Flagstar Bank (NYSE: FLG) extends CEO Otting through 2028 and elevates Co-Presidents
Filing Impact
Filing Sentiment
Form Type
8-K
Rhea-AI Filing Summary
Flagstar Bank, N.A. has extended Executive Chairman and CEO Joseph Otting’s employment agreement in his CEO role through March 6, 2028 and made several leadership changes. Otting will remain Executive Chairman and CEO but relinquish the President title, while Richard Raffetto and Lee Smith become Co-Presidents and Co-Chief Operating Officers with expanded responsibilities across commercial, consumer and operational functions. Smith continues as Chief Financial Officer. Bao Nguyen is named Chief Legal Officer and Chief Operating Officer for Consumer and Retail Banking, with Peter Sullivan becoming General Counsel and Sydney Menefee moving to Chief Audit Executive. Otting’s amended agreement raises his base salary to $1,400,000 from March 6, 2027, sets target annual cash bonuses of $2,250,000 for 2026 and $2,500,000 for 2027, and grants $10,000,000 in restricted stock units vesting quarterly from March 6, 2027 to March 6, 2028. If he resigns for good reason or is terminated without cause before that date, he is entitled to a severance payment equal to two times his base salary and target bonus, plus an additional payment equal to one times his base salary and bonus in effect immediately before March 6, 2028 in exchange for post-employment restrictive covenants. The company highlights these moves as supporting its long-term strategic plan and executive succession planning.
Positive
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Insights
Flagstar extends CEO tenure, formalizes succession track, and increases leadership bandwidth.
Flagstar Bank is locking in CEO Joseph Otting through March 6, 2028 while elevating internal leaders. Co-Presidents Richard Raffetto and Lee Smith now oversee broad commercial, consumer, finance and operations areas, distributing day-to-day responsibilities under a stable CEO framework.
Otting’s amended contract includes a base salary of $1,400,000 from March 6, 2027, target cash bonuses of $2,250,000 for 2026 and $2,500,000 for 2027, plus a $10,000,000 restricted stock unit grant vesting through March 6, 2028. This package closely aligns his incentives with multi‑year performance.
The filing also details a two-times salary and target bonus severance if he leaves for good reason or without cause before March 6, 2028, and a one-times salary and bonus payment tied to post-employment restrictive covenants. These commitments increase fixed obligations but may support continuity as the bank executes its strategic plan and manages prior acquisitions and capital actions disclosed in the forward‑looking section.
8-K Event Classification
3 items: 5.02, 8.01, 9.01
3 items
Item 5.02
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers
Governance
Key personnel changes including departures, elections, or appointments of directors and executive officers.
Item 8.01
Other Events
Other
Voluntary disclosure of events the company deems important to shareholders but not covered by other items.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Total assets: $87.1 billion
Total loans: $60.7 billion
Deposits: $66.8 billion
+5 more
8 metrics
Total assets
$87.1 billion
As of March 31, 2026
Total loans
$60.7 billion
As of March 31, 2026
Deposits
$66.8 billion
As of March 31, 2026
Stockholders' equity
$8.1 billion
As of March 31, 2026
CEO base salary
$1,400,000
Effective March 6, 2027 under amended agreement
CEO target bonus 2026
$2,250,000
Short-term cash incentive program
CEO target bonus 2027
$2,500,000
Short-term cash incentive program
RSU grant value
$10,000,000
Grant to Joseph Otting on May 18, 2026
Key Terms
restricted stock unit award, short-term cash incentive program, Chief Operating Officer, Chief Audit Executive, +2 more
6 terms
restricted stock unit award financial
"Mr. Otting will receive a restricted stock unit award with a grant date fair value of $10,000,000"
A restricted stock unit award is a promise by a company to give an employee a specified number of company shares at a future date if certain conditions are met, such as staying with the company or hitting performance goals. For investors, these awards matter because they can increase the total number of shares outstanding when converted, diluting existing holders, and they align employees’ incentives with shareholders’ interests much like giving a rising bonus that becomes real only after conditions are satisfied.
short-term cash incentive program financial
"target annual cash bonus opportunity of $2,250,000 for 2026 and $2,500,000 for 2027 under the Bank’s short-term cash incentive program"
Chief Operating Officer financial
"will serve as Co-Presidents and Co-Chief Operating Officers of the Bank, effective immediately"
A chief operating officer (COO) is a senior executive responsible for overseeing the day-to-day activities of a company, ensuring that all parts of the organization work smoothly and efficiently. They often act like a company's operational quarterback, translating strategic plans into practical actions. For investors, the COO's effectiveness can influence a company's performance and stability, making them an important figure in assessing the company's management strength.
