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What changed in FLAGSTAR BANK, NATIONAL ASSOCIATION's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of FLAGSTAR BANK, NATIONAL ASSOCIATION's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+618 added−632 removedSource: 10-K (2025-03-04) vs 10-K (2024-03-14)

Top changes in FLAGSTAR BANK, NATIONAL ASSOCIATION's 2024 10-K

618 paragraphs added · 632 removed · 319 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

96 edited+115 added−43 removed107 unchanged
Biggest changeCapital Requirements In 2013, the FRB and the FDIC approved revisions to their capital adequacy guidelines and prompt corrective action rules to implement the revised standards of the Basel Committee on Banking Supervision, commonly called Basel III, and to address relevant provisions of the DFA.
Biggest changeWhile it will take several years for its full impact to be known, the legislation generally limits a landlord’s ability to increase rents on rent-regulated apartments and makes it more difficult to convert rent regulated apartments to market rent apartments. 11 Capital Requirements In 2013, the FRB and the FDIC approved revisions to their capital adequacy guidelines and prompt corrective action rules to implement the revised standards of the Basel Committee on Banking Supervision, commonly called Basel III, and to address relevant provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
We may also be subject to supervision and examination by applicable state regulatory authorities in the jurisdictions in which we may offer consumer financial products or services. Consumer Financial Protection Bureau The Bank is subject to oversight by the CFPB within the Federal Reserve System.
We may also be subject to supervision and examination by applicable state regulatory authorities in the jurisdictions in which we may offer consumer financial products or services. Consumer Financial Protection Bureau The Bank is subject to oversight by the Consumer Financial Protection Bureau ("CFPB") within the Federal Reserve System.
Generally, however, they contain one or more of the following elements: (i) restrictions on trade with, or investment in, a sanctioned country, including prohibitions against direct or indirect imports from, and exports to, a sanctioned country and prohibitions on “U.S. persons” engaging in financial transactions relating to making investments in, or providing investment-related advice or assistance to, a sanctioned country; and (ii) a blocking of assets in which the government or specially designated nationals of the sanctioned country have an interest, by prohibiting transfers of property subject to U.S. jurisdiction (including property in the possession or control of U.S. persons).
Generally, however, they contain one or more of the following elements: (i) restrictions on trade with, or investment in, a sanctioned country, including prohibitions against direct or indirect imports from, and exports to, a sanctioned country and 22 prohibitions on “U.S. persons” engaging in financial transactions relating to making investments in, or providing investment-related advice or assistance to, a sanctioned country; and (ii) a blocking of assets in which the government or specially designated nationals of the sanctioned country have an interest, by prohibiting transfers of property subject to U.S. jurisdiction (including property in the possession or control of U.S. persons).
Blocked assets (e.g., property and bank deposits) cannot be paid out, withdrawn, set off, or transferred in any manner without a license from OFAC. Failure to comply with these sanctions could have serious legal and reputational consequences. 22 Data Privacy Federal and state law contains extensive consumer privacy protection provisions.
Blocked assets (e.g., property and bank deposits) cannot be paid out, withdrawn, set off, or transferred in any manner without a license from OFAC. Failure to comply with these sanctions could have serious legal and reputational consequences. Data Privacy Federal and state law contains extensive consumer privacy protection provisions.
The standards also must be consistent with accompanying FDIC Guidelines, which include loan-to-value limitations for the different types of real estate loans. Institutions are also permitted to make a limited amount of loans that do not conform to the proposed loan-to-value limitations as long as such exceptions are reviewed and justified 17 appropriately.
The standards also must be consistent with accompanying FDIC Guidelines, which include loan-to-value limitations for the different types of real estate loans. Institutions are also permitted to make a limited amount of loans that do not conform to the proposed loan-to-value limitations as long as such exceptions are reviewed and justified appropriately.
As a Category IV banking organization, we are subject to enhanced liquidity risk management requirements which include 16 reporting, liquidity stress testing, a liquidity buffer and resolution planning, subject to the applicable transition periods. If we were to meet or exceed certain other thresholds for asset size, we would become subject to additional requirements.
As a Category IV banking organization, we are subject to enhanced liquidity risk management requirements which include reporting, liquidity stress testing, a liquidity buffer and resolution planning, subject to the applicable transition periods. If we were to meet or exceed certain other thresholds for asset size, we would become subject to additional requirements.
The CFPB has exclusive examination and primary enforcement authority with respect to compliance with federal consumer financial protection laws and regulations by institutions under its supervision and is authorized, individually or jointly 24 with the federal banking agencies, to conduct investigations to determine whether any person is, or has, engaged in conduct that violates such laws or regulations.
The CFPB has exclusive examination and primary enforcement authority with respect to compliance with federal consumer financial protection laws and regulations by institutions under its supervision and is authorized, individually or jointly with the federal banking agencies, to conduct investigations to determine whether any person is, or has, engaged in conduct that violates such laws or regulations.
The effect of government policies on the earnings of the Company and the Bank cannot be predicted. 12 Environmental Issues We encounter certain environmental risks in our lending activities and other operations. The existence of hazardous materials may make it unattractive for a lender to foreclose on the properties securing its loans.
The effect of government policies on the earnings of the Company and the Bank cannot be predicted. Environmental Issues We encounter certain environmental risks in our lending activities and other operations. The existence of hazardous materials may make it unattractive for a lender to foreclose on the properties securing its loans.
If the OCC determines for safety and soundness reasons that a bank should calculate its investment limits more frequently than required by the OCC's Investment Securities regulations, the OCC may provide written notice to the bank 18 directing the bank to calculate its investment limitations at a more frequent interval, and the bank must thereafter calculate its investment limits at that interval until further notice from the OCC.
If the OCC determines for safety and soundness reasons that a bank should calculate its investment limits more frequently than required by the OCC's Investment Securities regulations, the OCC may provide written notice to the bank directing the bank to calculate its investment limitations at a more frequent interval, and the bank must thereafter calculate its investment limits at that interval until further notice from the OCC.
Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary, actions by regulators that could have a material effect on the Consolidated Financial Statements. For additional information, see the Capital section of the MD&A and Note 17 -Capital. Holding Company Limitations on Capital Distributions.
Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary, actions by regulators that could have a material effect on the Consolidated Financial Statements. For additional information, see the Regulatory Capital section of the MD&A and Note 17 - Capital . Holding Company Limitations on Capital Distributions.
See the discussion of "Income Taxes" in Note 2 - Summary of Significant Accounting Policies Regulation and Supervision The following is a brief summary of certain statutes and regulations that significantly affect the Company and its subsidiaries. A number of other statutes and regulations may affect the Company and the Bank but are not discussed in the following paragraphs.
See the discussion of "Income Taxes" in Note 2 - Summary of Significant Accounting Policies 10 Regulation and Supervision The following is a brief summary of certain statutes and regulations that significantly affect the Company and its subsidiaries. A number of other statutes and regulations may affect the Company and the Bank but are not discussed in the following paragraphs.
Community Reinvestment Act Federal Regulation Under the CRA, as implemented by OCC regulations, an institution has a continuing and affirmative obligation consistent with its safe and sound operation to help meet the credit needs of its entire community, including low and moderate income neighborhoods.
Community Reinvestment Act Federal Regulation Under the Community Reinvestment Act, as implemented by OCC regulations, an institution has a continuing and affirmative obligation consistent with its safe and sound operation to help meet the credit needs of its entire community, including low and moderate income neighborhoods.
Most aspects of the rule apply only to banking organizations that are not subject to the “advanced approaches” in the capital rule, which are generally firms with less than $250.0 billion in total consolidated assets and less than $10.0 billion in total foreign exposure.
Most aspects of the rule apply only to banking organizations that are not subject to the “advanced approaches” in the capital rule, which are generally firms with less than $250 billion in total consolidated assets and less than $10 billion in total foreign exposure.
Because the estimated loss pursuant to the systemic risk determination will be periodically adjusted, the FDIC retains the ability to cease collection early, extend the special assessment collection period one or more quarters beyond the initial eight-quarter collection period to collect the difference between actual or estimated losses and the amounts collected, and impose a final shortfall special assessment on a one-time basis after the receiverships for Silicon Valley Bank and Signature Bank terminate.
Because the estimated loss pursuant to the systemic risk determination will be periodically adjusted, the FDIC retains the ability to cease collection early, extend the special assessment collection period one or more quarters beyond the initial eight-quarter collection period to collect the difference between actual or estimated losses and the amounts collected, and impose a final shortfall special assessment on a one-time basis after the receivership's for Silicon Valley Bank and Signature Bank terminate.
The capital conservation buffer is now at its fully phased-in level of 2.5 percent. An institution can be subject to limitations on paying dividends, engaging in share repurchases, and paying discretionary bonuses if its capital levels fall below these amounts. Basel III also establish a maximum percentage of eligible retained income that can be utilized for such capital distributions.
The capital conservation buffer is now at its fully phased-in level of 2.5 percent. An institution can be subject to limitations on paying dividends, engaging in share repurchases, and paying discretionary bonuses if its capital levels fall below these amounts. Basel III also establishes a maximum percentage of eligible retained income that can be utilized for such capital distributions.
Monetary Policy The Company and the Bank are affected by fiscal and monetary policies of the federal government, including those of the FRB which regulates the national money supply in order to mitigate recessionary and inflationary pressures. Among the techniques available to the FRB are engaging in open market transactions of U.S.
Monetary Policy The Company and the Bank are affected by fiscal and monetary policies of the federal government, including those of the Federal Reserve Board ("FRB") which regulates the national money supply in order to mitigate recessionary and inflationary pressures. Among the techniques available to the FRB are engaging in open market transactions of U.S.
The CRA requires each federal banking agency, in connection with its examination of a financial institution, to assess and assign one of four ratings to the institution’s record of meeting the credit needs of the community and to take such record into account in its evaluation of certain applications by the institution, including applications for charters, branches and other deposit facilities, relocations, mergers, consolidations, acquisitions of assets or assumptions of liabilities, and bank holding company and savings and loan holding company acquisitions.
The Community Reinvestment Act requires each federal banking agency, in connection with its examination of a financial institution, to assess and assign one of four ratings to the institution’s record of meeting the credit needs of the community and to take such record into account in its evaluation of certain applications by the institution, including applications for charters, branches and other deposit facilities, relocations, mergers, consolidations, acquisitions of assets or assumptions of liabilities, and bank holding company and savings and loan holding company acquisitions.
As a result of our acquisition of Flagstar, we are required to seek regulatory approval from the OCC for the payment of any dividend to the Parent Company through at least the period ending November 1, 2024, which could restrict our ability to pay the common stock dividend. 20 Transactions with Affiliates Under current federal law, transactions between depository institutions and their affiliates are governed by Sections 23A and 23B of the Federal Reserve Act and the FRB’s Regulation W promulgated thereunder.
As a result of our acquisition of Flagstar, we were required to seek regulatory approval from the OCC for the payment of any dividend to the Parent Company through at least the period ending November 1, 2024, which could have restricted our ability to pay the common stock dividend. 20 Transactions with Affiliates Under current federal law, transactions between depository institutions and their affiliates are governed by Sections 23A and 23B of the Federal Reserve Act and the FRB’s Regulation W promulgated thereunder.
Applicable consumer protection laws, and their implementing regulations, include, but may not be limited to, the DFA, Truth in Lending Act (Regulation Z), Truth in Savings Act (Regulation DD), Equal Credit Opportunity Act (Regulation B), Electronic Funds Transfer Act (Regulation E), Fair Housing Act, Home Mortgage Disclosure Act (Regulation C), Fair Debt Collection Practices Act (Regulation F), Fair Credit Reporting Act (Regulation V), as amended by the Fair and Accurate Credit Transactions Act, Expedited Funds Availability (Regulation CC), Reserve Requirements (Regulation D), Insider Transactions (Regulation O), Privacy of Consumer Information (Regulation P), Margin Stock Loans (Regulation U), Right To Financial Privacy Act, Flood Disaster Protection Act, Homeowners Protection Act, Servicemembers Civil Relief Act, Real Estate Settlement Procedures Act (Regulation X), Telephone Consumer Protection Act, CAN-SPAM Act, Children’s Online Privacy Protection Act, the Military Lending Act, and the Homeownership Counseling Act.
Applicable consumer protection laws, and their implementing regulations, include, but may not be limited to, the Dodd-Frank Wall Street Reform and Consumer Protection Act, Truth in Lending Act (Regulation Z), Truth in Savings Act (Regulation DD), Equal Credit Opportunity Act (Regulation B), Electronic Funds Transfer Act (Regulation E), Fair Housing Act, Home Mortgage Disclosure Act (Regulation C), Fair Debt Collection Practices Act (Regulation F), Fair Credit Reporting Act (Regulation V), as amended by the Fair and Accurate Credit Transactions Act, Expedited Funds Availability (Regulation CC), Reserve Requirements (Regulation D), Insider Transactions (Regulation O), Privacy of Consumer Information (Regulation P), Margin Stock Loans (Regulation U), Right To Financial Privacy Act, Flood Disaster Protection Act, Homeowners Protection Act, Servicemembers Civil Relief Act, Real Estate Settlement Procedures Act (Regulation X), Telephone Consumer Protection Act, CAN-SPAM Act, Children’s Online Privacy Protection Act, the Military Lending Act, and the Homeownership Counseling Act.
In addition, the Basel III rules assign higher risk weights to certain assets, such as the 150 percent risk weighting assigned to exposures that are more than 90 days past due or are on non-accrual status, and to certain CRE facilities that finance the acquisition, development, or construction of real property.
In addition, the Basel III rules assign higher risk weights to certain assets, such as the 150 percent risk weighting assigned to exposures that are more than 90 days past due or are on non-accrual status, and to certain commercial real estate facilities that finance the acquisition, development, or construction of real property.
The FDIC Guidelines also list a number of lending situations in which exceptions to the loan-to-value standards are justified. The FDIC, the OCC, and the FRB (collectively, the “Federal Banking Agencies”) also have issued joint guidance entitled “Concentrations in Commercial Real Estate Lending, Sound Risk Management Practices” (the “CRE Guidance”).
The FDIC Guidelines also list a number of lending situations in which exceptions to the loan-to-value standards are justified. The FDIC, the OCC, and the FRB (collectively, the “Federal Banking Agencies”) also have issued joint guidance entitled “Concentrations in Commercial Real Estate Lending, Sound Risk Management Practices” (the “Commercial Real Estate 15 Guidance”).
Insurance of Deposit Accounts The deposits of the Bank are insured up to applicable limits by the DIF. The maximum deposit insurance provided by the FDIC per account owner is $250,000 for all types of accounts.
Insurance of Deposit Accounts The deposits of the Bank are insured up to applicable limits by the Deposit Insurance Fund. The maximum deposit insurance provided by the FDIC per account owner is $250,000 for all types of accounts.
Specifically, the CRE Guidance provides that a bank has a concentration in CRE lending if (1) total reported loans for construction, land development, and other land represent 100 percent or more of total risk-based capital; or (2) total reported loans secured by multi-family properties, non-farm non-residential properties (excluding those that are owner-occupied), and loans for construction, land development, and other land represent 300 percent or more of total risk-based capital.
Specifically, the Commercial Real Estate Guidance provides that a bank has a concentration in commercial real estate lending if (1) total reported loans for construction, land development, and other land represent 100 percent or more of total risk-based capital; or (2) total reported loans secured by multi-family properties, non-farm non-residential properties (excluding those that are owner-occupied), and loans for construction, land development, and other land represent 300 percent or more of total risk-based capital.
If a concentration is present, management must employ heightened risk management practices that address key elements, including board and management oversight and strategic planning, portfolio management, development of underwriting standards, risk assessment and monitoring through market analysis and stress testing, and maintenance of increased capital levels as needed to support the level of CRE lending.
If a concentration is present, management must employ heightened risk management practices that address key elements, including board and management oversight and strategic planning, portfolio management, development of underwriting standards, risk assessment and monitoring through market analysis and stress testing, and maintenance of increased capital levels as needed to support the level of commercial real estate lending.
Banking organizations also will have the option to reevaluate any or all of their ADC loans originated on or after January 1, 2015, using the revised HVCRE exposure definition. Dividend Limitations The Parent Company is a separate legal entity from the Bank and must provide for its own liquidity.
Banking organizations also will have the option to reevaluate any or all of their acquisition, development, and construction loans originated on or after January 1, 2015, using the revised HVCRE exposure definition. Dividend Limitations The Parent Company is a separate legal entity from the Bank and must provide for its own liquidity.
Assessment rates range from 1.5 to 40 basis points of the institution’s assessment base, which is calculated as average total assets minus average tangible equity. No institution may pay a dividend if in default of the federal deposit insurance assessment. Deposit insurance assessments are based on total average assets, excluding PPP loans, less average tangible common equity.
Assessment rates range from 2.5 to 42 basis points of the institution’s assessment base, which is calculated as average total assets minus average tangible equity. No institution may pay a dividend if in default of the federal deposit insurance assessment. Deposit insurance assessments are based on total average assets, excluding PPP loans, less average tangible common equity.
The final rule (i) encourages banks to expand access to credit, investment and banking services in low- and moderate-income communities, (ii) adapts to changes in the banking industry, including mobile and online banking, (iii) provides greater clarity and consistency in the application of CRA regulations and (iv) tailors CRA evaluations and data collection to bank size and type.
The final rule (i) encourages banks to expand access to credit, investment and banking services in low- and moderate-income communities, (ii) adapts to changes in the banking industry, including mobile and online banking, (iii) provides greater clarity and consistency in the application of Community Reinvestment Act regulations and (iv) tailors Community Reinvestment Act evaluations and data collection to bank size and type.
The federal system of regulation and supervision establishes a comprehensive framework of activities in which to operate and is primarily intended for the protection of depositors and the FDIC's DIF rather than our shareholders. As a bank holding company, we are required to comply with the rules and regulations of the Federal Reserve.
The federal system of regulation and supervision establishes a comprehensive framework of activities in which to operate and is primarily intended for the protection of depositors and the FDIC's Deposit Insurance Fund rather than our shareholders. As a bank holding company, we are required to comply with the rules and regulations of the Federal Reserve.
General The Bank is a national banking association, subject to federal regulation and oversight by the OCC. The activities of the Bank are limited to those specifically authorized under the National Bank Act and related interpretations of the OCC.
General The Bank is a national banking association, subject to federal regulation and oversight by the Office of Comptroller of the Currency (the "OCC"). The activities of the Bank are limited to those specifically authorized under the National Bank Act and related interpretations of the OCC.
Enhanced Stress Testing and Prudential Standards As a result of the Signature transaction, our total assets exceeded $100 billion and therefore we became classified as a Category IV banking organization under the rules issued by the federal banking agencies that tailor the application of enhanced prudential standards to large bank holding companies and the capital and liquidity rules to large bank holding companies and depository institutions under the Dodd-Frank Act and the Economic Growth, Regulatory Relief, and Consumer Protection Act.
Enhanced Stress Testing and Prudential Standards During 2023, our total assets exceeded $100 billion and therefore we became classified as a Category IV banking organization under the rules issued by the federal banking agencies that tailor the application of heightened standards to large bank holding companies and the capital and liquidity rules to large bank holding companies and depository institutions under the Dodd-Frank Act and the Economic Growth, Regulatory Relief, and Consumer Protection Act.
The CRE Guidance, which addresses land development, construction, and certain multi-family loans, as well as CRE loans, does not establish specific lending limits but, rather, reinforces and enhances the Federal Banking Agencies’ existing regulations and guidelines for such lending and portfolio management.
The Commercial Real Estate Guidance, which addresses land development, construction, and certain multi-family loans, as well as commercial real estate loans, does not establish specific lending limits but, rather, reinforces and enhances the Federal Banking Agencies’ existing regulations and guidelines for such lending and portfolio management.
Earnings releases, dividend announcements, and other press releases are posted upon issuance to the Investor Relations portion of the website, which can be found at www.ir.myNYCB.com.
Earnings releases, dividend announcements, and other press releases are posted upon issuance to the Investor Relations portion of the website, which can be found at www.flagstar.com.
Under the final rule, the agencies will evaluate bank performance across the varied activities they conduct and communities in which they operate so that the CRA continues to be an effective tool to address inequities in access to credit and financial services.
Under the final rule, the agencies will evaluate bank performance across the varied activities they conduct and communities in which they operate so that the Community Reinvestment Act continues to be an effective tool to address inequities in access to credit and financial services.
