Flagstar Bank, National Association (FLG) Earnings Call Transcript & Summary

I guess we get started with our next session. We have with us Flagstar. And from Flagstar, we have Lee Smith, CFO, and Richard Raffetto, Senior Executive Vice President and President of the Commercial and Private Bank. So first of all, thank you both for being with us.

Yes. Thanks, Ebrahim. It's great to be here again.

And maybe just to kick it off with you, Lee, give us an update. I mean, obviously, fourth quarter was a bit of a milestone for Flagstar, turned profitable. As you think about just a mark-to-market in terms of everything that's gone on over the last couple of years with the bank, just talk to us about the progress that's been made in terms of shifting the focus, moving from sort of addressing and ring-fencing the credit quality issues towards pivoting to growth and kind of how you've seen all of this evolve and where things stand today?

Yes. No, absolutely. It's obviously -- the last couple of years, it's been a tremendous effort and a lot of blood, sweat and tears. But I think, first of all, it all starts with people. And obviously, the new investors and Board, the first thing they did was they bought Joseph Otting in as the new CEO. And I think Joseph did an incredible job of bringing together very quickly a new management team, and it's a management team that is very communicative, very transparent. We meet at least twice a week for an hour, and we talk about everything. And so I think the foundation is with people. But then in terms of building the foundation, we set about raising additional capital. So we sold some very successful noncore businesses, particularly mortgage businesses. That gave us the ability to raise capital, but also liquidity. We used that liquidity to deleverage the balance sheet. We've paid down over $20 billion of wholesale borrowings over the last 15 months, and that has reduced our funding costs significantly. We re-underwrote the credit book, particularly the multifamily and CRE book, and we took both credit marks and interest rate marks, which is something no other bank has done. And so in 2024, we took over $900 million of charge-offs as well as increasing our ACL reserves. And so today, our coverage ratios are some of the highest in the industry for multiple asset classes. We took over $700 million of costs out of the business. That was something I think a lot of people didn't think we could do. And while we were doing all of that, we were investing heavily in Richie's C&I business so that we could build the C&I business and move to a more diversified balance sheet, which is we say 1/3, 1/3, 1/3. 1/3 CRE, 1/3 C&I, 1/3 consumer. And so it was important that we did all of that because that created the foundation from which we could grow and be successful. And then as you move through '25, there were a couple of important milestones. In Q3, we achieved net C&I growth, and that was something that we had been targeting. And then in the fourth quarter, as you mentioned, we actually returned to profitability after a couple of years, and that was something that we said we would do. So everything we said we would do, we accomplished in 2025. And now I think we're at that inflection point where it's really about the growth story. And we ended the year with a balance sheet of $87.5 billion. We're looking to get to $94 billion by the end of '26 and then about $102 billion, $103 billion by the end of 2027. And we believe that we've got the appropriate resources and teams in place to really drive that growth, particularly through Richie's C&I businesses.

Got it. That's helpful. And I'd like to come back to some of the credit quality and just the New York CRE topics. But maybe, Rich, since we are on C&I, it was a good sort of year 2025. As we think about just the momentum and what you've laid out around growth expectations for C&I., just talk to us around, one, the bankers that were brought on last year, like just the pedigree of those bankers, their ability and sort of to move business both on the lending side and hopefully, at some point, deposits as well.

