8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):July 17, 2012

Flagstar Bancorp, Inc.

(Exact name of registrant as specified in its charter)

Michigan	1-16577	38-3150651
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)
5151 Corporate Drive, Troy, Michigan		48,098
(Address of principal executive offices)		(Zip Code)

(248) 312-2000

(Registrant's telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition

On July 17, 2012, the Company issued a press release regarding its results of operations and financial condition for the three and six months ended June 30, 2012. The text of the press release is included as Exhibit 99.1 to this report. The Company will include final financial statements and additional analysis for the three and six months ended June 30, 2012 as part of its Quarterly Report on Form 10-Q.

The information in this Item 2.02, including the exhibit attached hereto, is furnished pursuant to Item 2.02 and shall not be deemed "filed" for any other purpose, including for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that Section. The information in this Item 2.02 of this Current Report on Form 8-K shall not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended (the "Securities Act"), or the Exchange Act regardless of any general incorporation language in such filing.

Item 7.01 Regulation FD Disclosure

On July 18, 2012, the Company held a quarterly conference call to review second quarter 2012 earnings and furnished a slide presentation to accompany the call. A copy of the slide presentation used by the Company on the conference call is furnished as Exhibit 99.2 to this Current Report on Form 8-K and incorporated by reference herein.

The information in this Item 7.01, including the exhibit attached hereto, is furnished pursuant to Item 7.01 and shall not be deemed "filed" for any other purpose, including for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that Section. The information in this Item 7.01 of this Current Report on Form 8-K shall not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act regardless of any general incorporation language in such filing.

Item 9.01 Financial Statements and Exhibits

	Exhibits.
99.1	Press release of Flagstar Bancorp, Inc. dated July 17, 2012
99.2	Flagstar Bancorp, Inc. Conference Call Presentation Slides - Second Quarter 2012 Financial Results

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

	FLAGSTAR BANCORP, INC.
Dated: July 18, 2012		By:	/s/    Paul D. Borja
			Paul D. Borja
			Executive Vice-President and Chief Financial Officer

Exhibit Index

Exhibit No.	Description
99.1	Press release of Flagstar Bancorp, Inc. dated July 17, 2012
99.2	Flagstar Bancorp, Inc. Conference Call Presentation Slides - Second Quarter 2012 Financial Results

EX-99.1

EXHIBIT 99.1

NEWS RELEASE

For more information, contact:

Paul D. Borja

Executive Vice President / CFO

Bradley T. Howes

Investor Relations Officer

(248) 312-2000

FOR IMMEDIATE RELEASE

Flagstar Announces Return to Profitability in Second Quarter 2012

Reports second quarter 2012 net income of $86.0 million, or $0.15 per share, and year-to-date 2012 net income of $77.3 million, or $0.13 per share;

Continuing improvements in consumer credit quality

TROY, Mich. (July 17, 2012) - Flagstar Bancorp, Inc. (NYSE:FBC) (the “Company”), the holding company for Flagstar Bank, FSB (the “Bank”), today announced its return to profitability, reporting second quarter 2012 net income applicable to common stockholders of $86.0 million, or $0.15 per share, as compared to a first quarter 2012 net loss of $(8.7) million, or $(0.02) per share and a second quarter 2011 net loss of $(74.9) million, or $(0.14) per share. For the six months ended June 30, 2012, net income applicable to common stockholders totaled $77.3 million, or $0.13 per share, as compared to a net loss of $(106.6) million, or $(0.19) per share during the same period in 2011.

"I am very pleased to report strong net income for the second quarter and for the first six months of 2012," said Joseph P. Campanelli, Chairman of the Board, President and CEO. "Returning to profitability following an extended period of losses marks a major milestone for our bank, and is the culmination of countless hours of hard work and dedication by our employees. While we are excited about reaching this significant milestone, we recognize that we still have a great deal of work ahead of us. We have made great progress in transforming Flagstar into a diversified super-community bank, and we remain committed to delivering diversified products and exceptional service to our customers and generating value for our shareholders."

Campanelli continued, "Our second quarter performance reflects the earnings power of our industry-leading mortgage banking franchise and a continued focus on risk management and controlling credit costs, while at the same time, adding reserves to the balance sheet. We also continued to see improvements in our consumer loan credit quality, with total delinquent consumer loans decreasing for the third consecutive quarter."

Second Quarter Highlights:

• Gain on loan sale income increased to $212.7 million, reflecting a margin of 1.66 percent, as compared to $204.9 million, reflecting a margin of 1.89 percent, in the prior quarter.

• Bank net interest margin remained relatively flat at 2.37 percent, as compared to 2.41 percent in the prior quarter.

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• Tier 1 capital ratio (to adjusted total assets) increased to 9.07 percent and total risk-based capital ratio (to risk-weighted assets) increased to 17.03 percent.

• Significant liquidity at quarter-end, with cash on hand and interest-earning deposits of $1.3 billion, in addition to over $600 million in unused borrowing capacity at the Federal Home Loan Bank of Indianapolis (FHLB).

• Total reserves increased by $25.0 million from the prior quarter, with the allowance for loan losses increasing to $287.0 million and the representation and warranty reserve increasing to $161.0 million.

• Total delinquent loans (i.e., 30 days or more past due) held-for-investment decreased slightly from the prior quarter.

Second quarter 2012 net income of $0.15 per share (diluted) was based on average shares outstanding of 561,821,000, as compared to a first quarter 2012 net loss of $(0.02) per share (diluted) based on average shares outstanding of 556,623,000 and a second quarter 2011 net loss of $(0.14) per share (diluted) based on average shares outstanding of 553,946,000.

For the six months ended June 30, 2012, the net income of $0.13 per share (diluted) was based on average shares outstanding of 560,082,000, as compared to the net loss of $(0.19) per share (diluted) based on average shares of 553,752,000 during the same period 2011.

Net Interest Income

Second quarter 2012 net interest income was generally unchanged at $75.5 million, as compared to $74.7 million for the first quarter 2012. Net interest margin for the Bank compressed slightly to 2.37 percent for the second quarter 2012, from 2.41 percent for the first quarter 2012. The slight decrease in net interest margin for the Bank primarily reflects the lower interest rate environment during the second quarter 2012. Yields on interest-earning assets declined at a greater rate than the rates paid on interest-bearing liabilities, partially offset by an increase in average interest-earning assets.

Average interest-earning assets increased to $12.9 billion in the second quarter 2012, as compared to $12.6 billion for the first quarter 2012. This increase was primarily driven by an increase in the average balance of available for sale mortgage loans due to the increase in mortgage originations during the quarter, and an increase in commercial loans held-for-investment driven by new commercial relationships.

The Company's average cost of funds for the second quarter 2012 decreased to 1.72 percent, an improvement from the prior quarter of 1.76 percent. This decline was driven primarily by an increase in lower-cost retail core deposits from prior quarter. The average cost of total retail deposits declined during the second quarter 2012 to 0.98 percent, as compared to 1.06 percent during the first quarter 2012.

Non-interest Income

Second quarter 2012 non-interest income increased to $240.3 million, as compared to $221.4 million for the first quarter 2012. Excluding the provision related to the representation and warranty reserve (discussed in Credit-Related Costs and Asset Quality below), non-interest income increased to $286.4 million for the second quarter 2012, as compared to $281.9 million for the first quarter 2012. The increase was primarily due to higher net gain on loan sales, which was reflective of strong consumer demand for the refinancing of residential mortgage loans in a declining interest rate environment. Additionally, the Company believes it has been able to strategically take advantage of opportunities given the current displacement in the mortgage market.

Second quarter 2012 net gain on loan sales increased to $212.7 million, as compared to $204.9 million for the first quarter 2012. This increase from the prior quarter was a result of increases in both residential first mortgage rate lock commitments and sales of residential first mortgage loans.

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Gain on loan sale margin is calculated based on residential first mortgage rate lock commitments and actual sales of residential first mortgage loans, and is net of sales expenses, hedging costs and provisions related to the representation and warranty reserve (i.e., the portion of the reserve established at the time of sale). Gain on loan sale margin declined to 1.66 percent for the second quarter 2012, as compared to 1.89 percent for the first quarter 2012, due to increased hedging costs resulting from a more rapid declining rate market during second quarter 2012, as compared to the first quarter 2012. Residential first mortgage rate lock commitments increased 17.9 percent to $17.5 billion for the second quarter 2012, as compared to $14.9 billion for the first quarter 2012. Loan sales of residential first mortgage loans also increased for the second quarter 2012 to $12.8 billion, as compared to $10.8 billion for the first quarter 2012.

Residential first mortgage loan originations, which are principally comprised of agency-eligible residential first mortgage loans, increased to $12.5 billion for the second quarter 2012, as compared to $11.2 billion for the first quarter 2012.

Loan fees and charges increased to $34.8 million for the second quarter 2012, as compared to $30.0 million for the first quarter 2012, reflecting the increase in residential first mortgage loan originations during the quarter.

Net servicing revenue, which is the combination of net loan administration income (including the economic hedges of mortgage servicing rights) and the gain (loss) on trading securities (i.e., the on-balance sheet hedges of mortgage servicing rights), decreased to $28.7 million for the second quarter 2012, as compared to $32.9 million for the first quarter 2012. This decrease from the prior quarter reflects a lower value of mortgage servicing rights in the second quarter 2012, principally as a result of an increase in prepayment speeds due to the refinancing of consumer mortgages from the decline in interest rates during the quarter. This decline in value was substantially offset by income generated from both the economic hedges (e.g., U.S. Treasury and Eurodollar futures, swap futures, and “to be announced” forwards) and the on-balance sheet hedges.

Non-interest Expense

Second quarter 2012 non-interest expense declined to $169.5 million, as compared to $188.7 million for the first quarter 2012. The 10.2 percent decrease in non-interest expense from prior quarter was primarily driven by decreases in asset resolution expense, warrant expense, and general and administrative expense. Excluding asset resolution expense (discussed in Credit-Related Costs and Asset Quality below), non-interest expense declined to $148.6 million for the second quarter 2012, as compared to $152.0 million for the first quarter 2012. The efficiency ratio, as adjusted to exclude credit-related costs, improved to 41.2 percent for the second quarter 2012, as compared to 42.6 percent for the first quarter 2012 (see non-GAAP reconciliation).

Compensation and benefits were $65.4 million for the second quarter 2012, relatively flat as compared to $66.0 million for the first quarter 2012. Commission expense increased to $17.8 million for the second quarter 2012, as compared to $15.5 million for the first quarter 2012, as a result of the 12.3 percent increase in residential first mortgage loan originations during the quarter.

Warrant income for the second quarter 2012 was $(0.6) million, as compared to an expense of $2.5 million in the first quarter 2012, reflecting the decrease in the quarterly valuation of the outstanding warrant liability arising from the decrease in the market price of the Company's common stock at June 30, 2012, as compared to March 31, 2012.

Balance Sheet and Funding

Total assets at June 30, 2012 were $14.4 billion, as compared to $14.0 billion at March 31, 2012. The increase from the prior quarter was primarily the result of a $512.4 million increase in cash and cash equivalents arising from a short-term, period-end increase in company-controlled deposits.

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Loans are primarily funded with deposits obtained through banking centers in Michigan and from public units, as well as from deposits obtained in prior years from investment banking firms and not yet matured. Funds are also obtained through loan repayments and sales of loans and securities in the ordinary course of business, advances from the FHLB in varying maturities depending on current needs, customer escrow accounts and security repurchase agreements. Several of these sources are relied on at different times to address daily and forecasted liquidity needs for operational requirements and policy levels while managing overall net interest costs and interest rate risk.