On December 13, 2019, the Federal Banking Agencies issued a final rule, which became effective on April 1, 2020, to modify the agencies’ capital rules for high volatility CRE (“HVCRE”) exposures, as required by the EGRRCPA.
On December 13, 2019, the Federal Banking Agencies issued a final rule, which became effective on April 1, 2020, to modify the agencies’ capital rules for high volatility commercial real estate (“HVCRE”) exposures, as required by the EGRRCPA.
The final rule includes a grandfathering provision, which provides banking organizations with the option to maintain their current capital treatment for ADC loans originated on or after January 1, 2015, and before April 1, 2020.
The final rule includes a grandfathering provision, which provides banking organizations with the option to maintain their current capital treatment for acquisition, development, and construction loans originated on or after January 1, 2015, and before April 1, 2020.
In 2023, dividends of $580 million were paid by the Bank to the Parent Company. Investment Activities National bank investment activities are governed by the National Bank Act and OCC regulations which, consistent with safe and sound banking practices, prescribe standards under which national banks may purchase, sell, deal in, underwrite, and hold securities.
In 2024, dividends of $67 million were paid by the Bank to the Parent Company. 16 Investment Activities National bank investment activities are governed by the National Bank Act and OCC regulations which, consistent with safe and sound banking practices, prescribe standards under which national banks may purchase, sell, deal in, underwrite, and hold securities.
The final rule also updates existing CRA regulations to evaluate lending outside traditional assessment areas generated by the growth of non-branch delivery systems, such as online and mobile banking, branchless banking, and hybrid models.
The final rule also updates existing Community Reinvestment Act regulations to evaluate lending outside traditional assessment areas generated by the growth of non-branch delivery systems, such as online and mobile banking, branchless banking, and hybrid models.
The GLBA also requires financial institutions to implement a comprehensive information security program that includes administrative, technical, and physical safeguards to ensure the security and confidentiality of customer records and information, and imposes certain limitations on the ability to share consumers’ nonpublic personal information with non-affiliated third-parties.
The Gramm Leach Bliley Act also requires financial institutions to implement a comprehensive information security program that includes administrative, technical, and physical safeguards to ensure the security and confidentiality of customer records and information and imposes certain limitations on the ability to share consumers’ nonpublic personal information with non-affiliated third parties.
Privacy requirements, including notice and opt out requirements, under the GLBA and the FCRA are enforced by the FTC and by the CFPB through UDAAP laws and regulations, and are a standard component of CFPB examinations. State entities also may initiate actions for alleged violations of privacy or security requirements under state law.
Privacy requirements, including notice and opt out requirements, under The Gramm Leach Bliley Act and the FCRA are enforced by the FTC and by the CFPB through UDAAP laws and regulations, and are a standard component of CFPB examinations. State entities also may initiate actions for alleged violations of privacy or security requirements under state law.
The CRA also requires that all institutions make public disclosure of their CRA ratings. On October 24, 2023, the OCC, the FDIC and the Federal Reserve issued a final rule amending the agencies’ CRA regulations.
The Community Reinvestment Act also requires that all institutions make public disclosure of their Community Reinvestment Act ratings. On October 24, 2023, the OCC, the FDIC and the Federal Reserve issued a final rule amending the agencies’ Community Reinvestment Act regulations.
The GLBA requires financial institutions to periodically disclose their privacy practices and policies relating to sharing such information and enable retail customers to opt out of the Company’s ability to share certain information with affiliates and non-affiliates for marketing and/or non-marketing purposes, or to contact customers with marketing offers.
The Gramm Leach Bliley Act requires financial institutions to periodically disclose their privacy practices and policies relating to sharing such information and enable retail customers to opt out of the Company’s ability to share certain information with affiliates and non-affiliates for marketing and/or non-marketing purposes, or to contact customers with marketing offers.
We are proud to strive to maintain a diverse and inclusive workforce that reflects the demographics of the communities in which we do business. Our company recognizes that the talents of a diverse workforce are a key competitive advantage.
We are proud to strive to maintain an inclusive workforce that reflects the demographics of the communities in which we do business. Our company recognizes that the talents of a dedicated workforce are a key competitive advantage.
In addition, the GLBA generally restricts a company from acquiring us if that company is engaged directly or indirectly in activities that are not permissible for a bank holding company or financial holding company. Capital Requirements.
In addition, the Gramm Leach Bliley Act generally restricts a company from acquiring us if that company is engaged directly or indirectly in activities that are not permissible for a bank holding company or financial holding company. Capital Requirements.
We attempt to mitigate such environmental risks by requiring either that a borrower purchase environmental insurance or that an appropriate environmental site assessment be completed as part of our underwriting review on the initial granting of CRE and ADC loans, regardless of location, and of any out-of-state multi-family loans we may produce.
We attempt to mitigate such environmental risks by requiring either that a borrower purchase environmental insurance or that an appropriate environmental site assessment be completed as part of our underwriting review on the initial granting of commercial real estate and acquisition, development, and construction loans, regardless of location, and of any out-of-state multi-family loans we may produce.
Our benefits program includes a 401(k) Plan with an employer matching contribution, healthcare and other insurance benefits, flexible spending accounts and paid time off. Many of our employees are also eligible to participate in the Company’s equity award program and the Company's annual incentive program.
Our employees receive salaries that are subject to annual review and periodic benchmarking. Our benefits program includes a 401(k) Plan with an employer matching contribution, healthcare and other insurance benefits, flexible spending accounts and paid time off. Many of our employees are also eligible to participate in the Company’s equity award program and the Company's annual cash incentive program.
Under the BHCA, an existing bank holding company would be required to obtain the FRB’s approval before acquiring more than 5 percent of the Company’s voting stock. See “Holding Company Regulation” earlier in this report. Banking Regulation Limitation on Capital Distributions .
Under the BHCA, an existing bank holding company would be required to obtain the FRB’s approval before acquiring more than 5 percent of the Company’s voting stock. See “Holding Company Regulations” above. Banking Regulation Limitation on Capital Distributions .
Item 1. Business General New York Community Bancorp, Inc., (on a stand-alone basis, the “Parent Company” or, collectively with its subsidiaries, the “Company”) is the bank holding company for Flagstar Bank, N.A. (hereinafter referred to as the “Bank”). The Company went public in 1993 and has grown organically and through a series of accretive mergers and acquisitions.
Flagstar Financial, Inc., (on a stand-alone basis, the “Parent Company” or, collectively with its subsidiaries, the “Company”) is the bank holding company for Flagstar Bank, N.A. (hereinafter referred to as the “Bank”). The Company went public in 1993 and has grown organically and through a series of accretive mergers and acquisitions.
The GLBA and FDIC regulations also impose certain quantitative and qualitative restrictions on such activities and on a bank’s dealings with a subsidiary that engages in specified activities.
The Gramm Leach Bliley Act and FDIC regulations also impose certain quantitative and qualitative restrictions on such activities and on a bank’s dealings with a subsidiary that engages in specified activities.
To increase diversity within our talent pool, we work with key stakeholders in our business locations to deepen our understanding of the local labor market and better position the organization to recruit and retain talent within under-represented communities.
To increase our talent pool, we work with key stakeholders in our business locations to deepen our understanding of the local labor market and better position the organization to recruit and retain exceptional talent.
Our commitment is reflected in the policies that govern our workforce, such as our Diversity Pledge and our Diversity, Equity and Inclusion Policy, and is evidenced in our recruiting strategies, diversity and inclusion training and Employee resource groups, which are key to our efforts. Our Employee resource groups provide our associates access to coaching, mentoring and professional development.
Our commitment is reflected in the policies that govern our workforce, and is evidenced in our recruiting strategies, inclusion training and Employee resource groups, which are key to our efforts. Our employee resource groups, which are open to all employees, provide our associates access to coaching, mentoring and professional development.
The CFPB was established under the DFA to implement and enforce rules and regulations under certain federal consumer protection laws with respect to the conduct of providers of certain consumer financial products and services.
The CFPB was established under the Dodd-Frank Wall Street Reform and Consumer Protection Act to implement and enforce rules and regulations under certain federal consumer protection laws with respect to the conduct of providers of certain consumer financial products and services.
For example, the vast majority of our multi-family loans are collateralized by rental apartment buildings in New York City, while the majority of the properties collateralizing our CRE and ADC loans are located in the Northeast and Midwest.
For example, the vast majority of our multi-family loans are collateralized by rental apartment buildings in New York City, while the majority of the properties collateralizing our commercial real estate and acquisition, development, and construction loans are located in the Northeast and Midwest.
In these proceedings, the CFPB can obtain cease and desist orders (which can include orders for restitution or rescission of contracts, as well as other kinds of affirmative relief) and monetary penalties which, for 2023, range from $6,813 per day for minor violations of federal consumer financial laws (including the CFPB’s own rules) to $34,065 per day for reckless violations and $1,362,567 per day for knowing violations.
In these proceedings, the CFPB can obtain cease and desist orders (which can include orders for restitution or rescission of contracts, as well as other kinds of affirmative relief) and monetary penalties which, for 2024, range from $7,034 per day for minor violations of federal consumer financial laws (including the CFPB’s own rules) to $35,169 per day for reckless violations and $1,406,728 per day for knowing violations.
These processes assist us in mitigating environmental risk by enabling us to identify and address potential issues, including by avoiding taking ownership or control of contaminated properties. Subsidiary Activities We conduct business primarily through our wholly-owned bank subsidiary, Flagstar Bank, N.A. The Bank has formed, or acquired through merger transactions, 39 active subsidiaries.
These processes assist us in mitigating environmental risk by enabling us to identify and address potential issues, including by avoiding taking ownership or control of contaminated properties. 9 Subsidiary Activities We conduct business primarily through our wholly owned bank subsidiary, Flagstar Bank, N.A and through certain direct subsidiaries of the Bank and indirect wholly owned non-bank subsidiaries of the Company.
On November 16, 2023, the FDIC published in the Federal Register its final rule that imposes special assessments to recover the loss to the Deposit Insurance Fund arising from the protection of uninsured depositors in connection with the systemic risk determination announced on March 12, 2023, following the closures of Silicon Valley Bank and Signature Bank.
The timing and form of any final rule implementing the long-term debt requirements and clean holding company requirements remains uncertain. 17 On November 16, 2023, the FDIC published in the Federal Register its final rule that imposes special assessments to recover the loss to the Deposit Insurance Fund arising from the protection of uninsured depositors in connection with the systemic risk determination announced on March 12, 2023, following the closures of Silicon Valley Bank and Signature Bank.
Global Systemically Important Banks and their depository institution subsidiaries), and the least stringent prudential standards apply under Category IV (defined as U.S. banking organizations with $100.0 billion or more but less than $250.0 billion in total assets and have less than $75.0 billion in cross-jurisdictional activity, weighted short-term wholesale funding, nonbank assets, or off-balance sheet exposure).
Global Systemically Important Banks and their depository institution subsidiaries), and the least stringent prudential standards apply under Category IV (defined as U.S. banking organizations with $100.0 billion or more but less than $250.0 billion in total assets and have less than $75.0 billion in cross-jurisdictional activity, weighted short-term wholesale funding, nonbank assets, or off-balance sheet exposure). 14 In January 2021, the Board finalized a rule to update capital planning requirements for large banks to be consistent with the tailoring rule.
Prior to acquiring a large-scale property, a Phase 1 Environmental Property Assessment is typically performed by a licensed professional engineer to determine the integrity of, and/or the potential risk associated with, the facility and the property on which it is built.
Our attention to environmental risks also applies to the properties and facilities that house our bank operations. Prior to acquiring a large-scale property, a Phase 1 Environmental Property Assessment is typically performed by a licensed professional engineer to determine the integrity of, and/or the potential risk associated with, the facility and the property on which it is built.
The CRA generally does not establish specific lending requirements or programs for financial institutions, nor does it limit an institution’s discretion to develop the types of products and services that it believes are best suited to its particular community, consistent with the CRA. However, institutions are rated on their performance in meeting the needs of their communities.
The Community Reinvestment Act generally does not establish specific lending requirements or programs for financial institutions, nor does it limit an institution’s discretion to develop the types of products and services that it believes are best suited to its particular community, consistent with the Community Reinvestment Act.
For such purposes, the law establishes five capital tiers: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized. The five capital tiers are described in more detail below. Under the prompt corrective action regulations, an institution that fails to remain “well capitalized” becomes subject to a series of restrictions that increase in severity as its capital condition weakens.
The five capital tiers are described in more detail below. Under the prompt corrective action regulations, an institution that fails to remain “well capitalized” becomes subject to a series of restrictions that increase in severity as its capital condition weakens.
Federal Home Loan Bank System The Bank is a member of the FHLB-NY and FHLB-Indianapolis. As a member of the FHLB-NY, the Bank is required to acquire and hold shares of FHLB-NY capital stock.
Federal Home Loan Bank System The Bank is a member of the FHLB-NY and FHLB-Indianapolis. As a member of the FHLB-NY, the Bank is required to acquire and hold shares of FHLB-NY capital stock. At December 31, 2024, the Bank held $598 million of FHLB-NY stock and $329 million of FHLB-Indianapolis stock.
Certain states have adopted laws regulating and requiring licensing, registration, notice filing, or other approval for parties that engage in certain activity regarding consumer finance transactions. Furthermore, certain states and localities have adopted laws requiring licensing, registration, notice filing, or other approval for consumer debt collection or servicing, and/or purchasing or selling consumer loans.
Furthermore, certain states and localities have adopted laws requiring licensing, registration, notice filing, or other approval for consumer debt collection or servicing, and/or purchasing or selling consumer loans.
Those rules and regulations, among other things, prohibit discrimination and establish underwriting guidelines, which include provisions for inspections and appraisals, require credit reports on prospective borrowers, and fix maximum loan amounts. Lenders are required annually to submit audited financial statements to Fannie Mae, FHA and VA. Each of these regulatory entities has its own financial requirements.
Those rules, policies, regulations, guidelines or procedures, among other things, prohibit discrimination and establish underwriting guidelines, which include provisions for inspections and appraisals, require credit reports on prospective borrowers, and fix maximum loan amounts. Each of these entities has its own financial requirements, including submitting audited financial statements annually.
The DFA is complex and comprehensive legislation that impacts practically all aspects of a banking organization, and represents a significant overhaul of many aspects of the regulation of the financial services industry.
The Dodd-Frank Wall Street Reform and Consumer Protection Act is complex and comprehensive legislation that impacts practically all aspects of a banking organization and represents a significant overhaul of many aspects of the regulation of the financial services industry.
We strive to create and foster a supportive environment for all of our employees, and we are proud to share our business success with individuals whose cultural and personal differences support an innovative and productive workplace. Approximately two-thirds of our workforce is female and nearly half of our workforce have diverse ethnic backgrounds.
We strive to create and foster a supportive environment for all of our employees, and we are proud to share our business success with individuals whose cultural and personal differences support an innovative and productive workplace.
For additional information, see the Capital section of the MD&A and Note 17 - Capital. As of December 31, 2023, each of the Bank’s capital ratios exceeded those required for an institution to be considered “well capitalized” under these regulations.
For additional information, see the Capital section of the MD&A and Note 17 - Capital. As of December 31, 2024, each of the Bank’s capital ratios exceeded those required for an institution to be considered “well capitalized” under these regulations. 13 Resolution Planning As an insured depository institution, the Bank is required to file a resolution plan with the FDIC.
We strive to build and leverage a diverse, inclusive and engaged workforce that inspires all individuals to work together towards a common goal of superior business results by embracing the unique needs and objectives of our customers and community.
We strive to build and leverage an inclusive and engaged workforce that inspires all individuals to work together towards a common goal of superior business results by embracing the unique needs and objectives of our customers and community. We strive to achieve this by hiring great people who represent the talents, experiences, and background of the communities we serve.
These are typically known as the “OFAC” rules, based on their administration by the U.S. Treasury Department Office of Foreign Assets Control. The OFAC-administered sanctions targeting countries take many different forms.
Office of Foreign Assets Control Regulation The United States has imposed economic sanctions that affect transactions with designated foreign countries, foreign nationals, and others. These are typically known as the “OFAC” rules, based on their administration by the U.S. Treasury Department Office of Foreign Assets Control. The OFAC-administered sanctions targeting countries take many different forms.
Most of the final rule’s requirements will become effective beginning on January 1, 2026 and the remaining requirements, including the final rule’s data reporting requirements, will become effective on January 1, 2027. 21 Community Pledge Agreement with the National Community Reinvestment Coalition On January 24, 2022, the Company and the National Community Reinvestment Coalition ("NCRC") announced the Company's commitment to provide $28.0 billion in loans, investments, and other financial support to communities and people of color, low- and moderate-income ("LMI") families and communities, and small businesses.
The final outcome of such challenge is uncertain. 21 Community Pledge Agreement with the National Community Reinvestment Coalition On January 24, 2022, the Company and the National Community Reinvestment Coalition ("NCRC") announced the Company's commitment to provide $28.0 billion in loans, investments, and other financial support to communities and people of color, low- and moderate-income ("LMI") families and communities, and small businesses.
If the appropriate federal banking agency determines that an institution fails to meet any standard prescribed by the Guidelines, the agency may require the institution to provide it with an acceptable plan to achieve compliance with the standard, as required by the Federal Deposit Insurance Act, as amended, (the “FDI Act”).
If the appropriate federal banking agency determines that an institution fails to meet any standard prescribed by the Guidelines, the agency may require the institution to provide it with an acceptable plan to achieve compliance with the standard and agree to specific deadlines for the submission to and review by the regulator of reports confirming progress in implementing the safety and soundness compliance plan, as required by the Federal Deposit Insurance Act, as amended, (the “FDI Act”).
In addition, the Bank has 134 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. The market for the loans we produce varies, depending on the type of loan.
In addition, the Bank has approximately 80 private banking teams located in over ten 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.
Local economic conditions have a significant impact on loan demand, the value of the collateral securing our credits, and the ability of our borrowers to repay their loans. The competition we face for loans also varies with the type of loan we are originating.
Economic conditions have a significant impact on loan demand, the value of the collateral securing our credits, and the ability of our borrowers to repay their loans.
The rule also aligns the frequency of the calculation of the stress capital buffer requirement with the frequency of the supervisory stress test (with both occurring every other year for banking organizations subject to Category IV standards).
Therefore, banking organizations subject to Category IV standards are not required to calculate forward-looking projections of capital under scenarios provided by the Board. The rule also aligns the frequency of the calculation of the stress capital buffer requirement with the frequency of the supervisory stress test (with both occurring every other year for banking organizations subject to Category IV standards).
Many states have consumer protection laws analogous to, or in addition to, the federal laws listed above, such as usury laws, state debt collection practices laws, and requirements regarding loan disclosures and terms, credit discrimination, credit reporting, money transmission, recordkeeping, and unfair or deceptive business practices.
Many states have consumer protection laws analogous to, or in addition to, the federal laws listed above, such as usury laws, state debt collection practices laws, and requirements regarding loan disclosures and terms, credit discrimination, credit reporting, money transmission, recordkeeping, and unfair or deceptive business practices. 24 Certain states have adopted laws regulating and requiring licensing, registration, notice filing, or other approval for parties that engage in certain activity regarding consumer finance transactions.
The Company is subject to the information and proxy solicitation requirements, insider trading restrictions, and other requirements under the Exchange Act. Consumer Protection Regulations The activities of the Company’s banking subsidiary, including its lending and deposit gathering activities, is subject to a variety of consumer laws and regulations designed to protect consumers.
Consumer Protection Regulations The activities of the Company’s banking subsidiary, including its lending and deposit gathering activities, is subject to a variety of consumer laws and regulations designed to protect consumers.
Any change to laws and regulations, whether by the Regulatory Agencies or Congress, could have a materially adverse impact on our operations. 14 The Dodd-Frank Wall Street Reform and Consumer Protection Act Enacted in July 2010, the DFA significantly changed the bank regulatory structure and will continue to affect, into the immediate future, the lending and investment activities and general operations of depository institutions and their holding companies.
The Dodd-Frank Wall Street Reform and Consumer Protection Act Enacted in July 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act significantly changed the bank regulatory structure and will continue to affect, into the immediate future, the lending and investment activities and general operations of depository institutions and their holding companies.
