8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):July 25, 2017

(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 July 25, 2017, Flagstar Bancorp, Inc. (the "Company") issued a press release regarding its preliminary results of operations and financial condition for the three months ended June 30, 2017. The text of the press release is furnished as Exhibit 99.1 to this report. The Company will include final financial statements and additional analyses for the three and six months ended June 30, 2017 as part of its Quarterly Report on Form 10-Q.

On July 25, 2017, the Company will hold a conference call to review second quarter 2017 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 July 25, 2017
99.2	Flagstar Bancorp, Inc. Conference Call Presentation Slides - Earnings Presentation Second Quarter 2017

SIGNATURE

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

	FLAGSTAR BANCORP, INC.
Dated: July 25, 2017		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 July 25, 2017
99.2	Flagstar Bancorp, Inc. Conference Call Presentation Slides - Earnings Presentation Second Quarter 2017

EX-99.1

EXHIBIT 99.1

NEWS RELEASE

For more information, contact:

David L. Urban

david.urban@flagstar.com

(248) 312-5970

Flagstar Reports Second Quarter 2017 Net Income of $41 million, or $0.71 per Diluted Share

Company continues successful transformation into commercial bank

Key Highlights - Second Quarter 2017

• Net income per diluted share increased $0.25, or 54 percent, from first quarter 2017.

• Strong loan growth with average commercial loans up 17 percent from last quarter.

• Net interest income rose $14 million, or 17 percent, from prior quarter, driven by strong earning asset growth and a higher net interest margin.

• Mortgage revenues, including gain on sale and return on MSR, up $10 million, or 16 percent, from last quarter led by seasonal increase in mortgage originations and recent acquisitions which successfully mitigated impact of softer mortgage market.

• Asset quality strong with minimal net charge-offs and low delinquencies across all loan portfolios.

TROY, Mich., July 25, 2017 - Flagstar Bancorp, Inc. (NYSE:FBC), the holding company for Flagstar Bank, FSB, today reported second quarter 2017 net income of $41 million, or $0.71 per diluted share, as compared to $27 million, or $0.46 per diluted share, in the first quarter 2017, and $47 million, or $0.66 per diluted share, in the second quarter 2016.

“We are pleased to report another solid quarter,” said Alessandro DiNello, president and chief executive officer of Flagstar Bancorp, Inc. “Our community bank results continued to be outstanding and we're right where we expected. Average warehouse loans rebounded nicely, growing 23 percent, and we saw a 15 percent increase in average commercial and industrial and commercial real estate loans. We also posted a 10 basis point increase in net interest margin, maintaining a stable deposit cost despite recent Fed rate hikes. The maturation of our community bank has generated a more balanced, more sustainable earnings stream for our Company.”

“Additionally, we closed on the previously reported bulk sales of $191 million of mortgage servicing rights (MSRs), successfully executing our MSR reduction strategy and releasing capital to support balance sheet growth. We are the subservicer on approximately 85 percent of the MSRs we sold, providing a boost to our subservicing business and helping us to exceed over 400,000 accounts serviced or subserviced. Our MSRs now stand at 13 percent of our Tier 1 capital, positioning us well for the full phase-in of Basel III.”

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“Our mortgage business also had an outstanding quarter. Fallout-adjusted locks rose 50 percent to $9.0 billion, driven primarily by the impact of the acquisitions of Opes Advisors (Opes) this quarter, as well as the delegated correspondent business from Stearns Lending (Stearns) last quarter. The integration of Opes is going smoothly, and the division is helping us maintain revenue in a softer mortgage origination market. Opes brings us more than double our pre-acquisition distributed retail origination volume and puts us now in a strong position for the move to a purchase mortgage market.”

“We have a formidable banking business, an industry-leading mortgage origination platform and a blossoming subservicing business--supported by strong capital and liquidity. It’s a powerful combination that positions us to grow our balance sheet with higher quality, relationship-focused assets and continues to create value for our shareholders.”

Second Quarter 2017 Highlights:

Income Statement Highlights
	Three Months Ended
	June 30, 2017			March 31, 2017		December 31, 2016		September 30, 2016 (1)		June 30, 2016
	(Dollars in millions)
Net interest income	$	97		$	83	$	87	$	80	$	77
Provision (benefit) for loan losses	(1		)	3		1		7		(3		)
Noninterest income	116			100		98		156		128
Noninterest expense	154			140		142		142		139
Income before income taxes	60			40		42		87		69
Provision for income taxes	19			13		14		30		22
Net income	$	41		$	27	$	28	$	57	$	47
Income per share:
Basic	$	0.72		$	0.47	$	0.50	$	0.98	$	0.67
Diluted	$	0.71		$	0.46	$	0.49	$	0.96	$	0.66

(1) Third quarter 2016 results include a $24 million benefit ($16 million after tax benefit or $0.27 per diluted income per share) related to a decrease in the fair value of the Department of Justice (“DOJ”) settlement liability. Excluding this benefit, the Company had adjusted non-GAAP third quarter 2016 net income of $41 million, or $0.69 per diluted share.

Key Ratios
	Three Months Ended										Change (bps)
	June 30, 2017		March 31, 2017		December 31, 2016		September 30, 2016		June 30, 2016		Seq	Yr/Yr
Net interest margin	2.77	%	2.67	%	2.67	%	2.58	%	2.63	%	10	14
Return on average assets	1.0	%	0.8	%	0.8	%	1.6	%	1.4	%	28	(34)
Return on average equity	11.6	%	7.9	%	8.6	%	16.5	%	11.5	%	369	4
Return on average common equity	11.6	%	7.9	%	8.6	%	17.5	%	13.8	%	369	(220)
Efficiency ratio	72.0	%	76.8	%	76.7	%	59.9	%	68.2	%	(480)	380

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Balance Sheet Highlights
	Three Months Ended										% Change
	June 30, 2017		March 31, 2017		December 31, 2016		September 30, 2016		June 30, 2016		Seq		Yr/Yr
	(Dollars in millions)
Average Balance Sheet Data
Average interest-earning assets	$	14,020	$	12,343	$	12,817	$	12,318	$	11,639	14	%	20	%
Average loans held-for-sale (LHFS)	4,269		3,286		3,321		3,416		2,884		30	%	48	%
Average loans held-for-investment (LHFI)	6,224		5,639		6,163		5,848		5,569		10	%	12	%
Average total deposits	8,739		8,795		9,233		9,126		8,631		(1	)%	1	%

Net Interest Income

Net interest income rose $14 million, or 17 percent, to $97 million, as compared to $83 million for the first quarter 2017. The results reflected a 14 percent increase in average earning assets, led by growth in commercial loans and loans held-for-sale, and net interest margin expansion of 10 basis points.

Average loans held-for-sale were $4.3 billion in the second quarter 2017, increasing $1 billion, or 30 percent, from the first quarter 2017, on higher mortgage activity.

Loans held-for-investment averaged $6.2 billion for the second quarter 2017, increasing $585 million, or 10 percent, from the prior quarter. During the second quarter 2017, average commercial loans rose 17 percent with average commercial and industrial loans rising $162 million, or 21 percent, average warehouse loans increasing $160 million, or 23 percent and average commercial real estate loans increasing $159 million, or 12 percent. Average consumer loans rose 4 percent, driven by an increase in mortgage loans (primarily jumbos).

Average total deposits were $8.7 billion in the second quarter 2017, unchanged from the first quarter 2017. Higher company-controlled and retail deposits largely offset lower government deposits. Average retail deposits increased $32 million, led by a 4 percent increase in demand deposits. Excluding warehouse loans and company-controlled deposits, the Company's held-for-investment (HFI) loan-to-deposit ratio was 73 percent in the second quarter 2017, as compared to 66 percent in the first quarter 2017.

Net interest margin increased 10 basis points to 2.77 percent for the second quarter 2017, as compared to the first quarter 2017. The increase from the prior quarter was driven by increased interest income on loans held-for-sale and commercial loans, partially offset by higher interest expense on short-term Federal Home Loan Bank advances due to recent Federal Reserve rate hikes. Total deposit costs remained relatively unchanged.

Provision (Benefit) for Loan Losses

The Company experienced a provision benefit in the second quarter 2017, resulting primarily from a continued decline in loss rates in the held-for-investment portfolio. The provision benefit for loan losses totaled $1 million for the second quarter 2017, as compared to a $3 million provision expense for the first quarter 2017.

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Noninterest Income

Noninterest income rose $16 million, or 16 percent, to $116 million in the second quarter of 2017, as compared to $100 million for the first quarter 2017. The increase was primarily due to an increase in mortgage revenues and loan fees and charges, partially offset by a decrease in the net return on the mortgage servicing rights.

Second quarter 2017 net gain on loan sales increased to $66 million, as compared to $48 million in the first quarter 2017. Fallout-adjusted locks rose 50 percent to $9.0 billion, led by a seasonal increase in the mortgage market and the impact of recent acquisitions (Stearns and Opes). Excluding recent acquisitions, fallout-adjusted locks increased 23 percent to $7.0 billion. The net gain on loan sale margin fell 7 basis points to 0.73 percent for the second quarter 2017, as compared to 0.80 percent for the first quarter 2017.

Mortgage Metrics
	Three Months Ended															Change (% / bps)
	June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016			June 30, 2016			Seq		Yr/Yr
	(Dollars in millions)
Mortgage rate lock commitments (fallout-adjusted) (1)	$	9,002		$	5,996		$	6,091		$	8,291		$	8,127		50	%	11	%
Net margin on mortgage rate lock commitments (fallout-adjusted) (1) (2)	0.73		%	0.80		%	0.93		%	1.13		%	1.04		%	(7)		(31)
Net gain on loan sales on HFS	$	66		48			$	57		$	94		$	85		38	%	(22	)%
Net (loss) return on the mortgage servicing rights (MSR)	$	6		$	14		$	(5	)	$	(11	)	$	(4	)	N/M		N/M
Gain on loan sales HFS + net (loss) return on the MSR	$	72		$	62		$	52		$	83		$	81		16	%	(11	)%
Residential loans serviced (number of accounts - 000's) (3)	402			393			383			375			358			2	%	12	%
Capitalized value of mortgage servicing rights	1.14		%	1.10		%	1.07		%	0.96		%	0.99		%	4		15
N/M - Not meaningful
(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.
(2) Gain on sale margin is based on net gain on loan sales (excluding gains from loans transferred from HFI) to fallout-adjusted mortgage rate lock commitments.
(3) Includes loans serviced for own loan portfolio, serviced for others, and subserviced for others.

Loan fees and charges rose to $20 million for the second quarter 2017, as compared to $15 million for the first quarter 2017. The increase primarily reflected higher mortgage loan closings with a greater mix of delegated correspondent loans.

Net return on the mortgage servicing rights (including the impact of hedges) was a net gain of $6 million for the second quarter 2017, as compared to a net gain of $14 million for the first quarter 2017. The drop in the net return on the mortgage servicing rights largely reflected lower service fee income due to MSR bulk sales with a fair value of $191 million that closed in the second quarter 2017.

The representation and warranty benefit was $3 million for the second quarter 2017, as compared to a $4 million benefit in the first quarter 2017. The representation and warranty reserve was reduced to $20 million at June 30, 2017, from $23 million at March 31, 2017, reflecting a continued improvement in risk trends and a repurchase pipeline that was only $4 million at June 30, 2017.

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Noninterest Expense

Noninterest expense rose to $154 million for the second quarter 2017, as compared to $140 million for the first quarter 2017. The increase from the prior quarter was primarily due to operating expenses and transaction costs associated with the recent acquisitions of Stearns and Opes, and an increase in commissions and loan processing expense from higher mortgage closings. Excluding $11 million of operating expenses and $1 million of transaction costs from the acquisitions, our adjusted non-GAAP noninterest expense was $142 million.

The Company's efficiency ratio improved to 72 percent for the second quarter 2017, as compared to 77 percent for the first quarter 2017.

Income Taxes

The second quarter 2017 provision for income taxes totaled $19 million, as compared to $13 million in the first quarter 2017. The effective tax rate was 32 percent for the second quarter 2017, as compared to 33 percent for the first quarter 2017.

