MOODY'S RATINGS UPGRADES FLAGSTAR BANK, N.A. CREDIT RATINGS - OUTLOOK REMAINS POSITIVE
Rhea-AI Summary
Flagstar Bank (NYSE: FLG) said Moody's upgraded several credit ratings on April 2, 2026, including Long-Term Deposits to Baa3 (from Ba1) and Short-Term Deposits to Prime-3 (from Not Prime), moving both deposit ratings to investment grade.
Moody's cited improved financial performance, remediation of a material weakness in internal controls, progress toward sustainable profitability (targeting ROAA above 0.5%), and a materially strengthened capital position. At December 31, 2025, Flagstar reported $87.5B assets, $61.0B loans, $66.0B deposits, and $8.1B equity.
Positive
- Deposit ratings upgraded to investment grade (Long-Term Baa3, Short-Term Prime-3)
- Assets $87.5B at December 31, 2025
- Loans $61.0B and deposits $66.0B reported at year-end 2025
- Material weakness remediated in internal controls over financial reporting
- Capital strengthened and credible path to ROAA >0.5%
Negative
- Long-term issuer rating remains Ba3 (still below investment grade)
News Market Reaction – FLG
In the Apr 2 session, FLG gained 0.82%, reflecting a mild positive market reaction.
Data tracked by StockTitan Argus on the day of publication.
Key Figures
Historical Context
| Date | Event | Sentiment | 24h Move | Catalyst |
|---|---|---|---|---|
| Mar 30 | Tech modernization phase | Positive | -1.4% | Completed first phase of data-center consolidation and infrastructure upgrade. |
| Mar 16 | Tech leadership hires | Positive | +3.8% | Added senior technology leaders to drive S2 platform transformation. |
| Mar 10 | Customer service award | Positive | -0.2% | Named Best Bank for Customer Service for U.S. middle market banking. |
| Mar 04 | Conference participation | Neutral | +0.9% | Announced participation in RBC Global Financial Institutions Conference. |
| Mar 03 | Fitch ratings upgrade | Positive | +0.9% | Fitch upgraded long- and short-term deposit and issuer ratings to IG/stable. |
24h Move is the share-price change in the day after each event; other market factors may also have contributed.
Recent positive strategic and recognition news (technology upgrades, awards, rating upgrades) often aligned with modest share gains, though there are instances of sell-offs on good news.
Over the past month, Flagstar reported multiple milestones, including a Fitch credit rating upgrade on Mar 3, 2026, recognition for middle market customer service on Mar 10, and expansion of its technology leadership team on Mar 16. It also advanced a major technology modernization with data-center consolidation by Mar 30. These events highlight balance-sheet strengthening, digital transformation, and franchise recognition, providing context for Moody’s subsequent upgrade as another step in this improving trajectory.
Key Terms
return on average assets financial
internal controls over financial reporting regulatory
forward-looking statements regulatory
fdic-assisted transaction regulatory
reverse stock split financial
AI-generated analysis. How Rhea-AI works. Not financial advice.
Both Long-Term and Short-Term Deposit Ratings Raised to Investment Grade
Moody's upgraded the Bank's Long-Term Deposit rating to Baa3 from Ba1 and its Short-Term Deposit rating to Prime-3 from Not Prime; both are investment grade ratings. In addition, Moody's raised the Bank's Long-Term Issuer rating to Ba3 from B1. In its ratings action, the agency cited as key factors, the Bank's overall improved financial performance, including the successful remediation of a previously identified material weakness in internal controls over financial reporting; progress toward sustainable profitability with a credible path to achieving a consistent Return on Average Assets above
The upgrade follows a similar action by Fitch Ratings in March, reinforcing the continued strengthening of Flagstar's operating performance.
"We are very pleased Moody's reviewed the company and our progress and upgraded several of our ratings, including our long- and short-term deposit ratings to investment grade. This is the second time in the last few weeks that a major rating agency has upgraded Flagstar," said Joseph M. Otting, Executive Chairman, President, and Chief Executive Officer of Flagstar Bank, N.A. "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 investment grade deposit ratings are expected to enhance the Bank's funding profile, expand access to corporate, institutional, and municipal deposit relationships, and support the Bank's continued growth.
Summary of Rating Actions:
Long Term Deposits to Baa3 from Ba1
Short Term Deposits to Prime-3 from Not Prime
Long Term Issuer to Ba3 from B1
Flagstar Bank, N.A.
Flagstar Bank, N.A. is one of the largest regional banks in the country and is headquartered in
Cautionary Statements Regarding Forward-Looking Statements
This release may include forward‐looking statements by us and our authorized officers pertaining to such matters as our goals, beliefs, intentions, and expectations regarding, among other things: (a) revenues, earnings, loan production, asset quality, liquidity position, capital levels, risk analysis, divestitures, acquisitions, and other material transactions, among other matters; (b) the future costs and benefits of the actions we may take; (c) our assessments of credit risk and probable losses on loans and associated allowances and reserves; (d) our assessments of interest rate and other market risks; (e) our ability to achieve profitability goals within projected timeframes and to execute on our strategic plan, including the sufficiency of our internal resources, procedures and systems; (f) our ability to attract, incentivize, and retain key personnel and the roles of key personnel; (g) our ability to achieve our financial and other strategic goals, including those related to our recent holding company reorganization, which was completed in October 2025 (the "Reorganization"), our merger with Flagstar Bancorp, Inc., which was completed in December 2022, our acquisition of substantial portions of the former Signature Bank through an FDIC-assisted transaction, which was completed in March 2023, and our ability to comply with the heightened regulatory standards with respect to governance and risk management programs to which we are subject as a national bank with assets of
Forward‐looking statements are typically identified by such words as "believe," "expect," "anticipate," "intend," "outlook," "estimate," "forecast," "project," "should," "confident," and other similar words and expressions, and are subject to numerous assumptions, risks, and uncertainties, which change over time. Accordingly, actual results or future events could differ, possibly materially, from those anticipated in our statements, and our future performance could differ materially from our historical results. Further, forward‐looking statements speak only as of the date they are made; we do not assume any duty, and do not undertake, to update our forward‐looking statements.
Our forward‐looking statements are subject to, among others, the following principal risks and uncertainties: general economic conditions and trends, either nationally or locally; conditions in the securities, credit and financial markets; changes in interest rates; changes in deposit flows, and in the demand for deposit, loan, and investment products and other financial services; changes in real estate values; changes in the quality or composition of our loan or investment portfolios, including associated allowances and reserves; changes in future allowance for credit losses, including changes required under relevant accounting and regulatory requirements; the ability to pay future dividends; changes in our capital management and balance sheet strategies and our ability to successfully implement such strategies; our ability to achieve the anticipated benefits of the Reorganization; changes in our Board of Directors and our executive management team; changes in our strategic plan, including changes in our internal resources, procedures and systems, and our ability to successfully implement such plan; changes in competitive pressures among financial institutions or from non‐financial institutions; changes in legislation, regulations, and policies; the impacts of tariffs, sanctions and other trade policies of
More information regarding some of these factors is provided in the Risk Factors section of our Annual Report on Form 10‐K for the year ended December 31, 2025 and in other securities reports that we file. Our forward‐looking statements may also be subject to other risks and uncertainties, including those we may discuss in this news release, during investor presentations, or in our securities disclosure filings, which are accessible on our website, on the OCC's website at www.occ.gov and on the SEC's website, www.sec.gov.
Investor Contact:
Salvatore J. DiMartino
(516) 683-4286
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SOURCE Flagstar Bank, N.A.