Expanded Commercial Banking Team: Flagstar Banks Plans Hiring of 80-90 Banking Professionals in 2023
Flagstar Bank Shifts Focus, Aims for Profitability by 2025
Flagstar Bank, a leading financial institution, is pursuing a strategic overhaul to reposition its business and achieve profitability by the end of 2025. The bank is focusing on expanding its commercial and industrial (C&I) loan portfolio while reducing exposure to commercial real estate (CRE) and multifamily loans.
The C&I loan origination growth has been impressive, with new loans increasing by 42% in Q1 2025 and surging by 57% in Q2 2025 to $1.2 billion in new loans funded. Flagstar aims to hire around 100 commercial bankers by the end of 2025 to support this growth, with 15 bankers added in Q1 and an additional 47 bankers and credit staff in Q2.
Flagstar's C&I loan balance currently stands at $14.4 billion, a 6.2% decrease year-over-year. The bank targets growing this significantly, aiming to reach $1 billion in quarterly C&I loans outstanding and eventually ramping up to $1.5 billion quarterly once fully staffed. The long-term strategic goal is to have C&I loans comprise roughly one-third of its loan portfolio.
The bank is also working to reduce risk by lowering its CRE exposure by over $1 billion in 2025. This move has resulted in a substantial decrease in criticized assets and a stabilization of non-accrual loans.
In addition to these initiatives, Flagstar is streamlining operations and simplifying regulations, targeting profitability in Q4 2025 driven largely by C&I loan expansion and wealth management growth.
However, the bank has reported a quarterly loss of $100 million in its latest earnings report. To cut costs, Flagstar plans to close about 60 retail branches, 20 private-client retail locations, and a couple of operating centers in 2025. Some branch closures will occur at the end of June and early July, with more consolidation planned at the end of September. The bank expects to cut about $750 million in expenses.
Flagstar has already made significant progress in 2025, selling billions of dollars in mortgage loans and its residential mortgage servicing business over the past year. The bank is also making investments in hiring, technology upgrades, and risk governance infrastructure.
In summary, Flagstar Bank is executing a strategic overhaul focusing on building a large, diversified C&I loan portfolio, supported by significant hiring of commercial bankers, while shrinking riskier CRE exposures. This is a cornerstone in the bank’s broader attempt to achieve profitability by the end of 2025.
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- Flagstar Bank, with the aim of attaining profitability by 2025, is concentrating on increasing its business in the finance industry, particularly in the commercial and industrial (C&I) sector, while reducing its commercial real estate (CRE) exposure.
- To support its growth in the fintech sector, Flagstar plans to hire around 100 commercial bankers by the end of 2025, and aims to have C&I loans comprise roughly one-third of its loan portfolio in the long term.