Asset Quality

Credit Quality Ratios
	Three Months Ended															Change (% / bps)
	June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016			June 30, 2016			Seq		Yr/Yr
	(Dollars in millions)
Allowance for loan loss to LHFI	2.1		%	2.4		%	2.4		%	2.3		%	2.6		%	(30)		(50)
Allowance for loan loss to LHFI and loans with government guarantees	2.0		%	2.3		%	2.2		%	2.2		%	2.4		%	(30)		(40)
Charge-offs, net of recoveries	$	—		$	4		$	2		$	7		$	9		(100	)%	(100	)%
Charge-offs associated with loans with government guarantees	—			2			1			5			4			(100	)%	(100	)%
Charge-offs associated with the sale or transfer of nonperforming loans and TDRs	—			1			—			—			2			(100	)%	(100	)%
Charge-offs, net of recoveries, adjusted (1)	$	—		$	1		$	1		$	2		$	3		(100	)%	(100	)%
Total nonperforming loans held-for-investment	$	30		$	28		$	40		$	40		$	44		7	%	(32	)%
Net charge-offs to LHFI ratio (annualized)	0.04		%	0.27		%	0.13		%	0.51		%	0.62		%	(23)		(58)
Net charge-off ratio, adjusted (annualized)	0.02		%	0.07		%	0.07		%	0.15		%	0.18		%	(5)		(16)
Ratio of nonperforming LHFI to LHFI	0.44		%	0.47		%	0.67		%	0.63		%	0.76		%	(3)		(32)
N/M - Not meaningful

(1) Excludes charge-offs associated with loans with government guarantees and charge-offs associated with the sale or transfer of nonperforming loans and TDRs.

The allowance for loan losses was $140 million at June 30, 2017, covering 2.1 percent of loans held-for-investment, as compared to an allowance for loan losses of $141 million at March 31, 2017, covering 2.4 percent of loans held-for-investment.

Net charge-offs in the second quarter 2017 were less than $1 million, or 0.04 percent of HFI loans, compared to $4 million, or 0.27 percent of such loans in the prior quarter.

Nonperforming loans held-for-investment were $30 million at June 30, 2017, compared to $28 million at March 31, 2017. As in the prior quarter, there were no nonperforming commercial loans at June 30, 2017. The ratio of nonperforming loans to loans held-for-investment decreased to 0.44 percent at June 30, 2017 from 0.47 percent at March 31, 2017. At June 30, 2017, consumer loan delinquencies totaled $5 million, unchanged from March 31, 2017.

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Capital

Capital Ratios (Bancorp)	Three Months Ended															Change (% /$)
	June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016			June 30, 2016			Seq		Yr/Yr
Total capital	15.92		%	15.98		%	16.41		%	15.26		%	20.19		%	(0.06	)%	(4.27	)%
Tier 1 capital	14.65		%	14.70		%	15.12		%	13.98		%	18.89		%	(0.05	)%	(4.24	)%
Tier 1 leverage	9.10		%	9.31		%	8.88		%	8.88		%	11.59		%	(0.21	)%	(2.49	)%
Mortgage servicing rights to Tier 1 capital	13.1		%	23.1		%	26.7		%	24.6		%	19.9		%	(10.0	)%	(6.8	)%
Tangible book value per share	$	24.29		$	23.96		$	23.50		$	22.72		$	23.54		0.33		0.75

The Company maintained a robust capital position with regulatory ratios well above current regulatory quantitative guidelines for "well capitalized" institutions. At June 30, 2017, the Company had a Tier 1 leverage ratio of 9.10 percent, as compared to 9.31 percent at March 31, 2017.

At June 30, 2017, the Company had a common equity-to-assets ratio of 8.82 percent.

Earnings Conference Call

As previously announced, the Company's second quarter 2017 earnings call will be held Tuesday, July 25, 2017 at 11 a.m. (ET).

To join the call, please dial (888) 394-8218 toll free or (719) 325-2226 and use passcode 2137097. 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 and using passcode 2137097.

The conference call will also be available as a live audiocast on the Investor Relations section of flagstar.com, where it will be archived and 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 $16.0 billion savings and loan holding company headquartered in Troy, Mich. Flagstar Bank, FSB, 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 85 retail locations in 26 states, representing the combined retail branches of Flagstar and Opes Advisors mortgage division. Flagstar is a leading national originator and servicer of mortgage loans, handling payments and record keeping for $87 billion of home loans representing 402,000 borrowers. For more information, please visit flagstar.com.

Use of Non-GAAP Financial Measures

In addition to results presented in accordance with GAAP, this news release includes non-GAAP financial measures, such as tangible book value per share and estimated fully implemented Basel III capital levels and ratios. The Company believes these non-GAAP financial measures provide additional information that is useful to investors in helping to understand the capital requirements Flagstar will face in the future and underlying performance and trends of Flagstar.

Non-GAAP financial measures have inherent limitations. Readers should be aware of these limitations and should be cautious with respect to the use of such measures. To compensate for these limitations, we use non-GAAP measures as comparative tools, together with GAAP measures, to assist in the evaluation of our operating

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performance or financial condition. Also, we ensure that these measures are calculated using the appropriate GAAP or regulatory components in their entirety and that they are computed in a manner intended to facilitate consistent period-to-period comparisons. Flagstar’s method of calculating these non-GAAP measures may differ from methods used by other companies. These non-GAAP measures should not be considered in isolation or as a substitute for those financial measures prepared in accordance with GAAP or in-effect regulatory requirements.

Where non-GAAP financial measures are used, the most directly comparable GAAP or regulatory financial measure, as well as the reconciliation to the most directly comparable GAAP or regulatory financial measure, can be found in this news release. Additional discussion of the use of non-GAAP measures can also be found in conference call slides, the Form 8-K Current Report related to this news release and 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)

(Unaudited)

	June 30, 2017			March 31, 2017			December 31, 2016			June 30, 2016
Assets
Cash	$	80		$	72		$	84		$	64
Interest-earning deposits	103			89			74			120
Total cash and cash equivalents	183			161			158			184
Investment securities available-for-sale	1,614			1,650			1,480			1,145
Investment securities held-to-maturity	1,014			1,048			1,093			1,211
Loans held-for-sale	4,506			4,543			3,177			3,091
Loans held-for-investment	6,776			5,959			6,065			5,822
Loans with government guarantees	278			322			365			435
Less: allowance for loan losses	(140		)	(141		)	(142		)	(150		)
Total loans held-for-investment and loans with government guarantees, net	6,914			6,140			6,288			6,107
Mortgage servicing rights	184			295			335			301
Federal Home Loan Bank stock	260			201			180			172
Premises and equipment, net	299			277			275			259
Net deferred tax asset	266			273			286			333
Other assets	725			773			781			920
Total assets	$	15,965		$	15,361		$	14,053		$	13,723
Liabilities and Stockholders' Equity
Noninterest-bearing	$	2,012		$	1,831		$	2,077		$	2,109
Interest-bearing	6,683			6,814			6,723			6,462
Total deposits	8,695			8,645			8,800			8,571
Short-term Federal Home Loan Bank advances and other	3,670			3,186			1,780			1,069
Long-term Federal Home Loan Bank advances	1,200			1,200			1,200			1,577
Other long-term debt	493			493			493			247
Representation and warranty reserve	20			23			27			36
Other liabilities	479			443			417			624
Total liabilities	14,557			13,990			12,717			12,124
Stockholders' Equity
Preferred stock	—			—			—			267
Common stock	1			1			1			1
Additional paid in capital	1,509			1,510			1,503			1,491
Accumulated other comprehensive (loss) income	(9		)	(6		)	(7		)	(19		)
Accumulated deficit	(93		)	(134		)	(161		)	(141		)
Total stockholders' equity	1,408			1,371			1,336			1,599
Total liabilities and stockholders' equity	$	15,965		$	15,361		$	14,053		$	13,723

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Flagstar Bancorp, Inc.  Condensed Consolidated Statements of Operations  (Dollars in millions, except per share data) (Unaudited)
															Second Quarter 2017 Compared to:
	Three Months Ended														First Quarter 2017					Second Quarter 2016
	June 30, 2017			March 31, 2017		December 31, 2016			September 30, 2016			June 30, 2016			Amount			Percent		Amount			Percent
Interest Income
Total interest income	$	129		$	110	$	111		$	106		$	99		$	19		17	%	$	30		30	%
Total interest expense	32			27		24			26			22			5			19	%	10			45	%
Net interest income	97			83		87			80			77			14			17	%	20			26	%
Provision (benefit) for loan losses	(1		)	3		1			7			(3		)	(4		)	N/M		$	2		(67	)%
Net interest income after provision (benefit) for loan losses	98			80		86			73			80			18			23	%	18			23	%
Noninterest Income
Net gain on loan sales	66			48		57			94			90			18			38	%	$	(24	)	(27	)%
Loan fees and charges	20			15		20			22			19			5			33	%	1			5	%
Deposit fees and charges	5			4		5			5			6			1			25	%	(1		)	(17	)%
Loan administration income	6			5		4			4			4			1			20	%	2			50	%
Net (loss) return on the mortgage servicing rights	6			14		(5		)	(11		)	(4		)	(8		)	(57	)%	10			N/M
Representation and warranty benefit	3			4		7			6			4			(1		)	(25	)%	(1		)	(25	)%
Other noninterest income	10			10		10			36			9			—			—	%	1			11	%
Total noninterest income	116			100		98			156			128			16			16	%	(12		)	(9	)%
Noninterest Expense
Compensation and benefits	71			72		66			69			66			(1		)	(1	)%	5			8	%
Commissions	16			10		15			16			14			6			60	%	2			14	%
Occupancy and equipment	25			22		21			21			21			3			14	%	4			19	%
Loan processing expense	14			12		15			13			15			2			17	%	(1		)	(7	)%
Legal and professional expense	8			7		9			5			6			1			14	%	2			33	%
Other noninterest expense	20			17		16			18			17			3			18	%	3			18	%
Total noninterest expense	154			140		142			142			139			14			10	%	15			11	%
Income before income taxes	60			40		42			87			69			20			50	%	(9		)	(13	)%
Provision for income taxes	19			13		14			30			22			6			46	%	(3		)	(14	)%
Net income	$	41		$	27	$	28		$	57		$	47		$	14		52	%	$	(6	)	(13	)%
Income per share
Basic	$	0.72		$	0.47	$	0.50		$	0.98		$	0.67		$	0.25		53	%	$	0.05		7	%
Diluted	$	0.71		$	0.46	$	0.49		$	0.96		$	0.66		$	0.25		54	%	$	0.05		8	%

N/M - Not meaningful

9

Flagstar Bancorp, Inc.  Condensed Consolidated Statements of Operations  (Dollars in millions, except per share data) (Unaudited)
						Six Months Ended June 30, 2017
	Six Months Ended					Compared to: Six Months Ended June 30, 2016
	June 30, 2017		June 30, 2016			Amount			Percent
Total interest income	$	239	$	200		$	39		20	%
Total interest expense	59		44			15			34	%
Net interest income	180		156			24			15	%
Provision (benefit) for loan losses	2		(16		)	18			N/M
Net interest income after provision (benefit) for loan losses	178		172			6			3	%
Noninterest Income
Net gain on loan sales	114		165			(51		)	(31	)%
Loan fees and charges	35		34			1			3	%
Deposit fees and charges	9		12			(3		)	(25	)%
Loan administration income	11		10			1			10	%
Net (loss) return on the mortgage servicing rights	20		(10		)	30			N/M
Representation and warranty benefit	7		6			1			17	%
Other noninterest income	20		16			4			25	%
Total noninterest income	216		233			(17		)	(7	)%
Noninterest Expense
Compensation and benefits	143		134			9			7	%
Commissions	26		24			2			8	%
Occupancy and equipment	47		43			4			9	%
Loan processing expense	26		27			(1		)	(4	)%
Legal and professional expense	15		15			—			—	%
Other noninterest expense	37		33			4			12	%
Total noninterest expense	294		276			18			7	%
Income before income taxes	100		129			(29		)	(22	)%
Provision for income taxes	32		43			(11		)	(26	)%
Net income	$	68	$	86		$	(18	)	(21	)%
Income per share
Basic	$	1.18	$	1.23		$	(0.05	)	(4	)%
Diluted	$	1.16	$	1.21		$	(0.05	)	(4	)%

10

Flagstar Bancorp, Inc.

