Flagstar Bank Posts $3M Q3 Profit Despite 8% Drop in Interest Income; Shares Fall 6.68%

Flagstar Bank N.A. (FLG) reported third-quarter net income of $3 million, or $0.01 per share, reversing a $45 million loss a year earlier, though shares fell 6.68% to $10.69 in premarket NYSE trading Friday. The profit was driven primarily by a $22 million income tax benefit, up from $5 million last year; excluding tax, the company posted a $10 million loss, narrower than the prior year's $41 million. Total interest income dropped 8% to $1.012 billion from $1.101 billion, as weak non-interest income offset higher net interest income, which rose 8% to $460 million. Non-interest income fell 26% to $70 million, and the provision for credit losses climbed to $76 million from $38 million, reflecting higher interest rates including on the New York City rent-regulated multifamily loan portfolio. Total loans and leases held for investment rose 2% sequentially to $61.9 billion, while total deposits increased to $67.8 billion from $67.5 billion.