11-K 12.31.2011
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
Mark One
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þ | | ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended December 31, 2011
OR |
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o | | TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission File No.: 001-16577
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A. | | Full title of the plan and the address of the plan, if different from that of the issuer named below: |
Flagstar Bank 401(k) Plan
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B. | | Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: |
Flagstar Bancorp, Inc.
5151 Corporate Drive
Troy, MI 48098
TABLE OF CONTENTS
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Financial Statements | |
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| 3 |
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| 4 |
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| 11 |
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| 12 |
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| 16 |
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Note: All other schedules required by Section 2520.103-10 of The Department of Labor Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974 have been omitted because they are not applicable.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Participants and Administrator of
Flagstar Bank 401(k) Plan
We have audited the accompanying statements of net assets available for benefits of Flagstar Bank 401(k) Plan (the “Plan”) as of December 31, 2011 and 2010, and the related statements of changes in net assets available for benefits for the years ended December 31, 2011 and 2010. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Plan is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2011 and 2010, and the changes in net assets available for benefits for the years ended December 31, 2011 and 2010, in conformity with accounting principles generally accepted in the United States of America.
Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule, Schedule H, line 4i-Schedule of Assets (Held at End of Year) as of December 31, 2011, is presented for the purpose of additional analysis and is not a required part of the basic financial statements, but is supplementary information required by the Department of Labor Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedule is the responsibility of the Plan’s management. The supplemental schedule has been subjected to the auditing procedures applied in our audit of the basic 2011 financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic 2011 financial statements taken as a whole.
/s/ Baker Tilly Virchow Krause, LLP
Southfield, Michigan
June 28, 2012
Flagstar Bank 401(k) Plan
Statements of Net Assets Available for Benefits
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| | | | | | | | |
| | December 31, |
| | 2011 | | 2010 |
Assets | | | | |
Investments — at fair value | | | | |
Flagstar Bancorp, Inc. common stock | | $ | 1,295,635 |
| | $ | 2,085,212 |
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Mutual funds | | 70,905,657 |
| | 71,700,891 |
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Money market funds | | 5,670,020 |
| | 7,659,192 |
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Common collective trust fund | | 535,545 |
| | 76,992 |
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Total investments — at fair value | | 78,406,857 |
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| 81,522,287 |
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Receivables | | | | |
Notes receivable from participants | | 3,254,411 |
| | 3,076,019 |
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Other | | 739 |
| | 2,617 |
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Total receivables | | 3,255,150 |
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| 3,078,636 |
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Total assets | | 81,662,007 |
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| 84,600,923 |
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Liabilities — Refundable contributions | | 32,245 |
| | 125,644 |
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Net assets available for benefits reflecting all investments at fair value | | 81,629,762 |
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| 84,475,279 |
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Adjustment from fair value to contract value for interest in common collective trust fund relating to fully benefit — responsive investment contracts | | 24,118 |
| | 9,182 |
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Net assets available for benefits | | $ | 81,653,880 |
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| $ | 84,484,461 |
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The accompanying notes are an integral part of these statements.
Flagstar Bank 401(k) Plan
Statements of Changes in Net Assets Available for Benefits
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| | | | | | | | |
| | For the Years Ended December 31, |
| | 2011 | | 2010 |
Income: | | | | |
Net realized and unrealized (depreciation) appreciation in fair value of investments | | $ | (6,279,010 | ) | | $ | 6,438,476 |
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Interest | | 150,781 |
| | 174,933 |
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Dividends | | 2,148,181 |
| | 1,040,088 |
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Total income (loss) — net | | (3,980,048 | ) | | 7,653,497 |
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Contributions: | | | | |
Participant | | 9,216,539 |
| | 7,982,512 |
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Company | | 1,090,709 |
| | — |
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Rollovers | | 822,209 |
| | 641,116 |
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Total contributions | | 11,129,457 |
| | 8,623,628 |
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Total additions | | 7,149,409 |
| | 16,277,125 |
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Deductions: | | | | |
Participant benefits paid /deemed distributions | | 9,842,122 |
| | 14,336,739 |
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Administrative fees | | 137,868 |
| | 152,126 |
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Total deductions | | 9,979,990 |
| | 14,488,865 |
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Net (decrease) increase in assets available for benefits | | (2,830,581 | ) | | 1,788,260 |
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Net assets available for benefits: | | | | |
Beginning of year | | 84,484,461 |
| | 82,696,201 |
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End of year | | $ | 81,653,880 |
| | $ | 84,484,461 |
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The accompanying notes are an integral part of these statements.