Summary of Selected Consolidated Financial and Statistical Data

(Dollars in millions, except share data)

(Unaudited)

	Three Months Ended									Six Months Ended
	June 30, 2017			March 31, 2017			June 30, 2016			June 30, 2017			June 30, 2016
Selected Mortgage Statistics:
Mortgage loans originated (1)	$	9,198		$	5,912		$	8,330		$	15,110		$	14,682
Mortgage loans sold and securitized	$	8,989		$	4,484		$	7,940		$	13,473		$	14,888
Mortgage rate lock commitments (gross)	$	10,813		$	7,377		$	10,168		18,190			18,930
Selected Ratios:
Interest rate spread (2)	2.59		%	2.49		%	2.43		%	2.55		%	2.46		%
Net interest margin	2.77		%	2.67		%	2.63		%	2.72		%	2.64		%
Net margin on loans sold and securitized	0.73		%	1.06		%	1.07		%	0.84		%	1.01		%
Return on average assets	1.04		%	0.76		%	1.38		%	0.91		%	1.27		%
Return on average equity	11.57		%	7.88		%	11.53		%	9.77		%	10.81		%
Return on average common equity	11.57		%	7.88		%	13.83		%	9.77		%	13.00		%
Efficiency ratio	72.0		%	76.8		%	68.2		%	74.2		%	71.2		%
Equity-to-assets ratio (average for the period)	9.02		%	9.59		%	11.95		%	9.29		%	11.73		%
Average Balances:
Average common shares outstanding	57,101,816			56,921,605			56,574,796			57,012,208			56,544,256
Average fully diluted shares outstanding	58,138,938			58,072,563			57,751,230			58,106,070			57,623,081
Average interest-earning assets	$	14,020		$	12,343		$	11,639		$	13,187		$	11,755
Average interest-paying liabilities	$	11,804		$	10,319		$	9,205		$	11,066		$	9,514
Average stockholders' equity	$	1,418		$	1,346		$	1,606		$	1,382		$	1,583

	June 30, 2017			March 31, 2017			December 31, 2016			June 30, 2016
Selected Statistics:
Book value per common share	$	24.64		$	24.03		$	23.50		$	23.54
Tangible book value per share	24.29			23.96			23.50			23.54
Number of common shares outstanding	57,161,431			57,043,565			56,824,802			56,575,779
Number of FTE employees	3,432			2,948			2,886			2,894
Number of bank branches	99			99			99			99
Ratio of allowance for loan losses to LHFI (3)	2.07		%	2.37		%	2.37		%	2.62		%
Ratio of allowance for loan losses to LHFI and loans with government guarantees (3)	1.99		%	2.25		%	2.23		%	2.43		%
Ratio of nonperforming assets to total assets	0.24		%	0.27		%	0.39		%	0.46		%
Equity-to-assets ratio	8.82		%	8.92		%	9.50		%	11.65		%
Common equity-to-assets ratio	8.82		%	8.92		%	9.50		%	9.70		%
MSR Key Statistics and Ratios:
Weighted average service fee (basis points)	27.8			26.7			26.7			28.2
Capitalized value of mortgage servicing rights	1.14		%	1.10		%	1.07		%	0.99		%
Mortgage servicing rights to Tier 1 capital	13.1		%	23.1		%	26.7		%	19.9		%

(1) Includes residential first mortgage and home equity 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.

11

Average Balances, Yields and Rates

(Dollars in millions)

(Unaudited)

	Three Months Ended
	June 30, 2017						March 31, 2017						June 30, 2016
	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	$	4,269	$	42	4.00	%	$	3,286	$	32	3.87	%	$	2,884	$	26	3.64	%
Loans held-for-investment
Residential first mortgage	2,495		21		3.38	%	2,399		20		3.33	%	2,232		18		3.15	%
Home equity	439		6		4.91	%	431		5		5.11	%	485		6		4.91	%
Other	27		—		4.54	%	27		1		4.50	%	29		—		4.92	%
Total Consumer loans	2,961		27		3.61	%	2,857		26		3.60	%	2,746		24		3.48	%
Commercial Real Estate	1,477		16		4.16	%	1,318		12		3.80	%	899		8		3.41	%
Commercial and Industrial	936		11		4.77	%	774		9		4.56	%	607		6		3.97	%
Warehouse Lending	850		10		4.71	%	690		8		4.51	%	1,317		14		4.28	%
Total Commercial loans	3,263		37		4.48	%	2,782		29		4.19	%	2,823		28		3.94	%
Total loans held-for-investment	6,224		64		4.07	%	5,639		55		3.89	%	5,569		52		3.71	%
Loans with government guarantees	295		3		4.02	%	342		4		4.61	%	444		4		3.33	%
Investment securities	3,166		20		2.57	%	3,012		19		2.51	%	2,558		17		2.66	%
Interest-earning deposits	66		—		1.07	%	64		—		0.86	%	184		—		0.50	%
Total interest-earning assets	14,020		$	129	3.69	%	12,343		$	110	3.55	%	11,639		$	99	3.40	%
Other assets	1,690						1,700						1,799
Total assets	$	15,710					$	14,043					$	13,438
Interest-Bearing Liabilities
Retail deposits
Demand deposits	$	510	$	—	0.15	%	$	507	$	—	0.18	%	$	482	$	—	0.17	%
Savings deposits	3,933		8		0.75	%	3,928		7		0.76	%	3,691		7		0.79	%
Money market deposits	239		—		0.42	%	276		1		0.46	%	363		1		0.52	%
Certificates of deposit	1,094		3		1.08	%	1,073		3		1.06	%	951		2		1.00	%
Total retail deposits	5,776		11		0.75	%	5,784		11		0.75	%	5,487		10		0.75	%
Government deposits
Demand deposits	200		—		0.39	%	235		—		0.39	%	203		—		0.39	%
Savings deposits	411		1		0.56	%	459		1		0.52	%	398		—		0.52	%
Certificates of deposit	291		—		0.68	%	318		—		0.63	%	410		1		0.50	%
Total government deposits	902		1		0.56	%	1,012		1		0.52	%	1,011		1		0.49	%
Wholesale deposits and other	4		—		0.48	%	8		—		0.39	%	—		—		—%
Total interest-bearing deposits	6,682		12		0.72	%	6,804		12		0.72	%	6,498		11		0.71	%
Short-term Federal Home Loan Bank advances and other	3,429		8		0.98	%	1,822		3		0.73	%	835		1		0.41	%
Long-term Federal Home Loan Bank advances	1,200		6		1.91	%	1,200		6		1.87	%	1,625		8		1.93	%
Other long-term debt	493		6		5.06	%	493		6		5.04	%	247		2		3.31	%
Total interest-bearing liabilities	11,804		32		1.10	%	10,319		27		1.06	%	9,205		22		0.97	%
Noninterest-bearing deposits (1)	2,057						1,991						2,133
Other liabilities	431						387						494
Stockholders' equity	1,418						1,346						1,606
Total liabilities and stockholders' equity	$	15,710					$	14,043					$	13,438
Net interest-earning assets	$	2,216					$	2,024					$	2,434
Net interest income			$	97					$	83					$	77
Interest rate spread (2)					2.59	%					2.49	%					2.43	%
Net interest margin (3)					2.77	%					2.67	%					2.63	%
Ratio of average interest-earning assets to interest-bearing liabilities					118.8	%					119.6	%					126.4	%
Total average deposits	$	8,739					$	8,795					$	8,631

(1) Includes noninterest-bearing company-controlled deposits that arise due to the servicing of loans for others.

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

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

12

Average Balances, Yields and Rates

(Dollars in millions)

(Unaudited)

	Six Months Ended
	June 30, 2017						June 30, 2016
	Average Balance		Interest		Annualized Yield/Rate		Average Balance		Interest		Annualized Yield/Rate
Interest-Earning Assets
Loans held-for-sale	$	3,780	$	74	3.94	%	$	2,897	$	54	3.72	%
Loans held-for-investment
Residential first mortgage	2,447		41		3.35	%	2,504		39		3.12	%
Home equity	436		11		5.01	%	497		13		5.36	%
Other	26		—		4.52	%	29		1		4.94	%
Total Consumer loans	2,909		52		3.61	%	3,030		53		3.50	%
Commercial Real Estate	1,399		28		3.99	%	862		15		3.38	%
Commercial and Industrial	855		20		4.67	%	585		12		4.03	%
Warehouse Lending	770		18		4.62	%	1,141		25		4.29	%
Total Commercial loans	3,024		66		4.34	%	2,588		52		3.93	%
Total loans held-for-investment	5,933		118		3.98	%	5,618		105		3.70	%
Loans with government guarantees	318		7		4.34	%	460		7		3.18	%
Investment securities	3,090		39		2.54	%	2,625		34		2.59	%
Interest-earning deposits	66		1		0.97	%	155		—		0.50	%
Total interest-earning assets	13,187		$	239	3.63	%	11,755		$	200	3.39	%
Other assets	1,694						1,736
Total assets	$	14,881					$	13,491
Interest-Bearing Liabilities
Retail deposits
Demand deposits	$	509	$	—	0.17	%	$	463	$	—	0.15	%
Savings deposits	3,930		15		0.76	%	3,706		15		0.79	%
Money market deposits	258		1		0.44	%	303		1		0.45	%
Certificates of deposit	1,083		6		1.07	%	904		4		0.96	%
Total retail deposits	5,780		22		0.75	%	5,376		20		0.74	%
Government deposits
Demand deposits	217		—		0.39	%	230		—		0.39	%
Savings deposits	435		1		0.54	%	409		1		0.52	%
Certificates of deposit	305		1		0.65	%	411		1		0.71	%
Total government deposits	957		2		0.54	%	1,050		2		0.57	%
Wholesale deposits and other	6		—		0.42	%	—		—		—	%
Total interest-bearing deposits	6,743		24		0.72	%	6,426		22		0.70	%
Short-term Federal Home Loan Bank advances and other	2,630		12		0.89	%	1,249		3		0.40	%
Long-term Federal Home Loan Bank advances	1,200		11		1.89	%	1,592		15		1.91	%
Other long-term debt	493		12		5.05	%	247		4		3.27	%
Total interest-bearing liabilities	11,066		59		1.08	%	9,514		44		0.93	%
Noninterest-bearing deposits (1)	2,024						1,915
Other liabilities	409						479
Stockholders' equity	1,382						1,583
Total liabilities and stockholders' equity	$	14,881					$	13,491
Net interest-earning assets	$	2,121					$	2,241
Net interest income			$	180					$	156
Interest rate spread (2)					2.55	%					2.46	%
Net interest margin (3)					2.72	%					2.64	%
Ratio of average interest-earning assets to interest-bearing liabilities					119.2	%					123.6	%
Total average deposits	$	8,767					$	8,341

(1) Includes noninterest-bearing company-controlled deposits that arise due to the servicing of loans for others.

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

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

13

Flagstar Bancorp, Inc.

Earnings Per Share

(Dollars in millions, except share data)

(Unaudited)

	Three Months Ended									Six Months Ended
	June 30, 2017			March 31, 2017			June 30, 2016			June 30, 2017			June 30, 2016
Net income	41			27			47			68			86
Deferred cumulative preferred stock dividends (1)	—			—			(8		)	—			(16		)
Net income applicable to common stockholders	$	41		$	27		$	39		$	68		$	70
Weighted average shares
Weighted average common shares outstanding	57,101,816			56,921,605			56,574,796			57,012,208			56,544,256
Effect of dilutive securities
May Investor warrants	—			49,149			349,539			24,575			327,307
Stock-based awards	1,037,122			1,101,809			826,895			1,069,287			751,518
Weighted average diluted common shares	58,138,938			58,072,563			57,751,230			58,106,070			57,623,081
Earnings per common share
Basic earnings per common share	$	0.72		$	0.47		$	0.67		$	1.18		$	1.23
Effect of dilutive securities
Stock-based awards	(0.01		)	(0.01		)	(0.01		)	(0.02		)	(0.02		)
Diluted earnings per common share	$	0.71		$	0.46		$	0.66		$	1.16		$	1.21

(1) Under the terms of the Series C Preferred Stock, we elected to defer dividends beginning with the February 2012 dividend. In July 2016, we ended the deferral and brought current our previously deferred dividends and redeemed the stock.

Regulatory Capital - Bancorp

(Dollars in millions)

(Unaudited)

	June 30, 2017				March 31, 2017				December 31, 2016				June 30, 2016
	Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount		Ratio
Tier 1 leverage (to adjusted tangible assets)	$	1,408	9.10	%	$	1,277	9.31	%	$	1,256	8.88	%	$	1,514	11.59	%
Total adjusted tangible asset base	$	15,468			$	13,716			$	14,149			$	13,068
Tier 1 common equity (to risk weighted assets)	$	1,196	12.45	%	$	1,071	12.32	%	$	1,084	13.06	%	$	1,086	13.55	%
Tier 1 capital (to risk weighted assets)	$	1,408	14.65	%	$	1,277	14.70	%	$	1,256	15.12	%	$	1,514	18.89	%
Total capital (to risk weighted assets)	$	1,530	15.92	%	$	1,389	15.98	%	$	1,363	16.41	%	$	1,618	20.19	%
Risk weighted asset base	$	9,610			$	8,689			$	8,305			$	8,014

Regulatory Capital - Bank

(Dollars in millions)

(Unaudited)

	June 30, 2017				March 31, 2017				December 31, 2016				June 30, 2016
	Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount		Ratio
Tier 1 leverage (to adjusted tangible assets)	$	1,590	10.26	%	$	1,477	10.74	%	$	1,491	10.52	%	$	1,576	12.03	%
Total adjusted tangible asset base	$	15,504			$	13,754			$	14,177			$	13,102
Tier 1 common equity (to risk weighted assets)	$	1,590	16.49	%	$	1,477	16.93	%	$	1,491	17.90	%	$	1,576	19.58	%
Tier 1 capital (to risk weighted assets)	$	1,590	16.49	%	$	1,477	16.93	%	$	1,491	17.90	%	$	1,576	19.58	%
Total capital (to risk weighted assets)	$	1,712	17.75	%	$	1,588	18.20	%	$	1,598	19.18	%	$	1,679	20.86	%
Risk weighted asset base	$	9,645			$	8,726			$	8,332			$	8,048

14

Loan Originations (Dollars in millions) (Unaudited)
	Three Months Ended
	June 30, 2017				March 31, 2017				June 30, 2016
Consumer loans
Mortgage (1)	$	9,198	95.1	%	$	5,912	95.1	%	$	8,330	97.6	%
Other consumer (2)	61		0.6	%	47		0.8	%	42		0.5	%
Total consumer loans	9,259		95.7	%	5,959		95.9	%	8,372		98.1	%
Commercial loans (3)	410		4.3	%	257		4.1	%	164		1.9	%
Total loan originations	$	9,669	100.0	%	$	6,216	100.0	%	$	8,536	100.0	%

	Six Months Ended
	June 30, 2017				June 30, 2016
Mortgage (1)	$	15,110	95.1	%	$	14,682	97.8	%
Other consumer (2)	108		0.7	%	69		0.5	%
Total consumer loans	15,218		95.8	%	14,751		98.3	%
Commercial loans (3)	667		4.2	%	248		1.7	%
Total loan originations	$	15,885	100.0	%	$	14,999	100.0	%

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

(2) Includes HELOC and other consumer loans.