At June 30, 2012, the Bank had approximately $1.3 billion of cash on hand and interest-earning deposits, as compared to $757.9 million at March 31, 2012. The Bank also maintains a line of credit with the FHLB under which borrowings are collateralized by residential first mortgage loans and other assets of the Bank. At June 30, 2012, the Bank's outstanding long-term borrowings on the FHLB line of credit were approximately $3.4 billion, with no short-term borrowings outstanding. At June 30, 2012, the Bank also had approximately $650 million of collateralized borrowing capacity available.

Credit-Related Costs and Asset Quality

For the second quarter 2012, total credit-related costs decreased to $127.6 million, as compared to $213.6 million for the first quarter 2012 (see non-GAAP reconciliation).

The allowance for loan losses at June 30, 2012 increased to $287.0 million, as compared to $281.0 million at March 31, 2012. The increase from prior quarter was primarily attributable to an increase in residential first mortgage loan modifications (also referred to as troubled debt restructurings) and an increase in historical loss rates, which are updated quarterly. These increases were partially offset by a decrease in commercial allowance for loan losses, as older loans (originated prior to 2009) with higher loss rates paid off and were partially replaced by new originations with lower loss rates.

At June 30, 2012, the ratio of the allowance for loan losses to loans held-for-investment was 4.4 percent and the ratio of the allowance for loan losses to non-performing loans held-for-investment was 66.5 percent, as compared to 4.2 percent and 69.1 percent, respectively, at March 31, 2012.

The provision for loan losses in the second quarter 2012 decreased to $58.4 million, as compared to $114.7 million for the first quarter 2012. The decline in second quarter 2012 provision for loan losses primarily reflects a lower level of net charge-offs for the second quarter 2012. In the prior quarter, the Company wrote-off its specific valuation allowances related to residential and commercial loans over 180 days past due, and no longer carries such allowances.

Total non-performing loans increased to $431.6 million at June 30, 2012, as compared to $406.6 million at March 31, 2012. The increase from the prior quarter was driven by a $45.8 million increase in non-performing commercial loans, substantially all of which was related to commercial real estate loans originated prior to 2009. Non-performing consumer loans decreased by $20.8 million from the prior quarter, partially offsetting the increase in non-performing commercial loans.

Total delinquent loans decreased to $522.5 million at June 30, 2012, as compared to $533.4 million at March 31, 2012, primarily due to decreases in the 30-59 days past due and the 60-89 days past due loans.

The Company maintains a representation and warranty reserve on the balance sheet, which reflects its estimate of probable losses that it may incur on loans that have been sold or securitized into the secondary market, primarily to the government sponsored entities ("GSEs"). At June 30, 2012, the representation and warranty reserve was $161.0 million, a 13.4 percent increase, as compared to $142.0 million at March 31, 2012. The representation and warranty reserve reflects an increase in pending loan demands from the GSEs and changes in loss severity rates. In the second quarter 2012, provisions related to the representation and warranty reserve, other than as included in our gain on sale computations, were $46.0 million, as compared to $60.5 million for the first quarter 2012.

4

Asset resolution expense, which includes expenses associated with foreclosed properties (including the foreclosure claims in process with respect to government insured loans for which we file claims with the U.S. Department of Housing and Urban Development) decreased to $20.9 million for the second quarter 2012, as compared to $36.8 million for the first quarter 2012. This decrease from the prior quarter was primarily attributable to a reduction in expected losses from loans repurchased with government guarantees, a reduction in foreclosure costs, and an improvement in recoveries.

Capital

The Bank was considered “well-capitalized” for regulatory purposes at June 30, 2012, and had regulatory capital ratios of 9.07 percent for the Tier 1 capital ratio (to adjusted total assets) and 17.03 percent for the total risk-based capital ratio (to risk-weighted assets). At June 30, 2012, the Company had a Tier 1 common capital ratio (to risk-weighted assets) of 9.60 percent and an equity-to-assets ratio of 8.20 percent.

Earnings Conference Call

As previously announced, the Company's quarterly earnings conference call will be held on Wednesday, July 18, 2012 from 11 a.m. until noon (Eastern).

Questions for discussion at the conference call may be submitted in advance by e-mail to investors@flagstar.comor asked live during the conference call.

The conference call and accompanying slide presentation will be webcast live on the Investor Relations section of the Company's website, www.flagstar.com, with replays available at that site for at least 10 days.

To listen by telephone, please call at least 10 minutes prior to the start of the conference call at (800) 344-6491 toll free or (785) 830-7988 and use passcode: 4797176.

About Flagstar

Flagstar Bancorp, Inc. is a full-service financial services company, offering a range of products and services to consumers, businesses, and homeowners. With $14.4 billion in total assets at June 30, 2012, Flagstar is the largest publicly held savings bank headquartered in the Midwest. As of June 30, 2012, Flagstar operated 111 branches in Michigan, 30 home loan centers in 13 states, and a total of four commercial banking offices in Massachusetts, Connecticut, and Rhode Island. Flagstar originates loans nationwide and is one of the leading originators of residential first mortgage loans. For more information, please visit flagstar.com.

Non-GAAP

This press release contains both financial measures based on accounting principles generally accepted in the United States (GAAP) and non-GAAP based financial measures, which are used where management believes it to be helpful in understanding the Company's results of operations or financial position. Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found in this press release. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.

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Forward Looking Statements

This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements, by their nature, involve estimates, projections, goals, forecasts, assumptions, risks and uncertainties that are difficult to predict and could cause actual results or outcomes to differ materially from those expressed in a forward-looking statement. Forward-looking statements contained in this press release and any information related to expectations about future events or results are based upon information available to the Company as of the date hereof. Forward-looking statements can be identified by such words as "anticipates," "intends," "plans," "seeks," "believes," "expects", "estimates," and similar references to future periods. Examples of forward-looking statements include, but are not limited to, statements made regarding the Company's results of operations, current expectations, plans or forecasts of core business drivers, credit related costs, asset quality, capital adequacy and liquidity, the implementation of the Company's business plan and growth strategies, and other similar matters. Although we believe that these forward-looking statements are based on reasonable estimates and assumptions, they are not guarantees of future performance and are subject to known and unknown risks, uncertainties, contingencies, and other factors. Accordingly, we cannot give you any assurance that our expectations will in fact occur or that actual results will not differ materially from those expressed or implied by such forward-looking statements. We caution you not to place undue reliance on any forward-looking statement and to consider all of the following uncertainties and risks, as well as those more fully discussed in the Company's filings with the Securities and Exchange Commission ("SEC"), including but not limited to, our Forms 10-K and 10-Q: volatile interest rates that impact, among other things, the mortgage banking business, our ability to originate loans and sell assets at a profit, prepayment speeds and our cost of funds; changes in regulatory capital requirements or an inability to achieve or maintain desired capital ratios; actions of mortgage loan purchasers, guarantors and insurers regarding repurchases and indemnity demands and uncertainty related to foreclosure procedures; our ability to control credit related costs and forecast the adequacy of reserves; and the imposition of regulatory enforcement actions against us. Except to the extent required under the federal securities laws and the rules and regulations promulgated by the SEC, the Company undertakes no obligation to update any such statement to reflect events or circumstances after the date on which it is made.

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Flagstar Bancorp, Inc.

Consolidated Statements of Financial Condition

(In thousands, except share data)

	June 30, 2012			March 31, 2012			December 31, 2011			June 30, 2011
Assets	(Unaudited)			(Unaudited)						(Unaudited)
Cash and cash items	$	71,184		$	46,946		$	49,715		$	56,031
Interest-earning deposits	1,199,205			711,002			681,343			701,852
Cash and cash equivalents	1,270,389			757,948			731,058			757,883
Securities classified as trading	169,834			307,355			313,383			292,438
Securities classified as available-for-sale	424,765			448,147			481,352			551,173
Loans held-for-sale ($2,195,679, $2,132,842, $1,629,618, and $1,870,499 at fair value at June 30, 2012, March 31, 2012, December 31, 2011, and June 30, 2011, respectively)	2,459,482			2,492,855			1,800,885			2,002,888
Loans repurchased with government guarantees	1,999,110			2,002,999			1,899,267			1,711,591
Loans held-for-investment ($20,231, $20,365, $22,651, and $21,514 at fair value at June 30, 2012, March 31, 2012, December 31, 2011, and June 30, 2011, respectively)	6,550,257			6,659,538			7,038,587			5,975,134
Less: allowance for loan losses	(287,000		)	(281,000		)	(318,000		)	(274,000		)
Loans held-for-investment, net	6,263,257			6,378,538			6,720,587			5,701,134
Total interest-earning assets	12,515,653			12,340,896			11,896,817			10,961,076
Accrued interest receivable	103,985			108,143			105,200			91,527
Repossessed assets, net	107,235			108,686			114,715			110,050
Federal Home Loan Bank stock	301,737			301,737			301,737			301,737
Premises and equipment, net	209,126			206,573			203,578			244,565
Mortgage servicing rights	638,865			596,830			510,475			577,401
Other assets	420,661			332,538			455,236			320,425
Total assets	$	14,368,446		$	14,042,349		$	13,637,473		$	12,662,812
Liabilities and Stockholders' Equity
Deposits	$	8,922,847		$	8,599,153		$	7,689,988		$	7,405,027
Federal Home Loan Bank advances	3,400,000			3,591,000			3,953,000			3,406,571
Long-term debt	248,585			248,585			248,585			248,610
Total interest-bearing liabilities	12,571,432			12,438,738			11,891,573			11,060,208
Accrued interest payable	12,271			10,124			8,723			10,935
Representation and warranty reserve	161,000			142,000			120,000			79,400
Other liabilities ($19,100, $19,100, $18,300, and $0 at fair value at June 30, 2012, March 31, 2012, December 31, 2011, and June 30, 2011, respectively)	445,394			364,066			537,461			337,829
Total liabilities	13,190,097			12,954,928			12,557,757			11,488,372
Stockholders' Equity
Preferred stock $0.01 par value, liquidation value $1,000 per share, 25,000,000 shares authorized; 266,657 issued and outstanding and outstanding at June 30, 2012, March 31, 2012, December 31, 2011, and June 30, 2011, respectively	257,556			256,139			254,732			251,959
Common stock $0.01 par value, 700,000,000 shares authorized; 557,722,618, 557,132,814, 555,775,639, and 554,163,337 shares issued and outstanding at June 30, 2012, March 31, 2012, December 31, 2011, and June 30, 2011, respectively	5,577			5,571			5,558			5,542
Additional paid in capital	1,468,905			1,467,476			1,466,461			1,464,131
Accumulated other comprehensive income (loss)	8,274			6,167			(7,819		)	(356		)
Accumulated deficit	(561,963		)	(647,932		)	(639,216		)	(546,836		)
Total stockholders' equity	1,178,349			1,087,421			1,079,716			1,174,440
Total liabilities and stockholders' equity	$	14,368,446		$	14,042,349		$	13,637,473		$	12,662,812