Flagstar Bank 401(k) Plan
Notes to Financial Statements
December 31, 2011 and 2010
Note 1 — Description of Plan
The following description of the Flagstar Bank 401(k) Plan (the “Plan”) provides only general information. Participants should refer to the Plan document for a more complete description of the Plan’s provisions.
General
The Plan is a defined contribution plan available to all employees of Flagstar Bancorp, Inc. (the “Company”) who have met the eligibility service requirements. The Plan includes a salary deferral feature under section 401(k) of the Internal Revenue Code (“IRC”). An employee is eligible to participate in the Plan after three months of service and age 21 or older. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”), as amended.
Contributions
As defined in the Plan, eligible employees may contribute up to 60 percent of their eligible compensation to the Plan in both the years 2011 and 2010 not to exceed the annual Internal Revenue Service (“IRS”) dollar limitation of $16,500. Participants who are age 50 or over at the end of the calendar year, were also able to make additional contributions of up to $5,500 in both the years ending December 31, 2011 and 2010 the annual IRS dollar limit on “catch-up” contributions. Certain participants were also able to contribute amounts representing rollover contributions from other qualified defined benefit or defined contribution plans. In 2009, the Plan was amended to suspend all employer matching contributions effective October 1, 2009 until such time as the Company affirmatively restates such matching contributions. The Plan made no non-discretionary matching contributions in 2010. The Plan was amended as of January 1, 2011, to include a non-discretionary matching contribution in an amount equal to 50 percent of deferral contribution subject to a maximum of 3 percent of a participant's eligible compensation contributed to the Plan. The Plan made $1,090,709 of non-discretionary matching contributions in 2011. The Company may also make discretionary contributions to the Plan. No discretionary contributions were made in 2011 and 2010. All contributions are invested in accordance with the participant’s directive.
Vesting
Participants are immediately vested in their voluntary contributions and related earnings. Vesting in the Company contributions and related earnings is based on a five-year graded vesting schedule. A participant is credited with 20 percent of the Company contributions each year they are employed by the Company until they become 100 percent vested in Company contributions after five years of credited service.
Participant accounts
Individual accounts are maintained for each of the Plan’s participants. Each participant’s account is credited with the participant’s contribution, the Company contribution made on the employee’s behalf and an allocation of Plan earnings based on the participant’s share of net earnings or losses of their respective elected investment options. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account.
Notes receivable from participants
Notes receivable from participants (“loans”) are permitted by the Plan. Participants may borrow a minimum of $1,000 up to the lesser of $50,000 or 50 percent of the participant’s vested account balance, reduced by the highest outstanding loan balance in the preceding 12 months. All loans must be repaid in level payments through after-tax payroll deductions over a five-year period or up to 10 years for the purchase of a primary residence. The loans are collateralized by up to 50 percent of a participant’s account balance and bear interest at rates ranging from 4.25 percent to 9.25 percent, as determined by the Plan administrator at the date of issuance of the loan. Payment of the loan is made in substantially level payments through payroll deductions. Payments of principal and interest are allocated to the investment funds elected for current contributions. A participant may continue to contribute to the Plan while he/she has an outstanding loan balance. Notes receivable from participants are recorded at unpaid principal balance plus accrued but unpaid interest. Upon default, termination of employment or death, loans must be repaid or rolled over within 60 days, or a taxable distribution will be declared. Other loan provisions may apply as defined by the plan document.
Flagstar Bank 401(k) Plan
Notes to Financial Statements — Continued
December 31, 2011 and 2010
Investment options
Upon enrollment in the Plan, a participant may direct contributions in 1 percent increments in any of the available investment options. Participants may change their designation daily.
Payment of benefits
Upon termination of services, retirement, attainment of age 59-1/2, death or disability, the participant or his or her beneficiaries are entitled to receive a distribution or rollover to an IRA or other eligible plan a single lump sum amount equal to the vested amount of his or her account. A participant may also receive a distribution of his or her vested account balance in the case of financial hardship subject to the discretion of the Plan’s administrator.