Sure. Thanks, Ebrahim, and it's great to be here. I will start with the theme of transformation that Lee touched on. Since I joined in June of 2024, we've had the privilege of on-boarding more than 300 new professionals in the commercial, corporate and private banking organization here at Flagstar. And these are generally mid-career professionals, who know what good looks like. We're hiring from banks of our size and larger. The great news about having Joseph Otting as our Chairman and CEO and me running our commercial and private businesses, we grew up as bankers, we grew up as commercial bankers. So we're able to go out in the marketplace, hire talent that we know or have worked with, bring in seasoned leaders who are also attracting talent. And that network effect is working very positively around how we're constructing a commercial bank from a bank whose legacy and roots were much more mortgage and commercial real estate than they were C&I or private banking. So that's the clay that we've had to mold. And as these folks have come onboard, we've really focused in the C&I space on building two key focus areas. First and foremost, we need to be more relevant in the geographies where Flagstar also already has brick-and-mortar branch locations, and we're in those communities with 340-plus retail branches and 20 private banking and wealth branches. So -- but we didn't have commercial bankers in many of those geographies. So adding commercial bankers in places like Ohio, South Florida, more density in the New York area and Michigan out in Arizona and California to make us more relevant in those markets in regional commercial and corporate banking, that's priority #1. Another part of priority #1 is leaning into specialized industry segments. So we've added over a dozen new industry verticals and hired the talent to support that side of the growth because many of the industries that we desire to serve in the C&I space require specialized industry knowledge and lending expertise. So we've hired not only revenue producers, but also credit underwriters and credit process professionals, who understand the unique nature of different industries that we've entered just over the last 12 to 18 months, segments such as oil and gas, renewable energy, entertainment, sports, technology, healthcare, and the list goes on, financial institutions, insurance, sponsor coverage, et cetera, so that we can round out those areas of focus. And that's enabled us each quarter for the last 6 quarters to show quarter-over-quarter momentum in new originations on the commitment side and in the funded loan outstandings. So we expect that trend to continue into 2026. And that brings us to our aspirations, which is, as we show on Slide 11 in our fourth quarter earnings slide deck, we aspire to drive $6 billion to $7.5 billion of net C&I loan growth in 2026. And based on the originations volume, we feel like we have a great runway there. We also expect to add another 40 to 60 commercial bankers and corporate bankers that will help us as we further scale in both these geographies and in these specialized industry segments. So we feel like we have the workings of a very realistic expectation for this growth in 2026. And if you think about it, with roughly 125 revenue-producing bankers and each banker delivering generally 4 new transactions, new client relationships for us; that turns out to about 500 new deals, if you will, with an average commitment size of about $25 million. That drives about $12 billion of new credit commitments. And with about 70% of that funded, that yields $8 billion to $9 billion. And then with regular amortization, that gets us back to our target range of $6 billion to $7.5 billion of net C&I loan growth in 2026.

And remind us, Rich, what's the sort of timeline between hiring a banker and before they start getting to the rhythm of adding four commitments in a quarter?

Great question, Ebrahim. The great news about hiring mid-career bankers is we generally find that our bankers are really productive in the first 90 days. We expect them to bring over their first relationship and do their first deal in the first 90 days of joining the company. And then we expect that continued ramp where they're bringing over at least 4 new client relationships in the first 12 months of being there. But in that first 90 days, that's pivotal where they're starting to leverage that Rolodex bring over those relationships, whether it's being the next bank added in a multiple bank syndicate or a club transaction or a bilateral transaction where you're getting full relationship primacy where they can take that full client relationship over from the bank that they just joined us from.

Got it. And I think I know the answer, but when you think about just the appeal for these bankers to move to Flagstar, just remind us what is it -- I mean obviously, there's a ton of growth runway for them. But what sort of is appealing to them and what keeps them around not just for a year or 2, but to sort of build their careers for many years to come?

Great. Another great question. The things that attract bankers to our platform are, first and foremost, they love the fact that we have commercial bankers running the enterprise. So our Chairman and CEO grew up as a relationship manager in commercial banking, and that's the same way I grew up in the business as well. So I think that leadership is -- resonates with candidates. They definitely understand the macro story of Flagstar that we have this desire and ambition to create a diversified regional bank with 1/3 commercial real estate, 1/3 C&I and 1/3 consumer and private banking. So they know we have a significant runway where banks of our size and complexity have C&I loan portfolios that are generally double the size of where Flagstar is today. So they know that we have a large runway and a whiteboard for them to build their business and be entrepreneurial. And one of the recurring themes that I hear from bankers that we bring over from not only the top 4 or 5 banks in the country, but also the super regionals and other banks of our size is they love the entrepreneurial spirit that we bring to the table where they know they can get business done, they can deliver for their clients. We're not overly layered or bureaucratic because of the size of our company. At around $90 billion in assets, we like to say we're big enough to matter, but small enough to care. It's easy to get myself or our CEO out in front of a client in-person. Happy to hop on an airplane to do that as we grow our business nationally. And it's really fun to build a business with an entrepreneurial set of bankers that feel like they can be -- make a big impact in an organization like Flagstar that's transforming.