(3) Includes commercial real estate and commercial and industrial loans.

Residential Loans Serviced

(Dollars in millions)

(Unaudited)

	June 30, 2017			March 31, 2017			December 31, 2016			June 30, 2016
	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)	$	7,156	30,875	$	7,369	33,766	$	5,816	29,244	$	5,379	29,520
Serviced for others	16,144		66,106	26,763		116,965	31,207		133,270	30,443		134,266
Subserviced for others (2)	63,991		304,830	48,940		242,445	43,127		220,075	38,185		194,528
Total residential loans serviced	$	87,291	401,811	$	83,072	393,176	$	80,150	382,589	$	74,007	358,314

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

(2) Includes temporary short-term subservicing performed as a result of sales of servicing-released mortgage servicing rights. Includes repossessed assets.

Loans Held-for-Investment

(Dollars in millions)

(Unaudited)

	June 30, 2017				March 31, 2017				December 31, 2016				June 30, 2016
Consumer loans
Residential first mortgage	$	2,538	37.5	%	$	2,463	41.3	%	$	2,327	38.3	%	$	2,075	35.6	%
Home equity	459		6.7	%	376		6.3	%	443		7.3	%	473		8.1	%
Other	27		0.4	%	27		0.5	%	28		0.5	%	32		0.5	%
Total consumer loans	3,024		44.6	%	2,866		48.1	%	2,798		46.1	%	2,580		44.2	%
Commercial loans
Commercial real estate	1,557		23.1	%	1,399		23.5	%	1,261		20.8	%	976		16.8	%
Commercial and industrial	1,040		15.3	%	854		14.3	%	769		12.7	%	615		10.6	%
Warehouse lending	1,155		17.0	%	840		14.1	%	1,237		20.4	%	1,651		28.4	%
Total commercial loans	3,752		55.4	%	3,093		51.9	%	3,267		53.9	%	3,242		55.8	%
Total loans held-for-investment	$	6,776	100.0	%	$	5,959	100.0	%	$	6,065	100.0	%	$	5,822	100.0	%

15

Allowance for Loan Losses

(Dollars in millions)

(Unaudited)

	As of/For the Three Months Ended
	June 30, 2017			March 31, 2017			June 30, 2016
Allowance for loan losses
Residential first mortgage	$	56		$	61		$	81
Home equity	19			21			30
Other	1			1			1
Total consumer loans	76			83			112
Commercial real estate	37			32			19
Commercial and industrial	21			20			11
Warehouse lending	6			6			8
Total commercial loans	64			58			38
Total allowance for loan losses	$	140		$	141		$	150
Charge-offs
Total consumer loans	(2		)	(5		)	(10		)
Total commercial loans	—			—			—
Total charge-offs	$	(2	)	$	(5	)	$	(10	)
Recoveries
Total consumer loans	2			1			1
Total commercial loans	—			—			—
Total recoveries	2			1			1
Charge-offs, net of recoveries	$	—		$	(4	)	$	(9	)
Net charge-offs to LHFI ratio (annualized) (1)	0.04		%	0.27		%	0.62		%
Net charge-offs ratio, adjusted (annualized) (1)(2)	0.02		%	0.07		%	0.18		%
Net charge-offs/(recoveries) to LHFI ratio (annualized) by loan type(1):
Residential first mortgage	0.09		%	0.60		%	1.42		%
Home equity and other consumer	0.02		%	0.29		%	0.61		%
Commercial real estate	—		%	(0.02		)%	—		%
Commercial and industrial	(0.01		)%	(0.01		)%	(0.02		)%

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

(2) Excludes charge-offs of zero, $1 million, and $2 million related to the sale of nonperforming loans, TDRs and non-agency loans during the three months ended June 30, 2017, March 31, 2017, and June 30, 2016. Also excludes charge-offs related to loans with government guarantees of zero, $2 million, and $4 million during the three months ended June 30, 2017, March 31, 2017, and June 30, 2016, respectively.

16

Allowance for Loan Losses (continued)

(Dollars in millions)

(Unaudited)

	Six Months Ended
	June 30, 2017			June 30, 2016
Total allowance for loan losses	$	140		$	150
Charge-offs
Total consumer loans	(7		)	(24		)
Total commercial loans	—			—
Total charge-offs	$	(7	)	$	(24	)
Recoveries
Total consumer loans	3			3
Total commercial loans	—			—
Total recoveries	3			3
Charge-offs, net of recoveries	$	(4	)	$	(21	)
Net charge-offs to LHFI ratio (annualized) (1)	0.15		%	0.74		%
Net charge-offs ratio, adjusted (annualized) (1)(2)	0.02		%	0.44		%
Net charge-offs/(recoveries) to LHFI ratio (annualized) by loan type(1):
Residential first mortgage	0.34		%	1.46		%
Home equity and other consumer	0.29		%	2.16		%
Commercial real estate	(0.01		)%	(0.01		)%
Commercial and industrial	(0.01		)%	(0.02		)%

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

(2) Excludes charge-offs of $1 million and $8 million during the six months ended June 30, 2017 and 2016, related to the sale of nonperforming loans, TDRs and non-agency loans. Also excludes charge-offs related to loans with government guarantees of $2 million and $7 million during the six months ended June 30, 2017 and 2016, respectively.

Nonperforming Loans and Assets

(Dollars in millions)

(Unaudited)

	June 30, 2017			March 31, 2017			December 31, 2016			June 30, 2016
Nonperforming loans	$	18		$	17		$	22		$	23
Nonperforming TDRs	5			5			8			6
Nonperforming TDRs at inception but performing for less than six months	7			6			10			15
Total nonperforming loans held-for-investment	30			28			40			44
Real estate and other nonperforming assets, net	9			13			14			19
Nonperforming assets held-for-investment, net (1)	$	39		$	41		$	54		$	63
Ratio of nonperforming assets to total assets	0.24		%	0.27		%	0.39		%	0.46		%
Ratio of nonperforming loans held-for-investment to loans held-for-investment	0.44		%	0.47		%	0.67		%	0.76		%
Ratio of nonperforming assets to loans held-for-investment and repossessed assets	0.57		%	0.69		%	0.90		%	1.09		%
Ratio of nonperforming assets to Tier 1 capital + allowance for loan losses	2.51		%	2.90		%	3.93		%	3.79		%

(1) Does not include nonperforming loans held-for-sale of $7 million, $21 million, $6 million, and $5 million at June 30, 2017, March 31, 2017, December 31, 2016, and June 30, 2016, respectively.

17

Asset Quality - Loans Held-for-Investment

(Dollars in millions)

(Unaudited)

	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 days (1)		Total Past Due		Total Loans Held-for-Investment
June 30, 2017
Consumer loans	$	2	$	3	$	30	$	35	$	3,024
Commercial loans	1		—		—		1		3,752
Total loans	$	3	$	3	$	30	$	36	$	6,776
March 31, 2017
Consumer loans	$	4	$	1	$	28	$	33	$	2,866
Commercial loans	—		—		—		—		3,093
Total loans	$	4	$	1	$	28	$	33	$	5,959
December 31, 2016
Consumer loans	$	8	$	2	$	40	$	50	$	2,798
Commercial loans	—		—		—		—		3,267
Total loans	$	8	$	2	$	40	$	50	$	6,065
June 30, 2016
Consumer loans	5		2		44		$	51	$	2,580
Commercial loans	—		—		—		—		3,242
Total loans	$	5	$	2	$	44	$	51	$	5,822

(1) Includes performing nonaccrual loans that are less than 90 days delinquent and for which interest cannot be accrued.

Troubled Debt Restructurings

(Dollars in millions)

(Unaudited)

	TDRs
	Performing		Nonperforming		Total
June 30, 2017
Consumer loans	$	46	$	12	$	58
Commercial loans	—		—		—
Total TDR loans	$	46	$	12	$	58
March 31, 2017
Consumer loans	$	48	$	11	$	—
Commercial loans	—		—		—
Total TDR loans	$	48	$	11	$	59
December 31, 2016
Consumer loans	$	67	$	18	$	85
Commercial loans	—		—		—
Total TDR loans	$	67	$	18	$	85
June 30, 2016
Consumer loans	$	72	$	21	$	93
Commercial loans	1		—		1
Total TDR loans	$	73	$	21	$	94

18

Representation and Warranty Reserve

(Dollars in millions)

(Unaudited)

	Three Months Ended									Six Months Ended
	June 30, 2017			March 31, 2017			June 30, 2016			June 30, 2017			June 30, 2016
Balance at beginning of period	$	23		$	27		$	40		$	27		$	40
Provision (benefit)
Gain on sale reduction for representation and warranty liability	1			—			1			2			3
Representation and warranty provision (benefit)	(3		)	(4		)	(4		)	(7		)	(6		)
Total	(2		)	(4		)	(3		)	(5		)	(3		)
(Charge-offs) recoveries, net	(1		)	—			(1		)	(2		)	(1		)
Balance at end of period	$	20		$	23		$	36		$	20		$	36

Non-GAAP Reconciliation

(Dollars in millions)

(Unaudited)

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 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 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.

June 30, 2017	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)
Basel III (transitional)	$	1,196		$	1,408		$	1,408		$	1,530
Increased deductions related to deferred tax assets, mortgage servicing rights and other capital components	(75		)	(47		)	(47		)	(44		)
Basel III (fully phased-in) capital	$	1,121		$	1,361		$	1,361		$	1,486
Risk-weighted assets – Basel III (transitional) to Basel III (fully phased-in)
Basel III assets (transitional)	$	9,610		$	15,468		$	9,610		$	9,610
Net change in assets	206			(46		)	206			206
Basel III (fully phased-in) assets	$	9,816		$	15,422		$	9,816		$	9,816
Capital ratios
Basel III (transitional)	12.45		%	9.10		%	14.65		%	15.92		%
Basel III (fully phased-in)	11.42		%	8.83		%	13.87		%	15.14		%

19

June 30, 2017	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)
Basel III (transitional)	$	1,590		$	1,590		$	1,590		$	1,712
Increased deductions related to deferred tax assets, mortgage servicing rights and other capital components	(22		)	(22		)	(22		)	(19		)
Basel III (fully phased-in) capital	$	1,568		$	1,568		$	1,568		$	1,693
Risk-weighted assets – Basel III (transitional) to Basel III (fully phased-in)
Basel III assets (transitional)	$	9,645		$	15,504		$	9,645		$	9,645
Net change in assets	331			(23		)	331			331
Basel III (fully phased-in) assets	$	9,976		$	15,481		$	9,976		$	9,976
Capital ratios
Basel III (transitional)	16.49		%	10.26		%	16.49		%	17.75		%
Basel III (fully phased-in)	15.71		%	10.13		%	15.71		%	16.97		%

Tangible book value per share. In addition to analyzing the Company's results on a reported basis, management reviews the Company's results and the results on an adjusted basis. This non-GAAP measure reflects the adjustment of the reported U.S.GAAP results for significant items that management does not believe are reflective of the Company's current and ongoing operations. The Company believes that tangible book value per share provides a meaningful representation of its operating performance on an ongoing basis. Management uses this measure to assess performance of the Company against its peers and evaluate overall performance. The Company believes this non-GAAP financial measure provides useful information for investors, securities analysts and others because it provides a tool to evaluate the Company’s performance on an ongoing basis and compared to its peers.

The following table provides a reconciliation of non-GAAP financial measures.

