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):October 23, 2012

(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 48098
(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 October 23, 2012, the Company issued a press release regarding its results of operations and financial condition for the three and nine months ended September 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 nine months ended September 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 October 23, 2012, the Company held a quarterly conference call to review third 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 October 23, 2012
99.2	Flagstar Bancorp, Inc. Conference Call Presentation Slides - Third 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: October 24, 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 October 23, 2012
99.2	Flagstar Bancorp, Inc. Conference Call Presentation Slides - Third Quarter 2012 Financial Results

EX-99.1

EXHIBIT 99.1

NEWS RELEASE

For more information, contact:

Paul D. Borja

Chief Financial Officer

Bradley T. Howes

Investor Relations Officer

(248) 312-2000

Flagstar Reports Third Quarter Net Income of $79.7 million

Second consecutive quarter of profitability driven by record gain on sale income and mortgage originations

Flagstar continuing to strengthen balance sheet and reduce overall risk profile

TROY, Mich. (October 23, 2012) - Flagstar Bancorp, Inc. (NYSE:FBC) (the "Company"), the holding company for Flagstar Bank, FSB (the "Bank"), today announced the second consecutive quarter of profitability, reporting third quarter 2012 net income applicable to common stockholders of $79.7 million, or $1.36 per share (diluted), as compared to a third quarter 2011 net loss of $(14.2) million, or $(0.26) per share (diluted). For the second quarter 2012, net income was $86.0 million, or $1.47 per share (diluted). All per share amounts and share counts have been adjusted to reflect the one-for-ten reverse stock split which began trading on October 11, 2012 following receipt of stockholder approval at the Company's annual meeting of stockholders.

"Our financial results for the quarter demonstrate Flagstar's commitment to and continued success in achieving growth and profitability," said Joseph P. Campanelli, Flagstar's Chief Executive Officer. "Although we are pleased with our second straight quarter of profitable results, including the record revenue and increased market share achieved by our mortgage banking franchise, we recognize that significant work remains to address Flagstar's legacy issues. Accordingly, we have added significant reserves and taken actions to strengthen the balance sheet against various legacy exposures, including loan repurchases from the GSEs and claims arising out of our 2005 and 2006 securitizations. In addition, we have reduced our overall risk profile by disposing of riskier legacy assets and prepaying long-term FHLB advances during the quarter."

Michael J. Tierney, Flagstar's President, added, "We remain committed to reducing risk across the organization, and believe the actions completed during the quarter help position Flagstar for continued profitability and a more predictable and stable stream of earnings. Over the past several years, we have emphasized capital and liquidity management, and continued to aggressively pursue strategies to reduce legacy assets, achieving significant improvements in both consumer and commercial delinquent loans. Our improving results and strengthened financial position are a testament to the job that Joe Campanelli has done, and we thank him for all that he helped Flagstar accomplish during his tenure here. Our team at Flagstar looks forward to building on a strong foundation to deliver enhanced value to all of our stakeholders."

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Third Quarter 2012 Highlights

• Delivered net income to common stockholders of $79.7 million, or $1.36 per diluted share.

• Recorded gain on loan sale income of $334.4 million, an increase of 57.3 percent, reflecting a margin of 2.42 percent, as compared to $212.7 million, reflecting a margin of 1.66 percent, in the prior quarter.

• Originated mortgage loans totaling $14.5 billion, an increase of 15.7 percent, as compared to $12.5 billion in the prior quarter.

• Incurred total credit-related costs of $189.7 million, an increase of 48.7 percent, as compared to $127.6 million in the prior quarter.

• Increased Tier 1 capital ratio (to adjusted total assets) to 9.31 percent and total risk-based capital ratio (to risk-weighted assets) to 17.58 percent, while non-performing assets as a percentage of Tier 1 capital plus allowance for loan losses improved to 30.8 percent, as compared to 34.0 percent in the prior quarter (see see non-GAAP reconciliation).

• Improved overall credit quality:

◦ Total past due loans (i.e., 30 days or more past due) decreased by 6.3 percent from the prior quarter.

◦ Consumer non-performing loans (i.e., 90 days or more past due) improved for the third consecutive quarter, with a 5.8 percent decline from the prior quarter.

◦ Commercial non-performing loans decreased by 11.2 percent from the prior quarter.

◦ Ratio of non-performing assets to total assets improved to 3.48 percent, as compared to 3.75 percent in the prior quarter.

• Strengthened balance sheet:

◦ Allowance for loans losses increased by $18.0 million, or 6.3 percent, from the prior quarter.

◦ Representation and warranty reserve increased by $41.0 million, or 25.5 percent, from the prior quarter.

• Other key items during the quarter:

◦ Increase of $40.0 million in litigation reserves for assessment of overall exposure from pending and threatened litigation

◦ $15.2 million loss on extinguishment of debt from the prepayment of $500.0 million in long-term Federal Home Loan Bank ("FHLB") advances.

◦ Recognition of a $19.9 million tax benefit realized upon the sale of the remaining $210.9 million in non-agency collateralized mortgage obligation securities.

Third quarter 2012 net income of $1.36 per share (diluted) was based on average shares outstanding of 56,233,165, as compared to a second quarter 2012 net income of $1.47 per share (diluted) based on average shares outstanding of 56,182,130 and a third quarter 2011 net loss of $(0.26) per share (diluted) based on average shares outstanding of 55,448,945.

Results for the Nine Months Ended September 30, 2012

For the nine months ended September 30, 2012, net income applicable to common stockholders totaled $156.9 million, or $2.61 per share (diluted), as compared to a net loss of $(120.8) million, or $(2.18) per share (diluted) during nine months ended September 30, 2011.

For the nine months ended September 30, 2012, the net income of $2.61 per share (diluted) was based on average shares outstanding of 56,083,757, as compared to the net loss of $(2.18) per share (diluted) based on average shares of 55,400,025 during the nine months ended September 30, 2011.

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Net Interest Income

Third quarter 2012 net interest income decreased to $73.1 million, as compared to $75.5 million for the second quarter 2012. Net interest margin for the Bank also compressed to 2.21 percent, as compared to 2.37 percent for the second quarter 2012, driven by a decrease in average yields on interest-earning assets.

Interest income decreased by $3.2 million from the prior quarter, driven primarily by lower yields and lower average balances of residential first mortgage loans held-for-investment and investment securities available-for-sale. Third quarter 2012 average yield on interest-earnings assets was 3.54 percent, as compared to 3.80 percent for the second quarter 2012. The decrease in yield was partially offset by increases in the balances of residential first mortgage loans available-for-sale and warehouse loans, both driven by increased mortgage originations during the quarter, and an increase in the average balance of interest-earning deposits primarily due to on-going strategic initiatives to increase liquidity levels. Total average interest-earning assets increased to $13.5 billion in the third quarter 2012, as compared to $12.9 billion for the second quarter 2012.

The Company's average cost of funds for the third quarter 2012 was 1.73 percent, relatively unchanged from the prior quarter of 1.72 percent. The average cost of deposits declined during the third quarter 2012 to 1.02 percent, as compared to 1.07 percent during the second quarter 2012. The decrease in the average cost of deposits was offset by an increase in the average cost of FHLB advances, as the Company prepaid such advances which carried lower average rates than the remaining FHLB advances.

Non-interest Income

Third quarter 2012 non-interest income increased to $273.7 million, as compared to $240.3 million for the second 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 $398.2 million for the third quarter 2012, as compared to $286.4 million for the second quarter 2012. This increase was primarily driven by an increase in net gain on loan sales.

Third quarter 2012 net gain on loan sales increased to $334.4 million, as compared to $212.7 million for the second quarter 2012. This $121.7 increase was driven by increases in both residential first mortgage rate lock commitments and sales of residential first mortgage loans, as well as an increase in gain on loan sale margin. In late 2011, the Company executed a number of mortgage banking initiatives designed to leverage vast distribution and longstanding customer relationships, intended to grow wholesale customer relationships and increase mortgage market share. Specifically, the Company added staff to facilitate loan growth, including reworking process flows for improved efficiency, as well as increasing underwriting and fulfillment staffing levels, while simultaneously implementing more robust quality control measures. As a result of these initiatives and the continued dislocation in the mortgage market space, the Company has been able to gain market share as it continues its emphasis as a top national mortgage lender.

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 increased to 2.42 percent for the third quarter 2012, as compared to 1.66 percent for the second quarter 2012. The increase from prior quarter was driven by a continuing increase in residential mortgage volume to near record levels, which drove a corresponding increase in margin as the Company manages to its production capacity and targeted service levels.

Residential first mortgage rate lock commitments increased to $18.1 billion for the third quarter 2012, as compared to $17.5 billion for the second quarter 2012. Loan sales of residential first mortgage loans also increased for the third quarter 2012 to $13.9 billion, as compared to $12.8 billion for the second quarter 2012.

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Mortgage loan originations, which are principally comprised of agency-eligible residential first mortgage loans, increased to $14.5 billion for the third quarter 2012, as compared to $12.5 billion for the second quarter 2012.

Net gain on securities available-for-sale was $2.6 million for the third quarter 2012, reflecting the gain from the sale of the Company's remaining non-agency collateralized mortgage obligations and seasoned agency securities completed during the quarter. As a result of the sale of these securities, the Company also recognized $19.9 million of tax benefit representing the recognition of the residual tax effect associated with previously unrealized losses on these securities recorded in other comprehensive income. At September 30, 2012, the Company had net deferred tax assets of $309.1 million, as compared to $348.2 at June 30, 2012, which have been entirely offset by a valuation allowance.

Net servicing revenue, which is the combination of net loan administration income (including the off-balance sheet 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 $11.3 million for the third quarter 2012, as compared to $28.7 million for the third quarter 2012. This decrease from the prior quarter reflects the decline in the fair value of the mortgage servicing rights as prepayment speeds increased due to increased refinance volumes driven by lower levels of market interest rates during the third quarter, as well as a decline in overall hedge performance associated with an increase in volatility in the mortgage, swap and treasury markets.

Credit-Related Costs and Asset Quality

For the third quarter 2012, total credit-related costs increased to $189.7 million, as compared to $127.6 million for the second quarter 2012 (see non-GAAP reconciliation). The increase from prior quarter was driven primarily by an increase in the representation and warranty reserve due to an increase in forecasted demands from the government sponsored entities ("GSEs") and an increase in the allowance for loan losses, despite an improvement in overall delinquent loan trends from the prior quarter.

The Company maintains a representation and warranty reserve on the balance sheet, which reflects an estimate of probable losses that may occur on both loans that have been sold or securitized into the secondary market and those currently in the repurchase pipeline, primarily to the GSEs. At September 30, 2012, the representation and warranty reserve was $202.0 million, a 25.5 percent increase as compared to $161.0 million at June 30, 2012. Provisions related to the representation and warranty reserve were $124.5 million for the third quarter 2012, as compared to $46.0 million for the second quarter 2012. The increase from the prior quarter reflects both the $41.0 million increase in the representation and warranty reserve and a $57.3 million increase in net charge-offs of loan repurchases.

The increase in representation and warranty reserve from prior quarter reflects two major components. First, recent changes in behavior by and enhanced transparency from the GSEs, primarily related to loans originated prior to 2009 (i.e., pre-2009 vintages), caused an increase in forecasted demands. Second, during the third quarter 2012 the Company made a number of enhancements to the repurchase operations, including installing new leadership, adding full time employees and increasing processing capacity. Part of the Company's enhancements included a significant effort during the third quarter 2012 to reduce the size and improve the aging of the current repurchase demand pipeline. As a result of these efforts, net-charge offs of loans repurchases increased significantly from the prior quarter, which had a negative impact on the Company's loss rates in the model, driving an increase in reserves.

The Company also experienced several encouraging trends during the third quarter 2012, including a 35 percent decrease in GSE repurchase audit file review requests from the prior quarter, a 26 percent decrease in new GSE repurchase demands from the prior quarter, and a $44.2 million decrease from the prior quarter in the total repurchase pipeline.

