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):April 24, 2018

(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 April 24, 2018, Flagstar Bancorp, Inc. (the "Company") issued a press release regarding its preliminary results of operations and financial condition for the three months ended March 31, 2018. 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 months ended March 31, 2018 as part of its Quarterly Report on Form 10-Q.

On April 24, 2018, the Company will hold a conference call to review first quarter 2018 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 April 24, 2018
99.2	Flagstar Bancorp, Inc. Conference Call Presentation Slides - Earnings Presentation First Quarter 2018

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:	April 24, 2018		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 April 24, 2018
99.2	Flagstar Bancorp, Inc. Conference Call Presentation Slides - Earnings Presentation First Quarter 2018

EX-99.1

EXHIBIT 99.1

NEWS RELEASE

For more information, contact:

David L. Urban

david.urban@flagstar.com

(248) 312-5970

Flagstar Reports First Quarter 2018 Net Income of $35 million, or $0.60 per Diluted Share

Company delivers strong results despite challenging mortgage market

Key Highlights - First Quarter 2018

• Net interest income relatively stable at $106 million, supported by solid gains in commercial loans.

• Mortgage revenues decreased $11 million, or 15 percent from prior quarter, led by seasonal decline in mortgage originations and margin compression from competitive market.

• Noninterest expense fell $5 million, or 3 percent from last quarter, driven by lower mortgage closings and prudent expense management.

• Strong asset quality with minimal net charge-offs, low consumer delinquencies and no commercial delinquencies.

• Acquisitions in the quarter position the Community Banking business for continued growth.

TROY, Mich., April 24, 2018 - Flagstar Bancorp, Inc. (NYSE:FBC), the holding company for Flagstar Bank, FSB, today reported first quarter 2018 net income of $35 million, or $0.60 per diluted share. This compared to a fourth quarter 2017 net loss of $45 million, or $0.79 per diluted share, which included a non-cash charge to the provision for income taxes of $80 million, or $1.37 per diluted share. Excluding the tax reform-related charge in the fourth quarter 2017, the Company had adjusted net income of $35 million, or $0.60 per diluted share. For the first quarter 2017, the Company reported net income of $27 million, or $0.46 per diluted share.

"This quarter continued to prove the resilience of our earnings," said Alessandro DiNello, president and chief executive officer of Flagstar Bancorp, Inc. “Our solid base of earning assets, along with careful expense management, helped us deliver strong results.

"We made terrific progress in strengthening the franchise in the first quarter. We continued to book high-quality commercial loans, we grew deposits, we kept our net interest margin stable and we closed on two strategic acquisitions that helped both sides of the balance sheet.

"First, we closed on the purchase of the mortgage warehouse business from Santander Bank, which brought approximately $500 million of mortgage warehouse loans to the balance sheet, then we acquired the branches of Desert Community Bank, bringing approximately $600 million in low cost deposits to the balance sheet.

1

"Servicing also continued to prosper. We sold $12 billion of mortgage servicing rights in the first quarter and agreed to sell an additional $7 billion next quarter, while entering into subservicing agreements for 100 percent of the sales. The purchasers of the MSRs have selected Flagstar to subservice their loans which is a testament to our best-in-class servicing platform. After all these sales close and together with non-Flagstar originated loans that we are scheduled to onboard in May and June, we will comfortably be above 500,000 loans serviced or subserviced by the end of the second quarter.

“We’re off to a nice start in 2018 supported by solid capital and a strong allowance coverage. Clearly, we have transformed our company into a well-diversified bank and have demonstrated the ability to produce consistent earnings."

First Quarter 2018 Highlights:

Income Statement Highlights
	Three Months Ended
	March 31, 2018		December 31, 2017			September 30, 2017		June 30, 2017			March 31, 2017
	(Dollars in millions)
Net interest income	$	106	$	107		$	103	$	97		$	83
Provision (benefit) for loan losses	—		2			2		(1		)	3
Noninterest income	111		124			130		116			100
Noninterest expense	173		178			171		154			140
Income before income taxes	44		51			60		60			40
Provision for income taxes (1)	9		96			20		19			13
Net income (loss)	$	35	$	(45	)	$	40	$	41		$	27
Income (loss) per share:
Basic	$	0.61	$	(0.79	)	$	0.71	$	0.72		$	0.47
Diluted	$	0.60	$	(0.79	)	$	0.70	$	0.71		$	0.46

(1) The three months ended December 31, 2017 included an $80 million, or $1.37 per diluted share, non-cash charge to the provision for income taxes, resulting from the revaluation of the Company's net deferred tax asset at a lower statutory rate as a result of the Tax Cuts and Jobs Act.

Key Ratios
	Three Months Ended										Change (bps)
	March 31, 2018		December 31, 2017		September 30, 2017		June 30, 2017		March 31, 2017		Seq	Yr/Yr
Net interest margin	2.76	%	2.76	%	2.78	%	2.77	%	2.67	%	0	9
Return on average assets	0.8	%	(1.1	)%	1.0	%	1.0	%	0.8	%	190	0
Return on average equity	9.9	%	(12.1	)%	11.1	%	11.6	%	7.9	%	N/M	200
Efficiency ratio	79.7	%	77.1	%	73.5	%	72.0	%	76.8	%	260	290

N/M - Not meaningful

2

Balance Sheet Highlights
	Three Months Ended										% Change
	March 31, 2018		December 31, 2017		September 30, 2017		June 30, 2017		March 31, 2017		Seq		Yr/Yr
	(Dollars in millions)
Average Balance Sheet Data
Average interest-earning assets	$	15,354	$	15,379	$	14,737	$	14,020	$	12,343	—	%	24	%
Average loans held-for-sale (LHFS)	4,231		4,537		4,476		4,269		3,286		(7	)%	29	%
Average loans held-for-investment (LHFI)	7,487		7,295		6,803		6,224		5,639		3	%	33	%
Average total deposits	9,371		9,084		9,005		8,739		8,795		3	%	7	%

Net Interest Income

Net interest income fell $1 million to $106 million for the first quarter 2018, as compared to the fourth quarter 2017. The decrease from the prior quarter reflected two fewer days in the first quarter 2018. Both average earning assets and net interest margin were steady at $15.4 billion and 2.76 percent, respectively, as higher consumer, commercial real estate and commercial and industrial loans were offset by seasonal declines in loans held-for-sale and warehouse loans.

Loans held-for-investment averaged $7.5 billion for the first quarter 2018, increasing $192 million, or 3 percent, from the prior quarter. During the first quarter 2018, average consumer loans rose $214 million, or 7 percent, led by home equity lines of credit and mortgage loans (primarily jumbos). Commercial loan growth was solid with average commercial and industrial and commercial real estate loans increasing $169 million, or 6 percent. Average warehouse loans fell $191 million, driven by anticipated seasonal factors and lower overall mortgage volumes experienced by the Company's warehouse customers. The Company's purchase of a mortgage warehouse business occurring late in the quarter did not have a significant impact on average warehouse balances.

Average total deposits were $9.4 billion in the first quarter 2018, increasing $287 million, or 3 percent from the fourth quarter 2017. The increase was led by higher government and retail deposits, partially offset by seasonally lower company controlled deposits. Average government deposits rose $151 million, or 15 percent. Average retail deposits increased $109 million, or 2 percent, as higher retail certificates of deposit (up $222 million, or 16 percent) were partially offset by a decline in retail savings deposits (down $131 million, or 4 percent).

Provision for Loan Losses

The Company had no provision for loan losses for the first quarter 2018, as compared to $2 million for the fourth quarter 2017. The lack of provision expense reflected strong asset quality and a low level of net charge-offs in the quarter.

Noninterest Income

Noninterest income fell $13 million, or 10 percent, to $111 million in the first quarter of 2018, as compared to $124 million for the fourth quarter 2017. The decrease was primarily due to a drop in net gain on loan sales and loan fees and charges, partially offset by an increase in the net return on the mortgage servicing rights.

First quarter 2018 net gain on loan sales fell $19 million, or 24 percent, to $60 million, versus $79 million in the fourth quarter 2017. Fallout-adjusted locks fell 11 percent to $7.7 billion primarily due to a seasonal decline in mortgage originations. The net gain on loan sale margin fell 14 basis points to 0.77 percent for the first quarter 2018, as compared to 0.91 percent for the fourth quarter 2017. The lower margin was primarily due to competitive pricing pressure.

3

Mortgage Metrics
	Three Months Ended															Change (% / bps)
	March 31, 2018			December 31, 2017			September 30, 2017			June 30, 2017			March 31, 2017			Seq		Yr/Yr
	(Dollars in millions)
Mortgage rate lock commitments (fallout-adjusted) (1)	$	7,722		$	8,631		$	8,898		$	9,002		$	5,996		(11	)%	29	%
Net margin on mortgage rate lock commitments (fallout-adjusted) (1) (2)	0.77		%	0.91		%	0.84		%	0.73		%	0.80		%	(14)		(3)
Net gain on loan sales	$	60		$	79		$	75		$	66		$	48		(24	)%	25	%
Net (loss) return on the mortgage servicing rights (MSR)	$	4		$	(4	)	$	6		$	6		$	14		N/M		(71	)%
Gain on loan sales + net (loss) return on the MSR	$	64		$	75		$	81		$	72		$	62		(15	)%	3	%
Residential loans serviced (number of accounts - 000's) (3)	470			442			415			402			393			6	%	20	%
Capitalized value of MSRs	1.27		%	1.16		%	1.15		%	1.14		%	1.10		%	11		17
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 (excludes net gain on loan sales of $1 million from loans transferred from HFI in the three months ended December 31, 2017, respectively) 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 fell to $20 million for the first quarter 2018, as compared to $24 million for the fourth quarter 2017. The decrease primarily reflected lower mortgage loan closings.

Net return on mortgage servicing rights (including the impact of hedges) increased $8 million, resulting in a net gain of $4 million for the first quarter 2018, as compared to a net loss of $4 million for the fourth quarter 2017. The increase from the prior quarter largely reflected two factors realized in the fourth quarter 2017 -- a $4 million decrease in fair value driven by model changes and a $3 million charge associated with MSR sales that closed in the first quarter 2018.