I think I just add on what Rich has said, we're sitting on 12.83% CET1 capital. So we want to use that capital to grow the balance sheet based on the numbers that I mentioned earlier. A lot of that is going to be in C&I. These new C&I, the dozen verticals that Rich mentioned, we're sort of new to this. So we're growing it. We don't have those concentration levels that maybe other banks that have been in the business for multiple years and already they're full up or they're approaching those concentration levels in certain industries or certain names. We're not running up against that. So they have that runway as well at Flagstar, and I think that's important.

Got it. And when we think about the $6 billion to $7.5 billion in loan growth, right, like you talk to banks, you talk about the macro outlook. It feels like in your instance, it's a lot more about them moving their books of business. There should be a higher sort of less sensitivity to what the macro does in any given quarter. Would that be a fair way to sort of...

I would say that's a fair assessment.

Absolutely. We find the bankers in that first 90 days, they're not only bringing over that first transaction or that first relationship, but there's many in the queue behind that from their career and their contacts and their network. So yes, absolutely. So we feel like we can grow our business at a faster rate than the market gives us because of the ongoing build of our platform. And with more people in the seat for longer, they become exponentially more productive.

When do you think the banker peaks? And when do they go to a point where they've grown enough and then they're managing sort of to stay in place? Like is it...

So another great question. As we bring bankers onboard, we see an accelerated ramp in the first 12 to 18 months. We think it starts to level off after 3 years because if you think about the life cycle of refinancing a middle market company's credit facility or some event-driven transaction like a new warehouse that they build or a competitor that they're going to merge or acquire, a lot of that plays out over a 3-year period, and that's when our banker has that opportunity to recapture that relationship over. So the maturity level is generally 36 months out.

And as we think about the loan growth, and you've been doing a lot on the liability side of the balance sheet, like what's the expectation of these bankers to bring in core deposits? One, does Flagstar have the technology infrastructure and the products to bring in -- to be able to bring in those deposits? And yes, like what's the goal for these bankers to do that?

Yes. So I'll start and then I'll sort of kick it over to Rich to get more specific on their goals. But as we think about the asset growth, we want to fund that with deposit growth. The deposit growth is coming from multiple angles. So obviously, we want to use the new C&I relationships that we're building here to leverage those, not just for deposits, but for fee income as well. We're very much about relationship banking. We're not just into transactional banking and giving the balance sheet away. There has to be a much deeper relationship. And so if we're going to lend to someone, then we expect that there's ultimately a deposit relationship and there's the opportunity for other fee income business to come our way as well. And I think Rich and the team, the bankers are aware of that. We're also leveraging the private bank to bring in deposits. So we further built out that private bank. The bankers have all the products that they need now. You think about the interest-only mortgage, subscription lending. Mark Pittsey, who runs the private bank, has got a Chief Investment Officer. We've got a trust adviser. We've got an insurance adviser, a family wealth planner. So it looks like a real private bank, and we want to leverage all of those products and those services to bring in deposits. We obviously have 350 bank branches in very good markets, New York, New Jersey, South Florida, the Midwest, Arizona, California, and we feel that we have a good product set there. And then we're going to be originating new CRE loans, and we want to leverage just those loans to bring in deposits. We're talking to vendors that we do business with. Again, if we're going to give them business, we expect something in return. So it's very much this relationship banking model, and we're not leaving a stone unturned as it relates to bringing in deposits. The final thing I'd mention is Rich has a team underneath him that is solely focused on bringing in these deposits. And as part of that team, you've got a government banking group that is working with municipalities and those municipalities in terms of deposit programs. So we're really looking at it in a holistic way, but I'll let Rich talk about any specific targets for the bankers.

Sure, sure. And it's very important. Every time we bring on a new relationship and over the last 12 months and in the focus areas, we've added about 165 new relationships. Each new relationship and each banker, we pressure test as they onboard that new relationship, what is the client strategy beyond just the initial extension of the balance sheet with credit? And that can come in the form of deposits, fee income products. And as we've invested in bankers, we're also investing in the product capabilities as well. So whether it's uplifting a treasury management product or a fraud capability, a commercial card product capability or capital markets service like interest rate hedging or an FX and loan syndications and other kinds of capabilities; that exponentially expands our fee potential. And then with the -- having both the commercial bank and the private bank under my leadership, there's a natural synergy where we're banking lots of privately held businesses and there's an opportunity, whether there's a liquidity event or a planning event, to work individually with those business owners and that bleeds into a private banking capability, residential mortgage lending, et cetera. So that ecosystem is driven by goal setting, both at the relationship level at the outset and at the banker level where we set annual goals for growth. So I think that part of the ecosystem is how we're delivering on Lee's mention of us being a relationship-driven bank, but we think that should drive both the relationship primacy that we desire for multiple and deeper relationships and will help drive us forward both in funding the loan growth with deposits as well as driving our fee income numbers higher.

