Flagstar Cuts 2027 Adjusted EPS Outlook, Pushes Long-Term Objectives to 2028

Flagstar Bank, N.A. cut its 2027 diluted adjusted EPS forecast to $0.85-$0.95 from $1.60-$1.70 and shifted the full realization of its long-term objectives to 2028 amid higher rates and credit costs.

The bank’s new 2028 diluted adjusted EPS forecast is $1.60-$1.70. Its 2026 forecast is $0.10-$0.15, down from $0.40-$0.50. Flagstar also raised its 2027 provision-for-loan-losses outlook to $175 million-$225 million, compared with the previous $100 million-$150 million range. Its 2026 provision forecast is $160 million-$170 million, versus $90 million-$140 million previously.

Flagstar tied the outlook changes to higher-for-longer interest rates and their effects on credit costs. It also pointed to greater competition for deposits, which is affecting pricing and growth expectations.

The revised forecasts follow Flagstar’s third-quarter results. Net income attributable to common stockholders was $3 million, or $0.01 per diluted share, compared with $26 million, or $0.06 per share, in the second quarter. Provision for credit losses increased to $76 million from $18 million.

Net interest income rose 5% quarter over quarter to $460 million, while net interest margin increased 4 basis points to 2.17%. Commercial and industrial loans grew $2 billion to $20.6 billion. The combined multifamily and commercial real estate portfolio declined $1.1 billion to $34.1 billion.

At Sept. 30, Flagstar had $87.4 billion in assets, $62.1 billion in loans and $67.8 billion in deposits.