Highlights

  • Third quarter 2026 net income was USD 12 million; net income to common stockholders was USD 3 million.
  • Net interest income rose USD 20 million to USD 460 million; net interest margin rose four basis points to 2.17%.
  • The provision for credit losses was USD 76 million, versus USD 18 million in the second quarter, citing higher rates.
  • Management said full realization of its long-term strategic objectives has shifted to 2028 from 2027.

Flagstar Bank, N.A. (NYSE: FLG) shares closed at USD 10.38 on October 23, 2026, down 9.27%. The bank reported third quarter 2026 results on the same day and updated its financial guidance in an accompanying presentation.

Flagstar Bank, National Association is a national bank with its principal executive offices at 102 Duffy Avenue in Hicksville, New York. It serves commercial, multi-family, commercial real estate and consumer customers, and its strategic plan centers on growing commercial and industrial lending and the private bank while reducing multi-family and commercial real estate exposure. Joseph M. Otting is Executive Chairman and Chief Executive Officer. The bank reports on a calendar year.

Third Quarter 2026 Results

Flagstar reported net income of USD 12 million for the third quarter of 2026, compared with USD 34 million in the second quarter and a net loss of USD 36 million in the third quarter of 2025. Net income attributable to common stockholders was USD 3 million, or USD 0.01 per diluted share, compared with USD 26 million, or USD 0.06, in the second quarter and a net loss of USD 45 million, or USD 0.11, a year earlier.

Net interest income was USD 460 million, up from USD 440 million in the second quarter and USD 425 million in the third quarter of 2025. Non-interest income was USD 70 million, compared with USD 76 million and USD 94 million. Total revenues were USD 530 million, and total non-interest expense was USD 464 million. Pre-provision net revenue was USD 66 million, unchanged from the prior quarter, and adjusted PPNR, a non-GAAP measure, was USD 66 million, up USD 4 million.

Loans, Deposits and Credit

Total loans held for investment were USD 61.9 billion, up USD 958 million from June 30, 2026. Commercial and industrial loans rose USD 2.0 billion, or 11%, to USD 20.6 billion, while the combined multi-family and commercial real estate portfolio fell USD 1.1 billion, or 3%, to USD 34.1 billion. The bank reported a commercial real estate concentration ratio of 346%, compared with 350% the prior quarter.

Total deposits were USD 67.8 billion, up USD 0.3 billion, and commercial banking deposits grew USD 0.6 billion, or 7%. Total assets were USD 87.4 billion.

The provision for credit losses was USD 76 million, compared with USD 18 million in the second quarter and USD 38 million a year earlier. The bank attributed the increase primarily to the impact of higher interest rates, including on its New York City rent-regulated multi-family portfolio. Net charge-offs were 0.49% of average loans, compared with 0.66%. The allowance for credit losses was 1.40% of loans held for investment, and substandard loans increased USD 248 million, or 4%.

Capital

The common equity Tier 1 capital ratio was 12.38%. Book value per share was USD 17.82 and tangible book value per share was USD 17.05, or USD 15.56 adjusted for warrant exercise. The bank said it completed a USD 250 million share repurchase in early October and has USD 1.2 billion of excess capital using the low end of its 10.5% CET1 target range.

Financial Objectives and Guidance

Mr. Otting said that, given a higher-for-longer interest rate environment, the full realization of the bank's long-term strategic objectives has shifted to 2028 from 2027. The presentation states that guidance was adjusted to reflect the higher rate environment and its impact on credit costs, and that the competitive deposit environment is affecting pricing and growth expectations.

The bank's updated guidance shows net interest income of USD 1,815 million to USD 1,830 million for 2026, USD 2,200 million to USD 2,300 million for 2027 and USD 2,600 million to USD 2,700 million for 2028. It shows adjusted diluted earnings per share, a non-GAAP measure, of USD 0.10 to USD 0.15 for 2026, USD 0.85 to USD 0.95 for 2027 and USD 1.60 to USD 1.70 for 2028. These are company expectations.