What the changes say
- Flagstar Bank added new risk disclosures addressing political volatility, CFPB enforcement actions, and execution of its enterprise strategic plan.
What changed since the prior 10-K
New
- NewFinancial Statements Risk
If we fail to maintain effective internal control over financial reporting, our ability to produce accurate and timely financial statements could be impaired and adversely affect our reputation, business, financial condition and stock price
The bank highlights ongoing risks of internal control deficiencies, despite remediating prior material weaknesses from 2023.
- NewLegal and Regulatory Risks
We operate in a highly regulated industry, and compliance with, or changes to, the laws and regulations that govern our operations may adversely affect us
The bank faces continuous regulatory changes and heavy federal and state oversight affecting its permissible activities and capital requirements.
- NewLegal and Regulatory Risks
Political developments, including those arising from transitions in administration and shifts in congressional control, may create volatility and uncertainty, potentially resulting in significant changes in the size, scope, and effectiveness of government agencies and services
Shifts in government administration and potential changes or eliminations of regulatory agencies create policy uncertainty.
- NewLegal and Regulatory Risks
manner in which financial institutions must interact with clients when taking deposits, making loans, collecting and servicing loans and providing other services
The CFPB and DOJ enforce strict consumer protection laws, creating risks of penalties or restrictions for non-compliance.
- NewOperational Risks
Failure to effectively execute and operationalize our enterprise strategic plan in the face of evolving business, economic, and regulatory conditions could adversely impact our operations, financial results, and stock price
Executing the multi-year enterprise strategic plan introduces operational and capital allocation risks.
Dropped
- DroppedFinancial Statements Risk
Our failure to maintain effective internal controls may impact the accuracy and timeliness of financial reporting and increase our expenses
- DroppedFinancial Statements Risk
The inability to receive dividends from our subsidiary bank could impact our ability to maintain or increase the current level of cash dividends we pay to our stockholders
- DroppedLegal and Regulatory Risks
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
- DroppedOperational Risks
We recently appointed new members to the Board of Directors and the executive management team and are embarking upon a new strategic plan, which creates uncertainties and could harm our business
Reworded
- 70% rewrittenLegal and Regulatory Risks
We are subject to numerous laws designed to protect consumers, including the Community Reinvestment Act and fair lending laws, and failure to comply with these laws could lead to a wide variety of sanctions
Updated to specify that the OCC rather than the Federal Reserve and OCC assesses Community Reinvestment Act performance.
- 52% rewrittenOperational Risks
Completing the diversification of our 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
Expanded loan portfolio diversification risk specifically to include reducing multi-family real estate concentrations alongside commercial real estate.
Was: 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
- 51% rewrittenLegal and Regulatory Risks
Legislation and regulations focused on data privacy could increase our compliance and operational risks, among others, leading to litigation or regulatory enforcement and reputational damage
Added phrasing regarding additional state-level data privacy requirements beyond breach notifications.
Was: New legislation and regulations focused on data privacy could increase our compliance and operational risks, among others, leading to litigation or regulatory enforcement and reputational damage
- 47% rewritten
Our allowance for credit losses might not be sufficient to cover our actual losses, which would adversely impact our financial condition, regulatory capital ratios and results of operations
Updated allowance figures, noting an ACL of $1.1 billion as of December 31, 2025, compared to $1.2 billion for 2024.
- 42% rewritten
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
Reorganized context on New York State rent laws and their impact on multi-family real estate loan collateral.
- 42% rewrittenLegal and Regulatory Risks
Failure to comply with OFAC regulations could result in legal and reputational risks
Clarified OFAC compliance risks to explicitly mention negative impacts on business, financial condition, and results of operations.
- 42% rewrittenOperational Risks
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
Added abbreviation for the National Bank Act as NBA in discussion of mortgage escrow interest litigation.
- 41% rewrittenFinancial and Market Risks
Economic conditions could adversely affect the value of the loans we originate and the securities in which we invest
Minor grammatical polish regarding economic conditions and collateral values without substantive metric changes.
- 36% rewritten
Our concentration in multi-family loans and commercial real estate loans could expose us to increased lending risks and related loan losses
- 33% rewrittenLegal and Regulatory Risks
The level of our commercial real estate loan portfolio may subject us to additional regulatory scrutiny
- 33% rewrittenFinancial Statements Risk
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 Bank
Was: 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
- 28% rewrittenFinancial Statements Risk
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
- 26% rewrittenLegal and Regulatory Risks
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
- 24% rewrittenOperational Risks
Increasing scrutiny and evolving expectations from customers, regulators, investors, and other stakeholders with respect to our environmental, social, and governance practices may impose additional costs on us or expose us to new or additional risks
- 21% rewrittenFinancial Statements Risk
Impairment in the carrying value in finite-lived intangible assets could negatively impact our financial condition and results of operations
All 41 risk factors
Headings as the filing states them, in filing order.
