as nyse fbc industry banking financial services founded flagstar bancorp inc. 1993 as fssb holding corporation ; flagstar bank fsb 1987 as first security savings bank fsb headquarters troy michigan united states key people alessandro dinello president and ceo products mortgage originations mortgage servicing home equity line of credit heloc loans commercial loans retail commercial government & company controlled deposits number of employees 2713 2016 website www.flagstar.com flagstar branch ann arbor mi flagstar bancorp inc. operates as the holding company for flagstar bank a federally chartered stock savings bank . flagstar is the largest publicly traded savings bank headquartered in michigan with assets of over 13 billion in 2016 . flagstar is also a leading mortgage lender and a national leader in the wholesale mortgage business . the bank was chartered in 1987 under the name first security savings bank fsb . a small savings bank in nearby jackson michigan security savings bank was purchased in 1994 . the banking charters of first security savings bank and security savings bank were merged in 1996 and the bank was renamed flagstar . an initial public offering for flagstar bancorp inc. common stock was held in april 1997 and listed on the nasdaq stock market under the symbol flgs . the company s securities listings moved to the nyse on july 13 2001 and trades under the ticker symbol fbc . as of september 2016 flagstar operated 99 branches in michigan having sold their branches in both indiana and georgia in order to focus on their core markets . on december 2 2011 all 22 flagstar branches located in indiana were sold to first financial bank ohio . 1 similarly on december 9 2011 all 27 flagstar branches located in georgia were sold to pnc financial services . 2 additionally flagstar operated 27 home loan centers in 13 states and a total of four commercial banking offices in massachusetts connecticut and rhode island . 3 the company also originates a number of mortgages across the united states through its internet banking branch . principal corporate offices are located in troy michigan . contents 1 current operations 1.1 mortgage originations 1.2 mortgage servicing 1.3 lending activities 1.3.1 home equity line of credit heloc loans 1.3.2 commercial loans 1.4 deposits 2 community relations 3 investment by matlin patterson & u.s. treasury 4 change in management 5 controversies 5.1 the financial crisis of 2008 5.2 predatory lending and mortgage fraud 6 financials 6.1 2011 6.2 2010 6.3 2009 6.4 2008 6.5 2007 6.6 2006 6.7 2005 6.8 2004 7 references 8 external links current operations edit flagstar bank delineates four primary business segments when reporting results . they include mortgage originations mortgage servicing lending activities and deposits . mortgage originations edit flagstar originates and sells one to four family residential mortgage loans . it is one of the top ten mortgage lenders in the united states . 4 mortgage servicing edit flagstar bank services and sub services loans on a fee basis for others and services residential mortgages held for investment in their own portfolio . in 2016 flagstar was given the servicer total achievement and rewards star award from fannie mae in the general servicing category . 5 lending activities edit home equity line of credit heloc loans edit helocs offered by flagstar are secured by a first lien or junior lien on the borrower s residence and allow customers to borrow against the equity in their homes or refinance existing mortgage debt . the heloc underwriting criteria are based on minimum credit scores debt to income ratios and loan to value ratios with current collateral valuations . commercial loans edit flagstar s commercial loans include commercial and industrial commercial real estate and warehouse loans . in 2016 flagstar launched a national home builder finance program which also falls under this category . deposits edit deposits include retail commercial government and company controlled deposits . flagstar acquires deposits through its network of 99 branches located throughout michigan and through its commercial relationships . community relations edit in september 2016 flagstar bank announced it plans 10 million economic development program for pontiac mi . the five year initiative is aimed at helping revitalize the oakland county mi city . the program includes 5 million for home mortgages including programs exclusively for homes in the city of pontiac 2.5 million for businesses and start ups 1.5 million for the previously announced naming rights of the flagstar strand theater for the performing arts along with an investment of 1 million for financial literacy in the community . 6 investment by matlin patterson & u.s. treasury edit in january 2009 flagstar raised 523 million of investment capital from three sources . these included 250 million from matlinpatterson global advisors 266 million from the u.s. treasury s troubled asset relief program capital purchase program and 5.23 million from management . 7 this was in effect a rescue to restore liquidity to the bank and allow them to cover mortgage related losses incurred in their loan portfolio . this initial investment by matlinpatterson was followed up shortly after with an additional 100 million investment to cover deepening losses . 8 a summary of matlinpatterson s flagstar investments follows note flagstar had approximately 8 million shares outstanding prior to these investments adjusted for the 1 10 reverse stock split in 2010 december 2008 purchased 31 250 000 shares for 8 share 9 january 2009 purchased 12 500 00 shares for 8 share 8 january 2010 purchased 42 253 521 shares for 7.10 share in a special rights offering 10 march 2010 purchased 20 000 000 shares for 5 share in a secondary offering 11 october 2010 purchased 250 000 000 shares for 1 share in a private offering this was completed in multiple parts via convertible shares later converted to common after a shareholder vote was held and approved to increase the allowable number of outstanding common shares 12 additional capital was raised from current shareholders in the rights offering and from private equity in the private placement offering see above . of note david einhorn hedge fund manager in early 2010 purchased approximately 16 million of flagstar stock 13 and later liquidated his position in early 2011 . in 2010 the stock traded as high as 10 and closed the year below 2 . the effect of these investments and issuance of new shares had a dilution impact of more than 70 fold on legacy shareholders legacy references shareholders prior to 2008 . shares outstanding rose from less than 8 million to over 555 million . without these investments the bank would have been deemed distressed or insolvent and been required to sell itself or fallen into receivership . 