Exactly three years after taking the helm of Flagstar Bancorp (FBC), Joseph Campanelli is moving on.

The $14.4 billion-asset company in Troy, Mich. disclosed late Monday that its board has promoted Michael J. Tierney serve as to president and chief executive. Tierney joined the company in early 2011 as an executive vice president and managing director of personal financial services. He also has served as Midwest president for the company's Flagstar Bank unit. Tierney is set to assume his new role on Nov. 1.

Campanelli plans to serve as CEO and a director until Oct. 31, but the company said he would continue to be available to support Flagstar "in a transitional role." The company said he is resigning to "pursue other opportunities."

"I am proud of all we have accomplished during my time as CEO," said Campanelli in a press release. "I believe that we have turned the corner in addressing many of Flagstar's legacy issues and have built a solid foundation for continued growth and success."

Campanelli joined Flagstar on Oct. 1, 2009, succeeding Mark T. Hammond as the company's president and chief executive. Flagstar had more than $1.1 billion in nonperforming assets at the time, and the news of Campanelli's appointment was welcomed by analysts. Prior to Flagstar, Campanelli led Sovereign Bancorp in Wyomissing, Pa. following the resignation of Jay Sidhu. Campanelli ran Sovereign for two rocky years before leaving in September 2008. That company was sold to Banco Santander SA in 2009.

Under Campanelli's direction, Flagstar retooled itself. It sold nearly half of its nonperforming assets in a bulk sale in late 2010 and exited markets like Atlanta. Meanwhile, he diversified the company's mortgage-heavy balance sheet with more commercial credits and opened a loan production office in New England.

He also returned the company to profitability. In the second quarter, the company reported earnings of $86 million, its first quarterly profit since the second quarter of 2008.

"On behalf of the entire board, I thank Joe for his hard work and all he has helped Flagstar accomplish during a critical time for the company," said David Matlin, a member of the Flagstar board, in a press release. Matlin is also the chief executive of MatlinPatterson Global Advisors LLC, a New York private-equity firm, which has been the main contributor of the more than $1.5 billion Flagstar has raised since early 2009 to keep itself afloat.

While Campanelli improved the company, it is still struggling with the repercussions of the downturn. It had $541 million of nonperforming assets at the end of the second quarter. Also, last week, a U.S. District Judge ruled that Flagstar would stand trial over charges it breached contracts for financial guarantee insurance on roughly $1 billion in residential mortgage-backed securities it issued during the run-up to the financial crisis.

David Treadwell, the lead independent director on Flagstar's board, expressed his confidence in Tierney in the press release.

"Since joining Flagstar early last year, Mike has been an invaluable part of the Flagstar executive team," he said. "Mike has a strong grasp of the Flagstar business and our marketplace, and we believe he is the right person to lead Flagstar as we enter a new phase of growth and development with a renewed Michigan focus."

Prior to joining Flagstar, Tierney was president and chief executive of the Bluewater Bank Group, an investment group formed to purchase Michigan banks.

The company also announced that John D. Lewis, managing director of Donnelly Penman & Partners and former vice chairman of Comerica Bank, has joined the board and will serve as non-executive chairman.

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