Exhibit 99.1

		NEWS RELEASE
		For more information, contact:
		Paul D. Borja
		Executive Vice President / CFO
		Bradley T. Howes
		Investor Relations Officer
		(248) 312-2000
		FOR IMMEDIATE RELEASE

FLAGSTAR REPORTS SECOND QUARTER RESULTS

Transformation continues supported by historically high capital and liquidity ratios
Announces agreement to sell retail branches in Georgia

TROY, Mich. (July 26, 2011) — Flagstar Bancorp, Inc. (NYSE:FBC) (the “Company”), the holding company for Flagstar Bank, FSB (the “Bank”), today reported a second quarter 2011 net loss applicable to common shareholders of $(74.9) million, as compared to a first quarter 2011 net loss of $(31.7) million and a second quarter 2010 net loss of $(97.0) million.

“Our net loss this quarter, while an improvement of 23 percent from second quarter 2010, was principally the result of continued credit costs associated with our legacy balance sheet. We are able to generate positive core earnings to offset those credit costs, driven by strong mortgage banking revenues, and are encouraged by the ongoing success we have had in implementing a number of initiatives to de-risk and generate high-quality interest-earning assets for our balance sheet. We continue to take aggressive steps to put legacy issues behind us, and remain focused on balancing the solid revenue base provided by our long-standing mortgage business with our continued efforts to execute on our transformation strategy to a diversified super community bank,” commented Joseph P. Campanelli, Chairman of the Board, President and CEO.

Campanelli continued, “We are encouraged by the early success of our commercial and specialty banking initiative, originating almost $100 million in high quality commercial loans for our balance sheet during the quarter. In addition, we continue to grow our commercial loan portfolio, and maintain an active and robust pipeline that is consistent with our commercial growth strategy. We also opened four new commercial banking centers during the quarter, and continue to attract experienced and highly talented commercial bankers to our team. At the same time, we maintained strong capital and liquidity levels, and further de-risked our balance sheet by selling, for a minimal gain, $68.1 million in non-performing commercial real estate assets, all of which will help fuel our planned transition.”

Key Items for Second Quarter 2011:

	•		Entered into an agreement with PNC Bank to divest the Company’s Georgia deposit franchise (deposits and facilities).
	•		Sold $68.1 million of non-performing commercial real estate assets, resulting in a $0.6 million gain.
	•		Originated commercial loans of $99.1 million, approximately a 300 percent increase from prior quarter.
	•		Increased held-for-investment loan portfolio $210.5 million, or 3.7 percent, from prior quarter.
	•		Continued to generate pre-tax, pre-credit cost income, with $41.0 million in second quarter 2011.
	•		Mortgage rate-lock commitments increased $0.9 billion, or 16.8 percent, from prior quarter.

	•		Decreased total non-performing assets by $34.8 million, or 6.3 percent, from prior quarter.
	•		Asset resolution expense related to non-performing residential first mortgage and commercial loans decreased by 38.9 percent from the prior quarter, to $23.3 million.
	•		Average core deposits increased by 8.4 percent from prior quarter, to $2.7 billion.
	•		Strengthened Tier 1 capital ratio to 10.07 percent.

Campanelli went on to say, “The agreement with PNC to divest our Georgia retail franchise for book value was a win-win for both parties. PNC will be acquiring a banking franchise with great potential, while Flagstar will be able to focus its growth strategy on our two major markets, the Midwest and the Northeast.”

Second quarter 2011 net loss per share was $(0.14) per share (diluted) based on average shares outstanding of 553,946,000, as compared to a first quarter 2011 of $(0.06) per share (diluted) based on average shares outstanding of 553,555,000 and $(0.63) per share (diluted) based on average shares outstanding of 153,298,000 in the second quarter 2010.

For the six months ended June 30, 2011, the net loss applicable to common stockholders totaled $(106.6) million, or $(0.19) per share (diluted) based on average shares outstanding of 553,752,000, a 40 percent improvement as compared to $(178.9) million or $(1.55) per share (diluted) based on average shares of 115,707,000 during the same period 2010.

Recent Developments

The Company announced that it has entered into an agreement for the sale or lease of its Georgia retail bank branch franchise to PNC Bank, N.A., part of The PNC Financial Services Group, Inc. (NYSE: PNC). Under the agreement, PNC Bank will be purchasing the facilities or assuming the leases associated with 27 branch offices, and buying the associated business and retail deposits (approximately $240 million at June 30, 2011).

PNC Bank has agreed to pay net book value of the acquired real estate and fixed assets (approximately $42 million at June 30, 2011) associated with the branches and to assume all current lease obligations with respect to the branches. The transaction is anticipated to close during December 2011 and is subject to regulatory approvals and other customary terms and conditions. For additional information on this transaction, refer to the Company’s Form 8-K to be filed with the Securities and Exchange Commission.

The 27 affected branches will operate normally through completion of the transaction. Customer ATM cards, checks and accounts will function as usual. Customers of these branches need not take any action at this time, and they will be contacted by both PNC and the Company prior to the branch transfer.