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Flagstar Bancorp, Inc.  Consolidated Statements of Operations  (In thousands, except per share data)  (Unaudited)
	For the Three Months Ended									For the Six Months Ended
	June 30, 2012			March 31, 2012			June 30, 2011			June 30, 2012			June 30, 2011
Interest Income
Loans	$	115,611		$	113,908		$	98,155		$	229,519		$	200,269
Securities classified as available-for-sale  or trading	6,850			8,571			8,949			15,421			17,046
Interest-earning deposits and other	462			412			957			874			1,925
Total interest income	122,923			122,891			108,061			245,814			219,240
Interest Expense
Deposits	18,321			18,986			24,902			37,307			51,924
FHLB advances	27,386			27,394			30,218			54,779			60,196
Other	1,738			1,778			1,617			3,517			3,223
Total interest expense	47,445			48,158			56,737			95,603			115,343
Net interest income	75,478			74,733			51,324			150,211			103,897
Provision for loan losses	58,428			114,673			48,384			173,101			76,693
Net interest income (loss) after provision for  loan losses	17,050			(39,940		)	2,940			(22,890		)	27,204
Non-Interest Income
Loan fees and charges	34,783			29,973			14,712			64,757			30,850
Deposit fees and charges	5,039			4,923			7,845			9,961			15,345
Loan administration	25,012			38,885			30,450			63,898			69,786
Gain (loss) on trading securities	3,711			(5,971		)	102			(2,260		)	28
Loss on transferors' interest	(1,244		)	(409		)	(2,258		)	(1,653		)	(4,640		)
Net gain on loan sales	212,666			204,853			39,827			417,518			90,012
Net loss on sales of mortgage servicing rights	(983		)	(2,317		)	(2,381		)	(3,299		)	(2,493		)
Net gain on securities available-for-sale	20			310			—			330			—
Net (loss) gain on sale of assets	(26		)	27			1,293			—			256
Total other-than-temporary impairment     (loss) gain	(1,707		)	3,872			39,725			2,810			39,725
Gain (loss) recognized in other comprehensive income before taxes	690			(5,047		)	(55,309		)	(5,002		)	(55,309		)
Net impairment losses recognized in  earnings	(1,017		)	(1,175		)	(15,584		)	(2,192		)	(15,584		)
Representation and warranty reserve -  change in estimate	(46,028		)	(60,538		)	(21,364		)	(106,566		)	(41,791		)
Other fees and charges, net	8,401			12,816			5,436			21,216			12,575
Total non-interest income	240,334			221,377			58,078			461,710			154,344

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Flagstar Bancorp, Inc.  Consolidated Statements of Operations  (In thousands, except per share data)  (Unaudited)
	For the Three Months Ended									For the Six Months Ended
	June 30, 2012			March 31, 2012			June 30, 2011			June 30, 2012			June 30, 2011
Non-Interest Expense
Compensation and benefits	65,402			65,989			53,719			131,390			109,459
Commissions	17,838			15,466			7,437			33,305			15,005
Occupancy and equipment	18,706			16,950			16,969			35,656			33,587
Asset resolution	20,851			36,770			23,282			57,621			61,391
Federal insurance premiums	12,104			12,324			10,789			24,428			19,515
Other taxes	370			946			667			1,327			1,533
Warrant (income) expense	(551		)	2,549			(1,998		)	1,998			(2,825		)
General and administrative	34,777			37,752			20,057			72,518			40,488
Total non-interest expense	169,497			188,746			130,922			358,243			278,153
Income (loss) before federal income taxes	87,887			(7,309		)	(69,904		)	80,577			(96,605		)
Provision for federal income taxes	500			—			264			500			528
Net income (loss)	87,387			(7,309		)	(70,168		)	80,077			(97,133		)
Preferred stock dividend/accretion (1)	(1,417		)	(1,407		)	(4,720		)	(2,824		)	(9,429		)
Net income (loss) applicable to common  stockholders	$	85,970		$	(8,716	)	$	(74,888	)	$	77,253		$	(106,562	)
Income (loss) per share
Basic	$	0.15		$	(0.02	)	$	(0.14	)	$	0.13		$	(0.19	)
Diluted	$	0.15		$	(0.02	)	$	(0.14	)	$	0.13		$	(0.19	)

(1) The preferred stock dividend/accretion for the three months ended June 30, 2012 and March 31, 2012 and six months ended June 30, 2012, respectively, represents only the accretion. As of December 31, 2011, the Company elected the deferral of dividend and interest payments on preferred stock.

9

Flagstar Bancorp, Inc.

Summary of Selected Consolidated Financial and Statistical Data

(Dollars in thousands, except per share data)

(Unaudited)

	For the Three Months Ended									For the Six Months Ended
Summary of Consolidated Statements of Operations	June 30, 2012			March 31, 2012			June 30, 2011			June 30, 2012			June 30, 2011
Return on average assets	2.37		%	(0.25		)%	(2.32		)%	1.08		%	(1.64		)%
Return on average equity	31.09		%	(3.07		)%	(24.87		)%	13.78		%	(17.40		)%
Efficiency ratio (1)	53.7		%	63.7		%	119.7		%	58.5		%	107.7		%
Efficiency ratio (credit-adjusted) (1)	41.2		%	42.6		%	82.3		%	41.8		%	72.2		%
Equity/assets ratio (average for the period)	7.62		%	8.00		%	9.33		%	7.81		%	9.40		%
Mortgage loans originated (2)	$	12,547,017		$	11,169,409		$	4,642,864		$	23,716,426		$	9,499,248
Other loans originated	$	203,584		$	271,445		$	152,408		$	475,029		$	183,698
Mortgage loans sold and securitized	$	12,777,311		$	10,829,798		$	4,362,518		$	23,607,109		$	10,192,026
Interest rate spread - Bank only (3)	2.10		%	2.15		%	1.62		%	2.12		%	1.62		%
Net interest margin - Bank only (4)	2.37		%	2.41		%	1.86		%	2.39		%	1.87		%
Interest rate spread - Consolidated (3)	2.08		%	2.13		%	1.61		%	2.10		%	1.61		%
Net interest margin - Consolidated (4)	2.32		%	2.35		%	1.81		%	2.34		%	1.81		%
Average common shares outstanding	557,405,579			556,623,046			553,946,138			557,014,312			553,751,593
Average fully diluted shares outstanding	561,821,303			556,623,046			553,946,138			560,082,317			553,751,593
Average interest earning assets	$	12,943,237		$	12,640,668		$	11,297,984		$	12,791,952		$	11,385,031
Average interest paying liabilities	$	11,100,307		$	10,994,258		$	10,301,159		$	11,047,283		$	10,380,371
Average stockholder's equity	$	1,106,224		$	1,136,618		$	1,204,652		$	1,121,421		$	1,224,829
Charge-offs to average investment loans (annualized)	3.24		%	8.99		%	3.15		%	6.18		%	2.64		%

	June 30, 2012			March 31, 2012			December 31, 2011			June 30, 2011
Equity/assets ratio	8.20		%	7.74		%	7.92		%	9.27		%
Tier 1 capital ratio (to adjusted total assets) (5)	9.07		%	8.64		%	8.95		%	10.07		%
Total risk-based capital ratio (to risk-weighted assets) (5)	17.03		%	16.06		%	16.64		%	19.73		%
Book value per common share	$	1.65		$	1.49		$	1.48		$	1.66
Number of common shares outstanding	557,722,618			557,132,814			555,775,639			554,163,337
Mortgage loans serviced for others	$	76,192,099		$	68,207,554		$	63,770,676		$	57,087,989
Weighted average service fee (bps)	30.4			28.7			30.8			30.3
Capitalized value of mortgage servicing rights	0.84		%	0.88		%	0.80		%	1.01		%
Ratio of allowance for loan losses to non-performing loans held-for-investment (6)	66.5		%	69.1		%	65.1		%	67.9		%
Ratio of allowance for loan losses to loans held-for-investment (6)	4.38		%	4.22		%	4.52		%	4.59		%
Ratio of non-performing assets to total assets (bank only)	3.75		%	3.67		%	4.43		%	4.10		%
Number of bank branches	111			113			113			162
Number of loan origination centers	30			28			27			30
Number of employees (excluding loan officers and account executives)	3,184			2,970			2,839			2,990
Number of loan officers and account executives	336			311			297			316

(1) See Non-GAAP reconciliation.

(2) Includes residential first mortgage and second mortgage loans.

(3) Interest rate spread is the difference between the annualized average yield earned on average interest-earning assets for the period and the annualized average rate of interest paid on average interest-bearing liabilities for the period.

(4) Net interest margin is the annualized effect of the net interest income divided by that period's average interest-earning assets.

(5) Based on adjusted total assets for purposes of core capital and risk-weighted assets for purposes of total risk-based capital. These ratios are applicable to the Bank only.

(6) Bank only and does not include non-performing loans held-for-sale.

10

Loan Originations (Dollars in thousands) (Unaudited)
	For the Three Months Ended
	June 30, 2012				March 31, 2012				June 30, 2011
Consumer loans:
Mortgage (1)	$	12,547,017	98.4	%	$	11,169,409	97.7	%	$	4,642,864	96.8	%
Other consumer (2)	6,501		0.1	%	4,479		—	%	2,526		0.1	%
Total consumer loans	12,553,518		98.5	%	11,173,888		97.7	%	4,645,390		96.9	%
Commercial loans (3)	197,083		1.5	%	266,966		2.3	%	149,882		3.1	%
Total loan originations	$	12,750,601	100.0	%	$	11,440,854	100.0	%	$	4,795,272	100.0	%

	For the Six Months Ended
	June 30, 2012				June 30, 2011
Consumer loans:
Mortgage (1)	$	23,716,426	98.1	%	$	9,499,248	98.1	%
Other consumer (2)	10,980		—	%	3,653		—	%
Total consumer loans	23,727,406		98.1	%	9,502,901		98.1	%
Commercial loans (3)	464,049		1.9	%	180,045		1.9	%
Total loan originations	$	24,191,455	100.0	%	$	9,682,946	100.0	%

(1) Includes residential first mortgage and second mortgage loans.

(2) Other consumer loans include: warehouse lending, HELOC and other consumer loans.

(3) Commercial loans include: commercial real estate, commercial and industrial and commercial lease financing loans.

Loans Held-for-Investment

(Dollars in thousands)

(Unaudited)

	June 30, 2012				March 31, 2012				December 31, 2011				June 30, 2011
Consumer loans:
Residential first mortgage	$	3,102,137	47.4	%	$	3,304,889	49.7	%	$	3,749,821	53.1	%	$	3,745,240	62.7	%
Second mortgage	127,434		1.9	%	132,463		2.0	%	138,912		2.0	%	155,537		2.6	%
Warehouse lending	1,261,442		19.3	%	1,104,205		16.6	%	1,173,898		16.7	%	513,678		8.6	%
HELOC	198,228		3.0	%	209,228		3.1	%	221,986		3.2	%	241,396		4.0	%
Other	57,605		0.9	%	62,111		0.9	%	67,613		1.0	%	77,052		1.3	%
Total consumer loans	4,746,846		72.5	%	4,812,896		72.3	%	5,352,230		76.0	%	4,732,903		79.2	%
Commercial loans:
Commercial real estate	1,075,015		16.4	%	1,157,911		17.3	%	1,242,969		17.7	%	1,111,131		18.6	%
Commercial and industrial	569,288		8.7	%	544,481		8.2	%	328,879		4.7	%	106,943		1.8	%
Commercial lease financing	159,108		2.4	%	144,250		2.2	%	114,509		1.6	%	24,157		0.4	%
Total commercial loans	1,803,411		27.5	%	1,846,642		27.7	%	1,686,357		24.0	%	1,242,231		20.8	%
Total loans held-for-investment	$	6,550,257	100.0	%	$	6,659,538	100.0	%	$	7,038,587	100.0	%	$	5,975,134	100.0	%

11

12

Allowance for Loan Losses

(Dollars in thousands)

(Unaudited)