At September 30, 2012, the allowance for loan losses increased to $305.0 million, as compared to $287.0 million at June 30, 2012. The increase from the prior quarter was, in part, attributable to an increase in the consumer allowance for loan losses, reflecting management's view of probable losses on loan characteristics of performing

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consumer loans, specifically interest-only and adjustable rate mortgages. The increase from prior quarter was also driven by an increase in allowance for loan losses to reflect management's view of higher probable losses within the portfolio of troubled debt restructurings ("TDRs"). Commercial allowance for loan losses decreased from the prior quarter due to a decline in both the overall balance and level of non-performing loans in the legacy commercial real estate loan portfolio.

At September 30, 2012, the ratio of the allowance for loan losses to loans held-for-investment increased to 4.7 percent and the ratio of the allowance for loan losses to non-performing loans held-for-investment increased to 76.5 percent, as compared to 4.4 percent and 66.5 percent, respectively, at June 30, 2012.

The provision for loan losses in the third quarter 2012 decreased to $52.6 million, as compared to $58.4 million for the second quarter 2012. The decrease in third quarter 2012 provision for loan losses is primarily attributable to a decrease in net charge-offs from the prior quarter.

Total non-performing loans decreased to $398.9 million at September 30, 2012, as compared to $431.6 million at June 30, 2012. The decrease from the prior quarter was driven by decreases in both non-performing residential first mortgage and commercial real estate loans. The Company believes that the decline in non-performing residential first mortgage loans was driven by gradually improving economic conditions and effective risk mitigation activities. The decrease in non-performing commercial real estate loans was driven by pay-offs, dispositions, transfers to repossessed assets and net charge-offs.

Total past due loans (i.e., 30 day or more past due) also decreased to $489.6 million at September 30, 2012, as compared to $522.5 million at June 30, 2012, primarily driven by decreases in both consumer and commercial non-performing loans.

Asset resolution expense, which includes expenses associated with foreclosed properties (including the foreclosure claims in process with respect to government insured loans for which the Bank files claims with the U.S. Department of Housing and Urban Development) decreased to $12.5 million for the third quarter 2012, as compared to $20.9 million for the second quarter 2012. During the quarter, the Company participated in a HUD-coordinated market auction of loans repurchased with government guarantees, and which would involve a conveyance in an accelerated fashion of $302.4 million ($127.7 million received during third quarter 2012 with the remainder expected to be received during fourth quarter 2012) of such loans at par value. As a result, the Company recognized a reduction in otherwise expected curtailments of debenture interest income, which resulted in a benefit of $7.8 million that was applied against asset resolution expense during the third quarter 2012.

Non-interest Expense

Third quarter 2012 non-interest expense increased to $233.5 million, as compared to $169.5 million for the second quarter 2012. Excluding asset resolution expense (discussed in Credit-Related Costs and Asset Quality above), non-interest expense increased to $221.0 million for the third quarter 2012, as compared to $148.6 million for the second quarter 2012. The 37.8 percent increase in non-interest expense from the prior quarter reflects increases in general and administrative expenses and a $15.2 million loss on extinguishment of debt relating to the prepayment of FHLB advances.

The efficiency ratio, as adjusted to exclude credit-related costs, was 46.9 percent for the third quarter 2012, as compared to 41.2 percent for the second quarter 2012 (see non-GAAP reconciliation).

Compensation and benefits increased slightly to $67.4 million for the third quarter 2012, as compared to $65.4 million for the second quarter 2012. Commission expense also increased to $19.9 million for the third quarter 2012, as compared to $17.8 million for the second quarter 2012, driven by a 15.7 percent increase in mortgage loan originations during the quarter.

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Warrant expense for the third quarter 2012 was $1.5 million, as compared to income of $(0.6) million for the second quarter 2012. The increase in expense reflects the increase in the market price of the Company's common stock since the end of the second quarter 2012, and therefore the corresponding increase in outstanding warrant liability.

General and administrative expense increased to $83.5 million for the third quarter 2012, as compared to $34.8 million for the second quarter 2012. The increase from prior quarter primarily reflects the Company's assessment of overall exposure from pending and threatened litigation, and a resulting $40.0 million increase in the reserve for such matters.

Capital

The Bank was considered "well-capitalized" for regulatory purposes at September 30, 2012, and had regulatory capital ratios of 9.31 percent for the Tier 1 capital ratio (to adjusted total assets) and 17.58 percent for the total risk-based capital ratio (to risk-weighted assets). At September 30, 2012, the Company had a Tier 1 common capital ratio (to risk-weighted assets) of 10.32 percent and an equity-to-assets ratio of 8.39 percent.

Balance Sheet and Funding

Total assets at September 30, 2012 were $14.9 billion, as compared to $14.4 billion at June 30, 2012. The increase from the prior quarter was primarily the result of a $792.5 million increase in loans held-for-sale due to higher mortgage loan originations during the quarter, partially offset by a $225.9 million decrease in investment securities available-for-sale relating to the sale of non-agency collateralized mortgage obligations.

Loans are primarily funded with deposits obtained through branches 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 upon 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.

Total deposits were $9.5 billion at September 30, 2012, an increase of $566.3 million as compared to June 30, 2012, more than offsetting the prepayment of FHLB advances. The mix of retail deposits shifted from savings accounts to certificates of deposit, as consumers generally sought higher yields in reaction to a prolonged low interest rate environment.

During the third quarter 2012, the Company entered into a three-year agreement with the University of Michigan to become an official sponsor of the university's athletic program. The Company believes that this agreement, along with other advertising efforts, should increase brand awareness in Michigan, thus helping to generate additional core deposits in the state, and contributing towards funding needed to support its planned loan growth.

At September 30, 2012, the Bank had approximately $1.0 billion of cash on hand and interest-earning deposits, as compared to $1.3 billion at June 30, 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 September 30, 2012, the Bank had outstanding long-term borrowings from the FHLB of $2.9 billion, as compared to $3.4 billion at June 30, 2012. This was a result of the Bank's prepayment of $500.0 million of long-term advances during the third quarter 2012, at a cost of $15.2 million. The Bank prepaid the advances as part of its ongoing balance sheet management strategies to shift funding sources from borrowings to deposits and to help generate stronger net interest margin going forward with its super-community bank model. At September 30, 2012, the Bank had an additional $1.2 billion of collateralized borrowing capacity available at the FHLB.

Recent Developments

On October 1, 2012, the Company announced that its and the Bank's respective Boards of Directors appointed Michael J. Tierney to serve as President of the Company and the Bank, effective immediately, and as Chief

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Executive Officer of each entity, effective November 1, 2012, in each case subject to receipt of regulatory non-objection. Such non-objection has since been received from both the Bank's and Company's regulators. Upon becoming CEO, Mr. Tierney will join the Company's Board of Directors. The Company also announced that John D. Lewis, Managing Director of Donnelly Penman & Partners and former Vice Chairman of Comerica Bank, has been appointed a director of the Company and the Bank and will serve as Non-Executive Chairman of their respective Boards of Directors, in each case subject to receipt of regulatory non-objection.

On October 23, 2012, the Bank entered into a consent order (the "Consent Order") with the Office of the Comptroller of the Currency (the “OCC”). The Consent Order reflects matters identified by the OCC during supervisory examinations of the Bank conducted mainly in the fourth quarter of 2011 and the first quarter of 2012. Regulatory supervision of the Bank transitioned from the Office of Thrift Supervision (the “OTS”) to the OCC, which under the Dodd-Frank Act became the Bank's primary regulator in July 2011. The Consent Order replaces a previous OTS enforcement action. More details will be provided on Form 8-K, which the Company intends to file on October 23, 2012.

Earnings Conference Call

As previously announced, the Company's quarterly earnings conference call will be held on Wednesday, October 24, 2012 from 11 a.m. until Noon (Eastern).

Questions may be asked during the conference call or by emailing questions in advance to investors@flagstar.com

To join the call, please dial (800) 533-7954 toll free or (785) 830-1924, and use passcode: 2703194. Please call at least 10 minutes before the call is scheduled to begin. A replay will be available for five business days by calling (888) 203-1112 toll free or (719) 457-0820, using passcode: 2703194.

The conference call will also be available as a live audiocast on the Investor Relations section of flagstar.com. It will be archived on that site and will be available for replay and download. A slide presentation to accompany the conference call will also be posted on the site.

About Flagstar

Flagstar Bancorp, Inc. (NYSE: FBC) is the holding company for Flagstar Bank, a full-service financial institution offering a range of products and services to consumers, businesses, and homeowners. With $14.9 billion in total assets at September 30, 2012, Flagstar is the largest publicly held savings bank headquartered in the Midwest. As of September 30, 2012, Flagstar operated 111 branches in Michigan, 31 home loan centers in 14 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; uncertainty regarding pending and threatened litigation; our ability to control credit related costs and forecast the adequacy of reserves; and the imposition of regulatory enforcement actions against us; and our compliance with the Consent Order. 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)

	September 30, 2012			June 30, 2012			December 31, 2011			September 30, 2011
Assets	(Unaudited)			(Unaudited)						(Unaudited)
Cash and cash items	$	53,883		$	71,184		$	49,715		$	63,288
Interest-earning deposits	949,514			1,199,205			681,343			839,510
Cash and cash equivalents	1,003,397			1,270,389			731,058			902,798
Securities classified as trading	170,073			169,834			313,383			312,766
Securities classified as available-for-sale	198,861			424,765			481,352			521,259
Loans held-for-sale	3,251,936			2,459,482			1,800,885			2,080,926
Loans repurchased with government guarantees	1,931,163			1,999,110			1,899,267			1,745,974
Loans held-for-investment	6,552,399			6,550,257			7,038,587			6,821,737
Less: allowance for loan losses	(305,000		)	(287,000		)	(318,000		)	(282,000		)
Loans held-for-investment, net	6,247,399			6,263,257			6,720,587			6,539,737
Total interest-earning assets	12,748,946			12,515,653			11,896,817			12,040,172
Accrued interest receivable	106,458			103,985			105,200			100,442
Repossessed assets, net	119,468			107,235			114,715			113,365
Federal Home Loan Bank stock	301,737			301,737			301,737			301,737
Premises and equipment, net	211,981			209,126			203,578			250,674
Mortgage servicing rights	686,799			638,865			510,475			437,338
Other assets	669,950			420,661			455,236			427,013
Total assets	$	14,899,222		$	14,368,446		$	13,637,473		$	13,734,029
Liabilities and Stockholders' Equity
Deposits	$	9,489,169		$	8,922,847		$	7,689,988		$	8,128,258
Federal Home Loan Bank advances	3,088,000			3,400,000			3,953,000			3,615,000
Long-term debt	248,560			248,585			248,585			248,585
Total interest-bearing liabilities	12,825,729			12,571,432			11,891,573			11,991,843
Accrued interest payable	12,522			12,271			8,723			8,452
Representation and warranty reserve	202,000			161,000			120,000			85,000
Other liabilities	608,372			445,394			537,461			489,395
Total liabilities	13,648,623			13,190,097			12,557,757			12,574,690
Stockholders' Equity
Preferred stock	258,973			257,556			254,732			253,344
Common stock	5,583			5,577			5,558			5,550
Additional paid in capital	1,470,355			1,468,905			1,466,461			1,465,554
Accumulated other comprehensive (loss) income	(2,042		)	8,274			(7,819		)	(4,074		)
Accumulated deficit	(482,270		)	(561,963		)	(639,216		)	(561,035		)
Total stockholders' equity	1,250,599			1,178,349			1,079,716			1,159,339
Total liabilities and stockholders' equity	$	14,899,222		$	14,368,446		$	13,637,473		$	13,734,029

