Flagstar Bancorp, Inc. operates as the bank holding company for Flagstar Bank, FSB that provides commercial and consumer banking services.
The company operates full service banking branches that offer a full set of banking products to consumer, commercial and government customers. Its banking footprint spans Michigan, Indiana, California, Wisconsin, Ohio and contiguous states.
The company originates mortgages through a network of brokers and correspondents in all 50 states and its own loan off...
Flagstar Bancorp, Inc. operates as the bank holding company for Flagstar Bank, FSB that provides commercial and consumer banking services.
The company operates full service banking branches that offer a full set of banking products to consumer, commercial and government customers. Its banking footprint spans Michigan, Indiana, California, Wisconsin, Ohio and contiguous states.
The company originates mortgages through a network of brokers and correspondents in all 50 states and its own loan officers, including its direct lending team, from retail locations in 28 states and call centers. The company is also a leading national servicer of mortgage loans and provides complementary ancillary offerings, including MSR (mortgage servicing rights) lending, servicing advance lending, and MSR recapture services.
Segments
The company operates through three segments: Community Banking, Mortgage Originations, and Mortgage Servicing.
Community Banking segment
The company’s Community Banking segment serves commercial, governmental and consumer customers in its banking footprint, which spans throughout Michigan, Indiana, California, Wisconsin, Ohio, and contiguous states. The company also serves home builders, correspondents, and commercial customers on a national basis. The Community Banking segment originates and purchases loans, while also providing deposit and fee-based services to consumer, business and mortgage lending customers.
The company’s commercial customers operate in a diversified range of industries, including financial, insurance, service, manufacturing, and distribution. The company offers financial products to these customers for use in their normal business operations, as well as provides financing of working capital, capital investments, and equipment. Additionally, the company’s CRE (commercial real estate) business supports income producing real estate and home builders. The Community Banking segment also offers warehouse lines of credit to non-bank mortgage lenders.
Mortgage Originations segment
This segment is a leading national originator of residential first mortgages. The company’s Mortgage Originations segment utilizes multiple distribution channels to originate or acquire one-to-four family residential mortgage loans on a national scale, primarily to sell. Subsequent to sale, the company retains certain mortgage servicing rights, which are reported at their fair value. The company originates and retains certain mortgage loans in its LHFI (loans held-for-investment) portfolio, which generate interest income in the Mortgage Originations segment.
Mortgage Origination Distribution Channels
Correspondent: As of December 31, 2021, the company had active relationships with more than 570 delegated correspondents and over 510 non-delegated correspondents serving borrowers in all 50 states.
Broker: As of December 31, 2021, the company had active broker relationships with nearly 1,400 mortgage brokers servicing borrowers in all 50 states.
Retail: In the company’s distributed retail channel, loans are originated through the company’s nationwide network of stand-alone home loan centers. The company maintains retail locations in 28 states. In a direct-to-consumer lending transaction, loans are originated through the company’s direct-to-consumer team or from one of the company’s two national call centers, both of which may leverage the company’s existing customer relationships.
Mortgage Servicing segment
The Mortgage Servicing segment services loans when the company holds the MSR asset, and subservices mortgage loans for others through a scalable servicing platform on a fee for service basis. The loans the company services generate custodial deposits, which provide a stable funding source supporting interest-earning asset generation in the Community Banking and Mortgage Originations segments.
The company earns income from other segments for the use of noninterest-bearing escrows. Revenue for serviced and subserviced loans is earned on a contractual fee basis, with the fees varying based on the company’s responsibilities and the delinquency or payment status of the underlying loans. Along with these contractual fees, the company may also collect ancillary fees related to these loans. The Mortgage Servicing segment also services residential mortgages for the company’s LHFI portfolio in the Community Banking segment and its own MSR portfolio in the Mortgage Originations segment for which it earns intersegment revenue on a fee per loan basis.
Loans
Residential First Mortgage Loans: The company originates or purchases various types of conforming and non-conforming fixed and adjustable rate loans underwritten using Fannie Mae (Federal National Mortgage Association) and Freddie Mac (Federal Home Loan Mortgage Corporation) guidelines for the purpose of purchasing or refinancing owner occupied and second home properties. The company typically holds certain mortgage loans in LHFI that do not qualify for sale to the Agencies.