Asset Quality

During the second quarter 2011, the Company sold $68.1 million of non-performing commercial real estate assets, which resulted in a $0.6 million gain and is included in net gain (loss) on sale of assets. During the first quarter 2011, the Company sold $80.3 million of non-performing residential first mortgage loans which were included in the available-for-sale category. Since the fourth quarter 2010, the Company has sold $622.4 million in non-performing assets through bulk sales, which are in addition to loan or property sales in the ordinary course of business.

Non-performing assets held-for-investment totaled $518.8 million at June 30, 2011, as compared to $553.5 million at March 31, 2011, and $1.2 billion at June 30, 2010. This category of assets is comprised of non-performing loans (i.e., loans 90 days or more past due and matured loans), real estate owned and net repurchased assets, and it excludes repurchased loans that are guaranteed primarily by the Federal Housing Administration (FHA). The $34.7 million decrease in the second quarter 2011, as compared to first quarter 2011, consisted primarily of a $80.1 million decrease in non-performing commercial loans and commercial real estate owned ($68.1 million as the result of the above mentioned commercial real estate sale), offset in part by an $53.7 million increase in non-performing residential first mortgage loans.

Allowance for loan losses at June 30, 2011 was $274.0 million, or 4.6 percent of loans held-for-investment and 67.9 percent of non-performing loans held-for-investment, as compared to $271.0 million, or 4.7 percent of loans held-for-investment and 73.6 percent of non-performing loans held-for-investment at March 31, 2011. The decline in allowance for loan loss, as compared to second quarter 2010, was driven largely by a decrease in riskier loans as a result of the bulk sales of non-performing assets. At June 30, 2010, the allowance for loan losses was $530.0 million, or 7.2 percent of loans held-for-investment and 52.3 percent of non-performing loans.

The Company maintains a secondary marketing reserve on its balance sheet, which reflects the estimate of probable losses that currently exists on loans that it has sold or securitized into the secondary market, except for loans repurchased with government guarantees. The secondary marketing reserve was $79.4 million as of June 30, 2011 and March 31, 2011, as compared to $76.0 million at June 30, 2010. For the second quarter 2011, the Company incurred a secondary marketing reserve provision expense of $21.8 million, as compared to $22.7 million in the first quarter 2011 and $6.8 million in the second quarter 2010.

Capital

Flagstar Bank remained “well-capitalized” for regulatory purposes at June 30, 2011, with regulatory capital ratios of 10.07 percent for Tier 1 capital and 19.73 percent for total risk-based capital. The Company had an equity-to-assets ratio of 9.27 percent at June 30, 2011.

Mortgage Banking Operations

In the second quarter 2011, gain on loan sales totaled $39.8 million, as compared to $50.2 million for the first quarter 2011 and $64.3 million for the second quarter 2010. The decrease from the prior quarter is a result of increased competition in pricing during the quarter resulting in decreased spreads on originations, offset by an increase in fallout adjusted locks. Notwithstanding the reduction in pricing, gain on sale margin increased in the quarter, as it is calculated based on loans sold, rather than on fallout adjusted locks and is therefore a trailing indicator of pricing.

Mortgage rate lock commitments increased to $6.4 billion during the second quarter 2011, as compared to $5.5 billion during the first quarter 2011, and decreased from $8.3 billion during the second quarter 2010. Mortgage loan originations, which are substantially comprised of agency-eligible residential first mortgage loans, were $4.6 billion during the second quarter 2011, a decrease from $4.9 billion in the first quarter 2011 and from $5.5 billion in the second quarter 2010. Loan sales for the second quarter of 2011 decreased to $4.4 billion, as compared to $5.8 billion for the first quarter 2011 and $5.3 billion for the second quarter 2010.

At June 30, 2011, loans serviced for others totaled $57.1 billion with a weighted average servicing fee of 30.3 basis points. This was a decrease from $59.6 billion at March 31, 2011, with a weighted average servicing fee of 30.2 basis points, and an increase from $50.4 billion at June 30, 2010 with a weighted average servicing fee of 32.4 basis points. During the second quarter, the Company sold $47.1 million in residential first mortgage servicing rights through bulk sales.

Net Interest Margin

On June 30, 2011, the Company implemented a reclassification in the financial reporting application of amounts due from FHA relating to the servicing of delinquent FHA loans to recognize the accrued credit from FHA as interest income. Previously, income from FHA was applied as an offset to non-interest expense (asset resolution expense) relating to the servicing of delinquent FHA loans, and recorded on a net basis as asset resolution expense. The impact of the reclassification on the three and six months ended June 30, 2011, was an increase in net interest income of $12.7 million and $25.5 million, respectively, with an equal increase to asset resolution expense and an increase in the Bank’s net interest margin of 21 basis points in both periods. The impact of the reclassification on the three and six months ended June 30, 2010, was an increase in net interest income of $7.1 million and $13.2 million, respectively, with an equal increase to asset resolution expense and an increase in the Bank’s net interest margin of eight basis points and nine basis points, respectively.

Net interest margin for the Bank was 1.86 percent for the second quarter 2011, as compared to 1.87 percent for the first quarter 2011 and 1.61 percent for the second quarter 2010 (reflecting the reclassification in the financial reporting application relating to the servicing of delinquent FHA loans as described above). The slight decrease from first quarter 2011 reflects a 1.5 percent decline in average interest earning assets to $11.3 billion for the second quarter 2011 from $11.5 billion for the first quarter 2011.

