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 27, 2015

(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:

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

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

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

o 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 27, 2015, Flagstar Bancorp, Inc. (the "Company") issued a press release regarding its preliminary results of operations and financial condition for the three months ended September 30, 2015. The text of the press release is furnished 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, 2015 as part of its Quarterly Report on Form 10-Q.

On October 27, 2015, the Company will hold a conference call to review third quarter 2015 earnings. A copy of the slide presentation to be used by the Company on the conference call is furnished as Exhibit 99.2 to this Current Report on Form 8-K.

Item 9.01 Financial Statements and Exhibits

Exhibits
99.1	Press release of Flagstar Bancorp, Inc. dated October 27, 2015
99.2	Flagstar Bancorp, Inc. Conference Call Presentation Slides - Earnings Presentation Third Quarter 2015

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 27, 2015		By:	/s/    James K. Ciroli
			James K. Ciroli
			Executive Vice President and Chief Financial Officer

Exhibit Index

Exhibit No.	Description
99.1	Press release of Flagstar Bancorp, Inc. dated October 27, 2015
99.2	Flagstar Bancorp, Inc. Conference Call Presentation Slides - Earnings Presentation Third Quarter 2015

EX-99.1

EXHIBIT 99.1

NEWS RELEASE

For more information, contact:

David L. Urban

david.urban@flagstar.com

(248) 312-5970

Flagstar Reports Third Quarter 2015 Net Income of $47 million, or $0.69 per Diluted Share

Earnings increase 2 percent, led by positive operating leverage

Interest-only loan sale further improves balance sheet

Key Q3 Highlights

• Positive operating leverage, led by a 1 percent increase in revenue and a 5 percent drop in expenses versus prior quarter

• Interest-earning assets increased 3 percent from second quarter 2015, driven by loan growth; residential first mortgage loans rose 16 percent

• Interest-only held-for-investment loans decreased $214 million and NPLs declined 3 percent versus prior quarter

• Tier 1 leverage ratio remained strong at 11.7 percent

TROY, Mich. October 27, 2015 - Flagstar Bancorp, Inc. (NYSE:FBC), the holding company for Flagstar Bank, FSB, today reported third quarter 2015 net income of $47 million, or $0.69 per diluted share, as compared to $46 million in the second quarter 2015, or $0.68 per diluted share, and a net loss of $28 million in the third quarter 2014, or a loss of $0.61 per diluted share.

"We are pleased with the solid results we were able to post again this quarter. Despite lower revenue from mortgage originations, we grew total revenue and reduced expenses, resulting in positive operating leverage," said Alessandro P. DiNello, president and chief executive officer of Flagstar Bancorp. "We’ve now posted four straight quarters of positive net income and operating leverage, a testament to the execution of our business plan."

"Additionally, on October 15, 2015, we sold $214 million of interest-only loans, after previously moving these loans to our held-for-sale portfolio in anticipation of this transaction. We’ve now sold $600 million of these assets this year. Despite these sales, we’ve been able to grow the earnings power of our balance sheet, reinvesting the proceeds from these sales into higher quality assets. Additionally, our level of nonperforming loans remains below pre-crisis levels."

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"Our success has only strengthened our resolve in our business plan of growing our community bank, increasing the profitability of our mortgage originations, and building our mortgage sub-servicing business. We continue to make progress on the regulatory front and believe that we are on track for lifting the OCC consent order and redeeming our TARP preferred securities."

Third Quarter 2015 Highlights:

Income Statement Highlights
	Three Months Ended
	September 30, 2015			June 30, 2015			March 31, 2015			December 31, 2014		September 30, 2014
	(Dollars in millions)
Consolidated Statements of Operations
Net interest income	$	73		$	73		$	65		$	61	$	64
(Benefit) provision for loan losses	(1		)	(13		)	(4		)	5		8
Noninterest income	128			126			119			98		85
Noninterest expense	131			138			138			139		179
Income (loss) before income taxes	71			74			50			15		(38		)
Provision (benefit) for income taxes	24			28			18			4		(10		)
Net income (loss)	$	47		$	46		$	32		$	11	$	(28	)
Income (loss) per share:
Basic	$	0.70		$	0.69		$	0.43		$	0.07	$	(0.61	)
Diluted	$	0.69		$	0.68		$	0.43		$	0.07	$	(0.61	)

Key Ratios
	Three Months Ended										Change (bps)
	September 30, 2015		June 30, 2015		March 31, 2015		December 31, 2014		September 30, 2014		Seq	Yr/Yr
Net interest margin	2.75	%	2.79	%	2.75	%	2.80	%	2.91	%	(4)	(16)
Return (loss) on average assets	1.52	%	1.57	%	1.16	%	0.44	%	(1.08	)%	(5)	260
Return (loss) on average equity	12.41	%	12.71	%	8.85	%	3.18	%	(7.88	)%	(30)	2029

Balance Sheet Highlights
	Three Months Ended										% Change
	September 30, 2015		June 30, 2015		March 31, 2015		December 31, 2014		September 30, 2014		Seq		Yr/Yr
	(Dollars in millions)
Average Balance Sheet
Average interest-earning assets	$	10,693	$	10,367	$	9,422	$	8,725	$	8,815	3	%	21	%
Average loans held-for-sale	2,200		2,218		1,842		1,687		1,629		(1	)%	35	%
Average loans held-for-investment	5,412		4,938		4,293		4,031		4,088		10	%	32	%
Average total deposits	8,260		7,736		7,368		7,146		7,047		7	%	17	%

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Net Interest Income

Third quarter 2015 net interest income was unchanged at $73 million. The results were led by modest earning asset growth offset by a slight drop in net interest margin.

Net interest margin decreased 4 basis points to 2.75 percent for the third quarter 2015, as compared to 2.79 percent for the second quarter 2015. The decrease from the prior quarter was primarily driven by a lower yield on commercial loans held-for-investment (including warehouse loans) and higher interest on FHLB debt to match-fund long-term assets.

Average loans held-for-investment totaled $5.4 billion for the third quarter 2015, increasing $474 million, or 10 percent, compared to the second quarter 2015. Residential first mortgage loans grew $374 million, or 16 percent, as the Company retained more loan production on the balance sheet. Home equity lines of credit increased $83 million, or 25 percent, reflecting the acquisition of a loan portfolio in the second quarter 2015.

Average total deposits were $8.3 billion in the third quarter 2015, increasing $524 million, or 7 percent, from the prior quarter. Company-controlled deposits increased $380 million, or 24 percent, driven by the return of mortgage escrow deposits. Government deposits rose $124 million, or 13 percent, led by higher demand and savings deposits.

Provision for Loan Losses

The Company experienced a provision benefit in the third quarter 2015 from the transfer of interest-only and sale of lower performing loans. The benefit for loan losses totaled $1 million for the third quarter 2015, as compared to a benefit of $13 million for the second quarter 2015. During the third quarter 2015, the Company realized a $9 million net allowance release primarily related to loan sales.

Net charge-offs in the third quarter 2015 were $24 million, or 1.84 percent of applicable loans, compared to $18 million, or 1.49 percent of applicable loans in the prior quarter. The third quarter 2015 amount included $16 million of net charge-offs associated with the sale of $233 million unpaid principal balance of interest-only and lower performing loans. The second quarter 2015 amount included $15 million of net charge-offs associated with the sale of $456 million unpaid principal balance of interest-only and lower performing loans. Excluding loan sales in both quarters, net charge-offs in the third quarter 2015 were $8 million, or 0.61 percent of applicable loans, compared to $3 million, or 0.26 percent of applicable loans in the prior quarter.

Noninterest Income

Third quarter 2015 noninterest income increased $2 million, or 2 percent, to $128 million, as compared to $126 million for the second quarter 2015. The third quarter 2015 results were led by an increase in the net return on the mortgage servicing asset, the net gain on sale of assets and other noninterest income, partially offset by lower net gain on loan sales.

Third quarter 2015 net gain on loan sales decreased $15 million, or 18 percent, to $68 million, as compared to $83 million for the second quarter 2015. The decrease from the prior quarter reflected a drop in the gain on sale margin and lower fallout-adjusted locks. The net gain on loan sale margin fell 16 basis points to 1.05 percent for the third quarter 2015, as compared to 1.21 percent for the second quarter 2015, led by lower margins on government and refinance business. In the third quarter 2015, fallout-adjusted locks decreased 5 percent to $6.5 billion. The Company increased government and jumbo production to partially offset a drop in conventional volumes.

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Mortgage Metrics
	Three Months Ended															Change (% / bps)
	September 30, 2015			June 30, 2015			March 31, 2015			December 31, 2014			September 30, 2014			Seq		Yr/Yr
	(Dollars in millions)
GOS margin (change in bps) (1)	1.05		%	1.21		%	1.27		%	0.87		%	0.83		%	(16)		22
Gain on loan sales	$	68		$	83		$	91		$	53		$	52		(18.1	)%	30.8	%
Mortgage rate lock commitments (fallout-adjusted) (2)	$	6,495		$	6,804		$	7,185		$	6,156		$	6,304		(4.5	)%	3.0	%
Residential loans serviced (number of accounts - 000's) (3)	369			378			385			383			388			(2.4	)%	(4.9	)%
Capitalized value of mortgage servicing rights	1.12		%	1.15		%	1.03		%	1.01		%	1.08		%	(3)		4
(1) Gain on sale margin is based on net gain on loan sales to fallout-adjusted mortgage rate lock commitments.
(2) Fallout-adjusted mortgage rate lock commitments are adjusted by a percentage of mortgage loans in the pipeline that are not expected to close based on previous historical experience and the level of interest rates.
(3) Includes serviced for own loan portfolio, serviced for others and subserviced for others loans.

Net return on the mortgage servicing asset (including the impact of economic hedges of mortgage servicing rights) rose to $12 million for the third quarter 2015, as compared to $9 million for the second quarter 2015. The net return on the mortgage servicing asset improved $3 million from the prior quarter largely as the prior quarter had $5 million of elevated costs associated with sales in that quarter and the current quarter benefited $3 million from collections of contingencies held back by the purchaser relating to MSR sales in prior periods. These benefits were partially offset in the current quarter by the net impact of market-driven changes in the position.

Other noninterest income for the third quarter 2015 totaled $9 million, as compared to a loss of $1 million for the second quarter 2015. The $10 million improvement was the result of three main factors. First, the change in the fair value of the Company’s commitments to purchase HFI residential first mortgage loans improved $5 million due to a drop in interest rates at the end of the third quarter 2015, compared to an increase in rates at the end of the second quarter 2015; second, the change in fair value for HFI residential first mortgage loans carried under a fair value election was $3 million better due to the impact of the same change in interest rates; and finally, the fair value of HELOCs improved $2 million due to a $2 million charge in the prior quarter while certain of these loans were serviced by an outside servicer. At the end of the second quarter 2015, we exercised our clean-up call on part of this portfolio and its performance in the third quarter 2015 has been consistent with our expectations.

Noninterest Expense

Noninterest expense decreased $7 million, or 5 percent, to $131 million for the third quarter 2015, as compared to $138 million for the second quarter 2015. The third quarter 2015 results were led by a decrease in asset resolution expense and other noninterest expense, partially offset by higher legal and professional expense. The Company's efficiency ratio improved to 65.0 percent for the third quarter 2015 through careful expense management.

Compensation and benefits decreased $1 million, or 2 percent, to $58 million for the third quarter 2015, as compared to $59 million in the prior quarter.

Third quarter 2015 asset resolution expense declined $5 million, as compared to the second quarter 2015. The decrease largely reflected the positive impact of building a stronger balance sheet.

Legal and professional expenses were $10 million for the third quarter 2015, as compared to $8 million for the second quarter 2015. The $2 million increase was due to higher legal expense related to the execution of various non-agency loan sales and consulting fees on various projects to improve operational efficiency and risk management.

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Other noninterest expenses for the third quarter 2015 totaled $13 million, as compared to $15 million for the second quarter 2015. The $2 million decrease from the prior quarter was related to lower advertising costs and regulatory-related expense.

Income Taxes

The third quarter 2015 provision for income taxes totaled $24 million, as compared to $28 million in the second quarter 2015. The effective tax rate in the third quarter 2015 was 34.4 percent, as compared to 37.2 percent in the second quarter 2015. The decline in the marginal tax rate in the third quarter 2015 resulted from the recognition of R&D tax credits and higher tax exempt income.

