FLG Stock Forecast & Price Target

Flagstar Bank's stock outlook is supported by notable growth in commercial and industrial (C&I) loan commitments, which surged by 26% quarter-over-quarter to $2.4 billion in 3Q25, alongside a 41% increase in loan originations to $1.7 billion. The bank's net interest margin has shown consistent improvement, reaching 1.91% for the third consecutive quarter, indicating effective management of interest income relative to interest-bearing liabilities. Furthermore, an increase in commercial and premier deposits, up $1 billion to $8.3 billion, coupled with strategic personnel growth—doubling the number of relationship bankers—positions the bank favorably for future expansion and relationship building with high-net-worth individuals and businesses.

Flagstar Bank has reported a significant decrease in criticized loans, which fell by 19% year-to-date, yet the total remains notably high at $12.1 billion. The bank's average loan balances have also declined by $2.3 billion quarter-over-quarter, driven by elevated payoffs in multifamily and commercial real estate, raising concerns about the effectiveness of its lending strategies. Despite management's efforts to expand its relationship bankers and manage loan performance, the reduction in fee income and a miss on noninterest expenses indicate pressures on profitability, leading to a downward adjustment in earnings per share estimates.