Chief Audit Executive financial
"Sydney Menefee will shift from leading Strategic Capital & Financial Management to the role of Chief Audit Executive by the end of June"
FDIC-assisted transaction financial
"acquisition of substantial portions of the former Signature Bank through an FDIC-assisted transaction, which was completed in March 2023"
An FDIC-assisted transaction is a deal arranged by the Federal Deposit Insurance Corporation (FDIC) when a bank is failing, where the FDIC helps transfer deposits and assets to another institution or provides financial backstops to complete a sale. Think of it like a referee stepping in to arrange a safe handoff so customers aren’t left hanging; for investors it signals government-managed risk containment that can affect asset values, potential losses, and the stability of counterparties.
material weaknesses in internal control over financial reporting financial
"our previously disclosed material weaknesses in internal control over financial reporting"
A material weakness in internal control over financial reporting is a significant flaw in a company’s processes that increases the likelihood its financial statements could be wrong or misleading. Think of it as a broken checkpoint in an airport security line: if it fails, errors or fraud can pass through undetected. Investors care because these weaknesses raise the risk that reported earnings, assets, or liabilities are inaccurate, which can affect valuation, trust, and investment decisions.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 18, 2026
(Exact Name of Registrant as Specified in Charter)
| (State or Other Jurisdiction of Incorporation) | Commission File Number | (IRS Employer Identification No.) | ||||||||||||
| (Address of principal executive offices) | |||||||||||
(516 ) 683-4100
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Exchange Act:
| Title of each class | Trading symbol(s) | Name of each exchange on which registered | ||||||||||||
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act (17 CFR 230.405) or Rule 12b-2 of the Exchange Act (17 CFR 240.12b-2).
| Emerging growth company | |||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange
Act. ☐
| ITEM 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. | ||||
Effective May 18, 2026, Flagstar Bank, N.A. (the “Bank”) implemented leadership updates which further strengthen the Bank’s executive management team and support the continued execution of its long-term strategic plan, senior executive development, and succession planning.
As part of these planned changes, Joseph M. Otting, Executive Chairman, President, and Chief Executive Officer, will relinquish the title and role of President, while continuing to serve as Executive Chairman and Chief Executive Officer, and Richard Raffetto, Senior Executive Vice President and President of Commercial and Private Banking of the Bank, and Lee Smith, Senior Executive Vice President and Chief Financial Officer of the Bank, will serve as Co-Presidents and Co-Chief Operating Officers of the Bank, effective immediately.
In their expanded roles, Messrs. Raffetto and Smith will assume additional leadership responsibilities across key operational and strategic functions, further enhancing organizational alignment and continuing momentum across the Bank’s business lines. Mr. Raffetto will become the Bank’s Chief Banking Officer and will lead all commercial lending and relationship banking verticals, including commercial real estate, as well as consumer banking and private banking. Mr. Smith will remain Chief Financial Officer overseeing accounting and finance, treasury, investor relations, corporate real estate and vendor management, and mortgage banking. In addition, he will now have oversight for human resources, information technology, and operations. Messrs. Smith and Raffetto will both continue to report to the Chief Executive Officer and work closely with the Board of Directors to support the Bank’s long-term strategic vision.
