Stock-Related Benefits Plans

6 Months Ended

Jun. 30, 2023

Share-Based Payment Arrangement [Abstract]

Stock Based Compensation

At June 30, 2023, the Company had a total of 19,213,596 shares available for grants as restricted stock, options, or other forms of related rights under the 2020 Incentive Plan, which includes the remaining shares available, converted at the merger conversion factor from the legacy Flagstar Bancorp, Inc. 2016 Stock Plan. The Company granted 6,388,840 shares of restricted stock, with an average fair value of $9.57 per share on the date of grant, during the six months ended June 30, 2023.

The shares of restricted stock that were granted during the six months ended June 30, 2023 and 2022, vest over a one- or five years period. Compensation and benefits expense related to the restricted stock grants is recognized on a straight-line basis over the vesting period and totaled $18 million and $14 million for the six months ended June 30, 2023 and 2022, including $9 million and $7 million for the three months ended June 30, 2023 and June 30, 2022.

The following table provides a summary of activity with regard to restricted stock awards:


	For the Six Months Ended June 30, 2023
	Number of Shares	Weighted Average Grant Date Fair Value
Unvested at beginning of year	9,576,602	$	10.92
Granted	6,388,840	9.57
Vested	(2,885,476)	11.08
Forfeited	(592,118)	10.72
Unvested at end of period	12,487,848	$	10.20

As of June 30, 2023, unrecognized compensation cost relating to unvested restricted stock totaled $110 million. This amount will be recognized over a remaining weighted average period of 3.1 years.

The following table provides a summary of activity with regard to Performance-Based Restricted Stock Units ("PSUs") in the six months ended June 30, 2023:


	Number of Shares	Weighted Average Grant Date Fair Value		Performance Period	Expected Vesting Date
Outstanding at beginning of year	794,984	$	10.73
Granted	566,656	8.95
Released	(143,352)	10.34
Forfeited	0	—
Outstanding at end of period	1,218,288	9.95		January 1, 2022 - December 31, 2025	March 31, 2023 - 2026

PSUs are subject to adjustment or forfeiture, based upon the achievement by the Company of certain performance standards. Compensation and benefits expense related to PSUs is recognized using the fair value as of the date the units were approved, on a straight-line basis over the vesting period and totaled $2 million for the three and six months ended June 30, 2023, and $1 million for the three and six months June 30, 2022. As of June 30, 2023, unrecognized compensation cost relating to unvested restricted stock totaled $7 million. This amount will be recognized over a remaining weighted average period of 2.0 years. As of June 30, 2023, the Company believes it is probable that the performance conditions will be met.

The Company matches a portion of employee 401(k) plan contributions. Such expense totaled $10 million and $3 million for the six months ended June 30, 2023 and June 30, 2022, including $4 million and $1 million for the three months ended June 30, 2023 and June 30, 2022.