Flagstar Bank, National Association, reported a net income of $21 million for the first quarter of 2026, a decrease from $29 million in the previous quarter and a significant recovery from a net loss of $100 million in the same period last year. The net income attributable to common stockholders was $13 million, or $0.03 per diluted share, compared to $21 million, or $0.05 per diluted share in the prior quarter, and a loss of $108 million, or $0.26 per diluted share, a year earlier. The bank's total assets stood at $87.1 billion, with total loans of $60.7 billion and deposits of $66.8 billion.
In terms of net interest income (NII), Flagstar reported $443 million for the quarter, down from $467 million in the previous quarter but up from $410 million a year ago. The net interest margin (NIM) increased slightly to 2.15% from 2.14% in the prior quarter and rose significantly from 1.74% a year earlier. The decrease in NII compared to the previous quarter was attributed to lower yields on the commercial and industrial (C&I) loan portfolio and the absence of a $20 million hedge gain recorded in the prior quarter. However, the year-over-year increase in NII was driven by a reduction in higher-cost deposits and a strategic shift towards higher-earning assets.
Operationally, Flagstar has been focusing on diversifying its loan portfolio, resulting in a $307 million decrease in total loans held for investment compared to the end of 2025. The bank has reduced its multi-family loan concentration while increasing originations in the C&I sector, which saw a $1.4 billion increase in loans. The bank's total deposits increased by $832 million, primarily due to growth in money market accounts and custodial interest-bearing checking accounts, although there was a decline in non-interest-bearing deposits.
Looking ahead, Flagstar is committed to executing its strategic transformation plan aimed at evolving into a fully diversified bank. The bank has made significant progress in diversifying its balance sheet and revenue streams, enhancing its financial resilience, and improving liquidity. The management remains optimistic about the continued execution of this plan, which is expected to drive sustainable earnings and long-term shareholder value. However, the bank also faces challenges, including ongoing legal proceedings and regulatory scrutiny related to its past business practices and recent acquisitions.
About FLAGSTAR FINANCIAL, INC.
Flagstar Financial, Inc. is a bank holding company operating Flagstar Bank, N.A., a regional bank with over 400 locations across ten states. It offers retail banking, private banking, and commercial lending services, focusing on real estate, middle-market, and high-net-worth clients. The company emphasizes deposit gathering, fee-based services, and prudent risk management within a heavily regulated banking environment.
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