Noninterest Expense

Noninterest expense fell to $173 million for the first quarter 2018, as compared to $178 million for the fourth quarter 2017, due to lower mortgage closings and prudent expense management. During the first quarter 2018, commissions fell $5 million and loan processing expense declined $2 million from lower mortgage closings. The Company's efficiency ratio was 80 percent for the first quarter 2018, as compared to 77 percent for the fourth quarter 2017, resulting from the seasonal decline in mortgage revenue.

Income Taxes

The first quarter 2018 provision for income taxes totaled $9 million, as compared to $96 million in the fourth quarter 2017, which included a charge to the provision for income taxes of $80 million resulting from new tax legislation. As a result of tax reform, the Company's effective tax rate was 20 percent for the first quarter 2018, as compared to the adjusted effective tax rate of 32 percent for the fourth quarter 2017.

4

Asset Quality

Credit Quality Ratios
	Three Months Ended															Change (% / bps)
	March 31, 2018			December 31, 2017			September 30, 2017			June 30, 2017			March 31, 2017			Seq		Yr/Yr
	(Dollars in millions)
Allowance for loan loss to LHFI	1.7		%	1.8		%	2.0		%	2.1		%	2.4		%	(10)		(70)
Charge-offs, net of recoveries	$	1		$	2		$	2		$	—		$	4		(50	)%	(75	)%
Total nonperforming loans held-for-investment	$	29		$	29		$	31		$	30		$	28		—	%	4	%
Net charge-offs to LHFI ratio (annualized)	0.06		%	0.12		%	0.08		%	0.04		%	0.27		%	(6)		(21)
Ratio of nonperforming LHFI to LHFI	0.35		%	0.38		%	0.44		%	0.44		%	0.47		%	(3)		(12)

The allowance for loan losses was $139 million at March 31, 2018, compared to $140 million at December 31, 2017. The allowance for loan losses covered 1.7 percent of loans held-for-investment at March 31, 2018, as compared to 1.8 percent of loans held-for-investment at December 31, 2017.

Net charge-offs in the first quarter 2018 were $1 million, or 6 basis points of HFI loans, compared to $2 million, or 12 basis points in the prior quarter.

Nonperforming loans held-for-investment were $29 million at March 31, 2018, unchanged from December 31, 2017. The ratio of nonperforming loans to loans held-for-investment was 0.35 percent at March 31, 2018, compared to 0.38 percent at December 31, 2017. At March 31, 2018, consumer loan delinquencies totaled $5 million, or 0.14 percent of consumer loans, compared to $5 million, or 0.15 percent at December 31, 2017. There were no commercial loan delinquencies greater than 30 days at March 31, 2018.

Capital

Capital Ratios (Bancorp)	Three Months Ended															Change (% / bps)
	March 31, 2018			December 31, 2017			September 30, 2017			June 30, 2017			March 31, 2017			Seq		Yr/Yr
Tangible common equity to assets ratio	7.65		%	8.15		%	8.47		%	8.64		%	8.90		%	(50)		(125)
Tier 1 leverage (to adj. avg. total assets)	8.72		%	8.51		%	8.80		%	9.10		%	9.31		%	21		(59)
Tier 1 common equity (to RWA)	10.80		%	11.50		%	11.65		%	12.45		%	12.32		%	(70)		(152)
Tier 1 capital (to RWA)	12.90		%	13.63		%	13.72		%	14.65		%	14.70		%	(73)		(180)
Total capital (to RWA)	14.14		%	14.90		%	14.99		%	15.92		%	15.98		%	(76)		(184)
MSRs to Tier 1 capital	16.2		%	20.1		%	17.3		%	13.1		%	23.1		%	(390)		N/M
Tangible book value per share	$	23.62		$	24.04		$	25.01		$	24.29		$	23.96		(2	)%	(1	)%

N/M - Not meaningful

The Company maintained a robust capital position with regulatory ratios well above current regulatory quantitative guidelines for "well capitalized" institutions. At March 31, 2018, the Company had a Tier 1 leverage ratio of 8.72 percent, as compared to 8.51 percent at December 31, 2017. The increase in the ratio resulted from MSR sales and earnings retention, partially offset by the Company's acquisition of the branches of Desert Community Bank and the mortgage warehouse business from Santander Bank.

Under the terms of recently proposed changes to regulatory capital requirements, the Company's Tier 1 leverage ratio would have increased by approximately 50 basis points and risk-based capital ratios by approximately 10-25 basis points at March 31, 2018 (pro-forma basis).

5

Earnings Conference Call

As previously announced, the Company's first quarter 2018 earnings call will be held Tuesday, April 24, 2018 at 11 a.m. (ET).

To join the call, please dial (800) 667-5617 toll free or (334) 323-0505 and use passcode 3321708. 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 3321708.

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 $17.7 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 Michigan and 8 branches in California through its Desert Community Bank division. It also provides home loans through a wholesale network of brokers and correspondents in all 50 states, as well as 92 retail locations in 31 states, representing the combined retail branches of Flagstar and its Opes Advisors mortgage division. Flagstar is a leading national originator and servicer of mortgage loans, handling payments and record keeping for $104 billion of home loans representing over 470,000 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, adjusted net income and adjusted earnings per share. 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 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.

6

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. The Company's actual results could differ materially from those described in the forward-looking statements depending upon various factors as described 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.

7

Flagstar Bancorp, Inc.

Consolidated Statements of Financial Condition

(Dollars in millions)

(Unaudited)

	March 31, 2018			December 31, 2017			March 31, 2017
Assets
Cash	$	121		$	122		$	72
Interest-earning deposits	122			82			89
Total cash and cash equivalents	243			204			161
Investment securities available-for-sale	1,918			1,853			1,650
Investment securities held-to-maturity	771			939			1,048
Loans held-for-sale	4,743			4,321			4,543
Loans held-for-investment	8,134			7,713			5,959
Loans with government guarantees	286			271			322
Less: allowance for loan losses	(139		)	(140		)	(141		)
Total loans held-for-investment and loans with government guarantees, net	8,281			7,844			6,140
Mortgage servicing rights	239			291			295
Federal Home Loan Bank stock	303			303			201
Premises and equipment, net	348			330			277
Net deferred tax asset	130			136			273
Other assets	760			691			773
Total assets	$	17,736		$	16,912		$	15,361
Liabilities and Stockholders' Equity
Noninterest-bearing	$	2,391		$	2,049		$	1,831
Interest-bearing	7,595			6,885			6,814
Total deposits	9,986			8,934			8,645
Short-term Federal Home Loan Bank advances	4,153			4,260			3,186
Long-term Federal Home Loan Bank advances	1,280			1,405			1,200
Other long-term debt	494			494			493
Representation and warranty reserve	13			15			23
Other liabilities	383			405			443
Total liabilities	16,309			15,513			13,990
Stockholders' Equity
Common stock	1			1			1
Additional paid in capital	1,514			1,512			1,510
Accumulated other comprehensive loss	(30		)	(16		)	(6		)
Accumulated deficit	(58		)	(98		)	(134		)
Total stockholders' equity	1,427			1,399			1,371
Total liabilities and stockholders' equity	$	17,736		$	16,912		$	15,361

8

Flagstar Bancorp, Inc.  Condensed Consolidated Statements of Operations  (Dollars in millions, except per share data) (Unaudited)
													First Quarter 2018 Compared to:
	Three Months Ended												Fourth Quarter 2017					First Quarter 2017
	March 31, 2018		December 31, 2017			September 30, 2017		June 30, 2017			March 31, 2017		Amount			Percent		Amount			Percent
Interest Income
Total interest income	$	152	$	148		$	140	$	129		$	110	$	4		3	%	$	42		38	%
Total interest expense	46		41			37		32			27		5			12	%	19			70	%
Net interest income	106		107			103		97			83		(1		)	(1	)%	23			28	%
Provision (benefit) for loan losses	—		2			2		(1		)	3		(2		)	(100	)%	(3		)	(100	)%
Net interest income after provision (benefit) for loan losses	106		105			101		98			80		1			1	%	26			33	%
Noninterest Income
Net gain on loan sales	60		79			75		66			48		(19		)	(24	)%	12			25	%
Loan fees and charges	20		24			23		20			15		(4		)	(17	)%	5			33	%
Deposit fees and charges	5		4			5		5			4		1			25	%	1			25	%
Loan administration income	5		5			5		6			5		—			—	%	—			—	%
Net (loss) return on the mortgage servicing rights	4		(4		)	6		6			14		8			N/M		(10		)	(71	)%
Representation and warranty benefit	2		2			4		3			4		—			—	%	(2		)	(50	)%
Other noninterest income	15		14			12		10			10		1			7	%	5			50	%
Total noninterest income	111		124			130		116			100		(13		)	(10	)%	11			11	%
Noninterest Expense
Compensation and benefits	80		80			76		71			72		—			—	%	8			11	%
Commissions	18		23			23		16			10		(5		)	(22	)%	8			80	%
Occupancy and equipment	30		28			28		25			22		2			7	%	8			36	%
Federal insurance premiums	6		5			5		4			3		1			20	%	3			100	%
Loan processing expense	14		16			15		14			12		(2		)	(13	)%	2			17	%
Legal and professional expense	6		8			7		8			7		(2		)	(25	)%	(1		)	(14	)%
Other noninterest expense	19		18			17		16			14		1			6	%	5			36	%
Total noninterest expense	173		178			171		154			140		(5		)	(3	)%	33			24	%
Income before income taxes	44		51			60		60			40		(7		)	(14	)%	4			10	%
Provision for income taxes	9		96			20		19			13		(87		)	(91	)%	(4		)	(31	)%
Net income (loss)	$	35	$	(45	)	$	40	$	41		$	27	$	80		N/M		$	8		30	%
Income (loss) per share
Basic	$	0.61	$	(0.79	)	$	0.71	$	0.72		$	0.47	$	1.40		N/M		$	0.14		30	%
Diluted	$	0.60	$	(0.79	)	$	0.70	$	0.71		$	0.46	$	1.39		N/M		$	0.14		30	%

N/M - Not meaningful

9

Flagstar Bancorp, Inc.