Asset Quality

Credit Quality Ratios
	Three Months Ended															Change (% / bps)
	September 30, 2015			June 30, 2015			March 31, 2015			December 31, 2014			September 30, 2014			Seq		Yr/Yr
	(Dollars in millions)
Allowance for loan loss to LHFI	3.7		%	4.3		%	5.7		%	7.0		%	7.6		%	(60)		(390)
Charge-offs, net of recoveries	$	24		$	18		$	41		$	9		$	13		33	%	85	%
Charge-offs, net of recoveries, adjusted (1)	$	8		$	3		$	5		$	6		$	7		167	%	14	%
Total nonperforming loans held-for-investment	$	63		$	65		$	84		$	120		$	107		(3	)%	(41	)%
Net charge-off ratio (annualized)	1.84		%	1.49		%	3.97		%	0.91		%	1.36		%	35		48
Net charge-off ratio, adjusted (annualized) (1)	0.61		%	0.26		%	0.45		%	0.60		%	0.70		%	35		(9)
Nonperforming loans to LHFI	1.15		%	1.22		%	1.81		%	2.71		%	2.56		%	(7)		(141)
(1) Excludes charge-offs of $16 million, $15 million, $36 million, $3 million and $6 million related to the sale of nonperforming loans and TDRs        during the three months ended September 30, 2015, June 30, 2015, March 31, 2015, December 31, 2014, and September 30, 2014, respectively.

The allowance for loan losses was $197 million at September 30, 2015, covering 3.7 percent of loans held-for-investment. The allowance for loan losses was $222 million at June 30, 2015, covering 4.3 percent of loans held-for-investment. The decrease in the allowance for loan losses in the third quarter 2015 was largely due to charge-offs and the allowance release related to the transfer of interest-only and sale of lower performing loans.

Third quarter 2015 net charge-offs were $24 million, representing 1.84 percent of applicable loans. This represented an increase of $6 million from the second quarter 2015 net charge-offs of $18 million, or 1.49 percent of applicable loans. Excluding loan sales in both quarters, net charge-offs in the third quarter 2015 were $8 million, or 0.61 percent, compared to $3 million, or 0.26 percent in the prior quarter. The increase was primarily due to $3 million of commercial loan charge-offs and $1 million of consumer charge-offs related to an operational change to partially charge-off loans when they are 180 days past the loan's maturity date, regardless of the delinquency status of the loan. The remaining $4 million of charge-offs accounted for 0.30 percent of applicable loans.

Nonperforming loans decreased to $63 million at September 30, 2015 from $65 million at June 30, 2015. The ratio of nonperforming loans to loans held-for-investment decreased to 1.15 percent at September 30, 2015 from 1.22 percent at June 30, 2015. At September 30, 2015, consumer loan delinquencies (30-89 days past due) totaled $21 million, or 64 basis points, an increase of 12 basis points from June 30, 2015 and a decrease of 131 basis points from the same period last year. There were no commercial loan delinquencies (30-89 days past due) at September 30, 2015.

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Capital

Capital Ratios (Bancorp) (1)	Three Months Ended															Change (% / bps)
	September 30, 2015			June 30, 2015			March 31, 2015			December 31, 2014			September 30, 2014			Seq		Yr/Yr
Total capital	21.64		%	21.30		%	22.61		%	24.12		%	24.35		%	34		(271	)
Tier 1 capital	20.32		%	19.97		%	21.26		%	22.81		%	23.03		%	35		(271	)
Tier 1 leverage	11.65		%	11.47		%	12.02		%	12.59		%	12.50		%	18		(85	)
Mortgage servicing rights to Tier 1 capital	21.1		%	24.2		%	22.2		%	21.8		%	24.9		%	(310	)	(380	)
Book value per common share (change in percent)	$	21.91		$	20.98		$	20.43		$	19.64		$	19.28		4.4	%	13.6	%
(1) On January 1, 2015, the Basel III rules became effective, subject to transition provisions primarily related to regulatory deductions and adjustments impacting common equity Tier 1 capital and Tier 1 capital. We reported under Basel I (which included the Market Risk Final Rules) at December 31, 2014 and prior.

The Company's regulatory capital ratios remain well above current regulatory quantitative guidelines for "well-capitalized" institutions. At September 30, 2015, the Company had a Tier 1 leverage ratio of 11.65 percent, as compared to 11.47 percent at June 30, 2015. The increase in the ratio resulted from earnings retention and a lower deduction for net operating loss-related deferred tax assets. At September 30, 2015, the Company had a common equity-to-assets ratio of 9.88 percent.

Earnings Conference Call

As previously announced, the Company's third quarter 2015 earnings call will be held Tuesday, October 27, 2015 at 11 a.m. (ET).

To join the call, please dial (877) 719-9795 toll free or (719) 325-4751, and use passcode 908089. Please call at least 10 minutes before the conference 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 908089.

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. The slide presentation accompanying the conference call will be posted on the site.

About Flagstar

Flagstar Bancorp, Inc. (NYSE: FBC) is a $12.5 billion savings and loan holding company headquartered in Troy, Mich. Flagstar Bank, FSB, the largest bank headquartered in Michigan, provides commercial, small business, and consumer banking services through 99 branches in the state. It also provides home loans through a wholesale network of brokers and correspondents in all 50 states, as well as through 14 retail centers in 10 states. Flagstar is the 10th largest national originator of mortgage loans and a top 20 mortgage servicer, handling payments and record keeping for over $74.3 billion home loans for nearly 370,000 borrowers. For more information, please visit flagstar.com.

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Use of Non-GAAP Financial Measures

In addition to results presented in accordance with GAAP, this press release includes non-GAAP financial measures such as the ratio of total nonperforming assets to Tier 1 capital (to adjusted total assets) and estimated Basel III ratios. The Company believes these non-GAAP financial measures provide additional information that is useful to investors in helping to understand the underlying performance and trends of Flagstar.

Non-GAAP financial measures have inherent limitations, which are not required to be uniformly applied and are not audited. Readers should be aware of these limitations and should be cautious with respect to the use of such measures. To mitigate these limitations, there are practices in place to ensure that these measures are calculated using the appropriate GAAP or regulatory components in their entirety and to ensure that the Company's performance is properly reflected to facilitate consistent period-to-period comparisons. Although the Company believes the non-GAAP financial measures disclosed in this report enhance investors' understanding of our business and performance, these non-GAAP measures should not be considered in isolation, or as a substitute for those financial measures prepared in accordance with GAAP.

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 earnings release, conference call slides, or the Form 8-K related to this press release. Additional discussion of the use of non-GAAP measures can also be found in periodic Flagstar reports filed with the U.S. Securities and Exchange Commission. These documents can all be found on the Company’s website at flagstar.com.

Forward-Looking Statements

This earnings release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the current beliefs and expectations of Flagstar Bancorp, Inc.’s management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. Factors that could cause the Company's actual results to differ materially from those described in the forward-looking statements can be found in periodic Flagstar reports filed with the U.S. Securities and Exchange Commission, which are available on the Company’s website (flagstar.com) and on the Securities and Exchange Commission's website (sec.gov). Other than as required under United States securities laws, Flagstar Bancorp does not undertake to update the forward-looking statements to reflect the impact of circumstances or events that may arise after the date of the forward-looking statements.

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Flagstar Bancorp, Inc.

Consolidated Statements of Financial Condition

(Dollars in millions)

	September 30, 2015			June 30, 2015			December 31, 2014			September 30, 2014
	(Unaudited)			(Unaudited)						(Unaudited)
Assets
Cash and cash equivalents
Cash	$	65		$	52		$	47		$	44
Interest-earning deposits	130			194			89			63
Total cash and cash equivalents	195			246			136			107
Investment securities available-for-sale	1,150			2,272			1,672			1,378
Investment securities held-to-maturity	1,108			—			—			—
Loans held-for-sale	2,408			2,038			1,244			1,469
Loans with government guarantees	509			592			1,128			1,192
Loans held-for-investment, net
Loans held-for-investment	5,514			5,335			4,448			4,185
Less: allowance for loan losses	(197		)	(222		)	(297		)	(301		)
Total loans held-for-investment, net	5,317			5,113			4,151			3,884
Mortgage servicing rights	294			317			258			285
Federal Home Loan Bank stock	113			113			155			210
Premises and equipment, net	243			240			238			238
Net deferred tax asset	372			400			442			450
Other assets	810			808			416			412
Total assets	$	12,519		$	12,139		$	9,840		$	9,625
Liabilities and Stockholders' Equity
Deposits
Noninterest-bearing	$	1,749		$	1,417		$	1,209		$	1,299
Interest-bearing	6,388			6,231			5,860			5,935
Total deposits	8,137			7,648			7,069			7,234
Federal Home Loan Bank advances	2,024			2,198			514			150
Long-term debt	279			283			331			340
Representation and warranty reserve	45			48			53			57
Other liabilities	530			511			500			492
Total liabilities	11,015			10,688			8,467			8,273
Stockholders' Equity
Preferred stock	267			267			267			267
Common stock	1			1			1			1
Additional paid in capital	1,484			1,482			1,482			1,481
Accumulated other comprehensive income	12			8			8			(1		)
Accumulated deficit	(260		)	(307		)	(385		)	(396		)
Total stockholders' equity	1,504			1,451			1,373			1,352
Total liabilities and stockholders' equity	$	12,519		$	12,139		$	9,840		$	9,625

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Flagstar Bancorp, Inc.  Condensed Consolidated Statements of Operations  (Dollars in millions, except per share data) (Unaudited)
															Third Quarter 2015 Compared to:
	Three Months Ended														Second Quarter 2015					Third Quarter 2014
	September 30, 2015			June 30, 2015			March 31, 2015			December 31, 2014		September 30, 2014			Amount			Percent		Amount			Percent
Interest Income
Total interest income	$	91		$	90		$	79		$	72	$	75		$	1		1.1	%	$	16		21.3	%
Total interest expense	18			17			14			11		11			1			5.9	%	7			63.6	%
Net interest income	73			73			65			61		64			—			—	%	9			14.1	%
(Benefit) provision for loan losses	(1		)	(13		)	(4		)	5		8			12			(92.3	)%	(9		)	N/M
Net interest income after provision for loan losses	74			86			69			56		56			(12		)	(14.0	)%	18			32.1	%
Noninterest Income
Net gain on loan sales	68			83			91			53		52			(15		)	(18.1	)%	16			30.8	%
Loan fees and charges	17			19			17			17		19			(2		)	(10.5	)%	(2		)	(10.5	)%
Deposit fees and charges	7			6			6			6		6			1			16.7	%	1			16.7	%
Loan administration income	8			7			4			5		6			1			14.3	%	2			33.3	%
Net return (loss) on the mortgage servicing asset	12			9			(2		)	2		1			3			33.3	%	11			N/M
Net gain (loss) on sale of assets	1			(2		)	—			2		5			3			N/M		(4		)	(80.0	)%
Representation and warranty benefit (provision)	6			5			2			6		(13		)	1			20.0	%	19			N/M
Other noninterest income (loss)	9			(1		)	1			7		9			10			N/M		—			—	%
Total noninterest income	128			126			119			98		85			2			1.6	%	43			50.6	%
Noninterest Expense
Compensation and benefits	58			59			61			59		54			(1		)	(1.7	)%	4			7.4	%
Commissions	10			11			10			9		10			(1		)	(9.1	)%	—			—	%
Occupancy and equipment	20			20			20			20		20			—			—	%	—			—	%
Asset resolution	—			5			8			13		14			(5		)	N/M		(14		)	N/M
Federal insurance premiums	6			6			6			5		6			—			—	%	—			—	%
Loan processing expense	14			14			12			11		10			—			—	%	4			40.0	%
Legal and professional expense	10			8			9			11		15			2			25.0	%	(5		)	(33.3	)%
Other noninterest expense	13			15			12			11		50			(2		)	(13.3	)%	(37		)	(74.0	)%
Total noninterest expense	131			138			138			139		179			(7		)	(5.1	)%	(48		)	(26.8	)%
Income (loss) before income taxes	71			74			50			15		(38		)	(3		)	(4.1	)%	109			N/M
Provision (benefit) for income taxes	24			28			18			4		(10		)	(4		)	(14.3	)%	34			N/M
Net income (loss) from continuing operations	$	47		$	46		$	32		$	11	$	(28	)	$	1		2.2	%	$	75		N/M
Income (loss) per share
Basic	$	0.70		$	0.69		$	0.43		$	0.07	$	(0.61	)	$	0.01		1.4	%	$	1.31		N/M
Diluted	$	0.69		$	0.68		$	0.43		$	0.07	$	(0.61	)	$	0.01		1.5	%	$	1.30		N/M

N/M - Not meaningful

9

Flagstar Bancorp, Inc.

