Flagstar Bancorp Q42008 earnings report

Flagstar BancorpTroy, Michigan

Presenter:

Thomas J. HammondChairman of the Board

January 30, 2009

Q4 2008 Results

January 30, 2009 2

The information contained in this presentation is not intended as a solicitation to buy Flagstar Bancorp, Inc. stock and is provided for general information.

This presentation may include forward-looking statements and include comments with respect to our objectives and strategies, and the results of our operations and our business. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words such as “expects,” “assumes”, “anticipates,” “intends,” “plans,” “believes,”“seeks,” “estimates,” or words of similar meaning, or future or conditional verbs such as “assuming”, “will,” “would,” “should,” “could”or “may.”

Forward-looking statements provide our expectations or predictions of future conditions, events or results. They are not guarantees of future performance. By their nature, these forward-looking statements involve numerous assumptions, uncertainties and opportunities, both general and specific. These statements speak only as of the date they are made. 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. There a number of factors, many of which are beyond our control that could cause actual conditions, events or results to differ significantly from those described in the forward looking statements. Some of these are:

- Volatile interest rates that impact, amongst other things, (i) the mortgage banking business, (ii) our ability to originate loans and sell assets at a profit, (iii) prepayment speeds and (iv) our cost of funds, could adversely affect earnings, growth opportunities and our ability to pay dividends to shareholders.

- Our ability to raise additional capital, either through the TARP Capital Purchase program or through private sources.

- Competitive factors for loans could negatively impact gain on loan sale margins.

- Competition from banking and non-banking companies for deposits and loans can affect our growth opportunities, earnings, gain on sale margins and our ability to open new branches, as well as our market share and our ability to diversify our commercial and residential loan portfolio.

- Changes in the regulation of financial services companies and government-sponsored housing enterprises, and in particular, declines in the liquidity of the mortgage loan secondary market, could adversely affect business.

- Changes in regulatory capital requirements or an inability to achieve desired capital ratios could adversely affect our growth and earnings opportunities and our ability to originate certain types of loans, as well as our ability to sell certain types of assets for fair market value.

- General business and economic conditions, including unemployment rates, movements in interest rates, the slope of the yield curve, any increase in mortgage fraud and other criminal activity and the potential decline of housing prices in certain geographic markets, may significantly affect the company’s business activities, loan losses, reserves and earnings.

- Factors concerning the implementation of proposed enhancements could result in slower implementation times than we anticipate and negate any competitive advantage that we may enjoy.

When relying on forward-looking statements to make decisions, investors should carefully consider the aforementioned factors as well as other uncertainties and events.

Legal Disclaimer

January 30, 2009 3

Q4 Credit Related Charges

** Totals may not foot due to rounding

Item Q4 Charge

Loan loss provision $176.3Loss on net loan administration income $46.2Other than temporary impairment (OTTI) on AFS securities $43.7REO disposition $16.4Reserve increase for reinsurance $9.8

Total $292.4

For the quarter ending Dec 31, 2008($ in millions)

January 30, 2009 4

Q4 Income Statement

(Dollars in millions, except for per share data)Q4 2008 Q3 2008 Q4 2007

Net interest income 46.5$ 59.8$ 54.1$ Provision for loan losses 176.3 (89.6) (38.4) Net interest income (loss) after provision (129.8) (29.8) 15.7

Non-interest income (57.5) 53.4 18.5 Non-interest expense (120.8) (119.2) (80.6) Loss before federal income tax (308.1) (95.6) (46.4)

Benefit for federal income taxes (107.8) (33.5) (16.4) Net Loss (200.3)$ (62.1)$ (30.1)$

Diluted loss per share (2.40)$ (0.79)$ (0.50)$


January 30, 2009 5

Q4 Non-Interest Income

(Dollars in millions)Q4 2008 Q3 2008 Q4 2007

Loan administration (46.2)$ 25.7$ 2.6$ Gain (loss) on MSR sales, net 1.4 0.9 (0.3) Gain (loss) on loan sales and securitizations 16.7 22.2 26.3 Other income (29.4) 4.6 (10.2) Total non-interest income (57.5)$ 53.4$ 18.5$

Loans sold $ 5,711 $ 6,810 $ 5,955 Sales spread 0.29% 0.33% 0.37%

M emo: Other income includes net loan fees and charges, deposit fees and charges, income from subsidiaries and impairment to residual charges and AFS securities