	June 30, 2017	March 31, 2017	December 31, 2016	June 30, 2016
	(Dollars in millions, except share data)
Total stock holders' equity	1,408	1,371	1,336	1,599
Preferred stock	—	—	—	267
Goodwill and intangibles	20	4	—	—
Tangible book value	1,388	1,367	1,336	1,332
Number of common shares outstanding	57,161,431	57,043,565	56,824,802	56,575,779
Tangible book value per share	24.29	23.96	23.50	23.54

20

EX-99.2

2nd Quarter 2017 Flagstar Bancorp, Inc. (NYSE: FBC) Earnings Presentation 2nd Quarter 2017 July 25, 2017

2nd Quarter 2017 Cautionary statements This presentation 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. Generally, forward-looking statements are not based on historical facts but instead represent our management’s beliefs regarding future events. Such statements may be identified by words such as believe, expect, anticipate, intend, plan, estimate, may increase, may fluctuate, and similar expressions or future or conditional verbs such as will, should, would and could. Such statements are based on management’s current expectations and are subject to risks, uncertainties and changes in circumstances. Actual results and capital and other financial conditions may differ materially from those included in these statements due to a variety of factors, including without limitation those 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). Any forward-looking statements made by or on behalf of us speak only as to the date they are made, and we do not undertake to update forward-looking statements to reflect the impact of circumstances or events that arise after the date the forward-looking statements were made, except as required under United States securities laws. In addition to results presented in accordance with GAAP, this presentation includes non-GAAP financial measures. The Company believes these non-GAAP financial measures provide additional information that is useful to investors in helping to understand the capital requirements Flagstar will face in the future and underlying performance and trends of Flagstar. Non-GAAP financial measures have inherent limitations, which are not required to be uniformly applied. Readers should be aware of these limitations and should be cautious with respect to the use of such measures. To compensate for these limitations, we use non-GAAP measures as comparative tools, together with GAAP measures, to assist in the evaluation of our operating performance or financial condition. Also, we ensure that these measures are calculated using the appropriate GAAP or regulatory components in their entirety and that they are computed in a manner intended to facilitate consistent period-to-period comparisons. Flagstar’s method of calculating these non-GAAP measures may differ from methods used by other companies. These non-GAAP measures should not be considered in isolation or as a substitute for those financial measures prepared in accordance with GAAP or in-effect regulatory requirements. Where non-GAAP financial measures are used, the most directly comparable GAAP or regulatory financial measure, as well as the reconciliation to the most directly comparable GAAP or regulatory financial measure, can be found in these conference call slides. Additional discussion of the use of non-GAAP measures can also be found in the Form 8-K Current Report related to this presentation and 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. 2

2nd Quarter 2017 Executive Overview Sandro DiNello, CEO

2nd Quarter 2017 Strategic highlights 4 Unique relationship-based business model • Formidable banking business – earning assets grew 14 percent vs. 1Q17 and 20 percent vs. 2Q16 • Industry-leading origination platform – acquisitions helped maintain revenue in a softer mortgage origination market • Growing subservicing business – high subservicing retention rate on MSR sales helped exceed 400,000 total accounts Strengthen mortgage revenues Grow community banking Highly profitable operations • Solid, consistent financial results with net income of $41 million and diluted EPS of $0.71 • Net interest margin rose 10 bps, maintaining stable deposit cost despite recent Fed rate hikes Positioned to thrive in any market • Strong credit metrics and low delinquency levels supported by 2.1 percent allowance coverage ratio • Relatively neutral interest rate risk position; strong liquidity • Strong Tier 1 leverage ratio of 9.1 percent available to support earning asset growth • Strong earning asset growth led by high quality, relationship-based commercial loans, up 17 percent vs. 1Q17 - Relationship lending led by broad-based initiatives - Scalable platforms with balance sheet growth at low incremental cost • Smooth integration of Opes Advisors - Adds 39 retail home lending offices in high growth western markets (CA, OR, WA) - More than doubles distributed retail origination volume and positions Company for move to purchase market

2nd Quarter 2017 Financial Overview Jim Ciroli, CFO

2nd Quarter 2017 Financial highlights 6 Solid results Strong banking contribution • Net interest income rose $14 million, or 17 percent, led by growth of high quality, relationship based commercial loans - C&I loans up $162mm, or 21 percent, led by diversified growth in lending initiatives - Warehouse loans up $160mm, or 23 percent, on seasonal increase - CRE loans up $159mm, or 12 percent, driven by home builder finance and in-footprint lending Good mortgage performance Strong asset quality • Net charge-offs less than $1 million, or 0.04 percent, versus $4 million, or 0.27 percent, in 1Q17 • Nonperforming loan ratio fell to 0.44 percent • Allowance for loan losses covered 2.1 percent of loans HFI Robust capital position • Regulatory capital ratios are well above current guidelines for “well capitalized” institutions - Tier 1 leverage remained strong at 9.1 percent as MSR sales released 65 bps of Tier 1 capital during 2Q17 and is 4.1 percentage points above “well-capitalized” minimum level - Other regulatory capital ratios are between 5.9 – 6.6 percentage points above “well capitalized” minimum levels • Net income per diluted share increased $0.25 to $0.71 in 2Q17 (up 54 percent) - Strong growth in net interest income - Higher noninterest income on increased mortgage revenues(1) and loan fees and charges - Disciplined expense management delivered positive operating leverage 1) Mortgage revenue is defined as net gain on loan sales HFS plus the net (loss) return on the MSR. • Noninterest income increased $16 million, or 16 percent, led by significant rise in net gain on loan sales - Fall-out adjusted lock volume increased $3 billion, or 50 percent, with acquisitions nearly two-thirds of growth - Net gain on loan sale margin declined slightly due to shift in mix and shorter-term market forces • 11 percent net return on MSR, despite $2 million of selling costs, on improved hedging and stable prepayments

2nd Quarter 2017 2Q17 1Q17 $ Variance % Variance Net interest income $97 $83 $14 17% Provision for loan losses ("PLL") (1) 3 (4) N/M Net interest income after PLL 98 80 18 23% Net gain on loan sales 66 48 18 38% Loan fees and charges 20 15 5 33% Loan administration income 6 5 1 20% Net return on mortgage servicing rights 6 14 (8) (57%) Representation and warranty benefit 3 4 (1) (25%) Other noninterest income 15 14 1 7% Total noninterest income 116 100 16 16% Net gain on loan sales / total revenue 31% 26% 5% Compensation and benefits 71 72 (1) (1%) Commissions and loan processing expense 30 22 8 36% Other noninterest expenses 53 46 7 15% Total noninterest expense 154 140 14 10% Income before income taxes 60 40 20 50% Provision for income taxes 19 13 6 46% Net income $41 $27 $14 52% Diluted income per share $0.71 $0.46 $0.25 54% Profitability Net interest margin 2.77% 2.67% 10 bps Total revenues $213 $183 $30 16% Mortgage rate lock commitments, fallout adjusted $9,002 $5,996 $3,006 50% Mortgage closings $9,186 $5,912 $3,274 55% Net gain on loan sale margin, HFS 0.73% 0.80% -7 bps Efficiency ratio 72.0% 76.8% -480 bps Quarterly income comparison $mm Observations Noninterest income • Noninterest income increased $16mm or 16% - Net gain on loan sales rose $18mm due to acquisitions and seasonality that was partially offset by lower gain on sale margin due to mix shift and shorter-term market forces - Loan fees and charges increased $5mm due to higher mortgage closings - Annualized net return on MSR of 11% despite $2mm of selling costs B Net interest income • Net interest income rose $14mm or 17% - Average earning assets increased 14%, led by commercial loans (up 17%) and loans HFS (up 30%) - Net interest margin increased 10 bps to 2.77% - Stable cost of interest-bearing deposits A Noninterest expense • Noninterest expense rose $14 m or 10% - Primarily due to incremental operating costs from acquisitions and higher commissions and loan processing expense on higher mortgage closings - Excluding $11mm of operating expenses and $1 million of transaction costs from acquisitions, noninterest expense was $142 million C A B2 C B1 B3 7

2nd Quarter 2017 Average balance sheet highlights 8 Equity(4) • Common equity to asset ratio of 8.8% • Price to book ratio of 124% based on closing price as of July 24, 2017 Interest-bearing liabilities • Average deposits relatively flat - Higher company-controlled and retail deposits largely offset lower government deposits • Short-term FHLB funding supported increased HFS and warehouse loans • Stable cost of interest-bearing deposits Observations Interest-earning assets • Loans held-for-sale increase led by higher originations and jumbos retained for RMBS securitization • Commercial loan growth stemmed from 2016 growth initiatives in home builder, MSR and equipment finance • Net interest margin increased 10bps to 2.77% - Diversification and growth into higher spread assets - Federal Reserve rate increases boosting yields 1) Measured vs. the prior quarter. 2) Consumer loans include first and second mortgages, HELOC and other loans; commercial loans include commercial real estate, commercial & industrial and warehouse loans. 3) Other earning assets include interest earning deposits, investment securities and loans with government guarantees. 4) Tangible book value and common shares are calculated on ending period balances. $ $ % Loans held-for-sale $4,269 $983 30% Consumer loans(2) 2,961 104 4% Commercial loans(2) 3,263 481 17% Total loans held-for-investment 6,224 585 10% Other earning assets(3) 3,527 109 3% Interest-earning assets 14,020 $1,677 14% Other assets 1,690 (10) (1%) Total assets 15,710 $1,667 12% Deposits $8,739 ($56) (1%) Short-term FHLB advances & other 3,429 1,607 88% Long-term FHLB advances 1,200 - 0% Other long-term debt 493 - 0% Other liabilities 431 44 11% Total liabilities 14,292 $1,595 13% Stockholders' equity 1,418 72 5% Total liabilities and stockholders' equity 15,710 $1,667 12% Tangible book valu per common share (6/30/17) (4) $24.29 $0.33 1% Incr (Decr)(1) 2Q17 ($mm)

2nd Quarter 2017 Asset quality 9 Performing TDRs and NPLs ($mm) 73 71 67 48 46 44 40 40 28 30 $117 $111 $107 $76 $76 6/30/2016 9/30/2016 12/31/2016 3/31/2017 6/30/2017 Peforming TDRs NPLs 1) Excludes loans carried under the fair value option and loans with government guarantees. Allowance coverage(1) (% of loans HFI) 2.6% 2.3% 2.4% 2.4% 2.1% 4.5% 3.8% 3.3% 2.9% 2.5% 1.2% 1.3% 1.6% 1.9% 1.7% 6/30/2016 9/30/2016 12/31/2016 3/31/2017 6/30/2017 Total Consumer Commercial Net charge-offs ($mm) Representation & warranty reserve(2) ($mm) $36 $32 $27 $23 $20 $11 $11 $6 $6 $4 6/30/2016 9/30/2016 12/31/2016 3/31/2017 6/30/2017 Reserve Repurchase pipeline 3 2 1 1 2 1 4 5 1 2 $9 $7 $2 $4 $0 2Q16 3Q16 4Q16 1Q17 2Q17 Adj. charge-offs Loan sales Govt. guaranteed loans 2) Please see slide 44 in the appendix for further details on the representation and warranty reserve.

2nd Quarter 2017 8.6% -293bps -35bps +57bps -23bps +23bps -33pbs +54bps +22bps -130bps +44bps +65bps 3.0% 11.6% 8.9% 8.9% 9.3% 9.1% 6/30/2016 9/30/2016 12/31/2016 3/31/2017 6/30/2017 Robust capital • Flagstar uses excess capital generation to support balance sheet growth • Flagstar grows regulatory capital at a greater pace as it utilizes NOL-related DTAs and reduces MSRs • The balance sheet has trapped capital of: - $140mm of NOL-related DTAs (91bps of Tier 1 Leverage) - $89mm of MSRs (58bps of Tier 1 Leverage) • Robust capital generation will support future growth Observations 2Q17 • Tier 1 leverage remained strong at 9.1% as capital released from MSR sales and quarterly earnings funded strong balance sheet growth - MSR sales helped reduce trapped capital $80mm or 65bps - 2Q17 earnings generated 44bps of Tier 1 leverage - Capital ratios are consistent or higher than peers before considering low risk content of business Tier 1 CET-1 Tier 1 Total RBC Leverage to RWA to RWA to RWA 2Q17 Actual 9.1% 12.5% 14.7% 15.9% 1 17 ctual 9.3 12.3 14.7 16.0 Higher rate capital generation (near-term) 10 Flagstar Bancorp Tier 1 Leverage Well Capitalized 5.0% Balance sheet impact Net earnings contribution TARP redemption 2017 phase-in under Basel III Capital released from MSR bulk sales Tier 1 equity less TARP incl. deferred dividends TARP incl. deferred dividends

2nd Quarter 2017 Business Segment Overview Lee Smith, COO

2nd Quarter 2017 Community banking 12 Average commercial loans ($bn) Quarter-end commercial loan commitments ($bn) Average consumer loans ($bn) Average deposit funding(1) ($bn) 0.6 0.6 0.7 0.8 0.9 0.9 1.1 1.2 1.3 1.5 1.3 1.6 1.5 0.7 0.9 $2.8 $3.3 $3.5 $2.8 $3.3 2Q16 3Q16 4Q16 1Q17 2Q17 Commercial and Industrial Commercial Real Estate Warehouse 1.0 1.1 1.2 1.4 1.7 1.5 1.8 1.9 2.2 2.3 2.4 2.9 2.9 2.4 2.6 $4.9 $5.8 $6.0 $6.0 $6.6 6/30/2016 9/30/2016 12/31/2016 3/31/2017 6/30/2017 Commercial and Industrial Commercial Real Estate Warehouse 2.2 2.1 2.2 2.4 2.5 0.5 0.5 0.5 0.5 0.5 $2.7 $2.6 $2.7 $2.9 $3.0 2Q16 3Q16 4Q16 1Q17 2Q17 Residential First Mortgages Other Consumer Loans 6.1 6.2 6.3 6.4 6.5 1.0 1.1 1.0 1.0 0.9 1.6 1.9 1.9 1.4 1.4 $8.6 $9.1 $9.2 $8.8 $8.7 2Q16 3Q16 4Q16 1Q17 2Q17 Retail Government Company-controlled deposits 1) Includes company-controlled deposits which are included as part of mortgage servicing.