Summary of Selected Consolidated Financial and Statistical Data

(Dollars in millions, except share data)

(Unaudited)

	Three Months Ended									Nine Months Ended
	September 30, 2015			June 30, 2015			September 30, 2014			September 30, 2015			September 30, 2014
Mortgage loans originated (1)	$	7,876		$	8,448		$	7,187		$	23,578		$	18,004
Mortgage loans sold and securitized	$	7,318		$	7,571		$	7,072		$	21,143		$	17,577
Interest rate spread (2)	2.56		%	2.63		%	2.79		%	2.59		%	2.84		%
Net interest margin	2.75		%	2.79		%	2.91		%	2.76		%	2.95		%
Average common shares outstanding	56,436,026			56,436,026			56,249,300			56,419,354			56,224,850
Average fully diluted shares outstanding	57,207,503			57,165,072			56,249,300			57,050,789			56,224,850
Average interest-earning assets	$	10,693		$	10,367		$	8,815		$	10,165		$	8,345
Average interest-paying liabilities	$	8,354		$	8,265		$	7,034		$	8,044		$	6,734
Average stockholders' equity	$	1,510		$	1,462		$	1,402		$	1,466		$	1,410
Return (loss) on average assets	1.52		%	1.57		%	(1.08		)%	1.43		%	(1.10		)%
Return (loss) on average equity	12.41		%	12.71		%	(7.88		)%	11.36		%	(7.66		)%
Efficiency ratio	65.00		%	69.62		%	120.00		%	69.63		%	98.30		%
Equity-to-assets ratio (average for the period)	12.27		%	12.37		%	13.68		%	12.56		%	14.39		%
Charge-offs to average LHFI (3)	1.84		%	1.49		%	1.36		%	2.34		%	1.17		%

	September 30, 2015			June 30, 2015			December 31, 2014			September 30, 2014
Book value per common share	$	21.91		$	20.98		$	19.64		$	19.28
Number of common shares outstanding	56,436,026			56,436,026			56,332,307			56,261,652
Mortgage loans subserviced for others	$	42,282		$	43,292		$	46,724		$	46,695
Mortgage loans serviced for others	$	26,306		$	27,679		$	25,427		$	26,378
Weighted average service fee (basis points)	28.3			27.4			27.2			26.8
Capitalized value of mortgage servicing rights	1.12		%	1.15		%	1.01		%	1.08		%
Mortgage servicing rights to Tier 1 capital	21.12		%	24.20		%	21.80		%	24.90		%
Ratio of allowance for loan losses to LHFI (3)	3.66		%	4.31		%	7.01		%	7.60		%
Ratio of nonperforming assets to total assets	0.64		%	0.69		%	1.41		%	1.39		%
Equity-to-assets ratio	12.01		%	11.95		%	13.95		%	14.04		%
Common equity-to-assets ratio	9.88		%	9.76		%	11.24		%	11.27		%
Number of bank branches	99			100			107			106
Number of FTE employees	2,677			2,713			2,739			2,725

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

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

(3) Excludes loans carried under the fair value option.

10

Flagstar Bancorp, Inc.

Earnings Per Share

(Dollars in millions, except share data)

(Unaudited)

	Three Months Ended									Nine Months Ended
	September 30, 2015			June 30, 2015			September 30, 2014			September 30, 2015			September 30, 2014
Net income (loss)	$	47		$	46		$	(28	)	$	125		$	(80	)
Less: preferred stock accretion	—			—			—			—			(1		)
Net income (loss) from continuing operations	47			46			(28		)	125			(81		)
Deferred cumulative preferred stock dividends	(8		)	(7		)	(7		)	(22		)	(19		)
Net income (loss) applicable to Common Stockholders	$	39		$	39		$	(35	)	$	103		$	(100	)
Weighted Average Shares
Weighted average common shares outstanding	56,436,026			56,436,026			56,249,300			56,419,354			56,224,850
Effect of dilutive securities
Warrants	339,478			299,391			—			290,840			—
Stock-based awards	431,999			429,655			—			340,595			—
Weighted average diluted common shares	57,207,503			57,165,072			56,249,300			57,050,789			56,224,850
Earnings (loss) per common share
Net income (loss) applicable to Common Stockholders	$	0.70		$	0.69		$	(0.61	)	$	1.82		$	(1.79	)
Effect of dilutive securities
Warrants	—			—			—			(0.01		)	—
Stock-based awards	(0.01		)	(0.01		)	—			(0.01		)	—
Diluted earnings (loss) per share	$	0.69		$	0.68		$	(0.61	)	$	1.80		$	(1.79	)

11

Average Balances, Yields and Rates

(Dollars in millions)

(Unaudited)

	Three Months Ended
	September 30, 2015						June 30, 2015						September 30, 2014
	Average Balance		Interest		Annualized Yield/Rate		Average Balance		Interest		Annualized Yield/Rate		Average Balance		Interest		Annualized Yield/Rate
Interest-Earning Assets
Loans held-for-sale	$	2,200	$	22	3.94	%	$	2,218	$	21	3.80	%	$	1,629	$	18	4.41	%
Loans with government guarantees	547		5		3.37	%	630		5		2.97	%	1,215		8		2.50	%
Loans held-for-investment
Consumer loans (1)	3,367		30		3.67	%	2,913		27		3.74	%	2,635		25		3.77	%
Commercial loans (1)	2,045		20		3.80	%	2,025		21		4.03	%	1,453		14		3.69	%
Total loans held-for-investment	5,412		50		3.72	%	4,938		48		3.86	%	4,088		39		3.74	%
Investment securities	2,313		14		2.50	%	2,350		15		2.55	%	1,642		10		2.64	%
Interest-earning deposits	221		—		0.53	%	231		1		0.55	%	241		—		0.25	%
Total interest-earning assets	10,693		$	91	3.42	%	10,367		$	90	3.42	%	8,815		$	75	3.39	%
Other assets	1,612						1,444						1,438
Total assets	$	12,305					$	11,811					$	10,253
Interest-Bearing Liabilities
Retail deposits
Demand deposits	$	429	$	—	0.14	%	$	431	$	—	0.14	%	$	421	$	—	0.14	%
Savings deposits	3,732		8		0.84	%	3,752		8		0.83	%	3,274		5		0.66	%
Money market deposits	262		—		0.33	%	242		—		0.26	%	262		—		0.20	%
Certificates of deposit	785		2		0.80	%	763		2		0.71	%	891		2		0.75	%
Total retail deposits	5,208		10		0.75	%	5,188		10		0.73	%	4,848		7		0.61	%
Government deposits
Demand deposits	286		—		0.39	%	210		—		0.40	%	218		—		0.39	%
Savings deposits	445		1		0.52	%	401		1		0.52	%	378		1		0.53	%
Certificates of deposit	335		—		0.40	%	331		—		0.34	%	344		—		0.35	%
Total government deposits	1,066		1		0.45	%	942		1		0.43	%	940		1		0.43	%
Total deposits	6,274		11		0.70	%	6,130		11		0.68	%	5,788		8		0.58	%
Federal Home Loan Bank advances	1,795		5		1.17	%	1,828		4		0.90	%	998		1		0.23	%
Other	285		2		2.51	%	307		2		2.38	%	248		2		2.69	%
Total interest-bearing liabilities	8,354		18		0.86	%	8,265		17		0.79	%	7,034		11		0.60	%
Noninterest-bearing deposits (2)	1,986						1,606						1,259
Other liabilities	455						478						558
Stockholders' equity	1,510						1,462						1,402
Total liabilities and stockholder's equity	$	12,305					$	11,811					$	10,253
Net interest-earning assets	$	2,339					$	2,102					$	1,781
Net interest income			$	73					$	73					$	64
Interest rate spread (3)					2.56	%					2.63	%					2.79	%
Net interest margin(4)					2.75	%					2.79	%					2.91	%
Ratio of average interest-earning assets to interest-bearing liabilities					128.0	%					125.4	%					125.3	%
Total average deposits	$	8,260					$	7,736					$	7,047

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

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

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

(4) Net interest margin is net interest income divided by average interest-earning assets.

12

Average Balances, Yields and Rates

(Dollars in millions)

(Unaudited)

	Nine Months Ended
	September 30, 2015						September 30, 2014
	Average Balance		Interest		Annualized Yield/Rate		Average Balance		Interest		Annualized Yield/Rate
Interest-Earning Assets
Loans held-for-sale	$	2,088	$	61	3.91	%	$	1,482	$	47	4.26	%
Loans with government guarantees	679		15		2.86	%	1,241		24		2.53	%
Loans held-for-investment
Consumer loans (1)	2,968		83		3.75	%	2,739		79		3.86	%
Commercial loans (1)	1,917		57		3.92	%	1,217		35		3.74	%
Total loans held-for-investment	4,885		140		3.82	%	3,956		114		3.82	%
Investment securities	2,260		43		2.54	%	1,454		28		2.60	%
Interest-earning deposits	253		1		0.50	%	212		—		0.26	%
Total interest-earning assets	10,165		$	260	3.41	%	8,345		$	213	3.40	%
Other assets	1,498						1,451
Total assets	$	11,663					$	9,796
Interest-Bearing Liabilities
Retail deposits
Demand deposits	$	428	$	—	0.14	%	$	422	$	1	0.14	%
Savings deposits	3,683		22		0.81	%	3,054		13		0.58	%
Money market deposits	253		1		0.28	%	269		—		0.19	%
Certificates of deposit	778		4		0.73	%	941		5		0.74	%
Total retail deposits	5,142		27		0.72	%	4,686		19		0.55	%
Government deposits
Demand deposits	241		1		0.39	%	166		—		0.38	%
Savings deposits	406		1		0.52	%	298		1		0.50	%
Certificates of deposit	341		1		0.36	%	341		1		0.32	%
Total government deposits	988		3		0.44	%	805		2		0.40	%
Total deposits	6,130		30		0.67	%	5,491		21		0.53	%
Federal Home Loan Bank advances	1,597		13		1.05	%	995		2		0.23	%
Other	317		6		2.35	%	248		5		2.68	%
Total interest-bearing liabilities	8,044		49		0.81	%	6,734		28		0.56	%
Noninterest-bearing deposits (2)	1,661						1,105
Other liabilities	492						547
Stockholders' equity	1,466						1,410
Total liabilities and stockholder's equity	$	11,663					$	9,796
Net interest-earning assets	$	2,121					$	1,611
Net interest income			$	211					$	185
Interest rate spread (3)					2.59	%					2.84	%
Net interest margin(4)					2.76	%					2.95	%
Ratio of average interest-earning assets to interest-bearing liabilities					126.4	%					123.9	%
Total average deposits	$	7,791					$	6,596

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

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

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

(4) Net interest margin is net interest income divided by average interest-earning assets.

13

Gain on Loan Sales

(Dollars in millions)

(Unaudited)

	Three Months Ended
	September 30, 2015			June 30, 2015			March 31, 2015			December 31, 2014			September 30, 2014
	(Dollars in millions)
Net gain on loan sales	$	68		$	83		$	91		$	53		$	52
Mortgage rate lock commitments (gross)	$	8,025		$	8,400		$	9,035		$	7,605		$	7,713
Loans sold and securitized	$	7,318		$	7,571		$	6,254		$	6,831		$	7,072
Net margin on loan sales	0.93		%	1.09		%	1.46		%	0.78		%	0.74		%
Mortgage rate lock commitments (fallout-adjusted)(1)	$	6,495		$	6,804		$	7,185		$	6,156		$	6,304
Net margin on mortgage rate lock commitments (fallout-adjusted)(1)	1.05		%	1.21		%	1.27		%	0.87		%	0.83		%

	Nine Months Ended
	September 30, 2015			September 30, 2014
	(Dollars in millions)
Net gain on loan sales	$	242		$	152
Mortgage rate lock commitments (gross)	$	25,460		$	21,941
Loans sold and securitized	$	21,143		$	17,577
Net margin on loan sales	1.14		%	0.87		%
Mortgage rate lock commitments (fallout-adjusted)(1)	$	20,484		$	17,851
Net margin on mortgage rate lock commitments (fallout-adjusted)(1)	1.18		%	0.85		%

(1) Fallout-adjusted mortgage rate lock commitments are adjusted by a percentage of mortgage loans in the pipeline that are not expected to close based on previous historical experience and the level of interest rates. The net margin is based on net gain on loan sales to fallout-adjusted mortgage rate lock commitments.

Regulatory Capital - Bancorp

(Dollars in millions)

(Unaudited)

	September 30, 2015				June 30, 2015				March 31, 2015				December 31, 2014				September 30, 2014
	Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount		Ratio
Tier 1 leverage (to adjusted tangible assets) (1)	$	1,393	11.65	%	$	1,309	11.47	%	$	1,257	12.02	%	$	1,184	12.59	%	$	1,146	12.50	%
Total adjusted tangible asset base	$	11,957			$	11,406			$	10,453			$	9,403			$	9,173
Tier 1 common equity (to risk weighted assets) (1)	$	1,024	14.93	%	$	954	14.56	%	$	909	15.38	%	N/A		N/A		N/A		N/A
Tier 1 capital (to risk weighted assets) (1)	$	1,393	20.32	%	$	1,309	19.97	%	$	1,257	21.26	%	$	1,184	22.81	%	$	1,146	23.03	%
Total capital (to risk weighted assets)	1,483		21.64	%	1,396		21.30	%	1,336		22.61	%	1,252		24.12	%	1,212		24.35	%
Risk weighted asset base	$	6,857			$	6,553			$	5,909			$	5,190			$	4,978

(1) On January 1, 2015, the Basel III rules became effective, subject to transition provisions primarily related to regulatory deductions and adjustments impacting common equity Tier 1 capital and Tier 1 capital. We reported under Basel I (which included the Market Risk Final Rules) at December 31, 2014 and prior.

