Fitch Ratings upgraded Flagstar Bank, N.A. (NYSE: FLG) on March 4, 2026, raising its long‑term deposit rating to BBB‑ and its short‑term deposit rating to F3, both of which are investment‑grade levels.
Prior to the upgrade, Flagstar’s long‑term deposit rating was BB+ and its short‑term rating was B. The bank’s Common Equity Tier 1 (CET1) ratio had risen to 12.83% at the end of 2025, up from 11.9% in Q1 2025 and 9.4% a year earlier, placing it above many peers and exceeding Fitch’s expectations.
The upgrade reflects Flagstar’s progress in de‑risking its loan portfolio, strengthening capital, and improving its funding profile. The bank has expanded its commercial and industrial (C&I) originations to $2.1 billion in Q4 2025 from $542 million in Q4 2024, reduced reliance on wholesale funding and brokered deposits, and cut $4.7 billion of commercial real‑estate exposure—including $3.2 billion in multifamily loans and $900 million in office loans—by January 31, 2025.
Joseph M. Otting, Executive Chairman, President, and CEO, said, "This ratings upgrade is another milestone for our organization… Over the past two years, we have strengthened our balance sheet, enhanced our capital and liquidity positions, improved our asset quality, diversified the loan portfolio through C&I growth, and executed our strategic plan to transform Flagstar Bank into one of the best performing regional banks in the country. We are extremely pleased that these efforts have been recognized by Fitch." He added, "Our edge is big enough to do whatever credit opportunities you want and have products and services to function in a successful manner. We're big enough to do whatever is needed, but small enough for small businesses."
Analysts have offered mixed valuations, with some viewing the bank as undervalued at $13.78 per share and others considering it slightly overvalued at around $12. The rating upgrade is expected to lower funding costs and enhance Flagstar’s competitive position, supporting its return to profitability and reinforcing confidence in its strategic transformation.
The upgrade underscores Flagstar’s successful de‑risking and capital‑strengthening efforts, positioning the bank to capitalize on growth opportunities in regional commercial and corporate banking while maintaining a robust capital buffer.
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