NiSource to Release First Quarter 2025 Financial Results and Host Conference Call on May 7
A replay of the call will be available beginning at 2 p.m. EDT on May 7, 2025, through 11:59 p.m. EDT on May 14, 2025. To access the recording, call +1 (800) 770-2030 and enter conference ID 5571489 followed by the # key. A recording of the call will be archived on the NiSource website.
About NiSource
NiSource Inc. (NYSE: NI) is one of the largest fully-regulated utility companies in the United States, serving approximately 3.3 million natural gas customers and 500,000 electric customers across six states through its local Columbia Gas and NIPSCO brands. The mission of our approximately 7,700 employees is to deliver safe, reliable energy that drives value to our customers. NiSource is a member of the Dow Jones Sustainability - North America Index and is on Forbes lists of America's Best Employers for Women and Diversity. Learn more about NiSource's record of leadership in sustainability, investments in the communities it serves and how we live our vision to be an innovative and trusted energy partner at www.NiSource.com.
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CENTENE CORPORATION REPORTS SECOND QUARTER 2025 RESULTS
-- Diluted Loss Per Share of $(0.51); Adjusted Diluted Loss Per Share of $(0.16) -- ST. LOUIS, July 25, 2025 /PRNewswire/ -- Centene Corporation (NYSE: CNC) (the Company) announced today its financial results for the second quarter ended June 30, 2025. In summary, the 2025 second quarter results were as follows: Total revenues (in millions) $ 48,742 Premium and service revenues (in millions) $ 42,467 Health benefits ratio 93.0 % SG&A expense ratio 7.1 % Adjusted SG&A expense ratio (1) 7.1 % GAAP diluted loss per share $ (0.51) Adjusted diluted loss per share (1) $ (0.16) Total cash flow provided by operations (in millions) $ 1,785 (1) Represents a non-GAAP financial measure. A full reconciliation of the adjusted diluted loss per share and adjusted selling, general and administrative (SG&A) expenses is shown in the Non-GAAP Financial Presentation section of this release. "We are disappointed by our second quarter results, but we have a clear understanding of the trends that have impacted our performance, and are working with urgency and focus to restore our earnings trajectory," said Chief Executive Officer of Centene, Sarah M. London. "Despite the shifting landscape, we believe that the staying power of Medicaid, Medicare and the Individual Marketplace is as strong as it has ever been. Centene has significantly fortified our platform in service of these programs over the last three years, and as we move forward, we are focused on continuing to adapt with the market to deliver meaningful value to our members, our stakeholders and our shareholders over the long term." Awards & Community Engagement Since May, Centene and its Missouri subsidiary, Home State Health, have been supporting the St. Louis community impacted by tornadoes through donations as well as volunteer hours. In June, WellCare of Kentucky announced relief efforts to support communities impacted by the tornadoes in Eastern Kentucky. WellCare, with additional funding from the Centene Foundation, will support housing and rebuilding, disperse financial assistance, and provide basic supplies to help people recover. In June, Centene was named one of Newsweek's America's Greatest Workplaces for the third consecutive year. The recognition is based on employee feedback about company culture, leadership, integrity, compensation, work-life balance, and more. In May, the Company was also named to Becker's 150 Top Places to Work in Healthcare and to Newsweek's America's Greatest Workplaces for Gen Z 2025, for the second consecutive year. In May, Health Net and the Centene Foundation announced grants to expand healthcare services to underserved Californians through mobile health clinics. The investment is part of Health Net's new Mobile Outreach for Value, Equity and Sustainability (MOVES) program that targets rural or resource-limited areas and will help deliver preventative care, health education, and social services directly to neighborhoods facing barriers to traditional healthcare access. Membership The following table sets forth membership by line of business:June 30,20252024 Traditional Medicaid (1) 11,227,40011,640,900 High Acuity Medicaid (2) 1,592,3001,499,000 Total Medicaid 12,819,70013,139,900 Marketplace 5,862,8004,401,300 Individual and Commercial Group (3) 449,700426,400 Total Commercial 6,312,5004,827,700 Medicare (4) 1,026,9001,138,400 Medicare Prescription Drug Plan (PDP) 7,845,8006,603,600 Total at-risk membership 28,004,90025,709,600 TRICARE eligibles —2,768,000 Total 28,004,90028,477,600(1) Membership includes Temporary Assistance for Needy Families (TANF), Medicaid Expansion, Children's Health Insurance Program (CHIP), Foster Care and Behavioral Health. (2) Membership includes Aged, Blind, or Disabled (ABD), Intellectual and Developmental Disabilities (IDD), Long-Term Services and Supports (LTSS) and Medicare-Medicaid Plans (MMP) Duals. (3) Membership includes Commercial Group, Individual Coverage Health Reimbursement Arrangement (ICHRA) and Other Off-Exchange Individual. (4) Membership includes Medicare Advantage and Medicare Supplement. Premium and Service Revenues The following table sets forth supplemental revenue information ($ in millions): Three Months Ended June 30, 20252024% Change Medicaid $ 21,723$ 20,2507 % Commercial 10,0708,53518 % Medicare (1) 9,4505,97858 % Other 1,2241,2101 % Total premium and service revenues $ 42,467$ 35,97318 %(1) Medicare includes Medicare Advantage, Medicare Supplement and Medicare PDP. Statement of Operations: Three Months Ended June 30, 2025 For the second quarter of 2025, premium and service revenues increased 18% to $42.5 billion from $36.0 billion in the comparable period of 2024. The increase was primarily driven by premium and membership growth in the PDP business along with overall market growth in the Marketplace business, and rate increases in the Medicaid business, partially offset by lower Medicaid membership as a result of redeterminations and lower Marketplace net risk adjustment revenue. The three months ended June 30, 2024, benefited from outperformance in Marketplace risk adjustment for the 2023 benefit year. Health benefits ratio (HBR) of 93.0% for the second quarter of 2025 represents an increase from 87.6% in the comparable period in 2024. The increase was primarily driven by a reduction in the Company's net 2025 Marketplace risk adjustment revenue transfer estimate, increased Marketplace medical costs, higher medical costs in Medicaid driven primarily by behavioral health, home health and high-cost drugs, and an increase to the 2025 Medicare Advantage premium deficiency reserve based on the progression of earnings during the year (with higher earnings at the beginning of the year and lower at the end of the year, given cost sharing progression). The SG&A expense ratio was 7.1% for the second quarter of 2025, compared to 8.0% in the second quarter of 2024. The adjusted SG&A expense ratio was 7.1% for the second quarter of 2025, compared to 8.0% in the second quarter of 2024. The decreases were primarily driven by continued leveraging of expenses over higher revenues and growth in the PDP business. The decreases were partially offset by growth in the Marketplace business, which operates at a meaningfully higher SG&A expense ratio as compared to the overall company. The income tax expense recorded in the second quarter of 2025 reflects the year-to-date impact of a lower estimated full year 2025 effective tax rate. Diluted loss per share was $(0.51) for the second quarter of 2025 driven primarily by a reduction in the Company's net 2025 Marketplace risk adjustment revenue transfer estimate. Cash flow provided by operations for the second quarter of 2025 was $1.8 billion, primarily driven by improved pharmacy rebate remittance timing. Balance Sheet At June 30, 2025, the Company had cash, investments and restricted deposits of $37.5 billion and maintained $234 million of cash and cash equivalents in its unregulated entities. Medical claims liabilities totaled $20.1 billion. The Company's days in claims payable (DCP) was 47 days, a decrease of two days as compared to the first quarter of 2025 driven by the timing and types of claims, as well as the impact of state-directed payments. Total debt was $17.6 billion, which included no borrowings on the $4.0 billion Revolving Credit Facility at quarter end. Outlook The Company will provide 2025 earnings expectations on the conference call. Conference Call As previously announced, the Company will host a conference call Friday, July 25, 2025, at 8:00 a.m. ET to review the financial results for the second quarter ended June 30, 2025. Investors and other interested parties are invited to listen to the conference call by dialing 1-877-883-0383 in the U.S. and Canada; +1-412-902-6506 from abroad, including the following Elite Entry Number: 7878291 to expedite caller registration; or via a live, audio webcast on the Company's website at under the Investors section. A webcast replay will be available for on-demand listening shortly following the completion of the call for the next 12 months or until 11:59 p.m. ET on Friday, July 24, 2026, at the aforementioned URL. In addition, a digital audio playback will be available until 9 a.m. ET on Friday, August 1, 2025, by dialing 1-877-344-7529 in the U.S., 1-855-669-9658 in Canada, or +1-412-317-0088 from abroad, and entering access code 7322068. Non-GAAP Financial Presentation The Company is providing certain non-GAAP financial measures in this release as the Company believes that these figures are helpful in allowing investors to more accurately assess the ongoing nature of the Company's operations and measure the Company's performance more consistently across periods. The Company uses the presented non-GAAP financial measures internally in evaluating the Company's performance and for planning purposes, by allowing management to focus on period-to-period changes in the Company's core business operations, and in determining employee incentive compensation. Therefore, the Company believes that this information is meaningful in addition to the information contained in the GAAP presentation of financial information. The Company strongly encourages investors to review its consolidated financial statements and publicly filed reports in their entirety and cautions investors that the non-GAAP financial measures used by the Company may differ from similar measures used by other companies, even when similar terms are used to identify such measures. The presentation of non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. Specifically, the Company believes the presentation of non-GAAP financial measures that excludes amortization of acquired intangible assets, acquisition and divestiture related expenses, as well as other items, allows investors to develop a more meaningful understanding of the Company's core performance over time. The tables below provide reconciliations of non-GAAP items ($ in millions, except per share data):Three Months Ended June 30,Six Months Ended June 30,2025202420252024 GAAP net earnings (loss) attributable to Centene $ (253)$ 1,146$ 1,058$ 2,309 Amortization of acquired intangible assets 173173346346 Acquisition and divestiture related expenses 16167 Other adjustments (1) 58261(97) Income tax effects of adjustments (2) (58)(44)(100)(126) Adjusted net earnings (loss) $ (79)$ 1,283$ 1,366$ 2,499 (1) Other adjustments include the following pre-tax items: 2025: (a) for the three months ended June 30, 2025: intangible asset impairment related to the wind-down of certain contracts in the Other segment of $55 million and a reduction to the previously reported gain on real estate transactions of $3 million; (b) for the six months ended June 30, 2025: intangible asset impairment related to the wind-down of certain contracts in the Other segment of $55 million, a reduction to the previously reported gain on the sale of Magellan Rx of $10 million and a net gain on real estate transactions of $4 million. 2024: (a) for the three months ended June 30, 2024: gain on the previously reported divestiture of Circle Health of $10 million, an additional loss on the divestiture of our Spanish and Central European businesses of $7 million, severance costs due to a restructuring of $4 million, reduction to the net gain on the sale of property due to closing costs of $3 million and net gain on the finalization of working capital adjustments for the previously reported divestiture of Magellan Specialty Health of $2 million; (b) for the six months ended June 30, 2024: net gain on the previously reported divestiture of Magellan Specialty Health due to the achievement of contingent consideration and finalization of working capital adjustments of $83 million, net gain on the sale of property of $21 million, gain on the previously reported divestiture of Circle Health of $20 million, Health Net Federal Services asset impairment due to the 2024 final ruling on the TRICARE Managed Care Support Contract of $14 million, severance costs due to a restructuring of $13 million, an additional loss on the divestiture of our Spanish and Central European businesses of $7 million and gain on the previously reported divestiture of HealthSmart due to the finalization of working capital adjustments of $7 million. (2) The income tax effects of adjustments are based on the effective income tax rates applicable to each adjustment. Three Months Ended June 30,Six Months Ended June 30,2025202420252024 GAAP diluted earnings (loss) per share attributable to Centene $ (0.51)$ 2.16$ 2.13$ 4.32 Amortization of acquired intangible assets 0.350.330.700.65 Acquisition and divestiture related expenses —0.01—0.13 Other adjustments (3) 0.12—0.12(0.18) Income tax effects of adjustments (4) (0.12)(0.08)(0.20)(0.24) Adjusted diluted earnings (loss) per share $ (0.16)$ 2.42$ 2.75$ 4.68 (3) Other adjustments include the following pre-tax items: 2025: (a) for the three months ended June 30, 2025: intangible asset impairment related to the wind-down of certain contracts in the Other segment of $0.11 per share ($0.08 after-tax) and a reduction to the previously reported gain on real estate transactions of $0.01 per share ($0.01 after-tax); (b) for the six months ended June 30, 2025: intangible asset impairment related to the wind-down of certain contracts in the Other segment of $0.11 per share ($0.08 after-tax), a reduction to the previously reported gain on the sale of Magellan Rx of $0.02 ($0.02 after-tax) and a net gain on real estate transactions of $0.01 ($0.01 after-tax); 2024: (a) for the three months ended June 30, 2024: gain on the previously reported divestiture of Circle Health of $0.02 ($0.02 after-tax), an additional loss on the divestiture of our Spanish and Central European businesses of $0.01 ($0.01 after-tax) severance costs due to a restructuring of $0.01 ($0.01 after-tax); (b) for the six months ended June 30, 2024: net gain on the previously reported divestiture of Magellan Specialty Health due to the achievement of contingent consideration and finalization of working capital adjustments of $0.15 ($0.11 after-tax), net gain on the sale of property of $0.04 ($0.03 after-tax), gain on the previously reported divestiture of Circle Health of $0.04 ($0.12 after-tax), Health Net Federal Services asset impairment due to the 2024 final ruling on the TRICARE Managed Care Support Contract of $0.03 ($0.02 after-tax), severance costs due to a restructuring of $0.02 ($0.02 after-tax), an additional loss on the divestiture of our Spanish and Central European businesses of $0.01 ($0.01 after-tax) and gain on the previously reported divestiture of HealthSmart due to the finalization of working capital adjustments of $0.01 ($0.01 after-tax). (4) The income tax effects of adjustments are based on the effective income tax rates applicable to each adjustment. Three Months Ended June 30,Six Months Ended June 30,2025202420252024 GAAP selling, general and administrative expenses $ 3,036$ 2,894$ 6,389$ 6,112 Less:Acquisition and divestiture related expenses 16167 Restructuring costs —4—13 Adjusted selling, general and administrative expenses $ 3,035$ 2,884$ 6,388$ 6,032 To provide clarity on the way management defines certain key metrics and ratios, the Company is providing a description of how the metric or ratio is calculated as follows: Health Benefits Ratio (HBR) (GAAP) = Medical costs divided by premium revenues. SG&A Expense Ratio (GAAP) = Selling, general and administrative expenses divided by premium and service revenues. Adjusted SG&A Expense Ratio (non-GAAP) = Adjusted selling, general and administrative expenses divided by premium and service revenues. Adjusted Effective Tax Rate (non-GAAP) = GAAP income tax expense (benefit) excluding the income tax effects of adjustments to net earnings divided by adjusted earnings (loss) before income tax expense. Adjusted Net Earnings (non-GAAP) = Net earnings less amortization of acquired intangible assets, less acquisition and divestiture related expenses, as well as adjustments for other items, net of the income tax effect of the adjustments. Adjusted Diluted EPS (non-GAAP) = Adjusted net earnings divided by weighted average common shares outstanding on a fully diluted basis. Debt to Capitalization Ratio (GAAP) = Total debt, divided by total debt plus total stockholder's equity. Average Medical Claims Expense (GAAP) = Medical costs for the period divided by number of days in such period. Average medical claims expense is most often calculated for the quarterly reporting period. Days in Claims Payable (GAAP) = Medical claims liabilities divided by average medical claims expense. Days in claims payable is most often calculated for the quarterly reporting period. In addition, the following terms are defined as follows: State-directed Payments: Payments directed by a state that have minimal risk but are administered as a premium adjustment. These payments are recorded as premium revenue and medical costs at close to a 100% HBR. In many instances, the Company has little