	For the Three Months Ended									For the Six Months Ended
	June 30, 2012			March 31, 2012			June 30, 2011			June 30, 2012			June 30, 2011
Beginning balance	$	281,000		$	318,000		$	271,000		$	318,000		$	274,000
Provision for loan losses	58,428			114,673			48,384			173,101			76,693
Charge-offs
Consumer loans:
Residential first mortgage	(22,570		)	(95,432		)	(9,441		)	(118,002		)	(12,543		)
Second mortgage	(4,057		)	(5,283		)	(6,138		)	(9,340		)	(11,916		)
Warehouse lending	—			—			(288		)	—			(288		)
HELOC	(4,257		)	(6,419		)	(4,925		)	(10,676		)	(9,988		)
Other	(728		)	(1,190		)	(507		)	(1,918		)	(1,346		)
Total consumer loans	(31,612		)	(108,324		)	(21,299		)	(139,936		)	(36,081		)
Commercial loans:
Commercial real estate	(31,277		)	(45,033		)	(25,957		)	(76,310		)	(45,246		)
Commercial and industrial	(23		)	(1,581		)	(9		)	(1,604		)	(57		)
Total commercial loans	(31,300		)	(46,614		)	(25,966		)	(77,914		)	(45,303		)
Total charge-offs	(62,912		)	(154,938		)	(47,265		)	(217,850		)	(81,384		)
Recoveries
Consumer loans:
Residential first mortgage	6,582			550			342			7,132			827
Second mortgage	1,039			249			344			1,288			1,210
Warehouse lending	—			—			—			—			5
HELOC	93			257			443			350			929
Other	395			212			290			607			529
Total consumer loans	8,109			1,268			1,419			9,377			3,500
Commercial loans:
Commercial real estate	2,344			1,992			462			4,336			1,191
Commercial and industrial	31			5			—			36			—
Total commercial loans	2,375			1,997			462			4,372			1,191
Total recoveries	10,484			3,265			1,881			13,749			4,691
Charge-offs, net of recoveries	(52,428		)	(151,673		)	(45,384		)	(204,101		)	(76,693		)
Ending balance	$	287,000		$	281,000		$	274,000		$	287,000		$	274,000
Net charge-off ratio	3.24		%	8.99		%	3.15		%	6.18		%	2.64		%

13

Composition of Allowance for Loan Losses

(In thousands)

(Unaudited)

June 30, 2012	Collectively Evaluated Reserves (1)		Individually Evaluated Reserves (2)		Total
Consumer loans:
Residential first mortgage	$	75,887	$	99,829	$	175,716
Second mortgage	14,654		5,429		20,083
Warehouse lending	1,556		—		1,556
HELOC	15,073		2,780		17,853
Other	2,502		83		2,585
Total consumer loans	109,672		108,121		217,793
Commercial loans:
Commercial real estate	48,703		9,704		58,407
Commercial and industrial	8,485		23		8,508
Commercial lease financing	2,292		—		2,292
Total commercial loans	59,480		9,727		69,207
Total allowance for loan losses	$	169,152	$	117,848	$	287,000

March 31, 2012
Consumer loans:
Residential first mortgage	$	73,092	$	85,569	$	158,661
Second mortgage	15,724		3,343		19,067
Warehouse lending	1,824		—		1,824
HELOC	14,760		18		14,778
Other	2,593		—		2,593
Total consumer loans	107,993		88,930		196,923
Commercial loans:
Commercial real estate	52,410		19,060		71,470
Commercial and industrial	2,654		—		2,654
Commercial lease financing	9,953		—		9,953
Total commercial loans	65,017		19,060		84,077
Total allowance for loan losses	$	173,010	$	107,990	$	281,000

(1) Represents loans collectively evaluated for impairment in accordance with ASC 450-20, Loss Contingencies (formerly FAS 5), and pursuant to amendments by ASU 2010-20 regarding allowance for unimpaired loans.

(2) Represents loans individually evaluated for impairment in accordance with ASC 310-10, Receivables (formerly FAS 114), and pursuant to amendments by ASU 2010-20 regarding allowance for impaired loans.

Non-Performing Loans and Assets

(Dollars in thousands)

(Unaudited)

	June 30, 2012			March 31, 2012			December 31, 2011			June 30, 2011
Non-performing loans held-for-investment	$	431,599		$	406,583		$	488,367		$	403,381
Real estate and other non-performing assets, net	107,235			108,686			114,715			110,050
Non‑performing assets held-for-investment, net	538,834			515,269			603,082			513,431
Non-performing loans available-for-sale	2,430			2,842			4,573			5,341
Total non-performing assets including loans available-for-sale	$	541,264		$	518,111		$	607,655		$	518,772
Ratio of non‑performing loans held-for- investment to loans held-for-investment	6.59		%	6.11		%	6.94		%	6.75		%
Ratio of non-performing assets to total assets (Bank)	3.75		%	3.67		%	4.43		%	4.10		%

14

Asset Quality - Loans Held-for-Investment

(Dollars in thousands)

(Unaudited)

	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 days		Total Past Due		Total Investment Loans
June 30, 2012
Consumer loans (1)	$	62,123	$	24,762	$	293,474	$	380,359	$	4,746,846
Commercial loans (1)	1,719		2,345		138,125		142,189		1,803,411
Total loans	$	63,842	$	27,107	$	431,599	$	522,548	$	6,550,257
March 31, 2012
Consumer loans (1)	$	67,719	$	39,133	$	314,232	$	421,084	$	4,812,896
Commercial loans (1)	11,133		8,802		92,351		112,286		1,846,642
Total loans	$	78,852	$	47,935	$	406,583	$	533,370	$	6,659,538
December 31, 2011
Consumer loans (1)	$	83,670	$	41,602	$	387,362	$	512,634	$	5,352,230
Commercial loans (1)	7,464		12,385		101,005		120,854		1,686,357
Total loans	$	91,134	$	53,987	$	488,367	$	633,488	$	7,038,587
June 30, 2011
Consumer loans (1)	$	91,185	$	46,082	$	298,751	$	436,018	$	4,732,903
Commercial loans (1)	1,392		187		104,630		106,209		1,242,231
Total loans	$	92,577	$	46,269	$	403,381	$	542,227	$	5,975,134

(1) Consumer loans include: residential first mortgage, second mortgage, warehouse lending, HELOC, and other consumer loans. Commercial loans include: commercial real estate, commercial and industrial, and commercial lease financing loans.

Gain on Loan Sales and Securitizations

(Dollars in thousands)

(Unaudited)

	For the Three Months Ended
	June 30, 2012					March 31, 2012					June 30, 2011
Description	(000's)			bps		(000's)			bps		(000's)			bps
Valuation gain (loss):
Value of interest rate locks	$	64,123		50		$	(2,700	)	(2	)	$	(2,860	)	(7	)
Value of forward sales	(47,126		)	(37	)	43,810			40		(3,657		)	(8	)
Fair value of loans held-for-sale	176,741			138		121,066			112		82,760			190
LOCOM adjustments on loans held-for-investment	—			—		(21		)	—		46			—
Total valuation gains	193,738			151		162,155			150		76,289			175
Sales gains (losses):
Marketing gains, net of adjustments	180,691			141		131,512			121		21,865			50
Pair-off (losses) gains	(156,120		)	(122	)	(83,763		)	(77	)	(56,952		)	(131	)
Provision for representation and warranty reserve	(5,643		)	(4	)	(5,051		)	(5	)	(1,375		)	(3	)
Total sales gains	18,928			15		42,698			39		(36,462		)	(84	)
Total gain on loan sales and securitizations	$	212,666		166		$	204,853		189		$	39,827		91
Total mortgage rate lock commitments	$	17,534,000				$	14,867,000				$	6,441,000
Total loan sales and securitizations	$	12,777,311				$	10,829,798				$	4,362,518

15

Gain on Loan Sales and Securitizations

(Dollars in thousands)

(Unaudited)

	For the Six Months Ended
	June 30, 2012					June 30, 2011
Description	(000's)			bps		(000's)			bps
Valuation gain (loss):
Value of interest rate locks	$	61,423		26		$	(3,476	)	(3	)
Value of forward sales	(3,316		)	(1	)	(44,018		)	(43	)
Fair value of loans held-for-sale	297,805			126		127,082			124
LOCOM adjustments on loans held-for-investment	(21		)	—		16			—
Total valuation gains	355,891			151		79,604			78
Sales gains (losses):
Marketing gains, net of adjustments	312,203			133		22,616			22
Pair-off (losses) gains	(239,883		)	(102	)	(8,494		)	(8	)
Provision for representation and warranty reserve	(10,693		)	(5	)	(3,714		)	(4	)
Total sales gains	61,627			26		10,408			10
Total gain on loan sales and securitizations	$	417,518		177		$	90,012		88
Total mortgage rate lock commitments	$	32,401,000				$	11,956,000
Total loan sales and securitizations	$	23,607,109				$	10,192,026

16

Average Balances, Yields and Rates

(Dollars in thousands)

(Unaudited)

	For the Three Months Ended
	June 30, 2012				March 31, 2012				June 30, 2011
	Average Balance		Annualized Yield/Rate		Average Balance		Annualized Yield/Rate		Average Balance		Annualized Yield/Rate
Interest-Earning Assets:
Loans held-for-sale	$	2,977,233	3.91	%	$	2,393,725	4.05	%	$	1,509,692	4.72	%
Loans repurchased with government guarantees	2,067,022		3.36	%	2,022,338		3.38	%	1,752,817		3.03	%
Loans held-for-investment:
Consumer loans (1)	4,635,259		4.38	%	4,990,828		4.33	%	4,551,266		4.59	%
Commercial loans (1)	1,835,897		3.97	%	1,755,917		4.21	%	1,211,284		4.85	%
Loans held-for-investment	6,471,156		4.27	%	6,746,745		4.30	%	5,762,550		4.65	%
Securities classified as available-for-sale or trading	642,389		4.27	%	786,275		4.36	%	724,694		4.94	%
Interest-earning deposits and other	785,437		0.24	%	691,585		0.24	%	1,548,231		0.25	%
Total interest-earning assets	12,943,237		3.80	%	12,640,668		3.89	%	11,297,984		3.82	%
Other assets	1,571,239				1,566,508				1,612,293
Total assets	$	14,514,476			$	14,207,176			$	12,910,277
Interest-Bearing Liabilities:
Demand deposits	$	361,916	0.24	%	$	346,542	0.26	%	$	409,663	0.33	%
Savings deposits	1,829,592		0.75	%	1,610,197		0.83	%	1,182,145		0.79	%
Money market deposits	482,296		0.49	%	486,907		0.54	%	579,361		0.73	%
Certificate of deposits	3,113,134		1.27	%	3,084,884		1.35	%	3,002,363		1.81	%
Total retail deposits	5,786,938		0.98	%	5,528,530		1.06	%	5,173,532		1.34	%
Demand deposits	95,805		0.49	%	98,724		0.49	%	66,549		0.55	%
Savings deposits	272,119		0.56	%	270,601		0.57	%	433,642		0.65	%
Certificate of deposits	361,315		0.66	%	392,656		0.66	%	237,600		0.67	%
Total government deposits	729,239		0.60	%	761,981		0.61	%	737,791		0.65	%
Wholesale deposits	339,018		3.78	%	357,532		3.74	%	741,024		3.46	%
Total deposits	6,855,195		1.07	%	6,648,043		1.15	%	6,652,347		1.50	%
FHLB advances	3,996,527		2.76	%	4,097,630		2.69	%	3,400,202		3.56	%
Other	248,585		2.81	%	248,585		2.88	%	248,610		2.61	%
Total interest-bearing liabilities	11,100,307		1.72	%	10,994,258		1.76	%	10,301,159		2.21	%
Other liabilities	2,307,945				2,076,300				1,404,466
Stockholder's equity	1,106,224				1,136,618				1,204,652
Total liabilities and stockholder's equity	$	14,514,476			$	14,207,176			$	12,910,277

(1) Consumer loans include: residential first mortgage, second mortgage, warehouse lending, HELOC and other consumer loans. Commercial loans include: commercial real estate, commercial and industrial, and commercial lease financing loans.