2nd Quarter 2017 $8.1 $8.3 $6.1 $6.0 $9.0 2Q16 3Q16 4Q16 1Q17 2Q17 3.8 3.9 3.2 3.1 5.5 4.5 5.3 5.3 2.8 3.7 $8.3 $9.2 $8.6 $5.9 $9.2 2Q16 3Q16 4Q16 1Q17 2Q17 Purchase originations Refinance originations Mortgage originations 13 47% 38% 43% 54% 58% 4.7 5.1 4.5 3.0 4.6 2.1 2.3 1.9 1.7 2.4 1.5 1.8 2.1 1.2 2.2 $8.3 $9.2 $8.6 $5.9 $9.2 2Q16 3Q16 4Q16 1Q17 2Q17 Conventional Government Jumbo Closings by purpose ($bn) Closings by mortgage type ($bn) Net gain on loan sales ($mm and %) Fallout-adjusted locks ($bn) $85 $90 $94 $57 $48 $66 1.04% 1.13% 0.93% 0.80% 0.73% 2Q16 3Q16 4Q16 1Q17 2Q17 Net gain on loan sales (HFS) Gain on HFI transfer Gain on sale margin (HFS) Purchase Mix %

2nd Quarter 2017 Mortgage servicing 14 MSR / regulatory capital (Bancorp) Quarter-end loans serviced (000’s) UPB of MSRs sold ($bn) 2.1 4.2 5.8 17.1 3.2 2.5 2.2 1.9 $2.2 $5.3 $6.7 $8.0 $19.0 2Q16 3Q16 4Q16 1Q17 2Q17 Bulk Sales Flow Transactions 134 139 133 117 66 194 207 221 242 305 30 29 29 34 31 358 375 383 393 402 6/30/2016 9/30/2016 12/31/2016 3/31/2017 6/30/2017 Serviced for Others Subserviced for Others Flagstar Loans HFI 28% 29% 31% 28% 15% 20% 25% 27% 23% 13% 6/30/2016 9/30/2016 12/31/2016 3/31/2017 6/30/17 MSR to Tier 1 Common MSR to Tier 1 Capital Average company-controlled deposits ($bn) $1.6 $1.9 $1.9 $1.4 $1.4 2Q16 3Q16 4Q16 1Q17 2Q17

2nd Quarter 2017 Noninterest expense and efficiency ratio • Flagstar‘s long-term objective is to achieve an efficiency ratio in the mid-60’s 15 2) References non-GAAP number for 3Q16, 1Q17 and 2Q17. 3Q16 number excludes DOJ benefit during that period. 1Q17 and 2Q17 number excludes transaction costs related to the acquisition of the delegated correspondent business from Stearns Lending and Opes Advisors. Please see reconciliation on slide 45. 70% 73% LTM 2Q16 LTM 2Q17 Adjusted efficiency ratio(2) 68% 67% 77% 76% 72% 2Q16 3Q16 4Q16 1Q17 2Q17 Quarterly noninterest expense ($mm) $138 $142 $12 $140 $154 $139 $142 $142 2Q16 3Q16 4Q16 1Q17 2Q17 Noninterest expense excluding acquisitions Acquisitions expense (1) 1) Represents operating expense and transactions costs of $2 million during 1Q17 and $12 million during 2Q17 from the acquisition of the delegated correspondent business from Stearns Lending and Opes Advisors.

2nd Quarter 2017 Closing Remarks / Q&A Sandro DiNello, CEO

2nd Quarter 2017 Earnings guidance(1) 17 1) See cautionary statements on slide 2. Net interest income • Net interest income up moderately - Average earning assets consistent with period-end Q2 level, led by continued rotation into higher spread commercial loans - Net interest margin steady Net gain on loan sales • Net gain on loan sales up significantly, led by full quarter of Opes - Fallout-adjusted locks (FOAL) up moderately - Gain on loan sale margin increases on higher distributed retail mix Mortgage servicing rights • Net return on mortgage servicing rights approximates 5-7% on stable prepayments and lower transaction costs on fewer anticipated MSR bulk sales Other noninterest income • Loan fees and charges up on higher mortgage closings • All other noninterest income steady with Q2 levels with modest decrease in R&W benefit Noninterest expense • Noninterest expense to rise to $168-$173 million, due to full quarter of Opes-related expenses and higher mortgage volume driven expenses 3rd Quarter 2017 Outlook

2nd Quarter 2017 Appendix Company overview 19 Financial performance 24 Community banking 28 Mortgage origination 37 Mortgage servicing 40 Capital and liquidity 41 Asset quality 44 Non-GAAP reconciliation 45

2nd Quarter 2017 Flagstar at a glance COMPANY OVERVIEW 46 Flagstar retail home lending offices(1) 99 Branches in Michigan Bank branches Flagstar retail home lending Opes retail home lending Community banking • Leading Michigan-based bank with a balanced, diversified lending platform • $16.0bn of assets and $8.7bn of deposits • 99 branches • 107k household & 15k business relationships Mortgage origination • Leading national originator of residential mortgages ($32.9bn during last twelve months) • Recent acquisitions originated approximately $10bn of residential mortgages during 2016 • More than 1,000 correspondent and nearly 700 broker relationships Mortgage servicing • 8th largest sub-servicer of mortgage loans nationwide • Currently servicing approximately 402k loans • Scalable platform with capacity to service 1mm loans • Low cost deposits from escrow balances Corporate Overview • Traded on the NYSE (FBC) • Headquartered in Troy, MI • Market capitalization $1.7bn • Member of the Russell 2000 Index 19 1) Includes seven home lending offices located in banking branches. 39 Opes retail home lending offices

2nd Quarter 2017 Flagstar’s one-of-a-kind business model … Originates mortgages in multiple channels on a national scale, which … … Deploy excess funding into lending opportunities where we are a lender of choice, which … … Cross-sell our banking products to deepen our B2B relationships, which … … Leverages our scalable sub-servicing platform, which … … Builds enduring net interest margin driven revenue, allowing us to … … Generates stable, lower cost, long-term funding, which we are able to ... … Expands our key B2B relationships to develop greater mortgage origination referrals, improving our ability to … … Generates capital with high ROE fee-based activity and servicing relationships, which … COMPANY OVERVIEW 20

2nd Quarter 2017 Flagstar has a strong executive team COMPANY OVERVIEW 21 Board of Directors John Lewis Chairman Community Banking Chief Financial Officer • CFO since 8/14 • 30 years of banking and financial services experience with First Niagara, Huntington and KeyCorp Chief Operating Officer • COO since 5/13 • Formerly a partner of MatlinPatterson Global Advisors and a Senior Director at Zolfo Cooper • Extensive expe- rience in financial management and operations • Chartered Accoun- tant in England and Wales Chief Risk Officer • CRO since 6/14 • Over 35 years of financial services experience with Citizens Republic, Fleet Boston Financial, First Union and Chase Manhattan Mortgage Banking • Interim management of sales and fulfillment to be shared between Sandro DiNello and Lee Smith, respectively, until a search is completed General Counsel • General Counsel since 6/15 • 20 years of legal experience with the FDIC and Sidley Austin LLP • 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 Patrick McGuirk Steve Figliuolo Drew Ottaway Sandro DiNello Jim Ciroli Lee Smith • Managing Director of Lending and Michigan Market President • Has over 25 years of banking and commercial lending experience in southeast Michigan with Comerica and NBD Chief Audit Officer Sandro DiNello President & CEO Brian Dunn

2nd Quarter 2017 Karen Sabatowski Chief Compliance Officer Sandro DiNello President & CEO Board of Directors Steve Figliuolo Chief Risk Officer Risk Committee Enterprise Risk Committee • Capital planning / stress test modeling • Mortgage • Warehouse • Commercial • Consumer • TPO’s • Counterparty • Model risk management • Risk assessment/ deficiency mgmt • R&W reserve • Market risk • Effective challenge 5 6 61 50 12 8 7 30 FTEs Regulatory Affairs Modeling & Analytics ERM Chief Credit Officer QC / Appraisal Review MFIU Fraud Investigations Loan Review Operational Risk AML / BSA Compliance 20 ¹ Excludes 25 FTEs in internal audit and 4 FTEs in Sarbanes-Oxley compliance. Risk management Best-in-class risk management platform with 199 FTEs(1) COMPANY OVERVIEW 22

2nd Quarter 2017 Strong growth opportunities Grow community banking Expand mortgage business • Recruit experienced talent to increase share of origination market - Distributed and direct-to-consumer retail - TPO account executives • Grow servicing operations - Acquire new sub-servicing relationships - Cross-sell additional revenue capabilities 23 B u il d B u y • Buyers of size in Michigan are engaged on other projects for the foreseeable future • Michigan is a highly fragmented banking market • Focused on our share in metro markets • Acquiring deposit oriented franchises that lag in profitability because of lack of asset generation • No strategic buyers of size • Highly fragmented industry with aging individual ownership • Regulatory and interest rate environment is accelerating exits • Will consider accretive transactions that add incrementally to annual origination volume • Team lift outs • Grow housing finance related relationships(1) - Expand warehouse lending (375bps spreads) - Grow builder finance lending (475bps spreads) - Build MSR lending (450bps spreads; LTVs<60%) • Cultivate middle-market commercial relationships in foot-print COMPANY OVERVIEW 1) Indicated spreads are targets and may not be reflective of actual spreads. 23

2nd Quarter 2017 Long-term targets • Long-term target of 1.2 - 1.6% - Add incremental revenue with low incremental cost - Improved risk management will deliver long-run savings - Adjusted return on average assets (last twelve months) of 1.0%(1) • Long-term target of 13 - 18% - Add / increase high ROE businesses - Adjusted return on average common equity (last twelve months) of 10.3%(1) Financial Performance Return on assets Return on equity • Lender of choice in key markets (Michigan, national housing finance) • Growth trajectory 10 - 15% - Every additional $1bn of earning assets increases pre-tax profits ~$20mm – $25mm - Rotate lower spread assets to higher spread assets while minimizing capital costs - Scalable platforms with balance sheet growth at low incremental cost • Nationally recognized leader the quick brown fox d • Growth trajectory 5 - 10% - Expand retail originations (distributed, DTC) - Every 100k in new loans sub-serviced generates $4mm - $6mm of incremental pre-tax profits Revenues Mortgage Banking FINANCIAL PERFORMANCE 1) References non-GAAP number for 3Q16, 1Q17 and 2Q17. 3Q16 number excludes DOJ benefit during that period. 1Q17 and 2Q17 number excludes transaction costs related to the acquisition of the delegated correspondent business from Stearns Lending and Opes Advisors. Please see reconciliation on slide 45. 24

2nd Quarter 2017 $20 $23 $26 $29 $32 $35 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 5 /1 6 6 /1 6 7 /1 6 8 /1 6 9 /1 6 1 0 /1 6 1 1 /1 6 1 2 /1 6 1 /1 7 2 /1 7 3 /1 7 4 /1 7 5 /1 7 6 /1 7 Pr ic e % o f Re c o m m e n d a ti o n s Buy Hold Actual Price Target Price Price target has increased on improved prospects 25 Analyst rating history 0% 25% 50% 75% 100% $20 $23 $26 $29 $32 $35 5/16 6/16 7/16 8/16 9/16 10/16 11/16 12/16 1/17 2/17 3/17 4/17 5/17 6/17 % o f Re c o m m e n d a tio n s Pr ic e Buy Hold Act ic Ta get Price Target Price +25% Actual Price +27% FINANCIAL PERFORMANCE