January 30, 2009 6

Loan Production – Historical Trend

$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Full Year

2006 2007 2008

($ In millions)


January 30, 2009 7

Loan Production

(Dollars in millions) Q4 2008 Q3 2008 Change Q4 2007 Change

Residential mortgage loans $ 5,390 $ 6,681 $ (1,291) $ 6,493 $ (1,103)Consumer loans 4 11 (7) 42 (38) Commercial (Real Estate and Other) 11 23 (12) 155 (144) Total $ 5,405 $ 6,715 $ (1,310) $ 6,690 $ (1,285)


January 30, 2009 8

Historical Residential Loan Underwriting Volume

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Jan

Feb

Mar AprMay Ju

n Jul

AugSep

tOct

Nov Dec

(val

ues

in m

illio

ns) 2004

2005200620072008

2004 2005 2006 2007 2008January 3,891 2,469 2,005 2,498 4,956February 4,515 3,450 2,031 2,774 5,436March 6,430 3,289 2,661 4,023 5,169April 4,301 3,104 2,243 3,615 4,623May 2,805 3,492 2,469 3,736 4,347June 2,792 4,153 2,204 3,471 3,850July 3,133 3,536 1,979 3,325 4,008August 3,582 3,645 2,585 4,447 3,366September 3,690 3,356 2,243 3,698 4,108October 4,055 2,604 2,546 4,026 3,015November 3,821 2,107 2,529 4,068 2,426December 3,224 1,896 2,541 4,181 5,176

Total: 46,240 37,101 28,036 43,862 50,479


January 30, 2009 9

Historical Residential Loan Lock Volume

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

5,500

6,000

6,500

Jan

Feb

Mar AprMay Ju

n Jul

AugSep

tOct

Nov Dec

(val

ues

in m

illio

ns) 2004

2005200620072008


Total: 42,092 36,114 26,851 37,678 45,079


January 30, 2009 10

Historical Residential Loan Closing Volume

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

Jan

Feb

Mar AprMay Ju

n Jul

AugSep

tOct

Nov Dec

(val

ues

in m

illio

ns) 2004

2005200620072008


Total: 32,596 27,190 18,652 25,747 28,009


January 30, 2009 11

Deposits(Dollars in millions)

BalanceWeighted

Average Rate BalanceWeighted

Average Rate BalanceWeighted

Average RateDemand deposits 417$ 0.47% 419$ 0.63% 436$ 1.60%Savings deposits 408 2.24% 410 2.50% 238 2.90%Money market deposits 562 2.61% 521 2.68% 532 3.86%Certificates of deposit 3,968 3.93% 3,531 4.03% 3,871 4.99% Total retail deposits 5,354$ 3.40% 4,881$ 3.48% 5,076$ 4.48%

Custodial Deposits 535 - 469 - 473 -Municipal deposits 598 2.84% 1,101 3.12% 1,545 5.04%Wholesale deposits 1,354 4.41% 970 4.59% 1,142 4.64% Total deposits $ 7,841 3.30% $ 7,421 3.35% $ 8,237 4.35%

Number of banking branches

As of Dec 31, 2008 As of Sep 30, 2008 As of Dec 31, 2007

173 164175


January 30, 2009 12

Selected Balance Sheet Items

(Dollars in millions, except for per share data) Dec 31, 2008 Sep 30, 2008 Dec 31, 2007

Total assets 14,209.7$ 14,159.4$ 15,792.7$

First mortgage loans 5,959 6,134 5,824 Second mortgage loans 287 292 57 Commercial real estate loans 1,779 1,737 1,542 Consumer loans 543 537 282 Other investment loans 514 435 429 Investment loan portfolio 9,082$ 9,135$ 8,134$

Loans held for sale 1,484.7$ 1,961.4$ 3,511.3$ Investment securities avail. for sale 1,118 1,041 1,309 Mortgage servicing rights 511 732 414 Stockholders' equity 478 676 693 Mortgage loans serviced for others 55,870$ 51,831$ 32,487$

As of


January 30, 2009 13

Residential First Mortgage – By State

ARM Fixed Total % of Total ARM Fixed Balloon First

HELOC Power

Option ARM Total % of Total

CA 9,230$ 298,281$ 307,511$ 20.7% 1,156,680$ 518,911$ 1,827$ 483$ 21,590$ 1,699,491$ 28.7%FL 165 77,119 77,283 5.2% 636,747 165,150 2,607 2,212 23,123 829,839 14.0%MI 1,760 98,892 100,652 6.8% 465,159 65,744 8,950 1,039 4,635 545,528 9.2%

