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Employee Benefits
 12 Months Ended
Dec. 31, 2024
Retirement Benefits [Abstract]  
Employee Benefits Employee Benefits
Retirement Plan

The Flagstar Financial, Inc. Retirement Plan (the “Retirement Plan”) covers substantially all employees who had attained minimum age, service, and employment status requirements prior to the date when the individual plans were frozen by the banks of origin. Once frozen, the individual plans ceased to accrue additional benefits, service, and compensation factors, and became closed to employees who would otherwise have met eligibility requirements.

The following table sets forth certain information regarding the Retirement Plan as of the dates indicated:

December 31,
(in millions)20242023
Change in Benefit Obligation:
Benefit obligation at beginning of year$115 $116 
Interest cost5 5 
Actuarial gain(6)2 
Annuity payments(7)(7)
Settlements(1)(1)
Benefit obligation at end of year$106 $115 
Change in Plan Assets:
Fair value of assets at beginning of year$253 $228 
Actual return (loss) on plan assets— 33 
Annuity payments(6)(7)
Settlements(1)(1)
Fair value of assets at end of year$246 $253 
Funded status (included in other assets)
$140 $138 
Changes recognized in other comprehensive income for the year ended December 31:
Amortization of actuarial loss$(3)$(7)
Net actuarial (gain) loss arising during the year10 (18)
Total recognized in other comprehensive income for the year (pre-tax)$7 $(25)
Accumulated other comprehensive loss (pre-tax) not yet recognized in net periodic benefit cost at December 31:
Actuarial loss, net$49 $41 
Total accumulated other comprehensive loss (pre-tax)$49 $41 

In 2025 $4 million of unrecognized net actuarial loss for the Retirement Plan will be amortized from accumulated other comprehensive loss into net periodic benefit cost. The comparable amount recognized as net actuarial loss for the Retirement Plan in 2024 was $3 million. The discount rates used to determine the benefit obligation at December 31, 2024 and 2023 were 5.4 percent and 4.7 percent, respectively.
The discount rate reflects rates at which the benefit obligation could be effectively settled. To determine this rate, the Company considers rates of return on high-quality fixed-income investments that are currently available and are expected to be available during the period until the pension benefits are paid. The expected future payments are discounted based on a
portfolio of high-quality rated bonds (AA or better) for which the Company relies on the Financial Times Stock Exchange (“FTSE”) Pension Liability Index that is published as of the measurement date.
The components of net periodic pension (credit) expense were as follows for the years indicated:

Years Ended December 31,
(in millions)202420232022
Components of net periodic pension expense (credit):
Interest cost$5 $5 $4 
Expected return on plan assets(17)(14)(16)
Amortization of net actuarial loss3 7 2 
Net periodic pension credit$(9)$(2)$(10)

The following table indicates the weighted average assumptions used in determining the net periodic benefit cost for the years indicated:

Years Ended December 31,
202420232022
Discount rate4.7 %4.9 %2.6 %
Expected rate of return on plan assets6.8 6.3 6.0 

The long-term objective for the Plan is to maintain assets at a level that will sufficiently cover future beneficiary obligations and to achieve long-term growth in assets.

To achieve the long-term investment objectives, the Trustee will invest the assets of the Plan in a diversified combination of asset classes, investment strategies, and pooled vehicles. The asset allocation guidelines in the table below reflect the plan sponsor’s risk tolerance and long-term objectives for the Plan:

Asset Allocation Parameters by Asset Class
EquityMinimumTargetMaximum
U.S. Large-Cap27%
U.S. Mid-Cap7%
U.S. Small-Cap7%
Non-U.S.14%
Total - Equity45%55%65%
Total - Fixed Income/Cash Equivalents35%45%55%

The parameters for each asset class provide the Trustee with the latitude for managing the Plan within a minimum and maximum range. The Trustee will have full discretion to buy, sell, invest and reinvest in these asset segments based on these guidelines.
The following table presents information about the fair value measurements of the investments held by the Retirement Plan as of December 31, 2024:

(in millions)TotalQuoted Prices in Active Markets for Identical Assets (Level 1)Significant Other Observable Inputs (Level 2)Significant Unobservable Inputs (Level 3)
Equity:
  Large-cap value
$14 $14 $— $— 
  Large-cap growth
28 28 — — 
  Large-cap core
21 21 — — 
  Mid-cap core
17 17 — — 
  Small-cap core
17 17 — — 
  International growth
18 18 — — 
  International value
12 12 — — 
Fixed Income Funds:
  Intermediate - Core Plus
96 96 — — 
Equity Securities:
  Company common stock
9 9 — — 
Common/Collective Trusts-Equity:
  Large cap value
14 — 14 — 
$246 $232 $14 $— 

Current Asset Allocation
The asset allocations for the Retirement Plan were as follows:
December 31,
20242023
Equity securities61 %61 %
Debt securities39 %39 %
Total100 %100 %

Determination of Long-Term Rate of Return
The long-term rate of return on Retirement Plan assets assumption was based on historical returns earned by equities and fixed income securities and adjusted to reflect expectations of future returns as applied to the Retirement Plan’s target allocation of asset classes. Equities and fixed income securities were assumed to earn long-term rates of return in the ranges of 6 percent to 8 percent and 3 percent to 5 percent, respectively, with an assumed long-term inflation rate of 2.5 percent reflected within these ranges. When these overall return expectations are applied to the Retirement Plan’s target allocations, the result is an expected rate of return of 5 percent to 7 percent.

Expected Contributions
The Company does not expect to contribute to the Retirement Plan in 2024.
Expected Future Annuity Payments
The following annuity payments, which reflect expected future service, as appropriate, are expected to be paid by the Retirement Plan during the years indicated:

(in millions)
2025$8 
20268 
20278 
20288 
20298 
2030 and thereafter43 
Total$83 

Qualified Savings Plan (401(k) Plan)

The Company maintains a defined contribution qualified savings plan in the form of a 401(k) plan in which all salaried employees are able to participate after one month of service and having attained age 21. The Company matches a portion of employee 401(k) plan contributions which totaled $28 million and $21 million for the year ended December 31, 2024 and 2023, respectively.

Post-Retirement Health and Welfare Benefits

The Company offers certain post-retirement benefits, including medical, dental, and life insurance (the “Health & Welfare Plan”) to retired employees, depending on age and years of service at the time of retirement. The costs of such benefits are accrued during the years that an employee renders the necessary service.
The Health & Welfare Plan is an unfunded plan and is not expected to hold assets for investment at any time. Any contributions made to the Health & Welfare Plan are used to immediately pay plan premiums and claims as they come due.

The estimated net actuarial loss and the prior service liability that will be amortized from accumulated other comprehensive loss into net periodic benefit cost in 2024 are less than $1 million, respectively.
The net periodic benefit costs and all components thereof for the years-ended December 31, 2024 and 2023 were $2 million and less than $1 million, respectively.

Expected Contributions and Expected Future Payments for Premiums and Claims
The Company expects to contribute $1 million to the Health & Welfare Plan to pay premiums and claims in the fiscal year ending December 31, 2024. Future Payments for premiums and claims are expected to be $1 million or less per year through the life of the Health & Welfare Plan.