Average interest-earning deposits, on which the Bank earns a minimal interest rate (25 basis points), were $1.5 billion in the second quarter 2011. The Bank’s interest-earning deposits allow the Bank flexibility to fund its on-going strategic initiatives to increase commercial and specialty lending, as well as other mortgage related initiatives.

The Bank’s deposit cost for the second quarter 2011 was 1.50 percent, an 8.0 percent decline, compared to 1.63 percent in the first quarter 2011, and a 34.2 percent decline compared to 2.28 percent in the second quarter 2010. The Bank reduced its deposit funding costs as higher yielding certificates of deposit matured and were replaced with lower-cost core deposits.

Net Interest Income

Second quarter 2011 net interest income was $51.3 million, as compared to $52.6 million during the first quarter 2011 and $49.6 million during the second quarter 2010. The $1.3 million decrease from first quarter 2011 reflects the 1.5 percent decline in average interest-earning assets, including loans held-for-investment and loans available-for-sale, offset by an increase in securities classified as available-for-sale or trading.

Provision for Loan Losses

The second quarter 2011 loan loss provision expense increased by $20.1 million to $48.4 million, as compared to $28.3 million in first quarter 2011 and decreased compared to $86.0 million in second quarter 2010. The increase compared to the first quarter 2011 was due to an increase in residential loan portfolio provisions resulting from continued increases in delinquencies and on-going nationwide market pressures on home price values. Loan loss provisions for the six months ended June 30, 2011 decreased 48.7 percent to $76.7 million from $149.6 million for the six months ended June 30, 2010.

Non-interest Income

Second quarter 2011 non-interest income was $58.1 million, as compared to $96.3 million for the first quarter 2011 and $100.3 million for the second quarter 2010. Non-interest income included the following components:

	•		Impairment on investment securities available-for-sale was $(15.6) million during the second quarter 2011, as compared to no impairment incurred during in the first quarter 2011, and an impairment of less than $0.4 million in the second quarter 2010. The increase in impairment losses during the second quarter reflected the quarterly valuation impairment charge on the collateralized mortgage obligations in line with current industry forecasts for future home price expectations.
	•		Gain on loan sale income decreased by $10.4 million to $39.8 million in the second quarter 2011, as compared to $50.2 million for the first quarter 2011. For more information, see Mortgage Banking Operations.
	•		Net servicing revenue, which is the combination of net loan administration income and the gain (loss) on trading securities (the on-balance sheet hedge of mortgage servicing rights), decreased by 22.5 percent to $30.5 million during second quarter 2011 as compared to $39.3 million during first quarter 2011. The decrease as compared to first quarter 2011 was primarily attributable to a decline of 9.1 percent in the portfolio of mortgage servicing rights due to mortgage servicing right asset sales, a lower and more volatile interest rate environment, and a reduction in the capitalization of new servicing assets during the second quarter.
	•		Other fees and charges were a net expense of $15.9 million, as compared to a net expense of $13.3 million for the first quarter 2011. The increase in expense was principally driven by a $1.9 million reduction in a one-time legal settlement fee and a $0.9 million decrease in secondary market reserve

provisions, which are accrued for probable losses on loans that are expected to be repurchased from the secondary market.

Non-interest Expense

Non-interest expense was $130.9 million for the second quarter 2011, a decrease of 11.1 percent from $147.2 million for the first quarter 2011, and a decrease of 16.2 percent from $156.2 million for the second quarter 2010.

	•		Asset resolution expense, which are expenses associated with foreclosed properties, decreased by 38.9 percent to $23.3 million, as compared to $38.1 million in the first quarter of 2011. The decline was due to a $12.4 million decrease in the provision on real estate owned properties.
	•		Compensation, benefits and commission expense decreased by $2.1 million to $61.2 million for the second quarter 2011, as compared to $63.3 million in first quarter 2011, and increased by $10.0 million as compared to $51.2 million in second quarter 2010. The $10.0 million increase in compensation, benefits and commissions expense was primarily due to the increase in the number of employees at June 30, 2011, as compared to June 30, 2010.
	•		Federal deposit insurance premiums increased by $2.1 million in the second quarter 2011 to $10.8 million, as compared to $8.7 million in first quarter 2011 and $10.6 million in second quarter 2010. The increase in second quarter 2011 premiums compared to first quarter 2011 was primarily due to the FDIC’s change in assessment methodology.

Balance Sheet Composition

Total assets at June 30, 2011 were $12.7 billion, as compared to $13.0 billion at March 31, 2011 and $13.7 billion at June 30, 2010. During the second quarter 2011, the Bank deployed $963.5 million of interest-earning deposits into $393.4 million of loans available-for-sale and $210.5 million of loans held-for-investment, primarily commercial and specialty loan originations and warehouse lending. Additionally, non-core deposits declined $343.9 million during the second quarter 2011.