The OCC, FDIC and the CFPB may take regulatory enforcement actions if we do not operate in accordance with applicable regulations, policies and directives. Proceedings may be instituted against us, or any "institution-affiliated party", such as a director, officer, employee, agent or controlling person, who engages in unsafe and unsound practices, including violations of applicable laws and regulations.
Proceedings may be instituted against us, or any "institution-affiliated party", such as a director, officer, employee, agent or controlling person, who engages in unsafe and unsound practices, including violations of applicable laws and regulations.
Depending on the results of an assessment, appropriate measures are taken to address the identified risks. In addition, we order an updated environmental analysis prior to foreclosing on such properties, and typically hold foreclosed multi-family, CRE, and ADC properties in subsidiaries. Our attention to environmental risks also applies to the properties and facilities that house our bank operations.
Depending on the results of an assessment, appropriate measures are taken to address the identified risks. In addition, we order an updated environmental analysis prior to foreclosing on such properties, and typically hold foreclosed multi-family, commercial real estate, and acquisition, development, and construction loan properties in subsidiaries.
The term “net profits” is defined as net income for a given period less any dividends paid during that period. As a result of our acquisition of Flagstar, we are also required to seek regulatory approval from the OCC for the payment of any dividend to the Parent Company through at least the period ending November 1, 2024.
As a result of our acquisition of Flagstar, we were also required to seek regulatory approval from the OCC for the payment of any dividend to the Parent Company through at least the period ending November 1, 2024, which we expect to continue during 2025.
We are also subject to regulation and examination by the FDIC, which insures the deposits of the Bank to the extent permitted by law and the requirements established by the Federal Reserve. The Bank is also subject to the supervision of the CFPB, which regulates the offering and provision of consumer financial products or services under federal consumer financial laws.
We are also subject to regulation and examination by the FDIC, which insures the deposits of the Bank to the extent permitted by law and the requirements established by the Federal Reserve.
Department of Housing and Urban Development (“HUD”), the Federal Housing Administration, the Veterans’ Administration (“VA”) and Fannie Mae and Freddie Mac with respect to originating, processing, selling and servicing mortgage loans.
Department of Housing and Urban Development, the Federal Housing Administration, the Veterans’ Administration, Federal National Mortgage Association, Government National Mortgage Association and Federal Home Loan Mortgage Corporation with respect to originating, processing, selling and servicing mortgage loans.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changePrimary among these are (1) interest rate risk, which arises from movements in interest rates; (2) credit risk, which arises from an obligor’s failure to meet the terms of any contract with a bank or to otherwise perform as agreed; (3) risks related to our financial statements; (4) liquidity and dividend risk, which arises from a bank’s inability to meet its obligations when they come due without incurring unacceptable losses, and related risks regarding our ability to pay dividends; (5) legal/compliance risk, which arises from violations of, or non-conformance with, laws, rules, regulations, prescribed practices, or ethical standards; (6) financial and market risk, which arises from changes in the value of portfolios of financial instruments, as well as other matters that may dilute the value of our securities; (7) strategic risk, which is the risk of loss arising from the execution of our strategic initiatives and business strategies, including our acquisition and integration of other companies we acquire; (8) operational risk, which arises from problems with service or product delivery; and (9) reputational risk, which arises from negative public opinion resulting in a significant decline in stockholder value.
Biggest changePrimary 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 terms of our outstanding trust preferred capital debt securities prohibit us from (1) declaring or paying any dividends or distributions on our capital stock, including our common stock; or (2) purchasing, acquiring, or making a liquidation payment on such stock, under the following circumstances: (a) if an event of default has occurred and is continuing under the applicable indenture; (b) if we are in default with respect to a payment under the guarantee of the related trust preferred securities; or (c) if we have given notice of our election to defer interest payments but the related deferral period has not yet 32 commenced, or a deferral period is continuing.
The terms of our outstanding trust preferred capital debt securities prohibit us from (1) declaring or paying any dividends or distributions on our capital stock, including our common stock; or (2) purchasing, acquiring, or making a liquidation payment on such stock, under the following circumstances: (a) if an event of default has occurred and is continuing under the applicable indenture; (b) if we are in default with respect to a payment under the guarantee of the related trust preferred securities; or (c) if we have given notice of our election to defer interest payments but the related deferral period has not yet commenced, or a deferral period is continuing.
Failure to comply (or to ensure that our agents and third-party service providers comply) with laws, regulations, or policies, including our failure to obtain any necessary state or local licenses, could result in enforcement actions or sanctions by regulatory agencies, civil money penalties, and/or reputational damage, which could have a material adverse effect on our business, financial condition, or results of operations.
Failure to comply (or to ensure that our agents and third-party service providers comply) with laws, regulations, or policies, including our failure to obtain and maintain any necessary state or local licenses, could result in enforcement actions or sanctions by regulatory agencies, civil money penalties, and/or reputational damage, which could have a material adverse effect on our business, financial condition, or results of operations.
The withdrawal of more deposits than we anticipate could have an adverse impact on our profitability as this source of funding, if not replaced by similar deposit funding, would need to be 31 replaced with more expensive wholesale funding, the sale of interest-earning assets, other sources of funding, or a combination of them all.
The withdrawal of more deposits than we anticipate could have an adverse impact on our profitability as this source of funding, if not replaced by similar deposit funding, would need to be replaced with more expensive wholesale funding, the sale of interest-earning assets, other sources of funding, or a combination of them all.
Additionally, state attorneys general have indicated that they intend to take a more active role in enforcing consumer protection laws, including through use of Dodd-Frank Act provisions that authorize state attorneys general to enforce certain provisions of federal consumer financial laws and obtain civil money 35 penalties and other relief available to the CFPB.
Additionally, state attorneys general have indicated that they intend to take a more active role in enforcing consumer protection laws, including through use of Dodd-Frank Act provisions that authorize state attorneys general to enforce certain provisions of federal consumer financial laws and obtain civil money penalties and other relief available to the CFPB.
If our Board of Directors (or any duly authorized committee of the Board) does not authorize and declare a dividend on (a) the Series A Preferred Stock for any dividend period, holders of the depository shares will not be entitled to receive any dividend for that dividend period, and the unpaid dividend will cease to accrue and be payable, or (b) Series B Preferred Stock and Series C Preferred Stock, the holders thereof will not be entitled to receive any dividend for that dividend period.
If our Board of Directors (or any duly authorized committee of the Board) does not authorize and declare a dividend on (a) the Series A Preferred Stock for any dividend period, holders of the depository shares will not be entitled to receive any dividend for that dividend period, and the unpaid dividend will cease to accrue and be payable, or (b) Series B Preferred Stock, the holders thereof will not be entitled to receive any dividend for that dividend period.
We maintain disclosure controls and procedures to ensure we will timely and sufficiently 40 notify our investors of material cybersecurity risks and incidents, including the associated financial, legal, or reputational consequence of such an event, as well as reviewing and updating any prior disclosures relating to the risk or event.
We maintain disclosure controls and procedures to ensure we will timely and sufficiently notify our investors of material cybersecurity risks and incidents, including the associated financial, legal, or reputational consequence of such an event, as well as reviewing and updating any prior disclosures relating to the risk or event.
In addition, such requirements could also compel us to issue additional securities, thus diluting the value of our common stock. In addition, failure to meet established capital requirements could result in the FRB and/or OCC placing limitations or 33 conditions on our activities and further restricting the commencement of new activities.
In addition, such requirements could also compel us to issue additional securities, thus diluting the value of our common stock. In addition, failure to meet established capital requirements could result in the FRB and/or OCC placing limitations or conditions on our activities and further restricting the commencement of new activities.
Private parties may also have the ability to challenge an institution’s performance under fair lending laws in private class action litigation. Such actions could have a material adverse effect on our business, financial condition and results of operations.
Private parties may also have the ability to challenge an institution’s performance under fair lending laws in private class action litigation. Such actions could have a material adverse effect on our business, financial condition and results 35 of operations.
We may also be required to expend significant additional resources to modify our protective measures or investigate and remediate vulnerabilities or other exposures arising from operational and security risks, including expenses for third-party expert consultants or outside counsel.
We may also be required to expend significant additional resources to modify our protective measures or investigate and remediate vulnerabilities or other exposures arising from operational and security risks, including expenses for third-party expert consultants or outside 38 counsel.
Additionally, under the FRB’s capital rules, dividends on the Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock may only be paid out of our net income, retained earnings, or surplus related to other additional tier 1 capital instruments.
Additionally, under the FRB’s capital rules, dividends on the Series A Preferred Stock and Series B Preferred Stock may only be paid out of our net income, retained earnings, or surplus related to other additional tier 1 capital instruments.
The holders of our Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock initially have the right to receive a payment on account of the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of our business before any payment may be made to holders of our common stock.
The holders of our Series A Preferred Stock and Series B Preferred Stock initially have the right to receive a payment on account of the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of our business before any payment may be made to holders of our common stock.
Our ability to 37 raise additional capital (and the associated terms) depends on conditions in the capital markets, economic conditions, and a number of other factors, including investor perceptions regarding the financial services and banking industry, market conditions and governmental activities, and on our financial condition and performance.
Our ability to raise additional capital (and the associated terms) depends on conditions in the capital markets, economic conditions, and a number of other factors, including investor perceptions regarding the financial services and banking industry, market conditions and governmental activities, and on our financial condition and performance.
We may also lose key personnel from the acquired entity as a result of an acquisition. We may not discover all known and unknown factors when examining a company for acquisition or merger during the due diligence period.
We may also lose key personnel from the acquired entity as a result of an acquisition. We may not discover all known and unknown factors when examining a company 37 for acquisition or merger during the due diligence period.
Deterioration in local economic conditions could drive the level of loan losses beyond the level we have provided for in our loan loss allowance; this, in turn, could necessitate an increase in our provisions for loan losses, which would reduce our earnings and capital.
Deterioration in local economic conditions could drive the level of loan losses beyond the level we have provided for in our loan loss allowance; this, in turn, could 36 necessitate an increase in our provisions for loan losses, which would reduce our earnings and capital.
These types of third-party relationships are subject to increasingly demanding regulatory requirements and oversight by federal bank regulators (such as the Federal Reserve Board, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation) and the CFPB.
These types of third-party relationships are subject to increasingly demanding regulatory requirements and oversight by federal bank regulators (such as the Federal Reserve Board, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation ("FDIC")) and the CFPB.
Dividends on our Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock are discretionary and noncumulative, and may not be paid if such payment will result in our failure to comply with all applicable laws and regulations.
Dividends on our Series A Preferred Stock and Series B Preferred Stock are discretionary and noncumulative and may not be paid if such payment will result in our failure to comply with all applicable laws and regulations. Dividends on our Series A Preferred Stock and Series B Preferred Stock are discretionary and noncumulative.
Our Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock initially have rights, preferences and privileges that are not held by, and are preferential to the rights of, our common stockholders, which could adversely affect our liquidity and financial condition.
Our Series A Preferred Stock and Series B Preferred Stock initially have rights, preferences and privileges that are not held by, and are preferential to the rights of, our common stockholders, which could adversely affect our liquidity and financial condition.
The unexpected loss of services of one or more of our key personnel could have a material adverse impact on our business, given the specialized knowledge of such personnel and the difficulty of finding qualified replacements on a timely basis.
The unexpected loss of 39 services of one or more of our key personnel could have a material adverse impact on our business, given the specialized knowledge of such personnel and the difficulty of finding qualified replacements on a timely basis.
In addition, 29 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.
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.
Our obligations to the holders of our Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock could limit our ability to obtain additional financing, which could have an adverse effect on our financial condition.
Our obligations to the holders of our Series A Preferred Stock and Series B Preferred Stock could limit our ability to obtain additional financing, which could have an adverse effect on our financial condition.
These regulatory authorities have extensive discretion in connection with their supervisory and enforcement activities, including with respect to the imposition of restrictions on the operation of a bank or a bank holding company, the imposition of significant fines, the ability to delay or deny merger or other regulatory applications, the payment of dividends, the classification of assets by a bank, and the adequacy of a bank’s allowance for loan losses, among other matters.
These regulatory authorities have extensive discretion in connection with their supervisory and enforcement activities, including with respect to the imposition of restrictions on the operation of a bank or a bank holding company and its subsidiaries, the imposition of significant fines, the ability to delay or deny merger or other regulatory applications, the payment of dividends, the classification of assets by a bank, and the adequacy of a bank’s allowance for loan losses, among other matters.
In addition, and depending on current market conditions, we have the ability to access the capital markets from time to time to generate additional liquidity.
In addition, and depending on current market conditions, we may have the ability to access the capital markets from time to time to generate additional liquidity.
Dividends on our Series B Preferred Stock and Series C Preferred Stock are payable at a rate of 13 percent per annum, payable quarterly and in arrears.
Dividends on our Series B Preferred Stock are payable at a rate of 13 percent per annum, payable quarterly and in arrears.
In addition, without notice to, or consent from, the holders of our common stock, we may issue additional series of trust preferred capital debt securities with similar terms, or enter into other financing agreements, that limit our ability to pay dividends on our common stock.
In addition, without notice to, or consent from, the holders of our common stock, we may issue additional series of trust preferred capital debt securities with similar terms, or enter into other financing agreements, which limit our ability to pay dividends on our common stock.
If our BSA policies, procedures and systems are deemed to be deficient, or the BSA policies, procedures and systems of the financial institutions that we acquire in the future are deficient, we would be subject to reputational risk and potential liability, including fines and regulatory actions such as restrictions on our ability to pay 34 dividends and the necessity to obtain regulatory approvals to proceed with certain aspects of our business plan, including our acquisition plans, which would negatively impact our business, financial condition and results of operations.
If our BSA policies, procedures and systems are deemed to be deficient, or the BSA policies, procedures and systems of the financial institutions that we acquire in the future are deficient, we would be subject to reputational risk and potential liability, including fines and regulatory actions such as restrictions on our ability to pay dividends and the necessity to obtain regulatory approvals to proceed with certain aspects of our business plan which would negatively impact our business, financial condition and results of operations.
Following the satisfaction of the liquidation preference, the Series B Preferred Stock and Series C Preferred Stock participates with our common stock on an as-converted basis in a liquidation, dissolution or winding up of the Company.
Following the satisfaction of the liquidation preference, the Series B Preferred Stock participates with our common stock on an as-converted basis in a liquidation, dissolution or winding up of the Company.
As a Category IV banking organization we are subject to enhanced liquidity risk management requirements which include reporting, liquidity stress testing, a liquidity buffer and resolution planning, subject to the applicable transition periods. If we were to meet or exceed certain other thresholds for asset size, we would become subject to additional requirements.
As a Category IV banking organization, we are subject to enhanced liquidity risk management requirements which include reporting, liquidity stress testing, a liquidity buffer and resolution planning, subject to the applicable transition periods. If we were to meet or exceed certain other thresholds, we would become subject to additional requirements.
Failure to comply with these sanctions could have serious legal and reputational consequences. Our enterprise risk management framework may not be effective in mitigating the risks to which we are subject, based upon the size, scope, and complexity of the Company.
Failure to comply with these sanctions could have serious legal and reputational consequences . Our Risk Governance Framework may not be effective in mitigating the risks to which we are subject, based upon the size, scope, and complexity of the Company.
In addition, because multi-family and CRE loans represent the majority of the loans in our portfolio, a decline in tenant occupancy or rents, due to such factors, or for other reasons, such as new legislation, could adversely impact the ability of our borrowers to repay their loans on a timely basis, which could have a negative impact on our net income.
In addition, because multi-family and commercial real estate loans represent the majority of the loans in our portfolio, a decline in tenant occupancy or rents, due to such factors, or for other reasons, such as new legislation, could adversely impact the ability of our borrowers to repay their loans on a timely basis, which could have a negative impact on our net income.
Any increase in the loan loss allowance or in loan charge-offs as required by such regulatory authorities could have a material adverse effect on our financial condition and results of operations. Our concentration in multi-family loans and CRE loans could expose us to increased lending risks and related loan losses.
Any increase in the loan loss allowance or in loan charge-offs as required by such regulatory authorities could have a material adverse effect on our financial condition and results of operations. Our concentration in multi-family loans and commercial real estate loans could expose us to increased lending risks and related loan losses.
The CRA requires the Federal Reserve and OCC to assess our performance in meeting the credit needs of the communities we serve, including low- and moderate-income neighborhoods. If the Federal Reserve or OCC determines that we need to improve our performance or are in substantial non-compliance with CRA requirements, various adverse regulatory consequences may ensue.
The Community Reinvestment Act requires the Federal Reserve and OCC to assess our performance in meeting the credit needs of the communities we serve, including low- and moderate-income neighborhoods. If the Federal Reserve or OCC determines that we need to improve our performance or are in substantial non-compliance with Community Reinvestment Act requirements, various adverse regulatory consequences may ensue.
A successful regulatory challenge to an institution’s performance under the CRA, fair lending laws or regulations, or consumer lending laws and regulations could result in a wide variety of sanctions, including damages and civil money penalties, injunctive relief, restrictions on mergers and acquisitions activity, restrictions on expansion, and restrictions on entering new business lines.
A successful regulatory challenge to an institution’s performance under the Community Reinvestment Act, fair lending laws or regulations, or consumer lending laws and regulations could result in a wide variety of sanctions, including damages and civil money penalties, injunctive relief, restrictions on mergers and acquisitions activity, restrictions on expansion, and restrictions on entering new business lines.
Financial and Market Risks A decline in economic conditions could adversely affect the value of the loans we originate and the securities in which we invest.
Financial and Market Risks Economic conditions could adversely affect the value of the loans we originate and the securities in which we invest.
Summary of Risk Factors Interest Rate Risks • Changes in interest rates could reduce our net interest income and negatively impact the value of our loans, securities, and other assets and have a material adverse effect on our cash flows, financial condition, results of operations, and capital.
Interest Rate Risk Changes in interest rates could reduce our net interest income and negatively impact the value of our loans, securities, and other assets, which could have a material adverse effect on our cash flows, financial condition, results of operations, and capital.
We face significant risks related to fraud, which could result in financial loss, expensive litigation, and damage to our reputation. Our organization is exposed to various types of fraud, including fraud or theft by colleagues or outsiders and unauthorized transactions.
We could be exposed to fraud risks that affect our operations and reputation. We face significant risks related to fraud, which could result in financial loss, expensive litigation, and damage to our reputation. Our organization is exposed to various types of fraud, including fraud or theft by colleagues or outsiders and unauthorized transactions.
Such regulation and supervision govern the activities in which a bank holding company and its banking subsidiaries may engage, and are intended primarily for the protection of the DIF, the banking system in general, and bank customers, rather than for the benefit of a company’s stockholders.
Such regulation and supervision govern the activities in which a bank holding company and its banking subsidiaries may engage and are intended primarily for the protection of the Deposit Insurance Fund, the banking system in general, and bank customers, rather than for the benefit of a company’s stockholders.
Our results of operations could be materially affected by the imposition of restrictions on our operations by bank regulators, further changes in bank regulation, or by our ability to comply with certain existing laws, rules, and regulations governing our industry.
Our operations could be materially affected by the imposition of restrictions on our operations by bank regulators, and other governmental entities, further changes in bank regulation, or by our ability to comply with certain existing laws, rules, and regulations governing our industry.
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 ACL, depending on various assumptions and factors used in this model.
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.
We review our other intangible assets for impairment at least annually or more frequently if events or changes in circumstances indicate that the carrying value may not be recoverable. A significant decline in deposits may necessitate taking additional charges in the future related to the impairment of other intangible assets.
We review our intangible assets for impairment if events or changes in circumstances indicate that the carrying value may not be recoverable. A significant decline in deposits may necessitate taking additional charges in the future related to the impairment of other intangible assets.
As a financial institution, we are subject to a number of risks, including interest rate, credit, liquidity, legal/compliance, market, strategic, operational, and reputational. Our ERM framework is designed to minimize the risks to which we are subject, as well as any losses stemming from such risks.
As a financial institution, we are subject to a number of risks, including interest rate, credit, liquidity, legal/compliance, market, strategic, operational, and reputational. Our Risk Governance Framework is designed to manage the risks to which we are subject, as well as any losses stemming from such risks.
As a result, the further development of previously unknown or unanticipated risks may result in our incurring losses in the future that could adversely impact our financial condition and results of operations. Furthermore, an ineffective ERM framework, as well as other risk factors, could result in a material increase in our FDIC insurance premiums.