Summary of Selected Consolidated Financial and Statistical Data

(Dollars in millions, except share data)

(Unaudited)

	Three Months Ended
	March 31, 2018			December 31, 2017			March 31, 2017
Selected Mortgage Statistics:
Mortgage rate lock commitments (fallout-adjusted) (1)	$	7,722		$	8,631		$	5,996
Mortgage loans originated (2)	$	7,886		$	9,749		$	5,903
Mortgage loans sold and securitized	$	7,247		$	10,096		$	4,484
Selected Ratios:
Interest rate spread (3)	2.54		%	2.56		%	2.49		%
Net interest margin	2.76		%	2.76		%	2.67		%
Net margin on loans sold and securitized	0.82		%	0.78		%	1.06		%
Return on average assets	0.82		%	(1.05		)%	0.76		%
Return on average equity	9.94		%	(12.07		)%	7.88		%
Efficiency ratio	79.7		%	77.1		%	76.8		%
Equity-to-assets ratio (average for the period)	8.27		%	8.73		%	9.59		%
Average Balances:
Average common shares outstanding	57,356,654			57,186,367			56,921,605
Average fully diluted shares outstanding	58,314,385			57,186,367			58,072,563
Average interest-earning assets	$	15,354		$	15,379		$	12,343
Average interest-paying liabilities	$	12,974		$	12,939		$	10,319
Average stockholders' equity	$	1,414		$	1,497		$	1,346

(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) Includes residential first mortgage.

(3) 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.

	March 31, 2018			December 31, 2017			March 31, 2017
Selected Statistics:
Book value per common share	$	24.87		$	24.40		$	24.03
Tangible book value per share (1)	23.62			24.04			23.96
Number of common shares outstanding	57,399,993			57,321,228			57,043,565
Number of FTE employees	3,659			3,525			2,948
Number of bank branches	107			99			99
Ratio of nonperforming assets to total assets	0.19		%	0.22		%	0.27		%
Common equity-to-assets ratio	8.05		%	8.27		%	8.92		%
MSR Key Statistics and Ratios:
Weighted average service fee (basis points)	30.4			28.9			26.7
Capitalized value of mortgage servicing rights	1.27		%	1.16		%	1.10		%
Mortgage servicing rights to Tier 1 capital	16.2		%	20.1		%	23.1		%

(1) Excludes goodwill and intangibles of $72 million, $21 million, and $4 million at March 31, 2018, December 31, 2017, and March 31, 2017, respectively, included in Other Assets on the Consolidated Statement of Financial Condition. See Non-GAAP Reconciliation for further information.

10

Average Balances, Yields and Rates

(Dollars in millions)

(Unaudited)

	Three Months Ended
	March 31, 2018						December 31, 2017						March 31, 2017
	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	$	4,231	$	44	4.12	%	$	4,537	$	46	4.07	%	$	3,286	$	32	3.87	%
Loans held-for-investment
Residential first mortgage	2,773		23		3.41	%	2,704		23		3.37	%	2,399		20		3.33	%
Home equity	668		9		5.21	%	524		7		5.11	%	431		6		5.08	%
Other	27		—		4.56	%	26		—		4.49	%	27		—		4.49	%
Total Consumer loans	3,468		32		3.76	%	3,254		30		3.66	%	2,857		26		3.60	%
Commercial Real Estate	1,954		24		4.87	%	1,866		21		4.48	%	1,318		12		3.80	%
Commercial and Industrial	1,217		16		5.21	%	1,136		14		4.76	%	774		9		4.56	%
Warehouse Lending	848		11		5.14	%	1,039		13		4.82	%	690		8		4.51	%
Total Commercial loans	4,019		51		5.03	%	4,041		48		4.65	%	2,782		29		4.19	%
Total loans held-for-investment	7,487		83		4.44	%	7,295		78		4.21	%	5,639		55		3.89	%
Loans with government guarantees	291		3		3.72	%	260		3		3.90	%	342		4		4.61	%
Investment securities	3,233		22		2.69	%	3,204		21		2.61	%	3,012		19		2.51	%
Interest-earning deposits	112		—		1.67	%	83		—		1.33	%	64		—		0.86	%
Total interest-earning assets	15,354		$	152	3.95	%	15,379		$	148	3.81	%	12,343		$	110	3.55	%
Other assets	1,736						1,772						1,700
Total assets	$	17,090					$	17,151					$	14,043
Interest-Bearing Liabilities
Retail deposits
Demand deposits	$	548	$	—	0.26	%	$	547	$	—	0.26	%	$	507	$	—	0.18	%
Savings deposits	3,490		7		0.81	%	3,621		8		0.77	%	3,928		7		0.76	%
Money market deposits	205		—		0.44	%	231		—		0.52	%	276		1		0.46	%
Certificates of deposit	1,619		6		1.45	%	1,397		5		1.32	%	1,073		3		1.06	%
Total retail deposits	5,862		13		0.92	%	5,796		13		0.84	%	5,784		11		0.75	%
Government deposits
Demand deposits	241		—		0.55	%	204		—		0.59	%	235		—		0.39	%
Savings deposits	483		2		1.11	%	394		1		0.94	%	459		1		0.52	%
Certificates of deposit	401		1		1.19	%	376		1		1.05	%	318		—		0.63	%
Total government deposits	1,125		3		1.02	%	974		2		0.91	%	1,012		1		0.52	%
Wholesale deposits and other	171		1		1.91	%	45		—		1.50	%	8		—		0.39	%
Total interest-bearing deposits	7,158		17		0.96	%	6,815		15		0.86	%	6,804		12		0.72	%
Short-term Federal Home Loan Bank advances and other	4,032		15		1.53	%	4,329		14		1.25	%	1,822		3		0.73	%
Long-term Federal Home Loan Bank advances	1,290		7		2.10	%	1,301		6		1.93	%	1,200		6		1.87	%
Other long-term debt	494		7		5.37	%	494		6		5.12	%	493		6		5.04	%
Total interest-bearing liabilities	12,974		46		1.41	%	12,939		41		1.25	%	10,319		27		1.06	%
Noninterest-bearing deposits (1)	2,213						2,269						1,991
Other liabilities	489						446						387
Stockholders' equity	1,414						1,497						1,346
Total liabilities and stockholders' equity	$	17,090					$	17,151					$	14,043
Net interest-earning assets	$	2,380					$	2,440					$	2,024
Net interest income			$	106					$	107					$	83
Interest rate spread (2)					2.54	%					2.56	%					2.49	%
Net interest margin (3)					2.76	%					2.76	%					2.67	%
Ratio of average interest-earning assets to interest-bearing liabilities					118.3	%					118.9	%					119.6	%
Total average deposits	$	9,371					$	9,084					$	8,795

(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.

11

Flagstar Bancorp, Inc.

Earnings Per Share

(Dollars in millions, except share data)

(Unaudited)

	Three Months Ended
	March 31, 2018			December 31, 2017			March 31, 2017
Net income (loss)	35			(45		)	27
Weighted average shares
Weighted average common shares outstanding	57,356,654			57,186,367			56,921,605
Effect of dilutive securities
May Investor warrants	—			—			49,149
Stock-based awards (1)	957,731			—			1,101,809
Weighted average diluted common shares	58,314,385			57,186,367			58,072,563
Earnings (loss) per common share
Basic earnings (loss) per common share	$	0.61		$	(0.79	)	$	0.47
Effect of dilutive securities
May Investor warrants	—			—			—
Stock-based awards (1)	(0.01		)	—			(0.01		)
Diluted earnings (loss) per common share	$	0.60		$	(0.79	)	$	0.46

(1) Three months ended December 31, 2017, excludes 1.2 million shares, or 2 cents per share, of unvested stock-based awards that are anti-dilutive due to net loss position.

Regulatory Capital - Bancorp

(Dollars in millions)

(Unaudited)

	March 31, 2018				December 31, 2017				March 31, 2017
	Amount		Ratio		Amount		Ratio		Amount		Ratio
Tier 1 leverage (to adjusted avg. total assets)	$	1,475	8.72	%	$	1,442	8.51	%	$	1,277	9.31	%
Total adjusted avg. total asset base	$	16,918			$	16,951			$	13,716
Tier 1 common equity (to risk weighted assets)	$	1,235	10.80	%	$	1,216	11.50	%	$	1,071	12.32	%
Tier 1 capital (to risk weighted assets)	$	1,475	12.90	%	$	1,442	13.63	%	$	1,277	14.70	%
Total capital (to risk weighted assets)	$	1,617	14.14	%	$	1,576	14.90	%	$	1,389	15.98	%
Risk-weighted asset base	$	11,440			$	10,579			$	8,689

Regulatory Capital - Bank

(Dollars in millions)

(Unaudited)

	March 31, 2018				December 31, 2017				March 31, 2017
	Amount		Ratio		Amount		Ratio		Amount		Ratio
Tier 1 leverage (to adjusted avg. total assets)	$	1,537	9.08	%	$	1,531	9.04	%	$	1,477	10.74	%
Total adjusted avg. total asset base	$	16,926			$	16,934			$	13,754
Tier 1 common equity (to risk weighted assets)	$	1,537	13.42	%	$	1,531	14.46	%	$	1,477	16.93	%
Tier 1 capital (to risk weighted assets)	$	1,537	13.42	%	$	1,531	14.46	%	$	1,477	16.93	%
Total capital (to risk weighted assets)	$	1,679	14.66	%	$	1,664	15.72	%	$	1,588	18.20	%
Risk-weighted asset base	$	11,449			$	10,589			$	8,726

12

Loan Originations (Dollars in millions) (Unaudited)
	Three Months Ended
	March 31, 2018				December 31, 2017				March 31, 2017
Residential first mortgage	$	7,886	98.2	%	$	9,749	96.1	%	$	5,903	95.0	%
Home equity (1)	65		0.8	%	111		1.1	%	56		0.9	%
Total consumer loans	7,951		99.0	%	9,860		97.2	%	5,959		95.9	%
Commercial loans (2)	79		1.0	%	283		2.8	%	257		4.1	%
Total loan originations	$	8,030	100.0	%	$	10,143	100.0	%	$	6,216	100.0	%

(1) Includes second mortgage loans, HELOC loans, and other consumer loans.