visibility to the timing of these payments until they are paid by a state. Pass-through Payments: Non-risk supplemental payments from a state that the Company is required to pass through to designated contracted providers. These payments are recorded as premium tax revenue and premium tax expense. About Centene Corporation Centene Corporation, a Fortune 500 company, is a leading healthcare enterprise that is committed to helping people live healthier lives. The Company takes a local approach – with local brands and local teams – to provide fully integrated, high-quality, and cost-effective services to government-sponsored and commercial healthcare programs, focusing on under-insured and uninsured individuals. Centene offers affordable and high-quality products to more than 1 in 15 individuals across the nation, including Medicaid and Medicare members (including Medicare Prescription Drug Plans) as well as individuals and families served by the Health Insurance Marketplace. Centene uses its investor relations website to publish important information about the Company, including information that may be deemed material to investors. Financial and other information about Centene is routinely posted and is accessible on Centene's investor relations website, Forward-Looking Statements All statements, other than statements of current or historical fact, contained in this press release are forward-looking statements. Without limiting the foregoing, forward-looking statements often use words such as "believe," "anticipate," "plan," "expect," "estimate," "guidance," "intend," "seek," "target," "goal," "may," "will," "would," "could," "should," "can," "continue" and other similar words or expressions (and the negative thereof). Centene Corporation and its subsidiaries (Centene, the Company, our or we) intends such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and we are including this statement for purposes of complying with these safe-harbor provisions. In particular, these statements include, without limitation, statements about our expected future operating or financial performance, changes in laws and regulations, market opportunity, expectations concerning pricing actions, competition, expected contract start dates and terms, expected activities in connection with completed and future acquisitions and dispositions, our investments, and the adequacy of our available cash resources. These forward-looking statements reflect our current views with respect to future events and are based on numerous assumptions and assessments made by us in light of our experience and perception of historical trends, current conditions, business strategies, operating environments, future developments, and other factors we believe appropriate. By their nature, forward-looking statements involve known and unknown risks and uncertainties and are subject to change because they relate to events and depend on circumstances that will occur in the future, including economic, regulatory, competitive, and other factors that may cause our or our industry's actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by these forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties, and assumptions. All forward-looking statements included in this press release are based on information available to us on the date hereof. Except as may be otherwise required by law, we undertake no obligation to update or revise the forward-looking statements included in this press release, whether as a result of new information, future events, or otherwise, after the date hereof. You should not place undue reliance on any forward-looking statements, as actual results may differ materially from projections, estimates, or other forward-looking statements due to a variety of important factors, variables, and events including, but not limited to: our ability to design and price products that are competitive and/or actuarially sound; our ability to accurately predict and effectively manage health benefits and other operating expenses and reserves, including fluctuations in medical costs; rate cuts, insufficient rate changes or other payment reductions or delays by government payors affecting our government businesses; the effect of social, economic, and political conditions, geopolitical events and state and federal policies, including the amount and terms of state and federal funding for government-sponsored healthcare programs, including as a result of changes in U.S. presidential administrations or Congress; changes in federal or state laws or regulations, including changes with respect to income tax reform or government healthcare programs as well as changes with respect to the Patient Protection and Affordable Care Act and the Health Care and Education Affordability Reconciliation Act (collectively referred to as the ACA) and any regulations enacted thereunder, including the timing and terms of renewal or modification of the enhanced advance premium tax credits or program integrity initiatives that could have the effect of reducing membership or profitability of our products; unanticipated increased healthcare costs, including due to changes in consumer and provider behaviors, inflation and tariffs; our ability to maintain or achieve improvement in the Centers for Medicare and Medicaid Services (CMS) Star ratings and maintain or achieve improvement in other quality scores in each case that could impact revenue and future growth; competition, including for providers, broker distribution networks, contract reprocurements and organic growth; our ability to adequately anticipate demand and timely provide for operational resources to maintain service level requirements in compliance with the terms of our contracts and state and federal regulations; our ability to comply with the terms of our contracts and state and federal regulations and our ability to effectively oversee our third-party vendors to comply with the terms of their contracts with us and state and federal regulations; our ability to manage our information systems effectively; disruption, unexpected costs, or similar risks from business transactions, including acquisitions, divestitures, and changes in our relationships with third-party vendors; impairments to real estate, investments, goodwill and intangible assets; changes in senior management, loss of one or more key personnel or an inability to attract, hire, integrate and retain skilled personnel; membership and revenue declines or unexpected trends; changes in healthcare practices, new technologies, and advances in medicine; our ability to effectively and ethically use artificial intelligence and machine learning in compliance with applicable laws; changes in macroeconomic conditions, including inflation, interest rates and volatility in the financial markets; negative public perception of the Company and the managed care industry; uncertainty concerning government shutdowns, debt ceilings or funding; tax matters; disasters, climate-related incidents, acts of war or aggression or major epidemics; changes in expected contract start dates and terms; changes in provider, broker, vendor, state, federal and other contracts and delays in the timing of regulatory approval of contracts, including due to protests and our ability to timely comply with any such changes to our contractual requirements or manage any unexpected delays in regulatory approval of contracts; the expiration, suspension, or termination of our contracts with federal or state governments (including, but not limited to, Medicaid, Medicare or other customers); the difficulty of predicting the timing or outcome of legal or regulatory audits, investigations, proceedings or matters including, but not limited to, our ability to resolve claims and/or allegations on acceptable terms, or at all, or whether additional claims, reviews or investigations will be brought; challenges to our contract awards; cyber-attacks or other data security incidents or our failure to comply with applicable privacy, data or security laws and regulations; the exertion of management's time and our resources, and other expenses incurred and business changes required in connection with complying with the terms of our contracts and the undertakings in connection with any regulatory, governmental, or third party consents or approvals for acquisitions or dispositions; any changes in expected closing dates, estimated purchase price, or accretion for acquisitions or dispositions; losses in our investment portfolio; restrictions and limitations in connection with our indebtedness; a downgrade of our corporate family rating, issuer rating or credit rating of our indebtedness; the availability of debt and equity financing on terms that are favorable to us and risks and uncertainties discussed in the reports that Centene has filed with the Securities and Exchange Commission (SEC). This list of important factors is not intended to be exhaustive. We discuss certain of these matters more fully, as well as certain other factors that may affect our business operations, financial condition, and results of operations, in our filings with the SEC, including our annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. Due to these important factors and risks, we cannot give assurances with respect to our future performance, including without limitation our ability to maintain adequate premium levels or our ability to control our future medical and selling, general and administrative costs. CENTENE CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In millions, except shares in thousands and per share data in dollars) June 30,2025December 31, 2024(Unaudited) ASSETSCurrent assets:Cash and cash equivalents $ 14,513$ 14,063 Premium and trade receivables 21,55219,713 Short-term investments 2,7682,622 Other current assets 1,5561,601 Total current assets 40,38937,999 Long-term investments 18,79717,429 Restricted deposits 1,4111,390 Property, software and equipment, net 2,1222,067 Goodwill 17,55817,558 Intangible assets, net 5,0105,409 Other long-term assets 1,108593 Total assets $ 86,395$ 82,445 LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND STOCKHOLDERS' EQUITYCurrent liabilities:Medical claims liability $ 20,117$ 18,308 Accounts payable and accrued expenses 13,52013,174 Return of premium payable 2,4422,008 Unearned revenue 682661 Current portion of long-term debt 25110 Total current liabilities 36,78634,261 Long-term debt 17,55218,423 Deferred tax liability 651684 Other long-term liabilities 3,9032,567 Total liabilities 58,89255,935 Commitments and contingenciesRedeemable noncontrolling interests 1110 Stockholders' equity:Preferred stock, $0.001 par value; authorized 10,000 shares; no shares issued or outstanding at June 30, 2025 and December 31, 2024 —— Common stock, $0.001 par value; authorized 800,000 shares; 622,834 issued and 491,128 outstanding at June 30, 2025, and 620,195 issued and 495,907 outstanding at December 31, 2024 11 Additional paid-in capital 20,67120,562 Accumulated other comprehensive (loss) (231)(504) Retained earnings 16,40615,348 Treasury stock, at cost (131,706 and 124,288 shares, respectively) (9,441)(8,997) Total Centene stockholders' equity 27,40626,410 Nonredeemable noncontrolling interest 8690 Total stockholders' equity 27,49226,500 Total liabilities, redeemable noncontrolling interests and stockholders' equity $ 86,395$ 82,445 CENTENE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except shares in thousands and per share data in dollars) (Unaudited) Three Months Ended June 30,Six Months Ended June 30,2025202420252024 Revenues:Premium $ 41,740$ 35,140$ 83,452$ 70,669 Service 7278331,5041,641 Premium and service revenues 42,46735,97384,95672,310 Premium tax 6,2753,86310,4067,933 Total revenues 48,74239,83695,36280,243 Expenses:Medical costs 38,80830,76575,31161,697 Cost of services 6416801,3391,349 Selling, general and administrative expenses 3,0362,8946,3896,112 Depreciation expense 141133283268 Amortization of acquired intangible assets 173173346346 Premium tax expense 6,3463,96210,5638,123 Impairment 55—5513 Total operating expenses 49,20038,60794,28677,908 Earnings (loss) from operations (458)1,2291,0762,335 Other income (expense):Investment and other income 3714637531,008 Interest expense (170)(176)(340)(354) Earnings (loss) before income tax (257)1,5161,4892,989 Income tax expense 2370434685 Net earnings (loss) (259)1,1461,0552,304 Loss attributable to noncontrolling interests 6—35 Net earnings (loss) attributable to Centene Corporation $ (253)$ 1,146$ 1,058$ 2,309 Net earnings (loss) per common share attributable to Centene Corporation: Basic earnings (loss) per common share $ (0.51)$ 2.16$ 2.14$ 4.34 Diluted earnings (loss) per common share $ (0.51)$ 2.16$ 2.13$ 4.32 Weighted average number of common shares outstanding: Basic 493,548529,602494,896532,385 Diluted 493,548530,755496,328534,517 CENTENE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions, unaudited) Six Months Ended June 30,20252024 Cash flows from operating activities:Net earnings $ 1,055$ 2,304 Adjustments to reconcile net earnings to net cash provided by operating activitiesDepreciation and amortization 629614 Stock compensation expense 94132 Impairment 5513 Deferred income taxes (116)40 (Gain) loss on divestitures, net 10(103) Other adjustments, net 16(11) Changes in assets and liabilities Premium and trade receivables (1,801)(1,059) Other assets (543)(404) Medical claims liabilities 1,809173 Unearned revenue 21(118) Accounts payable and accrued expenses 209(1,704) Other long-term liabilities 1,8571,838 Other operating activities, net —4 Net cash provided by operating activities 3,2951,719 Cash flows from investing activities:Capital expenditures (343)(337) Purchases of investments (3,593)(3,434) Sales and maturities of investments 2,5082,497 Divestiture proceeds, net of divested cash —959 Net cash (used in) investing activities (1,428)(315) Cash flows from financing activities:Proceeds from long-term debt 750350 Payments and repurchases of long-term debt (1,707)(565) Common stock repurchases (473)(954) Proceeds from common stock issuances 1825 Other financing activities, net (12)(4) Net cash (used in) financing activities (1,424)(1,148) Effect of exchange rate changes on cash, cash equivalents and restricted cash —7 Net increase in cash, cash equivalents and restricted cash and cash equivalents 443263 Cash, cash equivalents and restricted cash and cash equivalents, beginning of period 14,15617,452 Cash, cash equivalents and restricted cash and cash equivalents, end of period $ 14,599$ 17,715 Supplemental disclosures of cash flow information:Interest paid $ 320$ 352 Income taxes paid, net $ 504$ 551 The following table provides a reconciliation of cash, cash equivalents and restricted cash and cash equivalents reported within the Consolidated Balance Sheets to the totals above:June 30,20252024 Cash and cash equivalents $ 14,513$ 17,605 Restricted cash and cash equivalents, included in restricted deposits 86110 Total cash, cash equivalents and restricted cash and cash equivalents $ 14,599$ 17,715 CENTENE CORPORATION SUPPLEMENTAL FINANCIAL DATA Q2Q1Q4Q3Q2 20252025202420242024 MEMBERSHIPTraditional Medicaid (1) 11,227,40011,369,40011,408,10011,478,60011,640,900 High Acuity Medicaid (2) 1,592,3001,589,4001,595,4001,590,2001,499,000 Total Medicaid 12,819,70012,958,80013,003,50013,068,80013,139,900 Marketplace 5,862,8005,626,0004,382,1004,501,3004,401,300 Individual and Commercial Group (3) 449,700448,200431,400426,600426,400 Total Commercial 6,312,5006,074,2004,813,5004,927,9004,827,700 Medicare (4) 1,026,9001,043,2001,110,9001,129,9001,138,400 Medicare PDP 7,845,8007,867,8006,925,7006,766,4006,603,600 Total at-risk membership 28,004,90027,944,00025,853,60025,893,00025,709,600 TRICARE eligibles ——2,747,0002,747,0002,768,000 Total 28,004,90027,944,00028,600,60028,640,00028,477,600 (1) Membership includes TANF, Medicaid Expansion, CHIP, Foster Care and Behavioral Health. (2) Membership includes ABD, IDD, LTSS and MMP Duals. (3) Membership includes Commercial Group, ICHRA and Other Off-Exchange Individual. (4) Membership includes Medicare Advantage and Medicare Supplement. NUMBER OF EMPLOYEES 60,30060,40060,50060,70060,000 DAYS IN CLAIMS PAYABLE 4749535154 CASH, INVESTMENTS AND RESTRICTED DEPOSITS (in millions) Regulated $ 36,403$ 35,922$ 34,433$ 35,558$ 37,421 Unregulated 1,0861,0421,0711,1541,078 Total $ 37,489$ 36,964$ 35,504$ 36,712$ 38,499 DEBT TO CAPITALIZATION 39.0 %39.5 %41.2 %39.1 %39.1 % OPERATING RATIOS Three Months Ended June 30,Six Months Ended June 30,2025202420252024 HBR 93.0 %87.6 %90.2 %87.3 % SG&A expense ratio 7.1 %8.0 %7.5 %8.5 % Adjusted SG&A expense ratio 7.1 %8.0 %7.5 %8.3 % HBR BY PRODUCT Three Months Ended June 30,Six Months Ended June 30, 2025202420252024 Medicaid 94.9 %92.8 %94.2 %91.8 % Commercial 90.6 %73.4 %82.8 %73.4 % Medicare (5) 90.9 %89.2 %88.6 %90.0 % (5) Medicare includes Medicare Advantage, Medicare Supplement, D-SNPs and Medicare PDP. MEDICAL CLAIMS LIABILITY The changes in medical claims liability are summarized as follows (in millions): Balance, June 30, 2024$ 18,173 Less: Reinsurance recoverables58 Balance, June 30, 2024, net18,115 Incurred related to: Current period141,488 Prior periods(2,221) Total incurred139,267 Paid related to: Current period123,150 Prior periods14,229 Total paid137,379 Plus: Premium deficiency reserve54 Balance, June 30, 2025, net20,057 Plus: Reinsurance recoverables60 Balance, June 30, 2025$ 20,117 Centene's claims reserving process utilizes a consistent actuarial methodology to estimate Centene's ultimate liability. Any reduction in the "Incurred related to: Prior periods" amount may be offset as Centene actuarially determines the "Incurred related to: Current period." Additionally, approximately $124 million was recorded as a reduction to premium revenues resulting from development within "Incurred related to: Prior periods" due to minimum HBR and other return of premium programs. The amount of the "Incurred related to: Prior periods" above represents favorable development and includes the effects of reserving under moderately adverse conditions, new markets where we use a conservative approach in setting reserves during the initial periods of operations, receipts from other third party payors related to coordination of benefits and lower medical utilization and cost trends for dates of service June 30, 2024, and prior. View original content: SOURCE Centene Corporation Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