Funding Sources

The Bank’s primary sources of funds are deposits obtained through its community banking branches and its internet banking platform, as well as deposits obtained from municipalities and investment banking firms. Funds are also obtained from time to time through loan repayments and sales of loans and securities in the ordinary course of business, advances from the FHLB, community banking operations, customer escrow accounts and security repurchase agreements. The Bank relies upon several of these sources at different times to address its daily and forecasted liquidity needs for operational requirements and policy levels while managing overall net interest costs. Retail deposits were $5.2 billion at June 30, 2011, as compared to $5.5 billion at March 31, 2011 and $5.2 billion at June 30, 2010.

At June 30, 2011, the Bank had a collateralized $4.4 billion line of credit with the FHLB, of which $3.4 billion was advanced or borrowed, and $1.0 billion remained as borrowing capacity. The Bank also had $1.6 billion of liquidity in the form of cash on hand, interest-earning deposits and securities available-for-sale or trading.

Community Banking Operations

Flagstar Bank had 162 community banking branches at June 30, 2011, December 31, 2010 and June 30, 2010.

Earnings Conference Call

The Company’s quarterly earnings conference call will be held on Wednesday, July 27, 2011 from 11 a.m. until noon (Eastern).

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

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

To listen by telephone, please call at least 10 minutes prior to the start of the conference call at (866) 834-5823 toll free or (973) 341-3018 and use passcode: 82054354.

Flagstar Bancorp, with $12.7 billion in total assets, is the largest publicly held savings bank headquartered in the Midwest. At June 30, 2011, Flagstar operated 162 banking centers in Michigan, Indiana and Georgia and 30 loan origination centers in 15 states. Flagstar Bank originates loans nationwide and is one of the leading originators of residential first mortgage loans.

The information contained in this release is not intended as a solicitation to buy Flagstar Bancorp, Inc. stock and is provided for general information. This release contains certain statements that may constitute “forward-looking statements” within the meaning of federal securities laws. These forward-looking statements include statements about the Company’s beliefs, plans, objectives, goals, expectations, anticipations, estimates, and intentions, that are subject to significant risks and uncertainties, including, but are not limited to, the fact the sale of the Bank’s branches in Georgia may not be consummated pursuant to its terms, at the time anticipated or at all, and are subject to change based upon various factors (some of which may be beyond the Company’s control). The words “may,” “could,” “should,” “would,” “believe,” and similar expressions are intended to identify forward-looking statements.

Flagstar Bancorp, Inc.
Consolidated Statements of Financial Condition
(In thousands, except share data)

		June 30,				March 31,				December 31,				June 30,
		2011				2011				2010				2010
		(Unaudited)
Assets
Cash and cash items		$	56,031			$	49,677			$	60,039			$	52,867
Interest-earning deposits			701,852				1,665,342				893,495				702,251
Cash and cash equivalents			757,883				1,715,019				953,534				755,118
Securities classified as trading			292,438				160,650				160,775				487,370
Securities classified as available-for-sale			551,173				452,368				475,225				544,474
Other investments — restricted			—				—				—				1,951
Loans available-for-sale ($1,870,499, $1,484,824, $2,343,638 and $1,692,286 at fair value at June 30, 2011, March 31, 2011, December 31, 2010 and June 30, 2010, respectively)			2,002,888				1,609,501				2,585,200				1,849,718
Loans repurchased with government guarantees			1,711,591				1,756,534				1,674,752				1,323,517
Loans held-for-investment ($21,514, $22,198, $19,011 and $14,935 at fair value at June 30, 2011, March 31, 2011, December 31, 2010 and June 30, 2010, respectively)			5,975,134				5,764,675				6,305,483				7,365,817
Less: allowance for loan losses			(274,000	)			(271,000	)			(274,000	)			(530,000	)
Loans held-for-investment, net			5,701,134				5,493,675				6,031,483				6,835,817
Total interest-earning assets			10,961,076				11,138,070				11,820,930				11,745,098
Accrued interest receivable			91,527				86,862				83,893				80,842
Repossessed assets, net			110,050				146,372				151,085				198,230
Federal Home Loan Bank stock			301,737				337,190				337,190				373,443
Premises and equipment, net			244,565				233,621				232,203				234,880
Mortgage servicing rights at fair value			577,401				635,122				580,299				474,814
Other assets			320,425				390,053				377,865				533,656
Total assets		$	12,662,812			$	13,016,967			$	13,643,504			$	13,693,830
Liabilities and Stockholders’ Equity
Deposits		$	7,405,027			$	7,748,910			$	7,998,099			$	8,254,046
Federal Home Loan Bank advances			3,406,571				3,400,000				3,725,083				3,650,000
Long-term debt			248,610				248,610				248,610				248,635
Total interest-bearing liabilities			11,060,208				11,397,520				11,971,792				12,152,681
Accrued interest payable			10,935				10,124				12,965				25,117
Secondary market reserve			79,400				79,400				79,400				76,000
Other liabilities			337,829				292,901				319,684				363,671
Total liabilities			11,488,372				11,779,945				12,383,841				12,617,469
Commitments and contingencies — Note 21			—				—				—				—
Stockholders’ Equity
Preferred stock $0.01 par value, liquidation value $1,000 per share, 25,000,000 shares authorized; 266,657 issued and outstanding and outstanding at June 30, 2011, March 31, 2011, December 31, 2010, and June 30, 2010, respectively			3				3				3				3
Common stock $0.01 par value, 700,000,000 shares authorized; 554,163,337 and 553,313,113 and 153,338,007 shares issued and outstanding at June 30, 2011, March 31, 2011, December 31, 2010 and June 30, 2010, respectively			5,542				5,537				5,533				1,533
Additional paid in capital — preferred			251,956				250,569				249,193				246,481
Additional paid in capital — common			1,464,131				1,462,620				1,461,373				1,077,244
Accumulated other comprehensive loss			(357	)			(9,760	)			(16,165	)			(23,282	)
Retained earnings (accumulated deficit)			(546,835	)			(471,947	)			(440,274	)			(225,618	)
Total stockholders’ equity			1,174,440				1,237,022				1,259,663				1,076,361
Total liabilities and stockholders’ equity		$	12,662,812			$	13,016,967			$	13,643,504			$	13,693,830