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

Residential Loans Serviced

(Dollars in millions)

(Unaudited)

	March 31, 2018			December 31, 2017			March 31, 2017
	Unpaid Principal Balance (1)		Number of accounts	Unpaid Principal Balance (1)		Number of accounts	Unpaid Principal Balance (1)		Number of accounts
Serviced for own loan portfolio (2)	$	7,629	32,185	$	7,013	29,493	$	7,369	33,766
Serviced for others	18,767		77,426	25,073		103,137	26,763		116,965
Subserviced for others (3)	77,748		360,396	65,864		309,814	48,940		242,445
Total residential loans serviced	$	104,144	470,007	$	97,950	442,444	$	83,072	393,176

(1) UPB, net of write downs, does not include premiums or discounts.

(2) 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.

(3) 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)

	March 31, 2018				December 31, 2017				March 31, 2017
Consumer loans
Residential first mortgage	$	2,818	34.6	%	$	2,754	35.7	%	$	2,463	41.3	%
Home equity	671		8.3	%	664		8.6	%	376		6.3	%
Other	25		0.3	%	25		0.3	%	27		0.5	%
Total consumer loans	3,514		43.2	%	3,443		44.6	%	2,866		48.1	%
Commercial loans
Commercial real estate	1,985		24.4	%	1,932		25.1	%	1,399		23.5	%
Commercial and industrial	1,228		15.1	%	1,196		15.5	%	854		14.3	%
Warehouse lending	1,407		17.3	%	1,142		14.8	%	840		14.1	%
Total commercial loans	4,620		56.8	%	4,270		55.4	%	3,093		51.9	%
Total loans held-for-investment	$	8,134	100.0	%	$	7,713	100.0	%	$	5,959	100.0	%

13

Allowance for Loan Losses

(Dollars in millions)

(Unaudited)

	As of/For the Three Months Ended
	March 31, 2018			December 31, 2017			March 31, 2017
Allowance for loan losses
Residential first mortgage	$	47		$	47		$	61
Home equity	21			22			21
Other	1			1			1
Total consumer loans	69			70			83
Commercial real estate	44			45			32
Commercial and industrial	20			19			20
Warehouse lending	6			6			6
Total commercial loans	70			70			58
Total allowance for loan losses	$	139		$	140		$	141
Charge-offs
Total consumer loans	(2		)	(3		)	(5		)
Total commercial loans	—			(1		)	—
Total charge-offs	$	(2	)	$	(4	)	$	(5	)
Recoveries
Total consumer loans	1			—			1
Total commercial loans	—			2			—
Total recoveries	1			2			1
Charge-offs, net of recoveries	$	(1	)	$	(2	)	$	(4	)
Net charge-offs to LHFI ratio (annualized) (1)	0.06		%	0.11		%	0.27		%
Net charge-offs/(recoveries) to LHFI ratio (annualized) by loan type(1):
Residential first mortgage	0.11		%	0.26		%	0.60		%
Home equity and other consumer	0.28		%	0.39		%	0.29		%
Commercial real estate	(0.01		)%	0.03		%	(0.02		)%
Commercial and industrial	(0.01		)%	(0.15		)%	(0.01		)%

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

Nonperforming Loans and Assets

(Dollars in millions)

(Unaudited)

	March 31, 2018			December 31, 2017			March 31, 2017
Nonperforming LHFI	$	14		$	13		$	17
Nonperforming TDRs	5			5			5
Nonperforming TDRs at inception but performing for less than six months	10			11			6
Total nonperforming LHFI and TDRs (1)	29			29			28
Real estate and other nonperforming assets, net	5			8			13
LHFS	$	11		$	9		$	21
Total nonperforming assets	$	45		$	46		$	62
Ratio of nonperforming assets to total assets (2)	0.19		%	0.22		%	0.27		%
Ratio of nonperforming LHFI and TDRs to LHFI	0.35		%	0.38		%	0.47		%
Ratio of nonperforming assets to LHFI and repossessed assets (2)	0.42		%	0.48		%	0.69		%

(1) Includes less than 90 day past due performing loans placed on nonaccrual. Interest is not being accrued on these loans.

(2) Ratio excludes LHFS.

14

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
March 31, 2018
Consumer loans	$	4	$	1	$	29	$	34	$	3,514
Commercial loans	—		—		—		—		4,620
Total loans	$	4	$	1	$	29	$	34	$	8,134
December 31, 2017
Consumer loans	$	3	$	2	$	29	$	34	$	3,443
Commercial loans	—		—		—		—		4,270
Total loans	$	3	$	2	$	29	$	34	$	7,713
March 31, 2017
Consumer loans	4		1		28		$	33	$	2,866
Commercial loans	—		—		—		—		3,093
Total loans	$	4	$	1	$	28	$	33	$	5,959

(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
March 31, 2018
Consumer loans	$	44	$	15	$	59
Commercial loans	5		—		5
Total TDR loans	$	49	$	15	$	64
December 31, 2017
Consumer loans	$	43	$	16	$	59
Total TDR loans	$	43	$	16	$	59
March 31, 2017
Consumer loans	$	48	$	11	$	59
Total TDR loans	$	48	$	11	$	59

Representation and Warranty Reserve

(Dollars in millions)

(Unaudited)

	Three Months Ended
	March 31, 2018			December 31, 2017			March 31, 2017
Balance at beginning of period	$	15		$	16		$	27
Gain on sale reduction for representation and warranty liability	1			1			—
Representation and warranty (benefit)	(2		)	(2		)	(4		)
(Charge-offs), net	(1		)	—			—
Balance at end of period	$	13		$	15		$	23

15

Non-GAAP Reconciliation

(Dollars in millions)

(Unaudited)

Tangible book value per share, adjusted net income and adjusted earnings 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. These non-GAAP measures reflect the adjustments 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, adjusted net income and adjusted earnings per share provide a meaningful representation of its operating performance on an ongoing basis. Management uses these measures to assess performance of the Company against its peers and evaluate overall performance. The Company believes these non-GAAP financial measures provide 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 tables provide a reconciliation of non-GAAP financial measures.

Tangible book value per share

	March 31, 2018		December 31, 2017		September 30, 2017		June 30, 2017		March 31, 2017
	(Dollars in millions, except share data)
Total stockholders' equity	$	1,427	$	1,399	$	1,451	$	1,408	$	1,371
Goodwill and intangibles	72		21		21		20		4
Tangible book value	$	1,355	$	1,378	$	1,430	$	1,388	$	1,367
Number of common shares outstanding	57,399,993		57,321,228		57,181,536		57,161,431		57,043,565
Tangible book value per share	$	23.62	$	24.04	$	25.01	$	24.29	$	23.96

Adjusted Net Income and Adjusted Earnings per Share

	Three Months Ended
	March 31, 2018		December 31, 2017
	(Dollars in millions) (Unaudited)
Net income (loss)	$	35	$	(45	)
Adjustment to remove tax reform impact	—		80
Adjusted net income	$	35	$	35
Weighted average diluted common shares	58,314,385		58,311,881
Adjusted diluted earnings per share	$	0.60	$	0.60

16

EX-99.2

1st Quarter 2018 Flagstar Bancorp, Inc. (NYSE: FBC) Earnings Presentation 1st Quarter 2018 April 24, 2018

1st Quarter 2018 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

1st Quarter 2018 Executive Overview Sandro DiNello, CEO

1st Quarter 2018 Strategic highlights 4 Unique relationship-based business model • Delivered consistent earnings despite industry-wide challenges in mortgage origination - Average earning assets flat as continued growth in CRE and C&I loans offset seasonal declines in loans HFS and warehouse loans - Continued subservicing growth; should exceed 500,000 accounts by end of second quarter Strengthen mortgage revenues Grow community banking Highly profitable operations • Solid, consistent financial results despite challenging mortgage market - Net income of $35 million or $0.60 per diluted share; unchanged vs. adjusted 4Q17(1) and up 30% vs. 1Q17 - Noninterest expense fell $5 million, down 3 percent vs. 4Q17, driven by variable cost model and prudent expense management Positioned to thrive in any market • Strong credit metrics and low delinquency levels supported by 1.7 percent allowance coverage ratio • Relatively neutral interest rate risk position • Strong Tier 1 leverage ratio of 8.7 percent, Capital Simplification NPR would improve Tier 1 leverage ratio to 9.2 percent(2) • Average CRE and C&I loans increased $169 million, up 6 percent vs. 4Q17; deposits up 3% • Closed on acquisition of Desert Community Bank branches and Santander mortgage warehouse business • Mortgage revenues totaled $64 million, down 15 percent vs. 4Q17 and up 3 percent vs. 1Q17 • Strong, well-diversified distribution channels will help weather down market and positions us to take advantage of market dislocation 1) Non-GAAP number. Number shown excludes non-cash charge of $80 million, or $1.37 per diluted share, resulting from Tax Cuts and Jobs Act. Please see reconciliation on page 48. 2) Non-GAAP number. Please see reconciliation on page 48.