WA 1,901 72,251 74,151 5.0% 223,909 80,764 525 - 6,429 311,627 5.3%AZ 282 56,869 57,151 3.8% 178,512 70,414 1,685 7 2,698 253,316 4.3%TX 1,108 74,955 76,062 5.1% 105,077 74,400 584 - 3,564 183,625 3.1%CO 751 43,911 44,662 3.0% 159,555 37,865 3,366 328 1,278 202,391 3.4%MD 1,765 46,788 48,553 3.3% 98,669 38,230 371 - 483 137,753 2.3%VA 674 43,707 44,381 3.0% 98,733 27,032 165 - 2,774 128,705 2.2%NV - 23,722 23,722 1.6% 113,686 26,814 2,631 - 1,791 144,922 2.5%NY 541 43,603 44,144 3.0% 63,069 53,721 514 - 1,100 118,404 2.0%GA 390 33,236 33,627 2.3% 64,105 26,269 32,081 - 533 122,988 2.1%IL 486 42,635 43,121 2.9% 83,175 22,640 540 - 1,097 107,451 1.8%NJ 304 31,114 31,418 2.1% 73,500 41,081 455 517 2,069 117,621 2.0%OH - 31,342 31,342 2.1% 82,727 16,171 713 123 78 99,812 1.7%

OTHER 6,644 440,171 446,814 30.1% 614,274 251,165 31,923 1,963 11,637 910,962 15.4%

Total : 26,001$ 1,458,593$ 1,484,593$ 100% 4,217,578$ 1,516,370$ 88,936$ 6,672$ 84,878$ 5,914,433$ 100%

State

AFS HFI

Residential First Mortgages *As of Dec 31, 2008

($ in thousands)

* Excludes net prem/disc, FAS 91, negative escrow and participation loans


January 30, 2009 14

Residential First Mortgage – By LTV


HELOC

Power Option ARM

Total % of Total

< 70% 6,500$ 175,463$ 181,963$ 12.3% 1,448,013$ 587,879$ 10,790$ 2,888$ 2,260$ 2,051,830$ 34.7%

70% - 79.99% 7,088 158,854 165,942 11.2% 1,808,590 683,863 10,774 2,464 2,896 2,508,586 42.4%

80% - 90% 2,842 204,700 207,543 14.0% 752,314 154,182 51,017 1,320 79,722 1,038,556 17.6%

> 90% 9,570 919,576 929,146 62.6% 208,661 90,446 16,355 - - 315,462 5.3%

Total : 26,001$ 1,458,593$ 1,484,593$ 100% 4,217,578$ 1,516,370$ 88,936$ 6,672$ 84,878$ 5,914,433$ 100%

LTV

AFS HFI


($ in thousands)



January 30, 2009 15

Residential First Mortgage – By FICO

ARM Fixed Total % of Total ARM Fixed Balloon First HELOC

Power Option ARM

Total % of Total

No score -$ 89,800$ 89,800$ 6.0% 28,198$ 10,480$ -$ 6,672$ -$ 45,351$ 0.8%

< 580 406 15,684 16,090 1.1% 41,101 26,442 - - - 67,543 1.1%

580 - 619 1,864 164,749 166,613 11.2% 52,962 31,908 - - - 84,870 1.4%

620 - 659 6,411 267,659 274,071 18.5% 238,423 90,681 1,998 - 150 331,252 5.6%

660 - 699 5,442 286,394 291,836 19.7% 1,126,594 382,910 20,428 - 1,840 1,531,772 25.9%

> 700 11,877 634,307 646,184 43.5% 2,730,299 973,947 66,510 - 82,889 3,853,645 65.2%

Total : 26,001$ 1,458,593$ 1,484,593$ 100% 4,217,578$ 1,516,370$ 88,936$ 6,672$ 84,878$ 5,914,433$ 100%

FICO

AFS HFI


($ in thousands)



