Flagstar Financial, Inc. (FLG) shares surged 5.45% in pre-market trading on Friday following the release of its third-quarter 2025 results and positive outlook. Despite reporting a net loss, investors appeared encouraged by signs of improvement and the company's strategic positioning for future profitability.

The bank reported a net loss attributable to common stockholders of $0.11 per diluted share for Q3 2025, with an adjusted net loss of $0.07 per share. While still in negative territory, these figures represent a narrowing of losses compared to previous quarters. Notably, Flagstar's net interest income came in at $425 million, and the company saw its net interest margin improve by 10 basis points to 1.91%.

Investors seem particularly optimistic about Flagstar's future prospects. The bank stated that the execution of its strategic plan has positioned it to return to profitability in Q4 2025. Additionally, Flagstar provided a positive outlook for 2025, projecting net interest income between $1,700 million and $1,750 million. The company also reported a 3% increase in C&I loans, driven by significant rises in new loan originations and commitments. Furthermore, credit quality showed signs of stabilization, with the provision for credit losses decreasing by 41% and net charge-offs down 38%.