Home Equity: The company’s home equity portfolio includes HELOANs (home equity loans), second mortgage loans, and HELOCs (home equity lines of credit). Second mortgage loans and HELOANs are fixed rate loans and are available with terms up to 20 years. HELOC loans are primarily variable-rate loans that contain a 10-year interest only draw period followed by a 20-year amortizing period.
Other Consumer Loans: The company’s other consumer loan portfolio consists of secured and unsecured loans originated through its indirect lending business, third-party closings, and the company’s Community Banking segment.
Commercial Real Estate Loans: The CRE portfolio contains loans collateralized by diversified property types, which are primarily income producing in the normal course of business. The majority of the company’s retail exposure is to neighborhood centers and single tenant locations, which include pharmacies and hardware stores.
Commercial and Industrial (C&I) Loans: C&I LHFI facilities typically include lines of credit and term loans and leases to businesses for use in normal business operations to finance working capital, equipment and capital purchases, acquisitions, and expansion projects.
Warehouse Lending: The company has a national platform with relationship managers across the country. The company offers warehouse lines of credit to other mortgage lenders, which allow the lender to fund the closing of residential mortgage loans. Each extension, advance, or draw-down on the line is fully collateralized by residential mortgage loans and is paid off when the lender sells the loan to an outside investor or, in some instances, to the bank.
Deposits
As of December 31, 2021, the company’s deposits were retail deposits, such as branch retail deposits (including savings accounts, demand deposit accounts, certificates of deposit/CDARS (Certificates of Deposit Account Registry Service), and money market demand accounts), commercial deposits (such as demand deposit accounts, savings accounts, and money market demand accounts); government deposits, such as savings accounts, demand deposit accounts, certificates of deposit/CDARS, and money market demand accounts; custodial deposits; and wholesale deposits.
Regulation and Supervision
The bank is a federally chartered savings bank, subject to federal regulation and oversight by the Office of the Comptroller of the Currency (OCC). The company is also subject to regulation and examination by the Federal Deposit Insurance Corporation (FDIC), which insures the deposits of the bank to the extent permitted by law and the requirements established by the Board of Governors of the Federal Reserve System (Federal Reserve). The bank is also subject to the supervision of the Consumer Financial Protection Bureau (CFPB), which regulates the offering and provision of consumer financial products or services under federal consumer financial laws.
As a savings and loan holding company, the company is required to comply with the rules and regulations of the Federal Reserve. The company is required to file certain reports, and it is subject to examination by, and the enforcement authority of, the Federal Reserve. Under the federal securities laws, the company is also subject to the rules and regulations of the Securities and Exchange Commission (SEC).
The FDIC insures the deposits of the bank and such insurance is backed by the full faith and credit of the U.S. government through the DIF (Deposit Insurance Fund).
The bank is subject to the affiliate and insider transaction rules applicable to member banks of the Federal Reserve, as well as additional limitations imposed by the OCC.
The bank is subject to the BSA (Bank Secrecy Act) and other anti-money laundering laws and regulations, including the USA PATRIOT Act. The bank is also required to comply with the U.S. Treasury’s Office of Foreign Assets Control imposed economic sanctions that affect transactions with designated foreign countries, nationals, individuals, entities, and others.
Certain key aspects of the Economic Growth, Regulatory Relief, and Consumer Protection Act have the potential to affect the company’s business.
The bank is subject to a number of federal consumer protection laws and regulations. These include, among others, the Truth in Lending Act, the Truth in Savings Act, the Equal Credit Opportunity Act, the Fair Housing Act, the Fair Credit Reporting Act, the Service Members Civil Relief Act, the Expedited Funds Availability Act, the Community Reinvestment Act, the Real Estate Settlement Procedures Act, electronic funds transfer laws, redlining laws, predatory lending laws, laws prohibiting unfair, deceptive or abusive acts or practices in connection with the offer, or sale of consumer financial products or services and the GLBA (Gramm-Leach Bliley Act) and California Consumer Protection Act regarding customer privacy and data security.
The bank is subject to supervision by the CFPB, which has responsibility for enforcing federal consumer financial laws. The bank is subject to the CFPB’s supervisory, examination and enforcement authority.
History
Flagstar Bancorp, Inc. was founded in 1987. The company was incorporated in 1993.
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