9

Flagstar Bancorp, Inc.  Consolidated Statements of Operations  (In thousands, except per share data)  (Unaudited)
	For the Three Months Ended									For the Nine Months Ended
	September 30, 2012			June 30, 2012			September 30, 2011			September 30, 2012			September 30, 2011
Interest Income
Loans	$	114,158		$	115,611		$	109,966		$	343,677		$	310,234
Securities classified as available-for-sale  or trading	4,912			6,850			9,626			20,333			26,673
Interest-earning deposits and other	672			462			433			1,546			2,358
Total interest income	119,742			122,923			120,025			365,556			339,265
Interest Expense
Deposits	17,819			18,321			22,679			55,126			74,603
FHLB advances	27,091			27,386			30,121			81,870			90,317
Other	1,753			1,738			1,611			5,270			4,834
Total interest expense	46,663			47,445			54,411			142,266			169,754
Net interest income	73,079			75,478			65,614			223,290			169,511
Provision for loan losses	52,595			58,428			36,690			225,696			113,383
Net interest income (expense) after provision for loan losses	20,484			17,050			28,924			(2,406		)	56,128
Non-Interest Income
Loan fees and charges	37,359			34,783			18,383			102,116			49,233
Deposit fees and charges	5,255			5,039			7,953			15,216			23,297
Loan administration	11,099			25,012			(3,478		)	74,997			66,308
Gain (loss) on trading securities	237			3,711			20,385			(2,023		)	20,414
Loss on transferors' interest	(118		)	(1,244		)	(186		)	(1,771		)	(4,825		)
Net gain on loan sales	334,427			212,666			103,858			751,945			193,869
Net loss on sales of mortgage servicing rights	(1,332		)	(983		)	(2,587		)	(4,631		)	(5,080		)
Net gain on securities available-for-sale	2,616			20			—			2,946			—
Net (loss) gain on sale of assets	—			(26		)	1,041			—			1,297
Total other-than-temporary impairment     (loss) gain	—			(1,707		)	51,003			2,810			35,993
Gain (loss) recognized in other comprehensive income before taxes	—			690			(52,325		)	(5,002		)	(52,899		)
Net impairment losses recognized in  earnings	—			(1,017		)	(1,322		)	(2,192		)	(16,906		)
Representation and warranty reserve -  change in estimate	(124,492		)	(46,028		)	(38,985		)	(231,058		)	(80,776		)
Other fees and charges, net	8,686			8,401			7,489			29,903			20,064
Total non-interest income	273,737			240,334			112,551			735,448			266,895

10

Flagstar Bancorp, Inc.  Consolidated Statements of Operations  (In thousands, except per share data)  (Unaudited)
	For the Three Months Ended									For the Nine Months Ended
	September 30, 2012			June 30, 2012			September 30, 2011			September 30, 2012			September 30, 2011
Non-Interest Expense
Compensation and benefits	67,386			65,402			55,238			198,776			164,701
Commissions	19,888			17,838			10,188			53,193			25,193
Occupancy and equipment	18,833			18,706			17,083			54,490			50,669
Asset resolution	12,487			20,851			34,515			70,108			95,906
Federal insurance premiums	12,643			12,104			10,665			37,071			30,180
Other taxes	2,036			370			647			3,363			2,178
Warrant expense (income)	1,516			(551		)	(4,202		)	3,513			(7,027		)
Loss on extinguishment of debt	15,246			—			—			15,246			—
General and administrative	83,456			34,777			26,557			155,975			67,044
Total non-interest expense	233,491			169,497			150,691			591,735			428,844
Income (loss) before federal income taxes	60,730			87,887			(9,216		)	141,307			(105,821		)
(Benefit) provision for federal income taxes	(20,380		)	500			264			(19,880		)	792
Net income (loss)	81,110			87,387			(9,480		)	161,187			(106,613		)
Preferred stock dividend/accretion (1)	(1,417		)	(1,417		)	(4,719		)	(4,241		)	(14,148		)
Net income (loss) applicable to common  stockholders	$	79,693		$	85,970		$	(14,199	)	$	156,946		$	(120,761	)
Income (loss) per share
Basic (2)	$	1.37		$	1.48		$	(0.26	)	$	2.63		$	(2.18	)
Diluted (2)	$	1.36		$	1.47		$	(0.26	)	$	2.61		$	(2.18	)

(1) The preferred stock dividend/accretion for the three months ended September 30, 2012 and June 30, 2012 and the nine months ended September 30, 2012, respectively, represents only the accretion. On January 27, 2012, the Company elected to defer payment of dividends and interest on the preferred stock.

(2) Restated for a one-for-ten reverse stock split announced September 27, 2012 and began trading on October 11, 2012.

11

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 Nine Months Ended
	September 30, 2012			June 30, 2012			September 30, 2011			September 30, 2012			September 30, 2011
Return on average assets	2.10		%	2.37		%	(0.43		)%	1.43		%	(1.23		)%
Return on average equity	25.78		%	31.09		%	(4.90		)%	18.04		%	(13.39		)%
Efficiency ratio	67.3		%	53.7		%	84.6		%	61.7		%	98.3		%
Efficiency ratio (credit-adjusted) (1)	46.9		%	41.2		%	53.5		%	43.8		%	64.4		%
Equity-to-assets ratio (average for the period)	8.16		%	7.62		%	8.80		%	7.93		%	9.20		%
Mortgage loans originated (2)	$	14,513,635		$	12,547,017		$	6,926,451		$	38,230,061		$	16,425,699
Other loans originated	$	165,668		$	203,584		$	322,558		$	640,697		$	506,430
Mortgage loans sold and securitized	$	13,876,626		$	12,777,311		$	6,782,795		$	37,483,736		$	16,974,821
Interest rate spread - bank only (3)	1.84		%	2.10		%	2.02		%	2.02		%	1.75		%
Net interest margin - bank only (4)	2.21		%	2.37		%	2.30		%	2.33		%	2.01		%
Interest rate spread - consolidated (3)	1.81		%	2.08		%	2.01		%	2.00		%	1.74		%
Net interest margin - consolidated (4)	2.16		%	2.32		%	2.25		%	2.28		%	1.96		%
Average common shares outstanding (5)	55,801,692			55,740,558			55,448,945			55,735,095			55,400,025
Average fully diluted shares outstanding (5)	56,233,165			56,182,130			55,448,945			56,083,757			55,400,025
Average interest-earning assets	$	13,476,917		$	12,943,237		$	11,677,994		$	13,021,941		$	11,483,759
Average interest paying liabilities	$	10,737,734		$	11,100,307		$	10,337,645		$	10,943,347		$	10,365,972
Average stockholder's equity	$	1,236,411		$	1,106,224		$	1,159,825		$	1,160,031		$	1,202,923
Charge-offs to average investment loans (annualized)	2.12		%	3.24		%	1.83		%	4.83		%	2.36		%

	September 30, 2012			June 30, 2012			December 31, 2011			September 30, 2011
Equity-to-assets ratio	8.39		%	8.20		%	7.92		%	8.44		%
Tier 1 capital ratio (to adjusted total assets) (6)	9.31		%	9.07		%	8.95		%	9.31		%
Total risk-based capital ratio (to risk-weighted assets) (6)	17.58		%	17.03		%	16.64		%	17.64		%
Book value per common share (5)	$	17.76		$	16.50		$	14.80		$	16.30
Number of common shares outstanding (5)	55,828,470			55,772,262			55,577,564			55,501,501
Mortgage loans serviced for others	$	82,414.799		$	76,192,099		$	63,770,676		$	56,772,598
Weighted average service fee (basis points)	30.1			30.4			30.8			30.5
Capitalized value of mortgage servicing rights	0.83		%	0.84		%	0.80		%	0.77		%
Ratio of allowance for loan losses to non-performing loans held-for-investment (7)	76.5		%	66.5		%	65.1		%	63.4		%
Ratio of allowance for loan losses to loans held-for-investment (7)	4.65		%	4.38		%	4.52		%	4.13		%
Ratio of non-performing assets to total assets (bank only)	3.48		%	3.75		%	4.43		%	4.09		%
Number of bank branches	111			111			113			162
Number of loan origination centers	31			30			27			29
Number of employees (excluding loan officers and account executives)	3,240			3,184			2,839			2,993
Number of loan officers and account executives	336			336			297			306

(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) Restated for a 1-for-10 reverse stock split announced September 27, 2012 and began trading on October 11, 2012.

(6) 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.

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

12

Loan Originations (Dollars in thousands) (Unaudited)
	For the Three Months Ended
	September 30, 2012				June 30, 2012				September 30, 2011
Consumer loans
Mortgage (1)	$	14,513,635	98.8	%	$	12,547,017	98.4	%	$	6,926,451	97.6	%
Other consumer (2)	8,489		0.1	%	6,501		0.1	%	4,338		0.1	%
Total consumer loans	14,522,124		98.9	%	12,553,518		98.5	%	6,930,789		97.7	%
Commercial loans (3)	157,179		1.1	%	197,083		1.5	%	318,220		2.3	%
Total loan originations	$	14,679,303	100.0	%	$	12,750,601	100.0	%	$	7,249,009	100.0	%

	For the Nine Months Ended
	September 30, 2012				September 30, 2011
Consumer loans
Mortgage (1)	$	38,230,061	98.3	%	$	16,425,699	97.0	%
Other consumer (2)	19,469		0.1	%	7,991		0.1	%
Total consumer loans	38,249,530		98.4	%	16,433,690		97.1	%
Commercial loans (3)	621,228		1.6	%	498,439		2.9	%
Total loan originations	$	38,870,758	100.0	%	$	16,932,129	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)

	September 30, 2012				June 30, 2012				December 31, 2011				September 30, 2011
Consumer loans
Residential first mortgage	$	3,086,096	47.1	%	$	3,102,137	47.4	%	$	3,749,821	53.1	%	$	3,828,114	56.2	%
Second mortgage	122,286		1.9	%	127,434		1.9	%	138,912		2.0	%	146,501		2.1	%
Warehouse lending	1,307,292		20.0	%	1,261,442		19.3	%	1,173,898		16.7	%	995,663		14.6	%
HELOC	192,117		2.9	%	198,228		3.0	%	221,986		3.2	%	232,796		3.4	%
Other	53,188		0.8	%	57,605		0.9	%	67,613		1.0	%	73,127		1.1	%
Total consumer loans	4,760,979		72.7	%	4,746,846		72.5	%	5,352,230		76.0	%	5,276,201		77.4	%
Commercial loans
Commercial real estate	1,005,498		15.3	%	1,075,015		16.4	%	1,242,969		17.7	%	1,268,878		18.6	%
Commercial and industrial	597,273		9.1	%	569,288		8.7	%	328,879		4.7	%	234,148		3.4	%
Commercial lease financing	188,649		2.9	%	159,108		2.4	%	114,509		1.6	%	42,510		0.6	%
Total commercial loans	1,791,420		27.3	%	1,803,411		27.5	%	1,686,357		24.0	%	1,545,536		22.6	%
Total loans held-for-investment	$	6,552,399	100.0	%	$	6,550,257	100.0	%	$	7,038,587	100.0	%	$	6,821,737	100.0	%

13

Allowance for Loan Losses

(Dollars in thousands)

(Unaudited)

	For the Three Months Ended									For the Nine Months Ended
	September 30, 2012			June 30, 2012			September 30, 2011			September 30, 2012			September 30, 2011
Beginning balance	$	287,000		$	281,000		$	274,000		$	318,000		$	274,000
Provision for loan losses	52,595			58,428			36,690			225,696			113,383
Charge-offs
Consumer loans
Residential first mortgage	(23,999		)	(22,570		)	(11,233		)	(142,001		)	(22,517		)
Second mortgage	(3,990		)	(4,057		)	(4,629		)	(13,330		)	(16,545		)
Warehouse lending	—			—			(272		)	—			(560		)
HELOC	(1,483		)	(4,257		)	(3,477		)	(12,159		)	(13,465		)
Other	(892		)	(728		)	(1,208		)	(2,810		)	(3,813		)
Total consumer loans	(30,364		)	(31,612		)	(20,819		)	(170,300		)	(56,900		)
Commercial loans
Commercial real estate	(15,532		)	(31,277		)	(9,853		)	(91,842		)	(55,099		)
Commercial and industrial	(12		)	(23		)	(587		)	(1,616		)	(644		)
Total commercial loans	(15,544		)	(31,300		)	(10,440		)	(93,458		)	(55,743		)
Total charge-offs	(45,908		)	(62,912		)	(31,259		)	(263,758		)	(112,643		)
Recoveries
Consumer loans
Residential first mortgage	5,899			6,582			756			13,031			1,251
Second mortgage	428			1,039			371			1,716			1,581
Warehouse lending	—			—			—			—			5
HELOC	44			93			524			394			1,453
Other	448			395			423			1,055			1,284
Total consumer loans	6,819			8,109			2,074			16,196			5,574
Commercial loans
Commercial real estate	4,461			2,344			373			8,797			1,564
Commercial and industrial	33			31			122			69			122
Total commercial loans	4,494			2,375			495			8,866			1,686
Total recoveries	11,313			10,484			2,569			25,062			7,260
Charge-offs, net of recoveries	(34,595		)	(52,428		)	(28,690		)	(238,696		)	(105,383		)
Ending balance	$	305,000		$	287,000		$	282,000		$	305,000		$	282,000
Net charge-off ratio (annualized)	2.12		%	3.24		%	1.83		%	4.83		%	2.36		%

