024, indicating potential challenges in maintaining revenue streams.
Balance Sheet
45
Neutral
The balance sheet of Flagstar Financial shows high leverage with a debt-to-equity ratio that remains elevated. Stockholders' equity has remained relatively stable, but the equity ratio has decreased over time. The company has a substantial amount of cash and equivalents, which provides some liquidity buffer.
Cash Flow
58
Neutral
Flagstar Financial's cash flow shows some resilience with positive operating and free cash flows, although they have decreased from the prior year. The company has managed to maintain positive free cash flow despite lower operating cash flow, indicating some efficiency in capital expenditure management.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue5.99B6.38B6.05B2.18B1.75B1.77B
Gross Profit1.46B1.49B2.80B1.35B1.35B1.10B
EBITDA-941.00M-1.19B115.00M849.00M827.00M612.00M
Net Income-891.00M-1.12B-79.00M650.00M596.00M511.00M
Balance Sheet
Total Assets97.63B100.16B114.06B90.14B59.53B56.31B
Cash, Cash Equivalents and Short-Term Investments25.44B25.83B20.62B10.66B6.82B6.48B
Total Debt14.18B14.43B28.62B31.66B20.56B16.35B
Total Liabilities89.47B91.99B105.69B81.32B52.48B49.46B
Stockholders Equity8.15B8.17B8.37B8.82B7.04B6.84B
Cash Flow
Free Cash Flow-220.00M50.00M197.00M1.02B286.00M334.00M
Operating Cash Flow-210.00M86.00M263.00M1.03B290.00M334.00M
Investing Cash Flow13.07B15.45B20.67B-6.32B-2.76B-1.02B
Financing Cash Flow-13.24B-11.59B-11.41B5.17B2.73B1.90B

Flagstar Financial Technical Analysis

Technical Analysis Sentiment
Positive
Last Price12.05
Price Trends
50DMA
11.56
Positive
100DMA
11.50
Positive
200DMA
11.20
Positive
Market Momentum
MACD
0.19
Negative
RSI
58.52
Neutral
STOCH
86.80
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FLG, the sentiment is Positive. The current price of 12.05 is above the 20-day moving average (MA) of 11.35, above the 50-day MA of 11.56, and above the 200-day MA of 11.20, indicating a bullish trend. The MACD of 0.19 indicates Negative momentum. The RSI at 58.52 is Neutral, neither overbought nor oversold. The STOCH value of 86.80 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FLG.

Flagstar Financial Risk Analysis

Flagstar Financial disclosed 43 risk factors in its most recent earnings report. Flagstar Financial reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Flagstar Financial Peers Comparison

Overall Rating
UnderperformOutperform
Sector (68)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
79
Outperform
$5.91B8.5312.68%3.26%7.12%2.56%
79
Outperform
$5.80B12.517.41%3.08%7.51%8.42%
74
Outperform
$5.21B24.556.63%2.96%8.10%6.95%
74
Outperform
$5.34B12.496.33%4.62%0.20%9.86%
72
Outperform
$4.91B10.309.73%6.17%-0.17%1.69%
68
Neutral
$17.10B11.449.70%3.58%11.11%-4.78%
51
Neutral
$5.00B―-10.40%0.33%-8.17%73.59%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
FLG
Flagstar Financial
12.05
0.87
7.78%
OZK
Bank OZK
52.07
7.13
15.87%
COLB
Columbia Banking System
23.35
-2.18
-8.54%
FNB
F.N.B.
15.59
0.53
3.52%
GBCI
Glacier Bancorp
44.56
-0.35
-0.78%
VLY
Valley National Bancorp
9.53
1.70
21.71%

Flagstar Financial Corporate Events

M&A TransactionsShareholder MeetingsBusiness Operations and Strategy
Flagstar Financial Plans to Streamline Operations
Neutral
Jul 25, 2025

Flagstar Financial, Inc. announced plans to streamline its operations by eliminating its bank holding company structure, aiming to reduce duplicative supervision and regulation, and achieve annual cost savings of approximately $15 million. The company intends to issue a preliminary proxy in August 2025, with a shareholder meeting scheduled for October 2025, and expects to complete the merger by the fourth quarter of 2025, pending necessary approvals.

The most recent analyst rating on (FLG) stock is a Buy with a $14.00 price target. To see the full list of analyst forecasts on Flagstar Financial stock, see the FLG Stock Forecast page.

M&A TransactionsBusiness Operations and Strategy
Flagstar Financial Announces Merger with Flagstar Bank
Neutral
Jul 24, 2025

On July 24, 2025, Flagstar Financial, Inc. announced an internal reorganization plan to merge with its wholly-owned subsidiary, Flagstar Bank, N.A. This merger, approved by the boards of both entities, aims to streamline the corporate structure, reduce costs, and eliminate redundant activities. The merger will result in Flagstar Bank, N.A. continuing as the surviving entity, maintaining the same brand name, management, and board of directors. The reorganization is subject to regulatory and shareholder approval, with expectations to complete it by the end of 2025. The move is intended to enhance the company’s focus on its customers and communities, while also maintaining its position as a publicly traded company on the NYSE under the ticker symbol ‘FLG’.

The most recent analyst rating on (FLG) stock is a Buy with a $14.00 price target. To see the full list of analyst forecasts on Flagstar Financial stock, see the FLG Stock Forecast page.

Executive/Board ChangesBusiness Operations and Strategy
Flagstar Financial Appoints New Executive Vice President
Neutral
Jul 7, 2025

On July 1, 2025, Flagstar Bank entered into an employment agreement with Richard Raffetto, appointing him as the Senior Executive Vice President and President of Commercial and Private Banking. The agreement includes a base salary of $700,000, eligibility for a cash bonus, and participation in the company’s long-term equity incentive program. It also outlines conditions for termination and post-employment covenants, impacting the company’s executive management and potentially its strategic direction.

The most recent analyst rating on (FLG) stock is a Buy with a $14.00 price target. To see the full list of analyst forecasts on Flagstar Financial stock, see the FLG Stock Forecast page.

Executive/Board ChangesShareholder Meetings
Flagstar Financial Holds Virtual Shareholders’ Meeting
Neutral
Jun 6, 2025

On June 4, 2025, Flagstar Financial, Inc. held its annual shareholders’ meeting virtually. At this meeting, shareholders elected three directors for three-year terms and ratified KPMG LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2025. Additionally, the shareholders approved, on a non-binding advisory basis, the compensation of the company’s named executive officers.

The most recent analyst rating on (FLG) stock is a Hold with a $13.00 price target. To see the full list of analyst forecasts on Flagstar Financial stock, see the FLG Stock Forecast page.

Business Operations and StrategyFinancial Disclosures
Flagstar Financial Reports Strong Q1 2025 Results
Positive
Apr 25, 2025

On April 25, 2025, Flagstar Financial announced its first quarter results, highlighting significant growth in credit commitments and loan originations, driven by strategic focus areas such as expanding product offerings and reducing operating expenses. The company is actively managing its commercial real estate portfolio and aims to improve its earnings profile by reducing costs and enhancing operational efficiencies, with over 80% of targeted efficiencies already realized.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 18, 2025