Forfeitures
If a participant terminates employment, any non-vested portion of the participant’s account is forfeited. Forfeitures are applied to plan expenses and any amounts remaining are then used to reduce the contributions of the Company. Forfeited non-vested accounts totaled $80,000 and $675,000 at December 31, 2011 and 2010, respectively. In 2011, administrative expenses were reduced by $49,000 and employer contributions were reduced by $781,000 from forfeited non-vested accounts. In 2010, employer contributions were reduced by $54,000 in administrative expenses from forfeited non-vested accounts.
Administrative expenses
The Company pays a portion of the Plan’s administrative expenses. Participants pay the applicable fees associated with their loan distributions, withdrawals and stock transactions.
Plan termination
Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan, subject to provisions of the IRC and ERISA. In the event of termination of the Plan, the assets of the Plan shall be distributed to all participants to the extent of the value of each participant’s account after adjustment for liquidation expenses, which were not paid by the Company. In the event of the Plan termination, participants would become 100 percent vested in their Company contributions.
Note 2 — Summary of Accounting Policies
A summary of the significant accounting polices consistently applied in the preparation of the accompanying financial statements follows:
Basis of accounting
The accompanying financial statements have been prepared using the accrual method of accounting in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
Use of estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.
Investment valuation and income recognition
Investments are stated at fair value using the methods described in Note 3. The Statements of Net Assets Available for Benefits and the Statements of Changes in Net Assets Available for Benefits are presented on a contract value basis. Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date.
Flagstar Bank 401(k) Plan
Notes to Financial Statements — Continued
December 31, 2011 and 2010
Fidelity managed income portfolio
The Plan has an investment in the Managed Income Portfolio, a common trust fund of the Fidelity Group Trust for the Employee Benefit Plans (the “Managed Income Portfolio Fund”), which includes benefit-responsive investment contracts. Investment contracts held by a defined-contribution plan are required to be reported at fair value. However, contract value is the relevant measurement attribute for that portion of the net assets available for benefits of a defined-contribution plan attributable to fully benefit-responsive investment contracts because the contract value is the amount participants would receive if they were to initiate permitted transactions under the terms of the Plan. Contract value represents contributions plus earnings, less participant withdrawals and administrative expenses. The Statements of Net Assets Available for Benefits present the fair value of the Managed Income Portfolio Fund and the adjustment from fair value to contract value.
The fair value of the Plan’s investment in the Managed Income Portfolio Fund was $535,545 and $76,992 as December 31, 2011 and 2010, respectively. The contract value of the Plan’s investment in the Managed Income Portfolio Fund was $559,663 and $86,174 as of December 31, 2011 and 2010, respectively.
Payment of benefits
Benefits are recorded upon distribution.
Notes receivable from participants
Notes receivable from participants are valued at unpaid principal balance, plus any accrued but unpaid interest. Delinquent notes receivable from participants are recorded as distributions based on the terms of the Plan document.
Recently adopted accounting standards
In January 2010, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2010-06, Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements which requires new disclosures and clarifies existing disclosures required under current fair value guidance. Under the new guidance, a reporting entity must disclose separately gross transfers in and gross transfers out of Levels 1, 2, and 3 and describe the reasons for the transfers. A reporting entity must also disclose and consistently follow its policy for determining when transfers between levels are recognized. There were no transfers between levels during the years ended December 31, 2011 and 2010, respectively. The new guidance also requires separate presentation of purchases, sales, issuances, and settlements rather than net presentation in the Level 3 reconciliation. The ASU also makes clear the appropriate level of disaggregation for fair value disclosures, which is generally by class of assets and liabilities, as well as clarifies the requirement to provide disclosures about valuation techniques and inputs for both recurring and nonrecurring fair value measurements that fall under Level 2 or Level 3. The new disclosure requirements were effective for the year ending December 31, 2010 with the exception of the requirement to separately disclose purchases, sales, issuances, and settlements which was effective for the Plan year ending December 31, 2011. The Plan adopted the new guidance for the years ended December, 31 2011 and 2010, respectively, and the adoption did not materially affect the Plan’s financial statements.