Representation and Warranty Reserve

(Dollars in thousands)

(Unaudited)

		For the Three Months Ended									For the Nine Months Ended
		September 30, 2012			June 30, 2012			September 30, 2011			September 30, 2012			September 30, 2011
		(Dollars in thousands)
Balance, beginning of period		$	161,000		$	142,000		$	79,400		$	120,000		$	79,400
Provision
	Charged to gain on sale for current loan sales	6,432			5,643			1,797			17,126			5,511
	Charged to representation and warranty reserve - change in estimate	124,492			46,028			38,985			231,058			80,776
	Total	130,924			51,671			40,782			248,184			86,287
Charge-offs, net		(89,924		)	(32,671		)	(35,182		)	(166,184		)	(80,687		)
Balance, end of period		$	202,000		$	161,000		$	85,000		$	202,000		$	85,000

14

Composition of Allowance for Loan Losses

(In thousands)

(Unaudited)

September 30, 2012	Collectively Evaluated Reserves (1)		Individually Evaluated Reserves (2)		Total
Consumer loans
Residential first mortgage	$	74,950	$	129,902	$	204,852
Second mortgage	12,478		6,410		18,888
Warehouse lending	1,038		—		1,038
HELOC	15,216		2,340		17,556
Other	2,229		—		2,229
Total consumer loans	105,911		138,652		244,563
Commercial loans
Commercial real estate	47,113		1,722		48,835
Commercial and industrial	8,857		20		8,877
Commercial lease financing	2,725		—		2,725
Total commercial loans	58,695		1,742		60,437
Total allowance for loan losses	$	164,606	$	140,394	$	305,000

June 30, 2012
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

(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)

	September 30, 2012			June 30, 2012			December 31, 2011			September 30, 2011
Non-performing loans held-for-investment	$	398,948		$	431,599		$	488,367		$	444,887
Real estate and other non-performing assets, net	119,468			107,235			114,715			113,365
Non‑performing assets held-for-investment, net	518,416			538,834			603,082			558,252
Non-performing loans available-for-sale	2,086			2,430			4,573			3,331
Total non-performing assets including loans available-for-sale	$	520,502		$	541,264		$	607,655		$	561,583
Ratio of non-performing assets to total assets (Bank only)	3.48		%	3.75		%	4.43		%	4.09		%
Ratio of non-performing loans held-for- investment to loans held-for-investment	6.09		%	6.59		%	6.94		%	6.52		%

15

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
September 30, 2012
Consumer loans (1)	$	53,919	$	26,697	$	276,319	$	356,935	$	4,760,979
Commercial loans (1)	9,563		432		122,629		132,624		1,791,420
Total loans	$	63,482	$	27,129	$	398,948	$	489,559	$	6,552,399
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
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
September 30, 2011
Consumer loans (1)	$	91,318	$	46,023	$	352,429	$	489,770	$	5,276,201
Commercial loans (1)	13,699		10,454		92,458		116,611		1,545,536
Total loans	$	105,017	$	56,477	$	444,887	$	606,381	$	6,821,737

(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.

Troubled Debt Restructurings

(Dollars in thousands)

(Unaudited)

	TDRs
	Performing		Non-performing		Total
September 30, 2012	(Dollars in thousands)
Consumer loans	$	612,956	$	106,250	$	719,206
Commercial loans	1,329		3,230		4,559
Total TDRs	$	614,285	$	109,480	$	723,765
June 30, 2012
Consumer loans	$	574,359	$	126,312	$	700,671
Commercial loans	1,738		6,776		8,514
Total TDRs	$	576,097	$	133,088	$	709,185
December 31, 2011
Consumer loans	$	499,438	$	167,076	$	666,514
Commercial loans	17,737		29,509		47,246
Total TDRs	$	517,175	$	196,585	$	713,760
September 30, 2011
Consumer loans	$	492,486	$	137,942	$	630,428
Commercial loans	21,318		26,861		48,179
Total TDRs	$	513,804	$	164,803	$	678,607

16

Gain on Loan Sales and Securitizations

(Dollars in thousands)

(Unaudited)

	For the Three Months Ended
	September 30, 2012					June 30, 2012					September 30, 2011
Description	(000's)			bps		(000's)			bps		(000's)			bps
Valuation gain (loss)
Value of interest rate locks	$	97,176		73		$	64,123		50		$	79,078		117
Value of forward sales	(91,329		)	(68	)	(47,126		)	(37	)	(52,573		)	(78	)
Fair value of loans held-for-sale	273,270			198		176,741			138		132,285			195
Total valuation gains	279,117			203		193,738			151		158,790			234
Sales gains (losses)
Marketing gains, net of adjustments	218,262			157		180,691			141		94,942			140
Pair-off (losses) gains	(156,520		)	(113	)	(156,120		)	(122	)	(148,078		)	(218	)
Provision for representation and warranty reserve	(6,432		)	(5	)	(5,643		)	(4	)	(1,796		)	(3	)
Total sales gains	55,310			39		18,928			15		(54,932		)	(81	)
Total gain on loan sales and securitizations	$	334,427		242		$	212,666		166		$	103,858		153
Total mortgage rate lock commitments	$	18,089,000				$	17,534,000				$	13,097,000
Total loan sales and securitizations	$	13,876,626				$	12,777,311				$	6,782,795

	For the Nine Months Ended
	September 30, 2012					September 30, 2011
Description	(000's)			bps		(000's)			bps
Valuation gain (loss)
Value of interest rate locks	$	158,599		86		$	75,602		45
Value of forward sales	(94,645		)	(68	)	(96,591		)	(57	)
Fair value of loans held-for-sale	571,075			152		259,367			152
LOCOM adjustments on loans held-for-investment	(21		)	—		16			—
Total valuation gains	635,008			170		238,394			140
Sales gains (losses)
Marketing gains, net of adjustments	530,466			142		117,558			69
Pair-off (losses) gains	(396,403		)	(106	)	(156,572		)	(92	)
Provision for representation and warranty reserve	(17,126		)	(5	)	(5,511		)	(3	)
Total sales gains	116,937			31		(44,525		)	(26	)
Total gain on loan sales and securitizations	$	751,945		201		$	193,869		114
Total mortgage rate lock commitments	$	50,489,000				$	25,051,000
Total loan sales and securitizations	$	37,483,736				$	16,974,821

17

Average Balances, Yields and Rates

(Dollars in thousands)

(Unaudited)

	For the Three Months Ended
	September 30, 2012				June 30, 2012				September 30, 2011
	Average Balance		Annualized Yield/Rate		Average Balance		Annualized Yield/Rate		Average Balance		Annualized Yield/Rate
Interest-Earning Assets
Loans held-for-sale	$	3,301,860	3.70	%	$	2,977,233	3.91	%	$	2,041,173	4.35	%
Loans repurchased with government guarantees	2,070,813		2.98	%	2,067,022		3.36	%	1,790,464		3.34	%
Loans held-for-investment
Consumer loans (1)	4,717,672		4.32	%	4,635,259		4.38	%	4,857,771		4.54	%
Commercial loans (1)	1,815,897		3.67	%	1,835,897		3.97	%	1,429,449		4.82	%
Loans held-for-investment	6,533,569		4.14	%	6,471,156		4.27	%	6,287,220		4.60	%
Securities classified as available-for-sale or trading	505,361		3.89	%	642,389		4.27	%	840,490		4.58	%
Interest-earning deposits and other	1,065,314		0.25	%	785,437		0.24	%	718,647		0.24	%
Total interest-earning assets	13,476,917		3.54	%	12,943,237		3.80	%	11,677,994		4.09	%
Other assets	1,680,208				1,571,239				1,503,828
Total assets	$	15,157,125			$	14,514,476			$	13,181,822
Interest-Bearing Liabilities
Demand deposits	$	364,612	0.27	%	$	361,916	0.24	%	$	401,647	0.31	%
Savings deposits	1,768,897		0.65	%	1,829,592		0.75	%	1,250,844		0.73	%
Money market deposits	457,425		0.46	%	482,296		0.49	%	580,508		0.65	%
Certificate of deposits	3,227,201		1.21	%	3,113,134		1.27	%	2,811,458		1.72	%
Total retail deposits	5,818,135		0.92	%	5,786,938		0.98	%	5,044,457		1.24	%
Demand deposits	107,944		0.48	%	95,805		0.49	%	84,114		0.54	%
Savings deposits	291,046		0.55	%	272,119		0.56	%	485,815		0.65	%
Certificate of deposits	375,922		0.64	%	361,315		0.66	%	289,063		0.54	%
Total government deposits	774,912		0.58	%	729,239		0.60	%	858,992		0.60	%
Wholesale deposits	334,595		3.77	%	339,018		3.78	%	657,557		3.41	%
Total deposits	6,927,642		1.02	%	6,855,195		1.07	%	6,561,006		1.37	%
FHLB advances	3,561,532		3.03	%	3,996,527		2.76	%	3,528,054		3.39	%
Other	248,560		2.81	%	248,585		2.81	%	248,585		2.57	%
Total interest-bearing liabilities	10,737,734		1.73	%	11,100,307		1.72	%	10,337,645		2.09	%
Other liabilities (2)	3,182,980				2,307,945				1,684,352
Stockholder's equity	1,236,411				1,106,224				1,159,825
Total liabilities and stockholder's equity	$	15,157,125			$	14,514,476			$	13,181,822

(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.

(2) Includes company controlled deposits that arise due to the servicing of loans for others, which do not bear interest.

18

Average Balances, Yields and Rates

(Dollars in thousands)

(Unaudited)

	For the Nine Months Ended
	September 30, 2012				September 30, 2011
	Average Balance		Annualized Yield/Rate		Average Balance		Annualized Yield/Rate
Interest-Earning Assets
Loans held-for-sale	$	2,892,439	3.87	%	$	1,746,202	4.48	%
Loans repurchased with government guarantees	2,053,455		3.24	%	1,763,055		3.10	%
Loans held-for-investment
Consumer loans (1)	4,781,021		4.35	%	4,675,795		4.66	%
Commercial loans (1)	1,802,619		3.95	%	1,290,474		4.84	%
Loans held-for-investment	6,583,640		4.24	%	5,966,269		4.70	%
Securities classified as available-for-sale or trading	644,166		4.21	%	732,316		4.86	%
Interest-earning deposits and other	848,241		0.24	%	1,275,917		0.25	%
Total interest-earning assets	13,021,941		3.74	%	11,483,759		3.93	%
Other assets	1,606,255				1,593,237
Total assets	$	14,628,196			$	13,076,996
Interest-Bearing Liabilities
Demand deposits	$	357,715	0.26	%	$	403,236	0.34	%
Savings deposits	1,736,348		0.74	%	1,170,057		0.80	%
Money market deposits	475,477		0.50	%	572,041		0.72	%
Certificate of deposits	3,142,051		1.28	%	2,998,440		1.82	%
Total retail deposits	5,711,591		0.98	%	5,143,774		1.35	%
Demand deposits	100,850		0.49	%	76,160		0.54	%
Savings deposits	277,970		0.56	%	425,998		0.65	%
Certificate of deposits	376,628		0.65	%	259,573		0.63	%
Total government deposits	755,448		0.60	%	761,731		0.63	%
Wholesale deposits	343,682		3.77	%	745,879		3.40	%
Total deposits	6,810,721		1.08	%	6,651,384		1.50	%
FHLB advances	3,884,049		2.82	%	3,465,986		3.48	%
Other	248,577		2.83	%	248,602		2.60	%
Total interest-bearing liabilities	10,943,347		1.74	%	10,365,972		2.19	%
Other liabilities (2)	2,524,818				1,508,101
Stockholder's equity	1,160,031				1,202,923
Total liabilities and stockholder's equity	$	14,628,196			$	13,076,996

(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.