2nd Quarter 2017 Valuation metrics Observation: Flagstar has a valuation discount to its banking peers. The Company closed the valuation gap through October 2016, but has underperformed since the U.S. presidential election. FINANCIAL PERFORMANCE 26 1 /3 1 /2 0 1 6 2 /2 9 /2 0 1 6 3 /3 1 /2 0 1 6 4 /3 0 /2 0 1 6 5 /3 1 /2 0 1 6 6 /3 0 /2 0 1 6 7 /3 1 /2 0 1 6 8 /3 1 /2 0 1 6 9 /3 0 /2 0 1 6 1 0 /3 1 /2 0 1 6 1 1 /3 0 /2 0 1 6 1 2 /3 1 /2 0 1 6 1 /3 1 /2 0 1 7 2 /2 8 /2 0 1 7 3 /3 1 /2 0 1 7 4 /3 0 /2 0 1 7 5 /3 1 /2 0 1 7 6 /3 0 /2 0 1 7 1 /3 1 /2 0 1 6 2 /2 9 /2 0 1 6 3 /3 1 /2 0 1 6 4 /3 0 /2 0 1 6 5 /3 1 /2 0 1 6 6 /3 0 /2 0 1 6 7 /3 1 /2 0 1 6 8 /3 1 /2 0 1 6 9 /3 0 /2 0 1 6 1 0 /3 1 /2 0 1 6 1 1 /3 0 /2 0 1 6 1 2 /3 1 /2 0 1 6 1 /3 1 /2 0 1 7 2 /2 8 /2 0 1 7 3 /3 1 /2 0 1 7 4 /3 0 /2 0 1 7 5 /3 1 /2 0 1 7 6 /3 0 /2 0 1 7 77% U .S . p re s iden ti a l e le c ti o n 57% Market value gap: ~$0.8B Market / tangible book Price / LTM earnings . FBC valuation vs. SNL U.S. Bank and Thrift Index Market value gap: ~$0.3B . FBC valuation vs. SNL U.S. Bank and Thrift Index 69% 85% 67% 85% U .S . p re s iden ti a l e le c ti o n

2nd Quarter 2017 Date Federal NOL (2) Other (3) Total 6/30/17 (actual) $125 $141 $266 FY17 tax expense(1) (34) - (34) 12/31/17 (pro-forma) $91 $141 $232 FY2018 Pro forma Tier 1 corporate tax rate NOL Other Total Capital (5) 35% $0 $0 $0 0 bps 30% ($13) ($20) ($33) 0 bps 25% ($26) ($40) ($66) 0 bps 20% ($39) ($60) ($99) 0 bps Notes: (1) Represents consensus estimate from analysts covering FBC. (2) Includes $36 of NOL's subject to §382 limitations. (3) Other includes DTAs related to state NOLs and reserves for ALLL, R&W and DOJ. (4) Represents write-down in value of DTA at new tax rate. (5) Represents Tier 1 Capital reduction at new tax rate under fully phased-in Basel III regulations. Deferred tax asset, net Income Statement(4) Potential corporate tax reform 27 FINANCIAL PERFORMANCE FBC considerations regarding potential tax reform • A reduction of the U.S. corporate tax rate would impact FBC’s earnings by: - Reducing deferred tax asset upon the enactment date of the law • Reduction in tangible book value • Limited reduction to regulatory capital - Decreasing effective tax rate, which will increase net income and EPS upon effective date of the law • Focus on implementing strategies to maximize economic benefit of DTA Pro-forma impact of potential tax reform ($mm)

2nd Quarter 2017 Deposit Median Proj HHI Proj pop Market $mm % of total mkt share HHI(2) growth(2)(3) growth(2)(3) Oakland County 3,456 47.5% 7.0% 72,183 10.7% 2.7% Grand Rapids MSA 402 5.5% 2.0% 58,024 10.3% 4.3% Ann Arbor MSA 296 4.1% 3.6% 65,958 9.2% 3.3% Key Flagstar markets 4,154 57.1% 5.3% 70,369 10.6% 2.9% National aggregate 57,462 8.7% 3.8% Flagstar Deposits 154 7 35 Strong market position as leading MI-based bank COMMUNITY BANKING Source: SNL Financial; Note: Deposit data as of June 30, 2016; MI-based banks highlighted; Pro forma for pending mergers and acquisitions. 1) Oakland County data excludes $1.5bn of company-controlled deposits held at company headquarters. 2) Flagstar Median HHI, projected HHI growth and projected population growth are deposit weighted. 3) 2017–2022 CAGR. Flagstar’s branch network Market share Attractive markets Leading position among independent banks Overall MI-based Institution (pro forma) Branches Total Share 1 Chase 246 $42,006 21% 2 Comerica 214 26,963 13% 3 PNC 206 17,326 9% 4 Bank of America 127 16,564 8% 5 Fifth Third 215 16,073 8% 6 Huntington (pro forma) 362 15,212 8% 7 1 Chemical (pro forma) 224 11,281 6% 8 2 Flagstar 99 8,773 4% 9 Citizens 98 5,138 3% 10 TCF 54 2,908 1% Top 10 1,845 $162,244 81% Rank Deposits ($mm) 28

2nd Quarter 2017 Deposits Portfolio and strategy overview 6.1 6.2 6.3 6.4 6.5 2.6 2.9 2.9 2.4 2.2 $8.6 $9.1 $9.2 $8.8 $8.7 2Q16 3Q16 4Q16 1Q17 2Q17 Retail deposits Other deposits Total average deposits ($bn) • Flagstar gathers deposits from consumers, 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 growing DDA balances with consumer, business banking and commercial relationships – We additionally maintain depository relationships in connection with our mortgage origination and servicing businesses, and with Michigan governmental entities – Cost of total deposits equal to 0.55%(1) DDA 14% Savings 45% MMDA 3% CD 12% Company- controlled 16% Government & other 10% 74% retail Total : $8.7bn 0.55% cost of total deposits(1) 2Q17 total average deposits COMMUNITY BANKING 1. Total deposits include noninterest bearing deposits. 29

2nd Quarter 2017 Deposit growth opportunities • Average balance of $0.9bn during 2Q17 • Cost of total government deposits: 0.56%(2) during 2Q17 • Michigan deposits are not collateralized • Strong relationships across the state • Average balance of $0.5bn during 2Q17 • Offer complete line of treasury management services • Flagstar realized 16% quarter-over-quarter increase in service charges • Average balance of $1.4bn during 2Q17 on 402k loans serviced and sub-serviced • Low cost of deposits • Deposit balances increase along with the number of loans serviced and sub-serviced • Average balance of $6.0bn during 2Q17 of which 79% are demand & savings accounts • Cost of total core deposits(1): 0.67%(2) during 2Q17 • Average core deposits of $65mm per branch • Flagstar’s brand campaign is helping grow its core deposit base Core Deposits Retail Commercial Other Deposits Government Company-controlled COMMUNITY BANKING 1) Core deposits = total deposits excluding government deposits and company-controlled deposits. 2) Total deposits include noninterest bearing deposits. 30

2nd Quarter 2017 2.9 3.4 3.3 3.3 4.3 5.6 5.8 6.2 5.6 6.2 $8.9 $9.7 $9.9 $9.2 $10.8 2Q16 3Q16 4Q16 1Q17 2Q17 Loans HFS Loans HFI Loans with government guarantees 1st Mortgage HFI 23% 2nds, HELOC & other 4% Warehouse 8% CRE and C&I 22% Loans with government guarantees 3% 1st Mortgage HFS 40% 2Q17 average loans Lending Portfolio and strategy overview Total average loans ($bn) • Flagstar’s largest category of earning assets consists of loans held-for-investment which averaged $6.2bn during 2Q17 – Loans to consumers consist of residential first and second mortgage loans, HELOC and other – C&I / CRE lending is an important growth strategy, offering risk diversification and asset sensitivity – Warehouse lending to both originators that sell to Flagstar and those who sell to other investors • Flagstar maintains a balance of mortgage loans held- for-sale which averaged $4.3bn during 2Q17 – Essentially all of our mortgage loans originated are sold into the secondary market – Flagstar has the option to direct a portion of the mortgage loans it originates to its own balance sheet COMMUNITY BANKING 31

2nd Quarter 2017 $73 $73 $76 $79 $77 $80 $87 $83 $97 $10,367 $10,693 $11,240 $11,871 $11,639 $12,318 $12,817 $12,343 $14,020 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 Net interest income Average earning assets ● Sold lower performing assets and re-deployed capital into higher spread commercial loans ● Transition to more stable net interest income Average earning assets and net interest income ($mm) CAGR 16% CAGR 16% 32 Higher net interest income is stabilizing earnings COMMUNITY BANKING

2nd Quarter 2017 Commercial lending Diversified relationship-based commercial lending capabilities COMMUNITY BANKING Commercial Real Estate - $1.6bn (6/30/17) Home builder finance 26% Multi-family 17% Retail 17% Owner- occupied 16% Office 11% Special purpose 9% Industrial 4% Commercial & Industrial - $1.0bn (6/30/17) Services 33% Financial, Insurance & Real Estate 33% Manufacturing 19% Distribution 6% Servicing Advances 5% Government & Education 4% Warehouse - $1.2bn (6/30/17) Overview • Warehouse lines with approximately 270 relationships nationwide, of which more than 90% sell a portion of their loans to Flagstar • Collateralized by mortgage loans being funded which are paid off once the loan is sold • Diversified property types which are primarily income- producing in the normal course of business • Focused on experienced top-tier developers with significant deposit and non-credit product opportunities • Lines of credit and term loans for working capital needs, equipment purchases, and expansion projects • Primarily Michigan based relationships or relationships with national finance companies Warehouse Commercial Real Estate Commercial & Industrial >75%; ~150 borrowers 25% - 75%; ~60 borrowers < 25%; ~60 borrowers Average 39% advances sold to Flagstar Industry % Advances sold to Flagstar Property type 33 64% Michigan 47% Michigan; 22% national finance

2nd Quarter 2017 Flagstar has deep lending experience COMMUNITY BANKING 34 Sandro DiNello President & CEO Drew Ottaway Managing Director of Lending & Michigan Market President Commercial Real Estate Comprised of commercial and homebuilder lending officers who average experience of 21 years in banking. Prior banking experience includes Fifth Third, Wells Fargo, Bank of America, Texas Capital, and Royal Bank of Canada. Supported by a team of credit officers with more than 15 years average banking experience. Commercial & Industrial Comprised of lending officers who average experience of 25 years in banking. Prior banking experience includes Fifth Third, PNC, Bank of America and JP Morgan Chase. Supported by a team of credit officers with more than 20 years average banking experience. Warehouse Lending Comprised of lending officers who average experience of 26 years in banking. Prior banking experience includes Citizens Bank, Bank of America and Texas Capital. Supported by a team of credit officers with nearly 15 years average banking experience. Capital Markets More than 20 years experience in various capital raising activities across all asset classes. Prior banking experience includes MUFG Union Bank Supports all the lending segments of Commercial Lending where the officers average over 17 years of experience Business Banking Comprised of lending officers with average experience of over 25 years in banking. Prior banking experience includes Comerica, Huntington, PNC, and Fifth Third. Supported by a team of credit officers with more than 20 years average banking experience. Consumer Finance Consumer Finance supports the product and pricing of consumer lending products, including processing and underwriting of loan applications received from the Retail Branch and Direct to Consumer lending channels. Supported by a management team with an overage of 25+ years of consumer lending experience

2nd Quarter 2017 Warehouse lenders ranked by commitments ($mm) YOY Rank Institution Growth Total Share 1 JPMorgan Chase 50% $9,000 15% 2 Wells Fargo 19% 5,600 9% 3 Comerica 21% 4,000 6% 4 EverBank 8% 4,000 6% 5 BB&T 30% 3,650 6% 6 Customers Bank 7% 3,517 6% 7 Texas Capital -32% 3,371 5% 8 First Tennessee 44% 3,364 5% 9 Santander Bank 11% 2,600 4% 10 Flagstar Bancorp 4% 2,459 4% Top 10 16% $41,561 67% 1Q17 Source: Inside Mortgage Finance as of May 25, 2017. FBC average warehouse loans ($mm) 62% 57% Warehouse lending ● National relationship based lending platform ● Attractive asset class with good spreads and low credit risk ● Strong demonstrated growth potential ● Flagstar is well positioned to gain market share, leveraging relationships in complementary lines of business, including home builder finance and mortgage originations COMMUNITY BANKING 35 $1,317 $1,553 $1,542 $690 $850 2Q16 3Q16 4Q16 1Q17 2Q17

2nd Quarter 2017 1,779 356 815 1 9 9 9 2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 Home builder finance COMMUNITY BANKING 36 Home builder loan commitments ($mm) ● National relationship based lending platform launched in 1Q16 - Attractive asset class with good spreads (~475bps) - Meaningful cross-sell opportunities including warehouse loans, commercial deposits and purchase originations ● Flagstar is well positioned to gain market share given builder and mortgage relationships - Focused on markets with strong housing fundamentals and higher growth potential - We currently finance 5 of the top 10 and have active relationships with 29 of the top 100 builders nationwide - We are well positioned to take advantage of supply demand imbalance in housing market Home builder finance footprint Primary markets Secondary markets Overview $152 $234 $264 $365 $494 $155 $229 $297 $403 $484 $307 $463 $561 $768 $978 6/30/16 9/30/16 12/31/16 3/31/17 6/30/17 Outstanding Unused U.S. 1-unit housing starts (000’s) (SAAR thru 5/31/17)