17

Average Balances, Yields and Rates

(Dollars in thousands)

(Unaudited)

	For the Six Months Ended
	June 30, 2012				June 30, 2011
	Average Balance		Annualized Yield/Rate		Average Balance		Annualized Yield/Rate
Interest-Earning Assets:
Loans held-for-sale	$	2,685,479	3.97	%	$	1,596,272	4.57	%
Loans repurchased with government guarantees	2,044,680		3.37	%	1,749,124		2.98	%
Loans held-for-investment:
Consumer loans (1)	4,813,043		4.36	%	4,583,299		4.72	%
Commercial loans (1)	1,795,907		4.09	%	1,219,834		4.85	%
Loans held-for-investment	6,608,950		4.28	%	5,803,133		4.75	%
Securities classified as available-for-sale or trading	714,332		4.32	%	677,332		5.04	%
Interest-earning deposits and other	738,511		0.24	%	1,559,170		0.25	%
Total interest-earning assets	12,791,952		3.84	%	11,385,031		3.85	%
Other assets	1,568,874				1,638,684
Total assets	$	14,360,826			$	13,023,715
Interest-Bearing Liabilities:
Demand deposits	$	354,229	0.25	%	$	404,043	0.36	%
Savings deposits	1,719,894		0.79	%	1,128,994		0.85	%
Money market deposits	484,602		0.51	%	567,737		0.76	%
Certificate of deposits	3,099,009		1.31	%	3,093,482		1.87	%
Total retail deposits	5,657,734		1.01	%	5,194,256		1.41	%
Demand deposits	97,265		0.49	%	72,117		0.55	%
Savings deposits	271,360		0.57	%	395,593		0.65	%
Certificate of deposits	376,985		0.66	%	244,584		0.68	%
Total government deposits	745,610		0.61	%	712,294		0.65	%
Wholesale deposits	348,275		3.76	%	790,772		3.40	%
Total deposits	6,751,619		1.11	%	6,697,322		1.56	%
FHLB advances	4,047,079		2.72	%	3,434,438		3.53	%
Other	248,585		2.84	%	248,610		2.61	%
Total interest-bearing liabilities	11,047,283		1.74	%	10,380,370		2.24	%
Other liabilities	2,192,122				1,418,516
Stockholder's equity	1,121,421				1,224,829
Total liabilities and stockholder's equity	$	14,360,826			$	13,023,715

(1) Consumer loans include: residential first mortgage, second mortgage, warehouse lending, HELOC and other consumer loans. Commercial loans include: commercial real estate, commercial and industrial, and commercial lease financing loans.

18

Non-GAAP Reconciliation

(Dollars in thousands)

(Unaudited)

	For the Three Months Ended									For the Six Months Ended
	June 30, 2012			March 31, 2012			June 30, 2011			June 30, 2012			June 30, 2011
Pre-tax, pre-credit-cost revenue
Income (loss) before tax provision	$	87,887		$	(7,309	)	$	(69,904	)	$	80,577		$	(96,605	)
Add back:
Provision for loan losses	58,428			114,673			48,384			173,101			76,693
Asset resolution	20,851			36,770			23,282			57,621			61,391
Other than temporary impairment on AFS investments	1,017			1,175			15,584			2,192			15,584
Representation and warranty repurchase reserve - change in estimate	46,028			60,538			21,364			106,566			41,791
Write down of residual interest	1,244			409			2,258			1,653			4,640
Total credit-related costs:	127,568			213,565			110,872			341,133			200,099
Pre-tax, pre-credit-cost revenue	$	215,455		$	206,256		$	40,968		$	421,710		$	103,494
Efficiency ratio (credit-adjusted)
Net interest income (a)	$	75,478		$	74,733		$	51,324		$	150,211		$	103,897
Non-interest income (b)	240,334			221,377			58,078			461,710			154,344
Add: Representation and warranty repurchase reserve - change in estimate (d)	46,028			60,538			21,364			106,566			41,791
Adjusted revenue	361,840			356,648			130,766			718,487			300,032
Non-interest expense (c)	169,497			188,746			130,922			358,243			278,153
Less: Asset resolution expense (e)	(20,581		)	(36,770		)	(23,282		)	(57,621		)	(61,391		)
Adjusted non-interest expense	$	148,916		$	151,976		$	107,640		$	300,622		$	216,762
Efficiency ratio (c/(a+b))	53.7		%	63.7		%	119.7		%	58.5		%	107.7		%
Efficiency ratio (credit-adjusted) ((c-e)/((a+b)+d)))	41.2		%	42.6		%	82.3		%	41.8		%	72.2		%

	June 30, 2012			March 31, 2012			December 31, 2011			June 30, 2011
Non-performing assets / Tier 1 capital + allowance for loan losses
Non-performing assets	$	538,834		$	515,269		$	603,082		513,431
Tier 1 capital	$	1,295,962		$	1,207,237		$	1,215,220		1,267,885
Allowance for loan losses	287,000			281,000			318,000			274,000
Tier 1 capital + allowance for loan losses	$	1,582,962		$	1,488,237		$	1,533,220		1,541,885
Non-performing assets / Tier 1 capital + allowance for loan losses	34.0		%	34.6		%	39.3		%	33.3		%
Tier 1 common (to risk-weighted assets)
Tier 1 capital (to adjusted total assets)	$	1,295,962		$	1,207,237		$	1,215,220		$	1,267,885
Adjustments
Preferred stock	(266,657		)	(266,657		)	(266,657		)	(266,657		)
Qualifying trust preferred securities	(240,000		)	(240,000		)	(240,000		)	(240,000		)
Tier 1 common	789,305			700,580			708,563			761,228
Total risk-weighted assets (1)	$	8,224,348		$	8,168,050		$	7,905,062		$	6,870,929
Tier 1 common (to risk-weighted assets) ratio	9.60		%	8.58		%	8.96		%	11.08		%

(1) Under the regulatory guidelines for risk-based capital, on-balance sheet assets and credit equivalent amounts of derivatives and off-balance sheet items are assigned to one of several broad risk categories according to the obligor or, if relevant, the guarantor or the nature of any collateral. The aggregate dollar amount in each risk category is then multiplied by the risk weight associated with that category. The resulting weighted values from each of the risk categories are aggregated for determining total risk-weighted assets.

19

EX-99.2

Earnings Presentation Second Quarter 2012 Presenters: Joseph P. Campanelli Chief Executive Officer Paul D. Borja Chief Financial Officer

2 Legal Disclaimer This presentation contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements, by their nature, involve estimates, projections, goals, forecasts, assumptions, risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed in a forward-looking statement. Examples of forward- looking statements include statements regarding our expectations, beliefs, plans, goals, objectives and future financial or other performance. Words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates" and variations of such words and similar expressions are intended to identify such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made. Except to fulfill our obligations under the U.S. securities laws, we undertake no obligation to update any such statement to reflect events or circumstances after the date on which it is made. There are a number of important factors that could cause future results to differ materially from historical performance and these forward-looking statements. Factors that might cause such a difference include: (1) Volatile interest rates that impact, amongst other things, (i) the mortgage banking business, (ii) our ability to originate loans and sell assets at a profit, (iii) prepayment speeds and (iv) our cost of funds, could adversely affect earnings, growth opportunities and our ability to pay dividends to stockholders; (2) Competitive factors for loans could negatively impact gain on loan sale margins; (3) Competition from banking and non-banking companies for deposits and loans can affect our growth opportunities, earnings, gain on sale margins, market share and ability to transform business model; (4) Changes in the regulation of financial services companies and government-sponsored housing enterprises, and in particular, declines in the liquidity of the residential mortgage loan secondary market, could adversely affect our business; (5) Changes in regulatory capital requirements or an inability to achieve or maintain desired capital ratios could adversely affect our growth and earnings opportunities and our ability to originate certain types of loans, as well as our ability to sell certain types of assets for fair market value or to transform our business model; (6) General business and economic conditions, including unemployment rates, movements in interest rates, the slope of the yield curve, any increase in mortgage fraud and other related criminal activity and the further decline of asset values in certain geographic markets, may significantly affect our business activities, loan losses, reserves, earnings and business prospects; (7) Factors concerning the implementation of proposed refinements and transformation of our business model could result in slower implementation times than we anticipate and negate any competitive advantage that we may enjoy; (8) Actions of mortgage loan purchasers, guarantors and insurers regarding repurchases and indemnity demands and uncertainty related to foreclosure procedures could adversely affect our business activities and earnings; (9) The Dodd-Frank Wall Street Reform and Consumer Protection Act has resulted in the elimination of the Office of Thrift Supervision, tightening of capital standards, and the creation of a new Consumer Financial Protection Bureau ("CFPB") and has resulted, or will result, in new laws, regulations and regulatory supervisors that are expected to increase our costs of operations. In addition, the change to the Office of the Comptroller of the Currency ("OCC") as Flagstar Bank, FSB’s primary federal regulator may result in interpretations affecting our operations different than those of the Office of Thrift Supervision ("OTS"); (10) Both the volume and the nature of consumer actions and other forms of litigation against financial institutions have increased and to the extent that such actions are brought against us or threatened, the cost of defending such suits as well as potential exposure could increase our costs of operations; (11) Our compliance with the terms and conditions of the agreement with the U.S. Department of Justice, the impact of performance and enforcement of commitments under, and provisions contained in the agreement, and our accuracy and ability to estimate the financial impact of that agreement, including the fair value of the future payments required, could accelerate our litigation settlement expenses relating thereto; (12) The downgrade by Standards & Poor's of the long-term credit rating of the U.S. could materially affect global and domestic financial markets and economic conditions, which may affect our business activities, financial condition, and liquidity; and (13) If we do not regain compliance with the New York Stock Exchange ("NYSE") continued listing requirements, our common stock may be delisted from the NYSE. All of the above factors are difficult to predict, contain uncertainties that may materially affect actual results, and may be beyond our control. New factors emerge from time to time, and it is not possible for our management to predict all such factors or to assess the effect of each such factor on our business. Please also refer to Item 1A to Part I of our Annual Report on Form 10-K, which is incorporated by reference herein, for further information on these and other factors affecting us. Although we believe that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate, and therefore any of these statements included herein may prove to be inaccurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by us or any other person that the results or conditions described in such statements or our objectives and plans will be achieved.

