Mark Pitzey

Mark Pitzey of Piper Sandler inquired about the percentage of Flagstar Bank N.A.'s $1.7 billion C&I originations in Q3 2025 that were participations. He also asked if the bank had any exposure to Tricolor or First Brand and for an update on the note sale market for "modestly challenged" New York multifamily loans, including market depth and potential sale prices.

Answer

CEO Joseph Otting confirmed that 50-60% of C&I loans are participations, but emphasized that these involve direct relationships with management, not just trading desk purchases, and require high standards for expected fee income and deposits. CFO Lee Smith confirmed no exposure to First Brands or Tricolor, and stated that the NDFI book (including MSR lending) was reviewed and deemed sound. Regarding multifamily loans, Lee Smith noted continued strong demand from other lenders and GSEs, with $1.3 billion in Q3 payoffs (42% substandard), and expects more payoffs in a declining interest rate environment, aiding diversification.