1st Quarter 2018 Financial Overview Jim Ciroli, CFO

1st Quarter 2018 Financial highlights 6 1) Mortgage revenue is defined as net gain on loan sales HFS plus the net return on the MSRs. Unique relationship-based business model Grow community banking • Net interest income of $106 million, reflecting two fewer days in quarter - Average earning assets unchanged; earning assets at quarter-end of $16 billion - Net interest margin stable; booking attractive spread assets while managing deposit costs - Acquisitions late in the quarter will provide immediate benefits Seasonally lower mortgage revenues Strong asset quality • Negligible net charge-offs • Nonperforming loan ratio fell to 0.35 percent; early stage consumer delinquencies low; no commercial loan delinquencies over 30 days • Allowance for loan losses covered 1.7 percent of loans HFI Robust capital position • Capital remained strong with regulatory capital ratios well above current “well capitalized” guidelines - Tier 1 leverage at 8.7 percent with nearly 50 basis points of trapped capital in MSRs and DTAs - Tier 1 leverage has approximately 370 basis point buffer to “well-capitalized” minimums that would grow to approximately 420 basis points under the Capital Simplification proposal • Net income of $35 million, or $0.60 per diluted share, in 1Q18 - Increased HELOC, CRE and C&I loans - Mortgage revenues down on seasonal decline in originations and margin compression from competitive market - Mortgage Servicing gained scale from sales of MSRs (subservicing retained) • Mortgage revenue(1) down $11 million; lower net gain on loan sales partially offset by higher net return on MSRs - Net gain on loan sales fell $19 million, reflecting lower FOAL (down 11%) and GOS margin (down 14 basis points) - Net return on MSRs 5 percent after transaction costs of $2 million from MSR sales in 1Q18

1st Quarter 2018 1Q18 4Q17 $ Variance % Variance Net interest income $106 $107 ($1) (1%) Provision for loan losses ("PLL") - 2 (2) (100%) Net interest income after PLL 106 105 1 1% Net gain on loan sales 60 79 (19) (24%) Loan fees and charges 20 24 (4) (17%) Loan administration income 5 5 - - Net return on mortgage servicing rights 4 (4) 8 N/M Representation and warranty benefit 2 2 - - Other noninterest income 20 18 2 11% Total noninterest income 111 124 (13) (10%) Compensation and benefits 80 80 - - Commissions and loan processing expense 32 39 (7) (18%) Other noninterest expenses 61 59 2 3% Total noninterest expense 173 178 (5) (3%) Income before income taxes 44 51 (7) (14%) Provision for income taxes 9 16 (1) (7) (44%) Net income $35 $35 (1) - - Diluted income per share $0.60 $0.60 (1) - - Profitability Net interest margin 2.76% 2.76% 0 bps Total revenues $217 $231 ($14) (6%) Net gain on loan sales / total revenue 28% 34% (600 bps) Mortgage rate lock commitments, fallout $7,722 $8,631 ($909) (11%) Mortgage closings $7,886 $9,749 ($1,863) (19%) Net gain on loan sale margin, HFS 0.77% 0.91% (14 bps) Quarterly income comparison $mm Observations • Noninterest income fell $13mm - Net gain on loan sales down $19mm due to seasonal decline in mortgage originations and margin compression from competitive market - Net return on MSRs improved $8mm Noninterest income B • Net interest income declined $1mm • Average earning assets steady at $15.4bn - Net interest margin stable at 2.76% - Deposits grew 3% Net interest income • Noninterest expense decreased $5mm or 3% - Commissions and loan processing expense declined $7mm on lower mortgage closings - Compensation and benefits steady at $80mm - Merger expenses of $1mm Noninterest expense A B C 7 1) Non-GAAP number. Number shown excludes non-cash charge of $80 million, or $1.37 per diluted share, resulting from Tax Cuts and Jobs Act. Please see reconciliation on page 48. N/M – not meaningful C A

1st Quarter 2018 • Tangible common equity to asset ratio of 7.7% • FBC closing share price of $33.61 on April 23, 2018 is 142% of tangible book value per share Equity(4) Average balance sheet highlights 8 • Average deposits increased $287mm, or 3% • Government deposits rose $151mm, or 15% • Retail deposits grew $109mm, or 2%, with mix shift from retail savings to retail CDs - Deposit costs well managed despite slight duration extension from higher CD mix Interest-bearing liabilities Observations • Average loans held-for-investment increased $192mm, or 3% - Higher consumer, CRE and C&I loans offset decline in loans HFS and warehouse loans from seasonal drop in mortgage closings - Acquisitions late in quarter to provide immediate NII growth Interest-earning assets 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 per common share references a non-GAAP number. Please see reconciliation on page 48. $ $ % Loans held-for-sale $4,231 ($306) (7%) Consumer loans(2) 3,468 214 7% Commercial loans(2) 4,019 (22) (1%) Total loans held-for-investment 7,487 192 3% Other earning assets(3) 3,636 89 3% Interest-earning assets $15,354 ($25) (0%) Other assets 1,736 (36) (2%) Total assets $17,090 ($61) (0%) Deposits $9,371 $287 3% Short-term FHLB advances & other 4,032 (297) (7%) Long-term FHLB advances 1,290 (11) (1%) Other long-term debt 494 - 0% Other liabilities 489 43 10% Total liabilities $15,676 $22 0% Stockholders' equity 1,414 (83) (6%) Total liabilities nd stockholders' equity $17,090 ($61) (0%) Tangible book value er common share(4) $23.62 ($0.42) (2%) Incr (Decr)(1) Average Balance Sheet 1Q18 ($mm)

1st Quarter 2018 Asset quality 9 Performing TDRs and NPLs ($mm) 48 46 46 43 49 28 30 31 29 29 $76 $76 $77 $72 $78 3/31/2017 6/30/2017 9/30/2017 12/31/2017 3/31/2018 Peforming TDRs NPLs 1) Excludes loans carried under the fair value option and loans with government guarantees. Allowance coverage(1) (% of loans HFI) 2.4% 2.1% 2.0% 1.8% 1.7% 2.9% 2.5% 2.3% 2.0% 2.0% 1.9% 1.7% 1.7% 1.6% 1.5% 3/31/2017 6/30/2017 9/30/2017 12/31/2017 3/31/2018 Total Consumer Commercial Net charge-offs ($mm) Representation & warranty reserve(2) ($mm) $23 $20 $16 $15 $13 $6 $4 $5 $3 $6 3/31/2017 6/30/2017 9/30/2017 12/31/2017 3/31/2018 Reserve Repurchase pipeline $4 $0 $2 $2 $1 1Q17 2Q17 3Q17 4Q17 1Q18 2) Please see slide 47 in the appendix for further details on the representation and warranty reserve.

1st Quarter 2018 8.5% -32bps +2bps +23bps +28bps 8.7% 14.9% -149bps +35bps +38bps 14.1% 9.2% 15.2% 9.2% 14.2% 12/31/2017 3/31/2018 12/31/2017 3/31/2018 Robust capital Observations 1Q18 Tier 1 CET-1 Tier 1 Total RBC Leverage to RWA to RWA to RWA 1Q18 Actual 8.7% 10.8% 12.9% 14.1% 4 17 ctual 8.5 11.5 13.6 14.9 10 Flagstar Bancorp Capital Ratios Well Capitalized 5.0% • Tier 1 leverage ratio ended quarter at 8.7% (372bp stress buffer above “well capitalized”) - Increase led by earnings retention (28bps) and MSR sales (23bps), partially offset by acquisition of DCB branches and Santander mortgage warehouse business (32bps) - Target range of 8-9% • Closely monitoring total risk-based capital ratio due to increase in risk weights and continued growth in commercial loans - Ended quarter at 14.1% (414bp stress buffer above “well capitalized”) - Target range of 13.5-14.5% • Capital Simplification proposal would increase Tier 1 leverage ratio ~50 bps(2) and total risk-based capital ratio by ~10 bps(2) to support balance sheet growth • Flagstar will generate capital at pre-tax rate as it utilizes its NOL- related DTAs - $66mm of NOL-related DTAs (39bps of Tier 1 leverage) Balance sheet impact(1) Net earnings contribution Impact from 2018 acquisitions Change in MSR balance Proforma ratio under Capital Simplification proposal(2) 2) Non-GAAP number. Please see reconciliation on page 48. 1) Change from 12/31/17 to 3/31/18 includes insignificant impact resulting from 2018 phase-in under Basel III. Tier 1 Leverage Total Risk Based Capital Well Capitalized 10.0%

1st Quarter 2018 Business Segment Overview Lee Smith, COO

1st Quarter 2018 Community banking 12 Quarter-end commercial loan commitments ($bn) Average deposit funding(1) ($bn) 6.4 6.5 6.6 6.5 6.8 1.0 0.9 0.9 1.0 1.1 1.4 1.4 1.5 1.6 1.5 $8.8 $8.7 $9.0 $9.1 $9.4 1Q17 2Q17 3Q17 4Q17 1Q18 Retail Government Company-controlled deposits 1) Includes company-controlled deposits which are included as part of mortgage servicing. 2) Includes brokered certificates of deposits. 1.4 1.7 1.8 1.9 1.9 2.2 2.3 2.7 2.9 2.9 2.4 2.6 2.7 2.8 4.3 $6.0 $6.6 $7.2 $7.6 $9.1 3/31/2017 6/30/2017 9/30/2017 12/31/2017 3/31/2018 Commercial and Industrial Commercial Real Estate Warehouse Average commercial loans ($bn) Average consumer loans ($bn) 0.8 0.9 1.1 1.1 1.2 1.3 1.5 1.6 1.9 2.0 0.7 0.9 1.0 1.0 0.8 $2.8 $3.3 $3.7 $4.0 $4.0 1Q17 2Q17 3Q17 4Q17 1Q18 Commercial and Industrial Commercial Real Estate Warehouse 2.4 2.5 2.6 2.7 2.8 0.5 0.5 0.5 0.6 0.7 $2.9 $3.0 $3.1 $3.3 $3.5 1Q17 2Q17 3Q17 4Q17 1Q18 Residential First Mortgages Other Consumer Loans (2)

1st Quarter 2018 $6.0 $9.0 $8.9 $8.6 $7.7 1Q17 2Q17 3Q17 4Q17 1Q18 3.1 5.5 5.5 5.3 4.5 2.8 3.7 4.1 4.4 3.4 $5.9 $9.2 $9.6 $9.7 $7.9 1Q17 2Q17 3Q17 4Q17 1Q18 Purchase originations Refinance originations Purchase Mix % Mortgage originations 13 54% 58% 55% 54% 59% 3.0 4.6 4.5 4.9 3.9 1.7 2.4 2.2 2.3 2.1 1.2 2.2 2.9 2.5 1.9 $5.9 $9.2 $9.6 $9.7 $7.9 1Q17 2Q17 3Q17 4Q17 1Q18 Conventional Government Jumbo Closings by purpose ($bn) Closings by mortgage type ($bn) Net gain on loan sales – revenue and margin Fallout-adjusted locks ($bn) $48 $66 $75 $79 $60 0.80% 0.73% 0.84% 0.91% 0.77% 1Q17 2Q17 3Q17 4Q17 1Q18 Gain on loan sale Gain on sale margin (HFS)