In September 2010, the FASB issued ASU No. 2010-25, Plan Accounting—Defined Contribution Pension Plans (Topic 962): Reporting Loans to Participants by Defined Contribution Pension Plans, which requires that participant loans be classified as notes receivable and measured at unpaid principal balance plus accrued but unpaid interest. Previously these participant loans were classified as Plan investments, and were subject to the fair value measurement and disclosure requirements of FASB Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures. This new standard eliminated the need to calculate fair values and present disclosures for these loans in accordance with FASB ASC 820. The guidance was effective for fiscal years ending after December 15, 2010, with early adoption permitted. The guidance is applied retrospectively to all periods presented. The Plan adopted this guidance as of January 1, 2010, and reclassified participant loans from plan investments to a component of receivables for both periods presented in the Statements of Net Assets Available for Benefits. Other than the reclassification requirements, the adoption of this standard did not have a material impact on the Plan’s financial statements.
Flagstar Bank 401(k) Plan
Notes to Financial Statements — Continued
December 31, 2011 and 2010
Recent Accounting Pronouncements
In May 2011, the FASB issued ASU No. 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. The amended guidance represents the converged guidance of the FASB and the International Accounting Standards Board (IASB) on fair value measurement. A variety of measures are included in the update
intended to either clarify existing fair value measurement requirements, change particular principles requirements for measuring fair value or for disclosing information about fair value measurements. For many of the requirements, the FASB does not intend to change the application of existing requirements under Accounting Standards Codification (ASC) Topic 820, Fair Value Measurements. ASU 2011-04 is effective for interim and annual periods beginning after December 15, 2011 and early application is not permitted. The adoption of the guidance is not expected to have a material impact on the Plan's financial statements.
Reclassifications
Certain amounts previously reported have been reclassified to conform with current presentation.
Subsequent Events
Management has evaluated the impact of all subsequent events through June 28, 2012, the date the Plan’s financial statements were issued, and determined that all subsequent events have been appropriately recognized and disclosed in the accompanying financial statements.
Note 3 — Fair Value Accounting
The Plan's assets, which are recorded at fair value, are grouped into three levels based on the markets in which the assets are traded and the reliability of the assumptions used to determine fair value. An asset’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement (with Level 1 considered highest and Level 3 considered lowest). A brief description of each level follows:
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• | Level 1 — Fair value is based upon quoted prices for identical instruments in active markets. |
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• | Level 2 — Fair value is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market. |
| |
• | Level 3 — Fair value is generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates that market participants would use in pricing that asset or liability. Valuation techniques may include discounted cash flow models and similar techniques. |
The following is a description of the valuation methodologies used by the Plan for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy.
Flagstar Bancorp, Inc. common stock. Valued at the closing price reported on the active market on which the security is traded and are therefore classified within the Level 1 valuation hierarchy.
Mutual funds. Valued at the net asset value of the shares held by the Plan at year end. The net asset value is based on the fair value of the underlying assets of the assets of the trust, minus its liabilities divided by the number of units outstanding and are therefore classified within the Level 1 valuation hierarchy.
Money market funds. Valued at cost which approximates the net asset value of the shares held by the Plan at year end and are classified within Level 2 of the valuation hierarchy.
Flagstar Bank 401(k) Plan
Notes to Financial Statements — Continued
December 31, 2011 and 2010
Common collective trust fund. Valued as the sum of (a) the fair value of the investments in guaranteed investment contracts (traditional GICs) and security-backed investment contracts that are wrapped by an insurance company, bank or other financial institution as determined by that fund’s trustee (synthetic GICs) and (b) the fair value of the fund’s investments in externally managed collective investment funds as determined by those funds’ trustees. The Plan reports the fair value of the common collective trust fund and measured consistent with the Level 2 methodology for traditional GICs.
The following tables present the Plan’s investments carried at fair value as of December 31, 2011 and 2010, by valuation hierarchy (as described above).