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Aon Reports Second Quarter 2025 Results
DUBLIN, July 25, 2025 /PRNewswire/ -- Aon plc (NYSE: AON) today reported results for the three months ended June 30, 2025. Aon delivered another quarter of strong performance, including 11% total revenue growth and 6% organic revenue growth. We are executing our Aon United strategy through the 3x3 Plan to meet client demand Strong Free Cash Flow is powering our capital allocation strategy – supporting debt reduction, disciplined middle-market M&A and capital return to shareholders Our first-half performance reinforces our confidence in achieving our full-year 2025 financial guidanceSecond Quarter 2025First Half 202520252024Change20252024Change Total revenue $4,155$3,76011 %$8,884$7,83013 % Organic revenue growth (Non-GAAP) 6 %5 % Operating income $859$65631 %$2,320$2,1219 % Adjusted operating income (Non-GAAP) $1,171$1,02914 %$2,987$2,64413 % Operating margin 20.7 %17.4 %26.1 %27.1 % Adjusted operating margin (Non-GAAP) 28.2 %27.4 %33.6 %33.8 % Diluted EPS $2.66$2.468 %$7.10$7.72(8) % Adjusted EPS (Non-GAAP) $3.49$2.9319 %$9.17$8.508 % Cash provided by operations $796$51355 %$936$82214 % Free cash flow (Non-GAAP) $732$46059 %$816$72113 % "We delivered strong second quarter results, including 6% organic revenue growth, 19% growth in adjusted EPS, and 59% free cash flow growth," said Greg Case, president and CEO of Aon. "This performance reflects the growing demand for our advice and solutions, driven by an increasingly complex environment and the need to unlock new sources of capital. Our solutions are resonating with clients and we are effectively meeting that demand. The continued successful execution of our Aon United strategy – operationalized by our 3x3 Plan and powered by Aon Business Services – is fueling sustainable organic growth, margin expansion and free cash flow growth, as we invest in our business. Looking ahead, we remain confident in our outlook and are reaffirming our full-year 2025 guidance." Net income attributable to Aon shareholders increased 8%, to $2.66 per share on a diluted basis, compared to $2.46 per share on a diluted basis, in the prior year period. Adjusted net income per share attributable to Aon shareholders increased 19% to $3.49 on a diluted basis compared to $2.93 in the prior year period. Certain items that impacted second quarter results and comparisons with the prior year period are detailed in "Reconciliation of Non-GAAP Measures - Operating Income, Operating Margin and Diluted Earnings Per Share" on page 11 of this press release. SECOND QUARTER 2025 FINANCIAL SUMMARY Total revenue in the second quarter increased 11% to $4.2 billion compared to the prior year period, reflecting 6% organic revenue growth, the contribution from NFP and 1% favorable impact from foreign currency translation. Risk Capital revenue increased $216 million, or 8%, to $2.9 billion and Human Capital revenue increased $166 million, or 15%, to $1.3 billion. Total operating expenses in the second quarter increased 6% to $3.3 billion compared to the prior year period due primarily to the inclusion of NFP's ongoing operating expenses, an increase in intangible asset amortization associated with the NFP acquisition and an increase in expense associated with 6% organic revenue growth and investments in long-term growth, partially offset by transaction costs incurred in the prior year period, lower Accelerating Aon United program expense and $35 million of net restructuring savings. Risk Capital operating expenses increased $136 million, or 7%, to $2.0 billion and Human Capital operating expenses increased $139 million, or 13%, to $1.2 billion. Foreign currency translation had a de minimis impact on EPS in the second quarter. If currency were to remain stable at today's rates, the Company would expect an unfavorable impact on adjusted EPS of approximately $0.05 per share for the full year 2025. Effective tax rate was 15.5% in the second quarter compared to 22.9% in the prior year period. After adjusting to exclude the applicable tax impact associated with certain non-GAAP adjustments, the adjusted effective tax rate for the second quarter of 2025 was 16.5% compared to 22.2% in the prior year period. The primary drivers of the change in adjusted effective tax rate were the net favorable impact from discrete items and changes in the geographical distribution of income. Weighted average diluted shares outstanding increased to 217.3 million in the second quarter compared to 213.3 million in the prior year period. The Company repurchased 0.7 million class A ordinary shares for approximately $250 million in the second quarter. As of June 30, 2025, the Company had approximately $1.8 billion of remaining authorization under its share repurchase program. YEAR TO DATE 2025 CASH FLOW SUMMARY Cash flows provided by operations for the first six months of 2025 increased $114 million, or 14%, to $936 million compared to the prior year period, primarily due to strong adjusted operating income growth and days sales outstanding improvements, partially offset by higher payments related to incentive compensation, interest, and restructuring. Free cash flow, defined as cash flow from operations less capital expenditures, increased 13%, to $816 million for the first six months of 2025 compared to the prior year period, reflecting an increase in cash flows provided by operations, partially offset by a $19 million increase in capital expenditures. SECOND QUARTER 2025 REVENUE REVIEW The second quarter revenue reviews provided below include supplemental information related to Organic revenue growth, which is a non-GAAP measure that is described in detail in "Reconciliation of Non-GAAP Measures - Organic Revenue Growth and Free Cash Flow" on page 10 of this press release. Three Months Ended June 30, (millions)20252024% ChangeLess: Currency ImpactLess: Fiduciary Investment IncomeLess: Acquisitions, Divestitures & OtherOrganic Revenue Growth Risk Capital Revenue: Commercial Risk Solutions$ 2,178$ 2,0158 %1 %— %1 %6 % Reinsurance Solutions68863581—16 Human Capital Revenue: Health Solutions77266217——116 Wealth Solutions519463122—73 Eliminations(2)(15)N/AN/AN/AN/AN/A Total revenue$ 4,155$ 3,76011 %1 %— %4 %6 % Total revenue increased $395 million, or 11%, to $4.2 billion, compared to the prior year period, reflecting 6% organic revenue growth, the contribution from NFP and a 1% favorable impact from foreign currency translation. Risk Capital revenue increased $216 million, or 8%, to $2.9 billion and Human Capital revenue increased $166 million, or 15%, to $1.3 billion. Risk Capital Commercial Risk Solutions Organic revenue growth of 6% reflects growth across all major geographies driven by net new business and ongoing strong retention. Performance was highlighted by strong growth globally in core P&C and strength in M&A services relative to the prior year. Market impact was modestly positive. Reinsurance Solutions Organic revenue growth of 6% reflects double-digit increases in insurance-linked securities and facultative placements. Results also reflect growth in treaty, driven by net new business and ongoing strong retention, partially offset by a modest unfavorable market impact. Human Capital Health Solutions Organic revenue growth of 6% reflects strength in core health and benefits, driven by net new business, ongoing strong retention, and a modestly positive market impact. The core performance was highlighted by double-digit growth internationally. Results also reflect strength in executive benefits and pharmacy benefits in NFP. Wealth Solutions Organic revenue growth of 3% reflects growth in Retirement driven by advisory related to the ongoing impact of regulatory change. In Investments, results reflect strength in NFP, driven by net asset inflows and market performance. SECOND QUARTER 2025 EXPENSE REVIEW Three Months Ended June 30, (millions)20252024$ Change% Change Expenses Compensation and benefits$ 2,360$ 2,130$ 23011 % Information technology13613243 Premises858234 Depreciation of fixed assets474524 Amortization and impairment of intangible assets2011287357 Other general expense373455(82)(18) Accelerating Aon United Program expenses94132(38)(29) Total operating expenses$ 3,296$ 3,104$ 1926 % Compensation and benefits expense increased $230 million, or 11%, compared to the prior year period due primarily to the inclusion of operating expenses from NFP and expense associated with 6% organic revenue growth, partially offset by savings from Accelerating Aon United restructuring actions. Information technology expense increased $4 million, or 3%, compared to the prior year period due primarily to the inclusion of ongoing operating expenses from NFP. Premises expense increased $3 million, or 4%, compared to the prior year period, due primarily to the inclusion of ongoing operating expenses from NFP. Depreciation of fixed assets increased $2 million, or 4%, compared to the prior year period. Amortization and impairment of intangible assets increased $73 million, or 57%, compared to the prior year period due primarily to an increase in intangible assets related to the acquisition of NFP. Other general expense decreased $82 million, or 18%, compared to the prior year period due primarily to a decrease in transaction and integration costs. Accelerating Aon United Restructuring Program expense decreased $38 million, or 29%, compared to the prior year period due to lower costs related to workforce optimization and asset impairments, partially offset by higher costs related to technology and other costs. SECOND QUARTER 2025 INCOME SUMMARY Certain noteworthy items impacted adjusted operating income and Adjusted operating margin in the second quarters of 2025 and 2024, which are also described in detail in "Reconciliation of Non-GAAP Measures - Operating Income, Operating Margin and Diluted Earnings Per Share" on page 11 of this press release. Three Months Ended June 30, (millions)20252024% Change Revenue$ 4,155$ 3,76011 % Expenses3,2963,1046 % Operating income$ 859$ 65631 % Operating margin20.7 %17.4 % Adjusted operating income $ 1,171$ 1,02914 % Adjusted operating margin28.2 %27.4 % Operating income increased $203 million and operating margin increased 330 basis points to 20.7%, each compared to the prior year period. Adjusted operating income increased $142 million, or 14%, and Adjusted operating margin increased 80 basis points to 28.2%, each compared to the prior year period. The increase in adjusted operating income reflects organic revenue growth, the impact from NFP, and net restructuring savings, partially offset by increased expenses and investments in long-term growth. Interest income decreased $31 million compared to the prior year period due primarily to interest earned in the prior year period on the investment of $5 billion of term debt proceeds which were used to fund the purchase of NFP. Interest expense decreased $13 million compared to the prior year period, reflecting lower total debt. Other income was $56 million compared to $236 million in the prior year period, primarily due to gains related to the sale of a business in the prior year period, partially offset by deferred consideration from the 2017 sale of our outsourcing business. Adjusted other expense was $32 million compared to $15 million in the prior year period, primarily due to the unfavorable impact of exchange rates on the remeasurement of assets and liabilities in non-functional currencies and an increase in non-cash pension expense. Net income attributable to Aon shareholders increased 10% to $579 million compared to $524 million in the prior year period. Adjusted net income attributable to Aon shareholders increased 22% to $759 million compared to $624 million in the prior year period. Conference Call, Presentation Slides, and Webcast Details The Company will host a conference call on Friday, July 25, 2025 at 7:30 a.m., central time. Interested parties can listen to the conference call via a live audio webcast and view the presentation slides at About AonAon plc (NYSE: AON) exists to shape decisions for the better — to protect and enrich the lives of people around the world. Through actionable analytic insight, globally integrated Risk Capital and Human Capital expertise, and locally relevant solutions, our colleagues provide clients in over 120 countries with the clarity and confidence to make better risk and people decisions that protect and grow their businesses. Follow Aon on LinkedIn, X, Facebook, and Instagram. Stay up-to-date by visiting the Aon Newsroom and sign up for News Alerts Safe Harbor StatementThis communication contains certain statements related to future results, or states Aon's intentions, beliefs and expectations or predictions for the future, all of which are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from either historical or anticipated results depending on a variety of factors. These forward-looking statements include information about possible or assumed future results of Aon's operations. All statements, other than statements of historical facts, that address activities, events or developments that Aon expects or anticipates may occur in the future, including such things as our outlook, market and industry conditions, including competitive and pricing trends, the development and performance of our services and products, our cost structure and the outcome of cost-saving or restructuring initiatives, including the impacts of the Accelerating Aon United Program, the integration of NFP, actual or anticipated legal settlement expenses, future capital expenditures, growth in commissions and fees, changes to the composition or level of our revenues, cash flow and liquidity, expected tax rates, expected foreign currency translation impacts, business strategies, competitive strengths, goals, the benefits of new initiatives, growth of our business and operations, plans, references to future successes, and expectations with respect to the benefits of the acquisition of NFP are forward-looking statements. Also, when Aon uses words such as "anticipate", "believe", "continue", "could", "estimate", "expect", "forecast", "intend", "looking forward", "may", "might", "plan", "potential", "opportunity", "commit", "probably", "project", "positioned", "should", "will", "would" or similar expressions, it is making forward-looking statements. The following factors, among others, could cause actual results to differ from those set forth in or anticipated by the forward looking statements: changes in the competitive environment, due to macroeconomic conditions or otherwise, or damage to Aon's reputation; fluctuations in currency exchange, interest, or inflation rates that could impact our financial condition or results; changes in global equity and fixed income markets that could affect the return on invested assets; changes in the funded status of Aon's various defined benefit pension plans and the impact of any increased pension funding resulting from those changes; the level of Aon's debt and the terms thereof reducing Aon's flexibility or increasing borrowing costs; rating agency actions that could limit Aon's access to capital and our competitive position; volatility in Aon's global tax rate due to being subject to a variety of different factors, including the adoption and implementation in the European Union, the United States, the United Kingdom, or other countries of the Organization for Economic Co-operation and Development tax proposals or other pending proposals in those and other countries, which could create volatility in that tax rate; changes in Aon's accounting estimates or assumptions on Aon's financial statements; limits on Aon's subsidiaries' ability to pay dividends or otherwise make payments to Aon; the impact of legal proceedings and other contingencies, including those arising from acquisition or disposition transactions, errors and omissions and other claims against Aon (including proceeding and contingencies relating to transactions for which capital was arranged by Vesttoo Ltd. or related to actions we may take in being responsible for making decisions on behalf of clients in our investment business or in other advisory services that we currently provide, or may provide in the future); the impact of, and potential challenges in complying with, laws and regulations in the jurisdictions in which Aon operates, particularly given the global nature of Aon's operations and the possibility of differing or conflicting laws and regulations, or the application or interpretation thereof, across jurisdictions in which Aon does business; the impact of any regulatory investigations brought in Ireland, the U.K., the U.S. and other countries; failure to protect intellectual property rights or allegations that Aon infringes on the intellectual property rights of others; general economic and political conditions in different countries in which Aon does business around the world; the failure to retain, attract and develop experienced and qualified personnel; international risks associated with our global operations, including geopolitical conflicts, tariffs, or changes in trade policies; the effects of natural or human-caused disasters, including the effects of health pandemics and the impacts of climate related events; any system or network disruption or breach resulting in operational interruption or improper disclosure of confidential, personal, or proprietary data, and resulting liabilities or damage to our reputation; Aon's ability to develop, implement, update and enhance new technology; the actions taken by third parties that perform aspects of Aon's business operations and client services; Aon's ability to continue, and the costs and risks associated with, growing, developing and integrating acquired business, and entering into new lines of business or products; Aon's ability to secure regulatory approval and complete