Flagstar Bank Posts Third Consecutive Profit as C&I Lending Gains

The Hicksville-based bank reported that total C&I loans surged by $2 billion, or 12%, during the quarter to reach $18.6 billion. This growth helped offset the bank's ongoing strategic de-risking of its commercial real estate and multi-family portfolios, which saw a combined reduction of $1.5 billion. Executive Chairman and CEO Joseph M. Otting described the results as an inflection point in the bank's transformation into a top-performing regional lender.

Alongside the earnings report, Flagstar announced a $250 million share repurchase program, signaling confidence in its current capital position. The bank maintained a strong CET1 capital ratio of 13.16%. Operating expenses declined by 3% compared to the first quarter, contributing to a positive operating leverage of 7%. While non-accrual loans rose slightly to $2.8 billion, the bank noted that substandard loans declined by 6%, reflecting the stability of its credit quality trends as it pivots its business model.