Flagstar Bancorp, Inc.
Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)

		For the Three Months Ended												For the Six Months Ended
		June 30, 2011				March 31, 2011				June 30, 2010				June 30, 2011				June 30, 2010
Interest Income
Loans		$	98,155			$	102,115			$	115,953			$	200,269			$	232,234
Securities classified as available-for-sale or trading			8,949				8,097				20,735				17,046				36,102
Interest-earning deposits and other			957				968				482				1,925				1,126
Total interest income			108,061				111,180				137,170				219,240				269,462
Interest Expense
Deposits			24,902				27,022				41,521				51,924				83,407
FHLB advances			30,218				29,979				42,151				60,196				83,938
Security repurchase agreements			—				—				1,597				—				2,750
Other			1,617				1,606				2,348				3,223				6,044
Total interest expense			56,737				58,607				87,617				115,343				176,139
Net interest income			51,324				52,573				49,553				103,897				93,323
Provision for loan losses			48,384				28,309				86,019				76,693				149,579
Net interest expense after provision for loan losses			2,940				24,264				(36,466	)			27,204				(56,256	)
Non-Interest Income
Loan fees and charges			14,712				16,138				20,236				30,850				36,565
Deposit fees and charges			7,845				7,500				8,798				15,345				17,211
Loan administration			30,450				39,336				(54,665	)			69,786				(28,515	)
Gain (loss) on trading securities			102				(74	)			69,660				28				66,348
Loss on residual and transferors’ interest			(2,258	)			(2,381	)			(4,312	)			(4,640	)			(6,994	)
Net gain on loan sales			39,827				50,184				64,257				90,012				116,823
Net loss on sales of mortgage servicing rights			(2,381	)			(112	)			(1,266	)			(2,493	)			(3,479	)
Net gain on securities available-for-sale			—				—				4,523				—				6,689
Net gain (loss) on sale of assets			1,293				(1,036	)			—				256				—
Total other-than-temporary impairment gain			39,725				—				11,274				39,725				36,796
Loss recognized in other comprehensive income before taxes			(55,309	)			—				(11,665	)			(55,309	)			(40,473	)
Net impairment losses recognized in earnings			(15,584	)			—				(391	)			(15,584	)			(3,677	)
Other fees and charges, net			(15,928	)			(13,289	)			(6,509	)			(29,216	)			(28,642	)
Total non-interest income			58,078				96,266				100,331				154,344				172,329
Non-Interest Expense
Compensation, commissions and benefits			61,156				63,308				51,104				124,464				112,125
Occupancy and equipment			16,969				16,618				15,903				33,587				31,914
Asset resolution			23,282				38,110				52,587				61,391				75,246
Federal insurance premiums			10,789				8,725				10,640				19,515				20,688
Other taxes			667				866				841				1,533				1,696
Warrant (income) expense			(1,998	)			(827	)			(3,486	)			(2,825	)			(2,259	)
Loss on extinguishment of debt			—				—				8,971				—				8,971
General and administrative			20,057				20,430				19,621				40,488				37,229
Total non-interest expense			130,922				147,230				156,181				278,153				285,610
Loss before federal income taxes			(69,904	)			(26,700	)			(92,316	)			(96,605	)			(169,537	)
Provision for federal income taxes			264				264				—				528				—
Net Loss			(70,168	)			(26,964	)			(92,316	)			(97,133	)			(169,537	)
Preferred stock dividend/accretion			(4,720	)			(4,710	)			(4,690	)			(9,429	)			(9,369	)
Net loss applicable to common stock		$	(74,888	)		$	(31,674	)		$	(97,006	)		$	(106,562	)		$	(178,906	)
Loss per share
Basic		$	(0.14	)		$	(0.06	)		$	(0.63	)		$	(0.19	)		$	(1.55	)
Diluted		$	(0.14	)		$	(0.06	)		$	(0.63	)		$	(0.19	)		$	(1.55	)

Flagstar Bancorp, Inc.
Summary of Selected Consolidated Financial and Statistical Data
(Dollars in thousands, except per share data)
(Unaudited)