3 Second Quarter 2012 Highlights  Net income to common stockholders of $86.0 million, or $0.15 per share (year-to-date net income of $77.3 million, or $0.13 per share) • Gain on loan sale income of $212.7 million, or 166 bps • Net servicing revenue of $28.7 million and loan fees and charges of $34.8 million • Quarterly bank net interest margin relatively flat at 2.37% • Retail core deposits increased from prior quarter and cost of funds declined from prior quarter • Commercial loans continue to grow, consistent with business plan  Remained well-capitalized with significant liquidity • Tier 1 capital ratio (to adjusted total assets) increased to 9.07% • Significant liquidity, with cash and cash equivalents of $1.3 billion, in addition to over $600 million in unused capacity at FHLB  Continued emphasis on credit risk management and controlling credit costs • Total credit-related costs decreased by 40.3% from prior quarter • Total delinquent loans held-for-investment declined slightly • Allowance coverage ratio remained stable at 66.5%

4 Summary Financial Results [1] Net servicing revenue includes net loan administration income and net gain (loss) on trading securities. [2] See Non-GAAP reconciliation on pages 41 – 42. ($ in millions, except per share data) Q2 2012 Q1 2012 Q2 2011 Net Interest Income $75.5 $74.7 $51.3 Provision $58.4 $114.7 $48.4 Gain on Loan Sale $212.7 $204.9 $39.8 Net Servicing Revenue [1] $28.7 $32.9 $30.6 Net Gain (Loss) Applicable to Common Shareholders $86.0 ($8.7) ($74.9) Diluted Earnings / (Loss) per Share $0.15 ($0.02) ($0.14) Total Assets $14,368.4 $14,042.3 $12,662.8 Total Stockholders' Equity $1,178.3 $1,087.4 $1,174.4 Book Value per Common Share $1.65 $1.49 $1.66 NPLs / Gross Loans HFI 6.59% 6.11% 6.75% NPAs / Total Assets (Bank) 3.75% 3.67% 4.06% ALLL / NPLs 66.50% 69.11% 67.93% ALLL / Gross Loans HFI 4.38% 4.22% 4.59% NPAs / Tier 1 Capital + Allowance for Loan Losses [2] 34.04% 34.62% 33.30% Tier 1 Capital Ratio 9.07% 8.64% 10.07% Total Risk Based Capital Ratio 17.03% 16.06% 19.73% Tier 1 Common to Risk Weighted Assets 9.60% 8.58% 11.08% Total Equity / Total Assets 8.20% 7.74% 9.27%

5 Pre-tax, Pre-credit-cost Revenue -- Pre-tax, pre-credit-cost revenue of $215.5 million, increased from prior quarter… Note: See Non-GAAP reconciliation on pages 41 - 42. ($ in millions)

6 Gain on Loan Sales -- Gain on loan sale income improved from prior quarter, driven by the strength of the mortgage banking business… ($ in millions)

$2,347.2 $2,538.9 $2,148.3 $2,188.5 $3,324.5 $2,295.5 $4,387.5 $8,038.8 $8,980.9 $9,222.5 $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Purchase Originations Refinance Originations 7 Residential Mortgage Originations -- Residential first mortgage originations increased from the prior quarter, driven by increases in both purchase and refinance originations… ($ in millions)

8 Historical Monthly Lock Volume ($ in millions) -- Residential first mortgage rate locks continued at historically high levels, reflecting the favorable interest rate environment… $1,500 $2,500 $3,500 $4,500 $5,500 $6,500 $7,500 2007 2008 2009 2010 2011 2012

9 Net Servicing Revenue -- Mortgage servicing rights portfolio, net of hedges, continues to generate substantial revenues… Note: Net servicing revenue includes net loan administration income and net gain (loss) on trading securities. ($ in millions)

10 Bank Net Interest Income and Margin ($ in millions) -- Bank net interest income was relatively flat from the prior quarter…

11 Cost of Funds -- Average cost of funds continues to improve… ($ in millions)

12 Retail Core Deposits -- Retail core deposits increased, both in total and as a percentage, from the prior quarter… Note: Retail core deposits include checking accounts, savings accounts, and money market accounts. ($ in millions)

13 Commercial Non-RE Portfolio -- Commercial non-real estate loan balances continue to grow, consistent with the business plan… ($ in millions) Note: Includes commercial and industrial and commercial lease financing loans.

14 Commercial RE Portfolio Note: “ Legacy CRE” consists loans originated prior to 2011, including those refinanced during 2009 and 2010, while “New CRE” consists of loans originated during 2011 and 2012. -- The “new” commercial real estate loan portfolio continues to grow, while the “legacy” portfolio continues to run-off… $1,059.7 $1,025.1 $970.0 $873.0 $746.9 $51.5 $243.7 $273.0 $284.9 $328.2 $- $500 $1,000 $1,500 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Legacy CRE New CRE ($ in millions)

15 Regulatory Capital Ratios -- Regulatory capital ratios improved from the prior quarter…

16 Summary Asset Quality (1) Consumer loans include: residential first mortgage, second mortgage, construction, warehouse lending, HELOC, and other consumer loans. Commercial loans include: commercial real estate, commercial and industrial, and commercial lease financing loans. (2) Includes non-performing loans available-for-sale. Totals may not foot due to rounding $ in millions Q2 2012 Q1 2012 Q2 2011 Consumer (1) $62.1 $67.7 $91.2 Commercial (1) $1.7 $11.1 $1.4 Total 30 - 59 Days Past Due $63.8 $78.9 $92.6 Consumer (1) $24.8 $39.1 $46.1 Commercial (1) $2.3 $8.8 $0.2 Total 60 - 89 Days Past Due $27.1 $47.9 $46.3 Consumer (1) $293.5 $314.2 $298.8 Commercial (1) $138.1 $92.4 $104.6 Total Greater than 90 days Past Due $431.6 $406.6 $403.4 Non-performing Assets (2) $541.3 $518.1 $518.8 To Total Assets (Bank only) 3.75% 3.67% 4.10% Provision for Loan Losses $58.4 $114.7 $48.4 Charge-offs, Net of Recoveries $52.4 $151.7 $45.4 Allowance for Loan Losses $287.0 $281.0 $274.0 To Loans Held for Investment 4.38% 4.22% 4.59% To Non-performing Loans 66.5% 69.1% 67.9% Real Estate Owned $107.2 $108.7 $110.1 -- Consumer credit quality continues to improve…

$48.4 $36.7 $63.5 $114.7 $58.4 $23.3 $34.5 $32.4 $36.8 $20.9 $21.4 $39.0 $69.3 $60.5 $46.0 $0 $50 $100 $150 $200 $250 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Provision for loan losses Asset resolution Representation and warranty reserve – change in estimate 17 Primary Credit-Related Costs -- The three largest credit-related costs each decreased from the prior quarter… ($ in millions)

18 Allowance for Loan Losses ($ in millions) -- The allowance for loan losses increased from prior quarter…

19 Troubled Debt Restructures (TDRs) ($ in millions) -- TDRs increased from prior quarter, consistent with the focus on risk management and emphasis on increased loan modifications and other loss mitigation activities … $111.0 $133.5 $137.6 $67.2 $59.2 $39.2 $32.4 $61.3 $93.3 $74.8 $486.7 $454.6 $481.2 $530.7 $599.4 $0 $100 $200 $300 $400 $500 $600 $700 $800 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Nonperforming TDRs Modified (less than 6 months) Performing TDRs

20 Net Charge-offs ($ in millions) -- Net charge-offs decreased significantly from prior quarter as a result of the heightened level taken in the first quarter related to the write-off of the Specific Valuation Allowances… Note: Consumer loans include: residential first mortgage, second mortgage, construction, warehouse lending, HELOC, and other consumer loans. Commercial loans include: commercial real estate, commercial and industrial, and commercial lease financing loans.

21 Declines in Legacy Assets Note: “ Legacy CRE” consists loans originated prior to 2011, including those refinanced during 2009 and 2010. ($ in millions) -- Substantial declines in residential first and second mortgage held-for-investment portfolios and the “legacy” portion of commercial real estate held-for-investment portfolio…

22 HFI Delinquent Loan Trends Note: Consumer loans include: residential first mortgage, second mortgage, construction, warehouse lending, HELOC, and other consumer loans. Commercial loans include: commercial real estate, commercial and industrial, and commercial lease financing loans.

23 Representation and Warranty Reserve ($ in millions) 2Q11 3Q11 4Q11 1Q12 2Q12 2005 & Prior $21 $12 $13 $18 $26 2006 30 31 32 28 34 2007 84 99 86 94 136 2008 40 45 45 63 89 2009-2012 19 22 14 36 60 Total $194 $209 $190 $239 $344 Pending demands increased in 2Q12; primarily FNMA loans ($ in millions) 2Q11 3Q11 4Q11 1Q12 2Q12 Period -end Balance $326 $352 $343 $357 $479 % Non-Agency (approx) 2% 2% 2% 2% < 1% Key reserve variables UPB Metric (2005-2012 Vintages) (1) 1Q12 2Q12 Sold UPB $175 (B) $192 (B) Remaining UPB (2) $75 (B) $83 (B) Loan File Review as % of UPB 5% 9% Repurchase Demand Rate 21% 15% Actual Repurchase Rate (Win/Loss) (Weighted Avg.) 44% 38% Loss Severity Rate (Weighted Avg.) 36% 40% Ending Reserve Balance $142 (M) $161 (M) 2Q 12 charge-offs declined; reserve increased ($ in millions) 2Q11 3Q11 4Q11 1Q12 2Q12 Beg Balance $79 $79 $85 $120 $142 Additions 23 41 73 66 52 Charge-offs (23) (35) (38) (44) (34) End Balance $79 $85 $120 $142 $161 (1) Includes estimates (2) Includes servicing sold with recourse Demands increased in 2Q12

Appendix

25 Full Income Statement Totals may not foot due to rounding ($ in millions, except per share data) Q2 2012 Q1 2012 Q2 2011 Net Interest Income $75.5 $74.7 $51.3 Provision for Loan Losses 58.4 114.7 48.4 Net Interest Income (Loss) after Provision 17.1 (39.9) 2.9 Non-interest Income 240.3 221.4 58.1 Non-interest Expense 169.5 188.7 130.9 Net Earnings (Loss) Before Tax Provision 87.9 (7.3) (69.9) Provision for Income Taxes 0.5 0.0 0.3 Net Earnings (Loss) Before Preferred Dividends 87.4 (7.3) (70.2) Preferred Dividends (1.4) (1.4) (4.7) Net Earnings (Loss) $86.0 ($8.7) ($74.9) Weighted average common shares outstanding 561.8 556.6 553.9 Diluted Earnings (Loss) per Share $0.15 ($0.02) ($0.14)

26 Select Balance Sheet Items Totals may not foot due to rounding ($ in millions) Q2 2012 Q1 2012 Q2 2011 Total assets $14,368.4 $14,042.3 $12,662.8 Cash and interest earning deposits $1,270.4 $757.9 $757.9 First mortgage and construction loans 3,102.1 3,304.9 3,745.2 Second mortgage loans 127.4 132.5 155.5 Commercial real estate loans 1,075.0 1,157.9 1,111.1 Warehouse loans 1,261.4 1,104.2 513.7 Consumer lending (including HELOC and other) 255.8 271.3 318.4 Commercial and Industrial 728.4 688.7 131.1 Investment loan portfolio $6,550.3 $6,659.5 $5,975.1 Loans held for sale $2,459.5 $2,492.9 $2,002.9 Loans repurchased with government guarantees 1,999.1 2,003.0 1,711.6 Securities classified as trading 169.8 307.4 292.4 Securities classified as available for sale 424.8 448.1 551.2 Mortgage servicing rights 638.9 596.8 577.4

27 Deposit Mix Note: Represents the ending balance and rate for period noted. Retail core deposits include demand, savings and money market accounts. Totals may not foot due to rounding ($ in millions) Balance Rate Balance Rate Balance Rate Retail Deposits: Demand deposits 631$ 0.14% 648$ 0.17% 623$ 0.20% Savings deposits 1,846 0.69% 1,757 0.79% 1,236 0.74% Money market deposits 474 0.47% 468 0.47% 588 0.73% Certificates of deposit 3,126 1.25% 3,120 1.29% 2,765 1.76% Total retail deposits 6,076 0.90% 5,993 0.96% 5,212 1.21% Core retail deposits / retail deposits 48.55% 47.94% 46.95% Government Banking Deposits: Demand deposits 126 0.38% 93 0.41% 62 0.44% Savings deposits 244 0.56% 312 0.56% 384 0.65% Certificates of deposit 351 0.62% 375 0.63% 229 0.76% Total government banking deposits 721 0.56% 780 0.57% 675 0.67% Company controlled deposits 1,786 0.00% 1,480 0.00% 815 0.00% Wholesale deposits 339 3.52% 346 3.49% 703 3.28% Total deposits $ 8,923 0.79% $ 8,599 0.86% $ 7,405 1.23% Number of banking branches As of Jun 30, 2012 As of Mar 31, 2012 As of Jun 30, 2011 111 113 162