(2) Includes company controlled deposits that arise due to the servicing of loans for others, which do not bear interest.

19

Non-GAAP Reconciliation

(Dollars in thousands)

(Unaudited)

	For the Three Months Ended									For the Nine Months Ended
	September 30, 2012			June 30, 2012			September 30, 2011			September 30, 2012			September 30, 2011
Pre-tax, pre-credit-cost revenue
Income (loss) before tax provision	$	60,730		$	87,887		$	(9,216	)	$	141,307		$	(105,821	)
Add back
Provision for loan losses	52,595			58,428			36,690			225,696			113,383
Asset resolution	12,487			20,851			34,515			70,108			95,906
Other than temporary impairment on AFS investments	—			1,017			1,322			2,192			16,906
Representation and warranty reserve - change in estimate	124,492			46,028			38,985			231,058			80,776
Write down of residual interest	118			1,244			186			1,771			4,825
Total credit-related costs	189,692			127,568			111,698			530,825			311,796
Pre-tax, pre-credit-cost net revenue	$	250,422		$	215,455		$	102,482		$	672,132		$	205,975
Efficiency ratio (credit-adjusted)
Net interest income (a)	$	73,079		$	75,478		$	65,614		$	223,290		$	169,511
Non-interest income (b)	273,737			240,334			112,551			735,448			266,895
Add: Representation and warranty reserve - change in estimate (d)	124,492			46,028			38,985			231,058			80,776
Adjusted income	471,308			361,840			217,150			1,189,796			517,182
Non-interest expense (c)	233,491			169,497			150,691			591,735			428,844
Less: Asset resolution expense (e)	(12,487		)	(20,851		)	(34,515		)	(70,108		)	(95,906		)
Adjusted non-interest expense	$	221,004		$	148,646		$	116,176		$	521,627		$	332,938
Efficiency ratio (c/(a+b))	67.3		%	53.7		%	84.6		%	61.7		%	98.3		%
Efficiency ratio (credit-adjusted) ((c-e)/((a+b)+d)))	46.9		%	41.2		%	53.5		%	43.8		%	64.4		%

	September 30, 2012			June 30, 2012			December 31, 2011			September 30, 2011
Non-performing assets / Tier 1 capital + allowance for loan losses
Non-performing assets	$	518,416		$	538,834		$	603,082		558,252
Tier 1 capital (to adjusted total assets) (1)	$	1,379,701		$	1,295,962		$	1,215,220		1,273,929
Allowance for loan losses	305,000			287,000			318,000			282,000
Tier 1 capital + allowance for loan losses	$	1,684,701		$	1,582,962		$	1,533,220		1,555,929
Non-performing assets / Tier 1 capital + allowance for loan losses	30.8		%	34.0		%	39.3		%	35.9		%
Tier 1 common (to risk-weighted assets)
Tier 1 capital (to adjusted total assets) (1)	$	1,379,701		$	1,295,962		$	1,215,220		$	1,273,929
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	873,044			789,305			708,563			767,272
Total risk-weighted assets (2)	$	8,461,130		$	8,224,348		$	7,905,062		$	7,782,666
Tier 1 common (to risk-weighted assets) ratio	10.32		%	9.60		%	8.96		%	9.86		%

(1)    Represents Tier 1 capital for Bank.

(2) 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.

20

EX-99.2

Earnings Presentation Third Quarter 2012 October 24, 2012 Presenters: Joseph P. Campanelli Chief Executive Officer Michael J. Tierney President Paul D. Borja Chief Financial Officer

Cautionary Statement 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. 2 3rd Quarter 2012 Earnings Presentation

Third Quarter 2012 Highlights 3 • Net income to common stockholders of $79.7 million, or $1.36 per share (year-to-date $156.9 million, or $2.61 per share) • Record gain on loan sale income of $334.4 million, or 242 bps. • Residential mortgage originations of $14.5 billion. • Quarterly bank net interest margin of 2.21%. • Continued growth in commercial loans, consistent with business plan. • $14.9 billion in total assets. • Regulatory capital ratios increased, credit quality improved: • Tier 1 capital ratio (to adjusted total assets) increased to 9.31%. • Consumer non-performing loans improved for third consecutive quarter, with a 5.8% decrease from prior quarter. • Commercial non-performing loans decreased by 11.2% from prior quarter. • Balance sheet strengthened: • Increased ALLL by $18.0 million from prior quarter. • Increased representation and warranty reserves by $41.0 million from prior quarter. • Other key items: • Increase of $40.0 million in litigation reserves for assessment of overall exposure from pending and threatened litigation • $15.2 million loss on extinguishment of debt from the prepayment of $500.0 million in long-term FHLB advances. • Recognition of a $19.9 million tax benefit realized upon the sale of the remaining $210.9 million in non- agency collateralized mortgage obligation securities. 3rd Quarter 2012 Earnings Presentation

Summary of Financial Results 4 (1) Net servicing revenue includes net loan administration income and net gain (loss) on trading securities. (2) See Non-GAAP reconciliation. ($ in millions, except per share data) Q3 2012 Q2 2012 Q3 2011 Net Interest Income $73.1 $75.5 $65.6 Provision $52.6 $58.4 $36.7 Gain on Loan Sale $334.4 $212.7 $103.9 Net Servicing Revenue (1) $11.3 $28.7 $16.9 Net Income (Loss) Applicable to Common Shareholders $79.7 $86.0 ($14.2) Diluted Earnings / (Loss) per Share $1.36 $1.47 ($0.26) Total Assets $14,899.2 $14,368.4 $13,734.0 Total Stockholders' Equity $1,250.6 $1,178.3 $1,159.3 Book Value per Common Share $17.76 $16.50 $16.30 NPLs / Gross Loans HFI 6.09% 6.59% 6.52% NPAs / Total Assets (Bank) 3.48% 3.75% 4.09% ALLL / NPLs 76.45% 66.50% 63.39% ALLL / Gross Loans HFI 4.65% 4.38% 4.13% NPAs / Tier 1 Capital + Allowance for Loan Losses (2) 30.77% 34.04% 35.88% Tier 1 Capital Ratio 9.31% 9.07% 9.31% Total Risk Based Capital Ratio 17.58% 17.03% 17.64% Tier 1 Common to Risk Weighted Assets (2) 10.32% 9.60% 9.86% Total Equity / Total Assets 8.39% 8.20% 8.44% 3rd Quarter 2012 Earnings Presentation

Condensed Income Statement 5 (1) The preferred stock dividend/accretion for Q3 2012 and Q2 2012 represents only the accretion. On January 27, 2012, the Company elected to defer payment of dividends and interest on the preferred stock. (2) Restated for a one-for-ten reverse stock split announced September 27, 2012 and effective on October 10, 2012. ($ in millions, except per share data) Q3 2012 Q2 2012 Q3 2011 Net interest income $73.1 $75.5 $65.6 Provision for loan losses 52.6 58.4 36.7 Net interest income after provision for loan losses 20.5 17.1 28.9 Non-interest income 273.7 240.3 112.6 Non-Interest expense 233.5 169.5 150.7 Income (loss) before federal income taxes 60.7 87.9 (9.2) (Benefit) provision for federal income taxes (20.4) 0.5 0.3 Net income (loss) 81.1 87.4 (9.5) Preferred stock dividend/accretion (1) (1.4) (1.4) (4.7) Net income (loss) applicable to common stockholders $79.7 $86.0 ($14.2) Diluted earnings (loss) per Share (2) $1.36 $1.47 ($0.26) -- Net income to common stockholders was $79.7 million for the third quarter 2012, the second consecutive quarter of profitability… 3rd Quarter 2012 Earnings Presentation Totals may not foot due to rounding

Select Balance Sheet Items 6 -- During the quarter we sold our remaining non-agency CMO portfolio … 3rd Quarter 2012 Earnings Presentation ($ in millions) As of Sep 30, 2012 As of Jun 30, 2012 As of Sep 30, 2011 Total assets $14,899.2 $14,368.4 $13,734.0 Cash and interest earning deposits $1,003.4 $1,270.4 $902.8 Residential first mortgage loans 3,086.1 3,102.1 3,828.1 Second mortgage loans 122.3 127.4 146.5 Commercial real estate loans 1,005.5 1,075.0 1,268.9 Warehouse loans 1,307.3 1,261.4 995.7 Consumer lending (including HELOC and other) 245.3 255.8 305.9 Other commercial loans 785.9 728.4 276.7 Investment loan portfolio $6,552.4 $6,550.3 $6,821.7 Loans held for sale $3,251.9 $2,459.5 $2,080.9 Loans repurchased with government guarantees 1,931.2 1,999.1 1,746.0 Securities classified as trading 170.1 169.8 312.8 Securities classified as available for sale 198.9 424.8 521.3 Mortgage servicing rights 686.8 638.9 437.3 Totals may not foot due to rounding

3rd Quarter 2012 Earnings Presentation 7 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. $ in millions Q3 2012 Q2 2012 Q3 2011 Consumer (1) $53.9 $62.1 $91.3 Commercial (1) $9.6 $1.7 $13.7 Total 30 - 59 Days Past Due $63.5 $63.8 $105.0 Consumer (1) $26.7 $24.8 $46.0 Commercial (1) $0.4 $2.3 $10.5 Total 60 - 89 Days Past Due $27.1 $27.1 $56.5 Consumer (1) $276.3 $293.5 $352.4 Commercial (1) $122.6 $138.1 $92.5 Total Greater than 90 days Past Due $398.9 $431.6 $444.9 Non-performing Assets (2) $520.5 $541.3 $561.6 To Total Assets (Bank only) 3.48% 3.75% 4.09% Provision for Loan Losses $52.6 $58.4 $36.7 Charge-offs, Net of Recoveries $34.6 $52.4 $28.7 Allowance for Loan Losses $305.0 $287.0 $282.0 To Loans Held for Investment 4.65% 4.38% 4.13% To Non-performing Loans 76.5% 66.5% 63.4% Real Estate Owned $119.5 $107.2 $113.4 -- Past due loans stabilized or improved… -- The ratio of NPAs to total assets improved… -- The coverage of ALLL to NPLs and to total loans improved… Totals may not foot due to rounding

3rd Quarter 2012 Earnings Presentation (millions) 8 Pre-tax, Pre-credit-cost Revenue Note: See Non-GAAP reconciliation. -- Pre-tax, pre-credit-cost revenue continues to grow, driven by the strength of the mortgage banking business… $95.4 $89.7 $62.5 $41.0 $102.5 $98.3 $206.3 $215.5 $250.4 $0 $50 $100 $150 $200 $250 $300 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Pre-tax, pre-credit-cost revenue

9 Regulatory Capital Ratios -- The regulatory capital ratios, especially the Tier 1 capital ratio, increased from the prior quarter, reflecting the quarter’s profitable results… 3rd Quarter 2012 Earnings Presentation 0.0939 9.24% 9.12% 9.61% 9.87% 10.07% 9.31% 8.95% 8.64% 9.07% 9.31% 0.1798 17.20% 16.87% 18.55% 20.51% 19.73% 17.64% 16.64% 16.06% 17.03% 17.58% 0 0.05 0.1 0.15 0.2 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Tier 1 Capital Ratio (to Adjusted Total Assets) Total Risk-Based Capital Ratio (to Risk-weighted Assets)

10 Net Gain on Loan Sales and Margin (millions) -- Net gain on loan sales continued to increase, driven by higher margins and increasing volume… $103.9 $106.9 $204.9 $212.7 $334.4 1.53% 1.02% 1.89% 1.66% 2.42% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% 5.00% $0 $50 $100 $150 $200 $250 $300 $350 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Net Gain on Loan Sales Gain on Loan Sale Margin 3rd Quarter 2012 Earnings Presentation