		For the Three Months Ended												For the Six Months Ended
		June 30,				March 31,				June 30,				June 30,				June 30,
		2011				2011				2010				2011				2010
Summary of Consolidated Statements of Operations
Return on average assets			(2.32	)%			(0.96	)%			(2.72	)%			(1.64	)%			(2.55	)%
Return on average equity			(24.87	)%			(10.17	)%			(34.72	)%			(17.40	)%			(37.31	)%
Efficiency ratio			119.7	%			98.8	%			104.2	%			107.7	%			107.5	%
Equity/assets ratio (average for the period)			9.33	%			9.48	%			7.84	%			9.40	%			6.84	%
Residential first mortgage loans originated		$	4,642,706			$	4,856,312			$	5,451,667			$	9,499,017			$	9,776,788
Other loans originated		$	152,566			$	31,363			$	6,935			$	183,929			$	19,662
Mortgage loans sold and securitized		$	4,362,518			$	5,829,508			$	5,259,830			$	10,192,026			$	9,796,450
Interest rate spread — Bank only (1)			1.62	%			1.62	%			1.29	%			1.62	%			1.31	%
Net interest margin — Bank only (2)			1.86	%			1.87	%			1.61	%			1.87	%			1.57	%
Interest rate spread — Consolidated (1)			1.61	%			1.61	%			1.28	%			1.61	%			1.27	%
Net interest margin — Consolidated (2)			1.81	%			1.81	%			1.54	%			1.81	%			1.47	%
Average common shares outstanding			553,946,138				553,554,886				153,298,115				553,751,593				115,707,181
Average fully diluted shares outstanding			553,946,138				553,554,886				153,298,115				553,751,593				115,707,181
Average interest earning assets		$	11,297,984			$	11,473,046			$	12,746,811			$	11,385,031			$	12,514,547
Average interest paying liabilities		$	10,301,159			$	10,460,463			$	11,641,804			$	10,380,371			$	11,707,054
Average stockholder’s equity		$	1,204,652			$	1,245,229			$	1,117,686			$	1,224,829			$	959,039
Charge-offs to average investment loans (annualized)			3.15	%			2.14	%			5.07	%			2.64	%			5.42	%

		June 31,				March 31,				December 31,				June 30,
		2011				2011				2010				2010
Equity/assets ratio			9.27	%			9.50	%			9.23	%			7.86	%
Core capital ratio (3)			10.07	%			9.87	%			9.61	%			9.24	%
Total risk-based capital ratio (3)			19.73	%			20.51	%			18.55	%			17.20	%
Book value per common share		$	1.66			$	1.78			$	1.83			$	5.41
Number of common shares outstanding			554,163,337				553,711,848				553,313,113				153,338,007
Mortgage loans serviced for others		$	57,087,989			$	59,577,239			$	56,040,063			$	50,385,208
Weighted average service fee (bps)			30.3				30.2				30.8				32.4
Capitalized value of mortgage servicing rights			1.01	%			1.07	%			1.04	%			0.94	%
Ratio of allowance for loan losses to non-performing loans held-for-investment (4)			67.9	%			73.6	%			86.1	%			52.3	%
Ratio of allowance for loan losses to loans held-for-investment (4)			4.59	%			4.70	%			4.35	%			7.20	%
Ratio of non-performing assets to total assets (bank only)			4.10	%			4.26	%			4.35	%			9.06	%
Number of bank branches			162				162				162				162
Number of loan origination centers			30				29				27				28
Number of employees (excluding loan officers and account executives)			2,990				3,030				3,001				2,885
Number of loan officers and account executives			316				306				278				296

Loan Originations
(Dollars in thousands)
(Unaudited)

		For the Three Months Ended
		June 30,								March 31,								June 30,
		2011								2011								2010
Consumer loans:
Residential first mortgage		$	4,642,706				96.8	%		$	4,856,312				99.3	%		$	5,451,667				99.9	%
Other consumer (1)			2,684				0.1				1,200				0.1				1,577				—
Total consumer loans			4,645,390				96.9				4,857,512				99.4				5,453,244				99.9
Commercial loans (2)			149,882				3.1				30,163				0.6				5,995				0.1
Total loan originations		$	4,795,272				100.0	%		$	4,887,675				100.0	%		$	5,459,239				100.0	%

		For the Six Months Ended
		June 30,								June 30,
		2011								2010
Consumer loans:
Residential first mortgage		$	9,499,017				98.1	%		$	9,776,788				99.8	%
Other consumer (1)			3,884				0.1				7,465				0.1
Total consumer loans			9,502,901				98.2				9,784,253				99.9
Commercial loans (2)			180,045				1.8				12,197				0.1
Total loan originations		$	9,682,946				100.0	%		$	9,796,450				100.0	%

Loans Held-for-Investment
(Dollars in thousands)
(Unaudited)