N/A - Not applicable.

14

Regulatory Capital - Bank

(Dollars in millions)

(Unaudited)

	September 30, 2015				June 30, 2015				March 31, 2015				December 31, 2014				September 30, 2014
	Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount		Ratio
Tier 1 leverage (to adjusted tangible assets) (1)	$	1,426	11.91	%	$	1,337	11.70	%	$	1,278	12.21	%	$	1,167	12.43	%	$	1,134	12.38	%
Total adjusted tangible asset base	$	11,975			$	11,424			$	10,471			$	9,392			$	9,162
Tier 1 common equity (to risk weighted assets) (1)	$	1,426	20.75	%	$	1,337	20.35	%	$	1,278	21.58	%	N/A		N/A		N/A		N/A
Tier 1 capital (to risk weighted assets) (1)	$	1,426	20.75	%	$	1,337	20.35	%	$	1,278	21.58	%	$	1,167	22.54	%	$	1,134	22.84	%
Total capital (to risk weighted assets)	1,516		22.05	%	1,423		21.66	%	1,357		22.91	%	1,235		23.85	%	1,199		24.14	%
Risk weighted asset base	$	6,874			$	6,570			$	5,925			$	5,179			$	4,968

(1) On January 1, 2015, the Basel III rules became effective, subject to transition provisions primarily related to regulatory deductions and adjustments impacting common equity Tier 1 capital and Tier 1 capital. We reported under Basel I (which included the Market Risk Final Rules) at December 31, 2014 and prior.

N/A - Not applicable.

Loan Originations (Dollars in millions) (Unaudited)
	Three Months Ended
	September 30, 2015				June 30, 2015				September 30, 2014
Consumer loans
Mortgage (1)	$	7,876	97.9	%	$	8,448	99.1	%	$	7,187	98.8	%
Other consumer (2)	39		0.5	%	33		0.4	%	29		0.4	%
Total consumer loans	7,915		98.4	%	8,481		99.5	%	7,216		99.2	%
Commercial loans (3)	131		1.6	%	40		0.5	%	55		0.8	%
Total loan originations	$	8,046	100.0	%	$	8,521	100.0	%	$	7,271	100.0	%

	Nine Months Ended
	September 30, 2015				September 30, 2014
Mortgage (1)	$	23,578	98.7	%	$	18,004	97.9	%
Other consumer (2)	93		0.4	%	67		0.4	%
Total consumer loans	23,671		99.1	%	18,071		98.3	%
Commercial loans (3)	209		0.9	%	321		1.7	%
Total loan originations	$	23,880	100.0	%	$	18,392	100.0	%

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

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

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

15

Loans Held-for-Investment

(Dollars in millions)

(Unaudited)

	September 30, 2015				June 30, 2015				December 31, 2014				September 30, 2014
Consumer loans
Residential first mortgage	$	2,726	49.5	%	$	2,495	46.7	%	$	2,193	49.2	%	$	2,224	53.1	%
Second mortgage	140		2.5	%	143		2.7	%	149		3.4	%	154		3.7	%
HELOC	405		7.3	%	422		7.9	%	257		5.8	%	262		6.3	%
Other	32		0.6	%	31		0.6	%	31		0.7	%	32		0.8	%
Total consumer loans	3,303		59.9	%	3,091		57.9	%	2,630		59.1	%	2,672		63.9	%
Commercial loans
Commercial real estate	707		12.8	%	629		11.8	%	620		13.9	%	567		13.5	%
Commercial and industrial	493		8.9	%	412		7.7	%	429		9.7	%	351		8.4	%
Warehouse lending	1,011		18.4	%	1,203		22.6	%	769		17.3	%	595		14.2	%
Total commercial loans	2,211		40.1	%	2,244		42.1	%	1,818		40.9	%	1,513		36.1	%
Total loans held-for-investment	$	5,514	100.0	%	$	5,335	100.0	%	$	4,448	100.0	%	$	4,185	100.0	%

Residential Loans Serviced

(Dollars in millions)

(Unaudited)

	September 30, 2015			June 30, 2015			December 31, 2014			September 30, 2014
	Unpaid Principal Balance		Number of accounts	Unpaid Principal Balance		Number of accounts	Unpaid Principal Balance		Number of accounts	Unpaid Principal Balance		Number of accounts
Serviced for own loan portfolio (1)	$	5,707	29,764	$	5,211	28,106	$	4,521	26,268	$	5,062	26,671
Serviced for others	26,306		118,702	27,679		124,299	25,427		117,881	26,378		122,788
Subserviced for others (2)	42,282		220,648	43,292		225,268	46,724		238,498	46,695		238,425
Total residential loans serviced	$	74,295	369,114	$	76,182	377,673	$	76,672	382,647	$	78,135	387,884

(1) Includes loans held-for-investment (residential first mortgage, second mortgage and HELOC), loans-held-for-sale (residential first mortgage), loans with government guarantees (residential first mortgage), and repossessed assets.

(2) Does not include temporary short-term subservicing performed as a result of sales of servicing-released mortgage servicing rights. Includes repossessed assets.

16

Allowance for Loan Losses

(Dollars in millions)

(Unaudited)

	Three Months Ended									Nine Months Ended
	September 30, 2015			June 30, 2015			September 30, 2014			September 30, 2015			September 30, 2014
Beginning balance	$	222		$	253		$	306		$	297		$	207
Provision (release) for loan losses	(1		)	(13		)	8			(18		)	127
Charge-offs
Consumer loans
Residential first mortgage	(21		)	(19		)	(12		)	(80		)	(29		)
Second mortgage	(1		)	(1		)	(1		)	(2		)	(3		)
HELOC	(1		)	—			(1		)	(2		)	(5		)
Other	(1		)	(1		)	(1		)	(3		)	(2		)
Total consumer loans	(24		)	(21		)	(15		)	(87		)	(39		)
Commercial loans
Commercial real estate	—			—			—			—			(2		)
Commercial and industrial	(3		)	—			—			(3		)	—
Total commercial loans	(3		)	—			—			(3		)	(2		)
Total charge-offs	(27		)	(21		)	(15		)	(90		)	(41		)
Recoveries
Consumer loans
Residential first mortgage	1			1			1			3			3
Second mortgage	1			1			—			1			—
Other	1			1			1			2			2
Total consumer loans	3			3			2			6			5
Commercial loans
Commercial real estate	—			—			—			2			3
Total commercial loans	—			—			—			2			3
Total recoveries	3			3			2			8			8
Charge-offs, net of recoveries	(24		)	(18		)	(13		)	(82		)	(33		)
Ending balance	$	197		$	222		$	301		$	197		$	301
Net charge-off ratio (annualized) (1)	1.84		%	1.49		%	1.36		%	2.34		%	1.17		%
Net charge-off ratio, adjusted (annualized) (1)(2)	0.61		%	0.26		%	0.70		%	0.43		%	0.87		%
Net charge-off ratio (annualized) by loan type (1)
Residential first mortgage	2.9		%	2.9		%	1.9		%	4.3		%	1.4		%
Second mortgage	1.0		%	1.0		%	1.8		%	1.7		%	3.3		%
HELOC and consumer	1.4		%	0.4		%	2.9		%	1.3		%	4.2		%
Commercial real estate	—		%	(0.2		)%	0.4		%	(0.4		)%	(0.2		)%
Commercial and industrial	2.7		%	0.2		%	—		%	1.0		%	(0.1		)%

(1) Excludes loans carried under the fair value option.

(2) Excludes charge-offs of $16 million, $15 million and $6 million, related to the sale of nonperforming loans and TDRs during the three months ended September 30, 2015, June 30, 2015, and September 30, 2014, respectively, and $67 million and $8 million during the nine months ended September 30, 2015 and 2014, respectively.

17

Representation and Warranty Reserve

(Dollars in millions)

(Unaudited)

		Three Months Ended									Nine Months Ended
		September 30, 2015			June 30, 2015			September 30, 2014			September 30, 2015			September 30, 2014
Balance, beginning of period		$	48		$	53		$	50		$	53		$	54
Provision (release)
	Charged to gain on sale for current loan sales	2			2			2			6			5
	Charged to representation and warranty (benefit) provision	(6		)	(5		)	13			(13		)	16
	Total	(4		)	(3		)	15			(7		)	21
Charge-offs, net		1			(2		)	(8		)	(1		)	(18		)
Balance, end of period		$	45		$	48		$	57		$	45		$	57

Composition of Allowance for Loan Losses

(Dollars in millions)

(Unaudited)

September 30, 2015	Collectively Evaluated Reserves		Individually Evaluated Reserves		Total
Consumer loans
Residential first mortgage	$	108	$	21	$	129
Second mortgage	6		7		13
HELOC	22		1		23
Other	1		—		1
Total consumer loans	137		29		166
Commercial loans
Commercial real estate	13		—		13
Commercial and industrial	14		—		14
Warehouse lending	4		—		4
Total commercial loans	31		—		31
Total allowance for loan losses	$	168	$	29	$	197

June 30, 2015	Collectively Evaluated Reserves		Individually Evaluated Reserves		Total
Consumer loans
Residential first mortgage	$	137	$	14	$	151
Second mortgage	6		8		14
HELOC	24		1		25
Other	1		—		1
Total consumer loans	168		23		191
Commercial loans
Commercial real estate	15		—		15
Commercial and industrial	12		—		12
Warehouse lending	4		—		4
Total commercial loans	31		—		31
Total allowance for loan losses	$	199	$	23	$	222

18

Nonperforming Loans and Assets

(Dollars in millions)

(Unaudited)

	September 30, 2015			June 30, 2015			December 31, 2014			September 30, 2014
Nonperforming loans	$	37		$	41		$	74		$	72
Nonperforming TDRs	6			11			29			18
Nonperforming TDRs at inception but performing for less than six months	20			13			17			17
Total nonperforming loans held-for-investment	63			65			120			107
Real estate and other nonperforming assets, net	17			18			19			27
Nonperforming assets held-for-investment, net (1)	$	80		$	83		$	139		$	134
Ratio of nonperforming assets to total assets	0.64		%	0.69		%	1.41		%	1.39		%
Ratio of nonperforming loans held-for-investment to loans held-for-investment	1.15		%	1.22		%	2.71		%	2.56		%
Ratio of nonperforming assets to loans held-for-investment and repossessed assets	1.45		%	1.55		%	3.12		%	3.18		%

(1) Does not include nonperforming loans held-for-sale of $14 million, $14 million, $15 million and $15 million at September 30, 2015, June 30, 2015, December 31, 2014 and September 30, 2014, respectively.

Asset Quality - Loans Held-for-Investment

(Dollars in millions)

(Unaudited)

	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 days		Total Past Due		Total Investment Loans
September 30, 2015
Consumer loans	$	13	$	8	$	60	$	81	$	3,303
Commercial loans	—		—		3		3		2,211
Total loans	$	13	$	8	$	63	$	84	$	5,514
June 30, 2015
Consumer loans	$	10	$	6	$	65	$	81	$	3,091
Commercial loans	—		—		—		—		2,244
Total loans	$	10	$	6	$	65	$	81	$	5,335
December 31, 2014
Consumer loans	$	34	$	10	$	120	$	164	$	2,630
Commercial loans	—		—		—		—		1,818
Total loans	$	34	$	10	$	120	$	164	$	4,448
September 30, 2014
Consumer loans	40		12		107		$	159	$	2,672
Commercial loans	6		—		—		6		1,513
Total loans	$	46	$	12	$	107	$	165	$	4,185

19

Troubled Debt Restructurings

(Dollars in millions)

(Unaudited)

	TDRs
	Performing		Nonperforming		Nonperforming TDRs at inception but performing for less than six months		Total
September 30, 2015
Consumer loans	$	97	$	6	$	20	$	123
Commercial loans	—		—		—		—
Total TDR loans	$	97	$	6	$	20	$	123
June 30, 2015
Consumer loans	$	108	$	11	$	13	$	132
Commercial loans	—		—		—		—
Total TDR loans	$	108	$	11	$	13	$	132
December 31, 2014
Consumer loans	$	361	$	29	$	17	$	407
Commercial loans	1		—		—		1
Total TDR loans	$	362	$	29	$	17	$	408
September 30, 2014
Consumer loans	$	365	$	18	$	17	$	400
Commercial loans	1		—		—		1
Total TDR loans	$	366	$	18	$	17	$	401

Non-GAAP Reconciliation

(Dollars in millions)

(Unaudited)

Nonperforming assets / Tier 1 + Allowance for Loan Losses. The ratio of nonperforming assets to Tier 1 capital and allowance for loan losses divides the total level of nonperforming assets held for investment by Tier 1 capital (to adjusted total assets), as defined by bank regulations, plus allowance for loan losses. We believe these measurements are meaningful measures of capital adequacy used by investors, regulators, management, and others to evaluate the adequacy of capital in comparison to other companies within the industry.