28 (1) 90+ days past due loans include performing non-accruals. Totals may not foot due to rounding As of June 30, 2012 Commercial RE Portfolio Note: “ Legacy CRE” consists of loans originated prior to 2011, including those refinanced during 2009 and 2010, while “New CRE” consists of loans originated during 2011 and 2012. Property Type Balance 30 - 59 Days Past Due 60 - 89 Days Past Due 90+ Days Past Due (1) Total Reserves Balance 30 - 59 Days Past Due 60 - 89 Days Past Due 90+ Days Past Due (1) Total Reserves Construction one-to-four family - - - - - $1,026.9 - - $1,026.9 - Land 161.8 - - - 2.7 10,741.5 - - 7,598.7 616.6 Services - - - - - - - - - - Commercial & Industrial Loans 3,579.7 - - - 59.8 - - - - - One-to-four family conventional 463.8 - - - 7.7 3,314.7 71.8 - 672.2 287.5 losed end mortgage - - - - - - - - - - Mult-family conventional 132,888.4 - - - 2,219.2 59,087.0 647.9 - 1,364.0 4,420.8 Commercial non-owner occupied 111,843.1 - - - 1,867.8 609,251.7 544.1 2,344.7 118,628.8 43,105.9 Secured by non-farm, non-residential 33,119.1 - - - 553.1 62,425.3 453.9 - 8,777.7 4,436.3 Other 47,905.9 - - - 800.0 394.4 - - - 29.9 Negative Escrow 0.3 - - - - 2,076.2 - - - - Net deferred fees and other (1,801.6) - - - - (1,463.1) - - - - Total: $328,160.5 $0.0 $0.0 $0.0 $5,510.3 $746,854.6 $1,717.7 $2,344.7 $138,068.3 $52,897.0 $ in thousands New Commercial RE Legacy Commercial RE

29 Commercial RE Portfolio – by State As of June 30, 2012 Note: Reflects unpaid principal balance of underlying loans before accounting adjustments for discounts and other items. Also excludes commercial letters of credit. Totals may not foot due to rounding State Construction One-to-Four Family Land Services Commercial and Industrial Loans One-to-Four Family Conventional One-to-Four Family Closed End Mortgage Multi-Family Conventional Commercial Non-Owner Occupied Secured by Non- farm, Non- residential Other Total MI $0 $688 $0 $337 $3,778 $0 $57,106 $357,353 $53,702 $1,387 $474,350 NY - - - - - - 100,596 25,184 9,477 9,500 144,758 GA - - - - - - 2,720 69,668 8,723 - 81,112 IN - 5,225 - - - - - 44,925 6,171 - 56,320 VA - - - - - - - 42,513 - 3,818 46,331 MA - - - - - - 19,583 4,357 3,644 13,943 41,526 CT - - - 3,243 - - - 37,362 - - 40,604 FL - - - - - - - 24,095 - 7,846 31,941 KY - 4,991 - - - - - 11,903 - - 16,895 RI - - - - - - 923 13,962 - 1,918 16,803 TN - - - - - - - 10,862 1,269 - 12,130 NC - - - - - - - 7,444 3,871 - 11,314 OH - - - - - - - 9,473 1,347 - 10,820 PA - - - - - - 9,937 852 - - 10,788 TX - - - - - - - 10,617 - - 10,617 Other 1,027 - - - - - 1,112 50,526 7,341 8,700 68,706 Total $1,027 $10,903 $0 $3,580 $3,778 $0 $191,975 $721,095 $95,544 $47,112 $1,075,015 $ in thousands

30 Commercial RE Portfolio – by Vintage As of June 30, 2012 Note: Reflects unpaid principal balance of underlying loans before accounting adjustments for discounts and other items. Also excludes commercial letters of credit. Totals may not foot due to rounding Vintage Construction One-to-Four Family Land Services Commercial and Industrial Loans One-to-Four Family Conventional One-to-Four Family Closed End Mortgage Multi-Family Conventional Commercial Non-Owner Occupied Secured by Non-farm, Non- residential Other Total Older $0 $0 $0 $0 $197 $0 $9,534 $31,112 $4,861 $0 $45,704 2003 - 460 - - - - 4,504 27,536 4,545 - 37,046 2004 - - - - 9 - 9,288 76,516 4,343 - 90,155 2005 - - - - - - 15,833 47,730 3,468 - 67,032 2006 - 4,991 - - 53 - 3,646 113,506 10,108 - 132,304 2007 - 2,082 - - 446 - 6,876 156,187 28,480 - 194,071 2008 - - - - 319 - 3,792 117,301 6,621 - 128,033 2009 - 66 - - 387 - - 10,066 - - 10,519 2010 1,027 - - - 1,903 - 5,614 14,261 - - 22,806 2011 - 3,305 - - 14 - 129,519 103,602 23,114 37,073 296,628 2012 - - - 3,580 450 - 3,369 23,277 10,005 10,039 50,719 Total 1,027 10,903 - 3,580 3,778 - 191,975 721,095 95,544 47,112 1,075,015 $ in thousands

First Mortgage Portfolio – by State 31 Note: Reflects unpaid principal balance of underlying loans before accounting adjustments for discounts and other items. Also excludes loans eligible for repurchase from Ginnie Mae pools. As of June 30, 2012 ARM Fixed Balloon Total % of Total ARM Fixed Balloon Total % of Total CA 87,559$ 730,951$ -$ 818,510$ 36.7% 530,353$ 366,568$ 65,520$ 962,441$ 31.7% FL 9,846 132,457 - 142,303 6.4% 270,294 117,151 18,448 405,893 13.3% MI 7,157 101,024 - 108,181 4.8% 243,308 53,149 15,998 312,455 10.3% WA 20,799 67,797 - 88,596 4.0% 91,670 44,308 7,454 143,432 4.7% AZ 6,055 73,806 - 79,861 3.6% 78,360 44,661 5,357 128,377 4.2% TX 9,101 129,160 - 138,261 6.2% 27,339 31,843 2,564 61,746 2.0% CO 3,367 48,963 - 52,330 2.3% 58,059 20,848 6,589 85,496 2.8% MD 4,478 47,257 - 51,735 2.3% 46,627 28,686 6,001 81,314 2.7% NY 3,195 53,497 - 56,692 2.5% 32,042 35,079 3,984 71,105 2.3% VA 2,722 48,502 - 51,224 2.3% 46,334 19,933 5,872 72,139 2.4% IL 7,432 50,774 - 58,206 2.6% 30,708 22,485 2,658 55,850 1.8% NJ 2,864 43,478 - 46,342 2.1% 30,798 22,804 4,206 57,808 1.9% GA 2,019 39,440 - 41,460 1.9% 33,919 21,947 4,889 60,755 2.0% NV - 13,849 - 13,849 0.6% 42,076 14,183 3,984 60,243 2.0% OH 1,075 21,583 - 22,658 1.0% 36,568 10,334 948 47,850 1.6% OR 3,733 27,651 - 31,384 1.4% 16,461 19,545 1,496 37,502 1.2% MA 2,670 34,108 - 36,778 1.6% 14,831 8,817 3,268 26,916 0.9% MO 1,186 33,349 - 34,535 1.5% 11,529 11,682 144 23,355 0.8% Other 19,758 338,588 357 358,704 16.1% 213,660 113,494 18,975 346,129 11.4% Total : 195,016$ 2,036,236$ 357$ 2,231,609$ 100% 1,854,936$ 1,007,518$ 178,353$ 3,040,808$ 100% $ in thousands State AFS HFI

First Mortgage Portfolio – by Vintage 32 Note: Reflects unpaid principal balance of underlying loans before accounting adjustments for discounts and other items. Also excludes loans eligible for repurchase from Ginnie Mae pools. As of June 30, 2012 ARM Fixed Balloon Total % of Total ARM Fixed Balloon Total % of Total Older 2,208$ 1,035$ -$ 3,243$ 0.1% 50,408$ 23,517$ 4,033$ 77,958$ 2.6% 2003 12,525 1,168 - 13,693 0.6% 160,324 22,275 7,869 190,468 6.3% 2004 12,395 1,767 - 14,162 0.6% 535,896 33,705 15,657 585,258 19.2% 2005 16,990 2,636 - 19,626 0.9% 575,862 45,421 24,277 645,560 21.2% 2006 4,520 6,974 89 11,583 0.5% 124,489 117,755 22,400 264,644 8.7% 2007 11,989 34,929 268 47,186 2.1% 347,248 570,132 100,309 1,017,689 33.5% 2008 530 25,027 - 25,558 1.1% 18,794 90,738 3,607 113,139 3.7% 2009 569 27,494 - 28,063 1.3% 8,982 53,110 200 62,292 2.0% 201 6,167 4,222 - 10,388 0.5% 9,372 15,467 - 24,839 0.8% 2011 54,440 28,184 - 82,623 3.7% 15,232 28,308 - 43,541 1.4% 2012 72,684 1,902,800 - 1,975,484 88.5% 8,329 7,092 - 15,420 0.5% Total : 195,016$ 2,036,236$ 357$ 2,231,609$ 100% 1,854,936$ 1,007,518$ 178,353$ 3,040,808$ 100% $ in thousands Year AFS HFI

First Mortgage Portfolio – by Current FICO 33 Note: Reflects unpaid principal balance of underlying loans before accounting adjustments for discounts and other items. Also excludes loans eligible for repurchase from Ginnie Mae pools. As of June 30, 2012 ARM Fixed Balloon Total % of Total ARM Fixed Balloon Total % of Total No Score -$ 17,000$ -$ 17,000$ 0.8% 317$ 3,663$ -$ 3,980$ 0.1% < 580 836 13,459 - 14,296 0.6% 162,370 207,168 23,154 392,692 12.9% 580 - 619 85 16,747 268 17,100 0.8% 121,197 102,781 26,553 250,531 8.2% 620 - 659 3,324 136,293 89 139,706 6.3% 192,031 128,248 34,385 354,664 11.7% 660 - 699 14,705 299,249 - 313,954 14.1% 323,376 152,382 35,600 511,357 16.8% > 699 176,066 1,553,487 - 1,729,553 77.5% 1,055,647 413,275 58,661 1,527,584 50.2% Total : 195,016$ 2,036,236$ 357$ 2,231,609$ 100% 1,854,936$ 1,007,518$ 178,353$ 3,040,808$ 100% $ in thousands FICO AFS HFI

First Mortgage Portfolio – by Original LTV 34 Note: Reflects unpaid principal balance of underlying loans before accounting adjustments for discounts and other items. Also excludes loans eligible for repurchase from Ginnie Mae pools. Original LTV equals original principal balance divided by appraised value at origination. As of June 30, 2012 ARM Fixed Balloon Total % of Total ARM Fixed Balloon Total % of Total < 70 86,905$ 494,167$ -$ 581,072$ 26.0% 419,548$ 226,759$ 33,197$ 679,504$ 22.3% 70 - 79.99 52,287 362,799 - 415,086 18.6% 607,288 345,484 63,557 1,016,329 33.4% 80 - 90 33,800 372,123 89 406,012 18.2% 712,083 302,844 72,769 1,087,697 35.8% > 90 22,024 807,147 268 829,440 37.2% 116,017 132,432 8,830 257,278 8.5% Total : 195,016$ 2,036,236$ 357$ 2,231,609$ 100% 1,854,936$ 1,007,518$ 178,353$ 3,040,808$ 100% $ in thousands Original LTV AFS HFI