		June 30,								March 31,								December 31,								June 30,
		2011								2011								2010								2010
Consumer loans:
Residential first mortgage		$	3,744,342				62.7	%		$	3,751,772				65.1	%		$	3,784,700				60.1	%		$	4,614,822				62.7	%
Second mortgage			155,537				2.6				165,161				2.8				174,789				2.8				196,702				2.7
Construction			898				—				3,246				0.1				8,012				0.1				13,003				0.2
Warehouse lending			513,678				8.6				303,785				5.3				720,770				11.4				702,455				9.5
HELOC			241,396				4.0				255,012				4.4				271,326				4.3				294,619				4.0
Other			77,052				1.3				81,037				1.4				86,710				1.4				93,631				1.3
Total consumer loans			4,732,903				79.2				4,560,013				79.1				5,046,307				80.1				5,915,232				80.4
Commercial loans:
Commercial real estate			1,111,131				18.6				1,170,198				20.3				1,250,301				19.8				1,439,324				19.5
Commercial and industrial			106,943				1.8				9,326				0.2				8,875				0.1				11,261				0.1
Commercial lease financing			24,157				0.4				25,138				0.4				—				—				—				—
Total commercial loans			1,242,231				20.8				1,204,662				20.9				1,259,176				19.9				1,450,585				19.6
Total loans held-for-investment		$	5,975,134				100.0	%		$	5,764,675				100.0	%		$	6,305,483				100.0	%		$	7,365,817				100.0	%

Composition of Mortgage Loans Held-for-Investment
(In thousands)
(Unaudited)

		June 30, 2011								March 31, 2011
		Portfolio Balance (1)				Allowance(1)				Portfolio Balance (1)				Allowance(1)
Performing modified (TDR)		$	529,588			$	44,838			$	562,570			$	45,309
Performing and not delinquent within last 36 months			2,237,486				26,696				2,326,486				29,798
Performing with government insurance			120,059				—				127,953				—
Other performing			650,706				35,963				631,833				29,886
Non-performing — 90+ day delinquent			241,258				53,077				146,951				38,986
Non-performing with government insurance			60,147				902				66,460				1,513
30 day and 60 day delinquent			61,533				4,103				57,926				4,642
Total		$	3,900,777			$	165,579			$	3,920,179			$	150,134
		December 31, 2010								June 30, 2010
		Portfolio Balance (1)				Allowance(1)				Portfolio Balance (1)				Allowance(1)
Performing modified (TDR)		$	576,594			$	46,857			$	479,635			$	44,467
Performing and not delinquent within last 36 months			2,084,578				27,700				2,416,302				31,836
Performing with government insurance			122,677				—				136,065				—
Other performing			987,975				43,462				1,000,843				50,664
Non-performing — 90+ day delinquent			76,572				19,786				651,630				180,125
Non-performing with government insurance			56,587				1,915				43,964				818
30 day and 60 day delinquent			62,518				4,866				96,088				4,621
Total		$	3,967,501			$	144,586			$	4,824,527			$	312,531

Composition of Commercial Loans Held-for-Investment
(In thousands)
(Unaudited)

		June 30, 2011								March 31, 2011
		Portfolio Balance (1)				Allowance (1)				Portfolio Balance (1)				Allowance (1)
Performing — not impaired		$	966,754			$	34,190			$	893,670			$	33,766
Special mention — not impaired			91,104				7,901				97,624				7,316
Impaired			82,496				19,630				5,649				957
Non-performing — not impaired			402				17				63,915				15,834
Non-performing			101,475				21,885				143,804				36,429
Total		$	1,242,231				83,623			$	1,204,662			$	94,302
		December 31, 2010								June 30, 2010
		Portfolio Balance (1)				Allowance (1)				Portfolio Balance (1)				Allowance (1)
Performing — not impaired		$	933,557			$	31,291			$	918,672			$	30,289
Special mention — not impaired			85,103				5,907				117,182				9,525
Impaired			73,631				17,181				14,022				296
Non-performing — not impaired			6,485				752				94,083				19,907
Non-performing			160,400				39,847				306,626				109,764
Total		$	1,259,176			$	94,978			$	1,450,585			$	169,781

Allowance for Loan Losses
(Dollars in thousands)
(Unaudited)

