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'd like to welcome everyone to the Flagstar Bank second quarter 2026 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'd like to ask a question during this time, simply press star then the number one on your telephone keypad. 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 second quarter 2026 earnings call. This morning, our executive chairman and chief executive officer, Joseph Otting, along with the company's co-president, co-chief operating officer and chief banking officer, Richard Raffetto, and Co-President, Co-Chief Operating Officer and Chief Financial Officer Lee Smith will discuss our results for the quarter. 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 at ir.flagstar.com. Also, before we begin, I'd like to remind everyone that certain comments made today by the management team 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. Also, when discussing our results today, 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 measure. Now, I would like to turn the call over to Mr. Otting. Joseph, please go ahead.

Thank you Sal and good morning everyone and thank you for joining us today. We are pleased to report another quarter full of meaningful progress across our franchise. Our results reflect continued execution against each of the strategic priorities we've outlined over the last past two years. Our second quarter operating results reflect our third consecutive quarter of profitability and improved earnings. higher pre-provisioned net revenue, the resumption of balance sheet growth, disciplined expense management, and the continued strategic reduction in the commercial real estate loan portfolio, a record level of C&I loan production, solid deposit growth, all while reducing our deposit costs, and the decline in our criticized and classified loans. This is the result of a clear strategic plan that we have laid out with disciplined execution and the talent to build this across our organization. We are in the early stages of a multi-year growth story and we are confident that we are on the right path. For some more color, I'd like to turn to slide three. This slide demonstrates the underlying strength and momentum of our core banking business, as well as the tangible progress we are making against each of our four focus areas. Let me walk you through each one. Under our first focus area, we believe that our capital position remains a competitive advantage, providing flexibility to support our organic growth and return capital to shareholders. In that regard, I am pleased that this morning we announced a $250 million share buyback, a clear signal of the progress we are making on our strategic plan and long-term outlook for the Bank. We are also pleased to report our third consecutive quarter of profitability and improved earnings as our pre-provision net revenue increased 51% compared to last quarter. Disciplined expense management has been a key contributor of our return to profitability, and in the second quarter they declined 3%, helping drive positive operating leverage. Also, the second quarter marked an inflection point in our growth trajectory as the balance sheet grew by almost $600 million as we indicated in the last call. And in terms of deposits, we grew core deposits this quarter by over $600 million while reducing deposit costs. Second, a key component of our transformation strategy is to diversify our loan portfolio by growing the CNI book of business. This quarter, we delivered $2 billion of net C&I loan growth on record origination volumes of $2.8 billion. This is our fourth consecutive quarter of net C&I loan growth and the first quarter of overall loan growth since the fourth quarter of 2023. In addition to the strong loan growth, we also grew C&I and private banking deposits this quarter by approximately $900 billion. Third, we continue to systematically reduce our CRE exposure as multifamily in CR par payoffs to $1.1 billion, which 39% of those were substandard rated loans. While the CRE concentration decreased to 350% from 367% last quarter and well over 500% when we originally came to the company. In terms of credit, our criticized and classified loans declined 1% compared to last quarter and are down $1.1 billion or 9% on a year-over-year basis. In the second quarter, we did experience an increase in net charge-offs to $100 million, but half of those were previously 100% reserved for. Next, turning to slide four, the EPS progression tells a compelling story of the Bank's underlying momentum. On an adjusted basis, we moved from a loss of 14 cents in the second quarter of 2025 to earning 5 cents in the second quarter of 2026, representing our third straight quarter of profitability. Now I'd like to turn it over to Rich Raffetto. With our recent reorganization, Rich assumed responsibility for all the banking activities in the company. This is his first earning report with us, and so I'd like to welcome Rich, and Rich, please I'll turn it over to you.