1st Quarter 2018 Mortgage servicing 14 MSR / regulatory capital (Bancorp) Quarter-end loans serviced (000’s) $ UPB of MSRs sold ($bn) 5.8 17.1 12.0 2.2 1.9 1.6 4.3 $8.0 $19.0 $2.0 $4.3 $12.0 1Q17 2Q17 3Q17 4Q17 1Q18 Bulk Sales Flow Transactions 117 66 87 103 77 242 305 297 310 361 34 31 31 29 32 393 402 415 442 470 3/31/2017 6/30/2017 9/30/2017 12/31/2017 3/31/2018 Serviced for Others Subserviced for Others Flagstar Loans HFI 28% 15% 20% 24% 19% 23% 13% 17% 21% 16% 3/31/2017 6/30/17 9/30/17 12/31/17 3/31/2018 MSR to Tier 1 Common MSR to Tier 1 Capital Average company-controlled deposits ($bn) $1.4 $1.4 $1.5 $1.6 $1.5 1Q17 2Q17 3Q17 4Q17 1Q18

1st Quarter 2018 Noninterest expense and efficiency ratio 15 Quarterly noninterest expense ($mm) and efficiency ratio $140 $154 $171 $178 $173 77% 72% 74% 77% 80% 1Q17 2Q17 3Q17 4Q17 1Q18 Noninterest expense Efficiency ratio ● Higher efficiency ratio led by strategic acquisitions and investments in growth initiatives

1st Quarter 2018 Closing Remarks / Q&A Sandro DiNello, CEO

1st Quarter 2018 Earnings guidance(1) 17 1) See cautionary statements on slide 2. Net interest income • Net interest income up 5-10% - Average earning assets grow 5-10%, led by significant increase in warehouse loans from Santander acquisition and higher CRE (home builder loans) - Net interest margin fairly steady Net gain on loan sales • Net gain on loan sales up 30-40% on seasonal increase in mortgage market led by higher purchase originations - Fallout-adjusted locks up 20-25% - Gain on loan sale margin improves 5-10 bps Mortgage servicing rights (MSRs) • Net return on MSRs approximates 5-7% before transaction costs from MSR sales Other noninterest income • Loan fees and charges up approximately 20% on higher mortgage closings • All other noninterest income declines 5-10% Noninterest expense • Noninterest expense to rise to between $180-$185 million, due to acquisitions closed late in 1Q18 and variable costs to support higher mortgage volume 2nd Quarter 2018 Outlook

1st Quarter 2018 Appendix Company overview 19 Financial performance 25 Community banking 29 Mortgage originations 41 Mortgage servicing 43 Capital and liquidity 44 Asset quality 47 Non-GAAP reconciliation 48

1st Quarter 2018 Flagstar at a glance COMPANY OVERVIEW 99 Branches in Michigan Community banking • Leading Michigan-based bank with a balanced, diversified lending platform • $17.7bn of assets and $10.0bn of deposits • 107 branches • 124k household & 17k business relationships Mortgage origination • Leading national originator of residential mortgages ($36.4bn during last twelve months) • 92 retail home lending offices operating in 31 states • More than 1,000 correspondent and more than 800 broker relationships Mortgage servicing • 8th largest sub-servicer of mortgage loans nationwide • Currently servicing approximately 470k loans • Scalable platform with capacity to service 1 mm loans • Lower cost deposits from escrow balances Corporate Overview • Traded on the NYSE (FBC) • Headquartered in Troy, MI • Market capitalization $1.9bn • Member of the Russell 2000 Index 19 1) Desert Community Bank branch acquisition closed during 1Q18. 2) Includes seven home lending offices located in banking branches. 3) Opes has one retail lending office in Honolulu, HI that is not pictured on this map. 42 Opes retail home lending offices(3) 50 Flagstar retail home lending offices(2) 99 Flagstar Bank branches 8 Desert Community Bank Branches(1) Operations center

1st Quarter 2018 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

1st Quarter 2018 ● Illustrative case studies detailed below: 21 Flagstar’s integrated business model Initial relationship • Established correspondent lending relationship (2017) - Purchased more than $290mm of mortgages since inception (2017) Expanded relationship • Warehouse line of credit (2017) - Commitments of $50mm • Initiated subservicing agreement (2017) - Entire portfolio of newly originated mortgage loans are on-boarded with Flagstar Residential MBS Investor Initial relationship • Bulk sale of MSRs with subservicing retained (2013 - 2014) Expanded relationship • Provided MSR lending facility (2016) - Commitments of $50mm collateralized by FNMA MSRs - Subservice non-Flagstar mortgage accounts providing fee income • Portfolio recapture services provided with direct-to-consumer refinancings of nearly $250mm since inception (2016) • Additional bulk and flow sales of MSRs with subservicing retained (2017 and 2018) Home Builder Initial relationship • Provided home builder line of credit (2016) - Unsecured non-real estate commitments of $30mm - Average commercial deposits of more than $35mm Expanded relationship • Participated in syndicated warehouse facility to captive mortgage operation (2016 - 2017) - Commitments of $36mm - 1 of 3 participants in the syndication Wholesale Originator COMPANY OVERVIEW

1st Quarter 2018 Flagstar has a strong executive team COMPANY OVERVIEW 22 Board of Directors John Lewis Chairman Community Banking Chief Financial Officer • CFO since 8/14 • More than 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 • Appointed President of Mortgage effective 9/17 • Has 15 years experience with Fannie Mae in various executive and leadership roles focused on building banking relationships and growth initiatives 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 Kristy Fercho Jim Ciroli Lee Smith • Executive Vice President, Michigan Market President and Managing Director, Lending • With Flagstar since 12/15 and has 30 years of banking and commercial lending experience in southeast Michigan with Comerica and NBD Chief Audit Officer Sandro DiNello President & CEO Brian Dunn

1st Quarter 2018 Risk management Best-in-class risk management platform with 221 FTEs(1) 23 1) Does not include 28 FTEs in internal audit. 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 51 12 8 8 31 FTEs Regulatory Affairs Modeling & Analytics ERM Chief Credit Officer QC / Appraisal Review MFIU Fraud Investigations Loan Review Operational Risk AML / BSA Compliance 29 Investigative Services 10 COMPANY OVERVIEW

1st Quarter 2018 Strong growth opportunities COMPANY OVERVIEW 24 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 24 B u il d B u y • Pairing a deposit franchise where we currently have mortgage origination offices could enhance synergies between them • Acquiring deposit oriented franchises that support asset generation • Leverage relationship banking models and community banking approach • Opportunistically; no strategic bank buyers of size • Highly fragmented industry with aging individual ownership • Regulatory and interest rate environment should accelerate exits • Can produce compelling returns with reliance only on funding synergies • Opportunistic team lift outs • Grow national lending platforms(1) - Expand warehouse lending (375bp spread) - Grow home builder finance (475bp spread) - Build MSR lending (425bp spread; LTVs<60%) • Cultivate middle-market and business banking relationships • Add specialty lending disciplines and teams 1) Indicated spreads are targets and may not be reflective of actual spreads.

1st Quarter 2018 Long-term targets • Long-term target of 1.1 – 1.7% - Add incremental revenue with low incremental cost - Improved risk management will deliver long-run savings • Long-term target of 12 - 17% - Add / increase high ROE businesses Financial Performance Return on assets Return on equity • Lender of choice in key markets (Michigan, national lending platforms) • 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 • Every 100k in new loans sub-serviced generates $4mm - $6mm of incremental pre-tax profits Revenues Mortgage Banking FINANCIAL PERFORMANCE 25

1st Quarter 2018 $61 $65 $73 $73 $76 $79 $77 $80 $87 $83 $97 $103 $107 $106 $8.7 $9.4 $10.4 $10.7 $11.2 $11.9 $11.6 $12.3 $12.8 $12.3 $14.0 $14.7 $15.4 $15.4 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 Net interest income ($mm) Average earning assets ($bn) ● 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 CAGR 19% CAGR 19% 26 Higher net interest income is stabilizing earnings FINANCIAL PERFORMANCE

1st Quarter 2018 0% 25% 50% 75% 100% $22 $26 $30 $34 $38 $42 $46 3/17 4/17 5/17 6/17 7/17 8/17 9/17 10/17 11/17 12/17 1/18 2/18 3/18 Buy Hold Actual Price Target Price Actual Price $33.61 Target Price $40.88 Price target has increased on improved prospects 27 Analyst rating history FINANCIAL PERFORMANCE Source: Analyst ratings and target price (consensus estimate) as reported by First Call as of 4/16/2018. As of 4/23/2018

1st Quarter 2018 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 7 /3 1 /2 0 1 7 8 /3 1 /2 0 1 7 9 /3 0 /2 0 1 7 1 0 /3 1 /2 0 1 7 1 1 /3 0 /2 0 1 7 1 2 /3 1 /2 0 1 7 1 /3 1 /2 0 1 8 2 /2 8 /2 0 1 8 3 /3 1 /2 0 1 8 . FBC valuation vs. SNL U.S. Bank and Thrift Index 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 7 /3 1 /2 0 1 7 8 /3 1 /2 0 1 7 9 /3 0 /2 0 1 7 1 0 /3 1 /2 0 1 7 1 1 /3 0 /2 0 1 7 1 2 /3 1 /2 0 1 7 1 /3 1 /2 0 1 8 2 /2 8 /2 0 1 8 3 /3 1 /2 0 1 8 Valuation metrics Observation: FBC trades at a discount to its banking peers FINANCIAL PERFORMANCE 28 U .S . p re s iden ti a l e le c ti o n Market / tangible book Price / LTM earnings Market value gap: ~$0.6B . FBC valuation vs. SNL U.S. Bank and Thrift Index 77% 67% 85% U .S . p re s iden ti a l e le c ti o n 77% 57% Market value gap: ~$0.8B 71% Source: SNL Financial; as of 4/16/2018 Source: SNL Financial; as of 4/16/2018

1st Quarter 2018 % YoY Overall MI-based Institution Branches Total Share Change 1 Chase 234 $43,668 21% 5% 2 Comerica 197 29,481 14% 14% 3 PNC 117 17,796 8% 11% 4 Bank of America 190 17,425 8% 5% 5 Fifth Third 211 16,954 8% 7% 6 Huntington 316 14,756 7% 8% 7 1 Chemical 206 11,565 6% 6% 8 2 Flagstar 99 9,024 4% 3% 9 Citizens 95 5,538 3% 9% 10 TCF 52 3,010 1% 13% Top 10 1,717 $169,218 81% 8% 2017 Rank Deposits ($mm) 154 7 35 Strong market position as leading MI-based bank COMMUNITY BANKING 29 Deposit Median Proj HHI Proj pop Market $mm % of total mkt share HHI(2) growth(2)(3) growth(2)(3) Oakland County(1) 3,497 46.4% 6.7% 76,705 11.7% 4.1% Grand Rapids MSA 415 5.5% 2.0% 61,391 10.9% 3.3% Ann Arbor MSA 351 4.7% 4.0% 69,221 8.9% 3.3% Key Flagstar markets 4,262 56.6% 5.3% 74,599 11.4% 3.9% National aggregate 61,045 8.9% 3.5% Flagstar Deposits Source: SNL Financial; Note: Deposit data as of June 30, 2017; MI-based banks highlighted. 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) 2018–2023 CAGR. Flagstar’s branch network Market share Attractive markets Leading position among independent banks

