Flagstar Bank, N.A. reported $3 million in third-quarter net income attributable to common stockholders as its credit-loss provision more than quadrupled from the prior quarter, while net interest income increased.
For the quarter ended Sept. 30, 2026, earnings were $0.01 per diluted share, compared with $26 million, or $0.06 per share, in the second quarter. A year earlier, Flagstar recorded a $45 million loss, or $0.11 per share. Total net income was $12 million, versus $34 million in the prior quarter and a $36 million loss in third-quarter 2025.
In an Oct. 23 earnings release filed with the Securities and Exchange Commission, Flagstar said a federal tax review covering 2019 through 2021 was settled, producing a $22 million tax benefit. The bank recorded a $10 million pretax loss for the quarter.
The provision for credit losses climbed to $76 million from $18 million in the second quarter. Net charge-offs fell by $26 million, or 26%, to $74 million. The allowance for credit losses, including unfunded commitments, was $927 million at quarter-end, up from $925 million on June 30. Flagstar cited higher interest rates, including their impact on New York City rent-regulated multifamily loans, as a source of credit-cost pressure.
Loans and leases held for investment totaled $61.945 billion, an increase of $958 million during the quarter. Commercial and industrial loans grew $2 billion, or 11%, to $20.6 billion, while the combined multifamily and commercial real estate portfolio declined $1.1 billion, or 3%, to $34.1 billion.
Flagstar reported $1.2 billion in commercial real estate payoffs at par, with 35% classified as substandard. Its commercial real estate concentration ratio improved to 346% from 350%. Total deposits rose $299 million, or 0.4%, to $67.820 billion; deposits in Commercial Banking increased $575 million, or 7%.
Net interest income rose 5% from the second quarter to $460 million, and net interest margin gained four basis points to 2.17%. Pre-provision net revenue was unchanged at $66 million. The bank reported a 12.38% common equity Tier 1 capital ratio and said it completed a $250 million share repurchase in early October.
Executive Chairman and CEO Joseph M. Otting said Flagstar’s target for fully realizing its objectives had moved to 2028 from 2027, citing the higher-for-longer interest-rate environment.