As a result, the further development of previously unknown or unanticipated risks may result in our incurring losses in the future that could adversely impact our financial condition and results of operations. Furthermore, an ineffective Risk Governance Framework, as well as other risk factors, could result in a material increase in our FDIC deposit insurance premium assessments.
As a result of the Signature transaction, our total assets exceeded $100 billion and therefore we became classified as a Category IV banking organization under the rules issued by the federal banking agencies that tailor the application of enhanced prudential standards to large bank holding companies and the capital and liquidity rules to large bank holding companies and depository institutions under the Dodd-Frank Act and the Economic Growth, Regulatory Relief, and Consumer Protection Act.
As our total assets exceed $100 billion and therefore we are classified as a Category IV banking organization under the rules issued by the federal banking agencies that tailor the application of enhanced prudential standards to large bank holding companies and the capital and liquidity rules to large bank holding companies and depository institutions under the Dodd-Frank 33 Act and the Economic Growth, Regulatory Relief, and Consumer Protection Act.
If the Ninth Circuit’s holding is more broadly adopted by other Federal Circuits, including those covering states that currently have enacted, or in the future may enact, statutes requiring the payment of interest on escrow balances or if we would be required to retroactively credit interest on escrow funds, the Company’s earnings could be adversely affected. 43 We could be exposed to fraud risks that affect our operations and reputation.
If the Ninth Circuit’s holding is more broadly adopted by other Federal Circuits, including those covering states that currently have enacted, or in the future may enact, statutes requiring the payment of interest on escrow balances or if we would be required to retroactively credit interest on escrow funds, the Company’s earnings could be adversely affected.
The amount of any impairment charge could be significant and could have a material adverse impact on our financial condition and results of operations. We may fail to maintain effective internal controls, which could impact the accuracy and timeliness of financial reporting.
The amount of any impairment charge could be significant and could have a material adverse impact on our financial condition and results of operations. Our failure to maintain effective internal controls may impact the accuracy and timeliness of financial reporting and increase our expenses.
At any given time, we are involved with a number of legal and regulatory examinations as a part of reviews conducted by regulators and other parties, which may involve banking, securities, consumer protection, employment, tort, and numerous other laws and regulations.
We are subject to various legal or regulatory investigations and proceedings. At any given time, we and our subsidiaries are involved with a number of legal proceedings and regulatory investigations and examinations as a part of reviews conducted by regulators and other parties, which may involve banking, securities, consumer protection, employment, tort, and numerous other laws and regulations.
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, 2023 , $3.4 billion, or 32.1 percent of ou r commercial real estate loan portfolio was secured by office buildings.
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.
Any such failure in our analytical or forecasting models could have a material adverse effect on our business, financial condition and results of operations. Impairment in the carrying value of other intangible assets could negatively impact our financial condition and results of operations. At December 31, 2023, other intangible assets, primarily core deposit intangibles, totaled $625 million.
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.
Changes in such regulation and supervision, or changes in regulation or enforcement by such authorities, whether in the form of policy, regulations, legislation, rules, orders, enforcement actions, ratings, or decisions, could have a material impact on the Company, our subsidiary bank and other affiliates, and our operations.
Changes in such regulation and supervision, or changes in regulation or enforcement by such authorities, whether in the form of policy, regulations, legislation, rules, orders, enforcement actions, ratings, or decisions, could have a material impact on the Company, our subsidiary bank and other affiliates, and our operations, including restrictions on the operation of a bank or a bank holding company and changes in FDIC deposit insurance premium assessments.
Downgrades of the credit ratings of the Company and the Bank, such as those announced by certain credit rating agencies in both February and March 2024, could result in an acceleration in deposit outflows and additional collateral needs, which this far have been modest.
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.
We are subject to regulation, supervision, and examination by the following entities: (1) the OCC; (2) the FDIC; (3) the FRB-NY; and (4) the CFPB, as well as state licensing restrictions and limitations regarding certain consumer finance products.
We and our subsidiaries are subject to regulation, supervision, and examination by the following entities: (1) the OCC; (2) the FDIC; (3) the FRB; and (4) the CFPB, as well as FINRA regulations and state licensing restrictions and limitations regarding certain financial services, investment management and other consumer finance products.
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, CRE, and ADC loans we originate for investment and the businesses of the customers to whom we make our other C&I loans are located.
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 29 construction loans we originate for investment and the businesses of the customers to whom we make our other commercial and industrial loans are located.
Economic weakness in the New York City metropolitan region, where the majority of the properties collateralizing our multi-family, CRE, and ADC loans, and the majority of the businesses collateralizing our other C&I loans, are located could have an adverse impact 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.
We have implemented various controls and security measures, but the failure of any of these controls could result in a failure to detect or mitigate fraud risks in a timely manner. We are committed to ongoing investments and attention to combat fraud and enhance our security measures to protect against these risks.
We have implemented various controls and security measures, but the failure of any of these controls could result in a failure to detect or mitigate fraud risks in a timely manner.
In addition, if loans that are collateralized by real estate become troubled and the value of the real estate has been significantly impaired, then we may not be able to recover the full contractual amount of principal and interest that we anticipated at the time we originated the loan, which could cause us to increase our provision for loan losses and adversely affect our operating results and financial condition.
In addition, if loans that are collateralized by real estate become troubled and the value of the real estate has been significantly impaired, then we may not be able to recover the full contractual amount of principal and interest that we anticipated at the time we originated the loan.
Furthermore, the payment of dividends falls under federal regulations that have grown more stringent in recent years. While we pay our quarterly cash dividend in compliance with current regulations, such regulations could change in the future.
Furthermore, the payment of dividends falls under federal regulations that have grown more stringent in recent years. While we pay our quarterly cash dividend in compliance with current regulations, such regulations could change in the future. We are currently paying quarterly cash dividends on shares of the Company's common stock at $0.01 per share.
Privacy initiatives have imposed and will continue to impose additional operational burdens on us. These initiatives may limit our ability to pursue desirable business initiatives and increase the risks associated with any future use of personal data.
It may also require changes to our systems, business practices, or privacy policies, which could adversely impact our operating results. Privacy initiatives have imposed and will continue to impose additional operational burdens on us. These initiatives may limit our ability to pursue desirable business initiatives and increase the risks associated with any future use of personal data.
Proceedings or actions brought against us may result in judgments, settlements, fines, penalties, injunctions, business improvement orders, consent orders, supervisory agreements, restrictions on our business activities, or other results adverse to us, which could materially and negatively affect our business.
Proceedings or actions brought against us or our subsidiaries may result in judgments, settlements, fines, penalties, injunctions, business improvement orders, consent orders, supervisory agreements, ratings downgrades, restrictions on our business activities, revocations or non-renewals of required licenses, changes in FDIC deposit insurance premium assessments or other results adverse to us, which could materially and negatively affect our business.
Legal/Compliance Risks Inability to fulfill minimum capital requirements could limit our ability to conduct or expand our business, pay a dividend, or result in termination of our FDIC deposit insurance, and thus impact our financial condition, our results of operations, and the market value of our stock.
The preferential rights could also result in divergent interests between the holders of our common stock, Series A Preferred Stock and Series B Preferred Stock and other classes of securities. 32 Legal and Regulatory Risks Inability to fulfill minimum capital requirements could limit our ability to conduct or expand our business, pay a dividend, or result in termination of our FDIC deposit insurance, and thus impact our financial condition, our results of operations, and the market value of our stock.
For further information, see Note 19 - Commitments and Contingencies and Item 3 - Legal Proceedings. We may be required to pay interest on certain mortgage escrow accounts in accordance with certain state laws despite the Federal preemption under the National Bank Act.
We may be required to pay interest on certain mortgage escrow accounts in accordance with certain state laws despite the Federal preemption under the National Bank Act.
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.
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.
Following is a discussion of the material risks and uncertainties that could have a material adverse impact on our financial condition, results of operations, and the value of our shares. 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 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.
They could adversely affect our access to liquidity and capital, and could significantly increase our cost of funds, trigger additional collateral or funding requirements, and decrease the number of investors and counterparties willing to lend to us or to purchase our securities. This could affect our growth, profitability, and financial condition, including our liquidity.
We have experienced situations which could occur again in the future that could adversely affect our access to liquidity and capital, and could significantly increase our cost of funds, trigger additional collateral or funding requirements, and decrease the number of investors and counterparties willing to lend to us or to purchase our securities.
On March 11, 2024, we completed an approximately $1.05 billion equity investment in the Company in connection with which we sold and issued (a) 76,630,965 shares of our common stock, at a purchase price per share of $2.00, (b) 192,062 shares of a new series of our preferred stock, par value $0.01 per share, designated as Series B Noncumulative Convertible Preferred Stock, at a price per share of $2,000, each share of which is convertible into 1,000 shares of common stock, (c) 256,307 shares of a new series of our preferred stock, par value $0.01 per share, designated as Series C Noncumulative Convertible Preferred Stock, at a price per share of $2,000, each share of which is convertible into 1,000 shares of common stock, and (d) warrants, which may not be exercised until 180 days after issuance thereof, affording the holder thereof the right, until the seven-year anniversary of the issuance of such warrant, to purchase for $2,500 per share, shares of a new class of non-voting, common-equivalent preferred stock of the Company, each share of which is convertible into 1,000 shares of common stock, and all of which shares of Series D NVCE Stock, upon issuance, will represent the right (on an as converted basis) to receive 315 million shares of common stock.
On March 11, 2024, we completed an approximately $1.05 billion equity investment in the Company in connection with which we sold and issued (a) 76,630,965 shares of our common stock, at a purchase price per share of $2.00, (b) 192,062 shares of a new series of our preferred stock, par value $0.01 per share, designated as Series B Noncumulative Convertible Preferred Stock, at a price per share of $2,000, each share of which is convertible into 1,000 shares of common stock, (c) 256,307 shares of a new series of our preferred stock, par value $0.01 per share, designated as Series C Noncumulative Convertible Preferred Stock, at a price per share of $2,000, each share of which is convertible into 1,000 shares of common stock, and (d) Warrants which were not exercisable until September 10, 2024 and expire 7 years after issuance.
As of December 31, 2023, approximately 35.9 percent of our total deposits of $81.5 billion were not FDIC-insured. In addition, large-scale withdrawals of brokered or institutional deposits could require us to pay significantly higher interest rates on our retail deposits or on other wholesale funding sources, which would have an adverse impact on our net interest income and net income.
In addition, large-scale withdrawals of brokered or institutional deposits could require and has required us to pay significantly higher interest rates on our retail deposits or on other wholesale funding sources, which has an adverse impact on our net interest income and net income.
The replacement of deposit funding with wholesale funding could cause our overall cost of funds to increase, which would reduce our net interest income and results of operations. A decline in interest-earning assets would also lower our net interest income and results of operations.
In extreme situations, withdrawals could exceed our capacity to fund the withdrawals and lead to the financial failure of the Company. The replacement of deposit funding with wholesale funding could cause our overall cost of funds to increase, which would reduce our net interest income and results of operations.
Reduction or elimination of our quarterly cash dividend could have an adverse impact on the market price of our common stock.
This could affect our growth, profitability, and financial condition, including our liquidity. The elimination of our quarterly cash dividend could have an adverse impact on the market price of our common stock.
In addition, the Equal Credit Opportunity Act, the Fair Housing Act and other fair lending laws and regulations impose nondiscriminatory lending requirements on financial institutions. The CFPB, the U.S. Department of Justice and other federal agencies are responsible for enforcing these laws and regulations.
In addition, the Equal Credit Opportunity Act, the Fair Housing Act and other fair lending laws and regulations impose nondiscriminatory lending requirements on financial institutions.
In addition, our right to participate in a distribution of assets upon the liquidation or reorganization of a subsidiary may be subject to the prior claims of the subsidiary’s creditors.
In addition, our right to participate in a distribution of assets upon the liquidation or reorganization of a subsidiary may be subject to the prior claims of the subsidiary’s creditors. We expect to continue to be required to seek approval from the OCC to pay dividends from the Bank to the Parent Company during 2025.
Moreover, higher inflation could lead to fluctuations in the value of our assets and liabilities and off-balance sheet exposures, and could result in lower equity market valuations of financial services companies. Credit Risk Our allowance for credit losses might not be sufficient to cover our actual losses, which would adversely impact our financial condition and results of operations.
Moreover, higher inflation could lead to fluctuations in the value of our assets and liabilities and off-balance sheet exposures and could result in lower equity market valuations of financial services companies.
The soundness of many financial institutions may be closely interrelated as a result of relationships between them involving credit, trading, execution of transactions, and the like. As a result, concerns about, or a default or threatened default by, one institution could lead to significant market-wide liquidity and credit problems, losses, or defaults by other institutions.
As a result, concerns about, or a default or threatened default by, one institution could lead to significant market-wide liquidity and credit problems, losses, or defaults by other institutions.
Our New York State multi-family loan portfolio could be adversely impacted by changes in legislation or regulation which, in turn, could have a material adverse effect on our financial condition and results of operations. On June 14, 2019, the New York State legislature passed the New York Housing Stability and Tenant Protection Act of 2019.
If the underlying collateral value is below the loan amount, the Company will suffer a loss upon a default. Our New York State multi-family loan portfolio could be adversely impacted by changes in legislation or regulation which, in turn, could have a material adverse effect on our financial condition and results of operations.
The cost of our deposits and short-term wholesale borrowings is largely based on short-term interest rates, the level of which is driven by the FOMC of the FRB. However, the yields generated by our loans and securities are typically driven by intermediate-term interest rates, which are set by the bond market and generally vary from day to day.
However, the yields generated by our loans and securities are typically driven by intermediate-term interest rates, which are set by the bond market and generally vary from day to day. The level of our net interest income is therefore influenced by movements in such interest rates, and the pace at which such movements occur.
As such “systemic risk” may adversely affect the financial intermediaries with which we interact on a daily basis (such as clearing agencies, clearing houses, banks, and securities firms and exchanges), we could be adversely impacted as well.
As such “systemic risk” may adversely affect the financial intermediaries with which we interact on a daily basis (such as clearing agencies, clearing houses, banks, and securities firms and exchanges), we could be adversely impacted as well. 40 Completing the diversification of the Company’s loan portfolio may be more difficult, costly or time consuming than expected and the anticipated benefits and cost savings of the plan may not be realized.
If the Bank is unable to pay dividends to the Parent Company, we might not be able to service our debt, pay our obligations, or pay dividends on our common stock.
If the Bank is unable to pay dividends to the Parent Company, we might not be able to service our debt, pay our obligations, or pay dividends on our common stock. Deferring payments on our trust preferred capital debt securities or being in default under the related indentures, would prohibit us from paying dividends on our common stock.
As a Category IV banking organization with over $100 billion in assets, we are subject to stringent regulations, including reporting, capital stress testing, and liquidity risk management. Non-compliance could result in regulatory risks and restrictions on our activities.
We are subject to enhanced prudential standards and additional capital and liquidity requirements including reporting, capital stress testing, and liquidity risk management. Non-compliance could result in regulatory risks and restrictions on our activities.
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 and also could subject us to material reputational and compliance risk.
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.
If federal, state, or local tax authorities were to determine that we did not adequately provide for our taxes, our income tax expense could be increased, adversely affecting our earnings. The amount of income taxes we are required to pay on our earnings is based on federal, state, and local legislation and regulations.
For further information, see Note 20 - Commitments and Contingencies and Item 3 - Legal Proceedings. If federal, state, or local tax authorities were to determine that we did not adequately provide for our taxes, our income tax expense could be increased, adversely affecting our earnings.
Compliance with these laws is essential to protect the privacy of personal information and avoid potential liability and reputational damage. Failure to comply with privacy laws and regulations may expose us to fines, litigation, or regulatory enforcement actions. It may also require changes to our systems, business practices, or privacy policies, which could adversely impact our operating results.
The sharing, use, disclosure, and protection of this information are governed by federal and state laws. Compliance with these laws is essential to protect the privacy of personal information and avoid potential liability and reputational damage. Failure to comply with privacy laws and regulations may expose us to fines, litigation, or regulatory enforcement actions.
We have identified certain material weaknesses described in Item 9A of this Annual Report on Form 10-K and may discover additional future material weaknesses or significant deficiencies, which could divert management attention and increase our expenses, in order to correct the weaknesses or deficiencies in our controls.
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.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe Committees meet monthly to review and discuss overall state, current developments, management and performance metrics, risk identification and mitigation status, and new initiatives associated with both the Enterprise Risk Management and Information/Cybersecurity Programs.
Biggest changeThe Committees meet quarterly to review and discuss overall state, current developments, management and performance metrics, risk identification and mitigation status, and new initiatives associated with both the Risk Governance 43 Framework and information/cybersecurity risk management programs. The Committees rely upon various management level committees (e.g.
Independent effective challenge has been embedded throughout this process and ensures that remediation efforts will, and have satisfactorily addressed the identified issue. A formal Incident Response Plan (“Plan”) is maintained by the Information Security Department, and approved by the Board of Directors or designated Committee thereof at least annually.
Independent effective challenge has been embedded throughout this process and ensures that remediation efforts will and have satisfactorily addressed the identified issue. A formal incident response plan is maintained by the Information Security Department and approved by the Board of Directors or designated Committee thereof at least annually.
The CISO reports directly to the Chief Risk Officer, and has over 15 years of direct experience in designing, implementing, and maturing information and cybersecurity strategies within the financial sector.
The CISO reports directly to the Chief Information Officer and has over 15 years of direct experience in designing, implementing, and maturing information and cybersecurity strategies within the financial sector.
The Plan sets forth the Bank’s information/cybersecurity incident response framework, which has been designed to ensure a consistent, repeatable response to any actual or threatened cybersecurity incident (“Incident”).
The response plan sets forth the Bank’s information/cybersecurity incident response framework, which has been designed to ensure a consistent, repeatable response to any actual or threatened cybersecurity incident.
Item 1C. Cybersecurity Risk Management and Strategy 44 The importance of protecting against unauthorized access to or use of customer data that has been entrusted to us as part of the various services provided to our customers; as well as operational disruptions caused by cybersecurity events, is of paramount importance to us.
Item 1C. Cybersecurity 42 Risk Management and Strategy The importance of protecting against unauthorized access to or use of customer data that has been entrusted to us as part of the various services provided to our customers; as well as operational disruptions caused by cybersecurity events, is of paramount importance to us.
Prior to joining the Bank, the CISO served as a technology examiner for one of the three Federal banking regulatory agencies, with over ten years of experience performing technology examinations of financial institutions (“FI”) and FI service providers primarily within the New York metropolitan area.
Prior to joining the Bank, the CISO served as a technology examiner for one of the three Federal banking regulatory agencies, with over ten years of experience performing technology examinations of financial institutions and financial institutions service providers primarily within the New York metropolitan area.
Governance The Board of Directors, through its Risk Assessment (“RAC”) and Technology (“TEC”) Committees, (together the “Committees”) provides direction and oversight of both the enterprise risk management and information/cybersecurity risk management programs.
Governance The Board of Directors, through its Risk Assessment (“RAC”) and Technology (“TEC”) Committees, (together the “Committees”) provides direction and oversight of both the Risk Governance Framework and information/cybersecurity risk management programs.
A key aspect of the ERM Program is the risk and control self-assessment (“RCSA”) process, which is used to evaluate the mitigation effectiveness of implemented controls through an independent effective challenge program.
A key aspect of the Risk Governance Framework is the risk and control self-assessment (“RCSA”) process, which is used to evaluate the mitigation effectiveness of implemented controls through an independent effective challenge program.
Gaps or control weaknesses identified as part of the RCSA process require creation of issues and remediation strategies, both of which are formally documented within the RMP, where remediation efforts are managed and monitored from initial creation through ultimate completion of the respective work effort.
Gaps or control weaknesses identified as part of the RCSA process require creation of issues and remediation strategies, both of which are formally documented within the GRC risk management platform, where remediation efforts are managed and monitored from initial creation through ultimate completion of the respective work effort.
The information/cybersecurity risk management program relies upon a layered security model to protect against both internal and external threats; and is a component of the Bank’s formalized enterprise risk management program (“ERM Program”), which is reviewed and approved by the Board of Directors or Committee thereof at least annually.
The information/cybersecurity risk management program relies upon a layered security model to protect against both internal and external threats; and is a component of the Bank’s Risk Governance Framework, which is reviewed and approved by the Board of Directors or Committee thereof at least annually.