1st Quarter 2018 Deposits Portfolio and strategy overview COMMUNITY BANKING 30 6.4 6.5 6.5 6.5 6.8 2.4 2.2 2.5 2.6 2.6 $8.8 $8.7 $9.0 $9.1 $9.4 1Q17 2Q17 3Q17 4Q17 1Q18 Retail deposits Other deposits Total average deposits ($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 0.73%(1) [CATEGORY NAME], [VALUE] Savings, 37% [CATEGORY NAME], [VALUE] [CATEGORY NAME](2), [VALUE] [CATEGORY NAME], 16% Government, 12% 72% retail Total : $9.4bn 0.73% cost of total deposits(1) 1Q18 total average deposits 1) Total deposits include noninterest bearing deposits. 2) Includes brokered CDs (2)

1st Quarter 2018 Deposit growth opportunities • Average balance of $1.1bn during 1Q18 • Cost of total government deposits: 1.01%(2) during 1Q18 • Michigan deposits are not required to be collateralized • Strong, long-term relationships across the state • Average balance of $0.5bn during 1Q18 • Flagstar is focused on growing commercial deposits - Increasing balances with growing lines of business, including home builder finance • Offer complete line of treasury management services • Average balance of $1.5bn during 1Q18 on 470k loans serviced and subserviced • Low cost of deposits • Deposit balances increase along with the number of loans serviced and subserviced • Average balance of $6.3bn during 1Q18 of which 60% are demand & savings accounts • Cost of total core deposits(1): 0.85%(2) during 1Q18 • Average core deposits of $63mm 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. 31

1st Quarter 2018 154 7 35 Desert Community Bank branches 32 San Bernardino County, CA (High Desert region) Acquired deposits ($mm) – 3/31/2018 • San Bernardino is the fifth largest county in California with 2.1mm residents and a median household income of $60k - Strong projected population growth of 4% and household income growth of 10% • Desert Community Bank has the #2 market share position in the High Desert region of San Bernardino County, CA - San Bernardino County has realized deposit growth of nearly 7% since 2012 (5 year CAGR); potential to grow low-cost deposits Demographics(1)(2) Rank Branch Location Deposits ($mm) 1 Apple Valley $155 2 Victorville (Main Branch) 101 3 Hesperia 88 4 Victorville (North Branch) 87 5 Adelanto 60 6 Barstow 56 7 Wrightwood 38 8 Phelan 38 $623 Average deposits / branch $78 Acquired branch list – 3/31/2018 Market rank ($mm)(1) – 6/30/17 Noninterest bearing 42% Savings & money market 43% Certificates of deposit 15% 0.26% cost of deposits As of 1-Year Rank Bank 6/30/17 % Incr 1 Bank of m rica $626 11% 2 Desert Community Bank $585 9% 3 JPMorgan Chas $479 14% 4 Wells Fargo $478 9% 5 Mitsubishi UFJ $338 7% 6 US Bank $307 5% 7 Citizens Business Bank $112 5% (1) Source: 6/30/17 FDIC Summary of Deposits as reported by SNL Financial. (2) As estimated at July 1, 2015 by the U.S. Census Bureau. COMMUNITY BANKING

1st Quarter 2018 Desert Community Bank branches 33 Transaction summary • Flagstar acquired the branches of Desert Community Bank, a division of East West Bank - 8 branches in High Desert region of San Bernardino County, California - Approximately $600 million of deposits at average cost of 0.26% (62% retail deposits) at 3/31/2018 - Approximately $60 million of loans (82% commercial) at 3/31/2018 Strategic rationale • Fits strategic goal of acquiring deposit-oriented franchises - Provides low-cost, stable funding to continue growing balance sheet • Combines a successful deposit franchise with a significant Flagstar presence already on the West Coast - Largest mortgage origination state (30+% of all Flagstar production) - Market with significant commercial lending activities, including warehouse lending and home builder financing Other considerations • Conducted comprehensive due diligence consistent with a full enterprise acquisition • Operate as a division of Flagstar and will retain: - Existing branding - Employees (currently 67 full-time and 7 part-time) as March 31, 2018 COMMUNITY BANKING

1st Quarter 2018 Lending Portfolio and strategy overview COMMUNITY BANKING 34 3.3 4.3 4.5 4.5 4.2 5.6 6.2 6.8 7.3 7.5 $9.2 $10.8 $11.6 $12.1 $12.0 1Q17 2Q17 3Q17 4Q17 1Q18 Loans HFS Loans HFI Loans with government guarantees 1st Mortgage HFI, 23% 2nds, HELOC & other, 6% Warehouse, 7% [CATEGORY NAME], 27% Loans with government guarantees, 2% [CATEGORY NAME], 35% 1Q18 average loans Total average loans ($bn) • Flagstar’s largest category of earning assets consists of loans held-for-investment which averaged $7.5bn during 1Q18 – 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 $4.2bn during 1Q18 – 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

1st Quarter 2018 Flagstar has deep lending experience COMMUNITY BANKING 35 Sandro DiNello President & CEO Drew Ottaway Managing Director of Lending & Michigan Market President Commercial Real Estate Comprised of commercial and homebuilder lending officers with 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 25 years average banking experience Commercial & Industrial Comprised of lending officers with 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 25 years average banking experience. Warehouse Lending Comprised of lending officers with average experience of 26 years in banking. Prior banking experience includes Citizens Bank, Bank of America and Texas Capital. In 2018, we acquired experienced lenders from Santander Bank. Supported by a team of credit officers with nearly 25 years average banking 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 25 years average banking experience. Homebuilder Finance Comprised of lending officers with have extensive experience of more than 20 years in banking. Prior banking experience includes Texas Capital and Royal Bank of Canada. Supported by a team of credit officers with more than 25 years average banking experience. Consumer Finance Consumer Finance supports the product functionality and pricing of consumer lending products. Processing and Underwriting supports the adjudication of loan applications received from the Retail Branch and Direct to Consumer lending channels. Supported by a management team with more than 25 years average consumer lending experience.

1st Quarter 2018 Community banking growth model • Primary focus is to build relationships - Recruit experienced bankers from larger regional banks - Retain seasoned bankers within our organization • Leverage deep industry experience and client relationships - Focus on moving relationships and credit facilities to Flagstar • Low incremental efficiency ratio - Marginal cost of 15-30% that varies with type of loans underwritten • Estimated pre-tax contribution of $5bn loan growth could contribute ~$1.00 earnings per share New banker additions (past 2 years) 36 Relationship-based growth platform (1) We focus on recruitment of bankers with larger, regional bank lending experience. # of Avg Years Line of Service Additions Experience(1) Business Banking 7 24 Commercial Lending 10 23 Consumer Finance 3 20 CRE Lending 5 10 Equip Financing 6 27 Home Builder Finance 15 20 Indirect Lending 3 22 Warehouse Lendng 2 18 Wealth Management 2 17 Grand Total 53 22 COMMUNITY BANKING

1st Quarter 2018 Commercial lending Diversified relationship-based commercial lending capabilities COMMUNITY BANKING Commercial Real Estate - $2.0bn (3/31/18) Home builder finance 27% Multi- family 20% Retail 15% Office 10% Industrial 11% Hospitality 6% Other 11% Commercial & Industrial - $1.2bn (3/31/18) Financial, insurance & real estate 33% Services 26% Manufacturing 16% Healthcare 9% Distribution 8% Government & education 6% Other 2% Warehouse - $1.4bn (3/31/18) Overview • Warehouse lines with approximately 275 active relationships nationwide, of which approximately 85% 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 ~130 borrowers sell >75% ~50 borrowers sell 25% - 75% ~95 borrowers sell <25% Average 32% advances sold to Flagstar Industry % Advances sold to Flagstar Property type 37 17% owner occupied 44% Michigan relationships; 20% National finance; 9% Home builder finance

1st Quarter 2018 1.2 1.2 1.2 1.1 1.4 1.2 1.4 1.5 1.7 2.9 $2.4 $2.6 $2.7 $2.8 $4.3 3/31/17 6/30/17 9/30/17 12/31/2017 3/31/2018 Outstandings Unfunded Commitments FBC warehouse loan commitments ($mm) Warehouse lending COMMUNITY BANKING 38 Warehouse lenders ranked by commitments ($mm) 1) Proforma - includes Santander warehouse commitments which were acquired 3/12/2018. Source: Inside Mortgage Finance as of March 2, 2018. ● National relationship-based lending platform ● Attractive asset class with good spreads and low credit risk ● Strong growth potential and scalable platform ● Flagstar is well positioned to gain market share, leveraging relationships in complementary lines of business, including home builder finance and mortgage originations YOY Rank Institution Growth Total Share 1 JPMorgan Chase 33% $12,000 18% 2 Wells Fargo 2% 5,900 9% 3 Texas Capital 18% 5,308 8% 4 Flagstar Bancorp (1) -9% 5,018 7% 5 BB&T 5% 3,770 6% 6 TIAA FSB (Everbank) -10% 3,700 6% 7 Comerica -19% 3,536 5% 8 Customers Bank 1% 3,475 5% 9 First Tennessee -4% 3,130 5% 10 U.S. Bancorp 5% 2,638 4% Top 10 5% $48,475 72% 4Q17

1st Quarter 2018 Santander acquisition 39 Transaction summary • Flagstar acquired mortgage warehouse business from Santander Bank on March 12, 2018 - Approximately $1.7 billion of commitments and $0.5 billion of outstanding loans • Diversifies warehouse business with low customer overlap Strategic rationale • Strengthens national, relationship based lending platform • Expands commercial customer base, providing opportunity to leverage relationships in complementary lines of business • Adds volume in an attractive asset class with good spreads and relatively low credit risk • Strong growth potential with scalable platform Other considerations • Conducted comprehensive due diligence, including financial analysis, credit review and an evaluation of risk management • Retained 9 full-time employees - Santander team has joined Flagstar’s Warehouse Lending group COMMUNITY BANKING

