Flagstar Bank, National Association (FLG)

Flagstar Bank reported third-quarter 2026 net income of $12 million on 23 October, down from $34 million in the second quarter 1. Net income attributable to common stockholders was $3 million, or $0.01 per diluted share 1.

Net interest income, the gap between what the Bank earns on loans and securities and what it pays on deposits and borrowings, rose $20 million to $460 million 1. The provision for credit losses, money set aside for loans that may not be repaid, rose $58 million to $76 million 1.

Chief executive Joseph Otting said a higher interest rate environment, deposit competition, persistent inflation and rent regulation of New York City apartment loans pressured credit costs 1. He said the full realization of the Bank's long-term objectives has shifted to 2028 from 2027 1.

Lending is changing shape, the Bank reports 1. Total loans rose $958 million to $61.9 billion, and commercial and industrial loans rose $2.0 billion to $20.6 billion 1. The multi-family and commercial real estate book fell $1.1 billion to $34.1 billion 1.

An open question is New York City's freeze on rents for certain rent-regulated properties, effective October 1, 2026, which the Bank lists among its risks 1.

The Bank was organized under Delaware law on July 20, 1993, and says it went public in 1993 3. It grew by itself and through a series of mergers and acquisitions 3. Its formal name is Flagstar Bank, National Association, and the holding company above it was once called New York Community Bancorp 9.

Its core business was lending against New York City apartment buildings 3. The 10-K says the vast majority of its multi-family loans are backed by rental apartment buildings in New York City 3. At the end of 2024, multi-family loans were 49.9 percent of loans held for investment 3.

Two deals changed its size, and the filings date both 13. The merger with Flagstar Bancorp was completed in December 2022, and in March 2023 it bought parts of Signature Bridge Bank from the Federal Deposit Insurance Corporation without a cash payment 13. It also assumed all of Signature's branches 3.

Interest income on earning assets was $5,491 million in 2023, $5,952 million in 2024 and $4,466 million in 2025 3. The jump in 2023 came from a much larger loan book after the Signature deal, and the fall since then from the Bank shrinking that book on purpose 3.

Accounting made 2023 look unusual 3. Non-interest income of $2,687 million included a $2,131 million gain on the Signature purchase, booked because the assets acquired were worth more than what was paid 3. Costs included a $2,426 million goodwill impairment, a write-down of the price paid for earlier acquisitions 3.

Trouble followed 3. A shareholder class action filed on February 6, 2024 alleges the Bank's disclosures about its business and its commercial real estate loans were misleading 3. The Bank reported a provision for credit losses of $1,092 million in 2024 3.

In March 2024 it completed a $1.05 billion capital raise, with Liberty 77 Capital agreeing to an investment under an agreement dated March 7, 2024 16. In July 2024 it carried out a reverse stock split, and during 2024 it sold its mortgage servicing, third-party mortgage origination and warehouse lending businesses 13.

In 2025 the Bank cut costs 3. Operating expenses fell to $1,913 million from $2,596 million, led by compensation and benefits, down to $976 million from $1,263 million 3. The provision for credit losses fell $908 million to $184 million 3.

The 2025 net loss was $177 million against $1.1 billion in 2024, and the Bank says it reached profitability in the three months ended December 31, 2025 3. On October 17, 2025 the former holding company was merged into the Bank, which became the company that files these reports 3.

In 2026 commercial lending drove the story 8. Commercial and industrial loans rose $2.0 billion, or 12 percent, to $18.6 billion in the second quarter of 2026 8. On 24 July 2026 the board authorized a repurchase of up to $250 million of stock over 12 months 7.

How the Bank is built

Flagstar says it operates in a single reportable segment, so the filing gives no split of revenue by product 3. Its main income is net interest income, the gap between interest earned on loans and securities and interest paid on deposits and borrowings 3.

At the end of 2025 loans held for investment were $60,732 million: multi-family $28,983 million, commercial and industrial $15,217 million, commercial real estate $9,314 million, one-to-four family mortgages $5,630 million and other loans $1,588 million 3.

Commercial and industrial lending

This is the growth engine 2. These are loans to businesses, and the Bank describes a national model with fast decisions, aimed at specific industries such as oil and gas, power and renewables, sports, healthcare and technology 2.

At September 30, 2026 the book was $20,579 million 2. Specialized Industries was $8,048 million, Equipment Finance $4,333 million and Corporate and Regional Commercial Banking $2,619 million 2. Public Finance and Other was $2,371 million, Asset-Based Finance $2,242 million and Mortgage Finance $967 million 2.

In the third quarter the Bank reported $2.9 billion of originations, 70 new relationships and a $2.7 billion pipeline of commitments 2. It targets companies with revenues above $50 million for its regional commercial banking effort 2.

Multi-family and commercial real estate

This is the older core, now being reduced 2. Multi-family loans fell from $28.8 billion on September 30, 2025 to $24.1 billion a year later, and the Bank says it has taken $739 million of net charge-offs on them since January 2024 2.

Commercial real estate payoffs at par were $1.2 billion in the third quarter, 35 percent of them rated substandard, and the concentration ratio improved to 346 percent from 350 percent 1. Non-accrual loans were $2,817 million, 4.55 percent of loans held for investment 1.