The Committees rely upon various management level committees (e.g. 45 Enterprise Risk Management, Operational Risk Management, and Technology Management) for oversight and direct management of the overarching risk management framework, which includes the information/cybersecurity risk management program and direct reporting by the Chief Information Security Officer (“CISO”).
Enterprise Risk Management, Operational Risk Management, and Technology Management) for oversight and direct management of the overarching Risk Governance Framework, which includes the information/cybersecurity risk management program and direct reporting by the Chief Information Security Officer (“CISO”).
The ERM Program sets forth enterprise-wide operational practices to ensure consistency in the organizations approach to risk identification, documentation, measurement, management, and mitigation with all aspects of risk management documented within a centrally maintained risk management platform (“RMP”).
The Risk Governance Framework sets forth enterprise-wide operational practices to ensure consistency in the Company's approach to risk identification, assessment and testing, issues management, and mitigation with all aspects of risk management documented within a centrally maintained Governance, Risk and Controls (“GRC”) risk management platform.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe also utilize other branch and back-office locations in those states, and in New Jersey, Arizona, California, Indiana, and Wisconsin under various lease and license agreements that expire at various times. (See Note 8 - Leases in Item 8, “Financial Statements and Supplementary Data.”) We believe that our facilities are adequate to meet our present and immediately foreseeable needs.
Biggest changeWe also utilize other branch and back-office locations in those states, and in New Jersey, Arizona, California, Indiana, and Wisconsin under various lease and license agreements that expire at various times.
Added
(See Note 8 - Leases, Premises and Equipment in Item 8, “Financial Statements and Supplementary Data.”) We believe that our facilities are adequate to meet our present and immediately foreseeable needs.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeNew York Community Bancorp, Inc., et al. , Case No. 1:24-cv-01118, filed on February 13, 2024 in the United States District Court for the Eastern District of New York.
Biggest changeCangemi et al. , Case No. 1:24-cv-01421, filed on February 26, 2024 in the United States District Court for the Eastern District of New York; Wang v. Cangemi et al. Case No. 1:24-cv-01422, filed on February 26, 2024 in the United States District Court for the Eastern District of New York; and Podems v.
This action, which also names the Company as a nominal defendant and seeks unspecified compensatory damages and certain corporate governance and internal procedures reforms, alleges claims of breach of fiduciary duty, gross mismanagement, waste of corporate assets, unjust enrichment, aiding and abetting with respect to the director defendants, and violations of Sections 10(b) and 21D of the Exchange Act with respect to the officer defendants.
These actions, which also name the Company as a nominal defendant and seeks unspecified compensatory damages and certain corporate governance and internal procedures reforms, alleges claims of breach of fiduciary duty, gross mismanagement, waste of corporate assets, unjust enrichment, aiding and abetting with respect to the director defendants, and violations of Sections 10(b) and 21D of the Exchange Act with respect to the officer defendants.
This action, which seeks unspecified compensatory damages to be proven at trial, alleges violations of the federal securities laws, including Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and SEC Rule 10b-5, with respect to disclosures concerning the Company’s business, operations and prospects, particularly regarding the impact of the Flagstar and Signature transactions and the Bank’s commercial real estate loan portfolio and related matters, that were made in the Company’s public SEC filings and press releases during the period beginning on March 1, 2023 and ending on January 30, 2024.
This action, which seeks unspecified compensatory damages to be proven at trial, alleges violations of the federal securities laws, including Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and SEC Rule 10b-5, with respect to disclosures concerning the Company’s business, operations and prospects, particularly regarding the impact of the Flagstar and Signature transactions and the Bank’s commercial real estate loan portfolio and related matters, that were made in the Company’s public SEC filings and press releases during the period beginning on July 27, 2022 and ending on February 29, 2024.
Item 3. Legal Proceedings The Company is involved in various legal actions arising in the ordinary course of its business. All such actions in the aggregate involve amounts that are believed by management to be immaterial to the financial condition and results of operations of the Company.
Item 3. Legal Proceedings The Company is involved in various legal actions arising in the ordinary course of its business. Except as set forth below, all such actions in the aggregate involve amounts that are believed by management to be immaterial to the financial condition and results of operations of the Company.
Cangemi, et al., Case No. 1:24-cv-01207, filed on February 15, 2024 in the United States District Court for the Eastern District of New York.
Cangemi, et al., Case No. 1:24-cv-01207, filed on February 15, 2024 in the United States District Court for the Eastern District of New York; Pierce v. Cangemi, et al., Case No. 1:24-cv-01408, filed on February 26, 2024 in the United States District Court for the Eastern District of New York; Karp v.
The Company intends to vigorously defend this action and any related actions. The Company’s President and Chief Executive Officer and Senior Executive Vice President and Chief Financial Officer, as well as all of the Company’s current directors, have also been named as defendants in a shareholder derivative action captioned Hauser v.
The Company is vigorously defending this action and also intends to vigorously defend any related actions. 44 The Company’s former President and Chief Executive Officer and former Senior Executive Vice President and Chief Financial Officer, as well as all of the Company’s directors as of January 31, 2024, have also been named as defendants in the following purported shareholder derivative actions: Hauser v.
The Company intends to vigorously defend this action and any related actions. 46 The outcome of the pending litigation described above is uncertain.
The Company and the named defendants are vigorously defending this action and also intend to vigorously defend any related actions. The outcome of the pending litigation described above is uncertain.
The Company and its President and Chief Executive Officer and Senior Executive Vice President and Chief Financial Officer have been named as defendants in a shareholder class action captioned Lemm, Jr. v.
The Company and certain former executive officers of the Company and certain current and former directors of the Company have been named as defendants in a consolidated purported shareholder class action captioned Lemm, Jr. v.
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The Company intends to vigorously defend this action and any related actions. The Company and its President and Chief Executive Officer and Senior Executive Vice President and Chief Financial Officer have also been named as defendants in a second shareholder class action captioned Miskey v.
Added
On December 19, 2024, another purported shareholder of the Company filed an additional purported shareholder class action, captioned Garfield v. Flagstar Financial, Inc. et al., Case No. 1:24-cv-08655, in the United States District Court for the Eastern District of New York against the Company and certain current and former directors and executive officers of the Company.
Removed
This action also seeks unspecified compensatory damages to be proven at trial and alleges violations of the federal securities laws, including Sections 10(b) and 20(a) of the Exchange Act and SEC Rule 10b-5, with respect to disclosures concerning the Company’s business, operations and prospects, particularly regarding the impact of the Flagstar and Signature transactions and the Bank’s commercial real estate loan portfolio and related matters, that were made in the Company’s public SEC filings and press releases during the period beginning on March 1, 2023 and ending on February 5, 2024.
Added
This additional purported class action alleges substantially the same claims as those set forth in the Lemm complaint and the plaintiff has filed a motion to consolidate this matter with the Lemm matter. The Company is vigorously defending the allegations set forth in the purported class action complaints and also intends to vigorously defend any related actions.
Added
The Company and certain former executive officers of the Company and certain current and former directors of the Company have also been named as defendants in a consolidated shareholder class action captioned In re New York Community Bancorp filed in the Commercial Division of the Supreme Court of New York State.
Added
This matter relates to two separate actions brought by two different purported shareholders of the Company, which were consolidated into a single matter on October 8, 2024. The action [seeks unspecified compensatory damages to be proven at trial] and alleges substantially the same claims as those set forth in the Lemm complaint.
Added
The court has stayed this matter pending the resolution of the Lemm matter.
Added
Cangemi, et al. , Case No. 608697/2024, filed on May 17, 2024 in the Supreme Court of the New York State (Nassau County).
Added
The Company has filed a motion to consolidate the Hauser matter with the three other federal derivative actions and has filed a notice to remove the state derivative action to federal court. The Company and the named defendants are vigorously defending these actions and also intend to vigorously defend any related actions.
Added
The Company’s President and Chief Executive Officer, as well as all of the Company’s current directors, have also been named in a purported shareholder derivative action captioned Siegel v. Otting, et al. , Case No. 2:24-cv-07352, filed on October 21, 2024 in the United States District Court for the Eastern District of New York.
Added
This action alleges breach of fiduciary duty and related claims and alleges that certain Company employment agreements and similar arrangements, and certain internal Company policies, violate the Dodd-Frank Act by failing to adequately inform employees of their right to report SEC rule violations and to receive eligible whistleblower protection and awards under the Dodd-Frank Act.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeDuring the year December 31, 2023 , the Company repurchased $12 million or 1 million shares of its common stock: (dollars in millions, except share data) Period Total Shares of Common Stock Repurchased Average Price Paid per Common Share Total Allocation Total Shares of Common Stock Purchased as Part of Publicly Announced Plans or Programs First Quarter 2023 976,454 $ 9.33 $ 9 0 Second Quarter 2023 190,177 10.36 2 0 Third Quarter 2023 33,956 12.50 0 0 Fourth Quarter 2023 October 1 - 31, 2023 1,525 10.29 0 — November 1 - 30, 2023 4,897 9.34 — — December 1 - 31, 2023 50,526 9.92 1 — Total Fourth Quarter 2023 56,948 $ 16.57 1 — 2023 Total 1,257,535 $ 9.59 $ 12 — Item 6.
Biggest changeThe following table provides information relating to the Company’s repurchase of common stock for the year December 31, 2024: (dollars in millions, except share data) Period Total Shares of Common Stock Repurchased Average Price Paid per Common Share Total Allocation Total Shares of Common Stock Purchased as Part of Publicly Announced Plans or Programs First Quarter 2024 300,713 $ 29.16 $ 9 — Second Quarter 2024 55,619 9.85 1 — Third Quarter 2024 99,470 10.13 1 — Fourth Quarter 2024 October 1 - 31, 2024 11,111 11.73 — — November 1 - 30, 2024 3,579 10.78 — — December 1 - 31, 2024 16,966 11.96 — — Total Fourth Quarter 2024 31,656 $ 11.75 — — 2024 Total 487,458 $ 21.94 $ 11 — Item 6.
Shares Repurchased Pursuant to the Board of Directors’ Share Repurchase Authorization On October 23, 2018, the Board of Directors authorized the repurchase of up to $300 million of the Company’s common stock. Under said authorization, shares may be repurchased on the open market or in privately negotiated transactions.
Shares Repurchased Pursuant to the Board of Directors’ Share Repurchase Authorization On October 23, 2018, the Board of Directors authorized the repurchase of up to approximately $300 million of the Company’s common stock. Under said authorization, shares may be repurchased on the open market or in privately negotiated transactions.
The S&P Mid-Cap 400 Index was chosen as the broad market index in connection with the Company’s trading activity on the NYSE; the S&P U.S. BMI Banks Index currently is comprised of 258 bank and thrift institutions, including the Company. S&P Global Market Intelligence provided us with the data for both indices.
The S&P Mid-Cap 400 Index was chosen as the broad market index in connection with the Company’s trading activity on the NYSE; the S&P U.S. BMI Banks Index currently is comprised of 251 bank and thrift institutions, including the Company. S&P Global Market Intelligence provided us with the data for both indices.
Stock Performance Graph The following graph compares the cumulative total return on the Company’s stock in the five years ended December 31, 2023 with the cumulative total returns on a broad market index (the S&P Mid-Cap 400 Index) and a peer group index (the S&P U.S. BMI Banks Index) during the same time.
Stock Performance Graph The following graph compares the cumulative total return on the Company’s stock in the five years ended December 31, 2024 with the cumulative total returns on a broad market index (the S&P Mid-Cap 400 Index) and a peer group index (the S&P U.S. BMI Banks Index) during the same time.
The cumulative total returns are based on the assumption that $100.00 was invested in each of the three investments on December 31, 2018 and that all dividends paid since that date were reinvested.
The cumulative total returns are based on the assumption that $100.00 was invested in each of the three investments on December 31, 2019, and that all dividends paid since that date were reinvested.
As of December 31, 2023 , the Company has approximately $9 million remaining under this repurchase authorization. 49 Shares that are repurchased pursuant to the Board of Directors’ authorization, and those that are repurchased pursuant to the Company’s stock-based incentive plans, are held in our Treasury account and may be used for various corporate purposes, including, but not limited to, merger transactions and the vesting of restricted stock awards.
As of December 31, 2024 , net of related issuance costs, the Company has approximately $9 million remaining under this repurchase authorization. 47 Shares that are repurchased pursuant to the Board of Directors’ authorization, and those that are repurchased pursuant to the Company’s stock-based incentive plans, are held in our Treasury account and may be used for various corporate purposes, including, but not limited to, merger transactions and the vesting of restricted stock awards.
Item 5. Market For the Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases The common stock of New York Community Bancorp, Inc. trades on the New York Stock Exchange (the “NYSE”) under the symbol “NYCB.” At December 31, 2023, the number of outstanding shares was 722,066,370 and the number of registered owners was approximately 11,746.
Item 5. Market For the Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities The common stock of Flagstar Financial, Inc. trades on the New York Stock Exchange (the “NYSE”) under the symbol “FLG.” At December 31, 2024, the number of outstanding shares was 414,934,628 and the number of registered owners was approximately 9,074.
BMI Banks Index $ 100.00 $ 137.36 $ 119.83 $ 162.92 $ 135.13 $ 147.41 Share Repurchases Shares Repurchased Pursuant to the Company’s Stock-Based Incentive Plans Participants in the Company’s stock-based incentive plans may have shares of common stock withheld to fulfill the income tax obligations that arise in connection with the vesting of their stock awards.
BMI Banks Index $ 100.00 $ 87.24 $ 118.61 $ 98.38 $ 107.32 $ 143.68 Share Repurchases Shares Repurchased Pursuant to the Company’s Stock-Based Incentive Plans Participants in the Company’s stock-based incentive plans may have shares of common stock withheld to fulfill the income tax obligations that arise in connection with the vesting of their stock awards.
Such returns are based on historical results and are not intended to suggest future performance. 48 CUMULATIVE TOTAL STOCKHOLDER RETURN COMPARED WITH PERFORMANCE OF SELECTED INDICES DECEMBER 31, 2018 THROUGH DECEMBER 31, 2023 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 New York Community Bancorp, Inc. $ 100.00 $ 135.38 $ 127.51 $ 156.41 $ 118.03 $ 149.75 S&P Mid-Cap 400 Index $ 100.00 $ 126.20 $ 143.44 $ 178.95 $ 155.58 $ 181.15 S&P U.S.
Such returns are based on historical results and are not intended to suggest future performance. 46 CUMULATIVE TOTAL STOCKHOLDER RETURN COMPARED WITH PERFORMANCE OF SELECTED INDICES DECEMBER 31, 2019, THROUGH DECEMBER 31, 2024 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 Flagstar Financial, Inc. $ 100.00 $ 94.13 $ 115.43 $ 87.06 $ 110.35 $ 34.08 S&P Mid-Cap 400 Index $ 100.00 $ 113.66 $ 141.80 $ 123.28 $ 143.54 $ 163.54 S&P U.S.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

96 edited+119 added−184 removed19 unchanged
Biggest changeThe following table sets forth our common equity tier 1, tier 1 risk-based, total risk-based, and leverage capital amounts and ratios on a consolidated basis and for the Bank on a stand-alone basis, as well as the respective minimum regulatory capital requirements, at that date: The following tables present the actual capital amounts and ratios for the Company: Risk-Based Capital December 31, 2023 Common Equity Tier 1 Tier 1 Total Leverage Capital (in millions) Amount Ratio Amount Ratio Amount Ratio Amount Ratio Total capital $ 8,009 9.05 % $ 8,512 9.62 % $ 10,415 11.77 % $ 8,512 7.75 % Minimum for capital adequacy purposes 3,983 4.50 5,310 6.00 7,081 8.00 4,392 4.00 Excess $ 4,026 4.55 % $ 3,202 3.62 % $ 3,334 3.77 % $ 4,120 3.75 % December 31, 2022 Total capital $ 6,335 9.06 % $ 6,838 9.78 % $ 8,154 11.66 % $ 6,838 9.70 % Minimum for capital adequacy purposes 3,146 4.50 4,195 6.00 5,593 8.00 2,819 4.00 Excess $ 3,189 4.56 % $ 2,643 3.78 % $ 2,561 3.66 % $ 4,019 5.70 % The following tables present the actual capital amounts and ratios for the Bank: Risk-Based Capital December 31, 2023 Common Equity Tier 1 Tier 1 Total Leverage Capital (dollars in millions) Amount Ratio Amount Ratio Amount Ratio Amount Ratio Total capital $ 9,305 10.52 % $ 9,305 10.52 % $ 10,271 11.61 % $ 9,305 8.48 % Minimum for capital adequacy purposes 3,980 4.50 5,307 6.00 7,076 8.00 4,389 4.00 Excess $ 5,325 6.02 % $ 3,998 4.52 % $ 3,195 3.61 % $ 4,916 4.48 % December 31, 2022 Total capital $ 7,653 10.96 % $ 7,653 10.96 % $ 7,982 11.43 % $ 7,653 10.87 % Minimum for capital adequacy purposes 3,142 4.50 4,189 6.00 5,585 8.00 2,817 4.00 Excess $ 4,511 6.46 % $ 3,464 4.96 % $ 2,397 3.43 % $ 4,836 6.87 % At December 31, 2023, our total risk-based capital ratio exceeded the minimum requirement for capital adequacy purposes by 377 basis points and the fully phased-in capital conservation buffer by 127 basis points.
Biggest changeThe following table presents the Bank's regulatory capital position: Risk-Based Capital December 31, 2024 Common Equity Tier 1 Tier 1 Total Leverage Capital (dollars in millions) Amount Ratio Amount Ratio Amount Ratio Amount Ratio Total capital $ 8,912 13.21 % $ 8,912 13.21 % $ 9,760 14.47 % $ 8,912 8.05 % Minimum for capital adequacy purposes 3,036 4.50 4,048 6.00 5,398 8.00 4,426 4.00 Excess $ 5,876 8.71 % $ 4,864 7.21 % $ 4,362 6.47 % $ 4,486 4.05 % December 31, 2023 Total capital $ 9,305 10.52 % $ 9,305 10.52 % $ 10,271 11.61 % $ 9,305 8.48 % Minimum for capital adequacy purposes 3,980 4.50 5,307 6.00 7,076 8.00 4,389 4.00 Excess $ 5,325 6.02 % $ 3,998 4.52 % $ 3,195 3.61 % $ 4,916 4.48 % At December 31, 2024, our total risk-based capital ratio exceeded the minimum requirement for capital adequacy purposes by 714 basis points and the fully phased-in capital conservation buffer by 464 basis points.
The specialty finance loans and leases we fund fall into three categories: asset-based lending, dealer floor-plan lending, and equipment loan and le ase financing. Each of these credits is secured with a perfected first security interest in, or outright ownership of, the underlying collateral, and structured as senior debt or as a non-cancelable lease.
The specialty finance loans and leases we fund fall into three categories: asset-based loans, dealer floor-plan lending and equipment loan and le ase financing. Each of these credits is secured with a perfected first security interest in, or outright ownership of, the underlying collateral, and structured as senior debt or as a non-cancelable lease.
In connection with receiving regulatory approval from the OCC for the Signature Transaction, the Bank has committed that (i) for a period of two years from the date of the Signature Transaction, it will not declare or pay any dividend without receiving a prior written determination of no supervisory objection from the OCC and (ii) it will not declare or pay dividends on the amount of retained earnings that represents any net bargain purchase gain that is subject to a conditional period that may be imposed by the OCC.
In connection with regulatory approval from the OCC for the Signature Transaction, the Bank has committed that (i) for a period of two years from the date of the Signature Transaction, it will not declare or pay any dividend without receiving a prior written determination of no supervisory objection from the OCC and (ii) it will not declare or pay dividends on the amount of retained earnings that represents any net bargain purchase gain that is subject to a conditional period that may be imposed by the OCC.
Market Risk As a financial institution, we are focused on reducing our exposure to interest rate volatility, which represents our primary market risk.
As a financial institution, we are focused on reducing our exposure to interest rate volatility, which represents our primary market risk.
Other strategies might include: • Asset restructuring, involving sales of assets having higher risk profiles, or a gradual restructuring of the asset mix over time to affect the maturity or repricing schedule of assets; • Liability restructuring, whereby product offerings and pricing are altered or wholesale borrowings are employed to affect the maturity structure or repricing of liabilities; • Expansion or shrinkage of the balance sheet to correct imbalances in the repricing or maturity periods between assets and liabilities; and/or • Use or alteration of off-balance sheet positions, including interest rate swaps, caps, floors, options, and forward purchase or sales commitments.