14 equity participation in addition to tarp was a contingent factor in tarp approval and it was unlikely the government would have approved their tarp application otherwise . following the stock market close on october 10 2012 the company effected its second 1 10 reverse stock split 15 per prior recommendation of the flagstar board of directors and shareholder approval at the annual meeting . 16 this action brings flagstar s stock back into compliance with nyse minimum share price requirements and avoids delisting . financials in this article have not yet been adjusted for this second reverse split . following six consecutive quarters of positive earnings as of august 2016 flagstar bank successfully made its final tarp repayment of 371 million . 1 change in management edit on october 1 2009 flagstar s board of directors elected joseph p. campanelli to be president and chief executive officer replacing mark t. hammond . 17 prior to flagstar campanelli worked at sovereign bancorp inc. 18 thomas j. hammond founded flagstar in 1987 and served as chairman of the board since 1993 . mark t. hammond served as vice chairman of the board also since 1993 . 19 on october 2 2012 flagstar bancorp announced that campanelli is resigning as of october 31 as president and ceo of flagstar bancorp to pursue other interests . the board of directors appointed michael tierney president immediately and he became ceo effective october 31 2012 . prior mr. tierney served as executive vice president and managing director of personal financial services at flagstar since february 2011 . 20 controversies edit the financial crisis of 2008 edit in mid august 2009 the bank was named as one of the biggest and worst off of more than 150 u.s. lenders which own nonperforming loans that equal 5 percent or more of their holdings . 5 percent is a threshold that former regulators have stated can wipe out a bank s equity and threaten its survival . flagstar s nonperforming portfolio was more than 10 percent . 21 predatory lending and mortgage fraud edit on february 24 2012 the u.s. department of justice doj filed a complaint in the united states district court for the southern district of new york case no. 12 cv 01392 against the company alleging that for over a decade flagstar had been improperly approving thousands of residential home mortgage loans for government insurance . specifically the doj alleges that the company i used unauthorized staff employees in the loan approval process ; ii paid substantial incentive awards to these unauthorized employees for exceeding certain quotas ; iii permitted underwriters to submit false certifications to the federal housing administration fha and the u.s. department of housing and urban development hud ; and iv misled fha and hud by certifying that the loans had been fully underwritten by properly registered and sufficiently experienced underwriters when they had not . the doj further alleges that as a result of the foregoing thousands of loans were approved for government insurance that did not qualify for insurance and when the loans defaulted hud was forced to cover the losses . 22 on march 13 2012 it was announced that shareholder rights firm robbins umeda llp was investigating possible breaches of fiduciary duty and other violations of the law by certain officers and directors at flagstar bancorp inc. 23 in particular the firm investigated allegations that flagstar violated the false claims act when it improperly endorsed federally insured mortgage loans that eventually defaulted and falsely certified its loan underwriting practices to federal housing authorities . on february 24 2012 the u.s. department of justice filed a complaint against flagstar which alleges that flagstar utilized under qualified underwriting assistants to approve thousands of residential home mortgage loans for federal housing administration insurance . the complaint also alleges that flagstar improperly set daily quotas for the underwriting assistants and paid them substantial incentive awards for exceeding their quotas . while engaging in this scheme the officers and directors of the company not only exposed flagstar to significant liability but represented to the investing public that flagstar was operating in compliance with all applicable laws and regulations . 23 financials edit 2011 edit net earnings thousands 165 643 24 earnings per share basic 0.30 total assets millions 13 637 shares outstanding at year end millions 555.776 return of average equity n a 2010 edit net earnings thousands 393 561 25 earnings per share basic 2.44 total assets millions 13 643 shares outstanding at year end millions 553.313 return of average equity n a 2009 edit net earnings thousands 513 802 26 earnings per share basic 16.20 total assets millions 14 013 shares outstanding at year end millions 46.8771 return of average equity n a 2008 edit net earnings thousands 257 268 27 earnings per share basic 35.70 total assets millions 14 210 shares outstanding at year end millions 8.3627 return of average equity n a 2007 edit net earnings thousands 39 225 earnings per share basic 6.40 total assets millions 15 793 shares outstanding at year end millions 6.0271 return of average equity 5.14 % 2006 edit net earnings thousands 75 202 earnings per share basic 11.80 total assets millions 15 497 return of average equity 9.42 % 2005 edit net earnings thousands