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| | | | | | Investments at |
December 31, 2011 | | Level 1 | | Level 2 | | Fair Value |
Flagstar Bancorp, Inc. common stock | | $ | 1,295,635 |
| | $ | — |
| | $ | 1,295,635 |
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Mutual funds: | | | | | |
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Large Cap | | 26,412,035 |
| | — |
| | 26,412,035 |
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Small Cap | | 2,932,471 |
| | — |
| | 2,932,471 |
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Mid Cap | | 9,223,447 |
| | — |
| | 9,223,447 |
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Blended | | 19,460,446 |
| | — |
| | 19,460,446 |
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Fixed Income | | 7,023,357 |
| | — |
| | 7,023,357 |
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International | | 5,617,679 |
| | — |
| | 5,617,679 |
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Specialty | | 236,222 |
| | — |
| | 236,222 |
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Money market funds | | — |
| | 5,670,020 |
| | 5,670,020 |
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Common collective trust fund | | — |
| | 535,545 |
| | 535,545 |
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Total assets at fair value | | $ | 72,201,292 |
| | $ | 6,205,565 |
| | $ | 78,406,857 |
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December 31, 2010 | | | | | | |
Flagstar Bancorp, Inc. common stock | | $ | 2,085,212 |
| | $ | — |
| | $ | 2,085,212 |
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Mutual funds: | | | | | |
|
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Large Cap | | 28,430,346 |
| | — |
| | 28,430,346 |
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Small Cap | | 3,005,755 |
| | — |
| | 3,005,755 |
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Mid Cap | | 11,074,533 |
| | — |
| | 11,074,533 |
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Blended | | 12,991,557 |
| | — |
| | 12,991,557 |
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Fixed Income | | 6,775,841 |
| | — |
| | 6,775,841 |
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International | | 8,831,567 |
| | — |
| | 8,831,567 |
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Specialty | | 591,292 |
| | — |
| | 591,292 |
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Money market funds | | — |
| | 7,659,192 |
| | 7,659,192 |
|
Common collective trust fund | | — |
| | 76,992 |
| | 76,992 |
|
Total assets at fair value | | $ | 73,786,103 |
| | $ | 7,736,184 |
| | $ | 81,522,287 |
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Flagstar Bank 401(k) Plan
Notes to Financial Statements — Continued
December 31, 2011 and 2010
Note 4 — Investments
The following tables present investments that represent 5 percent or more of the Plan’s net assets.
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| | | | | | | |
| | Number of | | |
December 31, 2011 | | Shares | | Fair Value |
Fidelity Retirement Government Money Market Fund | | 5,539,685 |
| | $ | 5,539,685 |
|
Mutual funds: | | | | |
Fidelity Growth Company Fund | | 111,102 |
| | 8,987,021 |
|
Fidelity Dividend Growth Fund | | 254,668 |
| | 6,588,258 |
|
Fidelity Diversified International Fund | | 213,882 |
| | 5,458,273 |
|
Fidelity Mid-Cap Stock | | 247,592 |
| | 6,600,794 |
|
Spartan US Bond Index Investor Class | | 379,041 |
| | 4,465,100 |
|
Spartan 500 Index Investor Class | | 100,202 |
| | 4,458,001 |
|
December 31, 2010 | | | | |
Fidelity Retirement Government Money Market Fund | | 6,356,849 |
| | $ | 6,356,849 |
|
Mutual funds: | | |
| | |
|
Fidelity Growth Company Fund | | 105,508 |
| | 8,772,999 |
|
Fidelity Dividend Growth Fund | | 264,671 |
| | 7,524,594 |
|
Fidelity Diversified International Fund | | 213,940 |
| | 6,450,295 |
|
Fidelity Mid-Cap Stock | | 249,365 |
| | 7,194,179 |
|
Spartan 500 Index Investor Class | | 96,914 |
| | 4,310,713 |
|
During the years ended December 31, 2011 and 2010, the Plan’s investments (including gains and losses on investments bought and sold, as well as held during the year) appreciated in fair value as determined by quoted market prices as follows.
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| | | | | | | | |
| | For the Years Ended December 31, |
Net realized and unrealized (depreciation) appreciation, in fair value of investments | | 2011 | | 2010 |
Flagstar Bancorp, Inc. common stock | | $ | (1,930,409 | ) | | $ | (2,692,510 | ) |
Mutual funds | | (4,348,601 | ) | | 9,134,440 |
|
Total | | $ | (6,279,010 | ) | | $ | 6,441,930 |
|
Note 5 — Parties-In-Interest
Certain Plan investments are shares of mutual funds managed by Fidelity Management Trust Company. Fidelity Management Trust Company is the trustee as defined by the Plan and, therefore, those transactions qualify as party-in-interest transactions. Pursuant to the Plan agreement, the Company may pay a portion of the administrative expenses of the Plan, at its discretion. Expenses paid to the trustee by the Company amounted to $49,000 and $54,000 for the years ended December 31, 2011 and 2010, respectively. In addition, the Plan trades in the common stock of the Company.
The Plan held 2,565,614 and 1,279,271 shares of Flagstar Bancorp, Inc. common stock as of December 31, 2011 and 2010, respectively. During 2011 and 2010, Flagstar Bancorp, Inc. did not declare or pay any common stock dividends.