Other
- 01Changes 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
- 02Our allowance for credit losses might not be sufficient to cover our actual losses, which would adversely impact our financial condition, regulatory capital ratios and results of operations47% rewritten
- 03Our concentration in multi-family loans and commercial real estate loans could expose us to increased lending risks and related loan losses36% rewritten
- 04Our 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 operations42% rewritten
- 05We are subject to credit risk in connection with our lending activities, and our financial condition and results of operations may be negatively impacted by economic conditions and other factors that adversely affect our borrowers
Financial Statements Risk
- 06Our accounting estimates and risk management processes rely on analytical and forecasting models, the nature of which are uncertain and may not reflect recent credit or macroeconomic factors
- 07Impairment in the carrying value in finite-lived intangible assets could negatively impact our financial condition and results of operations21% rewritten
- 08If we fail to maintain effective internal control over financial reporting, our ability to produce accurate and timely financial statements could be impaired and adversely affect our reputation, business, financial condition and stock priceNew
- 09Failure 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 Bank33% rewritten
- 10The elimination of our quarterly cash dividend could have an adverse impact on the market price of our common stock
- 11Deferring 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
- 12Dividends 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 regulations28% rewritten
- 13Our 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
Legal and Regulatory Risks
- 14We operate in a highly regulated industry, and compliance with, or changes to, the laws and regulations that govern our operations may adversely affect usNew
- 15Inability 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
- 16Our 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 industry26% rewritten
- 17Political developments, including those arising from transitions in administration and shifts in congressional control, may create volatility and uncertainty, potentially resulting in significant changes in the size, scope, and effectiveness of government agencies and servicesNew
- 18Noncompliance with the Bank Secrecy Act and other anti-money laundering statutes and regulations could result in material financial loss
- 19Failure to comply with OFAC regulations could result in legal and reputational risks42% rewritten
- 20Our 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 Bank
- 21We are subject to various legal or regulatory investigations and proceedings
- 22If 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
- 23We are subject to numerous laws designed to protect consumers, including the Community Reinvestment Act and fair lending laws, and failure to comply with these laws could lead to a wide variety of sanctions70% rewritten
- 24manner in which financial institutions must interact with clients when taking deposits, making loans, collecting and servicing loans and providing other servicesNew
- 25The level of our commercial real estate loan portfolio may subject us to additional regulatory scrutiny33% rewritten
- 26Legislation and regulations focused on data privacy could increase our compliance and operational risks, among others, leading to litigation or regulatory enforcement and reputational damage51% rewritten
Financial and Market Risks
- 27Economic conditions could adversely affect the value of the loans we originate and the securities in which we invest41% rewritten
Strategic Risks
- 28Extensive competition for loans and deposits could adversely affect our ability to expand our business, as well as our financial condition and results of operations
- 29We may be exposed to challenges in combining the operations of our recent acquisitions into our operations, which may prevent us from achieving the expected benefits from our acquisition activities
Operational Risks
- 30Our stress testing processes rely on analytical and forecasting models that may prove to be inadequate or inaccurate, which could adversely affect the effectiveness of our strategic planning and our ability to pursue certain corporate goals
- 31The Bank relies on third parties to perform certain key business functions, which may expose us to further operational risk
- 32Failure to keep pace with technological changes, including developments in digital assets such as stable coins and related payment technologies, could have a material adverse impact on our ability to compete for loans and deposits, and therefore on our financial condition and results of operations
- 33The inability to attract and retain key personnel could adversely impact our operations
- 34Failure to effectively execute and operationalize our enterprise strategic plan in the face of evolving business, economic, and regulatory conditions could adversely impact our operations, financial results, and stock priceNew
- 35Many aspects of our operations are dependent upon the soundness of other financial intermediaries and thus could expose us to systemic risk
- 36Completing the diversification of our 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 realized52% rewritten
- 37We 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 Act42% rewritten
- 38We could be exposed to fraud risks that affect our operations and reputation
- 39We could be adversely affected by natural disasters, terrorist activities, international hostilities, domestic civil unrest or other extraordinary events beyond our control
- 40Damage to our reputation could significantly harm the businesses we engage in, as well as our competitive position and prospects for growth
- 41Increasing scrutiny and evolving expectations from customers, regulators, investors, and other stakeholders with respect to our environmental, social, and governance practices may impose additional costs on us or expose us to new or additional risks24% rewritten
Other Flagstar Bank, National Association 10-Ks
- FY2024 10-K risk factors40 risks
Interest rate risk and net interest income pressures dominate the risk profile.
Filed Mar 04, 2025
About this page
The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.