Stock-Related Benefits Plans

3 Months Ended

Mar. 31, 2023

Share-Based Payment Arrangement [Abstract]

Stock Based Compensation

At March 31, 2023, the Company had a total of 3,613,685 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 5,786,435 shares of restricted stock, with an average fair value of $9.42 per share on the date of grant, during the three months ended March 31, 2023.

The shares of restricted stock that were granted during the three months ended March 31, 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 $8 million and $7 million for the three months ended March 31, 2023 and 2022, respectively.

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


	For the Year Ended March 31, 2023
	Number of Shares	Weighted Average Grant Date Fair Value
Unvested at beginning of year	9,576,602	$	10.92
Granted	5,786,435	9.42
Vested	(2,291,571)	11.50
Forfeited	(298,169)	11.29
Unvested at end of year	12,773,297	$	10.13

As of March 31, 2023, unrecognized compensation cost relating to unvested restricted stock totaled $116 million. This amount will be recognized over a remaining weighted average period of 3.2 years.

The following table provides a summary of activity with regard to Performance-Based Restricted Stock Units ("PSUs") in the three months ended March 31, 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 $1 million, and $0 million for the three months ended March 31, 2023, and March 31, 2022, respectively. As of March 31, 2023, unrecognized compensation cost relating to unvested restricted stock totaled $9 million. This amount will be recognized over a remaining weighted average period of 1.6 years. As of March 31, 2023, the Company believes it is probable that the performance conditions will be met.