Flagstar Bank, N.A.

Hello, and thank you for standing by. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Black Star Bank fourth quarter 2025 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star then the number one on your telephone keypad. If you'd like to withdraw your question, press star one again. I would now like to turn the conference over to Sal DiMartino, Director of Investor Relations. Please go ahead.

Thank you, Regina, and good morning, everyone. Welcome to Flagstar Bank's fourth quarter 2025 earnings call. This morning, our Chairman, President, and CEO, Joseph Otting, along with the company's Senior Executive Vice President and Chief Financial Officer, Lee Smith, will discuss our results for the quarter and the full year ended December 31st, 2025. During this call, we will be referring to a presentation which provides additional detail on our quarterly results and operating performance. Both the earnings presentation and the press release can be found on the investor relations section of our company website, Also, before we begin, I'd like to remind everyone that certain comments made today by the management team of Flagstar Bank may include forward-looking statements within the meanings of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements we may make are subject to the Safe Harbor Rules. Please review the forward-looking disclaimer and safe harbor language in today's press release and presentation for more information about risks and uncertainties which may affect us. Additionally, when discussing our results, we will reference certain non-GAAP measures which exclude certain items from reported results. Please refer to today's earnings release for reconciliations of these non-GAAP measures. With that, now I would like to turn the call over to Mr. Otting. Joseph, please go ahead.

Thank you, Sal. Good morning, everyone, and welcome to our fourth quarter 2025 earnings conference calls. We are pleased with the bank's performance throughout 2025, and especially during the fourth quarter. As all of you know, after two challenging years, I'm proud to share that we returned to profitability in the fourth quarter. reporting adjusted net income of 30 million or six cents per diluted share compared to a net loss of seven cents per diluted share in the previous quarter. 2025 was a year of significant momentum for the bank, which accelerated during the fourth quarter. We continue to successfully execute on our strategic plan to transform Flagstar Bank into one of the best performing regional banks in the country. one with a diversified balance sheet and revenue streams and strong capital liquidity and credit quality. While returning to profitability is a significant milestone, but it is only one of several positives during the quarter. Turning to slide three of the investor presentation, we'll highlight those. First, our return to profitability during the quarter was driven by several factors, including growth in our net interest income coupled with NIM expansion and disciplined expense management. This resulted in a $45 million increase in pre-provision net revenue and positive operating leverage of approximately 900 basis points. Second, we had another strong quarter of net C&I loan growth, up by 2% on a linked quarter basis or about 9% on an analyzed basis. Third, We continue to reduce our overall CRE exposure, mostly through par payoffs, resulting in an overall $2.3 billion reduction in multifamily and CRE loans, and a CRE concentration ratio now falling below 400. And fourth, our credit quality profile continued to improve as non-accrual loans declined, while we also had a decrease in net charge loss and the provision for loan losses. Moving to slide four, after two years of building a solid foundation for growth, we expect that in 2026, our earning power will continue to strengthen with a full year of profitability driven by continued growth in net interest income and margin expansion, along with a continued focus on managing our expenses lower, leading to a positive operating leverage in 2026. We remain focused on further improving the bank's credit profile, as we proactively manage our CRE exposure lower through par payoffs and opportunistic loan sales, reducing non-accruals, and a lower level of charge-offs. We will continue to diversify the loan portfolio through growth in non-CRE loans, especially through our C&I lending platform. And lastly, we will generate deposit growth across various business lines while keeping our discipline on pricing. On the next slide, we highlight the roadmap we employed to solidify the balance sheet and reposition the bank for growth. We build a strong capital position as our CET1 capital ratio has increased by almost 400 basis points, now ranking us amongst the highest best capitalized regional banks amongst our peers. We have also fortified our ACL through a rigorous credit review process and have increased the ACL up to 1.79% also amongst the tops of the regional banks. We significantly enhanced our liquidity position as cash and securities have increased to 25% of total assets. And we reduced our reliance on wholesale funding, lowering the cost of funds and boosting our net interest margin. And during the year, we reduced our broker deposits almost by $8 billion. We believe that our strategic initiatives over the past couple of years have provided us with the opportunity to drive sustainable growth and profitability going forward. The next two slides highlight the continued momentum and tremendous progress in our CNI business. Under Rich Raffetto's leadership, we've built in a relatively short period of time of about 15 months a very powerful origination team across America. As you see on slide six, You can see that the CNI lending had another strong quarter in commitments and originations. As total commitments increased 28% to $3 billion, while originations increased 22% to $2.1 billion. This is led by the bank's two primary strategic focus areas, our specialized industries and corporate and regional banking group. On slide seven, you'll see the overall CNI growth was 343 million or 2% compared to the third quarter. our second consecutive quarter of net C&I loan growth. This was driven by $1.5 billion in combined growth in these two businesses. One of the things that you also can observe on this slide is that we de-risked a number of the businesses, as we've talked about in the past, where either because of hold size or credit fall that we've decided to reduce those exposures or exit those credits. Alone in 2025, it was roughly about $4 billion of actions that we took And we do see the businesses of like asset base and equipment finance and mortgage starting to be accretive to our loan growth going forward. Turning now to slide eight, you can clearly see the trajectory of our adjusted EPS as we successfully executed on all our strategic initiatives, resolving in the first profitable quarter since the third quarter of 2023. With that, I now will turn it over to Lee to review our financials and credit quality.