2nd Quarter 2017 National distribution through multiple channels MORTGAGE ORIGINATIONS 37 Residential mortgage originations by channel ($bn) Broker Correspondent Retail $6.2 $7.0 $6.5 $4.5 $7.0 2Q16 3Q16 4Q16 1Q17 2Q17 $1.6 $1.6 $1.4 $1.0 $1.4 2Q16 3Q16 4Q16 1Q17 2Q17 $0.5 $0.6 $0.6 $0.4 $0.8 2Q16 3Q16 4Q16 1Q17 2Q17 • 2.8% market share with #8 national ranking(1) • Nearly 700 brokerage relationships in 50 states during 2Q17 • Targeted gain on sale margin of ~90bps • Top 10 relationships account for 19% of overall brokerage volume 1) Data source: As reported by Inside Mortgage Finance for 1Q17 published May 26, 2017. • 3.5% market share with #6 national ranking(1) • More than 1,000 correspondent partners in 50 states during 2Q17 • Targeted gain on sale margin of ~60bps • Top 10 relationships account for 11% of overall correspondent volume • Warehouse lines with approximately 250 correspondent relationships • Opes acquisition and organic growth has expanded our retail footprint to 85 locations in 26 states • Targeted gain on sale margin of ~300bps • Direct-to-consumer is 16% of retail volume

2nd Quarter 2017 Mortgage origination channel mix with acquisitions 38 MORTGAGE ORIGINATIONS Channel Sub-channel FBC, pre-acquisitions Acquisitions Pricing Credit Underwriting Funding GOS Margin Distributed retail N/A ~5% Opes (~100%) N/A FBC FBC Highest Consumer direct N/A ~2% N/A FBC FBC Broker N/A ~20% Best efforts FBC FBC Non-delegated ~50% Best efforts FBC Warehouse Delegated best efforts ~15% Stearns (~20%) Best efforts 3rd Party Warehouse Delegated mandatory ~3% Mandatory 3rd Party Warehouse Bulk mandatory ~5% Stearns (~80%) Mandatory 3rd Party Warehouse Lowest Correspondent Mortgage origination channel attributes

2nd Quarter 2017 Flagstar has restructured its operations to be profitable even at historical lows for the mortgage origination market 39 MORTGAGE ORIGINATIONS Source: Inside Mortgage Finance for actual periods and a blended average of forecast by Fannie Mae, Freddie Mac and Mortgage Bankers Association. 1. Adjusted for historical inflation as reported by Bloomberg (2015 = 100). 2. Adjusted for population growth as reported by the US Census Bureau (2015 = 100). Nominal ($) 0.6 0.9 1.0 0.8 0.6 0.8 0.9 1.5 1.3 1.0 2.2 2.9 3.9 2.9 3.1 3.0 2.4 1.5 1.8 1.6 1.5 2.1 1.9 1.2 1.7 2.0 1.7 1.6 Real(1) ($) 1.0 1.5 .7 1.2 1.0 1.2 1.3 2.1 .9 .4 3.0 3.8 5.1 3.7 .8 .5 .8 .7 2.0 .8 .6 .2 . . . . . . Adjusted(2) ($) .2 .9 2.1 .5 .2 .4 .5 .5 2.2 1.6 .3 4.3 .6 4.0 4.1 3.8 3.0 1. .1 1. 1. 2. 2.0 1.3 1.7 2.0 1.7 1.6 $ 1 .2 $ 1 .9 $ 2 .1 $ 1 .5 $ 1 .2 $ 1 .4 $ 1 .5 $ 2 .5 $ 2 .2 $ 1 .6 $ 3 .3 $ 4 .3 $ 5 .6 $ 4 .0 $ 4 .1 $ 3 .8 $ 3 .0 $ 1 .7 $ 2 .1 $ 1 .8 $ 1 .6 $ 2 .2 $ 2 .0 $ 1 .3 $ 1 .7 $ 1 .9 $ 1 .6 1 .2 1 .2 1 .2 1 .2 1 .2 1 .2 1 .2 1 .2 1 .2 1 .2 1 .2 1 .2 1 .2 1 .2 1 .2 1 .2 1 .2 1 .2 1 .2 1 .2 1 .2 1 .2 1 .2 1 .2 1 .2 1 .2 1 .2 1 .2 1 .2 1 9 9 1 A 1 9 9 2 A 1 9 9 3 A 1 9 9 4 A 1 9 9 5 A 1 9 9 6 A 1 9 9 7 A 1 9 9 8 A 1 9 9 9 A 2 0 0 0 A 2 0 0 1 A 2 0 0 2 A 2 0 0 3 A 2 0 0 4 A 2 0 0 5 A 2 0 0 6 A 2 0 0 7 A 2 0 0 8 A 2 0 0 9 A 2 0 1 0 A 2 0 1 1 A 2 0 1 2 A 2 0 1 3 A 2 0 1 4 A 2 0 1 5 A 2 0 1 6 F 2 0 1 7 F $ in t rill io n s 1 .2 1 .9 2 .1 1 .5 1 .2 1 .4 1 .5 2 .5 2 .2 1 .6 3 .3 4 .3 5 .6 4 .0 4 .1 3 .8 3 .0 1 .7 2 .1 1 .8 1 .6 2 .2 2 .0 1 .3 1 .7 2 .0 1 .7 1 .6 1 9 9 1 1 9 9 2 1 9 9 3 1 9 9 4 1 9 9 5 1 9 9 6 1 9 9 7 1 9 9 8 1 9 9 9 2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7 F 2 0 1 8 F $ in t rill io n s U.S. residential mortgage origination market (historical and projected volumes)

2nd Quarter 2017 Fannie 26% Freddie 56% GNMA 14% Private 4% by Investor 154 7 35 MSR portfolio as of 6/30/17 MSR portfolio characteristics (% UPB) MSR portfolio statistics Measure ($mm) 3/31/2017 6/30/2017 Difference Unpaid principal balance $26,763 $16,144 ($10,619) Fair value of MSR $295 $184 ($111) Capitalized rate (% of UPB) 1.10% 1.14% 0.04% Multiple 4.141 4.112 (0.029) N te rate 3.905% 4.032% 0.127% Service fee 0.266% 0.277% 0.011% Average Measure ($000) UPB per loan $229 $244 $15 FICO 744 733 (11) Loan to value 68.22% 76.06% 7.84% Mortgage servicing rights – $ return $ Return 2Q16 3Q16 4Q16 1Q17 2Q17 Net hedged profit (loss) $1 $4 ($5) $2 $0 Carry on asset 9 13 17 14 9 Run-off (15) (19) (17) (6) (4) Gr ss r turn on the mortgage servicing rights ($5) ($2) ($5) $10 $5 S l transaction & P/L 1 (9) 1 (1) 1 Model Changes - - (1) 5 0 Net return on the mortgage servicing rights ($4) ($11) ($5) $14 $6 Average mortgage servicing rights $307 $316 $327 $344 $205 2016 & later; 79% 2015; 12% 2014; 4% 2013 & prior; 5% by Vintage MORTGAGE SERVICING 40 2016 & later 79% 2015 12% 2014 4% 2013 & prior 5% By intage

2nd Quarter 2017 154 7 35 Balance sheet composition CAPITAL AND LIQUIDITY 41 3% Other liabilitie s 3% Other long- term debt Liabilities & Equity 2Q17 average balance sheet (%) Assets Attractive relationship lending with no loans >30 days delinquent Primarily low risk, stable assets (FHLB stock, BOLI, premises & equipment, deferred tax asset, etc.) ~74% of assets are in lower risk-content assets: cash, marketable securities, warehouse loans, loans held-for-sale and freshly-originated, high-FICO conforming mortgages underwritten by Flagstar 10% Other assets 5% Warehouse loans Loans held-for-sale 27% Mortgage loans held-for-investment 21% Agency MBS 21% 1% Cash 15% CRE and C&I loans Efficiently funds loans held-for-sale and warehouse loans 47% Deposits excluding company- controlled deposits (“CCD”) 29% FHLB borrowings 9% Common equity 9% Company-controlled deposits (“CCD”)

2nd Quarter 2017 Liquidity and funding 154 7 35 CAPITAL AND LIQUIDITY 42 60% 59% 63% 66% 73% 2Q16 3Q16 4Q16 1Q17 2Q17 1) HFI loan-to-deposit ratio is total average loans HFI (excluding warehouse loans) expressed as a percentage of total average deposits (excluding company-controlled deposits). HFI loan-to-deposit ratio(1) Commentary ■ Flagstar has invested significantly in building its Community Bank, which provides attractive core deposit funding for its balance sheet ■ These retail deposits are supplemented by company- controlled deposits from the servicing business ■ Much of the remainder of Flagstar’s balance sheet is self- funding given it is eligible collateral for FHLB advances (which provides significant liquidity capacity)

2nd Quarter 2017 Low interest rate risk CAPITAL AND LIQUIDITY 43 -1.9% -0.4% -7.5% -8% -6% -4% -2% 0% 2% 4% 6% 3/31/2016 6/30/2016 9/30/2016 12/31/2016 3/31/2017 6/30/2017 down 100bps up 100bps +/-100bps limit 0bps 50bps 100bps 150bps 200bps 250bps 300bps 350bps 400bps 450bps 1 month 3 months 6 months 1 year 2 years 3 years 5 years 7 years 10 years 20 years 30 years up 100 bps Bear Flattener 6/30/2017 Net interest margin – 12 month horizon instantaneous shocks ($mm) Economic value of equity, trend (12/31/15 - 3/31/17) ($ in mm) Parallel Shift Bear Flattener Net interest income $12 ($37) Noninterest Income ($12) to $0 $0 to $37 Up 100bps

2nd Quarter 2017 761 503 135 116 FY14 FY15 FY16 LTM 6/17 Repurchase demands Representation & Warranty reserve details (in millions) 6/30/16 9/30/16 12/31/16 3/31/17 6/30/17 Beginning balance $40) $36) $32 $27 $23 Additions (release) (3) (5) (6) (4) (2) Net (charge-offs) / recoveries (1) (1) 1 0 1 Ending Balance $36) $32) $27 $23 $20 Repurchase pipeline ($mm) Repurchase reserve ($mm) ASSET QUALITY $11 $11 $6 $6 $4 6/30/16 9/30/16 12/31/16 3/31/2017 6/30/2017 44 LTM 1Q17 Repurchase rate1,2 1. As reported, where available, by Inside Mortgage Finance, Inside Mortgage Trends and SEC documents for the top 50 mortgage originators as of July 14, 2017. 2. Repurchase rate is defined as mortgages repurchased / mortgages originated. 2 0.37% 0.09% 0.04% Average Median Flagstar

2nd Quarter 2017 Non-GAAP reconciliation NON-GAAP RECONCILIATION 45 $mm 1) Reflects the exclusion of the 3Q16 Department of Justice (“DOJ”) benefit. 2) Reflects the exclusion of 1Q17 and 2Q17 acquisition costs 3) Effective tax rate of 33% applied. 3 Months Ended 3 Months Ended 3 Months Ended 12 Months Ended 9/30/16 3/31/2017 6/30/2017 6/30/2017 Net interest income (a) $80 $83 $97 $347 Noninterest income (b) $156 $100 $116 $470 Adjustment to remove DOJ benefit(1) (24) - - (24) Adjusted noninterest income (c) $132 $100 $116 $446 Noninterest expense (d) $142 $140 $154 $578 Adjustment to remove acquisition costs (2) - (1) (1) (2) Adjusted noninterest income (c) $142 $139 $153 $576 Efficiency ratio (d/(a+b)) 60% 77% 72% 71% Adjustment to remove DOJ benefit(1) 7% 0% 0% 2% Adjustment to remove acquisition costs (1) 0% (1%) (0%) (0%) Adjusted efficiency ratio (d/(a+c)) 67% 76% 72% 73% 12 Months Ended 6/30/2017 Net income applicable to common stockholders (e) $153 Adjustment to remove DOJ benefit(1) (24) Tax impact of DOJ benefit(3) 8 Adjustment to remove acquisition costs (2) 2 Tax impact of acquisition costs (3) - Adjusted net income applicable to common stockholders (f) $139 Average total assets (g) $14,598 Return on average ssets ((e/g) x annualization factor) 1.0% Impact of adjustments to net income 0.0% Adjusted return on average assets ((f/g) x annualization factor) 1.0% Average common equity (h) $1,346 Return on average common equity ((e/h) x annualization factor) 11.4% Impact of adjustments to net income (1.1%) Adjusted return on average common equity ((f/h) x annualization factor) 10.3%