BUZZ-Flagstar's rocky 2024 leads to $3.6 bln loss in market capitalization

Shares of Flagstar Financial FLG.N, formerly known as New York Community Bancorp, fell over 70% YTD

Bank poised to end one of the most tumultuous periods in its 165-year history, having lost nearly $3.6 bln in market value

The frenzied sell-off began with FLG reporting a surprise quarterly loss due to provisions tied to commercial real estate loans and slashing of its dividend in January

More than a month later, the bank disclosed "material weakness" in some internal controls and replaced its management team

FLG's troubles sparked wider concerns about regional banks, threatening to upset the recovery of an industry that had been battered by another crisis in 2023

A $1 bln investment from investors, including former U.S. Treasury Secretary Steven Mnuchin's Liberty Strategic Capital, helped calm FLG investors

The bank also sold some non-core assets to boost capital, but delayed its targeted timeline for a return to profitability in October, highlighting the challenges of its turnaround

Stock is the worst performer on the S&P Composite 1500 banks index .SPCOMBNKS, which has gained ~17% YTD

(Reporting by Niket Nishant in Bengaluru)

((Niket.Nishant@thomsonreuters.com))