transactions, and the costs and risks associated with the failure to consummate proposed transactions; changes in commercial property and casualty markets, commercial premium rates or methods of compensation; Aon's ability to develop and implement innovative growth strategies and initiatives intended to yield cost savings (including the Accelerating Aon United Program), and the ability to achieve such growth or cost savings; the effects of Irish law on Aon's operating flexibility and the enforcement of judgments against Aon; adverse effects on the market price of Aon's securities and/or operating results for any reason, including, without limitation, because of a failure to realize the expected benefits of the acquisition of NFP (including anticipated revenue and growth synergies) in the expected timeframe, or at all; and significant integration costs or difficulties in connection with the acquisition of NFP or unknown or inestimable liabilities. Any or all of Aon's forward-looking statements may turn out to be inaccurate, and there are no guarantees about Aon's performance. The factors identified above are not exhaustive. Aon and its subsidiaries operate in a dynamic business environment in which new risks may emerge frequently. Accordingly, you should not place undue reliance on forward-looking statements, which speak only as of the dates on which they are made. In addition, results for prior periods are not necessarily indicative of results that may be expected for any future period. Further information concerning Aon and its businesses, including factors that could materially affect Aon's financial results, is contained in Aon's filings with the SEC. See Aon's Annual Report on Form 10-K for the year ended December 31, 2024 for a further discussion of these and other risks and uncertainties applicable to Aon and its businesses. These factors may be revised or supplemented in subsequent reports filed with the SEC. Aon is not under, and expressly disclaims, any obligation to update or alter any forward-looking statement that it may make from time to time, whether as a result of new information, future events or otherwise. Explanation of Non-GAAP MeasuresThis communication includes supplemental information not calculated in accordance with generally accepted accounting principles in the United States ("U.S. GAAP"), including Organic revenue growth, free cash flow, adjusted operating income, adjusted operating margin, adjusted earnings per share (EPS), adjusted net income attributable to Aon shareholders, adjusted diluted net income per share, adjusted effective tax rate, adjusted other income (expense), and adjusted income before income taxes that exclude the effects of intangible asset amortization and impairment, Accelerating Aon United Program expenses, contingent consideration, NFP transaction and integration costs, certain pension settlements, capital expenditures, and certain other noteworthy items that affected results for the comparable periods. Organic revenue growth includes the impact of intercompany activity and excludes foreign exchange rate changes, acquisitions (provided that Organic revenue growth includes Organic growth of an acquired business as calculated assuming that the acquired business was part of the combined company for the same proportion of the relevant prior year period), divestitures (including held for sale disposal groups, if any), transfers between revenue lines, fiduciary investment income, and gains or losses on derivatives accounted for as hedges. Currency impact represents the effect on prior year period results if they were translated at current period foreign exchange rates. Reconciliations to the closest U.S. GAAP measure for each non-GAAP measure presented in this communication are provided in the attached appendices. Supplemental Organic revenue growth information and additional measures that exclude the effects of certain items noted above do not affect net income or any other U.S. GAAP reported amounts. Free cash flow is cash flows from operating activity less capital expenditures. The adjusted effective tax rate excludes the applicable tax impact associated with adjustments previously described, generally at the estimated annual effective tax rate or jurisdictional rate, where appropriate. Beginning in the third quarter of 2024, the adjusted effective tax rate also excludes interest accruals for income tax reserves related to the termination fee payment made in connection with the Company's terminated proposed combination with Willis Towers Watson. Management believes that these measures are important to make meaningful period-to-period comparisons and that this supplemental information is helpful to investors. Management also uses these measures to assess operating performance and performance for compensation. Non-GAAP measures should be viewed in addition to, not in lieu of, Aon's Condensed Consolidated Financial Statements. Industry peers provide similar supplemental information regarding their performance, although they may not make identical adjustments. Aon does not provide a reconciliation of forward-looking non-GAAP measures, where Aon believes such a reconciliation would imply a degree of precision and certainty that could be misleading and is unable to reasonably predict certain items contained in the corresponding GAAP measures without unreasonable efforts. This is due to the inherent difficulty of forecasting the timing or amount of various items that have not yet occurred and are out of the Aon's control, or cannot be reasonably predicted. For these reasons, Aon is also unable to address the probable significance of the unavailable information. Investor Contact:Media Contact: Hallie MillerWill Dunn +1 847 442 0622Toll-free (U.S., Canada and Puerto Rico): +1 833 751 8114 +1 312 381 3024 mediainquiries@ Aon plcCondensed Consolidated Statements of Income (Unaudited)Three Months Ended June 30,Six Months Ended June 30, (millions, except per share data)20252024% Change20252024% Change Revenue Total revenue$ 4,155$ 3,76011 %$ 8,884$ 7,83013 % Expenses Compensation and benefits2,3602,13011 %4,6094,01315 % Information technology1361323 %2722566 % Premises85824 %1671539 % Depreciation of fixed assets47454 %93894 % Amortization and impairment of intangible assets20112857 %400144178 % Other general expense373455(18) %8198032 % Accelerating Aon United Program expenses94132(29) %204251(19) % Total operating expenses3,2963,1046 %6,5645,70915 % Operating income85965631 %2,3202,1219 % Interest income—31(100) %559(92) % Interest expense(212)(225)(6) %(418)(369)13 % Other income (expense)56236(76) %4631185 % Income before income taxes7036981 %1,9532,122(8) % Income tax expense (1)109160(32) %377491(23) % Net income59453810 %1,5761,631(3) % Less: Net income attributable to redeemable and nonredeemable noncontrolling interests15147 %3236(11) % Net income attributable to Aon shareholders$ 579$ 52410 %$ 1,544$ 1,595(3) %Basic net income per share attributable to Aon shareholders$ 2.68$ 2.479 %$ 7.14$ 7.75(8) % Diluted net income per share attributable to Aon shareholders$ 2.66$ 2.468 %$ 7.10$ 7.72(8) % Weighted average ordinary shares outstanding - basic216.2212.52 %216.3205.85 % Weighted average ordinary shares outstanding - diluted217.3213.32 %217.6206.75 % (1) The effective tax rate was 15.5% and 22.9% for the three months ended June 30, 2025 and 2024, respectively, and 19.3% and 23.1% for the six months ended June 30, 2025 and 2024, respectively. Aon plcSegment Results (Unaudited) Three Months Ended June 30,Risk CapitalHuman CapitalCorporate/Eliminations (1)Total Consolidated20252024202520242025202420252024 RevenueTotal revenue $ 2,866$ 2,650$ 1,291$ 1,125$ (2)$ (15)$ 4,155$ 3,760 ExpensesCompensation and benefits 1,5411,39079671023302,3602,130 Information technology 889345393—136132 Premises 545430281—8582 Other expenses (2) 31932930325893173715760 Total operating expenses 2,0021,8661,1741,0351202033,2963,104 Operating income $ 864$ 784$ 117$ 90$ (122)$ (218)$ 859$ 656 Operating margin 30.1 %29.6 %9.1 %8.0 %20.7 %17.4 %Six Months Ended June 30,Risk CapitalHuman CapitalCorporate/Eliminations (1)Total Consolidated20252024202520242025202420252024 RevenueTotal revenue $ 6,057$ 5,625$ 2,836$ 2,228$ (9)$ (23)$ 8,884$ 7,830 ExpensesCompensation and benefits 3,0022,7441,5701,23737324,6094,013 Information technology 17818290744—272256 Premises 10610459492—167153 Other expenses (2) 7106265973912092701,5161,287 Total operating expenses 3,9963,6562,3161,7512523026,5645,709 Operating income $ 2,061$ 1,969$ 520$ 477$ (261)$ (325)$ 2,320$ 2,121 Operating margin 34.0 %35.0 %18.3 %21.4 %26.1 %27.1 % (1) Corporate expenses/eliminations include governance costs, post-retirement benefits, and other costs that are not directly attributable to a specific segment. (2) Includes expenses related to Depreciation of fixed assets, Amortization and impairment of intangible assets, Accelerating Aon United Program expenses, and Other general expenses. Aon plcReconciliation of Non-GAAP Measures - Organic Revenue Growth and Free Cash Flow (Unaudited)Organic Revenue Growth (Unaudited) Three Months Ended June 30, 20252024% ChangeLess: Currency Impact (1)Less: Fiduciary Investment Income (2)Less: Acquisitions, Divestitures & Other Organic Revenue Growth (3) Risk Capital Revenue: Commercial Risk Solutions$ 2,178$ 2,0158 %1 %— %1 %6 % Reinsurance Solutions68863581—16 Human Capital Revenue: Health Solutions77266217——116 Wealth Solutions519463122—73 ...Eliminations(2)(15)N/AN/AN/AN/AN/A Total revenue$ 4,155$ 3,76011 %1 %— %4 %6 %Six Months Ended June 30, 20252024% ChangeLess: Currency Impact (1)Less: Fiduciary Investment Income (2)Less: Acquisitions, Divestitures & Other Organic Revenue Growth (3) Risk Capital Revenue: Commercial Risk Solutions$ 4,180$ 3,8239 %(1) %— %5 %5 % Reinsurance Solutions1,8771,8024———4 Human Capital Revenue: Health Solutions1,7981,39529(1)—246 Wealth Solutions1,038833251—186 Eliminations(9)(23)N/AN/AN/AN/AN/A Total revenue$ 8,884$ 7,83013 %(1) %— %9 %5 % (1) Currency impact represents the effect on prior year period results if they were translated at current period foreign exchange rates. (2) Fiduciary investment income for the three months ended June 30, 2025 and 2024 was $66 million and $75 million, respectively. Fiduciary investment income for the six months ended June 30, 2025 and 2024 was $133 million and $154 million, respectively. (3) Organic revenue growth includes the impact of certain intercompany activity and excludes the impact of changes in foreign exchange rates, fiduciary investment income, acquisitions (provided that Organic revenue growth includes Organic growth of an acquired business as calculated assuming that the acquired business was part of the combined company for the same proportion of the relevant prior year period), divestitures (including held for sale disposal groups, if any), transfers between revenue lines, and gains or losses on derivatives accounted for as hedges. Free Cash Flow (Unaudited)Three Months Ended June 30, (millions)20252024% Change Cash Provided by Operating Activities$ 796$ 51355 % Capital Expenditures(64)(53)21 % Free Cash Flow (1)$ 732$ 46059 % Six Months Ended June 30, (millions)20252024% Change Cash Provided by Operating Activities$ 936$ 82214 % Capital Expenditures(120)(101)19 % Free Cash Flow (1)$ 816$ 72113 % (1) Free cash flow is defined as cash flows from operations less capital expenditures. This non-GAAP measure does not imply or represent a precise calculation of residual cash flow available for discretionary expenditures. Aon plcReconciliation of Non-GAAP Measures - Operating Income and Operating Margin (Unaudited) (1) Three Months Ended June 30,Risk CapitalHuman CapitalCorporate/Eliminations (2)Total Consolidated (millions, except percentages) 20252024202520242025202420252024 Revenue $ 2,866$ 2,650$ 1,291$ 1,125$ (2)$ (15)$ 4,155$ 3,760 Operating income $ 864$ 784$ 117$ 90$ (122)$ (218)$ 859$ 656 Amortization and impairment of intangible assets 865311575——201128 Change in the fair value of contingent consideration (9)3(1)15——(10)18 Accelerating Aon United Program expenses (3) 3248612567294132 Transaction and integration costs (4)(5) 3391815742795 Adjusted operating income $ 976$ 891$ 246$ 210$ (51)$ (72)$ 1,171$ 1,029 Operating margin 30.1 %29.6 %9.1 %8.0 %20.7 %17.4 % Adjusted operating margin 34.1 %33.6 %19.1 %18.7 %28.2 %27.4 %Six Months Ended June 30,Risk CapitalHuman CapitalCorporate/Eliminations (2)Total Consolidated (millions, except percentages) 20252024202520242025202420252024 Revenue $ 6,057$ 5,625$ 2,836$ 2,228$ (9)$ (23)$ 8,884$ 7,830 Operating income $ 2,061$ 1,969$ 520$ 477$ (261)$ (325)$ 2,320$ 2,121 Amortization and impairment of intangible assets 1706523079——400144 Change in the fair value of contingent consideration (3)31015——718 Accelerating Aon United Program expenses (3) 51921023143136204251 Transaction and integration costs (4)(5) 1432118218956110 Adjusted operating income $ 2,293$ 2,132$ 791$ 612$ (97)$ (100)$ 2,987$ 2,644 Operating margin 34.0 %35.0 %18.3 %21.4 %26.1 %27.1 % Adjusted operating margin 37.9 %37.9 %27.9 %27.5 %33.6 %33.8 % (1) Certain noteworthy items impacting operating income in the three and six months ended June 30, 2025 and 2024 are described in this schedule. The items shown with the caption "adjusted" are non-GAAP measures. (2) Corporate expenses/eliminations include governance costs, post-retirement benefits, and other costs that are not directly attributable to a specific segment. (3) Total charges include technology-related costs to facilitate streamlining and simplifying operations, headcount reduction costs, and costs associated with asset impairments, including real estate consolidation. (4) Transaction costs include advisory, legal, accounting, regulatory, and other professional or consulting fees required to complete the NFP Transaction. No transaction costs were recognized for the three and six months ended June 30, 2025. $85 million and $96 million of transaction costs were recognized for the three and six months ended June 30, 2024, respectively. Of these amounts, $79 million and $90 million were recognized, respectively, in Total operating expenses and $6 million were recognized in Other income (expense) related to the extinguishment of acquired NFP debt for the three and six months ended June 30, 2024. (5) The NFP Transaction has and will continue to result in certain non-recurring integration costs associated with colleague severance, retention bonus awards, termination of redundant third-party agreements, costs associated with legal entity rationalization, and professional or consulting fees related to alignment of management processes and controls, as well as costs associated with the assessment of NFP information technology environment and security protocols. Aon incurred $27 million and $16 million of integration costs in the three months ended June 30, 2025 and 2024, respectively, and $56 million and $20 million of integration costs in the six months ended June 30, 2025 and 2024, respectively. Aon plcReconciliation of Non-GAAP Measures - Diluted Earnings Per Share (Unaudited) (1)Three Months Ended June 30,Six Months Ended June 30, (millions, except percentages)20252024% Change20252024% Change Adjusted operating income$ 1,171$ 1,02914 %$ 2,987$ 2,64413 % Interest income—31(100) %559(92) % Interest expense(212)(225)(6) %(418)(369)13 % Other income (expense): Other income (expense) - pensions(21)(11)91 %(44)(21)110 % Adjusted other income (expense) - other (2)(3)(4)(11)(4)175 %(18)(1)1,700 % Adjusted other income (expense)(32)(15)113 %(62)(22)182 % Adjusted income before income taxes 92782013 %2,5122,3129 % Adjusted income tax expense (5)153182(16) %485519(7) % Adjusted net income77463821 %2,0271,79313 % Less: Net income attributable to redeemable and nonredeemable noncontrolling interests15147 %3236(11) % Adjusted net income attributable to Aon shareholders$ 759$ 62422 %$ 1,995$ 1,75714 % Adjusted diluted net income per share attributable to Aon shareholders$ 3.49$ 2.9319 %$ 9.17$ 8.508 % Weighted average ordinary shares outstanding - diluted 217.3213.32 %217.6206.75 % Effective tax rates (5) U.S. GAAP15.5 %22.9 %19.3 %23.1 % Non-GAAP16.5 %22.2 %19.3 %22.4 % (1) Certain noteworthy items impacting operating income in the three and six months ended June 30, 2025 and 2024 are described in this schedule. The items shown with the caption "adjusted" are non-GAAP measures. (2) Adjusted Other income (expense) excluded gains from dispositions of $257 million related to the sale of a business for the three and six months ended June 30, 2024. (3) Adjusted Other income (expense) excluded approximately $6 million of debt extinguishment charges related to the repayment of NFP debt, which is considered a transaction related cost incurred in the second quarter of 2024. (4) For the three months ended June 30, 2025 and 2024, Other income was $56 million and $236 million, respectively. For the six months ended June 30, 2025 and 2024, Other income was $46 million and $311 million, respectively. During the three and six months ended June 30, 2025, gains of $88 million and $108 million were recognized, respectively, compared to $82 million recognized for the six months ended June 30, 2024, all of which was recognized in the first quarter of 2024. These gains related to deferred consideration from the affiliates of The Blackstone Group L.P. and the other designated purchasers related to a divestiture completed in a prior year period and were excluded from Adjusted other income (expense). Adjusted other expense for the three months ended June 30, 2025 and 2024 was $32 million and $15 million, respectively. Adjusted other expense for the six months ended June 30, 2025 and 2024 was $62 million and $22 million, respectively. (5) Adjusted items are generally taxed at the estimated annual effective tax rate, except for the applicable tax impact associated with Accelerating Aon United Program expenses, deferred consideration from a prior year sale of business, certain gains from dispositions, certain transaction and integration costs related to the acquisition of NFP, and changes in the fair value of contingent consideration, which are adjusted at the related