Got it. I guess maybe just pivoting back to the good old New York CRE book a little, just talk to us in terms of how you're thinking about the nonaccrual portfolio. And how we should think about the timing of that coming in like exiting some of those relationships?

Yes. So we've been very public that we're sitting on about $3 billion of non-accruals at the end of '25. We expect that to decline by $1 billion by the end of '26. So we think we can reduce that book by $1 billion. That does two things for us. It helps earnings because if you just think about that $1 billion, even if you just sit on that cash of 4%, you're earning $40 million is coming into your net interest income. It's not doing anything today sitting in nonaccrual. The other thing with the nonaccruals, they're 150% risk weighted. So as we further reduce the nonaccruals, it's capital accretive. And then I think the other big thing is it's been reported publicly. There was obviously a big bankruptcy that went to auction early in 2026. The auction process was completed. And then the bankruptcy judge confirmed and approved that, and we expect to close that transaction before the end of Q1. That one transaction is $450 million of nonaccrual loans that will get resolved once we close it, hopefully, before the end of Q1. So it's a big focus of ours for both the capital and the earnings reason. And obviously, we're pretty close here to resolving a significant portion.

And the exits in this case, so this one went through bankruptcy process. It's going to move. What are the other avenues to sort of exit these? Are there private assets like looking to pick these up?

Yes. So we have a SAG group, special asset group that is constantly working on these nonaccruals, and they have multiple tactics, whether that is working -- doing a workout with the borrower, discounted payoffs, the sales. So there's lots of different ways and tactics that we're looking to leverage to sort of bring this book down. But what I would tell you with the nonaccruals is every one is a separate negotiation with the borrower. So it's not linear. It can be chunky. But there absolutely are -- there are buyers out there for sort of pools of nonaccrual assets, and that's just something else that is at our disposal. We're obviously only going to pursue that if it makes economic sense for Flagstar.

Understood. And as we look forward, so you've done a lot of work on credit quality, the reserves you've taken, the charge-offs you've taken. As we look forward, where is the blind thought? Or where do things go wrong in terms of credit quality? Like what could lead to a worse outcome than what you're sort of positioned for today?

Well, look, I mean, you are always looking at credit. And so I don't think any wise person would make a definitive statement. But here's what I would tell you, as you said, we re-underwrote that CRE and multifamily credit book back in '24, and we took interest rate marks and credit marks, over $900 million of charge-offs. And we topped up our ACL reserves. So we have very, very strong coverage ratios. Every multifamily and CRE loan that is resetting or maturing within 18 months, we do a DSCR analysis using pro forma interest rates, current interest rates. And so we're constantly looking at what is coming due 18 months out, and then that is informing us about how we should risk rate those assets as well. We get annual financial statements now from all of the CRE borrowers. That is something legacy NYCB did not do. And when we look at the '24 statements that we've been analyzing in '25, we're 93% of the way through. 80% of them are stable, 7% showed improvement, 13% have shown some decline. So almost 90% are stable or improving, which is a good metric. You look at the quantity of C&I originations that Rich talked about. I think what is interesting here is the average loan size is $25 million. We're not taking outsized positions in any one name. And so that mitigates you from a risk point of view as well. And then when we think about our risk process, we have credit specialists in the first line. You've then got the second line, which is credit. Credit has the ultimate veto power. So they can say no to anything. And then you have the third line, which is loan review. So we never take our eye off the ball as it relates to credit because as we all know, that is something that can hurt you. And we look at it in lots of different ways to make sure we're not putting the bank under any undue risk from a credit point of view.

Got it. And I guess maybe just pivoting to the net interest margin outlook, I think it implied about 40 to 50 basis points of expansion. So I'm assuming some of that's coming from these nonaccrual loans going away. That's some component of the margin expansion.