	September 30, 2015			June 30, 2015			December 31, 2014			September 30, 2014
Nonperforming assets / Tier 1 capital + allowance for loan losses	(Dollars in millions) (Unaudited)
Nonperforming assets	$	80		$	83		$	139		$	134
Tier 1 capital	1,393			1,309			1,184			1,146
Allowance for loan losses	(197		)	(222		)	(297		)	(301		)
Tier 1 capital + allowance for loan losses	$	1,590		$	1,531		$	1,481		$	1,447
Nonperforming assets / Tier 1 capital + allowance for loan losses	5.0		%	5.4		%	9.4		%	9.3		%

Basel III (transitional) to Basel III (fully phased-in) reconciliation.On January 1, 2015, the Basel III rules became effective, subject to transition provisions primarily related to regulatory deductions and adjustments impacting common equity Tier 1 capital and Tier 1 capital. We reported under Basel I (which included the Market Risk Final Rules) at December 31, 2014 and prior. When fully phased-in, Basel III will increase capital requirements through higher minimum capital levels as well as through increases in risk-weights for certain exposures. Additionally, the final Basel III rules place greater emphasis on common equity. In October 2013, the OCC and Federal Reserve released final rules detailing the U.S. implementation of Basel III and the application of the risk-based and leverage capital rules to top-tier savings and loan holding companies. We have transitioned to the Basel III framework beginning in January 2015 and are subject to a phase-in period extending through 2018. Accordingly, the calculations provided below are estimates. These measures are considered to be non-GAAP financial measures because they are not formally defined by GAAP and the Basel III implementation regulations will not be fully phased-in until January 1, 2019. The

20

regulations are subject to change as clarifying guidance becomes available and the calculations currently include our interpretations of the requirements including informal feedback received through the regulatory process. Other entities may calculate the Basel III ratios differently from ours based on their interpretation of the guidelines. Since analysts and banking regulators may assess our capital adequacy using the Basel III framework, we believe that it is useful to provide investors information enabling them to assess our capital adequacy on the same basis.

September 30, 2015	Common Equity Tier 1 (to Risk Weighted Assets)			Tier 1 Leverage (to Adjusted Tangible Assets)			Tier 1 Capital (to Risk Weighted Assets)			Total Risk-Based Capital (to Risk Weighted Assets)
	(Dollars in millions) (Unaudited)
Flagstar Bancorp (the Company)
Regulatory capital – Basel III (transitional) to Basel III (fully phased-in) (1)
Basel III (transitional)	$	1,024		$	1,393		$	1,393		$	1,483
Increased deductions related to deferred tax assets, mortgage servicing assets, and other capital components	(373		)	(237		)	(237		)	(236		)
Basel III (fully phased-in) capital (1)	$	651		$	1,156		$	1,156		$	1,247
Risk-weighted assets – Basel III (transitional) to Basel III (fully phased-in) (1)
Basel III assets (transitional)	$	6,857		$	11,957		$	6,857		$	6,857
Net change in assets	(94		)	(237		)	(94		)	(94		)
Basel III (fully phased-in) assets (1)	$	6,763		$	11,720		$	6,763		$	6,763
Capital ratios
Basel III (transitional)	14.93		%	11.65		%	20.32		%	21.64		%
Basel III (fully phased-in) (1)	9.61		%	9.87		%	17.11		%	18.44		%

(1) On January 1, 2015, the Basel III rules became effective, subject to transition provisions primarily related to regulatory deductions and adjustments impacting common equity Tier 1 capital and Tier 1 capital. We reported under Basel I (which included the Market Risk Final Rules) at December 31, 2014.

September 30, 2015	Common Equity Tier 1 (to Risk Weighted Assets)			Tier 1 Leverage (to Adjusted Tangible Assets)			Tier 1 Capital (to Risk Weighted Assets)			Total Risk-Based Capital (to Risk Weighted Assets)
Flagstar Bank (the Bank)	(Dollars in millions) (Unaudited)
Regulatory capital – Basel III (transitional) to Basel III (fully phased-in) (1)
Basel III (transitional)	$	1,426		$	1,426		$	1,426		$	1,516
Increased deductions related to deferred tax assets, mortgage servicing assets, and other capital components	(173		)	(173		)	(173		)	(173		)
Basel III (fully phased-in) capital (1)	$	1,253		$	1,253		$	1,253		$	1,343
Risk-weighted assets – Basel III (transitional) to Basel III (fully phased-in) (1)
Basel III assets (transitional)	$	6,874		$	11,975		$	6,874		$	6,874
Net change in assets	107			(173		)	107			107
Basel III (fully phased-in) assets (1)	$	6,981		$	11,802		$	6,981		$	6,981
Capital ratios
Basel III (transitional)	20.75		%	11.91		%	20.75		%	22.05		%
Basel III (fully phased-in) (1)	17.95		%	10.62		%	17.95		%	19.23		%

(1) On January 1, 2015, the Basel III rules became effective, subject to transition provisions primarily related to regulatory deductions and adjustments impacting common equity Tier 1 capital and Tier 1 capital. We reported under Basel I (which included the Market Risk Final Rules) at December 31, 2014.

21

EX-99.2

3rd Quarter 2015 Flagstar Bancorp, Inc. (NYSE: FBC) Earnings Presentation 3rd Quarter 2015 October 27, 2015

3rd Quarter 2015 Cautionary statement This report contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements are based on management’s current expectations and assumptions regarding the Company’s business and performance, the economy and other future conditions, and forecasts of future events, circumstances and results. However, they are not guarantees of future performance and are subject to known and unknown risks, uncertainties, contingencies and other factors. 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. The Company’s actual results or outcomes may vary materially from those expressed or implied in a forward-looking statement. Accordingly, we cannot and do not provide you with 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. 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. Factors that could cause future results to differ materially from historical performance and these forward-looking statements include, but are not limited to, the following items: 1. 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 activity and changes in asset values in certain geographic markets, that affect us or our counterparties; 2. Volatile interest rates and our ability to effectively hedge against them, which could affect, among other things, (i) the overall mortgage business, (ii) our ability to originate or acquire loans and to sell assets at a profit, (iii) prepayment speeds, (iv) our cost of funds and (v) investments in mortgage servicing rights; 3. The adequacy of our allowance for loan losses and our representation and warranty reserves; 4. Changes in accounting standards generally applicable to us and our application of such standards, including the calculation of the fair value of our assets and liabilities; 5. Our ability to borrow funds, maintain or increase deposits or raise capital on commercially reasonable terms or at all, and our ability to achieve or maintain desired capital ratios; 6. Changes in material factors affecting our loan portfolio, particularly our residential mortgage loans, and the market areas where our business is geographically concentrated or further loan portfolio or geographic concentration; 7. Changes in, or expansion of, the regulation of financial services companies and government-sponsored housing enterprises, including new legislation, regulations, rulemaking and interpretive guidance, enforcement actions, the imposition of fines and other penalties by our regulators, the impact of existing laws and regulations, new or changed roles or guidelines of government-sponsored entities, changes in regulatory capital ratios, increases in deposit insurance premiums, and special assessments of the Federal Deposit Insurance Corporation; 8. Our ability to comply with the terms and conditions of the Supervisory Agreement with the Board of Governors of the Federal Reserve and the Bank’s ability to comply with the Consent Order with the Office of Comptroller of the Currency and the Consent Order of the Consumer Financial Protection Bureau and our ability to address any further matters raised by these regulators, and other regulators or government bodies; 9. Our ability to comply with the terms and conditions of the agreement with the U.S. Department of Justice and the impact of compliance with that agreement and our ability to accurately estimate the financial impact of that agreement, including the fair value and timing of the future payments; 10. The Bank’s ability to make capital distributions and our ability to pay dividends on our capital stock or interest on our trust preferred securities; 11. Our ability to attract and retain senior management and other qualified personnel to execute our business strategy, including our entry into new lines of business, our introduction of new products and services and management of risks relating thereto, and our competing in the mortgage loan originations, mortgage servicing and commercial and retail banking lines of business; 12. Our ability to satisfy our mortgage servicing and subservicing obligations and manage repurchases and indemnity demands by mortgage loan purchasers, guarantors, and insurers; 13. The outcome and cost of defending current and future legal or regulatory litigation, proceedings, or investigations; 14. Our ability to create and maintain an effective risk management framework and effectively manage risk, including, among other things, market, interest rate, credit and liquidity risk, including risks relating to the cyclicality and seasonality of our mortgage banking business, litigation and regulatory risk, operational risk, counterparty risk, and reputational risk; 15. The control by, and influence of, the fund that is our majority stockholder, and any changes that may occur with respect to that fund or its ownership interest in us; 16. A failure of, interruption in or cybersecurity attack on our network or computer systems, which could impact our ability to properly collect, process, and maintain personal data, ensure ongoing mortgage and banking operations, or maintain system integrity with respect to funds settlement; and 17. Factors that may require us to establish a valuation allowance against our deferred tax asset or that impact our ability to maximize the tax benefit of our net operating losses. Factors that may cause future results to differ materially from historical performance and from forward-looking statements, including but not limited to the factors listed above, may be difficult to predict, may contain uncertainties that materially affect actual results, and may be beyond our control. Also, new factors emerge from time to time, and it is not possible for our management to predict the occurrence of all such factors or to assess the effect of each such factor, or the combined effect of several of the factors at one time, on our business. 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.

3rd Quarter 2015 Executive Overview Sandro DiNello, CEO

3rd Quarter 2015 Progress on strategic initiatives Expand mortgage originations • Optimize fulfillment and secondary marketing to improve profitability • Accelerate retail & DTC distribution to boost purchase mortgage originations Grow community banking • Replace lower performing loans with higher quality assets • Refresh the Flagstar brand to build awareness and grow loans and deposits Enhance efficiency • Drive productivity and revenue improvements to maintain mid-60’s efficiency ratio • Position bank to generate positive operating leverage Sustain risk management • Continue to strengthen risk management practices • Exit regulatory orders (continue to make meaningful progress) Optimize capital structure • Redeem TARP (anticipated no later than 2nd half 2016) • Execute MSR reduction plan to meet Basel III phase-in target 4 Focus on growth and diversification of earnings

3rd Quarter 2015 Financial Overview Jim Ciroli, CFO

3rd Quarter 2015 3rd quarter key highlights Strong profitability • Net income of $47 million, or $0.69 per diluted share in 3Q15, up $1 million, or $0.01 per diluted share vs. 2Q15 • Positive operating leverage, resulting from a 1% increase in revenue and a 5% drop in expenses • Average interest earning assets increased 3%; residential first mortgages increased 16% Higher noninterest income • Noninterest income increased $2 million to $128 million, up 2% from 2Q15 - MSR return rose $3 million to $12 million - Other noninterest income increased $10 million to $9 million, led by favorable fair value adjustments - Net gain on loan sales decreased $15 million to $68 million on lower gain on sale margin and lock volumes Expense discipline • Noninterest expense decreased $7 million to $131 million, down 5% from 2Q15 - Asset resolution expense declined $5 million primarily benefitting from stronger balance sheet - Other noninterest expense fell $2 million on lower advertising costs and regulatory-related expense - Legal and professional expense rose $2 million due to higher non-agency loan sales expense and consulting fees Improved asset quality • Sold $233 million of interest-only (closed October 2015) and lower performing loans - Adjusted charge-offs were 61 bps - $8 million net allowance release, relating to transfer of interest-only and sale of lower performing loans - Allowance to loans held-for-investment remained strong at 3.7% Robust capital • Tier 1 leverage remains solid at 11.7% • On-balance sheet liquidity equal to 18.1% of total assets(1) 1) Liquid assets include interest earning deposits and investment securities; a 5% haircut is applied to investment securities to estimate liquidation costs. 6