jurisdictional rate. The tax adjustment also excludes interest accruals for income tax reserves related to the termination fee payment made in connection with the Company's terminated proposed combination with Willis Towers Watson. Aon plcCondensed Consolidated Statements of Financial PositionAs of (Unaudited) (millions) June 30,2025December 31,2024 Assets Current assets Cash and cash equivalents$ 1,008$ 1,085 Short-term investments379219 Receivables, net4,9053,803 Fiduciary assets (1)20,67717,566 Other current assets854759 Total current assets27,82323,432 Goodwill16,02415,234 Intangible assets, net6,7336,743 Fixed assets, net664637 Operating lease right-of-use assets735711 Deferred tax assets861654 Prepaid pension598556 Other non-current assets572998 Total assets$ 54,010$ 48,965Liabilities, redeemable noncontrolling interests, and equity Liabilities Current liabilities Accounts payable and accrued liabilities$ 2,294$ 2,905 Short-term debt and current portion of long-term debt1,837751 Fiduciary liabilities20,67717,566 Other current liabilities2,2671,773 Total current liabilities27,07522,995 Long-term debt15,45116,265 Non-current operating lease liabilities705685 Deferred tax liabilities363319 Pension, other postretirement, and postemployment liabilities1,0781,127 Other non-current liabilities1,2491,144 Total liabilities45,92142,535Redeemable noncontrolling interests81125Equity Ordinary shares - $0.01 nominal value Authorized: 500 shares (issued: 2025 – 215.7; 2024 - 216.0)22 Additional paid-in capital13,25813,173 Accumulated deficit(1,574)(2,309) Accumulated other comprehensive loss(3,843)(4,745) Total Aon shareholders' equity7,8436,121 Nonredeemable noncontrolling interests165184 Total equity8,0086,305 Total liabilities, redeemable noncontrolling interests and equity $ 54,010$ 48,965 (1) Includes cash and short-term investments of $8.3 billion and $7.2 billion as of June 30, 2025 and December 31, 2024, respectively. Aon plcCondensed Consolidated Statements of Cash Flows (Unaudited)Six Months Ended June 30, (millions) 20252024 Cash flows from operating activities Net income$ 1,576$ 1,631 Adjustments to reconcile net income to cash provided by operating activities: Gain from sales of businesses—(257) Depreciation of fixed assets9389 Amortization and impairment of intangible assets400144 Share-based compensation expense266247 Deferred income taxes(242)(122) Other, net(111)(112) Change in assets and liabilities: Receivables, net(902)(959) Accounts payable and accrued liabilities(738)(251) Accelerating Aon United Program liabilities1561 Current income taxes(73)60 Pension, other postretirement and postemployment liabilities(12)(17) Other assets and liabilities664308 Cash provided by operating activities936822 Cash flows from investing activities Proceeds from investments71146 Purchases of investments(42)(91) Net purchases (sales) of short-term investments - non fiduciary(153)189 Acquisition of businesses, net of cash and funds held on behalf of clients(143)(2,780) Sale of businesses, net of cash and funds held on behalf of clients119352 Capital expenditures(120)(101) Cash used for investing activities(268)(2,285) Cash flows from financing activities Share repurchase(500)(500) Proceeds from issuance of shares3327 Cash paid for employee taxes on withholding shares(194)(176) Commercial paper issuances, net of repayments480(591) Issuance of debt—7,926 Repayment of debt(300)(4,328) Increase in fiduciary liabilities, net of fiduciary receivables569283 Cash dividends to shareholders(308)(269) Redeemable and nonredeemable noncontrolling interests, and other financing activities(153)(108) Cash provided by (used for) financing activities(373)2,264 Effect of exchange rates on cash and cash equivalents and funds held on behalf of clients696(202) Net increase in cash and cash equivalents and funds held on behalf of clients991599 Cash, cash equivalents and funds held on behalf of clients at beginning of period8,3337,722 Cash, cash equivalents and funds held on behalf of clients at end of period$ 9,324$ 8,321 Reconciliation of cash and cash equivalents and funds held on behalf of clients: Cash and cash equivalents$ 1,008$ 974 Cash and cash equivalents and funds held on behalf of clients classified as held for sale138 Funds held on behalf of clients8,3157,309 Total cash and cash equivalents and funds held on behalf of clients$ 9,324$ 8,321 View original content: SOURCE Aon plc
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FLAGSTAR FINANCIAL, INC. REPORTS SECOND QUARTER 2025 NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS OF $0.19 PER DILUTED SHARE AND ADJUSTED NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS OF $0.14 PER DILUTED SHARE
ANNOUNCES PLANS TO ELIMINATE BANK HOLDING COMPANY STRONG C&I MOMENTUM AS NEW LOAN ORIGINATIONS INCREASE 57% AND NEW COMMITMENTS RISE 80% ON A LINKED-QUARTER BASIS CRITICIZED & CLASSIFIED ASSETS DECLINE 9% FROM PRIOR QUARTER AND 15% OVER FIRST HALF OF YEAR CREDIT COSTS MODERATING AS PROVISION FOR CREDIT LOSSES DECLINED COMPARED TO FIRST QUARTER RECORD PAR PAYOFFS INCLUDING 45% IN SUBSTANDARD LOANS DRIVE CRE EXPOSURE LOWER DISCIPLINED EXPENSE MANAGEMENT PUSHES ADJUSTED OPERATING EXPENSES DOWN 5% COMPARED TO PRIOR QUARTER - ON TRACK TO MEET EXPENSE SAVE GOALS NET INTEREST MARGIN INCREASED COMPARED TO PRIOR QUARTER MAINTAINED STRONG CAPITAL AND LIQUIDITY POSITIONS Second Quarter 2025 SummaryAsset QualityLoans and Deposits • Non-accrual loans declined 4% compared to Q1'25 • Criticized loans declined $2.2 billion or 15% since December 31, 2024 • Par pay-offs totaled $1.5 billion, up ~80%, with 45% of them being substandard loans • Total ACL of $1,162 million or 1.81% of total loans HFI compared to 1.82% last quarter • Multi-family ACL coverage of 1.68% • Multi-family ACL coverage for rent-regulated units equal to or greater than 50% of 2.88% • NCOs to average loans relatively stable at 0.72% • CRE exposure down $2.4 billion or 5% compared to Q1'25 • Multi-family loans down $1.5 billion or 5% • CRE loans declined $874 million or 8% • Continued momentum in C&I lending • Focus area growth of 12% compared to 4% in Q1'25 • New commitments of $1.9 billion, up 80% vs. Q1'25 • Originations of $1.2 billion, up 57% vs. Q1'25 • Deposit decline reflects $2.2 billion decrease in brokered deposits CapitalProfitability • CET1 capital ratio improved to 12.33%, at or above peer group levels • Book value per common share of $18.28 • Tangible book value per share of $17.24 • PPNR, as adjusted, was a positive $9 million compared to a loss of $23 million in prior quarter • NIM increased 7 basis points to 1.81% compared to prior quarter • Non-interest expense of $513 million, down $19 million or 4% over the prior quarter and adjusted operating expenses of $460 million, down $25 million or 5% compared to prior quarter HICKSVILLE, N.Y., July 25, 2025 /PRNewswire/ -- Flagstar Financial, Inc. (NYSE: FLG) ("the Company"), today reported results for the three- and six-months ended June 30, 2025. Second quarter 2025 results, on an operating basis improved significantly compared to both the linked-quarter and year-earlier periods. The second quarter 2025 net loss was $70 million compared to a net loss of $100 million for the first quarter 2025, a 30% improvement and compared to a net loss of $323 million for the second quarter 2024, a $253 million or 78% improvement. The net loss attributable to common stockholders for the second quarter 2025 was $78 million, or $0.19 per diluted share, compared to a net loss attributable to common stockholders of $108 million, or $0.26 per diluted share for the first quarter 2025, a 28% improvement and compared to a net loss attributable to common stockholders of $333 million, or $1.14 per diluted share for the second quarter 2024, a 77% improvement. The Company's six month results reflect a similar improvement, on an operating basis. For the six months ended June 30, 2025, the Company reported a net loss of $170 million compared to a net loss of $650 million for the six months ended June 30, 2024, a $480 million or 74% improvement. The net loss attributable to common stockholders for the six months ended June 30, 2025 was $186 million or $0.45 per diluted share compared to a net loss attributable to common stockholders for the six months ended June 30, 2024 of $668 million or $2.48 per diluted share. CEO COMMENTARY Commenting on the Company's second quarter 2025 performance, Chairman, President, and Chief Executive Officer, Joseph M. Otting stated, "I am very pleased with the progress the Company made during the second quarter across multiple fronts as we continued to execute on our successful strategy of transforming Flagstar into a top-performing, well-diversified regional bank. We made further gains on our C&I and Private Bank growth strategy, our credit quality metrics continue to improve, we continued to lower our operating expenses, reduced our commercial real estate exposure, and we also increased our net interest margin. As a result, our earnings profile during the quarter improved, as the second quarter net loss narrowed significantly compared to both the second quarter of last year and the first quarter of this year, while our net revenues, pre-provision for loan losses, turned positive during the quarter. This bodes well for our expected return to profitability in the fourth quarter of this year. "During the second quarter, we made tremendous progress in our C&I business, funding $1.2 billion of new loans, up nearly 57% compared to our first quarter funding levels. Importantly, we grew C&I loans in our two focus areas - Specialized Industries and Corporate/Regional Commercial Banking - by a combined $422 million, up about 12% compared to the previous quarter. In addition, we added 47 bankers and credit staff during the quarter, all from large regional banks, and plan to hire an additional 40 to 50 bankers during the second half of the year. "We also made further headway on reducing the level of our multi-family and commercial real estate exposure, due to record par payoffs of $1.5 billion. This is a primary reason why our total CRE balances are down 5% compared to the first quarter and 16% since the end of 2023. In addition, we continued to improve our credit quality. Overall, non-accrual loans were down slightly compared to the previous quarter - the first quarter in over a year that non-accrual loans have been stable or down. More importantly, criticized assets decreased $1.3 billion or 9% quarter over quarter and are down 15% or $2.2 billion for the first six months of the year. "In addition to the progress made on the financial front this quarter, yesterday afternoon we announced plans to enhance our corporate structure by merging the holding company into the Bank with Flagstar Bank, N.A. becoming the surviving entity. In addition to simplifying our corporate structure, this action is expected to further reduce costs, streamline various functions across the organization, and eliminate redundant corporate activities and duplicative supervision and regulation. "We have made great strides during the first half of the year and anticipate further progress over the remainder of the year. As always, I would like to thank all of our teammates for their efforts and collaboration. It's a team effort and together we will transform Flagstar into one of the best performing regional banks in the country." BALANCE SHEET SUMMARY AS OF JUNE 30, 2025 At June 30, 2025, total assets were $92.2 billion, down $5.4 billion or 6% versus March 31, 2025 and down $7.9 billion or 8% versus December 31, 2024. Both the linked-quarter decline and the decline from year-end 2024 were driven by a decrease in total loans and leases held for investment ("HFI") and in cash balances, offset by growth in available-for-sale ("AFS") investment securities, as the Company continues to redeploy excess cash into higher earning assets. Accordingly, AFS investment securities rose $2.0 billion or 16% to $14.8 billion on a linked-quarter basis and up $4.4 billion or 43% since year-end 2024. Total loans and leases HFI at June 30, 2025 were $64.1 billion, down $2.5 billion or 4% on a linked-quarter basis and down $4.2 billion or 6% versus December 31, 2024. The multi-family loan portfolio declined $1.5 billion or 5% to $31.9 billion on a linked-quarter basis and declined $2.2 billion or 6% versus December 31, 2024. The CRE portfolio decreased $874 million or 8% on a linked-quarter basis to $10.6 billion and declined $1.2 billion or 10% versus December 31, 2024. The linked-quarter decrease was primarily the result of par payoffs and maturities of $1.5 billion during the second quarter; the decline since year-end 2024 was also primarily due to par payoffs of $2.3 billion. The decrease in both of these portfolios is in line with the Company's ongoing strategy to reduce its overall exposure to multi-family and CRE loans to diversify the loan portfolio. Our new C&I lending teams had another strong quarter of production. During the second quarter, new credit commitments increased to $1.9 billion, up 80% compared to $1.0 billion in the first quarter and up 139% compared to $789 million in the fourth quarter of 2024. Of these amounts, we funded $1.2 billion during the second quarter, up 57% compared to $769 million in the first quarter and up 123% compared to $542 million in the fourth quarter of 2024. Our primary focus areas of Specialized Industries and Corporate/Regional Commercial Banking grew $422 million or 12% compared to the first quarter. Overall, however, total C&I loans declined $316 million or 2% on a linked-quarter basis to $14.4 billion and declined $950 million or 6% versus December 31, 2024. During the first six months of the year, the Company had pay-offs in several legacy C&I businesses, as it took deliberate steps to de-risk certain outsized credits by reducing hold limits and exiting lower risk rated and less profitable credits. Total deposits at June 30, 2025 were $69.7 billion, a $4.2 billion or 6% linked-quarter decrease and $6.1 billion or 8% decrease versus December 31, 2024. Both declines were primarily the result of the Company's disciplined deposit pricing approach, which led to a reduction in high-cost certificates of deposit ("CDs") and mortgage escrow-related deposits. CDs decreased $1.7 billion or 6% to $24.2 billion on a linked-quarter basis and decreased $3.1 billion or 11% versus December 31, 2024. Both the linked-quarter and year-to-date declines in CDs were primarily driven by a decline in brokered CDs, as part of the Company's strategy to reduce higher cost funding. The decline in brokered CDs was partially offset by growth in short-term retail CDs with rates in the low 4% range. During the second quarter, the Company paid off $2.2 billion in brokered CDs at a weighted average cost of 4.92%. On a year-to-date basis, the Company reduced brokered deposits by $4.1 billion with a weighted average cost of 4.97%. These various declines led to an 11 basis point quarter-over-quarter improvement in the second quarter cost of deposits. At June 30, 2025, wholesale borrowings totaled $12.2 billion, down $1.0 billion or 8% on a linked-quarter basis and down $1.3 billion or 9% versus December 31, 2024. After rebuilding our liquidity position over the course of 2024 through deposit growth and asset sales, we paid down wholesale borrowings, primarily Federal Home Loan Bank of New York ("FHLB-NY") advances, in the second half of 2024. This continued in the second quarter 2025, as the Company paid off $1 billion of FHLB-NY advances that matured during the quarter. NET INCOME (LOSS) | NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS - AS ADJUSTED In addition to $14 million of merger-related expenses, second quarter 2025 results included several notable items including $2 million in severance costs related to branch closures, $7 million in lease cost acceleration related to previously disclosed branch closures, and $3 million in trailing costs related to the sale of our mortgage servicing/sub-servicing and third-party origination business. Adjusted for these items, the net loss for second quarter 2025 was $52 million and the net loss attributable to common stockholders was $60 million or $0.14 per diluted share. This compares to a first quarter 2025 net loss, as adjusted, of $86 million and a net loss attributable to common stockholders of $94 million or $0.23 per diluted share. Second quarter 2024 net loss and net loss attributable to common stockholders, as adjusted for merger-related expenses, was $298 million and $308 million or $1.05 per diluted share, respectively. For the first six months of 2025, the Company also had several notable items, including $22 million in merger-related expenses, $12 million in lease cost acceleration related to branch closures, $8 million in trailing costs related to the sale of our mortgage servicing/sub-servicing business, and $2 million in severance costs related to branch closures and employee reduction actions. As adjusted for these items, the Company reported a net loss of $138 million and a net loss attributable to common stockholders of $154 million or $0.37 per diluted share. For the first six months of 2024, the Company reported a net loss of $472 million and a net loss attributable to common stockholders of $490 million or $1.82 per diluted share. Included in the six month 2024 results were $77 million of merger-related expenses and a $121 million reduction in the bargain purchase gain arising from the Signature transaction. EARNINGS SUMMARY FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 Net Interest Income, Net Interest Margin, and Average Balance Sheet Net Interest Income Net interest income for the second quarter 2025 totaled $419 million, up $9 million, or 2%, compared to first quarter 2025 but down $138 million or 25% on a year-over-year basis. The linked-quarter increase was driven by a lower cost of funds along with a lower level of average interest-bearing liabilities, partially offset by lower average interest-earning assets and a modest improvement in the average yield. The year-over-year decline was driven by a smaller balance sheet partially offset by lower funding costs. The smaller balance sheet