Flagstar CEO recalls tough decisions to 'right the ship'

• Key insight: When Flagstar Bank was in crisis in 2024, incoming CEO Joseph Otting felt the most important thing to do was to "make sure we had the talent" in leadership positions so the bank could survive. 
• Supporting data: Shortly after becoming CEO, Otting hired three of his former colleagues from the Office of the Comptroller of the Currency to take leadership roles at Flagstar.
• Expert quote: "That was kind of like you had a really good company softball team, and then all of a sudden you're in New York Yankee Stadium facing [longtime MLB pitcher] Andy Benes." —Flagstar CEO Joseph Otting

For Joseph Otting, becoming CEO of Flagstar Bank came with a daunting feeling that his team was overmatched.

"That was kind of like you had a really good company softball team, and then all of a sudden you're in New York Yankee Stadium facing [longtime MLB pitcher] Andy Benes," Otting said at a conference in New York on Wednesday. "So it was just a whole different game."

Otting took over at Flagstar two years ago, when the bank was still called New York Community Bancorp and was on the verge of collapse. At Wednesday's New York Banking Summit, hosted by Fitch Ratings and KPMG, the CEO candidly recalled his challenging early days at the helm.

When Otting took the reins in March 2024, NYCB was grappling with steep quarterly losses, a sharp rise in nonperforming loans — particularly in commercial real estate — and a stock price in free fall.

To top it off, the bank was facing a new level of regulatory scrutiny. NYCB had acquired Flagstar Bank in 2021, and in 2023 it bought much of the failed Signature Bank's assets and deposits. In the process, NYCB's total assets crossed the $100 billion threshold, making the bank subject to federal regulators, including the Office of the Comptroller of the Currency, which Otting used to run during the first Trump administration.

All of this made for a difficult introduction to NYCB's top leadership post. On Wednesday, Fitch Ratings managing director Christopher Wolfe asked Otting what he did to "right the ship."

"I think the very first thing we needed to do was make sure we had the talent," Otting said. "We had to go attract a lot of people into the company, both from larger competitors and the OCC, to help us get our organization ready to have a risk structure that matches the size of our company."

After taking office at NYCB, he quickly brought in three of his former OCC colleagues to fill out the bank's leadership team. He also hired veterans of U.S. Bancorp and OneWest Bank, where Otting had held leadership roles.

Of course, this meant many of NYCB's incumbent executives had to be replaced. For example, former Chief Financial Officer John Pinto lost his post to Craig Gifford, a former U.S. Bancorp executive.

"We had a lot of really nice, kind, good people at the bank in a lot of key roles," Otting recalled, but amid the regulatory pressures the bank now faced, "you had to bring in talent that was familiar with being in that type of environment."

Since Otting took the reins, the bank — which rebranded as Flagstar in late 2024 — has not only survived but returned to profitability. Since mid-2024, Flagstar has made progress by slashing expenses, remixing its loan portfolio, reeling in more low-cost deposits and improving its credit quality. In April 2026, the company reported its second consecutive quarter in the black after eight quarters of losses.

"We are doing exactly what we set out to do: strengthening our earnings profile, improving the quality of our balance sheet and building a top-performing regional bank," Otting said in April.

Last month, Flagstar announced that it had extended Otting's contract by one year, meaning he will continue to serve as CEO until at least March 2028.