Deposits, branches and private banking

The Bank operates approximately 320 retail locations and 20 Private Banking Offices across nine states 1. It has footholds in New York, New Jersey and the upper Midwest 1. Regional headquarters are in Troy, Michigan 3.

Deposits were $67.8 billion on September 30, 2026: retail $36.0 billion, private bank $16.7 billion, commercial $9.2 billion and mortgage $3.1 billion 2. The Bank says insured deposits were 78 percent, against a peer average of 56 percent 2.

Capital

The common equity tier 1 ratio, a measure of loss-absorbing capital, was 12.38 percent at September 30, 2026 and 13.16 percent at June 30 1. The minimum to be classed well capitalized is 6.5 percent 1.

The Bank says it completed a $250 million repurchase of its common stock in early October 1.

People

Joseph Otting is Executive Chairman and Chief Executive Officer, and the board extended his employment agreement as chief executive through March 6, 2028 5. On May 18, 2026 Richard Raffetto and Lee Smith became Co-Presidents and Co-Chief Operating Officers 5.

Raffetto is Chief Banking Officer, leading commercial lending, consumer and private banking, and Smith remains Chief Financial Officer 5. The workforce was 5,631 employees at December 31, 2025, none under a collective bargaining agreement 3.

Alessandro DiNello told the Bank on March 25, 2026 he would not stand for re-election on June 9 6. Eli Miller of Liberty Strategic Capital joined the board from April 1 6.

Rivals and competition

The 10-K names the kinds of rivals: other banks, credit unions, online banks and fintech companies for deposits, and capital markets and larger institutions for commercial loans 3. It names no single rival 3.

Current problems

The securities class action filed on February 6, 2024 remains pending, and the 10-K says the range of reasonably possible losses beyond amounts accrued is immaterial 3. The Bank also reports past material weaknesses in internal control as a litigation topic 3.

As a national bank with assets of $50 billion or more, it must meet heightened regulatory standards for governance and risk management 1. Its main regulator is the Office of the Comptroller of the Currency 3.

The umbrella, in words

Brands: the bank sells under the Flagstar name; two subsidiaries still carry the older NYCB name, NYCB Insurance Agency and NYCB Mortgage Company 4.

Subsidiaries: the 10-K exhibit lists 28 active subsidiaries, 22 owned directly by the Bank and 6 by Bank-owned entities 4. Examples are Flagstar Mortgage Securities, Flagstar Advisors, Flagstar Public Funding Corp. and Long Lake REIT 4.

Stakes: the Bank invested in Figure Technology Solutions, Inc. and reported a $30 million gain in 2025 once that company listed 3. In the second quarter of 2026 it reported a $4 million gain on a sale of that investment 8.

Land and property: the Bank owns its Long Island headquarters, some branches and back-office buildings in New York, Ohio, Florida and Michigan, and leases sites in New Jersey, Arizona, California, Indiana and Wisconsin 3.

Control: Liberty 77 Capital L.P. reported 113,520,361 shares, about 24.9 percent of the common stock, in a Schedule 13D amendment 9. The event date was October 17, 2025 9.

Steven T. Mnuchin is a reporting person on that filing and was elected a director at the annual meeting on June 9, 2026 912.

BlackRock reported 38,244,089 shares, 9.2 percent, as of September 30, 2026 10. RCP Eagle Holdings LP, tied to Reverence Capital Partners, reported 35,981,113 shares, 8.65 percent, as of December 31, 2025 11.

The Bank cut its financial forecasts on 23 October 2. In its third-quarter presentation it said progress toward its strategic priorities is on track, but given a higher for longer interest rate environment its 2027 financial objectives have shifted to 2028 2.

Its net income guidance is $85 million to $95 million for 2026, $400 million to $500 million for 2027 and $800 million to $900 million for 2028 2. The prior 2027 range was $800 million to $900 million 2.

Guidance for net interest income is $1,815 million to $1,830 million for 2026, $2,200 million to $2,300 million for 2027 and $2,600 million to $2,700 million for 2028 2. The net interest margin guidance is 2.15 to 2.20 percent, 2.55 to 2.65 percent and 2.85 to 2.95 percent 2.

Its long-term targets are a return on assets of 1 percent or more, a return on tangible equity of 11 to 12 percent and a capital ratio of 10.5 to 11.5 percent 2. It also gives adjusted earnings per share of $0.85 to $0.95 for 2027 and $1.60 to $1.70 for 2028 2.

The Bank said it plans to hire up to an additional 5 to 10 Specialized Industries bankers and up to 5 to 10 Corporate and Regional Commercial Banking producers in the fourth quarter of 2026 2.

Management said the proposed Basel III Endgame rules could add 60 to 80 basis points to its common equity tier 1 ratio, and that capital priorities include organic growth and capital actions 2.

Scheduled dates: the New York City rent freeze took effect October 1, 2026 on certain rent-regulated properties, which the Bank lists as a risk to its results 1. Mr. Otting's agreement as chief executive runs through March 6, 2028 5.

The 10-K schedules multi-family and commercial real estate loans to reprice or mature: $7,090 million in 2026, $9,885 million in 2027 and $7,146 million in 2028, before the loans excluded from its table 3.