In addition, effective May 18, 2026, Bao Nguyen, Senior Executive Vice President, General Counsel and Chief of Staff of the Bank, will become the Bank’s Chief Legal Officer and remain Chief of Staff, reporting to the Chief Executive Officer. The Bank’s General Counsel, as well as the strategic planning, regulatory affairs, and community investment functions will report to Mr. Nguyen. He will also add the new role of Chief Operating Officer for Consumer and Retail Banking and in this capacity, he will work with Reggie Davis, Senior Executive Vice President and President of Banking, who will continue to lead the Bank’s consumer and retail banking business. Also, effective upon the changes in Mr. Nguyen’s responsibilities, Peter Sullivan, Senior Deputy General Counsel and Chief Regulatory Counsel of the Bank, will become the Bank’s General Counsel and assume day-to-day management of the Bank’s legal department.
In connection with these planned changes, on May 18, 2026, the Bank entered into an amended and restated employment agreement with Mr. Otting in his role as Executive Chairman and Chief Executive Officer. The amended and restated employment agreement provides for a term ending on March 6, 2028 and may be extended or renewed upon the prior written agreement of the Bank and Mr. Otting. Under the amended and restated employment agreement, Mr. Otting’s base salary will be increased to $1,400,000, effective as of March 6, 2027, and Mr. Otting will have a target annual cash bonus opportunity of $2,250,000 for 2026 and $2,500,000 for 2027 under the Bank’s short-term cash incentive program. In addition, on May 18, 2026, Mr. Otting will receive a restricted stock unit award with a grant date fair value of $10,000,000, based on the opening stock price of the Bank’s common stock on May 18, 2026, which will vest in equal quarterly installments over the period from March 6, 2027 through March 6, 2028. The amended and restated employment agreement provides that if Mr. Otting’s employment is terminated by Mr. Otting for good reason (as defined in the agreement), or by the Bank without cause (as defined in the agreement) prior to March 6, 2028. Mr. Otting will be entitled to receive two times his base salary and target bonus. The amended and restated employment agreement also provides that Mr. Otting will be entitled to receive an amount equal to one times his base salary and bonus in effect as of immediately prior to March 6, 2028 in exchange for agreeing to certain post-employment restrictive covenants,.
Messrs. Raffetto, Smith and Nguyen will not receive any additional cash or equity-based compensation in connection with their appointment to their new roles.
Biographical and other information about Messrs. Raffetto, Smith and Nguyen can be found in the section of the definitive proxy statement on Schedule 14A, filed by the Bank with the Securities and Exchange Commission on April 30, 2026, titled “Executive Officers Who Are Not Directors and Their Business Experience,” which is incorporated herein by reference.
| ITEM 8.01 | Other Events. | ||||
On May 18, 2026, the Bank issued a press release announcing the leadership changes described in Item 5.02. A copy of the press release is included as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
| ITEM 9.01 | Financial Statements and Exhibits | ||||
| Exhibit | Description of Exhibit | |||||||
| No. | ||||||||
| 99.1 | Press release issued by the Bank on May 18, 2026 | |||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |||||||
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
| Date: | May 18, 2026 | Flagstar Bank, National Association | |||||||||
| /s/ Salvatore DiMartino | |||||||||||
| Salvatore DiMartino | |||||||||||
| Executive Vice President and Director of Investor Relations | |||||||||||