Yes. So there's multiple components, and we're in a sort of fortunate position where there's multiple levers in terms of our margin expansion. First of all, over the next 2 years, we have $14 billion of multifamily and CRE loans that are either resetting or maturing. And the weighted average coupon of those is less than 3.7%. So we just sit here and a patient. Those loans are going to hit their reset or maturity dates. And if they reset contractually with Flagstar, they reset a 5-year flood plus 300 or prime plus 275. So you get an immediate lift in NIM if they reset and stay with Flagstar. If they pay off, we can leverage those funds to invest in Ritchie's growth or pay down wholesale borrowings. So Ritchie's growth and the C&I loans that he's bringing on are typically coming on at a spread to SOFR of 220 to 230 basis points. So as we further grow that book, you're going to get NIM expansion there. And then the other things on the asset side would be as we're originating new CRE loans, not in New York, but in the Midwest, California, South Florida, other parts of our footprint; they're typically coming on at a spread to SOFR of 200 to 225, and these are floaters. They're not fixed rate. The final thing on the asset side, as you alluded to, is as we reduce those nonaccruals, then we will use those funds and invest in interest-earning assets. So that comes immediately back into NIM. On the liability side, we've paid down over $20 billion of wholesale borrowings over the last 15 months, high-cost wholesale borrowings. So that has reduced our funding cost significantly. And we've done a nice job of reducing the cost of interest-bearing deposits. Even without Fed cuts, we were bringing the cost of interest-bearing deposits down as retail CDs were maturing, we were keeping them, but rolling them into lower cost CDs. With the Fed cuts, we've targeted and we're hitting a 55% to 60% beta. And that's something that we're -- we have been very surgical and focused on is how do we reduce the cost of our interest-bearing deposits even without Fed cuts. And I think you'll continue to see that as we move throughout '26 as well. So there's multiple levers that we're pulling to achieve that NIM expansion.

Got it. That was clear. And I guess in terms of another lever, you've done a lot on the cost side in terms of optimization, cutting costs. As we look forward, I think your guidance still implies expenses will be somewhat lower in '26 versus where you ended fourth quarter on an annualized basis. Just where are the cost-saving opportunities remaining at the bank now?

Yes, sure. So I mean, the team has done an unbelievable job. We've taken $700 million of costs out of the organization if you compare full year '25 to full year '24. And it's across a series of initiatives. So our headcount when we started on this journey was 9,200. We're at 5,500 today. You think of vendor costs that we've been able to reduce significantly, real estate optimization, FDIC expenses, we've outsourced or offshored noncore back-office functions. And so that is how we've sort of achieved the $700 million to date. Looking forward and looking at Q4, Q4 of '25 had some onetime expenses in there. So we had some short-term incentive compensation, the associated taxes, and we had $4 million of severance costs related to a reduction that occurred 2 weeks ago. So that's about $25 million. If you take that out of Q4 and then look at the run rate, we are at the top end of our '26 guidance. But as we look through '26, we feel that we can gain further efficiencies, particularly as it relates to FDIC expenses continuing to come down as technology projects come online, that will enable us to get more efficient because we've still got a lot of manual processes in certain areas, there's some real estate optimization. But it's something that we continue to be myopically focused on, you have to be with costs. And we feel very comfortable that we'll be within the [ '26 ] range that we've provided.

I guess just last couple of questions. One, in terms of -- from a regulatory standpoint, I mean you're well below the $100 billion threshold today, but you will cross that at some point. Are you expecting additional clarity from the Fed around what the $100 billion threshold does or does not mean over the coming months?

Yes. So a couple of things on that. We didn't deliberately get below $100 billion. It was more happenstance as we've restructured the balance sheet. And as you say, our plan is to get back above the $100 billion by '27. We do think at some point that the demarcation line will get moved higher. But our risk infrastructure and the rest of our infrastructure has been built as though we are a Category 4 bank, and we think that, that provides certain competitive advantages. I think, from a regulatory point of view, the biggest thing for me is this materiality threshold that has been talked about and introduced because I think looking at it in a more pragmatic way is the right way to regulate. When you're doing things at scale, there are things that can go wrong. But if it isn't having a material impact, yes, you need to fix it. But you can actually tie yourself in knots and spend a lot of money and focus on fixing something and then you lose your focus on what you're trying to do. So I think the materiality threshold and the way that, that has been introduced and talked about is, for me, the most helpful thing from a regulatory point of view that I've heard.

Got it. And just I guess, moving to capital. So you have a -- you had a lot of capital at the end of the year at about 12.8% CET1. You're going to accrete a lot of capital, it sounds like in the near term. I think you've talked about like buybacks maybe something that you might look at in the back half of the year. Just talk to us in terms of is there an aspect to like just reducing the nonaccrual loans? Are there things that you're watching before you initiate buybacks? What's holding you back today?