1st Quarter 2018 Home builder finance COMMUNITY BANKING 40 Home builder loan commitments(2) ($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 have relationships with 6 of the top 10 and 44 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 $365 $494 $619 $699 $656 $403 $484 $559 $567 $765 $768 $978 $1,178 $1,266 $1,421 3/31/17 6/30/17 9/30/17 12/31/2017 3/31/2018 Unpaid principal balance Unused Tightening housing supply(1) 0 2 4 6 8 10 12 0 1 2 3 4 5 6 7 8 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 2 0 1 8 Existing home sales (mm) Months supply of existing homes for sale 1) Source: Bloomberg (through 2/28/18) 2) Commitments are for loans classified as commercial real estate and commercial & industrial. (left axis) (right axis)

1st Quarter 2018 • 4.3% market share with #7 national ranking(1) • More than 1,000 correspondent partners in 50 states in 1Q18 • Top 10 relationships account for 14% of overall correspondent volume • Warehouse lines with approximately 280 correspondent relationships National distribution through multiple channels MORTGAGE ORIGINATIONS 41 Residential mortgage originations by channel ($bn) Broker Correspondent Retail $4.5 $7.0 $7.0 $7.3 $5.8 1Q17 2Q17 3Q17 4Q17 1Q18 $1.0 $1.4 $1.3 $1.2 $1.1 1Q17 2Q17 3Q17 4Q17 1Q18 $0.4 $0.8 $1.3 $1.2 $1.0 1Q17 2Q17 3Q17 4Q17 1Q18 • 2.5% market share with #7 national ranking(1) • Approximately 800 brokerage relationships in 50 states in 1Q18 • Top 10 relationships account for 15% of overall brokerage volume 1) Data source: As reported by Inside Mortgage Finance for 3Q17 published November 24, 2017. • Retail distribution share of 12% in 1Q18 vs. 7% in 1Q17 • Opes acquisition and organic growth has expanded our retail footprint to 92 locations in 31 states • Direct-to-consumer is 13% of retail volume

1st Quarter 2018 1 .3 1 .9 2 .1 1 .5 1 .2 1 .4 1 .5 2 .9 2 .3 1 .8 3 .5 4 .3 5 .6 3 .9 4 .1 3 .5 3 .0 1 .9 2 .4 2 .0 1 .6 2 .2 2 .0 1 .3 1 .7 2 .1 1 .8 1 .7 1 .7 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 2 0 1 8 F 2 0 1 9 F $ in t rill io n s Flagstar has restructured its operations to be profitable even at historical lows for the mortgage origination market 42 MORTGAGE ORIGINATIONS Source: Mortgage Bankers Association 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 Bureau of Labor Statistics (2017 = 100). 2. Adjusted for population growth as reported by the U.S. Census Bureau (2016 = 100). U.S. residential mortgage origination market (historical and projected volumes) Nominal ($) 0.6 0.9 1.0 0.8 0.6 0.8 0.8 1.7 1.4 1.1 2.2 2.9 3.8 2.8 3.0 2.7 2.4 1.5 2.0 1.7 1.4 2.0 1.8 1.3 1.7 2.1 1.8 1.7 1.7 Real(1) ($) 1.0 1.6 .7 1.3 1.0 1.2 1.3 2.5 2.0 .6 3.1 3. 5.1 3.6 .8 3.3 .8 .8 .3 .9 .6 .2 2.0 . . . . . . Adjusted(2) ($) .3 .9 2.1 .5 .2 .4 .5 .9 .3 1.8 .5 4.3 .6 .9 4.1 .5 3.0 1.9 2.4 2.0 1. 2. . 1.3 1.7 2.1 1.8 1.7 1.7

1st Quarter 2018 Freddie 25% Fannie 25% GNMA 46% Private 4% by Investor 154 7 35 MSR portfolio MSR portfolio characteristics (% UPB) MSR portfolio statistics Measure ($mm) 12/31/2017 3/31/2018 Difference Unpaid principal balance $25,073 $18,767 ($6,306) Fair value of MSR $291 $239 ($52) Capitalized rate (% of UPB) 1.16% 1.27% 11 bps Multiple 4.015 4.158 0.143 Note rate 4.054% 3.968% 8.6 bps Service fee 0.289% 0.305% 1.6 bps Average Measure ($000) UPB per loan $243 $242 ($1) FICO 722 706 (16) Loan to value 76.61% 80.97% 436 bps Net (loss) return on mortgage servicing rights ($mm) $ Return 1Q17 2Q17 3Q17 4Q17 1Q18 Net hedged profit (loss) $2 $0 $0 ($1) ($1) Carry on asset 14 9 9 11 8 Run-off (6) (4) (4) (7) (5) Gross return on the mortgage servicing rights $10 $5 $5 $3 $2 Sale transaction & P/L (1) 1 1 (3) 1 Model changes 5 0 0 (4) 1 Net return on the mortgage servicing rights $14 $6 $6 ($4) $4 Average mortgage servicing rights $344 $205 $212 $269 $269 2016 & later; 79% 2015; 12% 2014; 4% 2013 & prior; 5% by Vintage MORTGAGE SERVICING 43 2018 19% 2017 69% 2016 4% 2015 & prior 8% By intage

1st Quarter 2018 154 7 35 Balance sheet composition CAPITAL AND LIQUIDITY 44 3% Other liabilitie s 3% Other long- term debt Liabilities & Equity 1Q18 average balance sheet (%) Assets Attractive relationship lending with no loans >30 days delinquent and still accruing Primarily low risk, stable assets (FHLB stock, BOLI, premises & equipment, deferred tax asset, etc.) ~71% 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 8% Other assets 5% Warehouse loans 25% Loans held-for-sale 18% Commercial loans Efficiently funds loans held-for-sale and warehouse loans 46% Deposits excluding company- controlled deposits (“CCD”) 31% FHLB borrowings 8% Common equity 9% Company-controlled deposits (“CCD”) 22% Mortgage loans held-for-investment 19% Agency MBS 1% Cash 2% MSR

1st Quarter 2018 Liquidity and funding 154 7 35 CAPITAL AND LIQUIDITY 45 66% 73% 78% 83% 84% 1Q17 2Q17 3Q17 4Q17 1Q18 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)

1st Quarter 2018 Low interest rate risk CAPITAL AND LIQUIDITY 46 -7.5% -8% -6% -4% -2% 0% 2% 4% 3/31/2017 6/30/2017 9/30/2017 12/31/2017 3/31/2018 down 100bps up 100bps +/-100bps limit 0bps 50bps 100bps 150bps 200bps 250bps 300bps 350bps 400bps 450bps 500bps 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 3/31/2018 Net interest margin – 12 month horizon instantaneous shocks ($mm) Economic value of equity, trend (3/31/17 – 3/31/18) ($ in mm) +100bps Bear Flattener Net interest income $20 ($40) Noninterest Income ($20) to $0 $0 to $40 Scenario

1st Quarter 2018 503 135 91 103 FY15 FY16 FY17 LTM 3/18 Repurchase demands Representation & Warranty reserve details (in millions) 3/31/17 6/30/17 9/30/17 12/31/17 3/31/18 Beginning balance $27 $23 $20 $16 $15 Additions (release) (4) (2) (3) (1) (1) Net (charge-offs) / recoveries 0 (1) (1) 0 (1) Ending Balance $23 $20 $16 $15 $13 Repurchase pipeline ($mm) Repurchase reserve ($mm) ASSET QUALITY $6 $4 $5 $3 $6 3/31/2017 6/30/2017 9/30/2017 12/31/2017 3/31/2018 47 Repurchase rate(1)(2) 1) As reported, where available, by Inside Mortgage Finance and Inside Mortgage Trends for the top 25 mortgage originators for the year ending 12/31/2017. 2) Repurchase rate is defined as mortgages repurchased / mortgages originated. 2 0.46% 0.23% 0.03% Average Median Flagstar

1st Quarter 2018 Non-GAAP reconciliation NON-GAAP RECONCILIATION 48 $mm 1) Reflects the 4Q17 non-cash charge resulting from Tax Cuts and Jobs Act. 3 M o nths Ended A djusted N et Inco me and D iluted Earnings per Share 12/ 31/ 2017 Net Income (45)$ Adjustment to remove tax reform charge(1) 80 A djusted N et Inco me 35$ Weighted average diluted common shares 58,311,881 A djusted D iluted Earnings per Share 0.60$ T angible B o o k Value per Share as o f 3/ 31/ 2018 as o f 12/ 31/ 2017 Total stockholders' equity 1,427$ 1,399$ Goodwill and intangible assets 72 21 Tangible book value 1,355$ 1,378$ Number of common shares oustanding 57,399,993 57,321,228 T angible bo o k value per share 23.62$ 24.04$ M arch 3 1, 2 0 18 C ommon Equit y T ier 1 ( t o R isk W eight ed A sset s) T ier 1 Leverage ( t o A d just ed Tang ib le A sset s) T ier 1 C ap it al ( t o R isk W eight ed A sset s) To t al R isk- B ased C ap it al ( t o R isk W eight ed A sset s) R egulat ory cap it al - B asel I I I t o cap it al simp lif icat ion Basel III $ 1,235 $ 1,475 $ 1,475 $ 1,617 Net change in deductions to DTAs, M SRs and other capital components 85 86 86 86 Basel III with capital simplif icat ion $ 1,320 $ 1,561 $ 1,561 $ 1,703 Risk-weight ed asset s – Basel I I I t o cap it al simp lif icat ion Basel III assets $ 11,440 $ 16,918 $ 11,440 $ 11,440 Net change in assets 526 85 526 526 Basel III with capital simplif icat ion $ 11,966 $ 17,003 $ 11,966 $ 11,966 C apit al rat ios Basel III (t ransit ional) 10.8% 8.7% 12.9% 14.1% B asel I I I wit h cap it al simp lif icat ion 11.0 % 9 .2 % 13 .0 % 14 .2 %