102 Duffy Avenue, Hicksville, NY 11801 ● Phone: (516) 683-4420 ● flagstar.com NEWS RELEASE Investor Contact: FOR IMMEDIATE RELEASE Salvatore J. DiMartino (516) 683-4286 FLAGSTAR BANK EXTENDS JOSEPH OTTING’S TERM AS CEO AND ANNOUNCES EXECUTIVE LEADERSHIP UPDATES Joseph Otting’s Employment Agreement in His Role as CEO Extended Through March 2028 Richard Raffetto and Lee Smith Named Co-Presidents and Co-Chief Operating Officers with Expanded Responsibilities Bao Nguyen Named Chief Legal Officer and Chief Operating Officer for Consumer and Retail Banking Sydney Menefee Named Chief Audit Executive Peter Sullivan Named General Counsel HICKSVILLE, N.Y., May 18, 2026 – Flagstar Bank, N.A. (NYSE: FLG) (the “Bank”) today announced several leadership updates which further strengthen the Bank’s executive management team and support the continued execution of its long-term strategic plan, senior executive development, and succession planning. The Board of Directors has approved a one-year extension of Executive Chairman and Chief Executive Officer Joseph M. Otting’s employment agreement in his role as CEO through March 6, 2028. This decision reflects the Board’s confidence in his leadership, the Bank’s return to profitability, and its commitment to ensuring stability and continuity, as the Bank continues to transform into a high-performing regional bank. In addition, Richard Raffetto and Lee Smith will serve as Co-Presidents and Co-Chief Operating Officers, effective immediately. In their expanded roles, Messrs. Raffetto and Smith will assume additional leadership responsibilities across key operational and strategic functions, further enhancing organizational alignment and continuing momentum across the Bank’s business lines. As part of these planned changes, Mr. Otting will relinquish the title and role of President, while continuing to serve as Executive Chairman and Chief Executive Officer. “This transition is a natural next step in the long-term maturity of Flagstar and capitalizes on the depth of talent we have built across our organization,” said Joseph M. Otting, Executive Chairman and Chief Executive Officer. “By expanding Rich’s and Lee’s roles and elevating them to Co-Presidents and Co-Chief Operating Officers, we are promoting their development and benefiting from the deep bench of talent here while positioning the Bank to execute on our strategic plan. I remain fully committed to leading the organization as CEO and Executive Chairman, and I am confident this structure will strengthen our ability to deliver value and exceptional service for our shareholders, employees, customers, and communities.” Messrs. Raffetto and Smith have each held senior leadership positions within the Bank and bring extensive experience to these expanded roles. Mr. Raffetto will become the Bank’s Chief Banking Officer and will lead all commercial lending and relationship banking verticals, including commercial real estate, as well as consumer banking and private banking.
Mr. Smith will remain Chief Financial Officer overseeing accounting and finance, treasury, investor relations, corporate real estate and vendor management, and mortgage banking. In addition, he will now have oversight for human resources, information technology, and operations. Both Messrs. Smith and Raffetto will continue to report to the CEO and work closely with the Board of Directors to support the Bank’s long-term strategic vision. The Bank also announced the following additional leadership changes, also effective immediately. Bao Nguyen, currently General Counsel and Chief of Staff, will become the Bank’s Chief Legal Officer and remain Chief of Staff, reporting to the CEO. The Bank’s General Counsel as well as the strategic planning, regulatory affairs, and community investment functions will report to Mr. Nguyen. He will add the new role of Chief Operating Officer for Consumer and Retail Banking and in this capacity, he will work with Reggie Davis, who will continue to lead Flagstar’s consumer and retail banking business. With the changes in Mr. Nguyen’s responsibilities, Peter Sullivan will become the Bank’s General Counsel and assume day-to-day management of the legal department. In addition, Sydney Menefee will shift from leading Strategic Capital & Financial Management to the role of Chief Audit Executive by the end of June, reporting to the Chair of the Audit Committee and the CEO. Flagstar Bank, N.A. Flagstar Bank, N.A. is one of the largest regional banks in the country and is headquartered in Hicksville, New York. At March 31, 2026, the Bank had $87.1 billion of assets, $60.7 billion of loans, deposits of $66.8 billion, and total stockholders' equity of $8.1 billion. Flagstar Bank, N.A. operates approximately 340 locations across nine states, with strong footholds in the greater New York/New Jersey metropolitan region and in the upper Midwest, along with a significant presence in fast-growing markets in Florida and the West Coast.