3rd Quarter 2015 (Benefit) provision for loan losses • $9 million net allowance release related to interest-only and lower performing loan sales • NPAs decreased 5 bps to 0.64% compared to 0.69% of total assets; no commercial loan delinquencies B Quarterly income comparison $mm Observations 7 Noninterest income • Noninterest income increased 2% - Net gain on loan sales decreased 18% on lower gain on sale margin and lock volumes - Net return on MSR rose on lower transaction costs, partially offset by market-driven changes - Other noninterest income improved $10 million on favorable loan fair value adjustments C Net interest income • Net interest income stable despite loan sales - Modest interest-earning asset growth of 3% - Net interest margin decreased 4 bps to 2.75% A 1) Expressed as a percent of fallout-adjusted locks. Noninterest expense • Efficiency ratio improved to 65% - Lower variable expenses related to decreased mortgage closings - Lower asset resolution, advertising and regulatory-related expenses, partially offset by increased legal & professional fees D 3Q15 2Q15 $ Variance % Variance Net interest income $73 $73 $0 0% (Benefit) provision for loan losses ("PLL") (1) (13) 12 (92%) Net interest income after PLL 74 86 (12) (14%) Net gain on loan sales 68 83 (15) (18%) Loan fees and charges 17 19 (2) (11%) Loan administration income 8 7 1 14% Net return on the mortgage servicing asset 12 9 3 33% Representation and warranty benefit 6 5 1 20% Other noninterest income 17 3 14 N/M Total noninterest income 128 126 2 2% Gain sale / total revenue 34% 39% -5% Compensation and benefits 58 59 (1) (2%) Commissions and loan processing expense 24 25 (1) (4%) Other noninterest expenses 49 54 (5) (9%) Total noninterest expense 131 138 (7) (5%) Income before income taxes 71 74 (3) (4%) Provision for income taxes 24 28 (4) 14% Net income $47 $46 $1 2% Diluted earnings per share $0.69 $0.68 $0.01 1% Profitability Net interest margi 2.75% 2.79% -4 bps Mortgage rate lock ommitments, fallout adjusted $6,495 $6,804 ($309) (5%) Mortgage closings $7,876 $8,448 ($572) (7%) Gain on loan sale margin(1) 1.05% 1.21% -16 bps Efficiency ratio 65.0% 69.6% 460 bps A B C2 D C1 C3

3rd Quarter 2015 154 7 35 8 Pre-tax earnings bridge (3Q15 vs 2Q15) ($mm) 1) See non-GAAP reconciliations in the appendix for excluded items in Q3 2014. $74 $71 ($12) +$10 ($15) +$3 +$5 +$3 $3 2Q15 Δ Benefit for loan losses Δ Other Noninterest Income Δ Gain on loan sales Δ Net MSR return Δ Asset resolution Δ Gain on sale of assets Core improvement 3Q15 Balance sheet Operations

3rd Quarter 2015 Book value per share • Price to book ratio of 99% based on closing price as of October 26, 2015(3) 1) Other consumer loans include second mortgage, HELOC and other loans; commercial loans include commercial real estate, commercial & industrial and warehouse loans. 2) Ratios are calculated on the average balance sheet for the quarter. 3) Book value per share has not been reduced for $79 million of unpaid dividends on our perpetual preferred stock, which has been deferred. If these dividends were paid, book value per share would be reduced by $1.39 per share. 3Q15 2Q15 $ Variance % Variance Total Assets $12,305 $11,811 $494 4% Cash and cash equivalents $192 $200 ($8) (4%) Investment securities $2,313 $2,350 (37) (2%) Liquid assets $2,505 $2,550 ($45) (2%) Residential first mortgages $2,782 $2,408 $374 16% Other consumer loans(1) $586 $505 81 16% Commercial loans(1) $1,108 $1,054 54 5% Warehouse loans $936 $970 (34) (4%) Loans, held for investment $5,412 $4,938 $474 10% Loans held for sale $2,200 2,218 (18) (1%) Loans with government guarantees $547 630 (83) (13%) Total loans $8,159 $7,786 $373 5% Mortgage servicing rights $317 $271 $46 17% Book value per common share $21.91 $20.98 $0.93 4% Strong balance sheet(2) • Deposits are a significant portion of our funding - Total deposits equaled 77% of liabilities - Core deposits equaled 46% of liabilities • Common equity / assets of 10% Average balance sheet highlights $mm Observations Balance sheet growth • Average balance sheet grew $0.5 billion or 4% • Total average loans increased 5% - Loans HFI rose 10% with residential first mortgages up 16% - Other consumer loans increased 16% 9

3rd Quarter 2015 10 Asset quality Performing TDRs and NPLs ($mm) 366 362 112 108 97 107 120 83 65 63 $473 $482 $195 $173 $160 9/30/2014 12/31/2014 3/31/2015 6/30/2015 9/30/2015 Peforming TDRs NPLs 1) Excludes loans carried under the fair value option. Representation & warranty reserve ($mm) Allowance coverage¹ (% of loans HFI) 7.6% 7.0% 5.7% 4.3% 3.7% 11.1% 11.0% 9.5% 6.5% 5.2% 1.9% 1.7% 1.5% 1.4% 1.4% 9/30/2014 12/31/2014 3/31/2015 6/30/2015 9/30/2015 Total Consumer Commercial $57 $53 $53 $48 $45 9/30/2014 12/31/2014 3/31/2015 6/30/2015 9/30/2015 Net charge-offs ($mm) 7 6 5 3 8 $13 $9 $41 $18 $24 0.70% 0.60% 0.45% 0.26% 0.61%(1) 3Q14 4Q14 1Q15 2Q15 3Q15 Charge-offs excl. asset sales Charge-offs from asset sales Adjusted NCO % LHFI 1) 0.30% excluding charge-offs of $3mm for commercial loans and $1mm for consumer loans related to an operational change

3rd Quarter 2015 -96bps +46bps -105bps +50bps -43bps +61bps 12.5%(1) 12.0% 11.5% 11.7% 12/31/2014 Bal Sheet Growth Earnings 3/31/2015 Bal Sheet Growth Earnings 6/30/2015 Bal Sheet Growth Earnings 9/30/2015 Robust capital 11 Repayment of TARP (targeted 2nd half of 2016) • Flagstar has used excess capital to support balance sheet growth • Flagstar grows regulatory capital at a greater pace as it utilizes its NOL-related DTAs and scales back its concentration of MSRs • From Tier 1 capital we currently deduct: - $228mm of NOL-related DTAs - $79mm of MSRs at 40% partial phase-in • Excess capital would be available to repay TARP Regulatory capital ratios as of 9/30/15 vs 6/30/15(1) 11.5% 14.6% 20.0% 21.3% 11.7% 14.9% 20.3% 21.6% Tier 1 Leverage CET-1 to RWA Tier 1 to RWA Total RBC to RWA 6/30/2015 9/30/2015 Observations (Q3 2015) • Increase in regulatory ratios resulted from earnings retention and a lower deduction for NOL-related deferred assets, partially offset by earning asset growth • Utilization of NOL-related DTA has released regulatory capital to support balance sheet growth (9 mos. YTD) - Benefit of 0.4% to Tier 1 Leverage ratio - Supported earning asset growth of $2.2bn (26%) • Flagstar continues to maintain strong capital ratios with the partial phase-in of Basel III regulations 1) Pro-forma under Basel III partial phase-in requirements. Please see non-GAAP tables in the appendix. Tier 1 leverage - 12/31/14 to 9/30/15 1) Please see non-GAAP tables in the appendix.

3rd Quarter 2015 Business Segment Overview Lee Smith, COO

3rd Quarter 2015 • Flagstar is investing in its community banking franchise to diversify and grow its earnings stream Community banking 13 Average commercial loans ($bn) Commercial loan total commitments ($bn) Average consumer loans ($bn) Average deposit funding(1) ($bn) 0.4 0.4 0.4 0.4 0.4 0.6 0.6 0.6 0.6 0.7 0.6 0.5 0.6 1.0 0.9 $1.5 $1.5 $1.7 $2.0 $2.0 3Q14 4Q14 1Q15 2Q15 3Q15 Commercial and Industrial Commercial Real Estate Warehouse 0.6 0.7 0.7 0.7 0.8 0.7 0.8 0.8 0.8 1.2 1.4 1.6 1.7 1.9 2.1 $2.7 $3.1 $3.2 $3.4 $4.1 9/30/2014 12/31/2014 3/31/2015 6/30/2015 9/30/2015 Commercial and Industrial Commercial Real Estate Warehouse 2.3 2.2 2.2 2.4 2.8 0.4 0.4 0.4 0.5 0.6 $2.6 $2.5 $2.6 $2.9 $3.4 3Q14 4Q14 1Q15 2Q15 3Q15 Residential First Other Consumer 5.2 5.3 5.5 5.7 5.7 0.9 1.0 1.0 0.9 1.1 0.9 0.8 1.0 1.1 1.5 $7.0 $7.1 $7.4 $7.7 $8.3 3Q14 4Q14 1Q15 2Q15 3Q15 Retail Government Company-controlled deposits 1) Includes company controlled deposits which are included as part of mortgage servicing.

3rd Quarter 2015 4.4 4.1 4.6 5.2 4.5 1.9 1.6 1.4 1.7 1.9 1.3 1.6 1.5 $7.2 $6.6 $7.3 $8.5 $7.9 3Q14 4Q14 1Q15 2Q15 3Q15 Conventional Government Jumbo Mortgage originations 14 Closings by purpose ($bn) 4.5 3.5 2.6 3.8 4.4 2.7 3.1 4.6 4.6 3.5 $7.2 $6.6 $7.2 $8.4 $7.9 3Q14 4Q14 1Q15 2Q15 3Q15 Purchase originations Refinance originations Closings by mortgage type ($bn) 61% 62% 64% 61% 57% Conforming (%) Gain on loan sale(1) – revenue and margin $52 $53 $91 $83 $68 0.83% 0.87% 1.27% 1.21% 1.05% 0.00% 0.50% 1.00% 1.50% 2.00% $0 $10 $20 $30 $40 $50 $60 $70 $80 $90 $100 3Q14 4Q14 1Q15 2Q15 3Q15 Fallout-adjusted locks ($bn) $6.3 $6.2 $7.2 $6.8 $6.5 3Q14 4Q14 1Q15 2Q15 3Q15 1) Based on fallout adjusted locks. • Flagstar has enhanced its mortgage originations business to improve customer service and profitability 15% 14% 12% 16% 20% FHA (%)

3rd Quarter 2015 15 Breakdown of loans serviced (as of 9/30/2015) MSR / regulatory capital Loans serviced (‘000) $ UPB of MSRs sold ($bn) $4.9 $6.4 $2.6 $4.6 $6.7 3Q14 4Q14 1Q15 2Q15 3Q15 123 118 126 124 119 238 238 231 225 221 27 26 27 28 30 388 382 384 377 370 9/30/2014 12/31/2014 3/31/2015 6/30/2015 9/30/2015 Serviced for Others Subserviced for Others Flagstar Loans HFI 45% 39% 31% 33% 29% 25% 22% 22% 24% 21% 9/30/14 12/31/2014 3/31/2015 6/30/2015 9/30/2015 MSR to Tier 1 Common MSR to Tier 1 Capital Mortgage servicing Fannie, 46% Freddie, 8% Ginnie, 34% HFI / Other, 11%

3rd Quarter 2015 Interest-only loan portfolio Overview 16 • Flagstar has materially eliminated risk associated with held-for-investment interest-only loans Subject to review HFI interest-only reset exposure (UPB $mm) Resolved, $1,432 Pre- reset, $97 Post- reset, $27 Remaining, $124 HFI interest-only portfolio at 12/31/2011 ($1,556) HFI interest-only portfolio at 9/30/2015 ($124)

3rd Quarter 2015 Adjusted noninterest expenses(1) Efficiency ratio 120.0% 87.2% 74.8% 69.6% 65.0% 3Q14 4Q14 1Q15 2Q15 3Q15 Quarterly noninterest expenses(1) ($mm) $140 $139 $138 $138 $131 3Q14 4Q14 1Q15 2Q15 3Q15 1) See non-GAAP reconciliations in the appendix for excluded items. Quarters with adjusted totals include Q3 2014. 17 • Flagstar ‘s variable cost model and expense discipline is contributing to positive operating leverage

3rd Quarter 2015 Closing Remarks / Q&A Sandro DiNello, CEO

3rd Quarter 2015 Guidance(1)(2) 19 1) See cautionary statements on slide 2. 2) All assumptions and estimates are subject to change and may impact 2015 4th quarter outlook. Net interest income and margin • Net interest income and net interest margin down slightly, primarily due to a modest seasonal decline in mortgage pipeline Mortgage originations • Fallout-adjusted locks will likely follow mortgage industry decline in activity • No notable change in market share is expected Gain on loan sales • Gain on loan sale margin down slightly Net servicing revenue • Net loan administration income declines slightly on reduced number of loans serviced • Net return on the mortgage servicing asset normalizes at 4-6% MSR to Tier 1 capital ratio • MSR to Tier 1 ratio will likely remain steady Provision for loan losses • Provision for loan losses to approximate 2Q15 charge-offs (adjusted for loan sales) Noninterest expenses • Noninterest expenses to remain stable between $130-$135 million 2015 4th quarter outlook Income tax expense • Effective rate for 4Q15 is expected to be 25%

3rd Quarter 2015 Appendix Company overview 21 Financial performance 24 Community banking segment 27 Mortgage origination segment 33 Mortgage servicing segment 34 Capital and liquidity 35 Asset quality 38 Non-GAAP reconciliation 39

3rd Quarter 2015 Solid core franchise 21 3 Community bank • Largest Michigan based bank • #7 in deposit market share • $12.1bn of assets • $7.6bn of deposits • 99 branches Mortgage originator • 10th largest originator nationally • Originated more than $29bn of residential mortgage loans during the last 12 months Mortgage servicer • 7th largest sub-servicer of mortgage loans nationwide • Currently servicing nearly 370k loans • Scalable mortgage platform to service up to 1mm loans COMPANY OVERVIEW

