Question · Q3 2025
Matthew Brees from Barclays asked about the percentage of Flagstar Bank N.A.'s loans that are pure floating rate and the spot cost of deposits at quarter-end or currently. He also inquired about the reason for the change in the tangible book value outlook to include warrants, the expectations for average diluted versus common shares outstanding for Q4 2025 and early 2026, and whether the expectation of profitability in Q4 2025 still holds.
Answer
CFO Lee Smith explained that C&I loans are floating rate, and residential loans are typically 5, 7, or 10-year ARMs. He stated the spot cost of deposits was 2.82% a couple of days prior. The change in tangible book value outlook and share count (from 416 million to 480 million) is due to warrants kicking in during Q4 2025, impacting both diluted and common shares outstanding through 2026 and 2027. Lee Smith reiterated the expectation for profitability in Q4 2025, citing the progress made over recent quarters.