Other strategies might include: • Asset restructuring, involving sales of assets having higher risk profiles, or a gradual restructuring of the asset mix over time to affect the maturity or repricing schedule of assets; • Liability restructuring, whereby product offerings and pricing are altered or wholesale borrowings are employed to affect the maturity structure or repricing of liabilities; 70 • Expansion or shrinkage of the balance sheet to correct imbalances in the repricing or maturity periods between assets and liabilities; and/or • Use or alteration of off-balance sheet positions, including interest rate swaps, caps, floors, options, and forward purchase or sales commitments.
For the year ended December 31, 2023, we did not engage in any off-balance sheet transactions that we expect to have a material effect on our financial condition, results of operations or cash flows. At December 31, 2023, we had no commitments to purchase securities.
For the year ended 2024, we did not engage in any off-balance sheet transactions that we expect to have a material effect on our financial condition, results of operations or cash flows. At December 31, 2024, we had no commitments to purchase securities.
(2) Amounts are at amortized cost. (3) Includes FHLB stock and FRB stock. 53 The following table presents the extent to which changes in interest rates and changes in the volume of interest-earning assets and interest-bearing liabilities affected our interest income and interest expense during the periods indicated.
(2) Amounts are at amortized cost. (3) Includes FHLB stock and FRB stock. 49 The following table presents the extent to which changes in interest rates and changes in the volume of interest-earning assets and interest-bearing liabilities affected our interest income and interest expense during the periods indicated.
In the event that our EVE and net interest income sensitivities were to breach our internal policy limits, we would undertake the following actions to ensure that appropriate remedial measures were put in place: • In formulating appropriate strategies, the ALCO Committee would ascertain the primary causes of the variance from policy tolerances, the expected term of such conditions, and the projected effect on capital and earnings. • Our ALCO Committee would inform the Board of Directors of the variance, and present recommendations to the Board regarding proposed courses of action to restore conditions to within-policy tolerances.
In the event that our EVE and net interest income sensitivities were to breach our internal policy limits, we would undertake the following actions to ensure that appropriate remedial measures were put in place: • In formulating appropriate strategies, the Asset and Liability Management Committee would ascertain the primary causes of the variance from policy tolerances, the expected term of such conditions, and the projected effect on capital and earnings. • Our Asset and Liability Management Committee would inform the Board of Directors of the variance, and present recommendations to the Board regarding proposed courses of action to restore conditions to within-policy tolerances.
At December 31, 2023, our capital measures continued to exceed the minimum federal requirements for a bank holding company and for a bank.
At December 31, 2024, our capital measures continued to exceed the minimum federal requirements for a bank holding company and for a bank.
The Bank also exceeded the minimum capital requirements to be categorized as “Well Capitalized.” To be categorized as well capitalized, a bank must maintain a minimum common equity tier 1 ratio of 6.50 percent; a minimum tier 1 risk-based capital ratio of 8 percent; a minimum total risk-based capital ratio of 10 percent; and a minimum leverage capital ratio of 5 percent.
At December 31, 2024, the Bank also exceeded the minimum capital requirements to be categorized as “Well Capitalized.” To be categorized as well capitalized, a bank must maintain a minimum common equity tier 1 ratio of 6.50 percent; a minimum tier 1 risk-based capital ratio of 8 percent; a minimum total risk-based capital ratio of 10 percent; and a minimum leverage capital ratio of 5 percent.
The quantitative measures established to ensure capital adequacy require that banks maintain minimum amounts and ratios of leverage capital to average assets and of common equity tier 1 capital, tier 1 capital, and total capital to risk-weighted 72 assets (as such measures are defined in the regulations).
The quantitative measures established to ensure capital adequacy require that banks and bank holding companies maintain minimum amounts and ratios of leverage capital to average assets and of common equity tier 1 capital, tier 1 capital, and total capital to risk-weighted assets (as such measures are defined in the regulations).
The EVE ratio, under any interest rate scenario, is defined as the EVE in that scenario divided by the market value of assets in the same scenario. The model assumes estimated loan and MBS prepayment rates, current market value spreads, and deposit decay rates and betas.
The EVE ratio, under any interest rate scenario, is defined as the EVE in that scenario divided by the market value of assets in the same scenario. The model assumes estimated loan and mortgage-backed securities prepayment rates, current market value spreads, and deposit decay rates and betas.
Net Interest Margin The following table sets forth certain information regarding our average balance sheet for the periods indicated, including the average yields on our interest-earning assets and the average costs of our interest-bearing liabilities. Average yields are calculated by dividing the interest income produced by the average balance of interest-earning assets.
The following table sets forth certain information regarding our net interest income and average balance sheet for the periods indicated: Average yields are calculated by dividing the interest income produced by the average balance of interest-earning assets. Average costs are calculated by dividing the interest expense produced by the average balance of interest-bearing liabilities.
These policies relate to: (a) the determination of our ACL, (b) fair value measurements and (c) the acquisition method of accounting. We believe the judgment, estimates and assumptions used in the preparation of our Consolidated Financial Statements and the Notes are appropriate given the factual circumstances at the time.
These policies relate to: (a) the determination of our allowance for credit losses, (b) fair value measurements and (c) the acquisition method of accounting. We believe the judgment, estimates and assumptions used in the preparation of our Consolidated Financial Statements and the Notes are appropriate given the factual circumstances at the time.
Based on the information and assumptions in effect at December 31, 2023, the following table reflects the estimated percentage change in future net interest income for the next twelve months, assuming the changes in interest rates noted: Change in Interest Rates (in basis points) (1) Estimated Percentage Change in Future Net Interest Income -200 shock (5.81)% -100 shock (3.17)% +100 shock 3.24% +200 shock 6.40% (1) In general, short- and long-term rates are assumed to increase in parallel instantaneously and then remain unchanged.
Based on the information and assumptions in effect at December 31, 2024, the following table reflects the estimated percentage change in future net interest income for the next twelve months, assuming the changes in interest rates noted: Change in Interest Rates (in basis points) (1) Estimated Percentage Change in Future Net Interest Income -200 shock (3.0)% -100 shock (1.5)% +100 shock 0.4% +200 shock 0.5% (1) In general, short- and long-term rates are assumed to increase in parallel instantaneously and then remain unchanged.
At December 31, 2023 and December 31, 2022, all of our securities were designated as “Available-for-Sale”. At December 31, 2023, 12 percent of our portfolio are floating rate securities.
At December 31, 2024 and December 31, 2023, all of our securities were designated as “Available-for-Sale”. At December 31, 2024, 26 percent of our portfolio are floating rate securities.
Based on the information and assumptions in effect at December 31, 2023, the following table sets forth our EVE, assuming the changes in interest rates noted: Change in Interest Rates (in basis points) Estimated Percentage Change in Economic Value of Equity -200 shock (2.39)% -100 shock (1.31)% +100 shock (0.28)% +200 shock (1.44)% The net changes in EVE presented in the preceding table are within the parameters approved by the Boards of Directors of the Company and the Bank.
Based on the information and assumptions in effect at December 31, 2024, the following table sets forth our EVE, assuming the changes in interest rates noted: Change in Interest Rates (in basis points) Estimated Percentage Change in Economic Value of Equity -200 shock 2.40% -100 shock 1.00% +100 shock (1.40)% +200 shock (3.60)% 69 The net changes in EVE presented in the preceding table are within the parameters approved by the Boards of Directors of the Company and the Bank.
Included in the quarter-end amount were mortgage-related securities of $6.6 billion and other debt securities of $2.6 billion. At the prior year-end, available-for-sale securities were $9.1 billion, and had an estimated weighted average life of six years. Mortgage-related securities accounted for $4.8 billion of the year-end balance, with other debt securities accounting for the remaining $4.3 billion.
Included in the year-end amount were mortgage-related securities of $8.6 billion and other debt securities of $1.8 billion. At the prior year-end, available-for-sale securities were $9.2 billion, and had an estimated weighted average life of six years.
Bank-Owned Life Insurance BOLI is recorded at the total cash surrender value of the policies in the Consolidated Statements of Condition, and the income generated by the increase in the cash surrender value of the policies is recorded in “Non-interest income” in the Consolidated Statements of Income and Comprehensive Income.
Bank-Owned Life Insurance (BOLI) Bank-owned life insurance is recorded at the total cash surrender value of the policies in the Consolidated Statements of Condition, and the income generated by the increase in the cash surrender value of the policies is recorded in Bank-owned life insurance on the Consolidated Statements of (Loss) Income.
These obligations include commitments to extend credit in the form of mortgage and other loan originations, as well as commercial, performance stand-by, and financial stand-by letters of credit. These commitments consist of agreements to extend credit, as long as there is no violation of any condition established in the contract under which the loan is made.
At December 31, 2024, we also had commitments to extend credit in the form of mortgage and other loan originations, as well as commercial, performance stand-by and financial stand-by letters of credit. These commitments consist of agreements to extend credit as long as there is no violation of any condition established in the contract under which the loan is made.
These factors are influenced by both the pricing and mix of our interest-earning assets and our interest-bearing liabilities which, in turn, are impacted by various external factors, including the local economy, competition for loans and deposits, the monetary policy of the FOMC, and market interest rates.
These factors are influenced by both the pricing and mix of our interest-earning assets and our interest-bearing liabilities which, in turn, are impacted by various external factors, including the local economy, competition for loans and deposits, the monetary policy of the Federal Open Market Committee, and market interest rates. 48 Our interest-bearing liabilities are comprised of customer deposits and funds we borrow.
Quantitative and Qualitative Disclosures about Market Risk We manage our assets and liabilities to reduce our exposure to changes in market interest rates.
Interest Rate Risk We manage our assets and liabilities to reduce our exposure to changes in market interest rates.
Government and GSE Obligations State, County, and Municipal Other Debt Securities (2) Available-for-Sale Debt Securities: (1) Due within one year — % 4.65 % — % — % Due from one to five years 3.33 5.42 — 5.53 Due from five to ten years 2.73 1.61 3.16 5.05 Due after ten years 4.18 — — 5.74 Total debt securities available for sale 4.09 2.27 3.16 5.56 (1) The weighted average yields are calculated by multiplying each carrying value by its yield and dividing the sum of these results by the total carrying values and are not presented on a tax-equivalent basis.
Government and GSE Obligations State, County, and Municipal Other Debt Securities (2) Available-for-Sale Debt Securities: (1) Due within one year 3.51 % — % — % 3.40 % Due from one to five years 3.02 — 3.16 4.79 Due from five to ten years 2.51 1.61 — 5.48 Due after ten years 4.44 — — 5.95 Total debt securities available for sale 4.35 1.61 3.16 5.28 (1) The weighted average yields are calculated by multiplying each carrying value by its yield and dividing the sum of these results by the total carrying values and are not presented on a tax-equivalent basis.
As of December 31, 2023, the net unrealized loss on securities available for sale, net of tax, was $581 million as compared to $626 million at December 31, 2022, reflecting the rising interest rate environment. At December 31, 2023, available-for-sale securities had an estimated weighted average life of six years.
As of December 31, 2024, the net unrealized loss on securities available for sale, net of tax, was $653 million as compared to $581 million at December 31, 2023, reflecting changes in market interest rates. At December 31, 2024, available-for-sale securities had an estimated weighted average life of six years.
However, given the sensitivity of our Consolidated Financial Statements and the Notes to these critical accounting policies, the use of other judgments, estimates and assumptions could result in material differences in our results of operations and/or financial condition.
However, given the sensitivity of our Consolidated Financial Statements and the Notes to these critical accounting policies, the use of other judgments, estimates and assumptions could result in material differences in our results of operations and/or financial condition. 72 For further information on our critical accounting policies, please refer to Note 2 - Summary of Significant Accounting Policies.
In this regard, the NII analysis presented below assumes that the composition of our interest rate sensitive assets and liabilities existing at the beginning of a period remains constant over the period being measured, and also assumes that a particular change in interest rates is reflected uniformly across the yield curve, regardless of the duration to maturity or repricing of specific assets and liabilities. 76 Furthermore, the model does not take into account the benefit of any strategic actions we may take to further reduce our exposure to interest rate risk.
In this regard, the NII analysis presented below assumes that the composition of our interest rate sensitive assets and liabilities existing at the beginning of a period remains constant over the period being measured, and also assumes that a particular change in interest rates is reflected uniformly across the yield curve, regardless of the duration to maturity or repricing of specific assets and liabilities.
At December 31, 2023 the Parent Company held cash and cash equivalents of $158 million. In addition to operating expenses, the Parent Company is responsible for paying any dividends declared to our common and preferred stockholders.
At December 31, 2024, the Parent Company held cash and cash equivalents of $579 million, adjusted for operational expense, debt interest expense, and tax expense/credits. In addition to operating expenses, the Parent Company is responsible for paying any dividends declared to our common and preferred stockholders.
Loans that have adjustable rates are shown as being due in the period during which their interest rates are next subject to change.
Loans that have adjustable rates are shown as being due in the period during which their interest rates are next subject to change. Risks associated with loan repricing are discussed in the Credit Risk section.
As of December 31, 2023, the Company originated $7.3 billion of specialty finance loans and leases, representing 35 percent of total originations compared to $6.0 billion for the same period in 2022, representing 35 percent of total originations.
As of December 31, 2024 , 85 percent of specialty finance loan commitments are structured as floating rate obligations. As of December 31, 2024, the Company originated $3.6 billion of specialty finance loans and leases, representing 42 percent of total originations compared to $7.3 billion for the same period in 2023, representing 35 percent of total originations.
In 2023, dividends of $580 million were paid by the Bank to the Parent Company. At December 31, 2023, we believe the Company has sufficient liquidity and capital resources to meet its cash flow obligations over the next 12 months and for the foreseeable future.
In 2024, dividends of $67 million were paid by the Bank to the Parent Company. At December 31, 2024, we believe the Company has sufficient liquidity and capital resources to meet its cash flow obligations through 2028.
For the Years Ended December 31, 2023 2022 2021 (dollars in millions) Average Balance Interest Average Yield/Cost Average Balance Interest Average Yield/Cost Average Balance Interest Average Yield/Cost ASSETS: Interest-earning assets: Mortgage and other loans and leases , net (1) $ 81,855 $ 4,509 5.51 % $ 49,376 $ 1,848 3.74 % $ 43,200 $ 1,525 3.53 % Securities (2) (3) 10,611 444 4.18 % 7,448 200 2.69 % 6,625 156 2.35 % Reverse repurchase agreements 388 22 5.77 % 460 15 3.24 % 430 4 1.05 % Interest-earning cash and cash equivalents 10,025 516 5.14 % 1,988 29 1.47 % 2,016 4 0.17 % Total interest-earning assets $ 102,879 $ 5,491 5.34 % $ 59,272 $ 2,092 3.53 % $ 52,271 $ 1,689 3.23 % Non-interest-earning assets 7,616 5,130 5,275 Total assets $ 110,495 $ 64,402 $ 57,546 LIABILITIES AND STOCKHOLDERS' EQUITY: Interest-bearing deposits: Interest-bearing checking and money market accounts $ 29,286 $ 943 3.22 % $ 17,910 $ 226 1.26 % $ 12,829 $ 31 0.24 % Savings accounts 9,941 169 1.70 % 9,336 60 0.64 % 7,612 28 0.36 % Certificates of deposit 17,097 646 3.78 % 8,772 97 1.11 % 9,094 55 0.60 % Total interest-bearing deposits $ 56,324 $ 1,758 3.12 % $ 36,018 $ 383 1.06 % $ 29,535 $ 114 0.38 % Short term borrowed funds 7,263 305 4.20 % 2,408 56 2.32 % 2,343 8 0.34 % Other borrowed funds 10,671 351 3.29 % 12,982 257 1.99 % 13,366 278 2.08 % Total borrowed funds $ 17,934 $ 656 3.66 % $ 15,390 $ 313 2.04 % $ 15,709 $ 286 1.82 % Total interest-bearing liabilities $ 74,258 $ 2,414 3.25 % $ 51,408 $ 696 1.35 % $ 45,244 $ 400 0.88 % Non-interest-bearing deposits 21,583 5,124 4,578 Other liabilities 4,073 787 790 Total liabilities $ 99,914 $ 57,319 $ 50,612 Stockholders’ equity 10,581 7,083 6,934 Total liabilities and stockholders’ equity $ 110,495 $ 64,402 $ 57,546 Net interest income/interest rate spread $ 3,077 2.09 % $ 1,396 2.17 % $ 1,289 2.35 % Net interest margin 2.99 % 2.35 % 2.47 % Ratio of interest-earning assets to interest-bearing liabilities 1.39 x 1.15 x 1.16 x (1) Amounts are net of net deferred loan origination costs/(fees) and includes loans held for sale and non-performing loans.
Year Ended December 31, 2024 2023 2022 (dollars in millions) Average Balance Interest Average Yield/Cost Average Balance Interest Average Yield/Cost Average Balance Interest Average Yield/Cost ASSETS: Interest-earning assets: Mortgage and other loans and leases, net (1) $ 78,883 $ 4,369 5.54 % $ 81,855 $ 4,509 5.51 % $ 49,376 $ 1,848 3.74 % Securities (2) (3) 12,222 559 4.57 % 10,611 444 4.18 % 7,448 200 2.69 % Reverse repurchase agreements — — — % 388 22 5.77 % 460 15 3.24 % Interest-earning cash and cash equivalents 19,478 1,024 5.26 % 10,025 516 5.14 % 1,988 29 1.47 % Total interest-earning assets $ 110,583 $ 5,952 5.38 % $ 102,879 $ 5,491 5.34 % $ 59,272 $ 2,092 3.53 % Non-interest-earning assets 5,151 7,616 5,130 Total assets $ 115,734 $ 110,495 $ 64,402 LIABILITIES AND STOCKHOLDERS' EQUITY: Interest-bearing deposits: Interest-bearing checking and money market accounts $ 23,654 $ 869 3.67 % $ 29,286 $ 943 3.22 % $ 17,910 $ 226 1.26 % Savings accounts 10,975 345 3.14 % 9,941 169 1.70 % 9,336 60 0.64 % Certificates of deposit 27,477 1,362 4.96 % 17,097 646 3.78 % 8,772 97 1.11 % Total interest-bearing deposits $ 62,106 $ 2,576 4.15 % $ 56,324 $ 1,758 3.12 % $ 36,018 $ 383 1.06 % Short term borrowed funds 5,703 221 3.89 % 7,263 305 4.20 % 2,408 56 2.32 % Other borrowed funds 18,465 1,003 5.43 % 10,671 351 3.29 % 12,982 257 1.99 % Total borrowed funds $ 24,168 $ 1,224 5.07 % $ 17,934 $ 656 3.66 % $ 15,390 $ 313 2.04 % Total interest-bearing liabilities $ 86,274 $ 3,800 4.40 % $ 74,258 $ 2,414 3.25 % $ 51,408 $ 696 1.35 % Non-interest-bearing deposits 18,140 21,583 5,124 Other liabilities 2,595 4,073 787 Total liabilities $ 107,009 $ 99,914 $ 57,319 Stockholders’ and mezzanine equity 8,725 10,581 7,083 Total liabilities and stockholders’ equity $ 115,734 $ 110,495 $ 64,402 Net interest income/interest rate spread $ 2,152 0.98 % $ 3,077 2.09 % $ 1,396 2.17 % Net interest margin 1.95 % 2.99 % 2.35 % Ratio of interest-earning assets to interest-bearing liabilities 1.28 x 1.39 x 1.15 x (1) Amounts are net of net deferred loan origination costs/(fees) and includes loans held for sale and non-accrual loans.
A broad range of C&I loans, both collateralized and unsecured, are made available to businesses for working capital (including inventory and accounts receivable), business expansion, the purchase of machinery and equipment, and other general corporate needs. In determining the term and structure of C&I loans, several factors are considered, including the purpose, the collateral, and the anticipated sources of repayment.
A broad range of commercial and industrial loans, both collateralized and unsecured, are made available to businesses for working capital (including inventory and accounts receivable), business expansion, the purchase of machinery and equipment, and other general corporate needs.
Contractual Obligations In the normal course of business, we enter into a variety of contractual obligations in order to manage our assets and liabilities, fund loan growth, operate our branch network, and address our capital needs.
