Flagstar Bank
| Company type | Subsidiary |
|---|---|
| Industry | Banking, Financial services |
| Founded | 1987 |
| Headquarters | Troy, Michigan , United States |
Area served | United States |
Key people | Alessandro P. DiNello (President and CEO) |
| Products | Mortgage lending, financial services |
| Parent | Flagstar Financial |
Flagstar Bank is a U.S.-based commercial bank with its headquarters located in Troy, Michigan. It functions as a fully owned subsidiary of Flagstar Financial. Established in 1987, the institution serves both consumer and commercial clients, offering mortgage lending and a variety of financial services. As of 2025, Flagstar is undergoing a phased restructuring of its branch network alongside initiatives aimed at reducing operational costs.
History
Originally chartered as a federal savings bank in 1987, First Security Savings Bank was led by chairman Thomas J. Hammond. The bank initially concentrated on retail and wholesale mortgage services within the region. Its holding company, FSSB Holding Corporation, was created in 1993. The following year, it acquired Security Savings Bank based in Jackson, Michigan, and by 1996 the bank adopted the name Flagstar Bank.
Flagstar became a publicly traded company in 1997 through an initial public offering, later transferring its stock listing from the NASDAQ to the New York Stock Exchange in 2001.
Amid the 2008 financial crisis, Flagstar secured $1.6 billion in capital via investments from MP Thrift Investments L.P., participation in the Troubled Asset Relief Program (TARP), and public stock issuances. By August 2016, the bank had completely repaid its TARP obligations.
To comply with NYSE listing requirements, Flagstar conducted reverse stock splits at a ratio of 1:10 in both 2010 and 2012. In 2013, the U.S. Treasury divested its preferred stock holdings to private investors.
Flagstar resolved several major lawsuits related to residential mortgage-backed securities (RMBS) and repurchase commitments, including settlements of $110 million to MBIA (2013), $105 million to Assured Guaranty (2013), $93.5 million to Fannie Mae (2011), and $8.9 million to Freddie Mac (2013). Additionally, in September 2014, it agreed to a $37.5 million payment to the Consumer Financial Protection Bureau for violations concerning mortgage servicing.
In 2013, Flagstar divested a commercial loan portfolio valued at $1.3 billion to CIT Group. The bank served as the jersey sponsor for the Detroit Pistons during the 2017–18 NBA season.
Flagstar broadened its branch footprint through multiple acquisitions: eight branches in San Bernardino County, California from Desert Community Bank in 2018; a mortgage warehouse loan portfolio acquired from Santander Bank that same year; and 52 branches purchased from Wells Fargo across Indiana, Michigan, Ohio, and Wisconsin also in 2018. The transition involving Wells Fargo branches encountered technical difficulties affecting customers; Flagstar addressed these issues by waiving fees, augmenting staff levels, and maintaining direct communication with affected clients.
In 2019, Flagstar launched a dividend distribution program coupled with a $50 million share buyback initiative.
Merger
On April 26, 2021, New York Community Bancorp, Inc. (NYCB) announced an all-stock strategic merger agreement to acquire Flagstar Bancorp, which was finalized on December 1, 2022.
Following Signature Bank’s regulatory closure on March 12, 2023—the third largest bank failure in U.S. history—NYCB’s Flagstar Bank took over nearly all of Signature’s deposits. Approximately $4 billion associated with Signature’s cryptocurrency operations were excluded from this transaction and retained by the FDIC. By March 20, 2023, forty former Signature branches were operating under Flagstar Bank’s brand. The FDIC also facilitated Flagstar’s acquisition of certain loan portfolios previously held by Signature.
In October 2024, New York Community Bancorp rebranded itself as Flagstar Financial, unifying all business segments under the Flagstar name and updating its stock ticker symbol to FLG.
Community
In 2016, Flagstar Bank introduced a $10 million economic development initiative spanning five years in Pontiac, Michigan, aimed at revitalizing the local community. This program dedicated $5 million toward home mortgage financing, including a specialized offering designed specifically for Pontiac residents. Additionally, $2.5 million was set aside to assist small businesses and emerging startups, while $1.5 million funded the naming rights for the Flagstar Strand Theatre for the Performing Arts. The remaining $1 million supported financial education efforts.
Management
Thomas J. Hammond, who founded Flagstar, held the position of chairman for both Flagstar Bank and Flagstar Bancorp. Mark Hammond assumed the role of president in 1995 and advanced to CEO in 2002.
In 2009, Joseph P. Campanelli, formerly CEO of Sovereign Bancorp, was appointed chairman, president, and CEO of Flagstar Bank and Flagstar Bancorp.
Michael J. Tierney, who had served as executive vice president and managing director of personal financial services at Flagstar, took on the roles of president and CEO in 2012. John D. Lewis, previously vice chairman and director at Comerica, was appointed chairman. In 2013, Alessandro P. DiNello succeeded as president, CEO, and director.
Controversy
On February 24, 2012, the United States Department of Justice filed a lawsuit accusing Flagstar of improperly approving thousands of residential mortgage loans for government insurance programs. In February 2013, a U.S. District Court ruled that the bank had significantly violated contractual agreements related to loan quality in the packaging of securities.