Flagstar Financial appoints Richard Raffetto as president of commercial and private banking

Flagstar Financial, Inc. (NYSE:FLG), a $4.6 billion financial institution currently rated as having weak financial health according to InvestingPro metrics, announced Monday that its subsidiary, Flagstar Bank, National Association, has entered into an employment agreement with Richard Raffetto, who will serve as Senior Executive Vice President and President of Commercial and Private Banking.

According to a statement in the company’s SEC filing, Mr. Raffetto’s agreement, effective July 1, 2025, includes an annual base salary of $700,000 and eligibility for an annual cash bonus with a target amount of $700,000. Starting in the fourth year of employment, he will be eligible to participate in the company’s long-term equity incentive program and receive annual equity awards on the same basis as other senior executives, as determined by the company.

Mr. Raffetto will also participate in the bank’s benefit plans and will receive reimbursement for relocation expenses to the New York City metropolitan area.

The agreement outlines terms for potential termination of employment. If Mr. Raffetto is terminated for cause, resigns without good reason, or his employment ends due to death or disability, he will be entitled to certain accrued benefits through the termination date. If he resigns for good reason or is terminated without cause, he will be eligible for continued health care benefits and a lump sum payment equal to his base salary and target bonus for the period from the termination date until the third anniversary of the agreement’s effective date.

The agreement includes post-employment restrictions, such as a 12-month non-solicitation period for customers and employees, a six-month non-competition clause regarding direct competition with the company’s material businesses, perpetual confidentiality, and mutual non-disparagement provisions.

This information is based on a statement from Flagstar Financial’s SEC filing.

In other recent news, Flagstar Bank has been the focus of several analyst updates and strategic moves. Jefferies initiated coverage with a Buy rating and a $15.00 price target, citing improved credit quality and operational efficiencies. DA Davidson also maintained its Buy rating with a $14.50 target, expressing confidence in the bank’s strategic direction and its potential return to profitability by late 2025. Additionally, Citi raised its price target to $15.50, highlighting Flagstar’s legal actions against Pinnacle Group as a positive step in addressing nonperforming loans.

Flagstar’s recent shareholder meeting resulted in the election of three directors and the ratification of KPMG LLP as the independent auditor for the fiscal year ending December 2025. Shareholders also voted on executive compensation, with a majority in favor. These developments come as Flagstar Bank continues to navigate through a challenging financial landscape, focusing on expanding its commercial and industrial loan portfolio while reducing exposure to the multifamily loan sector.

The bank’s proactive legal strategy, including the filing for a court-ordered receiver against Pinnacle Group, is seen as a move to secure loan repayments. This action involves 90 loans with a principal balance of approximately $590 million, representing a significant portion of Flagstar’s nonperforming loans. Analysts believe that these efforts, along with cost optimization plans, could enhance Flagstar’s financial stability and growth prospects in the coming quarters.

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