First Mortgage Portfolio – by HPI Adjusted LTV 35 Note: Reflects unpaid principal balance of underlying loans before accounting adjustments for discounts and other items. Also excludes loans eligible for repurchase from Ginnie Mae pools. The housing price index (HPI adjusted) LTV is updated from the original LTV based on Metropolitan Statistical Area-level Office of Federal Housing Enterprise Oversight (OFHEO) data. As of June 30, 2012 ARM Fixed Balloon Total % of Total ARM Fixed Balloon Total % of Total < 70 96,132$ 510,975$ -$ 607,107$ 27.2% 384,139$ 111,228$ 15,734$ 511,101$ 16.8% 70 - 79.99 50,718 412,489 89 463,296 20.8% 308,912 95,984 15,618 420,514 13.8% 80 - 90 16,814 288,468 - 305,282 13.7% 308,094 132,675 22,863 463,633 15.2% > 90 31,352 824,305 268 855,926 38.4% 853,791 667,630 124,139 1,645,560 54.1% Total : 195,016$ 2,036,236$ 357$ 2,231,609$ 100% 1,854,936$ 1,007,518$ 178,353$ 3,040,808$ 100% $ in thousands HPI Adjusted LTV AFS HFI

36 Non-Agency Investment Securities AFS Portfolio As of Jun 30, 2012 Note: Excludes agency investment securities, which are sold in normal course. Totals may not foot due to rounding Investment Name CUSIP Current Principal OTTI Impairment Mark-to- Market Net Book Value M SP F M SP F CWALT 2006-45T1 2A5 02149JAU0 $25,560 ($6,601) ($800) $18,158 Aaa AAA AAA Caa3 CC C CWHL 2007-3 A1 12543RAA7 25,888 (3,423) (841) 21,625 NR AAA AAA NR CCC C CWHL 2006-18 1A1 12543WAA6 19,774 (1,934) (385) 17,455 NR AAA AAA NR CC C CWHL 2005-23-A1 126694GU6 26,719 (1,860) (141) 24,717 NR AAA AAA NR CCC B CWHL 2006-1 A2 126694XC7 22,412 (3,061) (721) 18,630 NR AAA AAA NR CC C CWHL 2007-J1 1A1 12669MAA6 43,483 (6,322) (2,881) 34,280 NR AAA AAA NR D D CWALT TR 2006-J8 23245LAD2 25,582 (9,211) (55) 16,316 NR AAA AAA NR D D CWALT 2007-1T1 1A1 23246KAA9 28,357 (9,021) (1,665) 17,671 Aaa AAA AAA Ca D D JPMMT 2006-S4 A7 46629SAG7 43,975 (6,595) (1,908) 35,472 Aaa AAA AAA Caa2 D D Subtotal $261,750 ($48,029) ($9,397) $204,325 GMS Trust 2006-1 33848FAA1 $114,331 ($2,793) ($11,232) $100,306 Aaa AAA NR B3 AAA NR Subtotal $114,331 ($2,793) ($11,232) $100,306 Total $376,081 ($50,821) ($20,628) $304,631 Initial Current $ in thousands

37 Real Estate Owned Portfolio As of June 30, 2012 Totals may not foot due to rounding $ in thousands Commercial % Receivership % Construction % Manufactured Homes % Single Family Homes % Total % Current Month 7,216$ 24.3% -$ 0.0% 526$ 29.6% -$ 0.0% 3,266$ 6.6% 11,008$ 10.3% 30 days 489 1.6% 701 4.4% 80 4.5% 60 14.1% 7,807 15.8% 9,137 8.5% 60 days 3,066 10.3% - 0.0% 329 18.5% 162 38.4% 5,224 10.5% 8,780 8.2% 90 days 417 1.4% - 0.0% - 0.0% - 0.0% 3,090 6.2% 3,507 3.3% 91 - 180 days 1,546 5.2% 7,562 47.9% - 0.0% 89 21.2% 11,908 24.0% 21,106 19.7% 181 - 365 days 4,998 16.8% 1,616 10.2% 743 41.9% 78 18.5% 9,061 18.3% 16,496 15.4% 1 - 2 years 6,691 22.5% 5,917 37.5% 98 5.5% 33 7.9% 7,373 14.9% 20,112 18.8% 2 - 3 years 3,191 10.7% - 0.0% - 0.0% - 0.0% 1,014 2.0% 4,205 3.9% 3 - 4 years 65 0.2% - 0.0% - 0.0% - 0.0% 784 1.6% 848 0.8% 4 - 5 years 2,040 6.9% - 0.0% - 0.0% - 0.0% 6 0.0% 2,046 1.9% Reconciling Items - 0.0% - 0.0% - 0.0% - 0.0% - 0.0% - 0.0% Loans to Facilitate - 0.0% - 0.0% - 0.0% - 0.0% - 0.0% 9,989 9.3% Total 29,719$ 100.0% 15,796$ 100.0% 1,775$ 100.0% 422$ 100.0% 49,533$ 100.0% 107,235$ 100.0%

38 Asset Quality by Loan Type – HFI As of June 30, 2012 Note: Non-performing loans include 90+ days delinquent and matured, and performing non-accruals. Totals may not foot due to rounding Loan Type Balance Non-performing Loans % of Balance % of Overall NPLs Q2 '12 Charge Offs, Net of Recoveries Collectively Evaluated Reserves (1) Individually Evaluated Reserves (2) Total Reserves Residential first mortgage $3,101,763 $360,366 11.62% 68.96% $15,978 $75,310 $99,830 $175,140 Second mortgage 127,434 8,368 6.57% 1.60% 3,028 14,654 5,429 20,083 Construction 374 374 100.00% 0.07% - - - - Warehouse 1,261,442 28 0.00% 0.01% - 1,556 - 1,556 HELOC 198,228 10,086 5.09% 1.93% 4,163 15,073 2,780 17,853 Consumer 57,605 1,138 1.98% 0.22% 333 3,078 83 3,161 Commercial RE 1,075,015 142,131 13.22% 27.20% 28,926 48,703 9,704 58,407 Comm rcial NRE 728,396 57 0.01% 0.01% - 10,777 23 10,800 Total: $6,550,257 $522,548 7.98% 100.00% $52,428 $169,151 $117,849 $287,000 (1) Represents loans collectively evaluated for impairment in accordance with ASC 450-20, Loss Contingencies (formerly FAS 5), and pursuant to amendments by ASU 2010-20 regarding allowance for unimpaired loans (2) Represents loans individually evaluated for impairment in accordance with ASC 310-10, Receivables (formerly FAS 114), and pursuant to amendments by ASU 2010-20 regarding allowance for impaired loans. $ in thousands

39 Non-performing Loans HFI – by State As of June 30, 2012 Totals may not foot due to rounding Note: Non-performing loans include 90+ days delinquent and matured, and performing non-accruals. Excludes participations and first mortgage repurchases. State Mortgage Percent of Mortgage Second Mortgage HELOC Commercial Real Estate Commercial Construction Consumer Warehouse Total Percent of Total CA $94,849 26.2% $2,046 $767 $6,707 - - - - $104,370 20.4% FL 83,252 23.0% 670 46 10,785 - - - - 94,753 18.5% MI 17,535 4.8% 837 1,426 57,508 56 304 164 - 77,829 15.2% GA 7,008 1.9% 110 200 28,307 - - 24 - 35,649 7.0% NY 14,713 4.1% 83 59 - - - 5 - 14,860 2.9% KY 1,345 0.4% - - 13,375 - - - - 14,721 2.9% WA 13,532 3.7% 504 8 - - - - - 14,043 2.7% NV 12,085 3.3% 69 136 - - - - - 12,290 2.4% IL 9,158 2.5% 29 87 2,561 - - - - 11,836 2.3% MD 11,251 3.1% 107 182 - - - - - 11,540 2.3% NJ 11,442 3.2% - - - - - - - 11,442 2.2% TX 9,557 2.6% 71 - - - - - - 9,629 1.9% IN 2,208 0.6% - 346 6,900 - 70 82 - 9,606 1.9% AZ 8,778 2.4% 200 85 - - - - - 9,063 1.8% OH 5,076 1.4% 71 41 2,004 - - - 28 7,221 1.4% Other 60,123 16.6% 1,351 743 9,919 - - 1 - 72,137 14.1% Total $361,913 100.0% $6,147 $4,125 $138,068 $56 $374 $276 $28 $510,988 100.0% $ in thousands

40 Non-performing Loans HFI – by Vintage As of June 30, 2012 Totals may not foot due to rounding Note: Non-performing loans include 90+ days delinquent and matured, and performing non-accruals. Excludes participations and first mortgage repurchases. Vintage Mortgage Percent of Mortgage Second Mortgage HELOC Commercial Real Estate Commercial Construction Consumer Warehouse Total Percent of Total Older $20,530 5.7% $564 $1,112 $9,461 $12 $70 $17 - $31,766 6.2% 2004 27,735 7.7% 264 410 12,862 - - 10 - 41,282 8.1% 2005 41,907 11.6% 212 313 10,657 - - 127 - 53,216 10.4% 2006 31,857 8.8% 566 14 51,698 - - 16 - 84,150 16.5% 2007 156,475 43.2% 4,218 2,174 32,704 - - 48 - 195,619 38.3% 2008 51,293 14.2% 324 97 8,733 5 304 15 - 60,772 11.9% 2009 16,094 4.4% - - 621 - - 2 28 16,745 3.3% 2010 6,265 1.7% - - 8,859 - - 17 - 15,141 3.0% 2011 9,757 2.7% - 6 2,473 38 - 23 - 12,297 2.4% 2012 - 0.0% - - - - - 1 - 1 0.0% Total $361,913 100.0% $6,147 $4,126 $138,068 $56 $374 $276 $28 $510,988 100% $ in thousands

41 Non-GAAP Reconciliation Totals may not foot due to rounding $ in millions Q2 2012 Q1 2012 Q4 2011 Q3 2011 Q2 2011 Q1 2011 Q4 2010 Q3 2010 Q2 2010 Gain (loss) before tax provision and dividends $87.9 ($7.3) ($74.9) ($9.2) ($69.9) ($26.7) ($185.3) ($17.9) ($92.3) Add back: Provisi n for loan losses 58.4 114.7 63.5 36.7 48.4 28.3 225.4 51.4 86.0 Asset resolution 20.9 36.8 32.4 34.5 23.3 38.1 41.8 44.3 52.6 Other than temporary impairment on investments AFS 1.0 1.2 7.1 1.3 15.6 0.0 1.3 0.0 0.4 Representation and warranty reserve 46.0 60.5 69.3 39.0 21.4 20.4 10.3 13.0 11.4 Write down of residual interest 1.2 0.4 0.8 0.2 2.3 2.4 (3.8) 4.7 4.3 Reserve increase for reinsurance 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.4 Total credit related costs: 127.6 213.6 173.2 111.7 110.9 89.2 275.0 113.3 155.1 Pre-tax, pre-credit-cost revenue $215.5 $206.3 $98.3 $102.5 $41.0 $62.5 $89.7 $95.4 $62.8

42 Non-GAAP Reconciliation Totals may not foot due to rounding $ in millions 6/30/2012 3/31/2012 6/30/2011 Non-performing assets $538.8 $515.3 $513.4 Tier 1 Capital 1,296.0 1,207.2 1,267.9 Allowance for Loan Losses 287.0 281.0 274.0 Tier 1 Capital + Allowance for Loan Losses 1,583.0 1,488.2 1,541.9 Non-performing assets/ Tier 1 Capital + Allowance for Loan Losses 34.04% 34.63% 33.30% $ in millions 6/30/2012 3/31/2012 6/30/2011 Tier 1 capital $1,296.0 $1,207.2 $1,267.9 Preferred stock (266.7) (266.7) (266.7) Qualifying trust preferred securities (240.0) (240.0) (240.0) Tier 1 common 789.3 700.6 761.2 Total risk-weighted assets 8,224.3 8,168.1 6,870.9 Tier 1 common/ Total risk-weighted assets 9.60% 8.58% 11.08%