Flagstar Financial, Inc. reported a net loss of $36 million for the third quarter of 2025, a significant improvement from the $70 million loss recorded in the previous quarter. The loss attributable to common stockholders was $45 million, or $0.11 per diluted share, compared to a loss of $78 million, or $0.19 per diluted share, in the second quarter of 2025. For the nine months ending September 30, 2025, the company posted a net loss of $206 million, down from a staggering $930 million loss during the same period in 2024. This reduction in losses is attributed to improved credit trends and a strategic reduction in non-core loan portfolios.
The company’s net interest income (NII) for the third quarter was $425 million, a slight increase from $419 million in the previous quarter, driven by a decrease in interest-bearing deposits and improved yields on loans. However, NII for the nine months ending September 30, 2025, decreased by $437 million compared to the same period in 2024, primarily due to a strategic reduction in multi-family and commercial real estate loans, as well as the sale of its mortgage operations. The net interest margin (NIM) improved to 1.91% in the third quarter, up from 1.81% in the prior quarter.
Flagstar has undergone significant strategic changes, including an internal corporate reorganization that took effect on October 17, 2025, eliminating its holding company structure. This reorganization is expected to enhance operational efficiency and streamline reporting. The company operates approximately 340 locations across nine states, with a strong presence in the New York/New Jersey metropolitan area and growing markets in Florida and the West Coast. As of September 30, 2025, Flagstar reported total assets of $91.7 billion, with loans totaling $63.2 billion and deposits of $69.2 billion.
Operationally, Flagstar has focused on diversifying its loan portfolio, resulting in a decrease in total loans and leases held for investment to $62.7 billion, down from $68.3 billion at the end of 2024. The company has strategically reduced its exposure to multi-family and commercial real estate loans while increasing its commercial and industrial loan originations. The allowance for credit losses on loans and leases decreased to $1.1 billion, reflecting improving credit trends and a reduction in criticized assets. The company’s total deposits also decreased by $6.7 billion compared to the end of 2024, primarily due to the payoff of brokered certificates of deposit.
Looking ahead, Flagstar remains focused on executing its strategic transformation plan aimed at enhancing financial resilience and driving sustainable earnings. The company anticipates that ongoing improvements in credit quality and operational efficiencies will support its long-term growth objectives. However, it acknowledges potential risks related to market conditions, regulatory changes, and the integration of acquired assets, which could impact future performance.
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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