What Happened?

Shares of regional banking company Flagstar Financial (NYSE: FLG) fell 6.4% in the afternoon session after the company reported disappointing second-quarter results and lowered its full-year guidance. 

The regional bank cut its forecast for full-year 2025 net interest income and now expected a wider adjusted loss per share than previously guided. This outlook revision followed a second quarter where both earnings and revenue missed Wall Street's expectations. Flagstar's adjusted loss of $0.14 per share was slightly worse than the consensus estimate, while its revenue of $496 million represented a 26% decline from the previous year. Digging deeper into the report, the bank’s net interest income dropped 25% year-over-year, and total deposits decreased by $4.2 billion from the prior quarter, signaling ongoing business pressures.

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What Is The Market Telling Us

Flagstar Financial’s shares are very volatile and have had 28 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

Flagstar Financial is up 21.7% since the beginning of the year, but at $11.25 per share, it is still trading 14.9% below its 52-week high of $13.22 from February 2025. Investors who bought $1,000 worth of Flagstar Financial’s shares 5 years ago would now be looking at an investment worth $368.21.

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