		For the Three Months Ended												For the Six Months Ended
						March 31,
		June 30, 2011				2011				June 30, 2010				June 30, 2011				June 30, 2010
Beginning balance		$	271,000			$	274,000			$	538,000			$	274,000			$	524,000
Provision for loan losses			48,384				28,309				86,019				76,693				149,579
Charge-offs
Consumer loans:
Residential first mortgage			(8,383	)			(2,482	)			(45,597	)			(10,865	)			(75,282	)
Second mortgage			(6,138	)			(5,778	)			(8,401	)			(11,916	)			(15,096	)
Construction			(419	)			—				(60	)			(419	)			(81	)
Warehouse lending			(288	)			—				(1,278	)			(288	)			(1,749	)
HELOC			(4,925	)			(5,063	)			(7,363	)			(9,988	)			(12,240	)
Other			(507	)			(839	)			(982	)			(1,346	)			(1,616	)
Total consumer loans			(20,660	)			(14,162	)			(63,681	)			(34,822	)			(106,064	)
Commercial loans:
Commercial real estate			(25,957	)			(19,289	)			(31,402	)			(45,246	)			(39,736	)
Commercial and industrial			(9	)			(48	)			(316	)			(57	)			(463	)
Total commercial loans			(25,966	)			(19,337	)			(31,718	)			(45,303	)			(40,199	)
Other			(639	)			(620	)			(688	)			(1,259	)			(1,385	)
Total charge-offs		$	(47,265	)		$	(34,119	)		$	(96,087	)		$	(81,384	)		$	(147,648	)
Recoveries
Consumer loans:
Residential first mortgage		$	158			$	336			$	585			$	494			$	1,249
Second mortgage			344				866				393				1,210				658
Construction			—				1				4				1				5
Warehouse lending			—				5				53				5				53
HELOC			443				486				348				929				702
Other			290				239				248				529				549
Total consumer loans			1,235				1,933				1,631				3,168				3,216
Commercial loans:
Commercial real estate			462				729				227				1,191				600
Commercial and industrial			—				—				2				—				2
Total commercial loans			462				729				229				1,191				602
Other			184				148				208				332				251
Total recoveries		$	1,881			$	2,810			$	2,068			$	4,691			$	4,069
Charge-offs, net of recoveries		$	(45,384	)		$	(31,309	)		$	(94,019	)		$	(76,693	)		$	(143,579	)
Ending balance		$	274,000			$	271,000			$	530,000			$	274,000			$	530,000
Net charge-off ratio			3.15	%			2.14	%			5.07	%			2.64	%			3.85	%

Composition of Allowance for Loan Losses
As of June 30, 2011
(In thousands)
(Unaudited)

		General Reserves				Specific Reserves				Total
Consumer loans:
Residential first mortgage		$	135,975			$	9,269			$	145,244
Second mortgage			19,534				563				20,097
Construction			160				78				238
Warehouse lending			874				746				1,620
HELOC			16,230				—				16,230
Other			1,788				1				1,789
Total consumer loans			174,561				10,657				185,218
Commercial loans:
Commercial real estate			42,033				39,095				81,128
Commercial and industrial			176				—				176
Commercial lease financing			1,732				588				2,320
Total commercial loans			43,941				39,683				83,624
Other and unallocated			5,158				—				5,158
Total allowance for loan losses		$	223,660			$	50,340			$	274,000

Non-Performing Loans and Assets
(Dollars in thousands)
(Unaudited)

		June 30,				March 31,				December 31,				June 30,
		2011				2011				2010				2010
Non-performing loans held-for-investment		$	403,381			$	368,152			$	318,416			$	1,013,828
Real estate and other non-performing assets, net			110,050				178,774				179,557				226,215
Non-performing assets held-for-investment, net			513,431				546,926				497,973				1,240,043
Non-performing loans available-for-sale			5,341				6,598				94,889				—
Total non-performing assets including loans available-for-sale		$	518,772			$	553,524			$	592,862			$	1,240,043
Ratio of non-performing loans held-for-investment to loans held-for-investment			6.75	%			6.39	%			5.05	%			13.76	%
Ratio of non-performing assets to total assets			4.10	%			4.26	%			4.35	%			9.06	%

Asset Quality — Loans Held-for-Investment
(Dollars in thousands)
(Unaudited)

		June 30, 2011								March 31, 2011								December 31, 2010								June 30, 2010
		Balance				% of Total				Balance				% of Total				Balance				% of Total				Balance				% of Total
Days delinquent
30		$	92,577				1.5	%		$	94,132				1.6	%		$	133,449				2.1	%		$	112,694				1.5	%
60			46,269				0.8				56,037				1.0				53,745				0.9				83,046				1.1
90+ and matured delinquent			403,381				6.8				368,152				6.4				318,416				5.0				1,013,828				13.8
Total		$	542,227				9.1	%		$	518,321				9.0	%		$	505,610				8.0	%			1,209,568				16.4	%
Loans held-for- investment		$	5,975,134							$	5,764,675							$	6,305,483							$	7,365,817

Gain on Loan Sales and Securitizations
(Dollars in thousands)
(Unaudited)

		For the Three Months Ended
		June 30, 2011								March 31, 2011								June 30, 2010
		(000’s)				bps				(000’s)				bps				(000’s)				bps
Description
Valuation gain (loss):
Value of interest rate locks		$	(2,860	)			(7	)		$	(616	)			(1	)		$	33,075				63
Value of forward sales			(3,657	)			(8	)			(40,361	)			(69	)			(58,475	)			(111	)
Fair value of loans available for sale			82,760				190				44,322				76				103,643				197
LOCOM adjustments on loans held-for-investment			46				—				(30	)			—				(45	)			—
Total valuation gains			76,289				175				3,315				6				78,198				149
Sales gains (losses):
Marketing gains, net of adjustments			21,865				50				751				1				26,154				49
Pair-off gains (losses)			(56,951	)			(131	)			48,458				83				(33,309	)			(63	)
Provisions for secondary marketing reserve			(1,375	)			(3	)			(2,339	)			(4	)			(6,786	)			(13	)
Total sales gains			(36,462	)			(84	)			46,870				80				(13,941	)			(27	)
Total gain on loan sales and securitizations			39,827				91				50,185				86				64,257				122
Total loan sales and securitizations		$	4,362,518							$	5,829,508							$	5,259,830