Note 6 — Tax Status
The Internal Revenue Service has determined and informed the Company by a letter dated March 31, 2008, that the Plan and related trusts are designed in accordance with applicable sections of the IRC. The Plan was amended, subsequent to the application for favorable determination above, however, the Plan administrator believes that the Plan is designed and is currently
Flagstar Bank 401(k) Plan
Notes to Financial Statements — Continued
December 31, 2011 and 2010
being operated in compliance with applicable requirements of the IRC. Therefore, no provision for income taxes has been included in the Plan’s financial statements.
Accounting principles generally accepted in the United States require plan management to evaluate uncertain tax positions taken by the Plan. The financial statement effects of a tax position are recognized when the position is more likely than not, based on the technical merits to be sustained upon examination by the IRS. The plan administrator has analyzed the tax positions taken by the Plan, and has concluded that as of December 31, 2011 and 2010, there were no uncertain positions taken or expected to be taken. The Plan has recognized no interest or penalties related to uncertain tax positions. The Plan is subject to routine audits by taxing jurisdictions; however, there are currently no audits for any tax periods in progress. The plan administrator believes the Plan is no longer subject to income tax examinations for years prior to 2008.
Note 7 — Risks and Uncertainties
The Plan provides for various investment options in any combination of equity securities, bonds, fixed income securities and other investments with market and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participants’ account balances and the amounts reported in the financial statements.
Note 8 — Amounts Owed to Participants Withdrawing from the Plan
The Plan had no liability to participants who had withdrawn from the Plan as of December 31, 2011 and 2010, respectively.
Note 9 — Reconciliation of Financial Statements to Form 5500
The following is a reconciliation of Statements of Net Assets Available for Benefits per the financial statements to the Form 5500.
|
| | | | | | | | |
| | December 31, |
| | 2011 | | 2010 |
Net assets available for benefits per financial statements | | $ | 81,653,880 |
| | $ | 84,484,461 |
|
Adjustment to fair value from contract-value for investment relating to fully benefit-responsive investment contracts | | (24,118 | ) | | (9,182 | ) |
Net assets available for benefits per Form 5500 | | $ | 81,629,762 |
| | $ | 84,475,279 |
|
The following is a reconciliation of the activity reported within the Statements of Changes in Net Assets Available for Benefits per the financial statements to the Form 5500.
|
| | | | | | | | |
| | For the Years Ended December 31, |
| | 2011 | | 2010 |
Net increase in net assets available for benefits per Financial Statements | | $ | (2,830,581 | ) | | $ | 1,788,260 |
|
Change in adjustment to fair value from contract value for investment relating to fully benefit investment contracts | | 14,936 |
| | 1,727 |
|
Net income per Form 5500 | | $ | (2,815,645 | ) | | $ | 1,789,987 |
|
Supplemental Schedule
Flagstar Bank 401(k) Plan
EIN #38-3150651 Plan #47689
Form 5500, Schedule H, Part IV, line 4(i) — Schedule of Assets (Held at End of Year)
December 31, 2011
|
| | | | | | | |
(a) | (b) Identity of issue, borrower, lessor or similar party | (c) Description of investment including maturity date, rate of interest, collateral, par or maturity date | (d) Cost | (e) Current value |
Common Stock | | | | |
* | Flagstar Bancorp, Inc | 2,565,614 shares of Common Stock | * | * | $ | 1,295,635 |
|
| | | | | |
Mutual Funds | | | | |
| American Beacon | American Beacon International Equity Investor Class | * | * | $ | 74,039 |
|