11 Mortgage Originations $2,538.9 $2,148.3 $2,188.5 $3,324.5 $3,267.8 $4,387.5 $8,038.8 $8,980.9 $9,222.5 $11,245.8 $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Purchase Originations Refinance Originations (millions) -- Mortgage originations continued to grow overall, with increasing refinance business and continued demand for purchase loans similar to the prior quarter… 3rd Quarter 2012 Earnings Presentation

$1,500 $2,500 $3,500 $4,500 $5,500 $6,500 $7,500 2007 2008 2009 2010 2011 2012 12 Historical Monthly Lock Volume (millions) -- Current lock volume (see thick red line, below) is well above the 5-year levels for each of the months so far this year… 3rd Quarter 2012 Earnings Presentation

13 Net Servicing Revenue Note: Net servicing revenue includes net loan administration income and net gain (loss) on trading securities. (millions) $16.9 $29.0 $32.9 $28.7 $11.3 $0 $5 $10 $15 $20 $25 $30 $35 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Net Servicing Revenue -- Net servicing revenue, which is income arising from mortgage servicing rights plus hedges, declined in the current quarter as prepayment speeds increased due to refinances, and as the interest rate market experienced significant volatility during the quarter… 3rd Quarter 2012 Earnings Presentation

Mortgage Banking Revenue Supporting Bank 14 -- Mortgage banking revenue continues to support the Bank’s business model, offsetting or exceeding legacy credit costs over the last several quarters… $103.9 $106.9 $204.9 $212.7 $334.4 $111.7 $173.2 $213.6 $127.6 $189.7 $0 $50 $100 $150 $200 $250 $300 $350 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Net gain on loan sales Total credit-related-costs Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Mortgage Locks (billions) $13. 1 $ 11.2 $ 14.9 $ 17.5 $ 18.1 Mortgage Originations (billions) $ 6.9 $ 10.2 $ 11.2 $ 12.5 $ 14.5

$36.7 $63.5 $114.7 $58.4 $52.6 $34.5 $32.4 $36.8 $20.9 $12.5 $39.0 $69.3 $60.5 $46.0 $124.5 $0 $50 $100 $150 $200 $250 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Provision for loan losses Asset resolution Representation and warranty reserve – change in estimate 15 Primary Credit Related Costs (millions) -- Credit costs for the quarter were primarily affected by expenses for the representation and warranty reserve, as we increased our reserve in light of new information obtained from the GSEs, as well as current trends in repurchase demands, appeal rates and loss severity… 3rd Quarter 2012 Earnings Presentation

16 Representation and Warranty Reserve ($ in millions) 3Q11 4Q11 1Q12 2Q12 3Q12 Beginning balance $79.4 $85.0 $120.0 $142.0 $161.0 Additions $40.8 $72.8 $65.6 $51.7 $130.9 Net charge-offs ($35.2) ($37.8) ($43.6) ($32.7) ($89.9) Ending Balance $85.0 $120.0 $142.0 $161.0 $202.0 -- The R&W reserve was increased to reflect an updated forecast for future demands based on the latest available data… 3rd Quarter 2012 Earnings Presentation Totals may not foot due to rounding

$349.5 $343.3 $357.4 $469.8 $425.6 22.6% 26.8% 29.3% 21.1% 9.0% 0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 70.00% 80.00% $0 $100 $200 $300 $400 $500 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Repurchase Pipeline % demands 180+ days old 17 Repurchase Pipeline (UPB) (millions) -- Focus on pipeline demands during the quarter substantially reduced both the overall pipeline and the level of demands aged 180+ days… 9% Decrease 12% Decrease 3rd Quarter 2012 Earnings Presentation

18 Audit File Review Requests (Units) 3,911 2,776 2,785 2,910 1,224 598 996 1,202 1,502 1,664 0 500 1000 1500 2000 2500 3000 3500 4000 4500 5000 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Audit File Review Requests (units) Fannie Mae Freddie Mac -- Fannie Mae audit file review requests, a leading indicator of repurchase demands, decreased significantly from the prior quarter, with Freddie Mac file review requests increasing slightly… 35% Decrease 3rd Quarter 2012 Earnings Presentation

19 New Demands (Units) 840 818 917 1,572 1,100 131 151 217 208 216 0 200 400 600 800 1000 1200 1400 1600 1800 2000 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 New Demands (units) Fannie Mae Freddie Mac -- New demands made by the GSEs following audit file reviews have declined with Fannie Mae, and have remained relatively flat over the last three quarters with Freddie Mac… 26% Decrease 3rd Quarter 2012 Earnings Presentation

20 New Demands by Vintage (UPB) -- New demands by the GSEs reflect a decline in loans across all vintages, with a continued emphasis on 2007 – 2008 vintage loans… 3rd Quarter 2012 Earnings Presentation ($ in millions) 3Q11 4Q11 1Q12 2Q12 3Q12 2005 & Prior $13 $13 $18 $26 $16 2006 31 32 28 34 24 2007 87 87 93 136 113 2008 45 45 63 89 57 2009-2012 24 15 36 62 50 Total $201 $193 $239 $347 $259 Breakout of 3Q12 Demands ($ in millions) Fannie Mae Freddie Mac Total 2005 & Prior $14 $2 $15 2006 18 5 23 2007 108 5 111 2008 53 4 57 2009-2012 18 32 51 Total $211 $48 $259 Totals may not foot due to rounding

21 Performance of 2009 – 2012 Vintage Demands -- While new demands in the 2009 – 2012 vintage have increased over the last two quarters, we believe losses associated with those demands will be relatively insignificant… 3rd Quarter 2012 Earnings Presentation New demands for the 2009-2012 vintages were down 20% from the prior quarter Over the last 5 quarters, 66% of the new demands from the 2009 – 2012 vintages are loans that are currently “performing” • New demands for these vintages decreased by 20% from the prior quarter • Substantial percentage (66% on average over last 5 quarters) of these new demands are for performing loans, with a significant portion related to curable documentation and similar issues. 102 63 121 259 207 0 50 100 150 200 250 300 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 New Demands (Units) 3 5 11 31 9 85 37 87 142 144 14 21 23 86 54 0 50 100 150 200 250 300 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 New Demands (Units) Makewhole Repurchase - Current Repurchase - Delinquent

22 Allowance for Loan Losses $282 $318 $281 $287 $305 63.4% 65.1% 69.1% 66.5% 76.5% 20% 30% 40% 50% 60% 70% 80% 90% 100% $0 $50 $100 $150 $200 $250 $300 $350 $400 Allowance for Loan Losses ALLL / Non-performing Loans (millions) -- Loan loss reserves continue to strengthen, both in total and as a percentage of non-performing loans… 3rd Quarter 2012 Earnings Presentation

23 Troubled Debt Restructurings (TDRs) (millions) -- Our loan modification programs continued to be active in helping consumers stay in their homes. Performing TDRs have increased by 19% in 2012, while non-performing TDRs have decreased by 59% over the same period… 3rd Quarter 2012 Earnings Presentation $132.4 $135.2 $65.9 $58.2 $55.4 $32.4 $61.3 $93.3 $74.8 $54.1 $513.8 $517.2 $537.2 $576.0 $614.3 $0 $100 $200 $300 $400 $500 $600 $700 $800 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Non-performing TDRs Modified (less than 6 months) Performing TDRs

24 Net Charge-offs 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. $18.7 $25.9 $107.1 $23.5 $23.5 $9.9 $1.7 $44.6 $28.9 $11.1 $- $50 $100 $150 $200 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Consumer Commercial (millions) -- Charge-offs of our held for investment loans declined overall, reflecting a continued focus on loss mitigation strategies and generally improving economic conditions … 3rd Quarter 2012 Earnings Presentation

25 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. $0.0 $100.0 $200.0 $300.0 $400.0 $500.0 $600.0 30-60 days past due 60-90 days past due 90+ days past due ($ in millions) -- Despite intra-quarter fluctuations, non-performing loans (i.e., 90+ days past due) declined from the prior quarter… 3rd Quarter 2012 Earnings Presentation $0.0 $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 $70.0 $80.0 $90.0 $100.0 30 - 60 Days Past Due Consumer Commercial ($ in millions) $0.0 $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 60 - 90 Days Past Due Consu er Commercial ($ in millions) $0.0 $50.0 $100.0 $150.0 $200.0 $250.0 $300.0 $350.0 $400.0 $450.0 90+ ays Past Due onsumer Commercial ($ in millions)

$5,229.3 $3,967.5 $3,888.7 $3,208.4 $1,600.3 $1,250.3 $970.0 $618.8 $- $2,000 $4,000 $6,000 Dec 2009 Dec 2010 Dec 2011 Sept 30 2012 HFI Residential Mortgage (1st and 2nd) HFI "Legacy" Commercial Real Estate 26 Decline in Legacy Assets Note: “Legacy CRE” consists of loans originated prior to 2011, including those refinanced during 2009 and 2010. (millions) -- Overall legacy assets continue to decline, reflecting pay-downs, dispositions and mitigation efforts… 3rd Quarter 2012 Earnings Presentation 17% Decrease 36% Decrease

27 Bank Net Interest Income and Margin (millions) $67.2 $77.5 $76.5 $77.2 $74.8 2.30% 2.43% 2.41% 2.37% 2.21% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% $62 $64 $66 $68 $70 $72 $74 $76 $78 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Net Interest Income before Provision Net Interest Margin (Bank) -- NIM compression reflects declines in variable yields and yields on shorter-duration assets, without any corresponding decline in overall funding costs. Also reflects increased liquidity… 3rd Quarter 2012 Earnings Presentation

28 Cost of Funds $22.7 $20.9 $19.0 $18.3 $17.8 $30.1 $27.6 $27.4 $27.4 $27.1 $1.6 $1.7 $1.8 $1.7 $1.8 2.09% 1.81% 1.76% 1.72% 1.73% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% $0 $10 $20 $30 $40 $50 $60 $70 $80 $90 $100 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Deposit Interest Expense FHLB Interest Expense Other Interest Expense Average Funding Cost (millions) -- Average cost of funds remained unchanged from the prior quarter; however overall funds expense declined in both deposits and FHLB advances… 3rd Quarter 2012 Earnings Presentation

3rd Quarter 2012 Earnings Presentation 29 Deposit Mix Note: Represents the ending balance and rate for period noted. Retail core deposits include demand, savings and money market accounts. (millions) As of Sep 30, 2012 As of Jun 30, 2012 As of Sep 30, 2011 Balance Rate Balance Rate Balance Rate Retail Deposits: Demand deposits $ 650 0.16% $ 631 0.14% $ 640 0.19% Savings deposits 1,710 0.62% 1,846 0.69% 1,318 0.74% Money market deposits 435 0.45% 474 0.47% 557 0.62% Certificates of deposit 3,272 1.14% 3,126 1.25% 2,990 1.59% Total retail deposits 6,067 0.84% 6,076 0.90% 5,504 1.13% Core retail deposits / retail deposits 46.08% 48.55% 45.67% Government Banking Deposits: Demand deposits 103 0.36% 126 0.38% 97 0.45% Savings deposits 353 0.51% 244 0.56% 502 0.65% Certificates of deposit 450 0.60% 351 0.62% 362 0.66% Total government banking deposits 906 721 0.56% 961 0.63% Company controlled deposits 2,201 0.00% 1,786 0.00% 1,043 0.00% Wholesale deposits 315 3.43% 339 3.52% 619 3.04% Total deposits $ 9,489 0.70% $ 8,923 0.79% $ 8,128 1.07% Number of banking branches 111 111 162 Totals may not foot due to rounding

Note: Retail core deposits include checking accounts, savings accounts, and money market accounts. 30 Retail Core Deposits $2,514 $2,521 $2,873 $2,950 $2,795 45.7% 45.9% 47.9% 48.6% 46.1% 0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 70.00% $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 Q3 2011 Q4 2011 Q1 2012 Q 2 2012 Q 3 2012 Retail Core Retail Core / Retail Deposits (millions) -- Attraction of core deposits experienced significant competition from institutions offering higher CD yields as consumers reacted to a prolonged low interest rate environment… 3rd Quarter 2012 Earnings Presentation

