Flagstar Bancorp Annual Report 2021
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Flagstar Bancorp Annual Report 2021 Form 10-K (NYSE:FBC) Published: February 26th, 2021 PDF generated by stocklight.com UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number: 001-16577 fbc-20201231_g1.jpg Flagstar Bancorp, Inc. (Exact name of registrant as specified in its charter) Michigan 38-3150651 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 5151 Corporate Drive,Troy, Michigan 48098-2639 (Address of principal executive offices) (Zip Code) Registrant’s telephone number, including area code: (248) 312-2000 Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol Name of each exchange on which registered Common Stock, par value $0.01 per share FBC New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes No ☒ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act. Large Accelerated Filer ☒ Accelerated Filer ☐ Smaller Reporting Company ☐ Non-Accelerated Filer ☐ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐. Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒ The estimated aggregate market value of the voting common stock held by non-affiliates of the registrant, computed by reference to the closing sale price ($29.43 per share) as reported on the New York Stock Exchange on June 30, 2020, was approximately $2 billion. The registrant does not have any non- voting common equity shares. As of February 25, 2021, 52,679,147 shares of the registrant’s common stock, $0.01 par value, were issued and outstanding. DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant’s Proxy Statement relating to the 2021 Annual Meeting of Stockholders are incorporated by reference into Part III of this Report on Form 10-K. PART I ITEM 1. BUSINESS 6 ITEM 1A. RISK FACTORS 11 ITEM 1B. UNRESOLVED STAFF COMMENTS 23 ITEM 2. PROPERTIES 23 ITEM 3. LEGAL PROCEEDINGS 23 ITEM 4. MINE SAFETY DISCLOSURES 23 PART II ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND 24 ISSUER PURCHASES ITEM 6. SELECTED FINANCIAL DATA 26 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF 27 OPERATIONS ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 71 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 72 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL 135 DISCLOSURES ITEM 9A. CONTROLS AND PROCEDURES 135 ITEM 9B. OTHER INFORMATION 136 PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS OF THE REGISTRANT AND CORPORATE GOVERNANCE 137 ITEM 11. EXECUTIVE COMPENSATION 137 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED 137 STOCKHOLDER MATTERS ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE 137 ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES 137 PART IV ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES 138 ITEM 16. FORM 10-K SUMMARY 139 GLOSSARY OF ABBREVIATIONS AND ACRONYMS The following list of abbreviations and acronyms are provided as a tool for the reader and may be used throughout this Report, including the Consolidated Financial Statements and Notes: Term Definition Term Definition ACL Allowance for Credit Losses HELOAN Home Equity Loans AFS Available for Sale HELOC Home Equity Lines of Credit Federal National Mortgage Association, Federal Home Loan Mortgage Agencies Corporation, and Government National Mortgage Association, HFI Held for Investment Collectively ALCO Asset Liability Committee HOLA Home Owners Loan Act AOCI Accumulated Other Comprehensive Income (Loss) Home Equity Second Mortgages, HELOANs, HELOCs ASU Accounting Standards Update HPI Housing Price Index Basel III Basel Committee on Banking Supervision Third Basel Accord HTM Held to Maturity BSA Bank Secrecy Act LGG Loans with Government Guarantees C&I Commercial and Industrial LHFI Loans Held-for-Investment CAMELS Capital, Asset Quality, Management, Earnings, Liquidity and Sensitivity LHFS Loans Held-for-Sale CDARS Certificates of Deposit Account Registry Service LIBOR London Interbank Offered Rate CD Certificates of Deposit LTV Loan-to-Value Ratio CECL Current Expected Credit Losses Management Flagstar Bancorp’s Management CET1 Common Equity Tier 1 MBS Mortgage-Backed Securities CLTV Combined Loan-to-Value MD&A Management's Discussion and Analysis Common Stock Common Shares MP Thrift MP Thrift Investments, L.P. CRE Commercial Real Estate MSR Mortgage Servicing Rights CFPB Consumer Financial Protection Bureau N/A Not Applicable The change in the annualized cost of our deposits, divided by the Deposit Beta change in the Federal Reserve discount rate N/M Not Meaningful DIF Deposit Insurance Fund NASDAQ National Association of Securities Dealers Automated Quotations DOJ United States Department of Justice NPL Nonperforming Loan DOJ Liability 2012 settlement Agreement with the Department of Justice NYSE New York Stock Exchange DTA Deferred Tax Asset OCC Office of the Comptroller of the Currency EVE Economic Value of Equity OCI Other Comprehensive Income (Loss) ExLTIP Executive Long-Term Incentive Program PPP Paycheck Protection Program Fannie Mae Federal National Mortgage Association QTL Qualified Thrift Lending FASB Financial Accounting Standards Board Board of Governors of the Federal Reserve, Office of the Comptroller of the Currency, U.S. Department of the Treasury, Consumer Financial Regulatory Agencies Protection Bureau, Federal Deposit Insurance Corporation, Securities FBC Flagstar Bancorp and Exchange Commission FDIC Federal Deposit Insurance Corporation REO Real estate owned and other nonperforming assets, net Federal Reserve Board of Governors of the Federal Reserve System RMBS Residential Mortgage-Backed Securities FHA Federal Housing Administration RSU Restricted Stock Unit FHFA Federal Housing Finance Agency RWA Risk Weighted Assets FHLB Federal Home Loan Bank SEC Securities and Exchange Commission FICO Fair Isaac Corporation SNC Shared National Credit FOAL Fallout-Adjusted Locks SOFR Secured Overnight Financing Rate FRB Federal Reserve Bank TARP preferred TARP Fixed Rate Cumulative Perpetual Preferred Stock, Series C Freddie Mac Federal Home Loan Mortgage Corporation TDR Trouble Debt Restructuring FTE Full Time Equivalent TILA-RESPA Truth in Lending Act-Real Estate Settlement Procedures Act GAAP Generally Accepted Accounting Principles UPB Unpaid Principal Balance Ginnie Mae Government National Mortgage Association U.S. Treasury United States Department of Treasury GLBA Gramm-Leach Bliley Act VIE Variable Interest Entity GNMA Government National Mortgage Association XBRL eXtensible Business Reporting Language 3 FORWARD-LOOKING STATEMENTS Certain statements in this Form 10-K, including but not limited to statements included within the Management’s Discussion and Analysis of Financial Condition and Results of Operations, are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. In addition, we may make forward-looking statements in our other documents filed with or furnished to the SEC, and Management may make forward-looking statements orally to analysts, investors, representatives of the media and others. Generally, forward-looking statements are not based on historical facts but instead represent Management’s current beliefs and expectations regarding future events and are subject to significant risks and uncertainties. Such