| Artisan | Artisan Mid Cap Value Class | * | * | 345,633 |
|
* | Fidelity | Fidelity Capital & Income Fund | * | * | 498,019 |
|
* | Fidelity | Fidelity Contra Fund | * | * | 1,614,526 |
|
* | Fidelity | Fidelity Diversified International Fund | * | * | 5,458,273 |
|
* | Fidelity | Fidelity Dividend Growth Fund | * | * | 6,588,258 |
|
* | Fidelity | Fidelity Equity Income Fund | * | * | 1,980,615 |
|
* | Fidelity | Fidelity Freedom 2000 Fund | * | * | 486,929 |
|
* | Fidelity | Fidelity Freedom 2005 Fund | * | * | 30,326 |
|
* | Fidelity | Fidelity Freedom 2010 Fund | * | * | 1,224,863 |
|
* | Fidelity | Fidelity Freedom 2015 Fund | * | * | 1,197,390 |
|
* | Fidelity | Fidelity Freedom 2020 Fund | * | * | 3,979,439 |
|
* | Fidelity | Fidelity Freedom 2025 Fund | * | * | 2,023,996 |
|
* | Fidelity | Fidelity Freedom 2030 Fund | * | * | 3,465,398 |
|
* | Fidelity | Fidelity Freedom 2035 Fund | * | * | 1,949,054 |
|
* | Fidelity | Fidelity Freedom 2040 Fund | * | * | 2,626,661 |
|
* | Fidelity | Fidelity Freedom 2045 Fund | * | * | 913,859 |
|
* | Fidelity | Fidelity Freedom 2050 Fund | * | * | 520,702 |
|
* | Fidelity | Fidelity Freedom Income Fund | * | * | 594,372 |
|
* | Fidelity | Fidelity Growth Company Fund | * | * | 8,987,021 |
|
* | Fidelity | Fidelity Independence Fund | * | * | 1,518,920 |
|
| Fidelity | Fidelity Low Priced Stock Fund | * | * | 2,168,127 |
|
* | Fidelity | Fidelity Mid Capital Stock | * | * | 6,600,794 |
|
* | Fidelity | Fidelity Real Estate Investment Portfolio | * | * | 236,222 |
|
* | Fidelity | Fidelity Small Capital Discovery Fund | * | * | 2,822,699 |
|
| Invesco | Invesco Cvan Kampen Growth & Income Class A | * | * | 74,940 |
|
| Morgan Stanley | Morgan Stanley Institutional Mid Capital Growth Fund Class P | * | * | 108,893 |
|
| Oakmark | Oakmark Equity & Income Class I | * | * | 447,457 |
|
| Oakmark | Oakmark Select Class I | * | * | 1,189,754 |
|
| PIMCO | Pimco Real Return Fund Administrative Class | * | * | 647,363 |
|
| PIMCO | Pimco Total Return Fund Administrative Class | * | * | 847,757 |
|
| Royce | Royce Opportunity Fund Service Class | * | * | 20,268 |
|
| RS | RS Small — Capital Growth Class A | * | * | 89,504 |
|
| Spartan | Spartan 500 Index — Investor Class | * | * | 4,458,001 |
|
| Spartan | Spartan U.S. Bond Index — Investor Class | * | * | 4,465,100 |
|
| Templeton | Templeton Foreign Smaller Cost Class A | * | * | 85,367 |
|
| Templeton | Templeton Global Bond Class A | * | * | 565,118 |
|
| | Total Mutual Funds | | | $ | 70,905,657 |
|
| | | | | |
Money Market Funds | | | | |
| Fidelity | Fidelity Retirement Government Money Market | * | * | $ | 5,539,685 |
|
| Flagstar Bancorp, Inc | Interest-Bearing Cash | * | * | 130,335 |
|
| | Total Money Market Funds | | | $ | 5,670,020 |
|
Flagstar Bank 401(k) Plan
EIN #38-3150651 Plan #47689
Form 5500, Schedule H, Part IV, line 4(i) — Schedule of Assets (Held at End of Year)
December 31, 2011 |
| | | | | | | |
(a) | (b) Identity of issue, borrower, lessor or similar party | (c) Description of investment including maturity date, rate of interest, collateral, par or maturity date | (d) Cost | (e) Current value |
|
Common Collective Trust Fund | | | | |
* | Fidelity | Fidelity Managed Income Portfolio
| * | * | $ | 535,545 |
|
| | | | | |
| | Total Investments — at fair value | | | $ | 78,406,857 |
|
Notes Receivable from Participants | | | | |
* | Participants Loans | Interest rates ranging from 4.25% to 9.25% with various maturity dates | | -0- | $ | 3,254,411 |
|
| | | | | |
| | | | | $ | 81,661,268 |
|
* Party-in-interest to the Plan
** Participant Directed
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.
FLAGSTAR BANK 401(k) PLAN
June 28, 2012 /s/ Laura Anger
Plan Administrator
EXHIBIT INDEX
|
| | |
Exhibit No. | Description | Page No. |
| | |
23 | Consent of Independent Registered Public Accounting Firm | 16 |