Yes. I think, look, we were profitable in Q4. I think we want to show we can do it again. We want to get the bankruptcy behind us that we talked about, and I think we're pretty close to doing that. I think, look, we obviously want to use the capital to grow the balance sheet. That is the first sort of thought and what -- where we want to invest that capital because if we execute on the plan we've laid out, we will create a lot of value for our shareholders given where we're trading at a discount. We're trading at 82% of book, 90% of book when you factor in the warrants. Our peers are trading at anywhere from [ 1 5 to 1 7 ]. So that's the valuation gap that we are trying to solve for. And we believe we've laid out a plan that goes through the end of '27 that allows us to do that. And a big part of that is growing the balance sheet, and that's where we want to use the capital. Having said that, we do have a lot of capital, and we can likely do both. And I think sometime later this year, if we're still trading at a discount to book, and we're sitting on almost 13% CET1, then I think it's a real conversation that we'll have with the Board about should we look at doing a buyback here, maybe this is a good way to return value to shareholders.

Got it. I guess maybe one last one, just to wrap things up. As you fast forward maybe over the next 2 to 3 years, you've laid out the financial roadmap very clearly in terms of where you expect the ROE to go, earnings to go. What are the other major milestones? Like how do you think this franchise would look different in 2028 than what it does today?

Yes. I mean we want to be the best-performing regional bank in the country, it's as simple as that. If you think about our strategic plan, there are three pillars. It's sort of -- it's profitability, it's being customer-centric and offering the best customer experience in the industry. And it's obviously risk and compliance, not putting the banker undue risk. And so everything we sort of look to do, there's a lot behind it, but we try and keep it focused and simple. And in terms of 3 to 5 years, we want to be the best regional bank. And as I mentioned just a few moments ago, the opportunity for us is closing that valuation gap that we have to our peers. If we execute on our strategic plan by the end of '27, our profitability, our capital, our liquidity metrics, they look like all of our peers. And so if we are there at the end of '27, then there's no reason why we're not trading like our peers are. And if we're doing that, we've created a ton of value for our shareholders in a short period of time.

And then the other part of being relevant and where we want to be in 3 to 5 years is being more market present across the markets that we aspire to be more meaningful in. So we will be -- as a leadership team, we will have a certain level of gratification if we look back 3 to 5 years from now, and we see how relevant we are in the commercial banking franchises that we are building right now with the team members that we're building, we're still attracting talent. We're going deeper in those communities and those geographies where Flagstar has a presence, first and foremost. And we're going deeper and wider in the industry segments that we seek to be relevant in, not just in my world, but in commercial real estate and consumer banking. There's just a lot of franchise building that is the unique opportunity that is Flagstar. And I view this as the most special situation in the banking universe right now because we have this opportunity with our capital position, with our improving balance sheet and with the talent that we're attracting to really build something special and to make a really big impact in the market. And frankly, I'm a big fan of M&A, as long as it's not us doing it or being involved in it. We have this incredible unique opportunity in many of our geographies to take advantage of dislocation that happens related to M&A. So by not being distracted by M&A, we're finding opportunities where banks will be distracted with M&A, focused on integration and other kinds of internal areas of focus. And we're -- we expect to be able to take advantage of bankers that may fall out of M&A integration situations. We've already seen that in a number of our geographies, and we expect even more with some of these more recent announcements. And we expect clients to potentially be in motion as well because their banker may have just gotten a new assignment and the new organization, and that may have been the glue that kept that relationship at an institution, and we may have an opportunity to get relationship primacy with that client. So we see opportunities in the current M&A landscape with a constructive external economic landscape with a realistic regulatory environment, but with M&A happening for us to gain market share by acquiring really talented bankers. -- and by gaining market share and relevancy with clients and client engagement. So 3 to 5 years from now, we expect to just be a bigger version of ourselves with a lot more durable business mix and a lot more depth in the geographies and the business units that we're building.

That's a great point, given that one of your New York peer did decide to sell itself to a foreign bank. So I assume that creates some opportunities looking forward for Flagstar.

We love competitor M&A.

Excellent. On that note Rich, Lee, thank you so much.

Thanks, Ebrahim. Appreciate you having us.