reflects the Company's strategic actions over the past year to reduce its focus on multi-family and CRE loans through loan sales and par payoffs, along with the sale of our mortgage warehouse business and mortgage servicing/sub-servicing and third-party origination businesses. In addition, balances were impacted by a lower level of C&I loan balances as growth in our focus businesses (Specialized Industries and Corporate/Regional Commercial Banking) was offset by payoffs in other non-core, non-relationship businesses. As with the first quarter 2025, during the second quarter, the Company reinvested a portion of its cash position into higher yielding investment securities. The decrease in average loan balances was partially offset by a lower level of average deposits and average borrowed funds as the Company paid off brokered deposits and FHLB-NY advances during the quarter. For the first six months of 2025, net interest income decreased $352 million or 30% to $829 million compared to $1.2 billion for the first six months of 2024. The year-over-year decline is due to the significant decline in average interest-earning assets along with a concurrent decline in the average yield. The decrease in average interest-earning assets was primarily driven by a decline in average loan balances due to the Company's strategy to reduce its exposure to multi-family and CRE loans and the sale of the mortgage warehouse business and the mortgage servicing/sub-servicing and third-party origination business during full-year 2024. This was partially offset by a decline in average interest-bearing liabilities, mainly the result of the Company paying off a substantial amount of wholesale borrowings and brokered deposits during 2024 and the first half of 2025. Net Interest Income June 30, 2025For the Three Months Ended compared to (%): (dollars in millions) June 30, 2025March 31, 2025June 30, 2024March 31,2025June 30, 2024 Net interest income $ 419$ 410$ 5572 %-25 % Net Interest Income For the Six Months Ended (dollars in millions) June 30, 2025June 30, 2024% Change Net interest income $ 829$ 1,181-30 % Net Interest Margin During second quarter 2025, the Company's net interest margin ("NIM") increased compared to first quarter 2025. Second quarter 2025 NIM was 1.81%, up 7 basis points compared to first quarter 2025, but down 17 basis points compared to second quarter 2024. The linked-quarter improvement resulted from a 10 basis point decrease in the cost of average interest-bearing liabilities along with a 3 basis point improvement in the average interest-earning asset yield. Average interest-bearing deposits declined $1.7 billion or 3% to $60 billion along with an 11 basis point improvement in the average cost of interest-bearing deposits to 3.74%. Average loan balances declined $2.4 billion or 3.50% to $65.8 billion on a linked-quarter basis, while the average loan yield increased 6 basis points to 5.12% due to loan yield resets. Average cash balances decreased $2.3 billion or 15.96% to $12.1 billion as cash was used to purchase investment securities and reduce higher cost funding. Average securities balances rose $2.1 billion or 16.09% to $15.2 billion and the average yield improved to 4.48%, down 11 basis point compared to first quarter 2025. The year-over-year decline in the NIM was driven by several items including lower average loan balances, due to the Company's strategic actions to reduce its CRE concentration and sell certain non-core businesses. This was partially offset by the redeployment of cash into higher-yielding investment securities and a significant reduction in average wholesale borrowings, along with a lower cost of funds, as we proactively managed retail deposit costs lower and paid off higher cost brokered deposits and wholesale borrowings. Average loans declined $17.4 billion or 21% to $65.8 billion, while the average yield declined 50 basis points to 5.12%. Average securities balances increased $3.1 billion or 25% to $15.2 billion, while the average yield decreased 20 basis points to 4.48%. Average wholesale borrowings dropped $14.5 billion or 51% to $14.1 billion while their average cost declined 58 basis points to 4.70%. Average deposits of $60.0 billion were unchanged on a year-over-year basis, however, the average cost of deposits declined 41 basis points to 3.74%. For the first six months of 2025, the NIM was 1.77%, down 36 basis points compared to the first six months of 2024. The year-over-year decrease was largely the result of a smaller balance sheet driven by lower average loan balances offset partially by higher average securities balances and lower average borrowed funds. Average loan balances during the first six months of 2025 declined $16.7 billion or 20% to $67.0 billion compared to the first six months of 2024, while average securities balances increased $2.3 billion or 19% to $14.1 billion, while the average securities yield increased 4 basis points to 4.50%. The Company utilized a portion of its cash position to fund the securities purchases. Accordingly, average cash balances declined $2.9 billion or 18% to $13.2 billion, while the average yield decreased 106 basis points to 4.42%. Average borrowed funds declined $12.9 billion or 48% to $14.2 billion as the Company paid down FHLB-NY advances throughout 2024 and continuing into 2025. At the same time the average cost of borrowed funds decreased 61 basis points to 4.71%.June 30, 2025For the Three Months Ended compared to (bp): Yield/Cost June 30, 2025March 31, 2025June 30, 2024March 31, 2025June 30, 2024 Total loans and leases (1) 5.12 %5.06 %5.62 %6-50 Securities 4.48 %4.59 %4.68 %-11-20 Interest-earning cash and cash equivalents 4.42 %4.42 %5.44 %0-102 Total interest-earning assets 4.93 %4.90 %5.48 %3-55 Total interest-bearing deposits 3.74 %3.85 %4.15 %-11-41 Borrowed funds 4.70 %4.71 %5.28 %-1-58 Total interest-bearing liabilities 3.92 %4.02 %4.52 %-10-60 Net interest margin 1.81 %1.74 %1.98 %7-17 (1) Comprised of Loans and leases held for investment, net and Loans held for sale. For the Six Months Ended Yield/Cost June 30, 2025June 30, 2024(bp) Change Total loans and leases (1) 5.12 %5.65 %-53 Securities 4.50 %4.46 %4 Interest-earning cash and cash equivalents 4.42 %5.48 %-106 Total interest-earning assets 4.93 %5.50 %-57 Total interest-bearing deposits 3.80 %4.00 %-20 Borrowed funds 4.71 %5.32 %-61 Total interest-bearing liabilities 3.97 %4.36 %-39 Net interest margin 1.77 %2.13 %-36 (1) Comprised of Loans and leases held for investment, net and Loans held for sale. Average Balance SheetJune 30, 2025For the Three Months Ended compared to: (dollars in millions) June 30, 2025March 31, 2025June 30, 2024March 31, 2025June 30, 2024 Total loans and leases (1) $65,824$68,212$83,235-4 %-21 % Securities 15,16913,06712,09416 %25 % Interest-earning cash and cash equivalents 12,05414,34417,883-16 %-33 % Total interest-earning assets 93,04795,623113,212-3 %-18 % Total interest-bearing deposits 59,98961,72759,607-3 %1 % Borrowed funds 14,10514,37728,612-2 %-51 % Total interest-bearing liabilities 74,09476,10488,219-3 %-16 % Non-interest-bearing deposits $12,903$13,068$18,632-1 %-31 % (1) Comprised of Loans and leases held for investment, net and Loans held for sale. For the Six Months Ended (dollars in millions) June 30, 2025June 30, 2024% Change Total loans and leases (1) $67,011$83,679-20 % Securities 14,12411,83519 % Interest-earning cash and cash equivalents 13,19316,114-18 % Total interest-earning assets 94,328111,628-15 % Total interest-bearing deposits 60,85359,5732 % Borrowed funds 14,24027,171-48 % Total interest-bearing liabilities 75,09386,744-13 % Non-interest-bearing deposits $12,985$18,994-32 % (1) Comprised of Loans and leases held for investment, net and Loans held for sale. Provision for Credit Losses For the second quarter 2025, the provision for credit losses decreased $15 million compared to the first quarter 2025. The decrease in the provision for credit losses is due to the strategic reduction in multi-family and CRE loan balances, non-core C&I loan portfolio, a reduction in criticized assets, recent appraisals, and ongoing credit reviews. Net charge-offs for the second quarter 2025 totaled $117 million, relatively unchanged compared to first quarter 2025, but were down $232 million or 66% compared to second quarter 2024. Net charge-offs on an annualized basis represented 0.72% of average loans outstanding, compared to 0.68% of first quarter 2025 and compared to 1.68% during second quarter 2024. For the first six months of 2025, the provision for credit losses totaled $143 million compared to $705 million for the first six months of 2024, down $562 million or 80%. The year-over-year decrease was mainly the result of a significant decrease in net charge-offs primarily related to our multi-family and CRE portfolios, and stabilization in the allowance for credit losses. For the first six months of 2025, net charge-offs totaled $232 million compared to $431 million for the first six months of 2024. Net charge-offs for the first six months of 2025 represented 0.70% of average loans outstanding compared to 1.06% of average loans outstanding for the first six months of 2024. The decrease was due to normalizing credit trends, including stabilizing property values and borrower financials. Pre-Provision Net Revenue The table below details the Company's PPNR and PPNR, as adjusted, which are non-GAAP measures, for the periods noted:June 30, 2025For the Three Months Ended compared to: (dollars in millions) June 30, 2025March 31, 2025June 30, 2024March 31, 2025June 30, 2024 Net interest income $ 419$ 410$ 5572 %-25 % Non-interest income 7780114-4 %-32 % Total revenues $ 496$ 490$ 6711 %-26 % Total non-interest expense 513532705-4 %-27 % Pre - provision net loss (non-GAAP) $ (17)$ (42)$ (34)NMNM Merger-related expenses 1483475 %-59 % Severance costs 2——NMNM Lease cost acceleration related to closing branches 76—17 %NM Trailing mortgage sale costs with Mr. Cooper 35—-40 %NM Pre - provision net (loss)/revenue, as adjusted (non-GAAP) $ 9$ (23)$ —NMNM For the second quarter 2025, pre-provision net loss totaled $17 million compared to a pre-provision net loss of $42 million for first quarter 2025 and a pre-provision net loss of $34 million for second quarter 2024. Second quarter 2025 pre-provision net loss included $2 million in severance costs, $7 million in lease cost acceleration related to branch closures, and $3 million in trailing mortgage sale costs related to the sale of the mortgage servicing/sub-servicing and third-party origination business. As adjusted for these items and for $14 million in merger-related expenses, second quarter 2025 results would reflect PPNR of $9 million compared to a pre-provision net loss of $23 million for first quarter 2025 and PPNR of zero for second quarter the Six Months Ended(dollars in millions) June 30, 2025June 30, 2024% Change Net interest income $ 829$ 1,181-30 % Non-interest income 15712328 % Total revenues $ 986$ 1,304-24 % Total non-interest expense 1,0451,404-26 % Pre - provision net revenue / (loss) (non-GAAP) $ (59)$ (100)-41 % Bargain purchase gain —121NM Merger-related expenses 2277-71 % Severance costs 2—NM Lease cost acceleration related to closing branches 12—NM Trailing mortgage sale costs with Mr. Cooper 8—NM Pre - provision net revenue, as adjusted (non-GAAP) $ (15)$ 98-115 % For the first six months of 2025, pre-provision net loss was $59 million compared to pre-provision net loss of $100 million for the first six months of 2024. The first six months of 2025 pre-provision net loss included several notable items including $2 million in severance costs, $12 million in lease cost acceleration, and $8 million in trailing mortgage sale costs. As adjusted for these items and for $22 million in merger-related expenses, the pre-provision net loss was $15 million compared to PPNR of $98 million for the first six months of 2024, which included a $121 million partial reversal of the bargain purchase gain arising from the Signature transaction, along with $77 million of merger-related expenses. Non-Interest Income Non-interest income in second quarter 2025 was $77 million, relatively unchanged compared to $80 million in the first quarter 2025 but down $37 million or 32% compared to second quarter 2024. On a linked-quarter basis, net gain on loan sales and securitizations declined $7 million or 54% to $6 million due to lower transaction volumes. This was offset by a $7 million or 23% increase in other income to $38 million. The year-over-year decline was largely due to the sale of our mortgage servicing/sub-servicing business which impacted loan origination income (within the fee income category), the net return on mortgage servicing rights ("MSRs") and loan administration income. Accordingly, the net return on MSRs was zero in second quarter 2025 compared to $19 million in the year-ago second quarter, while net loan administration income in second quarter 2025 was $1 million compared to a $5 million loss in the year-ago second quarter, and fee income was down $19 million or 46% to $22 million, largely due to a decline in loan origination income. This was partially offset by a $9 million or 31% year-over-year increase in other income to $38 30, 2025For the Three Months Ended compared to: (dollars in millions) June 30, 2025March 31, 2025June 30, 2024March 31, 2025June 30, 2024 Fee income $22$22$41— %-46 % Bank-owned life insurance 101012— %-17 % Net return on mortgage servicing rights —019NMNM Net gain on loan sales and securitizations 61318-54 %-67 % Net loan administration income (loss) 14(5)-75 %-120 % Other income 38312923 %31 % Total non-interest income $77$80$114-4 %-32 % For the first six months of 2025, non-interest income totaled $157 million compared to $123 million for the first six months of 2024. Included in first six months of 2024 non-interest income was a partial reversal of the bargain purchase gain of $121 million related to the Signature transaction. As adjusted for these items, non-interest income for the first six months of 2025 was $157 million compared to $244 million for the first six months of 2024, a $87 million or 36% decline. The year-over-year decline was driven by a $40 million decrease in the net return on MSRs to zero for the first six months of 2025, a $19 million or 50% decline in the net gain on loan sales and securitizations, a $6 million or 55% drop in net loan administration income, and a $31 million or 41% decline in fee income largely driven by the decline in loan origination income. Each of these decreases was due to the sale of our mortgage servicing/sub-servicing and third-party origination business. This was partially offset by an $11 million or 19% increase in other the Six Months Ended (dollars in millions) June 30, 2025June 30, 2024% Change Fee income $44$75-41 % Bank-owned life insurance 2022-9 % Net return on mortgage servicing rights 040NM Net gain on loan sales and securitizations 1938-50 % Net loan administration income 511-55 % Bargain purchase gain 0(121)NM Other income 695819 % Total non-interest income $157$12328 % Impact of Notable Item:Bargain purchase gain 0121NM Adjusted noninterest income (non-GAAP) $157$244-36 % Non-Interest Expense Second quarter 2025 non-interest expense totaled $513 million, down $19 million or 4% on a linked-quarter basis and down $192 million or 27% on a year-over-year basis. Both the second and first quarters of 2025 include a number of notable items compared to no such items in second quarter 2024. Second quarter 2025 included $2 million of severance costs, $7 million of lease cost acceleration, and $3 million of trailing mortgage sale costs. As adjusted, for these items and excluding intangible amortization and merger-related expenses, second quarter 2025 operating expenses totaled $460 million, down $25 million or 5% on a linked-quarter basis and down $178 million or 28% on a year-over-year basis. The linked-quarter decreases were mainly driven by a $7 million or 3% decline in compensation and benefits expense, and a $14 million or 10% decline in general and administrative expenses. The year-over-year decline was the result of a $75 million or 24% decrease in compensation and benefits expense, a $50 million or 27% decline in general and administrative expenses, and a $42 million or 46% decline in FDIC insurance 30, 2025For the Three Months Ended compared to: (dollars in millions) June 30, 2025March 31, 2025June 30, 2024March 31, 2025June 30, 2024 Operating expenses:Compensation and benefits $237$244$312-3 %-24 % FDIC insurance 495091-2 %-46 % Occupancy and equipment 535552-4 %2 % General and administrative 133147183-10 %-27 % Total operating expenses 472496638-5 %-26 % Intangible asset amortization 272833-4 %-18 % Merger-related expenses 1483475 %-59 % Total non-interest expense $513$532$705-4 %-27 % Impact of Adjustments:Total operating expenses $472$496$638-5 %-26 % Severance costs (2)——NMNM Lease cost acceleration related to closing branches. (7)(6)—NMNM Trailing mortgage sale costs with Mr. Cooper (3)(5)—NMNM Adjusted operating expenses (non-GAAP) $460$485$638-5 %-28 % For the first six months of 2025, total non-interest expense was $1,045 million, down $359 million or 26% compared to the first six months of 2024. First half results include a number of notable items, such as $2 million in severance costs, $12 million of lease cost acceleration, and $8 million in trailing mortgage sale costs. As adjusted for these items and excluding intangible asset amortization and merger expenses, first six months of 2025 operating expenses were $946 million compared to $1.3 billion for first six months of 2024, down $313 million or 25%. The improvement was broad-based with declines in compensation and benefits, FDIC insurance expense, and general and administrative expense. Compensation and benefits expense decreased $164 million or 25% to $481 million; FDIC insurance expense declined $42 million or 30% to $99 million, and general and administrative expense declined $89 million or 24% to $280 million. Additionally, merger-related expenses decreased $55 million or 71% to $22 the Six Months Ended (dollars in millions) June 30, 2025June 30, 2024% Change Operating expenses:Compensation and benefits $481$645-25 % FDIC insurance 99141-30 % Occupancy and equipment 1081044 % General and administrative 280369-24 % Total operating expenses 9681,259-23 % Intangible asset amortization 5568-19 % Merger-related expenses 2277-71 % Total non-interest expense $1,045$1,404-26 % Impact of Notable Items:Total operating expenses $968$1,259-23 % Severance costs (2)—NM Lease cost acceleration related to closing branches (12)—NM Trailing mortgage sale costs with Mr. Cooper (8)—NM Adjusted operating expenses (non-GAAP) $946$1,259-25 % Income Taxes For the second quarter 2025, the Company reported a benefit for income taxes of $11 million compared to a benefit for income taxes of $21 million for the first quarter 2025 and a benefit of $101 million for the second quarter 2024. The effective tax rate for the second quarter 2025 was 12.9% compared to 17.8% for the first quarter 2025, and 23.7% for the second quarter 2024. For the first six months of 2025, the Company reported an income tax benefit of $32 million compared to an income tax benefit of $155 million for the first six months of 2024. The effective tax rate for the first six months of 2025 was 15.9% compared to 19.3% for the first six months of 2024. ASSET QUALITYJune 30, 2025As ofcompared to: (dollars in millions) June 30, 2025March 31, 2025June 30, 2024March 31, 2025June 30, 2024 Total non-accrual loans held for investment $3,180$3,280$1,942-3 %64 % Non-accrual loans held for sale $4$21$15-81 %-73 % NPLs to total loans held for investment 4.96 %4.93 %2.60 %3235 NPAs to total assets 3.57 %3.37 %1.65 %20192 Allowance for credit losses on loans and leases $1,106$1,168$1,268-5 %-13 % Total ACL, including on unfunded commitments $1,162$1,215$1,326-4 %-12 % ACL % of total loans held for investment 1.72 %1.75 %1.70 %-3 bps2 bps Total ACL % of total loans held for investment 1.81 %1.82 %1.78 %-1 bps3 bps ACL on loans and leases % of NPLs 35 %36 %65 %-1 %-31 % Total ACL % of NPLs 37 %37 %68 %-1 %-32 % June 30, 2025For the Three Months Ended compared to:June 30, 2025March 31, 2025June 30, 2024March 31, 2025June 30, 2024 Net charge-offs $117$115$3492 %-66 % Net charge-offs to average loans (1) 0.72 %0.68 %1.68 %4 bps-96 bps (1) Three months ended presented on an annualized basis. For the Six Months EndedJune 30, 2025June 30, 2024Change % Net charge-offs $232$431-46 % Net charge-offs to average loans(1) 0.70 %1.06 %-36 bps (1) Six months ended presented on an annualized basis. Non-Accrual Loans Non-performing assets were relatively stable on a linked-quarter basis. At June 30, 2025, total non-accrual loans, including held-for-sale, were $3,184 million, down $117 million or 4% compared to $3,301 million at March 31, 2025, but up $246 million or 7% compared to December 31, 2024. On a linked-quarter basis, a modest 1% increase in multi-family non-accrual loans was offset by declines in CRE non-accrual loans, C&I non-accrual loans, and a decline in non-accrual loans held-for-sale. The increase compared to year-end 2024 was driven by higher multi-family non-accruals, partially offset by lower C&I non-accrual loans. The majority of the increase in multi-family non-accrual loans is related to the one previously disclosed borrower relationship that went on non-accrual status in first quarter 2025. Total non-accrual loans HFI to total loans HFI were 4.96% at June 30, 2025 compared to 4.93% at March 31, 2025 and 2.60% at June 30, 2024. Total Allowance for Credit Losses The total allowance for credit losses including unfunded commitments was $1,162 million at June 30, 2025 compared to $1,215 million at March 31, 2025 and $1,326 million at June 30, 2024. The total allowance for credit losses on loans and leases at June 30, 2025 was $1,106 million compared to $1,168 million at March 31, 2025 and $1,268 million at June 30, 2024. The total allowance for credit losses to total loans at June 30, 2025 was 1.81% compared to 1.82% at March 31, 2025 and 1.78% at June 30, 2024. The total allowance for credit losses on loans and leases to total loans HFI was 1.72% at June 30, 2025 compared to 1.75% at March 31, 2025 and 1.70% at June 30, 2024. The allowance for credit losses in the second quarter 2025 declined slightly as a result of our ongoing focus on credit and declines in total loans, HFI, and stabilization in property values and borrower financials. CAPITAL POSITION The Company's regulatory capital ratios continue to exceed regulatory minimums to be classified as "Well Capitalized," the highest regulatory classification. The table below depicts the Company's and the Bank's regulatory capital ratios at those respective 30, 2025December 31, 2024 REGULATORY CAPITAL RATIOS: (1)Flagstar Financial, equity tier 1 ratio 12.33 %11.83 % Tier 1 risk-based capital ratio 13.12 %12.57 % Total risk-based capital ratio 15.77 %15.14 % Leverage capital ratio 8.61 %7.68 % Flagstar Bank, equity tier 1 ratio 13.89 %13.21 % Tier 1 risk-based capital ratio 13.89 %13.21 % Total risk-based capital ratio 15.15 %14.47 % Leverage capital ratio 9.11 %8.05 % (1) The minimum regulatory requirements for classification as a well-capitalized institution are a common equity tier 1 capital ratio of 6.5%; a tier one risk-based capital ratio of 8.00%; a total risk-based capital ratio of 10.00%; and a leverage capital ratio of 5.00%. Flagstar Financial, Inc. Flagstar Financial, Inc. is the parent company of Flagstar Bank, N.A., one of the largest regional banks in the country. The Company is headquartered in Hicksville, New York. At June 30, 2025, the Company had $92.2 billion of assets, $64.4 billion of loans, deposits of $69.7 billion, and total stockholders' equity of $8.1 billion. Flagstar Bank, N.A. operates approximately 360 locations across nine states, with strong footholds in the greater New York/New Jersey metropolitan region and in the upper Midwest, along with a significant presence in fast-growing markets in Florida and the West Coast. Post-Earnings Release Conference Call The Company will host a conference call on July 25, 2025 at 8:00 a.m. (Eastern Time) to discuss its second quarter 2025 performance. The conference call may be accessed by dialing (888) 596-4144 (for domestic calls) or (646) 968-2525 (for international calls) and providing the following conference ID: 5857240. The live webcast will be available at under Events. A replay will be available approximately three hours following completion of the call through 11:59 p.m. on July 29, 2025 and may be accessed by calling (800) 770-2030 (domestic) or (609) 800-9909 (international) and providing the following conference ID: 5857240. In addition, the conference call will be webcast at and archived through 5:00 p.m. on August 22, 2025. Investor Contact: Salvatore J. DiMartino (516) 683-4286Media Contact: Steven Bodakowski (248) 312-5872 Cautionary Statements Regarding Forward-Looking Language This earnings release and the associated conference call may include forward‐looking statements by the Company and our authorized officers pertaining to such matters as our goals, beliefs, intentions, and expectations regarding, among other things: (a) revenues, earnings, loan production, asset quality, liquidity position, capital levels, risk analysis, divestitures, acquisitions, and other material transactions, among other matters; (b) the future costs and benefits of the actions we may take; (c) our assessments of credit risk and probable losses on loans and associated allowances and reserves; (d) our assessments of interest rate and other market risks; (e) our ability to achieve profitability goals within projected timeframes and to execute on our strategic plan, including the sufficiency of our internal resources, procedures and systems; (f) our ability to attract, incentivize, and retain key personnel and the roles of key personnel; (g) our ability to achieve our financial and other strategic goals, including those related to the Reorganization, our merger with Flagstar Bancorp, Inc., which was completed in December 2022, our acquisition of substantial portions of the former Signature Bank through an FDIC-assisted transaction, which was completed in March 2023, and our ability to fully and timely implement and maintain the risk management programs institutions greater than $100 billion in assets must maintain for so long as we are subject to such requirements; (h) the impact of the $1.05 billion capital raise we completed in March 2024; (i) our previously disclosed material weaknesses in internal control over financial reporting; (j) the conversion or exchange of shares of the Company's preferred stock; (k) the payment of dividends on shares of the Company's capital stock, including adjustments to the amount of dividends payable on shares of the Company's preferred stock; (l) the availability of equity and dilution of existing equity holders associated with future equity awards and stock issuances; (m) the effects of the reverse stock split we effected in July 2024; (n) the impact of the recent sale of our mortgage servicing operations, third party mortgage loan origination business, and mortgage warehouse business; and (o) the impact of our recently announced proposed holding company reorganization transaction. Forward‐looking statements are typically identified by such words as "believe," "expect," "anticipate," "intend," "outlook," "estimate," "forecast," "project," "should," "confident," and other similar words and expressions, and are subject to numerous assumptions, risks, and uncertainties, which change over time. Additionally, forward‐looking statements speak only as of the date they are made; the Company does not assume any duty, and does not undertake, to update our forward‐looking statements. Furthermore, because forward‐looking statements are subject to assumptions and uncertainties, actual results or future events could differ, possibly materially, from those anticipated in our statements, and our future performance could differ materially from our historical results. Our forward‐looking statements are subject to, among others, the following principal risks and uncertainties: general economic conditions and trends, either nationally or locally; conditions in the securities, credit and financial markets; changes in interest rates; changes in deposit flows, and in the demand for deposit, loan, and investment products and other financial services; changes in real estate values; changes in the quality or composition of our loan or investment portfolios, including associated allowances and reserves; changes in future allowance for credit losses, including changes required under relevant accounting and regulatory requirements; the ability to pay future dividends; changes in our capital management and balance sheet strategies and our ability to successfully implement such strategies; recent turnover in our Board of Directors and our executive management team; changes in our strategic plan, including changes in our internal resources, procedures and systems, and our ability to successfully implement such plan; our ability to successfully remediate our previously disclosed material weaknesses in internal control over financial reporting; changes in competitive pressures among financial institutions or from non‐financial institutions; changes in legislation, regulations, and policies; the impacts of tariffs, sanctions and other trade policies of the United States and its global trading counterparts; the outcome of federal, state, and local elections and the resulting economic and other impact on the areas in which we conduct business; the imposition of restrictions on our operations by bank regulators; the outcome of pending or threatened litigation, or of investigations or any other matters before regulatory agencies, whether currently existing or commencing in the future; our ability to fully and timely implement and maintain the risk management programs institutions greater than $100 billion in assets must maintain for so long as we are subject to such requirements; the restructuring of our mortgage business; our ability to recognize anticipated cost savings and enhanced efficiencies with respect to our balance sheet and expense reduction strategies; the impact of failures or disruptions in or breaches of the Company's operational or security systems, data or infrastructure, or those of third parties, including as a result of cyberattacks or campaigns; the impact of natural disasters, extreme weather events, civil unrest, international military conflict, terrorism or other geopolitical events; and a variety of other matters which, by their nature, are subject to significant uncertainties and/or are beyond our control. Our forward-looking statements are also subject to the following principal risks and uncertainties with respect to our merger with Flagstar Bancorp, which was completed in December 2022, and our acquisition of substantial portions of the former Signature Bank through an FDIC-assisted transaction, which was completed in March 2023: the possibility that the anticipated benefits of the transactions will not be realized when expected or at all; the possibility of increased legal and compliance costs, including with respect to any litigation or regulatory actions related to the business practices of acquired companies or the combined business; diversion of management's attention from ongoing business operations and opportunities; the possibility that the Company may be unable to achieve expected synergies and operating efficiencies in or as a result of the transactions within the expected timeframes or at all; and revenues following the transactions may be lower than expected. In addition, our forward-looking statements are subject to the following principal risks and uncertainties, among others, with respect to our recently announced proposed holding company reorganization transaction: the potential timing or consummation of the proposed transaction and receipt of regulatory approvals or determinations, or the anticipated benefits thereof, including, without limitation, future financial and operating results; risks and uncertainties related to the ability to obtain shareholder and regulatory approvals or determinations, or the possibility that such approvals or determinations may be delayed; the imposition by regulators of conditions or requirements that are not favorable to us; our ability to achieve anticipated benefits from the consolidation and regulatory determinations; and legislative, regulatory and economic developments that may diminish or eliminate the anticipated benefits of the consolidation. More information regarding some of these factors is provided in the Risk Factors section of our Annual Report on Form 10‐K for the year ended December 31, 2024, and in other SEC reports we file. Our forward‐looking statements may also be subject to other risks and uncertainties, including those we may discuss in this news release, on our conference call, during investor presentations, or in our SEC filings, which are accessible on our website and at the SEC's website, - Financial Statements and Highlights Follow - FLAGSTAR FINANCIAL, INC. CONSOLIDATED STATEMENTS OF CONDITION (unaudited) June 30, 2025compared to (dollars in millions) June 30, 2025March 31, 2025December 31, 2024March 31, 2025December 31, 2024 AssetsCash and cash equivalents $ 8,094$ 12,614$ 15,430-36 %-48 % Securities:Available-for-sale 14,82312,82610,40216 %43 % Equity investments with readily determinable fair values, at fair value 141414— %— % Total securities net of allowance for credit losses 14,83712,84010,41616 %42 % Loans held for sale 319531899-40 %-65 % Loans and leases held for investment:Multi-family 31,93233,43734,093-5 %-6 % Commercial real estate(1) 10,63611,51011,836-8 %-10 % One-to-four family first mortgage 5,4455,1875,2015 %5 % Commercial and industrial 14,42614,74215,376-2 %-6 % Other loans 1,6821,7161,766-2 %-5 % Total loans and leases held for investment 64,12166,59268,272-4 %-6 % Less: Allowance for credit losses on loans and leases (1,106)(1,168)(1,201)-5 %-8 % Total loans and leases held for investment, net 63,01565,42467,071-4 %-6 % Federal Home Loan Bank stock and Federal Reserve Bank stock, at cost 1,0171,0611,146-4 %-11 % Premises and equipment, net 474486562-2 %-16 % Core deposit and other intangibles 433459488-6 %-11 % Bank-owned life insurance 1,6251,6151,6051 %1 % Other assets 2,4232,5982,543-7 %-5 % Total assets $ 92,237$ 97,628$ 100,160-6 %-8 % Liabilities and Stockholders' EquityDeposits:Interest-bearing checking and money market accounts $ 18,546$ 20,809$ 20,780-11 %-11 % Savings accounts 14,46014,46514,282— %1 % Certificates of deposit 24,21225,88727,324-6 %-11 % Non-interest-bearing accounts 12,52712,74513,484-2 %-7 % Total deposits 69,74573,90675,870-6 %-8 % Borrowed funds:Wholesale borrowings 12,15013,15013,400-8 %-9 % Junior subordinated debentures 584583582— %— % Subordinated notes 446445444— %— % Total borrowed funds 13,18014,17814,426-7 %-9 % Other liabilities 1,2161,3901,696-13 %-28 % Total liabilities 84,14189,47491,992-6 %-9 % Mezzanine equity:Preferred stock - Series B 111— %— % Stockholders' equity:Preferred stock - Series A and D 503503503— %— % Common stock 444— %— % Paid-in capital in excess of par 9,2919,2869,282— %— % Retained earnings (957)(875)(763)9 %25 % Treasury stock, at cost (204)(212)(219)-4 %-7 % Accumulated other comprehensive loss, net of tax: (542)(553)(640)-2 %-15 % Total stockholders' equity 8,0958,1538,167-1 %-1 % Total liabilities, Mezzanine and Stockholders' Equity $ 92,237$ 97,628$ 100,160-6 %-8 % (1) Includes Acquisition, Development, and Construction loans. FLAGSTAR FINANCIAL, INC. CONSOLIDATED STATEMENTS OF (LOSS) INCOME (unaudited) June 30, 2025For the Three Months Ended compared toJune 30, 2025March 31, 2025June 30, 2024March 31, 2025June 30, 2024 (dollars in millions, except per share data)Interest Income:Loans and leases $ 840$ 860$ 1,167-2 %-28 % Securities and money market investments 303304381— %-20 % Total interest income 1,1431,1641,548-2 %-26 % Interest Expense:Interest-bearing checking and money market accounts 162167214-3 %-24 % Savings accounts 11011164-1 %72 % Certificates of deposit 287308337-7 %-15 % Borrowed funds 165168376-2 %-56 % Total interest expense 724754991-4 %-27 % Net interest income 4194105572 %-25 % Provision for credit losses 6479390-19 %-84 % Net interest income after provision for credit losses 3553311677 %113 % Non-Interest Income:Fee income 222241— %-46 % Bank-owned life insurance 101012— %-17 % Net return on mortgage servicing rights ——19NMNM Net gain on loan sales and securitizations 61318-54 %-67 % Net loan administration (loss) income 14(5)-75 %-120 % Other income 38312923 %31 % Total non-interest income 7780114-4 %NM Non-Interest Expense:Operating expenses:Compensation and benefits 237244312-3 %-24 % FDIC insurance 495091-2 %-46 % Occupancy and equipment 535552-4 %2 % General and administrative 133147183-10 %-27 % Total operating expenses 472496638-5 %-26 % Intangible asset amortization 272833-4 %-18 % Merger-related expenses 1483475 %-59 % Total non-interest expense 513532705-4 %-27 % (Loss) income before income taxes (81)(121)(424)NMNM Income tax (benefit) expense (11)(21)(101)NMNM Net (loss) income (70)(100)(323)NMNM Preferred stock dividends 8810— %-20 % Net (loss) income attributable to common stockholders $ (78)$ (108)$ (333)NMNM Basic (loss) earnings per common share $ (0.19)$ (0.26)$ (1.14)NMNM Diluted (loss) earnings per common share $ (0.19)$ (0.26)$ (1.14)NMNM Dividends per common share $ 0.01$ 0.01$ 0.01— %— % FLAGSTAR FINANCIAL, INC. CONSOLIDATED STATEMENTS OF (LOSS) INCOME (unaudited) For the Six Months EndedChangeJune 30, 2025June 30, 2024AmountPercent (dollars in millions, except per share data)Interest Income:Loans and leases $ 1,700$ 2,360(660)-28 % Securities and money market investments 607701(94)-13 % Total interest income 2,3073,061(754)-25 % Interest Expense:Interest-bearing checking and money market accounts 329446(117)-26 % Savings accounts 22111111099 % Certificates of deposit 595628(33)-5 % Borrowed funds 333695(362)-52 % Total interest expense 1,4781,880(402)-21 % Net interest income 8291,181(352)-30 % Provision for credit losses 143705(562)-80 % Net interest income after provision for credit losses 68647621044 % Non-Interest Income:Fee income 4475(31)-41 % Bank-owned life insurance 2022(2)-9 % Net return on mortgage servicing rights —40(40)NM Net gain on loan sales and securitizations 1938(19)-50 % Net loan administration income 511(6)-55 % Bargain purchase gain —(121)121NM Other income 69581119 % Total non-interest income 1571233428 % Non-Interest Expense:Operating expenses:Compensation and benefits 481645(164)-25 % FDIC insurance 99141(42)-30 % Occupancy and equipment 10810444 % General and administrative 280369(89)-24 % Total operating expenses 9681,259(291)-23 % Intangible asset amortization 5568(13)-19 % Merger-related expenses 2277(55)-71 % Total non-interest expense 1,0451,404(359)-26 % (Loss) income before income taxes (202)(805)603-75 % Income tax (benefit) expense (32)(155)123-79 % Net (loss) income (170)(650)480-74 % Preferred stock dividends 1618(2)-11 % Net (loss) income attributable to common stockholders $ (186)$ (668)482-72 % Basic (loss) earnings per common share $ (0.45)$ (2.48)2.03-82 % Diluted (loss) earnings per common share $ (0.45)$ (2.48)2.03-82 % Dividends per common share $ 0.02$ 0.02—— % FLAGSTAR FINANCIAL, OF CERTAIN GAAP AND NON-GAAP FINANCIAL MEASURES In addition to GAAP measures, management considers various non-GAAP measures when evaluating the performance of the business. We believe that non-interest income, operating expenses, pre-provision net (loss) revenue (which includes both non-interest income and non-interest expense), net income (loss), net income (loss) attributed to common stockholders, diluted earnings (loss) per share and our efficiency ratio adjusted for items that we believe are not indicative of core operating results, such as but not limited to merger and restructuring expenses, as well as impairment charges and other exit costs resulting from strategic shifts in our operations provide valuable insights to investors by highlighting our underlying performance. These non-GAAP metrics also facilitate meaningful comparisons to other financial institutions, as they are widely used and frequently referenced by investors and analysts. We believe average tangible common stockholders' equity, tangible common stockholders' equity, average tangible assets and tangible book value per share are important measures for evaluating the performance of the business without the impact of our intangible assets. These non-GAAP metrics also provide investors with important indications regarding our ability to grow the business, our ability to pay dividends as well as engage in capital strategies in addition to facilitating meaningful comparisons to other financial institutions, as they are widely used and frequently referenced by investors and analysts. These non-GAAP measures should not be considered in isolation or as a substitute for comparable measures calculated in accordance with GAAP. Moreover, the way we calculate these non-GAAP measures may differ from that of other companies reporting non-GAAP measures with similar names. The following tables reconcile the above the non-GAAP financial measures we use to their comparable GAAP financial measures for the stated periods:At or for theAt or for theThree Months Ended June 30,Six Months Ended, (dollars in millions) June 30, 2025March 31, 2025June 30, 2024June 30, 2025June 30, 2024 Total Stockholders' Equity $ 8,095$ 8,153$ 8,397$ 8,095$ 8,397 Less: Other intangible assets (433)(459)(557)(433)(557) Less: Preferred stock - Series A and D (503)(503)(503)(503)(503) Tangible common stockholders' equity $ 7,159$ 7,191$ 7,337$ 7,159$ 7,337 Total Assets $ 92,237$ 97,628$ 119,055$ 92,237$ 119,055 Less: Other intangible assets (433)(459)(557)(433)(557) Tangible Assets $ 91,804$ 97,169$ 118,498$ 91,804$ 118,498 Average common stockholders' equity $ 7,486$ 7,700$ 7,984$ 7,592$ 7,942 Less: Other intangible assets (450)(478)(578)$ (464)$ (595) Average tangible common stockholders' equity $ 7,036$ 7,222$ 7,406$ 7,128$ 7,347 Average Assets $ 96,710$ 99,107$ 118,353$ 97,902$ 117,039 Less: Other intangible assets (450)(478)(578)(464)(595) Average tangible assets $ 96,260$ 98,629$ 117,775$ 97,438$ 116,444 GAAP MEASURES:(Loss) return on average assets (1) (0.29) %(0.40) %(1.09) %(0.35) %(1.11) % (Loss) return on average common stockholders' equity (2) (4.20) %(5.61) %(16.69) %(4.92) %(16.83) % Book value per common share $ 18.28$ 18.43$ 22.47$ 18.28$ 22.47 Common stockholders' equity to total assets 8.23 %7.84 %6.63 %8.23 %6.63 % NON-GAAP MEASURES:(Loss) return on average tangible assets (1) (0.21) %(0.35) %(1.01) %(0.28) %(0.81) % (Loss) return on average tangible common stockholders' equity (2) (3.41) %(5.23) %(16.63) %(4.33) %(13.36) % Tangible book value per common share $ 17.24$ 17.33$ 20.89$ 17.24$ 20.89 Tangible common stockholders' equity to tangible assets 7.80 %7.40 %6.19 %7.80 %6.19 % (1) To calculate return on average assets for a period, we divide net income, or non-GAAP net income, generated during that period by average assets recorded during that period. To calculate return on average tangible assets for a period, we divide net income by average tangible assets recorded during that period. (2) To calculate return on average common stockholders' equity for a period, we divide net income attributable to common stockholders, or non-GAAP net income attributable to common stockholders, generated during that period by average common stockholders' equity recorded during that period. To calculate return on average tangible common stockholders' equity for a period, we divide net income attributable to common stockholders generated during that period by average tangible common stockholders' equity recorded during that period. For the Three Months Ended For the Six Months Ended (dollars in millions, except per share data) June 30, 2025March 31, 2025June 30, 2024June 30, 2025June 30, 2024 Net (loss) income - GAAP $ (70)$ (100)$ (323)$ (170)$ (650) Merger-related expenses 148342277 Severance costs 2——2— Lease cost acceleration related to closing branches 76—12— Trailing mortgage sale costs with Mr. Cooper 35—8— Bargain purchase gain ————121 Total adjustments $ 25$ 19$ 34$ 44$ 198 Tax effect on adjustments $ (7)$ (5)$ (9)$ (11)$ (20) Net (loss) income, as adjusted - non-GAAP $ (52)$ (86)$ (298)$ (138)$ (472) Preferred stock dividends 88101618 Net (loss) income attributable to common stockholders, as adjusted - non-GAAP $ (60)$ (94)$ (308)$ (154)$ (490) (1) Certain merger-related items are not taxable or deductible. (2) Amounts may not foot as a result of rounding. For the Three Months Ended For the Six Months EndedJune 30, 2025March 31, 2025June 30, 2024June 30, 2025June 30, 2024Amount Per ShareAmount Per ShareAmount Per ShareAmount Per ShareAmount Per Share Diluted (Loss) Earnings Per Share - GAAP $(78) $(0.19)$(108) $(0.26)$(333) $(1.14)$(186) $(0.45)$(668) $(2.48) Adjustments 25 0.0619 0.0534 0.1244 0.11198 0.73 Tax effect on adjustments (7) (0.02)(5) (0.02)(9) (0.03)(11) (0.03)(20) (0.07) Diluted (Loss) Earnings Per Share, as adjusted - non-GAAP $(60) (0.14)$(94) (0.23)$(308) (1.05)$(153) (0.37)$(490) (1.82) Total shares for diluted earnings per common share 415,125,228414,824,158293,122,116414,975,524269,902,354 (1) Amounts may not foot as a result of rounding. For the Three Months Ended For the Six Months EndedJune 30, 2025March 31, 2025June 30, 2024June 30, 2025June 30, 2024 (dollars in millions)Net interest income $ 419$ 410$ 557$ 829$ 1,181 Non-interest income 7780114157123 Total revenues $ 496$ 490$ 671$ 986$ 1,304 Total non-interest expense 51353270510451,404 Pre - provision net revenue (non-GAAP) $ (17)$ (42)$ (34)$ (59)$ (100) Bargain purchase gain ————121 Merger-related expenses 148342277 Severance costs 2——2— Lease cost acceleration related to closing branches 76—12— Trailing mortgage sale costs with Mr. Cooper 35—8— Pre - provision net revenue excluding merger-related expenses, as adjusted (non-GAAP) $ 9$ (23)$ —$ (15)$ 98 Provision for credit losses (64)(79)(390)(143)(705) Bargain purchase gain ————(121) Merger-related expenses (14)(8)(34)(22)(77) Severance costs (2)——(2)— Long term asset impairment ———(12)— Lease cost acceleration related to closing branches (7)(6)—(8)— Trailing mortgage sale costs with Mr. Cooper (3)(5)——— (Loss) income before taxes $ (81)$ (121)$ (424)$ (202)$ (805) Income tax (benefit) expense (11)(21)(101)(32)(155) Net (Loss) Income (GAAP) $ (70)$ (100)$ (323)$ (170)$ (650) (1) Amounts may not foot as a result of rounding. FLAGSTAR FINANCIAL, INC. NET INTEREST INCOME ANALYSIS LINKED-QUARTER AND YEAR-OVER-YEAR COMPARISONS (unaudited) For the Three Months Ended June 30, 2025March 31, 2025June 30, 2024 (dollars in millions) Average Balance Interest Average Yield/CostAverage Balance Interest Average Yield/CostAverage Balance Interest Average Yield/Cost Assets:Interest-earning assets:Total loans and leases (1) $ 65,824 $ 840 5.12 %$ 68,212 $ 860 5.06 %$ 83,235 $ 1,167 5.62 % Securities 15,169 170 4.4813,067 148 4.5912,094 139 4.68 Interest-earning cash and cash equivalents 12,054 133 4.4214,344 156 4.4217,883 242 5.44 Total interest-earning assets 93,047 $ 1,143 4.9395,623 $ 1,164 4.90113,212 $ 1,548 5.48 Non-interest-earning assets 3,6633,4845,141 Total assets $ 96,710$ 99,107$ 118,353 Liabilities and Stockholders' Equity:Interest-bearing deposits: Interest-bearing checking and money market accounts $ 20,325 $ 162 3.19 %$ 21,023 $ 167 3.23 %$ 23,000 $ 214 3.73 % Savings accounts 14,353 110 3.0714,349 111 3.149,173 64 2.82 Certificates of deposit 25,311 287 4.5526,355 308 4.7427,434 337 4.95 Total interest-bearing deposits 59,989 559 3.7461,727 586 3.8559,607 615 4.15 Borrowed funds 14,105 165 4.7014,377 168 4.7128,612 376 5.28 Total interest-bearing liabilities 74,094 $ 724 3.9276,104 $ 754 4.0288,219 $ 991 4.52 Non-interest-bearing deposits 12,90313,06818,632 Other liabilities 1,7231,7322,521 Total liabilities 88,72090,904109,372 Stockholders' and mezzanine equity 7,9908,2038,981 Total liabilities and stockholders' equity $ 96,710$ 99,107$ 118,353 Net interest income/interest rate spread$ 419 1.01 % $ 410 0.88 % $ 557 0.97 % Net interest margin 1.81 %1.74 %1.98 % Ratio of interest-earning assets to interest-bearing liabilities 1.26 x 1.26 x 1.28 x (1) Comprised of Loans and leases held for investment, net and Loans held for sale. For the Six Months EndedJune 30, 2025June 30, 2024 (dollars in millions) Average Balance Interest Average Yield/CostAverage Balance Interest Average Yield/Cost Assets:Interest-earning assets:Total loans and leases (1) $ 67,011 $ 1,700 5.12 %$ 83,679 $ 2,360 5.65 % Securities 14,124 318 4.5011,835 262 4.46 Interest-earning cash and cash equivalents 13,193 289 4.4216,114 439 5.48 Total interest-earning assets 94,328 $ 2,307 4.93111,628 $ 3,061 5.50 Non-interest-earning assets 3,5745,411 Total assets $ 97,902$ 117,039 Liabilities and Stockholders' Equity:Interest-bearing deposits: Interest-bearing checking and money market accounts $ 20,672 $ 329 3.21 %$ 24,714 $ 446 3.63 % Savings accounts 14,351 221 3.108,787 111 2.54 Certificates of deposit 25,830 596 4.6526,072 628 4.85 Total interest-bearing deposits 60,853 1,146 3.8059,573 1,185 4.00 Borrowed funds 14,240 332 4.7127,171 695 5.32 Total interest-bearing liabilities 75,093 $ 1,478 3.9786,744 $ 1,880 4.36 Non-interest-bearing deposits 12,98518,994 Other liabilities 1,7282,540 Total liabilities 89,806108,278 Stockholders' and mezzanine equity 8,0968,761 Total liabilities and stockholders' equity $ 97,902$ 117,039 Net interest income/interest rate spread$ 829 0.96 % $ 1,181 1.14 % Net interest margin 1.77 %2.13 % Ratio of interest-earning assets to interest-bearing liabilities 1.26 x 1.29 x (1) Comprised of Loans and leases held for investment, net and Loans held for sale. FLAGSTAR FINANCIAL, INC. CONSOLIDATED FINANCIAL HIGHLIGHTS (unaudited) (dollars in millions) For the Three Months Ended For the Six Months Ended (dollars in millions, except share and per share data) June 30, 2025March 31, 2025June 30, 2024 June 30, 2025June 30, 2024 OTHER FINANCIAL MEASURES: Efficiency ratio 103.37 %108.70 %105.07 % 106.02 %107.67 % Efficiency ratio, as adjusted (1) 95.34101.2595.05 98.2888.40 Operating expenses to average assets 1.962.002.16 0.500.52 Effective tax rate 12.917.823.7 15.919.3 Shares used for basic and diluted EPS per common share 415,125,228414,824,158293,122,116 414,975,524269,902,354 Common shares outstanding at the respective period-ends 415,353,394415,021,890351,304,364 415,353,394351,304,364 (1) We calculate our efficiency ratio by dividing our operating expenses by the sum of our net interest income and non-interest income, excluding the bargain purchase gain. FLAGSTAR FINANCIAL, FINANCIAL HIGHLIGHTS (unaudited) ASSET QUALITY SUMMARY The following table presents the Company's asset quality measures at the respective dates:June 30, 2025compared to (dollars in millions) June 30, 2025March 31, 2025December 31, 2024March 31, 2025December 31, 2024 Non-accrual loans held for investment:Multi-family $ 2,388$ 2,361$ 1,7551 %NM Commercial real estate(1) 563589564-4 %— % One-to-four family first mortgage 8177705 %16 % Commercial and industrial 123231202-47 %-39 % Other non-accrual loans 25222414 %4 % Total non-accrual loans held for investment 3,1803,2802,615-3 %22 % Repossessed assets 111214-8 %-21 % Total non-accrual held for investment loans and repossessed assets $ 3,191$ 3,292$ 2,629-3 %21 % Non-accrual loans held for sale:Multi-family $ —$ —$ 51NMNM Commercial real estate(1) —18215NMNM One-to-four family first mortgage 435733 %NM Total non-accrual mortgage loans held for sale $ 4$ 21$ 323-81 %NM (1) Includes Acquisition, Development, and Construction loans. The following table presents the Company's asset quality measures at the respective dates:June 30, 2025March 31, 2025December 31, 2024 Non-accrual held for investment loans to total loans held for investment 4.96 %4.93 %3.83 % Non-accrual held for investment loans and repossessed assets to total assets 3.573.372.62 Allowance for credit losses on loans to non-accrual loans held for investment 34.7835.6145.93 Allowance for credit losses on loans to total loans held for investment 1.721.751.76 FLAGSTAR FINANCIAL, FINANCIAL INFORMATION (unaudited) The following table presents the Company's loans 30 to 89 days past due at the respective dates:June 30, 2025compared to (dollars in millions) June 30, 2025March 31, 2025December 31, 2024March 31, 2025December 31, 2024 Loans 30 to 89 Days Past Due:Multi-family $ 392$ 806$ 749-51 %-48 % Commercial real estate(1) 115857035 %64 % One-to-four family first mortgage 3028257 %20 % Commercial and industrial 3892110-59 %-65 % Other loans 29911222 %164 % Total loans 30 to 89 days past due $ 604$ 1,020$ 965-41 %-37 % (1) Includes Acquisition, Development, and Construction loans. The following table summarizes the Company's net charge-offs (recoveries) for the respective periods:For the Three Months Ended June 30, 2025March 31, 2025June 30, 2024 (in millions) Net Charge-offs (Recoveries)Average Balance%(2)Net Charge-offs (Recoveries)Average Balance%(2)Net Charge-offs (Recoveries)Average Balance%(2) Multi-family $ 96$ 32,8471.17 %$ 80$ 33,9150.94 %$ 76$ 36,6700.83 % Commercial real estate(1) 1311,0610.47211,6160.0723713,5277.01 One-to-four family residential 14,9950.0815,2020.0815,7860.07 Commercial and industrial 314,4860.082814,9280.753122,1120.56 Other 41,7110.9441,7450.9241,7380.92 Total $ 117$ 65,1000.72 %$ 115$ 67,4060.68 %$ 349$ 79,8321.75 % (1) Includes Acquisition, Development, and Construction loans. (2) Three months ended presented on an annualized basis. For the Six Months EndedJune 30, 2025June 30, 2024 (in millions) Net Charge-offs (Recoveries)Average Balance%(2)Net Charge-offs (Recoveries)Average Balance%(2) Multi-family $ 176$ 33,3781.05 %$ 86$ 36,8720.47 % Commercial real estate(1) 1511,2510.2730113,5564.44 One-to-four family residential 24,9890.0815,8760.03 Commercial and industrial 3114,7060.423623,0580.31 Other 81,7280.9372,0280.69 Total $ 232$ 66,0520.70 %$ 431$ 81,3901.06 % (1) Includes Acquisition, Development, and Construction loans. (2) Six months ended presented on an annualized basis. View original content to download multimedia: SOURCE Flagstar Financial, Inc. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