January 30, 2009 16

Residential First Mortgage – By Vintage


HELOC Power

Option ARM Total % of Total

2000 and older -$ -$ -$ 0.0% 66,043$ 27,289$ 516$ -$ -$ 93,847$ 1.6%2001 - - - 0.0% 11,401 11,130 115 - - 22,646 0.4%2002 - - - 0.0% 37,454 17,340 80 - 585 55,459 0.9%2003 - - - 0.0% 485,810 58,913 11,047 - 3,032 558,801 9.4%2004 - - - 0.0% 1,114,644 53,165 2,269 3,992 1,499 1,175,570 19.9%2005 - - - 0.0% 1,151,405 39,456 2,519 1,780 13,296 1,208,457 20.4%2006 - 138 138 0.0% 351,378 282,490 40,813 383 39,179 714,242 12.1%2007 236 - 236 0.0% 950,030 995,360 30,007 517 27,288 2,003,202 33.9%2008 25,765 1,458,454 1,484,219 100.0% 49,413 31,226 1,570 - - 82,209 1.4%

Total : 26,001$ 1,458,593$ 1,484,593$ 100% 4,217,578$ 1,516,370$ 88,936$ 6,672$ 84,878$ 5,914,433$ 100%

Vintage

AFS HFI


($ in thousands)



January 30, 2009 17

Non Agency Investment Securities Available for Sale PortfolioAs of Dec 31, 2008

($ in 000’s)

Balances

Security CUSIPCurrent

Principal1OTTI

ImpairmentOCI/Mark-to-

MarketNet Book

Value M SP F M SP F

CWHl 2006-J8 23245LAD2 $38,627,178 ($19,000,525) $ - $19,626,653 NR AAA AAA NR B CCCWALT 2007-1T1 23246KAA9 41,796,612 (24,691,469) - 17,105,143 Aaa AAA AAA Baa2 B CCCWHL 2007-J1 12669MAA6 85,217,290 (16,309,146) 68,908,144 NR AAA AAA NR BB A *-GSR 2006 7F 36298NAD6 42,729,099 (14,370,592) 28,358,508 Aaa NR AAA Ba2 NR AAACWALT 2006-45T1 02149JAU0 38,120,371 (18,678,505) 19,441,866 Aaa AAA AAA Aaa AAA BBJPMMT 2006 S4 46629SAG7 79,159,559 (24,731,704) 54,427,855 Aaa AAA AAA Baa2 A AAACWHL 2007-3 12543RAA7 44,425,620 (23,052,278) 21,373,342 NR AAA AAA NR BBB AAAGSR 2006 9F 3622X7AD8 41,825,592 (11,285,671) 30,539,922 Aaa NR AAA A1 NR AAACWHL 2005-23 126694GU6 42,543,896 (7,664,207) 34,879,689 NR AAA AAA NR AAA AAACWHL 2006-18 12543WAA6 40,460,968 (11,046,266) 29,414,701 NR AAA AAA NR AAA AAACWHL 2006-1 126694XC7 35,645,381 (11,665,355) 23,980,027 NR AAA AAA NR AAA AAA

Subtotal $530,551,567 ($43,691,994) ($138,803,723) $348,055,849

GMS Trust 2006-1 33848FAA1 $230,004,951 ($14,978,249) $215,026,702 Aaa AAA NR Baa1 AAA NRSubtotal $230,004,951 $ - ($14,978,249) $215,026,702

Total $760,556,518 ($43,691,994) ($153,781,972) $563,082,552

RatingsInitial Current


January 30, 2009 18

Real Estate Owned Portfolio

Commercial % Construction % Manufactured Homes

% Single Family Homes

% Total %

Current month $2,235 10.9% $ 285.76 9.7% $ 51.00 6.2% $6,191 7.3% $8,763 8.0%30 days - - 353 - - - 12,136 14.3% 12,489 11.4%60 days 399 2.0% 1,114 37.6% 67 8.2% 11,930 14.0% 13,510 12.4%90 days 197 - 214 7.2% - - 8,295 9.8% 8,706 8.0%91 - 180 days 3,974 19.4% 399 13.5% 329 40.2% 18,582 21.9% 23,284 21.3%181 - 365 days 8,124 39.7% 465 15.7% 66 8.1% 16,765 19.7% 25,420 23.3%1 - 2 years 2,710 - - - 128 15.6% 9,820 11.6% 12,658 11.6%2 - 3 years 1,333 6.5% 93 3.1% 67 8.2% 816 1.0% 2,309 2.1%3 - 4 years 1,471 7.2% 38 1.3% - - 383 0.5% 1,893 1.7%4 - 5 years - - - - - - 95 0.1% 95 0.1%Over 5 years - - - - 110 13.4% - - 110 0.1%In Process - - - - - - - - 60 0.1%