Contractual Obligations and Commitments In the normal course of business, we enter into a variety of contractual obligations in order to manage our assets and liabilities, fund loan growth, operate our branch network, and address our capital needs. For example, we offer certificates of deposit with contractual terms to our customers and borrow funds under contract from the FHLB.
The increase in NPLs was primarily driven by a $125 million increase in multi-family loans and a $108 million in commercial real estate loans, primarily office.
The increase in non-accrual loans was primarily driven by a $1.6 billion increase in multi-family loans and a $418 million in commercial real estate loans, primarily in the office sector.
The following table summarizes our non-interest income for the respective periods: For the Years Ended December 31, (in millions) 2023 2022 2021 Bargain purchase gain $ 2,131 $ 159 $ — Fee income 172 27 23 Net return on mortgage servicing rights 103 6 — Net gain on loan sales and securitizations 89 5 — Other 68 17 9 Bank-owned life insurance 43 32 29 Net loan administration income 82 3 — Net loss on securities (1) (2) — Total non-interest income $ 2,687 $ 247 $ 61 Non-interest income increased $2.4 billion for the year ended December 31, 2023 compared to the year ended December 31, 2022 primarily due to the bargain purchase gain of $2.1 billion related to the Signature Transaction.
Non-Interest Income The following table summarizes our non-interest income for the respective periods: Year Ended December 31, (in millions) 2024 2023 2022 Fee income $ 150 $ 172 $ 27 Net gain on mortgage/servicing sale 89 — — Net return on mortgage servicing rights 73 103 6 Net gain on loan sales and securitizations 48 89 5 Bank-owned life insurance 42 43 32 Net loan administration income 2 82 3 Bargain purchase gain (121) 2,131 159 Other 117 67 15 Total non-interest income $ 400 $ 2,687 $ 247 Comparison to Prior Year For the year ended 2024, non-interest income totaled $400 million compared to $2.7 billion for the year ended 2023.
(2) Includes corporate bonds, capital trust notes, foreign notes, and asset-backed securities. Federal Reserve and Federal Home Loan Bank Stock At December 31, 2023 the Company had $861 million and $329 million of FHLB-NY stock, at cost, and FHLB-Indianapolis stock, at cost, respectively.
Federal Reserve and Federal Home Loan Bank Stock At December 31, 2024, the Company had $598 million and $329 million of FHLB-NY stock, at cost, and FHLB-Indianapolis stock, at cost, respectively. At December 31, 2023, the Company had $861 million and $328 million of FHLB-NY stock, at cost and FHLB-Indianapolis stock, at cost, respectively.
The cost of our deposits and borrowed funds is largely based on short-term rates of interest, the level of which is partially impacted by the actions of the FOMC.
The average term of our fixed rate deposits is less than twelve months, therefore the cost of our deposits and most of our borrowed funds is largely based on short-term rates of interest, the level of which is partially impacted by the actions of the Federal Open Market Committee.
Credit Quality A loan generally is classified as a “non-accrual” loan when it is 90 days or more past due or when it is deemed to be impaired because we no longer expect to collect all amounts due according to the contractual terms of the loan agreement.
A loan generally is classified as a non-accrual loan when it is 90 days or more past due or when it is deemed to be impaired because there is significant uncertainty about whether we will be able to collect all principal and interest amounts due according to the contractual terms of the loan agreement.
In addition, we generally exclude any short-term property tax exemptions and abatement benefits the property owners receive when we underwrite our multi-family loans. 59 The following table presents a geographical analysis of the multi-family loans in our held-for-investment loan portfolio: At December 31, 2023 Multi-Family Loans (in millions) Amount Percent of Total New York City: Manhattan $ 6,893 18 % Brooklyn 5,840 16 % Bronx 3,619 10 % Queens 2,831 8 % Staten Island 133 — % Total New York City $ 19,316 52 % New Jersey 5,064 14 % Long Island 509 1 % Total Metro New York $ 24,889 67 % Other New York State 1,233 3 % Pennsylvania 3,682 10 % Florida 1,681 5 % Ohio 1,085 3 % Arizona 434 1 % All other states 4,261 11 % Total $ 37,265 100 % Commercial Real Estate At December 31, 2023, CRE loans represented $10.5 billion, or 12 percent, of total loans held for investment, reflecting a $2.0 billion increase when compared to $8.5 billion at December 31, 2022.
The following table presents a geographical analysis of the multi-family loans in our held for investment loan portfolio: Year Ended December 31, 2024 2023 (in millions) Amount Percent of Total Amount Percent of Total New York City: Manhattan $ 6,246 18 % $ 6,893 18 % Brooklyn 5,375 16 % 5,840 16 % Bronx 3,272 10 % 3,619 10 % Queens 2,526 7 % 2,831 8 % Staten Island 98 — % 133 — % Total New York City $ 17,517 51 % $ 19,316 52 % New Jersey 4,509 13 % 5,064 14 % Long Island 484 1 % 509 1 % Total Metro New York $ 22,510 66 % $ 24,889 67 % Other New York State 1,188 3 % 1,233 3 % Pennsylvania 3,375 10 % 3,682 10 % Florida 1,555 5 % 1,681 5 % Ohio 1,007 3 % 1,085 3 % All other states 4,458 13 % 4,695 13 % Total $ 34,093 100 % $ 37,265 100 % Commercial Real Estate At December 31, 2024, commercial real estate loans represented $8.7 billion, or 13 percent, of total loans held for investment, reflecting a $1.8 billion decrease when compared to $10.5 billion at December 31, 2023, primarily due to payoffs, as well as charge-offs and loan sales.
Allowance for Credit Losses The following table sets forth the allocation of the consolidated allowance for losses on loans, at each year-end: At December 31, 2023 2022 2021 (dollars in millions) Amount Percent of Total Loans and Leases Amount Percent of Total Loans and Leases Amount Percent of Total Loans and Leases Multi-family loans $ 307 44 % $ 178 55 % $ 159 76 % Commercial real estate loans 366 12 46 12 17 15 One-to-four family first mortgage loans 48 7 46 8 1 — Acquisition, development, and construction loans 36 3 20 3 2 — Commercial and industrial 132 30 — — Other loans 103 3 103 21 20 9 Total loans $ 992 100 % $ 393 100 % $ 199 100 % (1) Percentages represent the percentage of each loan and lease category to total loans and leases The allowance for credit losses on loans and leases increased $599 million from December 31, 2022 to December 31, 2023.
Allowance for Credit Losses The following table sets forth the allocation of the consolidated allowance for credit losses on loans and leases at each period-end: Year Ended December 31, 2024 2023 2022 (dollars in millions) Allowance for credit losses Allowance as a percent of loans in each portfolio Loans in each portfolio as a percent of total loans Allowance for credit losses Allowance as a percent of loans in each portfolio Loans in each portfolio as a percent of total loans Allowance for credit losses Allowance as a percent of loans in each portfolio Loans in each portfolio as a percent of total loans Multi-family loans $ 639 1.87 % 49.9 % $ 307 0.82 % 44.0 % $ 178 0.47 % 55.3 % Commercial real estate loans 260 2.99 12.7 366 3.50 12.4 46 0.54 12.4 One-to-four family first mortgage loans 39 0.75 7.6 48 0.79 7.2 46 0.79 8.4 Acquisition, development, and construction loans 44 1.40 4.6 36 1.24 3.4 20 1.00 2.8 Commercial and industrial 151 0.98 22.5 132 0.52 29.9 — — Other loans 68 3.85 2.6 103 3.88 3.1 103 4.57 21.1 Total loans $ 1,201 1.76 % 100.0 % $ 992 1.17 % 100.0 % $ 393 0.57 % 100.0 % The allowance for credit losses on loans and leases increased $209 million from December 31, 2023 to December 31, 2024.
The Parent Company has three primary funding sources for the payment of dividends, share repurchases, and other corporate uses: dividends paid to the Parent Company by the Bank; capital raised through the issuance of equity; and funding raised through the issuance of debt instruments.
The Parent Company has two primary funding sources for the payment of dividends, share repurchases, and other corporate uses: dividends paid to the Parent Company by the Bank; and capital raised through the issuance of equity. Various legal restrictions limit the extent to which the Company’s subsidiary bank can supply funds to the Parent Company and its non-bank subsidiaries.
Charge-offs For the year ended December 31, 2023, our gross charge-offs were $223 million and net charge-offs were $208 million, com pared to gross charge-offs of $7 million and net recoveries of $4 million over the same period in 2022. 66 The following table presents information on the Company's net charge-offs: For the Years Ended December 31, 2023 2022 (in millions) Charge-offs: Multi-family $ 119 $ 1 Commercial real estate 56 4 One-to-four family residential 4 — Commercial and industrial 30 — Other 14 2 Total charge-offs $ 223 $ 7 Recoveries: Commercial real estate — (4) One-to-four family residential — — Commercial and industrial (11) (7) Other (4) — Total recoveries $ (15) $ (11) Net charge-offs (recoveries) $ 208 $ (4) 67 The following table presents information on the Company's net charge-offs as compared to average loans held for investment outstanding: For the Years Ended December 31, (in millions) 2023 2022 2021 Multi-family Net charge-offs during the period $ 119 $ 1 $ 1 Average amount outstanding $ 37,839 $ 36,292 $ 32,424 Net charge-offs as a percentage of average loans 0.31 % 0.00 % 0.00 % Commercial real estate Net charge-offs during the period $ 56 $ — $ 2 Average amount outstanding $ 9,905 $ 6,964 $ 5,489 Net charge-offs as a percentage of average loans 0.57 % 0.00 % 0.04 % One-to-Four Family first mortgage Net charge-offs during the period $ 4 $ — $ 1 Average amount outstanding $ 5,907 $ 516 $ 191 Net charge-offs as a percentage of average loans 0.06 % 0.00 % 0.52 % Acquisition, Development and Construction Net charge-offs during the period $ — $ — $ — Average amount outstanding $ 2,530 $ 203 $ 152 Net charge-offs as a percentage of average loans 0.00 % 0.00 % 0.00 % Commercial and Industrial Loans Net charge-offs during the period $ 19 $ (7) $ — Average amount outstanding $ 21,460 $ — $ — Net charge-offs as a percentage of average loans 0.09 % 0.00 % 0.00 % Other Loans Net charge-offs (recoveries) during the period $ 10 $ (5) $ (6) Average amount outstanding $ 2,552 $ 5,401 $ 4,944 Net charge-offs (recoveries) as a percentage of average loans 0.38 % (0.09) % (0.12) % Total loans Net charge-offs (recoveries) during the period $ 208 $ (4) $ (2) Average amount outstanding $ 80,193 $ 49,376 $ 43,200 Net charge-offs (recoveries) as a percentage of average loans 0.26 % (0.01) % 0.00 % Lending Authority We maintain credit limits in compliance with regulatory requirements.
The following table presents information on the Company's net charge-offs: Year Ended December 31, 2024 2023 (in millions) Charge-offs: Multi-family $ 308 $ 119 Commercial real estate 462 56 One-to-four family residential 8 4 Acquisition, development and construction 4 — Commercial and industrial 136 30 Other 20 14 Total charge-offs $ 938 $ 223 Recoveries: Multi-family $ (5) $ — Commercial real estate (8) — One-to-four family residential (5) — Commercial and industrial (21) (11) Other (7) (4) Total recoveries $ (46) $ (15) Net charge-offs (recoveries) $ 892 $ 208 61 The following table presents information on the Company's net charge-offs as compared to average loans held for investment outstanding: Year Ended December 31, (in millions) 2024 2023 2022 Multi-family Net charge-offs during the period $ 303 $ 119 $ 1 Average amount outstanding $ 36,064 $ 37,839 $ 36,292 Net charge-offs as a percentage of average loans 0.84 % 0.31 % — % Commercial real estate Net charge-offs during the period $ 454 $ 56 $ — Average amount outstanding $ 9,919 $ 9,905 $ 6,964 Net charge-offs as a percentage of average loans 4.58 % 0.57 % — % One-to-Four Family first mortgage Net charge-offs during the period $ 3 $ 4 $ — Average amount outstanding $ 5,740 $ 5,907 $ 516 Net charge-offs as a percentage of average loans 0.05 % 0.06 % — % Acquisition, Development and Construction Net charge-offs during the period $ 4 $ — $ — Average amount outstanding $ 3,230 $ 2,530 $ 203 Net charge-offs as a percentage of average loans 0.12 % — % — % Commercial and Industrial Loans Net charge-offs during the period $ 115 $ 19 $ (7) Average amount outstanding $ 19,753 $ 21,460 $ — Net charge-offs as a percentage of average loans 0.58 % 0.09 % — % Other Loans Net charge-offs (recoveries) during the period $ 13 $ 10 $ (5) Average amount outstanding $ 1,902 $ 2,552 $ 5,401 Net charge-offs (recoveries) as a percentage of average loans 0.68 % 0.38 % (0.09) % Total loans held for investment Net charge-offs (recoveries) during the period $ 892 $ 208 $ (4) Average amount outstanding $ 76,608 $ 80,193 $ 49,376 Net charge-offs (recoveries) as a percentage of average loans 1.16 % 0.26 % -0.01 % Securities Total securities were $10.4 billion, or 10 percent, of total assets at December 31, 2024, compared to $9.2 billion, or 8 percent of total assets at December 31, 2023.
The following table summarizes the weighted average yields of debt securities for the maturities indicated at December 31, 2023: Mortgage- Related Securities U.S.
Mortgage-related securities accounted for $6.6 billion of the year-end balance, with other debt securities accounting for the remaining $2.6 billion. 62 The following table summarizes the weighted average yields of debt securities for the maturities indicated at December 31, 2024: Mortgage- Related Securities U.S.
Provision for Credit Losses Comparison to Prior Year to Date The year ended December 31, 2023 provision for credit losses was $833 million compared to $133 million for the year ended December 31, 2022.
Provision for Credit Losses Comparison to Prior Year For the year ended 2024, the provision for credit losses totaled $1.1 billion compared to $833 million for the year ended 2023.
When applicable, as a condition to closing an ADC loan, it is our practice to require that properties meet pre-sale or pre-lease requirements prior to funding. C&I Loans At December 31, 2023 C&I loans totaled $25.3 billion or 30 percent of total loans held-for-investment.
When applicable, as a condition to closing an ADC loan, it is our practice to require that properties meet pre-sale or pre-lease requirements prior to funding.
Workout specialists from our Loan Workout Unit actively pursue borrowers who are delinquent in repaying their loans in an effort to collect payment. In addition, outside counsel with experience in foreclosure proceedings are retained to institute such action with regard to such borrowers.
In accordance with our charge-off policy, collateral-dependent loans are written down to their current appraised values less costs to sell. Workout specialists from our Loan Workout Unit actively pursue borrowers who are delinquent in repaying their loans in an effort to collect payment. In addition, outside counsel with experience in foreclosure proceedings are retained to support these efforts.
Capital amounts and classifications are also subject to the Regulators’ qualitative judgments about the components of capital and risk weightings, among other factors.
Capital amounts and classifications are also subject to the regulators’ qualitative judgments about the components of capital and risk weighting assets, among other factors, and the regulators have discretion to require that institutions maintain capital in excess of minimum levels.
Wholesale borrowings at December 31, 2023 remained flat at $20.3 billion when compared to December 31, 2022. 56 Loans held-for-investment The following table summarizes the composition of our loan portfolio: At December 31, 2023 2022 (in millions) Amount Percent of Loans Held for Investment Amount Percent of Loans Held for Investment Mortgage Loans: Multi-family $ 37,265 44.0 % $ 38,130 55.3 % Commercial real estate 10,470 12.4 % 8,526 12.4 % One-to-four family first mortgage 6,061 7.2 % 5,821 8.4 % Acquisition, development, and construction 2,912 3.4 % 1,996 2.8 % Total mortgage loans $ 56,708 67.0 % $ 54,473 78.9 % Other Loans: Commercial and industrial $ 25,254 29.9 % $ 12,276 17.8 % Other loans 2,657 3.1 % 2,252 3.3 % Total other loans held for investment $ 27,911 33.0 % $ 14,528 21.1 % Total loans and leases held for investment $ 84,619 100.0 % $ 69,001 100.0 % Allowance for credit losses on loans and leases (992) (393) Total loans and leases held for investment, net $ 83,627 $ 68,608 Loans held for sale 1,182 1,115 Total loans and leases, net $ 84,809 $ 69,723 Loan Maturity and Repricing Analysis The following table sets forth the maturity or period to repricing of our portfolio of loans held for investment at December 31, 2023.
Loans and Leases The following table summarizes the composition of our loan portfolio: Year Ended December 31, 2024 2023 (in millions) Amount Percent of Loans Held for Investment Amount Percent of Loans Held for Investment Multi-family $ 34,093 49.9 % $ 37,265 44.0 % Commercial real estate 8,685 12.7 10,470 12.4 One-to-four family first mortgage 5,201 7.6 6,061 7.2 Acquisition, development, and construction 3,151 4.6 2,912 3.4 Commercial and industrial 15,376 22.5 25,254 29.9 Other loans 1,766 2.6 2,657 3.1 Total loans and leases held for investment $ 68,272 100% $ 84,619 100% Allowance for credit losses on loans and leases (1,201) (992) Total loans and leases held for investment, net $ 67,071 $ 83,627 Loans held for sale 899 1,182 Total loans and leases, net $ 67,970 $ 84,809 53 Loan Maturity and Repricing Analysis The following table sets forth option loans by year of repricing and non-option loans by year of contractual maturity for our multi-family and commercial real estate portfolios within loans held for investment at December 31, 2024.
Regulatory Capital The Bank is subject to regulation, examination, and supervision by the OCC and the Federal Reserve (the “Regulators”).
Regulatory Capital The Company is a bank holding company subject to regulation, examination and supervision by the Federal Reserve while the Bank is a national bank subject to regulation, examination, and supervision by the Office of the Comptroller of the Currency.
The actual duration of held-for-investment mortgage loans and mortgage-related securities can be significantly impacted by changes in prepayment levels and market interest rates. The level of prepayments may, in turn, be impacted by a variety of factors, including the economy in the region where the underlying mortgages were originated; seasonal factors; demographic variables; and the assumability of the underlying mortgages.
The actual duration of held for investment mortgage loans and mortgage-related securities can be significantly impacted by changes in prepayment levels and market interest rates.
Appraisals are ordered annually until such time as the loan becomes performing and is returned to accrual status. It is not our policy to obtain updated appraisals for performing loans. However, appraisals may be ordered for performing loans when a borrower requests an increase in the loan amount, a modification in loan terms, or an extension of a maturing loan.
However, appraisals may be ordered for performing loans when a borrower requests an increase in the loan amount, a modification in loan terms, or an extension of a maturing loan, or when we determine an updated appraisal is needed as a result of our ongoing credit analysis.
It is our policy to order updated appraisals for all non-performing loans 90 days or more past due that are collateralized by multi-family buildings, CRE properties, or land, if the most recent appraisal on file for the property is more than one year old.
Charge-offs of $770 million were recorded on commercial real estate and multi-family loans during the year ended December 31, 2024, primarily driven by appraisals received on those loans. 66 It is our policy to order updated appraisals for all substandard and non-accrual loans that are collateralized by multi-family buildings, commercial real estate properties, or land, if the most recent appraisal on file for the property is more than one year old.
In addition, the Company had Federal Reserve Bank stock, at cost, of $203 million and $176 million at December 31, 2023 and December 31, 2022, respectively.
In addition, the Company had Federal Reserve Bank stock, at cost, of $219 million and $203 million at December 31, 2024 and December 31, 2023, respectively. Goodwill We recorded goodwill in our consolidated statements of condition in connection with our historical business combinations.
Deposits Our ability to retain and attract deposits depends on numerous factors, including customer satisfaction, the rates of interest we pay, the types of products we offer, and the attractiveness of their terms. The vast majority of our deposits are retail in nature (i.e., they are deposits we have gathered through our branches or through business combinations).
Deposits We compete for deposits and customers through multiple channels, including our retail branch network, our private banking business and mobile and internet banking applications, Our ability to retain and attract deposits depends on numerous factors, including customer satisfaction, the rates of interest we pay, the types of products we offer, and the attractiveness of their terms.
