Moody’s Corporation upgraded Flagstar Bank, N.A.’s credit ratings on April 2, 2026, moving its long‑term deposit rating to Baa3 from Ba1, its short‑term deposit rating to Prime‑3 from Not Prime, and its long‑term issuer rating to Ba3 from B1. The agency maintained a positive outlook, citing the bank’s improved financial performance, the successful remediation of a material weakness in internal controls, progress toward sustainable profitability with a credible path to a return on average assets above 0.5% without outsized credit losses, and a materially strengthened capital position.
The upgrade follows a similar action by Fitch Ratings in March 2026, marking the second major rating agency to lift Flagstar’s ratings in recent weeks. At the end of 2025, the bank reported assets of $87.5 billion, loans of $61.0 billion, deposits of $66.0 billion, and total stockholders’ equity of $8.1 billion, underscoring a solid balance‑sheet foundation that supports the rating improvement.
A higher rating reduces Flagstar’s borrowing costs, broadens its access to capital markets, and signals to investors that the bank’s risk profile has improved. The upgrade also reflects the bank’s ongoing efforts to strengthen credit quality and return to profitability, as highlighted by Executive Chairman, President, and CEO Joseph M. Otting: "Achieving investment grade deposit ratings from two major credit rating agencies reflects the significant progress we have made in strengthening our balance sheet, improving credit quality, and returning the Bank to profitability. Most importantly, this recognition reflects the tremendous dedication and hard work of our entire team."
The rating change is part of a broader turnaround narrative that has attracted investor attention, reinforcing confidence in Flagstar’s strategic execution and financial resilience.
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