3rd Quarter 2015 Flagstar is at a turning point 2013 – 2015 2015-16 2016+ Addressed post-crisis issues  Assembled strong executive team  Improved asset quality – Sold lower performing loans to de-risk balance sheet – $1.6bn of lower performing assets – $88bn (UPB) of MSRs – Reinvested proceeds into higher quality assets  Increased capital & liquidity  Resolved legal & regulatory issues Build foundation for growth  Restored profitability – Grew earning assets – Increased NIM & GOS margin – Optimized cost structure  Optimize capital structure – Redeem TARP (anticipated no later than 2nd half 2016) – Establish MSR reduction plan  Continue strong risk management – Exit Consent Order (continue to make meaningful progress) Grow & diversify earnings  Grow community banking – Add high-quality assets – Boost NIM & fee income  Diversify mortgage originations – Accelerate retail & DTC distribution ahead of purchase mortgage market – Optimize fulfillment / secondary marketing  Expand mortgage servicing – Grow sub-servicing portfolio – Cross sell to customers 22 COMPANY OVERVIEW

3rd Quarter 2015 Assembled strong executive team 23 • Flagstar has rebuilt its management team with significant banking experience Sandro DiNello President & CEO Board of Directors Community Banking Sandro DiNello Currently serving as Director of Community Banking. Chief Financial Officer Jim Ciroli CFO since 8/14 Nearly 30 years of banking and financial services experience, most recently with First Niagara, Huntington and KeyCorp. Chief Operating Officer Lee Smith COO since 5/13 Formerly a partner of MatlinPatterson Global Advisors and a Senior Director at Zolfo Cooper with extensive experience in financial management and operations. He is a Chartered Accountant in England and Wales. Chief Risk Officer Steve Figliuolo CRO since 6/14 35 years of financial services experience, most recently with Citizens Republic, Fleet Boston Financial, First Union National and Chase Manhattan. Mortgage Banking Len Israel President of Mortgage Banking since 6/15 Nearly 30 years of mortgage industry experience, most recently with Mission Hills Mortgage, IndyMac and CitiMortgage. Chief Legal Officer Patrick McGuirk General Counsel since 6/15 20 years of legal experience, most recently with the FDIC and Sidley Austin LLP. Internal Audit Dave Colajezzi COMPANY OVERVIEW CEO since 5/13 Over 35 years of banking experience with Flagstar and its predecessors with a strong emphasis on community banking including the management of retail operations and product strategy.

3rd Quarter 2015 Restored profitability 24 $mm (except per share data) Observations Increased net interest income • Net interest income bolstered by higher interest-earning assets, led by expansion of commercial banking platform and residential mortgage production A Higher noninterest income • Led by increased net gain on loan sales and improved returns on MSR asset • Net gain on loan sales improved by higher GOS margins C Improved operating leverage • Efficiently managed noninterest expense after implementing cost optimization efforts • Lower efficiency ratio led by higher revenues with stable expense base D Lower credit costs • Sale of TDRs, I/Os and lower performing loans during 1Q15 - 3Q15 resulted in reserve releases • Rotation into higher quality assets resulted in lower provision for loan losses B 9/30/15 6/30/15 3/31/15 12/31/14 9/30/14 9/30/15 9/30/14 Net interest income $73 $73 $65 $61 $64 $211 $185 (Benefit) provision for loan losses ("PLL") (1) (13) (4) 5 8 (18) 127 Net interest income (loss) after PLL 74 86 69 56 56 229 58 Net gain on loans sales 68 83 91 53 52 242 152 Loan fees and charges 17 19 17 17 19 53 56 Loan administration income 8 7 4 5 6 19 19 Other noninterest income 35 17 7 23 8 59 36 Total noninterest income 128 126 119 98 85 373 263 Compensation and benefits 58 59 61 59 54 178 174 Commissions and loan processing 24 25 22 20 20 71 52 Other noninterest expense 49 54 55 60 105 158 213 Total noninterest expense 131 138 138 139 179 407 439 Income (loss) before income taxes 71 74 50 15 (38) 195 (118) Provision (benefit) for income taxes 24 28 18 4 (10) 70 (38) Net income (loss) to common $47 $46 $32 $11 ($28) $125 ($81) Dilluted income (loss) per share $0.70 $0.68 $0.43 $0.07 ($0.61) $1.82 ($1.79) Profitability Net interest margin 2.56% 2.79% 2.75% 2.80% 2.91% 2.76% 2.95% Mortgage rate lock commitments, fallout adjusted $6,495 $6,804 $7,185 $6,156 $6,304 $20,484 $17,851 Mortgage closings $7,876 $8,448 $7,254 $6,603 $7,187 $23,578 $18,004 Gain on loan sale margin 1.05% 1.21% 1.27% 0.87% 0.83% 1.18% 0.85% Efficiency ratio 65.0% 69.6% 74.8% 87.2% 120.0% 69.6% 98.3% Three Months Ended Nine Months Ended B D2 C2 C1 A D1 FINANCIAL PERFORMANCE

3rd Quarter 2015 Consolidated financial highlights 25 FINANCIAL PERFORMANCE Quarterly results – $mm 3Q14 4Q14 1Q15 2Q15 3Q15 Balance Sheet Gross loans HFS $1,469 $1,244 $2,097 $2,038 $2,408 Gross loans HFI $4,185 $4,448 $4,631 $5,335 $5,514 Government guaranteed loans $1,192 $1,128 $704 $592 $509 MSR $285 $258 $279 $317 $294 Total assets $9,625 $9,840 $11,571 $12,139 $12,519 Deposits $7,234 $7,069 $7,549 $7,648 $8,136 FHLB borrowings $150 $514 $1,625 $2,198 $2,024 Trust preferred $247 $247 $247 $247 $247 Preferred equity $267 $267 $267 $267 $267 Common equity $1,085 $1,106 $1,153 $1,184 $1,237 % common equity of total assets 11.3% 11.2% 10.0% 9.8% 9.9% Income Statement Net interest income $64 $61 $65 $73 $73 Gain on loan sales $52 $53 $91 $83 $68 Other noninterest income $33 $45 $28 $43 $61 Noninterest expense ($179) ($139) ($138) ($138) ($131) Pre-provision net revenue (expense) ($30) $20 $46 $61 $71 Provision for loan losses ($8) ($5) $4 $13 $1 Income (loss) before taxes ($38) $15 $50 $74 $71 PPNR / average assets -1.2% 0.8% 1.7% 2.1% 2.3% Credit ALLL $301 $297 $253 $222 $197 ALLL as a % of loans HFI (excl FV) 7.6% 7.0% 5.7% 4.3% 3.7% NPAs to total assets 1.40% 1.40% 0.90% 0.70% 0.60% Operations Number of banking centers 106 107 107 100 99 Number of loan origination centers 32 16 16 13 14 # of employees 2,725 2,739 2,680 2,713 2,677

3rd Quarter 2015 Consolidated financial highlights 26 FINANCIAL PERFORMANCE Annual results – $mm 2010 2011 2012 2013 2014 Balance Sheet Gross loans HFS $2,585 $1,801 $3,940 $1,480 $1,244 Gross loans HFI $6,305 $7,039 $5,438 $4,056 $4,448 Government guaranteed loans $1,675 $1,899 $1,841 $1,308 $1,128 MSR $580 $511 $711 $285 $258 Total assets $13,644 $13,637 $14,082 $9,407 $9,840 Deposits $7,998 $7,690 $8,294 $6,140 $7,069 FHLB borrowings $3,725 $3,953 $3,180 $988 $514 Trust preferred $247 $247 $247 $247 $247 Preferred equity $249 $255 $260 $266 $267 Common equity $1,011 $825 $899 $1,160 $1,106 % common equity of total assets 7.4% 6.0% 6.4% 12.3% 11.2% Income Statement Net interest income $211 $245 $297 $186 $247 Gain on loan sales $297 $301 $991 $402 $206 Other noninterest income $157 $85 $30 $251 $155 Noninterest expense ($612) ($635) ($989) ($918) ($579) Pre-provision net revenue (expense) $53 ($4) $329 ($79) $29 Provision for loan losses ($426) ($177) ($276) ($70) ($132) Income (loss) before taxes ($373) ($181) $53 ($149) ($103) PPNR / average assets 0.4% 0.0% 2.4% -0.7% 0.3% Credit ALLL ($274) ($318) ($305) ($207) ($297) ALLL as a % of loans HFI (excl FV) 4.40% 4.50% 5.60% 5.40% 7.00% NPAs to total assets 4.40% 4.40% 3.70% 2.00% 1.40% Operations Number of banking centers 162 111 111 111 107 Number of loan origination centers 27 27 31 39 16 # of employees 3,279 3,136 3,662 3,253 2,739

3rd Quarter 2015 Deposits Portfolio and strategy overview 4.8 5.4 5.5 5.7 5.7 $7.0 $7.1 $7.4 $7.7 $8.3 3Q14 4Q14 1Q15 2Q15 3Q15 Retail deposits Other deposits Total average deposits ($bn) +17% YOY • Flagstar gathers deposits from consumers, small businesses and select governmental entities – Traditionally, CDs and savings accounts represented the bulk of our branch-based retail depository relationships – Today, we are focused on gathering core DDA deposits from small business and consumers, which represents nearly $20mm of the quarterly deposit growth – We additionally maintain depository relationships in connection with our mortgage origination and servicing businesses, and with predominately Michigan governmental entities – Cost of interest-bearing deposits equal to 0.70% DDA 11% Savings 45% MMDA 3% CD 10% Company- controlled 18% Government & other 13% 69% retail Total : $8.3bn 0.70% cost of interest-bearing deposits Q3 2015 total average deposits 27 COMMUNITY BANKING

3rd Quarter 2015 Focus on driving branch deposit growth Key consumer accomplishments • 3Q15 represented the 15th consecutive quarter with net growth in personal checking accounts, despite the Saginaw branch sale in 3Q15 • 6% growth in average time deposit balances during 3Q15 • 6% growth in deposit fee income over prior quarter and 22% higher than 2014 average Average deposits / branch ($mm)(1) $48 $48 $49 $54 $55 3Q14 4Q14 1Q15 2Q15 3Q15 28 Affinity Relationships COMMUNITY BANKING 1) Excludes commercial, government and company controlled deposits.

3rd Quarter 2015 Deposit channel overviews: Commercial, Company-controlled, government Average commercial ($mm) $175 $191 $214 $242 $280 3Q14 4Q14 1Q15 2Q15 3Q15 Average company-controlled ($mm) $865 $836 $952 $1,131 $1,490 3Q14 4Q14 1Q15 2Q15 3Q15 Average government ($mm) $944 $994 $962 $947 $1,069 3Q14 4Q14 1Q15 2Q15 3Q15 • Arise due to servicing of loans for others and represent the portion of the investor custodial accounts on deposit with the Bank • 3Q15 increase was driven by the return of all remaining mortgage escrow deposits • We call on local governmental agencies and other public units as an additional source for deposit funding • Cost of deposit 0.45% • Over the past year, treasury management services has driven: – 60% growth in commercial deposits – 24% YTD growth in fee income • Cost of deposit: 0.54% 29 COMMUNITY BANKING

3rd Quarter 2015 1.6 1.7 1.8 2.2 2.2 4.1 4.0 4.3 4.9 5.4 1.2 1.1 0.9 0.6 0.5 $6.9 $6.9 $7.0 $7.8 $8.2 3Q14 4Q14 1Q15 2Q15 3Q15 Loans HFS Gross Loans HFI Government Guaranteed Loans 1st Mortgage HFI 34% 2nds, HELOC & other 7% Warehouse 11% CRE and C&I 14% GNMA buyouts 7% 1st Mortgage HFS 27% Q3 2015 average gross loans Lending Portfolio and strategy overview Total average loans ($bn) • Flagstar’s largest category of earning assets consists of loans held-for-investment, currently $5.4bn, gross – Loans to consumers consist of residential first mortgage loans, HELOC and other – C&I / CRE lending is an important growth strategy, offering risk diversification and asset sensitivity – Warehouse loans are extended to other mortgage lenders, offering attractive risk-adjusted returns • Flagstar maintains a balance of mortgage loans held for sale of $2.4bn at 9/30/15 – Essentially all of our mortgage loans produced are sold into the secondary market on a whole loan basis or by securitizing the loans into MBS – Flagstar has the option to direct a portion of the mortgage loans it originates to its own balance sheet • Flagstar also has a portfolio of FHA-insured or guaranteed delinquent loans securitized in Ginnie Mae pools, which it repurchases from time to time 30 COMMUNITY BANKING