31 Partnership with the University of Michigan 3rd Quarter 2012 Earnings Presentation

32 Deposit Market Share and Competitive Landscape 3rd Quarter 2012 Earnings Presentation Source: FDIC (based on most recently completed survey, June 30, 2012) Number of Branches Deposits Branch Market Share Deposit Market Share Power Ratio Branch Chg Deposit Chg Br Market Share Chg Deposit Market Share Chg Power Ratio Chg Chase 308 29,175,141 10.4% 17.5% 168% 1 14.0% 0.13% 1.28% 10.26% Comerica 218 23,674,354 7.4% 14.2% 192% 0 8.8% 0.07% 0.41% 3.75% PNC 241 14,947,726 8.2% 9.0% 110% (3) -0.7% -0.02% -0.58% -6.71% Bank of America 214 13,731,428 7.3% 8.2% 114% (7) -3.9% -0.17% -0.82% -8.48% Fifth Third 249 13,661,826 8.4% 8.2% 97% 0 4.6% 0.08% -0.09% -1.97% Flagstar 111 9,096,053 3.8% 5.5% 145% (2) 30.2% -0.03% 1.03% 28.30% Huntington 140 7,843,109 4.7% 4.7% 99% 11 10.2% 0.41% 0.20% -4.97% Citizens 156 5,923,119 5.3% 3.6% 67% 1 -1.7% 0.08% -0.27% -6.19% Charter One 104 4,711,827 3.5% 2.8% 80% (5) 1.2% -0.13% -0.12% -0.44% Chemical 143 4,383,781 4.8% 2.6% 54% 0 3.1% 0.05% -0.07% -1.87% All Other 1,066 39,478,958 36.1% 23.7% 66% (24) 1.5% -0.47% -0.97% -1.82% Total Market 2,950 166,627,322 100% 100% (28) 5.7% • Flagstar is ranked 6th in total Michigan deposit market share for 2012, moving up one position from 2011 • Flagstar outperformed the total Michigan market with deposit growth of 30% versus 5.7% for the state, the second highest competitor was at 14%. Michigan Deposit Market Share

33 Michigan Deposit Summary 3rd Quarter 2012 Earnings Presentation Source: FDIC (based on most recently completed survey, June 30, 2012) Institution June 30, 2012 June 30, 2011 Change Number of Branches Deposits ($000) Branch Size Number of Branches Deposits ($000) Branch Size Number of Branches Deposits ($000) Branch Size Comerica 218 23,674,354 108,598 218 21,760,681 99,820 0 1,913,673 8,778 Chase 308 29,175,141 94,724 307 25,593,656 83,367 1 3,581,485 11,358 Flagstar 111 9,096,053 81,946 113 6,987,263 61,834 (2) 2,108,790 20,112 Bank of America 214 13,731,428 64,166 221 14,285,495 64,640 (7) (554,067) (475) PNC 241 14,947,726 62,024 244 15,053,433 61,694 (3) (105,707) 329 Huntington 140 7,843,109 56,022 129 7,114,078 55,148 11 729,031 874 Fifth Third 249 13,661,826 54,867 249 13,066,391 52,475 0 595,435 2,391 Charter One 104 4,711,827 45,306 109 4,654,716 42,704 (5) 57,111 2,602 Citizens 156 5,923,119 37,969 155 6,024,966 38,871 1 (101,847) (902) All other 1,066 39,478,958 37,035 1,090 38,891,640 35,680 (24) 587,318 1,354 Chemical 143 4,383,781 30,656 143 4,251,223 29,729 0 132,558 927 Michigan 2,950 166,627,322 56,484 2,978 157,683,542 52,949 (28) 8,943,780 3,534

$276.7 $443.4 $688.7 $728.4 $785.9 $0 $100 $200 $300 $400 $500 $600 $700 $800 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Commercial Non-Real Estate Loan Balance 34 Commercial Non-RE Portfolio Note: Includes commercial and industrial and commercial lease financing loans. (millions) -- Portfolio growth during the quarter reflects the continued emphasis on C&I loan growth… 3rd Quarter 2012 Earnings Presentation

35 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. $1,025.1 $970.0 $873.0 $746.9 $618.8 $243.7 $273.0 $284.9 $328.2 $386.7 $- $500 $1,000 $1,500 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Legacy CRE New CRE (millions) -- The balances of “legacy” CRE loans continue to decline, with moderate growth in newly originated CRE loans… 3rd Quarter 2012 Earnings Presentation

3rd Quarter 2012 Earnings Presentation 36 Appendix

3rd Quarter 2012 Earnings Presentation 37 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. $ in thousands New Commercial RE Legacy Commercial RE 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 - - - - - $387 - - $387 - Land 156 - - - 3 5,230 - - 2,130 255 Services 303 - - - 5 - - - - - Commercial & Industrial Loans 6,447 - - - 298 215 - - - 151 One-to-four family conventional 1,645 - - - 28 648 103 - 241 46 One-to-four family closed end mortgage - - - - - 294 - - - 24 Mult-family conventional 136,873 - - - 2,292 48,496 8,902 - 1,233 3,883 Commercial non-owner occupied 148,626 - - - 2,504 510,064 130 397 112,864 34,185 Secured by non-farm, non- residential 45,144 - - - 448 52,174 428 - 5,731 3,865 Other 50,755 - - - 848 - - - - - Negative Escrow 2 - - - - 2,596 - - - - Net deferred fees and other (3,238) - - - - (1,319) - - - - Total: $386,713 $0.0 $0.0 $0.0 $6,426 $618,785 $9,563 $397 $122,586 $42,409 Totals may not foot due to rounding

3rd Quarter 2012 Earnings Presentation 38 Commercial RE Portfolio – by State Note: Reflects unpaid principal balance of underlying loans before accounting adjustments for discounts and other items. Also excludes commercial letters of credit $ in thousands 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 $221 $303 $6,662 $2,293 $294 $57,024 $345,957 $52,139 $986 $465,879 NY - - - - - - 100,000 25,048 9,279 9,500 143,827 GA - - - - - - - 63,032 7,951 - 70,983 MA - - - - - - 17,336 7,323 8,021 17,679 50,359 IN - 5,165 - - - - - 35,165 6,119 - 46,448 VA - - - - - - - 34,213 - 5,907 40,120 CT - - - - - - - 27,639 2,843 - 30,482 RI - - - - - - - 13,921 - 3,440 17,362 FL - - - - - - - 13,214 - 3,385 16,599 KY - - - - - - - 11,102 - - 11,102 TX - - - - - - - 10,568 - - 10,568 TN - - - - - - - 8,859 1,261 - 10,120 PA - - - - - - 9,905 - - - 9,905 MD - - - - - - - - - 9,858 9,858 CO - - - - - - - 9,554 147 - 9,701 Other 387 - - - - - 1,105 53,094 9,560 (1,959) 62,187 Total $387 $5,386 $303 $6,662 $2,293 $294 $185,369 $658,690 $97,318 $48,796 $1,005,498 Totals may not foot due to rounding

3rd Quarter 2012 Earnings Presentation 39 Commercial RE Portfolio – by Vintage Note: Reflects unpaid principal balance of underlying loans before accounting adjustments for discounts and other items. Also excludes commercial letters of credit $ in thousands 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 $187 $0 $9,517 $27,600 $4,781 $0 $42,085 2003 - - - - - - 4,438 19,714 3,965 - 28,116 2004 - - - - - - 9,043 58,349 3,714 - 71,106 2005 - - - - - - 15,620 43,834 2,748 - 62,202 2006 - - - - 23 - 3,598 85,986 6,999 - 96,606 2007 - 2,064 - 215 246 - 2,514 125,640 27,161 - 157,840 2008 - - - - 125 - 3,767 113,353 2,806 - 120,050 2009 - 66 - - 68 294 - 7,219 - - 7,646 2010 387 - - - - - - 13,507 - - 13,893 2011 - 3,256 - - - - 126,802 96,077 22,229 41,807 290,171 2012 - - 303 6,448 1,645 - 10,071 67,413 22,915 6,989 115,783 Total $387 $5,386 $303 $6,662 $2,293 $294 $185,369 $658,690 $97,318 $48,796 $1,005,498 Totals may not foot due to rounding

3rd Quarter 2012 Earnings Presentation 40 First Mortgage Portfolio – by State 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. $ in thousands State AFS HFI ARM Fixed Balloon Total % of Total ARM Fixed Balloon Total % of Total CA $ 31,193 $ 862,520 $ - $ 893,713 36.0% $ 609,455 $ 308,845 $ 32,078 $ 950,378 31.4% FL 4,403 148,819 - 153,222 6.2% 283,974 119,773 7,863 411,610 13.6% MI 4,342 125,268 - 129,610 5.2% 249,575 49,256 9,469 308,300 10.2% WA 6,317 74,290 - 80,607 3.2% 94,476 38,031 7,106 139,613 4.6% AZ 2,268 70,904 - 73,172 2.9% 86,984 37,151 2,480 126,615 4.2% CO 3,877 63,373 - 67,250 2.7% 59,940 17,603 5,283 82,826 2.7% MD 3,782 55,887 - 59,669 2.4% 51,274 24,480 6,032 81,786 2.7% NY 934 55,670 - 56,604 2.3% 38,909 31,638 2,093 72,640 2.4% VA 884 64,810 - 65,694 2.6% 48,870 19,414 3,501 71,785 2.4% TX 4,714 142,695 - 147,409 5.9% 29,376 31,483 2,449 63,308 2.1% NJ 1,132 48,337 - 49,469 2.0% 33,387 24,508 3,946 61,841 2.0% NV - 16,425 - 16,425 0.7% 41,647 16,733 1,167 59,547 2.0% IL 2,768 54,351 - 57,119 2.3% 35,383 22,033 2,383 59,799 2.0% GA 583 50,945 - 51,528 2.1% 34,528 21,082 3,346 58,956 1.9% OH 1,201 30,126 - 31,327 1.3% 34,557 9,942 813 45,312 1.5% Other 18,211 531,173 357 549,741 22.1% 267,065 151,703 17,323 436,091 14.4% Total : $ 86,609 $ 2,395,594 $ 357 $ 2,482,560 100% $ 1,999,400 $ 923,675 $ 107,332 $ 3,030,407 100% Totals may not foot due to rounding

3rd Quarter 2012 Earnings Presentation 41 First Mortgage Portfolio – by Vintage 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. $ in thousands Year AFS HFI ARM Fixed Balloon Total % of Total ARM Fixed Balloon Total % of Total Older $ 1,654 $ 983 $ - $ 2,637 0.1% $ 52,396 $ 24,825 $ 673 $ 77,894 2.6% 2003 10,722 680 - 11,402 0.5% 159,763 26,095 6,625 192,483 6.4% 2004 7,915 828 - 8,743 0.4% 532,442 42,016 9,666 584,124 19.3% 2005 3,987 1,036 - 5,023 0.2% 552,403 69,429 3,398 625,230 20.6% 2006 1,672 3,811 89 5,572 0.2% 150,288 124,617 16,316 291,221 9.6% 2007 6,195 24,247 268 30,710 1.2% 443,372 467,889 68,000 979,261 32.3% 2008 528 12,454 - 12,982 0.5% 38,054 79,507 2,654 120,215 4.0% 2009 - 9,517 - 9,517 0.4% 12,305 48,780 - 61,086 2.0% 2010 5,186 2,882 - 8,068 0.3% 9,563 14,411 - 23,974 0.8% 2011 4,495 6,620 - 11,115 0.4% 25,263 19,727 - 44,989 1.5% 2012 44,254 2,332,537 - 2,376,791 95.7% 23,552 6,379 - 29,931 1.0% Total : $ 86,609 $ 2,395,594 $ 357 $ 2,482,560 100% $ 1,999,400 $ 923,676 $ 107,332 $ 3,030,407 100% Totals may not foot due to rounding