Cautionary Statements Regarding Forward-Looking Language This press 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 $50 billion or more; (h) the impact of the $1.05 billion capital raise we completed in March 2024; (i) our previously disclosed material weaknesses in internal control over financial reporting; (j) the conversion or exchange of shares of our preferred stock; (k) the payment of dividends on shares of our capital stock, including adjustments to the amount of dividends payable on shares of our preferred stock; (l) the availability of equity and dilution of existing equity holders associated with future equity awards and stock issuances; (m) the effects of the reverse stock split we effected in July 2024; and (n) the impact of the 2024 sale of our mortgage servicing operations, third party mortgage loan origination business, and mortgage warehouse business. 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. Additionally, 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. Furthermore, because forward-looking statements are subject to assumptions and uncertainties, 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. 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 the United States and its global trading counterparts; the outcome of federal, state, and local elections and the resulting economic and other impact on the areas in which we conduct business; the impact of changing political conditions or federal government shutdowns; the imposition of restrictions on our operations by bank regulators; the outcome of pending or threatened litigation, or of investigations or any other matters before regulatory agencies, whether currently existing or commencing in the future; our ability to comply with heightened regulatory standards with respect to governance and risk management programs to which we are subject as a national bank with assets of $50 billion or more; the restructuring of our mortgage business; our ability to recognize anticipated cost savings and enhanced efficiencies with respect to our balance sheet and expense reduction strategies; the impact of failures or
disruptions in or breaches of our operational or security systems, data or infrastructure, or those of third parties, including as a result of cyberattacks or campaigns; the impact of natural disasters, extreme weather events, civil unrest, international military conflict, terrorism or other geopolitical events; and a variety of other matters which, by their nature, are subject to significant uncertainties and/or are beyond our control. Our forward-looking statements are also subject to the following principal risks and uncertainties with respect to our merger with Flagstar Bancorp, which was completed in December 2022, and our acquisition of substantial portions of the former Signature Bank through an FDIC-assisted transaction, which was completed in March 2023: the possibility that the anticipated benefits of the transactions will not be realized when expected or at all; the possibility of increased legal and compliance costs, including with respect to any litigation or regulatory actions related to the business practices of acquired companies or the combined business; diversion of management's attention from ongoing business operations and opportunities; the possibility that we may be unable to achieve expected synergies and operating efficiencies in or as a result of the transactions within the expected timeframes or at all; and revenues following the transactions may be lower than expected. 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 SEC reports we file. Our forward-looking statements may also be subject to other risks and uncertainties, including those we may discuss in this news release, on our conference call, 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.
FAQ
How long has Flagstar Bank (FLG) extended CEO Joseph Otting’s term?
Flagstar Bank extended CEO Joseph Otting’s employment agreement in his CEO role through March 6, 2028. The Board states this reflects confidence in his leadership, the Bank’s return to profitability, and a desire for stability while it continues transforming into a high-performing regional bank.
What are the key executive leadership changes announced by Flagstar Bank (FLG)?
Flagstar named Richard Raffetto and Lee Smith as Co-Presidents and Co-Chief Operating Officers, expanded Bao Nguyen’s role to Chief Legal Officer and COO for Consumer and Retail Banking, appointed Peter Sullivan as General Counsel, and moved Sydney Menefee to Chief Audit Executive.
What compensation changes were made to CEO Joseph Otting’s agreement at Flagstar Bank (FLG)?
Otting’s base salary will increase to $1,400,000 effective March 6, 2027, with target annual cash bonuses of $2,250,000 for 2026 and $2,500,000 for 2027. He will also receive $10,000,000 in restricted stock units vesting quarterly from March 6, 2027 through March 6, 2028.
What severance protections does Flagstar Bank’s CEO have under the new agreement?
If Joseph Otting resigns for good reason or is terminated without cause before March 6, 2028, he is entitled to two times his base salary and target bonus. He also receives an additional one times base salary and bonus in effect immediately before that date for agreeing to post-employment restrictive covenants.
Did other Flagstar Bank (FLG) executives receive extra pay with their new roles?
The filing states that Richard Raffetto, Lee Smith, and Bao Nguyen will not receive any additional cash or equity-based compensation specifically for their new titles and expanded responsibilities. Their leadership changes focus on organizational alignment, development, and succession planning rather than immediate pay adjustments.
How large is Flagstar Bank (FLG) based on the latest figures in the filing?
As of March 31, 2026, Flagstar Bank reported $87.1 billion in assets, $60.7 billion in loans, deposits of $66.8 billion, and total stockholders’ equity of $8.1 billion. It operates about 340 locations across nine states with strong regional footholds.