3rd Quarter 2015 $1.2 $1.3 $1.2 $1.3 $1.8 C&I, $493 , 22% CRE, $707 , 32% Warehouse, $1,011 , 46% Gross outstandings : $2,211mm Total unfunded commitments: $1,790mm Q3 average yield: 3.80% Commercial loan balances ($bn) 0.4 0.4 0.4 0.4 0.5 0.6 0.6 0.6 0.6 0.7 0.6 0.8 1.1 1.2 1.0 $1.5 $1.8 $2.1 $2.2 $2.2 9/30/2014 12/31/2014 3/31/2015 6/30/2015 9/30/2015 Commercial & Industrial Commercial Real Estate Warehouse 46% YOY Increase 9/30/15 commercial loan portfolio (%) Note: Commercial & Industrial loans include commercial lease financings Lending: Commercial 31 Unfunded commitment out. ($bn) COMMUNITY BANKING ($mm)

3rd Quarter 2015 Lending: Commercial C&I and CRE predominately in-footprint and well diversified 32 COMMUNITY BANKING MI 51% SC 12% NJ 10% MN 7% CA 7% All Other 13% Services 35% Financial / Insurance 45% Manufacturing, 11% Distribution 8% Govt & Educ. 1% MI 86% NC 2% NY 2% GA 2% KY 2% All Other 6% Office 21% Retail 22% Apartments 19% Industrial 7% Special Purpose 6% SFR Resi. & Land Devel. 5% Owner- Occupied 20% CRE as of 9/30/15 - $707mm Property type: C&I as of 9/30/15 - $493mm Property location: Borrower location: Borrower type:

3rd Quarter 2015 Mortgages are originated primarily through the correspondent channel 33 MORTGAGE ORIGINATIONS Residential mortgage originations by channel ($bn) $5.3 $4.8 $5.0 $5.8 $5.6 3Q14 4Q14 1Q15 2Q15 3Q15 Correspondent Broker Retail $1.5 $1.5 $1.8 $2.2 $1.9 3Q14 4Q14 1Q15 2Q15 3Q15 $0.3 $0.3 $0.4 $0.5 $0.4 3Q14 4Q14 1Q15 2Q15 3Q15 • Nearly 700 correspondent partners in 50 states in Q3 2015 • Top 10 relationships account for 14% of overall correspondent volume • Warehouse lines to over 250 correspondent relationships • Nearly 600 brokerage relationships in 50 states in Q3 2015 • Top 10 relationships account for 20% of overall brokerage volume • 14 standalone home loan centers in 10 states in Q3 2015 • Consumer direct is 32% of retail volume

3rd Quarter 2015 154 7 35 34 MSR portfolio as of 9/30/15 MSR portfolio characteristics (% UPB) MSR portfolio statistics Measure ($mm) 9/30/2015 6/30/2015 Δ Unpaid principal balance $26,308 $27,681 ($1,373) Fair value of MSR $294 $317 ($23) Capitalized rate 1.12% 1.15% -0.03% Multiple 3.990 4.209 (0.219) N te rate 4.108% 4.064% 0.044% Service fee 0.280% 0.272% 0.008% Average Measure ($000) UPB per loan $222 $223 ($1) FICO 727 734 (7) Loan to value 78.18% 76.71% 1.47% $ return – MSR asset $ Return 3Q14 4Q14 1Q15 2Q15 3Q15 Net hedged profit (loss) ($1) $0 ($4) $4 $1 Carry on asset 16 15 18 22 19 Run-off (9) (10) (15) (12) (8) Gr ss r turn on the mortgage servicing asset $6 $5 ($1) $14 $12 Sale transaction & P/L (2) (4) (2) (5) 3 Model Changes (3) - - - (3) Net return on the mortgage servicing asset $1 $2 ($2) $9 $12 Average mortgage servicing rights $295 $280 $265 $271 $317 2015, 56% 2014, 35% <=2013, 9% Vintage Fannie, 55% GNMA, 27% Freddie, 16% Private, 2% Investor MORTGAGE SERVICING

3rd Quarter 2015 Liquidity Gross loans/deposits Available liquidity/total assets(1) 23% 24% 24% 29% 27% 57% 57% 57% 65% 67% 17% 16% 11% 8% 7% 96% 97% 93% 102% 100% 9/30/2014 12/31/2014 3/31/2015 6/30/2015 9/30/2015 Gross loans HFS Gross loans HFI Gov. insured loans 35 CAPITAL AND LIQUIDITY 14% 17% 21% 19% 18% 29% 22% 13% 10% 13% 43% 39% 33% 29% 31% 9/30/2014 12/31/2014 3/31/2015 6/30/2015 9/30/2015 Cash + investment securities FHLB borrowing capacity / assets 1) Reclassification of certain Investment securities to held-to-maturity as of 9/30/15 have been included in available liquidity.

3rd Quarter 2015 Available liquidity and funding 36 CAPITAL AND LIQUIDITY Liquidity balances and ratios ($mm) Available liquidity 6/30/2014 9/30/2014 12/31/2014 3/31/2015 9/30/2015 Interest-earning deposits $63 $89 $198 $194 $130 Investment securites available-for-sale 1,378 1,672 2,295 2,272 1,150 Investment securites held-to-maturity (1) - - - - 1,108 Less: securities haircut (69) (84) (115) (114) (112) Less: pledged collateral (1) - - - (13) Liquid assets $1,371 $1,677 $2,378 $2,352 $2,263 FHLB borrowing capacity $2,775 $2,200 $1,476 $1,186 $1,569 Total available liquidity $4,146 $3,877 $3,854 $3,538 $3,832 Liquid assets as a % of total assets 14.2% 17.0% 20.6% 19.4% 18.1% FHLB Capacity as a % of total assets 28.8% 22.4% 12.8% 9.8% 12.5% Available liquidity as a % of total assets 43.1% 39.4% 33.3% 29.1% 30.6% Funding 9/30/2014 12/31/2014 3/31/2015 6/30/2015 9/30/2015 Brokered deposits $354 $392 $361 $328 $317 FHLB advances 150 514 1,625 2,198 2,024 Other debt 340 331 317 283 279 Total wholesale funding $844 $1,237 $2,303 $2,809 $2,620 Wholesale funding as a % of total assets 8.8% 12.6% 19.9% 23.1% 20.9% 1) Reclassification of certain Investment securities to held-to-maturity as of 9/30/15 have been included in available liquidity.

3rd Quarter 2015 Composition of liabilities 37 CAPITAL AND LIQUIDITY Quarter end liabilities ($mm) ($ in mm) Balance Mix Balance Mix Balance Mix Balance Mix Balance Mix Retail deposits Demand $685 8.3% $726 8.6% $751 7.4% $757 7.1% $746 6.8% Savings 3,311 40.0% 3,428 40.5% 3,643 35.9% 3,749 35.1% 3,671 33.3% Money market 220 2.7% 209 2.5% 196 1.9% 185 1.7% 176 1.6% Certificates of deposit 854 10.3% 807 9.5% 769 7.6% 765 7.2% 799 7.3% Total retail $5,070 61.3% $5,170 61.1% $5,359 52.8% $5,456 51.0% $5,392 49.0% Commercial deposits Demand $121 1.5% $133 1.6% $139 1.4% $161 1.5% $149 1.4% Savings 27 0.3% 27 0.3% 35 0.3% 39 0.4% 32 0.3% Money market 37 0.4% 43 0.5% 56 0.6% 96 0.9% 75 0.7% Certificates of deposit 1 0.0% 5 0.1% 6 0.1% 2 0.0% 14 0.1% Total commercial $186 2.2% $208 2.5% $236 2.3% $298 2.8% $270 2.5% Government deposits Demand $292 3.5% $246 2.9% $346 3.4% $254 2.4% $367 3.3% Savings 410 5.0% 317 3.7% 356 3.5% 403 3.8% 468 4.2% Certificates of deposit 376 4.5% 355 4.2% 240 2.4% 312 2.9% 372 3.4% Total government $1,078 13.0% $918 10.8% $942 9.3% $969 9.1% $1,207 11.0% Company controlled deposits $900 10.9% $773 9.1% $1,012 10.0% $925 8.7% $1,267 11.5% Total deposits $7,234 87.4% $7,069 83.5% $7,549 74.4% $7,648 71.6% $8,136 73.9% FHLB Advances 150 1.8% 514 6.1% 1,625 16.0% 2,198 20.6% 2,024 18.4% Other debt 340 4.1% 331 3.9% 317 3.1% 283 2.6% 279 2.5% Other liabilities 549 6.6% 553 6.5% 661 6.5% 559 5.2% 576 5.2% Total liabilities $8,273 100.0% $8,467 100.0% $10,152 100.0% $10,688 100.0% $11,015 100.0% 9/30/20156/30/20153/31/201512/31/20149/30/2014

3rd Quarter 2015 766 988 1,185 912 788 588 487 449 442 402 1,354 177 1,475 265 1,634 237 1,354 150 1,190 56 3Q 2014 4Q 2014 1Q 2015 2Q 2015 3Q 2015 Fannie Mae Freddie Mac Fannie Mae Freddie Mac Audit file pulls Repurchase demands Representation & Warranty reserve details (in millions) 9/30/14 12/31/14 3/31/15 6/30/15 9/30/15 Beginning balance $50) $57) $53) $53) $48) Additions 15) (4) 0) (3) (4) Net charge-offs (8) 0) (0) (2) 1) Ending Balance $57) $53) $53) $48) $45) Repurchase pipeline ($mm) Repurchase reserve ($mm) Repurchase activity with Fannie and Freddie Repurchase demands / file pulls 18% 15% 11% 13% 38 5% ASSET QUALITY $31 $43 $58 $46 $30 9/30/2014 12/31/2014 3/31/15 6/30/2015 9/30/2015

3rd Quarter 2015 Supplemental capital ratios 39 NON-GAAP RECONCILIATION $mm – Basel I to Basel III (transitional) as of 12/31/14 1) On January 1, 2015, the Basel III rules became effective, subject to transition provisions primarily related to regulatory deductions and adjustments impacting, risk weighted assets, adjusted tangible assets, common equity Tier 1 capital and Tier 1 capital. We reported under Basel I (which included the Market Risk Final Rules) at December 31, 2014. Flagstar Bancorp Common Equity Tier 1 (to Risk Weighted Assets) Tier 1 Leverage (to Adjusted Tangible Assets) Tier 1 Capital (to Risk Weighted Assets) Total Risk-Based Capital (to Risk Weighted Assets) Regulatory capital as of 12/31/14 Basel I capital N/A $1,184 $1,184 $1,252 Net change in capital N/A $37 $37 $37 Basel III capital(1) $876 $1,221 $1,221 $1,289 Risk-weighted assets as 12/31/14 Basel I assets N/A $9,403 $5,190 $5,190 Net change in assets N/A $351 $42 $42 Basel III assets(1) $5,232 $9,755 $5,232 $5,232 Capital ratios Basel I N/A 12.6% 22.8% 24.1% Basel III(1) 16.7% 12.5% 23.3% 24.6%

3rd Quarter 2015 Efficiency ratio and earnings per share 40 $mm 1) Reverse benefit for contract renegotiation. 2) Add back reserve increase related to indemnifications claims on government insured loans. 3) Negative fair value adjustment on repurchased performing loans and a benefit for contract renegotiation. 4) Adjust for legal expenses related to the litigation settlements during the respective periods. 5) Adjust for CFPB litigation settlement expense. NON-GAAP RECONCILIATION 3Q14 4Q14 1Q15 2Q15 3Q15 Net interest income (a) $64 $61 $65 $73 $73 Noninterest income (b) 85 98 119 126 128 Adjusting items: Loan fees and charges (1) - - - - - Representation and warranty reserve – change in estimate (2) 10 - - - - Other noninterest income (3) - - - - - Adjusted noninterest income $95 $98 $119 $126 $128 Adjusted income $159 $159 $184 $199 $201 Noninterest expense (c) $179 $139 $138 $138 $131 Adjusting items: Legal and professional expense (4) (1) - - - - Other noninterest expense (5) (38) - - - - Adjusted noninterest expense $140 $139 $138 $138 $131 Efficiency ratio (c/(a+b)) 120.1% 87.4% 75.0% 69.3% 65.2% Net (loss) income applicable to common stockholders ($28) $11 $32 $46 $47 Adjustment to remove adjusting items 49 - - - - Tax impact of adjusting items (17) - - - - Adjusting tax item - - - - - Adjusted net (loss) income applicable to common stockholders $4 $11 $32 $46 $47 Dilute (loss) income per share ($0.61) $0.07 $0.43 $0.68 $0.69 Adjustment to remove adjusting items 0.87 - - - - Tax impact of adjusting items (0.30) - - - - Adjusting tax item - - - - - Diluted adjusted (loss) income per share ($0.04) $0.07 $0.43 $0.68 $0.69 Weighted average shares outstanding Basic 56,249,300 56,310,858 56,385,454 56,436,026 56,436,026 Diluted 56,249,300 56,792,751 56,775,039 57,165,072 57,207,503