The following table sets forth the changes in non-accrual loans for the year ended December 31, 2023: (in millions) Balance at December 31, 2022 $ 141 New non-accrual, including acquired from acquisition 466 Charge-offs (97) Transferred to repossessed assets (3) Loan payoffs, including dispositions and principal pay-downs (36) Restored to performing status (43) Balance at December 31, 2023 $ 428 At December 31, 2023 total non-accrual mortgage loans increased $238 million to $363 million, while commercial and industrial loans increased $40 million to $43 million and other non-accrual loans increased $9 million to $22 million compared to December 31, 2022.
The following table sets forth the changes in non-accrual loans for the year ended 2024: (in millions) Balance at December 31, 2023 $ 428 New non-accrual 3,574 Charge-offs (256) Transferred to repossessed assets (513) Loan payoffs, including dispositions and principal pay-downs (542) Restored to performing status (76) Balance at December 31, 2024 $ 2,615 At December 31, 2024, non-performing assets to total assets equaled 2.62 percent compared to 0.39 percent at December 31, 2023, and non-accrual loans to total loans equaled 3.83 percent compared to 0.51 percent at December 31, 2023.
As of December 31, 2023, the repurchase liability on LGG loans was $456 million. As of December 31, 2022 one-to-four family loans totaled $5.8 billion. These loans include various types of conforming and non-conforming fixed and adjustable rate loans underwritten using Fannie Mae and Freddie Mac guidelines for the purpose of purchasing or refinancing owner occupied and second home properties.
One-to-four family loans include various types of conforming and non-conforming fixed and adjustable-rate loans underwritten using Fannie Mae and Freddie Mac guidelines for the purpose of purchasing or refinancing owner occupied and second home properties. The loan-to-value requirements on our residential first mortgage loans vary depending on occupancy, property type, loan amount, and FICO scores.
In the instance of an outdated appraisal on an impaired loan, we adjust the original appraisal by using a third-party index value to determine the extent of impairment until an updated appraisal is received. 64 Asset Quality Measures The following table presents the Company's asset quality measures at the respective dates: December 31, 2023 December 31, 2022 Non-performing loans to total loans held for investment 0.51 % 0.20 % Non-performing assets to total assets 0.39 0.17 Allowance for credit losses on loans and leases to non-performing loans 231.51 278.87 Allowance for credit losses on loans and leases to total loans held for investment 1.17 0.57 Non-Performing Loans The following table presents our non-performing loans held for investment by loan type and the changes in the respective balances: Change from December 31, 2022 to December 31, 2023 (in millions) December 31, 2023 December 31, 2022 Amount Non-Performing Loans (1)(2) : Non-accrual mortgage loans: Multi-family $ 138 $ 13 $ 125 Commercial real estate 128 20 108 One-to-four family first mortgage 95 92 3 Acquisition, development, and construction $ 2 $ — 2 Total non-accrual mortgage loans $ 363 $ 125 238 Commercial and industrial 43 3 40 Other non-accrual loans (3) 22 13 9 Total non-performing loans $ 428 $ 141 287 Repossessed assets 14 12 2 Total non-performing assets $ 442 $ 153 289 (1) Excludes LGG that are insured by U.S government agencies.
Asset Quality Measures The following table presents the Company's asset quality measures at the respective dates: Year Ended December 31, 2024 2023 Non-accrual loans to total loans held for investment 3.83 % 0.51 % Non-performing assets to total assets 2.62 0.39 Allowance for credit losses on loans and leases to non-accrual loans 45.93 231.51 Allowance for credit losses on loans and leases to total loans held for investment 1.76 1.17 All asset quality information excludes loans with government guarantees that are insured by U.S. government agencies. 58 Non-Accrual Loans The following table presents our non-accrual loans held for investment by loan type and the changes in the respective balances: Change from December 31, 2023 to Year Ended December 31, December 31, 2024 (in millions) 2024 2023 Amount Multi-family $ 1,755 $ 138 $ 1,617 Commercial real estate 546 128 418 One-to-four family first mortgage 70 95 (25) Acquisition, development, and construction 18 2 16 Commercial and industrial 202 43 159 Other non-accrual loans (1) 24 22 2 Total non-accrual loans $ 2,615 $ 428 $ 2,187 Repossessed assets 14 14 — Total non-performing assets $ 2,629 $ 442 $ 2,187 (1) Includes home equity, consumer and other loans.
Properties and other assets that are acquired through foreclosure are classified as repossessed assets, and are recorded at fair value at the date of acquisition, less the estimated cost of selling the property. Subsequent declines in the fair value of the assets are charged to earnings and are included in non-interest expense.
We evaluate loans that were previously placed on non-accrual at least quarterly to determine if additional charge-offs may be needed. Properties and other assets that are acquired through foreclosure are classified as repossessed assets and are recorded at fair value at the date of acquisition, less the estimated cost of selling the property.
The multi-family loan portfolio was $37.3 billion at December 31, 2023, down slightly compared to $38.1 billion at December 31, 2022 due to a combination of higher interest rates and our loan diversification strategy. The majority of our multi-family loans were secured by rental apartment buildings.
Multi-Family Loans The multi-family loan portfolio was $34.1 billion at December 31, 2024, down slightly compared to $37.3 billion at December 31, 2023, reflective of our continuing efforts to strategically encourage loan payoffs which has reduced the concentration of this portfolio. The majority of our multi-family loans are non-recourse and are secured by rental apartment buildings.
Repossessed assets of $14 million were slightly higher compared to $12 million in the prior year. 65 Delinquencies The following table presents our loans, 30 to 89 days past due by loan type and the changes in the respective balances: Change from December 31, 2023 to December 31, 2022 (in millions) December 31, 2023 December 31, 2022 Amount Percent Loans 30 to 89 Days Past Due (1) : Multi-family $ 121 $ 34 $ 87 256 % Commercial real estate 28 2 26 1300 % One-to-four family first mortgage 40 21 19 90 % Acquisition, development, and construction 2 — 2 NM Commercial and industrial 37 2 35 1750 % Other loans 22 11 11 100 % Total loans 30-89 days past due $ 250 $ 70 180 257 % (1) Excludes LGG that are insured by U.S government agencies.
Repossessed assets of $14 million remained unchanged from prior year. 59 Delinquencies The following table presents our loans, 30 to 89 days past due by loan type and the changes in the respective balances: December 31, 2024 compared to Year Ended December 31, December 31, 2023 (in millions) 2024 2023 Amount Loans 30 to 89 Days Past Due: Multi-family $ 749 $ 121 $ 628 Commercial real estate 65 28 37 One-to-four family first mortgage 25 40 (15) Acquisition, development, and construction 5 2 3 Commercial and industrial 110 37 73 Other loans 11 22 (11) Total loans 30-89 days past due $ 965 $ 250 $ 715 Over $494 million of the loans categorized as 30 to 89 days past due at December 31, 2024, became current with payments made in January 2025.
Bank Liquidity We manage our liquidity to ensure that our cash flows are sufficient to support our operations, and to compensate for any temporary mismatches between sources and uses of funds caused by variable loan and deposit demand. We monitor our liquidity daily to ensure that sufficient funds are available to meet our financial obligations.
We dispose of such properties as quickly and prudently as possible, given current market conditions and the property’s condition. Liquidity Risk We manage our liquidity to ensure that our cash flows are sufficient to support our operations, and to protect against temporary mismatches between sources and uses of funds caused by variable loan and deposit demand.
See Note 12 - Borrowed Funds,” in Item 8, “Financial Statements and Supplementary Data” for a further discussion of our wholesale borrowings, our junior subordinated debentures and subordinated debt.
We had $1.0 billion drawn under the Bank Term Funding Program in 2023 that was scheduled to mature in December 2024 and was repaid in October 2024. See Note 12 - Borrowed Funds, in Item 1, “Financial Statements and Supplementary Data” for a further discussion of our wholesale borrowings, our junior subordinated debentures and subordinated debt.
Commitments generally have fixed expiration dates or other termination clauses and may require the payment of a fee. The letters of credit we issue consist of performance stand-by, financial stand-by, and commercial letters of credit.
Commitments generally have fixed expiration dates or other termination clauses and may require the payment of a fee. The fees we collect in connection with the issuance of letters of credit are included in “Fee income” in the Consolidated Statements of (Loss) Income.
The following table presents a geographical analysis of the CRE loans in our held-for-investment loan portfolio: At December 31, 2023 Commercial Real Estate Loans (in millions) Amount Percent of Total New York $ 5,319 51 % Michigan 1,000 10 % New Jersey 580 5 % Florida 457 4 % Texas 105 1 % Pennsylvania 374 4 % Ohio 132 1 % All other states 2,503 24 % Total $ 10,470 100 % Acquisition, Development, and Construction Loans At December 31, 2023, our ADC loans represented $2.9 billion, or 3 percent, of total loans held for investment, reflecting an increase of $916 million compared to December 31, 2022.
These unfavorable market conditions also lower the value of underlying collateral which has had a material impact on loan charge-offs in 2024. 55 The following table presents an analysis of the property types that collateralize the commercial real estate loans in our held for investment loan portfolio: Year Ended December 31, 2024 2023 (dollars in billions) Amount Percent of Total Amount Percent of Total Office non-owner occupied $ 2,271 26 % $ 3,243 31 % Retail (includes owner and non-owner occupied) 1,934 22 % 2,234 21 % Industrial 2,939 34 % 2,995 29 % Other 1,541 18 % 1,998 19 % Total $ 8,685 100 % $ 10,470 100 % The following table presents a geographical analysis of the commercial real estate loans in our held for investment loan portfolio: Year Ended December 31, 2024 2023 (in millions) Amount Percent of Total Amount Percent of Total New York $ 4,156 48 % $ 5,319 51 % Michigan 800 9 % 1,000 10 % New Jersey 580 7 % 580 6 % California 462 5 % 457 4 % Florida 381 4 % 105 1 % Pennsylvania 292 3 % 374 4 % All other states 2,014 23 % 2,635 24 % Total $ 8,685 100 % $ 10,470 100 % Acquisition, Development and Construction Loans At December 31, 2024, our ADC loans represented $3.2 billion, or 4.6 percent of total loans held for investment, reflecting an increase of $239 million compared to December 31, 2023.
Goodwill, which is tested at least annually for impairment, refers to the difference between the purchase price and the fair value of an acquired company’s assets, net of the liabilities assumed. As of December 31, 2023, the Company identified a triggering event and applied a market approach using the end of day stock price.
Goodwill is the difference between the purchases price and the fair value of the acquired company's assets, net of the liabilities assumed. Goodwill was tested at least annually for impairment. The Company’s 2023 assessment concluded that goodwill from historical transactions (2007 and prior) was fully impaired as of December 31, 2023.
Specialty Finance At December 31, 2023, specialty finance loans and leases totaled $5.2 billion or 6 percent of total loans held for investment, up $769 million or 17 percent compared to December 31, 2022.
One-to-Four Family Loans One-to-four family loans were $5.2 billion and $6.1 billion at December 31, 2024 and 2023 respectively. This includes $378 million of loans with government guarantees, or 7.6 percent of total loans held for investment at December 31, 2024, compared to $541 million at December 31, 2023.
However, the factors with the most significant impact on prepayments are market interest rates and the availability of refinancing opportunities.
The level of prepayments may, in turn, be impacted by a variety of factors, including the economy in the region where the underlying mortgages were originated; seasonal factors; demographic variables; and the assumability of the underlying mortgages. However, the factors with the most significant impact on prepayments are market interest rates and the availability of refinancing opportunities.
Income tax expense for the current year was impacted by the bargain purchase gain arising from the Signature transaction. 55 RESULTS OF OPERATIONS: 2022 AS COMPARED TO 2021 The results of operations comparison of 2022 compared to 2021 can be found in the Company’s previously filed Annual Report on Form 10-K for the year-ended December 31, 2022 under Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations”- Results of Operations: 2022 As Compared to 2021.” Signature Transaction - Certain Financial Information In accordance with the guidance provided in Staff Accounting Bulletin Topic 1:K, “Financial Statements of Acquired Troubled Financial Institutions” (“SAB 1:K”) the Company has omitted certain financial information on the Signature Transaction required by Rule 3-05 of Regulation S-X and Article 11 of Regulation S-X.
Additionally. the prior year tax rate is not meaningful due to the net tax expense related to the Signature Transaction being netted in the bargain purchase gain. 52 RESULTS OF OPERATIONS: 2023 AS COMPARED TO 2022 The results of operations comparison of 2023 compared to 2022 can be found in the Company’s previously filed Annual Report on Form 10-K/A for the year-ended December 31, 2023, under Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations”.
As of December 31, 2023, non-government guaranteed loans in this portfolio had an average current FICO scor e of 741 and an average LTV of 53. Substantially all LGG are insured or guaranteed by the FHA or the U.S. Department of Veterans Affairs. Nonperforming repurchased loans in this portfolio earn interest at a rate based upon the 10-year U.S.
Substantially all loans with government guarantees are insured or guaranteed by the Federal Housing Administration or the U.S. Department of Veterans Affairs. Nonperforming repurchased loans in this portfolio earn interest at a rate based upon the 10-year U.S. Treasury note rate from the time the underlying loan becomes 60 days delinquent until the loan is conveyed to the U.S.
The Bank is also governed by numerous federal and state laws and regulations, including the FDIC Improvement Act of 1991, which established five categories of capital adequacy ranging from “well capitalized” to “critically undercapitalized.” Such classifications are used by the FDIC to determine various matters, including prompt corrective action and each institution’s FDIC deposit insurance premium assessments.
The Bank is subject to the Prompt Corrective Action regulatory capital framework that establishes five categories of capital adequacy ranging from “well capitalized” to “critically undercapitalized.” An institution’s capital category affects various matters, including legal requirements for regulators to take prompt corrective action and the level of a bank’s Federal Deposit Insurance Corporation deposit insurance premium assessments.
In addition, our multi-family loans may contain an initial interest-only period which typically does not exceed two years; however, these loans are underwritten on a fully amortizing basis.
We also are continuing our efforts to strategically reduce the concentration of this portfolio. Certain of our commercial real estate loans may contain an interest-only period which typically does not exceed three years; however, these loans are underwritten on a fully amortizing basis, including calculation of the debt service coverage ratio.
Net loss available to common stockholders for the year ended December 31, 2023 was $112 million, compared to net income $617 million for the year ended December 31, 2022. Diluted (loss) earnings per share totaled $(0.16) for the year ended December 31, 2023 compared to $1.26 for the year ended December 31, 2022.
The net loss attributable to common stockholders, which includes the impact from preferred dividends, for the year ended 2024 was $1.2 billion or $3.49 per diluted share compared to the net loss attributable to common stockholders of $112 million for the year ended 2023 or $0.49 per diluted share.
Income Tax Expense For the year ended December 31, 2023, the Company reported a provision for income taxes of $29 million, compared to $176 million for the year ended December 31, 2022.
Income Tax Expense For the year ended 2024, the Company reported an income tax benefit of $260 million compared to an income tax expense of $29 million for the year ended 2023. The effective tax rate for the year ended 2024 was 18.90 percent compared to (59.59) percent in the year ended 2023.
Such loans are tailored to meet the specific needs of our borrowers, and include term loans, demand loans, revolving lines of credit, and, to a much lesser extent, loans that are partly guaranteed by the Small Business Administration.
The commercial and industrial loans we produce are primarily made to small, mid-size, and larger corporate operating businesses and finance companies across a diverse set of industries. Such loans are tailored to meet the specific needs of our borrowers, and include term loans, demand loans, and revolving lines of credit.
For the Years Ended December 31, 2023 compared to Year Ended 2022 Increase/(Decrease) Due to: 2022 compared to Year Ended 2021 Increase/(Decrease) Due to: (in millions) Volume Rate Net Volume Rate Net INTEREST-EARNING ASSETS: Mortgage and other loans and leases, net $ 1789 $ 872 $ 2661 $ 231 $ 92 $ 323 Securities 132 112 244 22 22 44 Reverse repurchase agreements (4) 11 7 1 10 11 Interest Earning cash and cash equivalents 413 74 487 — 25 25 Total interest-earnings assets 2,327 1,072 3,399 247 156 403 INTEREST-BEARING LIABILITIES: Interest-bearing checking and money market accounts 366 351 717 64 131 195 Savings accounts 10 99 109 11 21 32 Certificates of deposit 315 234 549 (4) 46 42 Short term borrowed funds 204 45 249 2 46 48 Other borrowed funds (76) 170 94 (8) (13) (21) Total interest-bearing liabilities 743 975 1,718 83 213 296 Change in net interest income $ 1,584 $ 97 $ 1,681 $ 164 $ (57) $ 107 For the year ended December 31, 2023, the net interest margin was 2.99 percent, up 64 basis points compared to the year ended December 31, 2022.
Year Ended December 31, 2024 compared to Year Ended 2023 Increase/(Decrease) Due to: 2023 compared to Year Ended 2022 Increase/(Decrease) Due to: (in millions) Volume Rate Net Volume Rate Net INTEREST-EARNING ASSETS: Mortgage and other loans and leases, net $ (170) $ 30 $ (140) $ 1,503 $ 1,158 $ 2,661 Securities 73 42 115 109 135 244 Reverse repurchase agreements (22) — (22) (3) 10 7 Interest Earning cash and cash equivalents 508 — 508 266 221 487 Total interest-earnings assets $ 389 $ 72 $ 461 $ 1,875 $ 1,524 $ 3,399 INTEREST-BEARING LIABILITIES: Interest-bearing checking and money market accounts $ (290) $ 216 $ (74) $ 255 $ 462 $ 717 Savings accounts 37 139 176 7 102 109 Certificates of deposit 677 39 716 203 346 549 Short term borrowed funds (94) 10 (84) 158 91 249 Other borrowed funds 508 144 652 (61) 155 94 Total interest-bearing liabilities 838 548 1,386 562 1,156 1,718 Change in net interest income $ (449) $ (476) $ (925) $ 1,313 $ 368 $ 1,681 Comparison to Prior Year For the year ended 2024, net interest margin was 1.95 percent, down 104 basis points compared to the year ended 2023.
The subsidiary participates in syndicated loans that are brought to them, and equipment loans and leases that are assigned to them, by a select group of nationally recognized sources, and are generally made to large corporate obligors, many of which are publicly traded, carry investment grade or near-investment grade ratings, and participate in stable industries nationwide.
The decrease in specialty finance loans was due to our decision to run off certain non-core loans totaling $2.4 billion partially offset by originations. These loans are generally made to large corporate obligors, many of which are publicly traded, carry investment grade or near-investment grade ratings, and participate in stable industries nationwide.
Our deposit base includes $29.3 billion of uninsured deposits at December 31, 2023, up $12.9 billion as compared to December 31, 2022 largely due to the Signature Transaction. This represents 35.9 percent of our total deposits. These amounts were determined based on the same methodologies and assumptions used for regulatory reporting purposes and exclude internal accounts.
These amounts were estimated based on the same methodologies and assumptions used for regulatory reporting purposes and exclude internal accounts. At December 31, 2024, our deposit base includes $16.1 billion of uninsured deposits. Uninsured deposits decreased following our earnings announcement in January 2024 and subsequent credit rating agency downgrades of our credit ratings in February and March 2024.
Pursuant to blanket collateral agreements with the Bank, our FHLB-NY, FHLB-Indianapolis advances and overnight advances are secured by pledges of certain eligible collateral in the form of loans and securities.
FHLB advances are secured by eligible collateral in the form of loans and securities, under blanket collateral agreements with the FHLB. As of December 31, 2024, $250 million of our wholesale borrowings had callable features and $2 billion had callable features at December 31, 2023.
The term “net profits” is defined as net income for a given period less any dividends paid during that period. As a result of our acquisition of Flagstar, we are also required to seek regulatory approval from the OCC for the payment of any dividend to the Parent Company through at least the period ending November 1, 2024.
The term “net profits” is defined as net income for a given period less any dividends paid during that period.
Reflecting an increase in the cash surrender value of the underlying policies, our investment in BOLI at December 31, 2023 rose $19 million to $1.6 billion compared to December 31, 2022. 69 Goodwill We record goodwill in our consolidated statements of condition in connection with certain of our business combinations.
Reflecting an increase in the cash surrender value of the underlying policies, our investment in BOLI at December 31, 2024 rose $25 million to $1.6 billion compared to December 31, 2023. Premises and Equipment and Other Assets In December 2024, management approved the closure of certain private banking locations and retail branches which was a triggering event for potential impairment.

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