Thrifts & Mortgage Finance Stocks Q1 Results: Benchmarking Flagstar Financial (NYSE:FLG)

June 22, 2025 at 23:32 PM EDT

FLG Cover Image

Wrapping up Q1 earnings, we look at the numbers and key takeaways for the thrifts & mortgage finance stocks, including Flagstar Financial (NYSE: FLG) and its peers.

Thrifts & Mortgage Finance institutions operate by accepting deposits and extending loans primarily for residential mortgages, earning revenue through interest rate spreads (difference between lending rates and borrowing costs) and origination fees. The industry benefits from demographic tailwinds as millennials enter prime homebuying age, technological advancements streamlining the loan approval process, and potential interest rate stabilization improving affordability. However, significant headwinds include net interest margin compression during rate volatility, increased competition from fintech disruptors offering digital-first experiences, mounting regulatory compliance costs, and potential housing market corrections that could impact loan portfolios and default rates.

The 22 thrifts & mortgage finance stocks we track reported a slower Q1. As a group, revenues missed analysts’ consensus estimates by 18.5%.

In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.

Flagstar Financial (NYSE: FLG)

Tracing its roots back to 1859 and rebranded from New York Community Bancorp in 2024, Flagstar Financial (NYSE: FLG) is a bank holding company that offers commercial and consumer banking services, with specialties in multi-family lending, mortgage originations, and warehouse lending.

Flagstar Financial reported revenues of $490 million, down 22.6% year on year. This print fell short of analysts’ expectations by 4%. Overall, it was a slower quarter for the company with a significant miss of analysts’ net interest income estimates.

Commenting on the Company's first quarter 2025 performance, Chairman, President, and Chief Executive Officer, Joseph M. Otting stated, "I am very pleased with our solid financial results and operating performance during the quarter, as we continue to make progress on returning to profitability, executing on our strategic plan, and transforming the Company into a top-25 performing regional bank. In 2024, we successfully built capital, improved liquidity, and enhanced the credit quality of our loan portfolio. As a result, we begin the year in a strong balance sheet position with a CET1 capital ratio of around 12%, ACL reserve coverage of 1.82%, and ample liquidity of about $30 billion.

Interestingly, the stock is up 2.2% since reporting and currently trades at $11.52.

Read our full report on Flagstar Financial here, it’s free.

Best Q1: Northwest Bancshares (NASDAQ: NWBI)

Founded in 1896 and operating across Pennsylvania, New York, Ohio, and Indiana, Northwest Bancshares (NASDAQ: NWBI) is a bank holding company that operates Northwest Bank, providing personal and business banking, investment management, and trust services.

Northwest Bancshares reported revenues of $156.2 million, up 19% year on year, outperforming analysts’ expectations by 9.9%. The business had a stunning quarter with an impressive beat of analysts’ EPS and net interest income estimates.

The market seems content with the results as the stock is up 3.2% since reporting. It currently trades at $12.19.

Is now the time to buy Northwest Bancshares? Access our full analysis of the earnings results here, it’s free.

Weakest Q1: Dynex Capital (NYSE: DX)

Operating in the financial markets since 1988 with a focus on capital preservation during economic turbulence, Dynex Capital (NYSE: DX) is a mortgage real estate investment trust that invests primarily in government-backed residential mortgage securities to generate income for shareholders.

Dynex Capital reported revenues of $17.13 million, up 637% year on year, falling short of analysts’ expectations by 22.4%. It was a disappointing quarter as it posted a significant miss of analysts’ EPS estimates.

As expected, the stock is down 1.8% since the results and currently trades at $12.25.

Read our full analysis of Dynex Capital’s results here.

AGNC Investment (NASDAQ: AGNC)

Born during the 2008 financial crisis when mortgage markets were in turmoil, AGNC Investment (NASDAQ: AGNC) is a real estate investment trust that primarily invests in mortgage-backed securities guaranteed by U.S. government agencies or enterprises.

AGNC Investment reported revenues of $78 million, down 83.3% year on year. This print missed analysts’ expectations by 73.6%. It was a slower quarter as it also logged a slight miss of analysts’ tangible book value per share estimates.

The stock is up 13.5% since reporting and currently trades at $9.28.

Read our full, actionable report on AGNC Investment here, it’s free.

PennyMac Financial Services (NYSE: PFSI)

Founded during the 2008 financial crisis to help address the mortgage market meltdown, PennyMac Financial Services (NYSE: PFSI) is a specialty financial services company that originates, services, and manages investments related to residential mortgage loans in the United States.

PennyMac Financial Services reported revenues of $430.9 million, up 41% year on year. This result lagged analysts' expectations by 17.2%. Overall, it was a disappointing quarter as it also produced a miss of analysts’ tangible book value per share and EPS estimates.

The stock is down 6.3% since reporting and currently trades at $95.40.

Read our full, actionable report on PennyMac Financial Services here, it’s free.

Market Update

The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.

Want to invest in winners with rock-solid fundamentals? Check out our 9 Best Market-Beating Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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