3rd Quarter 2012 Earnings Presentation 42 First Mortgage Portfolio – by Original FICO 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. $ in thousands FICO AFS HFI ARM Fixed Balloon Total % of Total ARM Fixed Balloon Total % of Total < 580 637 10,336 - 10,973 0.4% 40,170 26,837 775 67,782 2.2% 580 - 619 - 11,558 268 11,826 0.5% 31,649 36,562 1,679 69,890 2.3% 620 - 659 1,376 126,008 89 127,473 5.1% 125,305 89,772 5,004 220,081 7.3% 660 - 699 6,555 343,070 - 349,625 14.1% 533,149 245,643 38,156 816,948 27.0% > 699 78,041 1,904,622 - 1,982,663 79.9% 1,269,127 524,862 61,719 1,855,707 61.2% Total : $ 86,609 $ 2,395,594 $ 357 $ 2,482,560 100% $ 1,999,400 $ 923,676 $ 107,332 $ 3,030,407 100%

3rd Quarter 2012 Earnings Presentation 43 First Mortgage Portfolio – by Original LTV 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. $ in thousands Original LTV AFS HFI ARM Fixed Balloon Total % of Total ARM Fixed Balloon Total % of Total < 70 $ 40,246 $ 680,080 $ - $ 720,327 29.0% $ 528,416 $ 233,090 $ 23,917 $ 785,423 25.9% 70 - 79.99 35,041 625,423 - 660,465 26.6% 1,209,596 496,614 63,012 1,769,222 58.4% 80 - 89.99 4,565 214,057 89 218,711 8.8% 129,338 73,715 13,791 216,844 7.2% 90 - 99.99 6,756 673,923 268 680,947 27.4% 126,318 109,726 6,344 242,388 8.0% 100 - 109.99 - 110,305 - 110,305 4.4% 5,491 8,654 149 14,294 0.5% 110 - 124.99 - 44,134 - 44,134 1.8% 241 1,877 - 2,118 0.1% > 124.99 - 47,671 - 47,671 1.9% - - 119 119 0.0% Total: $ 86,609 $ 2,395,594 $ 357 $ 2,482,560 100% $ 1,999,400 $ 923,676 $ 107,332 $ 3,030,407 100% Totals may not foot due to rounding

3rd Quarter 2012 Earnings Presentation 44 First Mortgage Portfolio – by HPI Adjusted LTV 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. $ in thousands HPI Adjusted LTV AFS HFI ARM Fixed Balloon Total % of Total ARM Fixed Balloon Total % of Total < 70 $ 50,085 $ 688,430 $ - $ 738,515 29.7% $ 392,689 $ 106,291 $ 8,169 $ 507,149 16.7% 70 - 79.99 24,358 607,036 89 631,482 25.4% 313,763 86,336 9,778 409,877 13.5% 80 - 89.99 4,130 219,069 - 223,199 9.0% 312,303 128,423 16,316 457,042 15.1% 90 - 99.99 7,822 665,997 - 673,819 27.1% 264,068 144,851 19,421 428,340 14.1% 100 - 109.99 214 106,721 268 107,203 4.3% 262,558 161,373 21,417 445,348 14.7% 110 - 124.99 - 53,004 - 53,004 2.1% 225,574 149,479 16,015 391,068 12.9% > 124.99 - 55,338 - 55,338 2.2% 228,445 146,924 16,216 391,584 12.9% Total : $ 86,609 $ 2,395,594 $ 357 $ 2,482,560 100% $ 1,999,400 $ 923,676 $ 107,332 $ 3,030,407 100% Totals may not foot due to rounding

3rd Quarter 2012 Earnings Presentation Totals may not foot due to rounding 45 Real Estate Owned Portfolio $ in thousands Commercial % Receivership % Construction % Manufactured Homes % Single Family Homes % Total % Current Month $ 1,555 3.8% $ - 0.0% $ 591 18.9% $ 53 15.3% $ 3,941 7.4% $ 6,141 5.1% 30 days 7,994 19.6% 5,010 39.5% 363 11.6% 33 9.4% 7,780 14.6% 21,179 17.7% 60 days 7,018 17.2% - 0.0% 495 15.9% 140 39.9% 7,582 14.2% 15,235 12.8% 90 days 5,058 12.4% - 0.0% 507 16.2% - 0.0% 2,117 4.0% 7,681 6.4% 91 - 180 days 2,992 7.3% 701 5.5% 329 10.5% 36 10.4% 9,310 17.5% 13,368 11.2% 181 - 365 days 5,814 14.2% 2,338 18.4% 723 23.1% 54 15.5% 12,882 24.2% 21,811 18.3% 1 - 2 years 5,522 13.5% 4,637 36.6% 118 3.8% - 0.0% 7,853 14.8% 18,131 15.2% 2 - 3 years 2,708 6.6% - 0.0% - 0.0% 33 9.5% 963 1.8% 3,705 3.1% 3 - 4 years 111 0.3% - 0.0% - 0.0% - 0.0% 795 1.5% 906 0.8% 4 - 5 years 2,040 5.0% - 0.0% - 0.0% - 0.0% 6 0.0% 2,046 1.7% 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% 9,266 7.8% Total $ 40,813 100.0% $ 12,687 100.0% $ 3,125 100.0% $ 350 100.0% $ 53,228 100.0% $ 119,468 100.0%

3rd Quarter 2012 Earnings Presentation 46 Asset Quality by Loan Type - HFI Note: Non-performing loans include 90+ days delinquent and matured, and performing non-accruals. $ in thousands Loan Type Balance Non-performing Loans % of Balance % of Overall NPLs Q3 '12 Charge Offs, Net of Recoveries Collectively Evaluated Reserves (1) Individually Evaluated Reserves (2) Total Reserves Residential first mortgage $3,086,025 $268,141 11.03% 69.55% $18,101 $74,972 $129,903 $204,875 Second mortgage 122,286 4,406 5.23% 1.31% 3,561 12,477 6,410 18,887 Construction 70 70 100.00% 0.01% - - - - Warehouse 1,307,292 28 0.00% 0.01% - 1,038 - 1,038 HELOC 192,117 3,435 4.56% 1.79% 1,438 15,216 2,340 17,556 Consumer 53,188 240 2.23% 0.24% 445 2,207 - 2,207 Commercial RE 1,005,498 122,585 13.18% 27.07% 11,071 47,113 1,722 48,835 Commercial NRE 785,922 43 0.01% 0.02% (21) 11,582 20 11,602 Total: $6,552,399 $489,559 7.47% 100.00% $34,595 $164,606 $140,394 $305,000 (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. Totals may not foot due to rounding

3rd Quarter 2012 Earnings Presentation 47 Non-performing Loans HFI – by State Note: Non-performing loans include 90+ days delinquent and matured, and performing non-accruals. Excludes participations and first mortgage repurchases. $ in thousands State Mortgage Percent of Mortgage Second Mortgage HELOC Commercial Real Estate Commercial Construction Consumer Warehouse Total Percent of Total CA $58,970 22.0% $741 $440 $17,618 $- $- $1 $- $77,770 19.5% FL 56,120 20.9% 489 80 4,711 - - - - 61,401 15.4% MI 14,590 5.4% 544 1,361 34,169 43 - 204 - 50,912 12.8% VA 3,874 1.4% - 121 34,213 - - - - 38,208 9.6% GA 5,414 2.0% 33 25 20,946 - - 3 - 26,422 6.6% NY 13,004 4.8% 87 349 - - - - - 13,440 3.4% NJ 11,036 4.1% 44 66 - - - - - 11,146 2.8% WA 10,026 3.7% 548 273 - - - - - 10,847 2.7% NV 6,727 2.5% 74 - 2,547 - - - - 9,349 2.3% TX 8,558 3.2% 36 - - - - - - 8,593 2.2% IL 6,050 2.3% 131 3 2,080 - - - - 8,264 2.1% AZ 8,004 3.0% 178 51 - - - - - 8,233 2.1% MD 7,813 2.9% 153 - - - - - - 7,966 2.0% CO 4,334 1.6% 226 - - - - - - 4,561 1.1% IN 2,095 0.8% 183 29 2,064 - 70 15 - 4,456 1.1% Other 51,525 19.2% 938 636 4,237 - - 18 28 57,382 14.4% Total $268,141 100.0% $4,406 $3,435 $122,585 $43 $70 $240 $28 $398,948 100.0% Totals may not foot due to rounding

3rd Quarter 2012 Earnings Presentation 48 Non-performing Loans HFI – by Vintage Note: Non-performing loans include 90+ days delinquent and matured, and performing non-accruals. Excludes participations and first mortgage repurchases. $ in thousands Vintage Mortgage Percent of Mortgage Second Mortgage HELOC Commercial Real Estate Commercial Construction Consumer Warehouse Total Percent of Total Older $13,889 5.2% $396 $1,258 $6,562 $- $70 $16 $- $22,191 5.6% 2004 23,537 8.8% 141 116 2,830 - - 1 - 26,626 6.7% 2005 26,954 10.1% 201 80 6,512 - - 96 - 33,843 8.5% 2006 20,621 7.7% 282 297 34,019 - - 1 - 55,220 13.8% 2007 102,105 38.1% 3,020 1,441 40,946 - - 39 - 147,551 37.0% 2008 43,335 16.2% 346 237 9,761 5 - 25 - 53,710 13.5% 2009 14,199 5.3% 19 - 593 - - - 28 14,840 3.7% 2010 4,648 1.7% - - 8,263 - - 44 - 12,956 3.2% 2011 6,085 2.3% - 5 13,098 38 - 15 - 19,242 4.8% 2012 12,767 4.8% - - - - - 2 - 12,769 3.2% Total $268,141 100.0% $4,406 $3,435 $122,585 $43 $70 $240 $28 $398,948 100% Totals may not foot due to rounding

3rd Quarter 2012 Earnings Presentation Totals may not foot due to rounding 49 Non – GAAP Reconciliation $ in millions Q3 2012 Q2 2012 Q1 2012 Q4 2011 Q3 2011 Q2 2011 Q1 2011 Q4 2010 Q3 2010 Gain (loss) before tax provision and dividends $60.7 $87.9 ($7.3) ($74.9) ($9.2) ($69.9) ($26.7) ($185.3) ($17.9) Add back: Provision for loan losses 52.6 58.4 114.7 63.5 36.7 48.4 28.3 225.4 51.4 Asset resolution 12.5 20.9 36.8 32.4 34.5 23.3 38.1 41.8 44.3 Other than temporary impairment on investments AFS 0.0 1.0 1.2 7.1 1.3 15.6 0.0 1.3 0.0 Representation and warranty reserve 124.5 46.0 60.5 69.3 39.0 21.4 20.4 10.3 13.0 Write down of residual interest 0.1 1.2 0.4 0.8 0.2 2.3 2.4 (3.8) 4.7 Reserve increase for reinsurance 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Total credit related costs: 189.7 127.6 213.6 173.2 111.7 110.9 89.2 275.0 113.3 Pre-tax, pre-credit-cost revenue $250.4 $215.5 $206.3 $98.3 $102.5 $41.0 $62.5 $89.7 $95.4

3rd Quarter 2012 Earnings Presentation 50 Non – GAAP Reconciliation $ in millions Sep 30, 2012 Jun 30, 2012 Sep 30, 2011 Non-performing assets $518.4 $538.8 $558.3 Tier 1 Capital 1,379.7 1,296.0 1,273.9 Allowance for Loan Losses 305.0 287.0 282.0 Tier 1 Capital + Allowance for Loan Losses 1,684.7 1,583.0 1,555.9 Non-performing assets/ Tier 1 Capital + Allowance for Loan Losses 30.77% 34.04% 35.88% $ in millions Sep 30, 2012 Jun 30, 2012 Sep 30, 2011 Tier 1 capital $1,379.7 $1,296.0 $1,273.9 Preferred stock (266.7) (266.7) (266.7) Qualifying trust preferred securities (240.0) (240.0) (240.0) Tier 1 common 873.0 789.3 767.2 Total risk-weighted assets 8,461.1 8,224.3 7,780.8 Tier 1 common/ Total risk-weighted assets 10.32% 9.60% 9.86% Totals may not foot due to rounding

FBC LISTED NYSE 51 3rd Quarter 2012 Earnings Presentation