Total: $20,444 85.8% $2,961 88.1% $818 100.0% $85,014 100.0% $109,297 100.0%


As of Dec 31, 2008($ in 000’s)

January 30, 2009 19

Asset Quality

Dec 31, 2008 Sep 30, 2008 Dec 31, 2007

Delinquency rate (90+ days)1 6.93% 4.53% 2.42%Non-performing assets2 to total assets 5.33% 3.87% 1.90%Net charge-off ratio3 1.08% 0.83% 0.58%Net charge-offs (in millions) $ 24.3 $ 19.6 $ 12.2

Non-performing loans (in millions) $ 629.5 $ 413.7 $ 197.1Allowance to non-performing loans 59.7% 54.1% 52.8%Allowance to loans held for investment 4.14% 2.45% 1.28%Allowance for loan losses (in millions) $ 376.0 $ 224.0 $ 104.0

1 Calculated using the OTS Method2 Includes non-performing loans, real estate ow ned and repurchased assets3 Ratio of charge-offs to average investment loans

As of / For the Quarter Ending


January 30, 2009 20

Asset Quality by Loan Type - HFI(unaudited)($ in 000's)

BalanceNon

PerformingLoans 1

% of Balance% of Overall

Delinquencies

Annualized Q4 '08 Charge Off

Ratio

Total General Reserves 2

Total Specific

Reserves

Total Reserves

Mortgage $5,958,748 $432,652 7.26% 68.73% 0.73% $142,027 $14,776 $156,802Second Mortgage 287,350 10,148 3.53% 1.61% 4.39% 16,674 - 16,674

HELOC 408,366 13,148 3.22% 2.09% 2.04% 12,500 742 13,242

Commercial Real Estate 1,779,363 164,496 9.24% 26.13% 0.87% 74,143 99,061 173,204Commercial 24,668 1,744 7.07% 0.28% 0.13% 289 746 1,036

Construction 54,749 5,674 10.36% 0.90% 2.66% 1,735 1,617 3,352Warehouse 434,140 - - - 0.29% 3,432 - 3,432

Other Consumer 134,737 1,595 1.18% 0.25% 1.01% 1,804 75 1,879

Total : $9,082,121 $629,457 6.93% 100.00% 1.03% $252,603 $117,017 $369,620

As of Dec 31, 2008

1. 90 day + matured, calculated using OTS method.2. General reserves do not include $5.5 million in unallocated reserve and $146 thousand of reserve allocated to deposits


January 30, 2009 21

Historical Delinquency Trends - HFI

12/31/07 03/31/08 06/30/08 09/30/08 12/31/08

30 day delinquency rate - LHI * 0.74% 0.95% 1.05% 1.17% 1.74%

60 day delinquency rate - LHI * 0.87% 0.57% 0.77% 1.21% 1.48%

90+ day delinquency rate - LHI * 2.42% 2.96% 3.66% 4.53% 6.93%


0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

Dec-07

Mar-08

Jun-08

Sep-08

Dec-08

30 day delinquency rate - LHI 60 day delinquency rate - LHI 90+ day delinquency - LHI

* Calculated using OTS method

January 30, 2009 22

Commercial Real Estate (CRE) Loan Portfolio

Property Type BalancePercentage of

Loans 30 Days 60 Days 90 DaysTotal ($) OTS Delinquent

90 Days (%) Delinquent

Specific Reserve

General Reserve

Office $408,486 22.96% $8,376 2,397 $13,772 $24,545 3.37% $9,542 $17,000Retail 305,766 17.18% 2,491 8,343 9,465 20,300 3.10% 9,571 12,725Shopping Center 323,743 18.19% 2,764 3,088 7,811 13,663 2.41% 4,344 13,473Residential Development 222,285 12.49% - 86 125,266 125,352 56.35% 64,278 9,251Other 163,110 9.17% 2,753 - - 2,753 - 2,147 6,788Non-residential Development 32,858 1.85% - 8,443 1,844 10,287 5.61% 533 1,264Industrial 135,868 7.64% - 14,994 - 14,994 - 2,995 5,654Multi-Family 116,514 6.55% 135 153 2,823 3,111 2.42% 2,413 4,849Warehouse 59,777 3.36% - - - - - 1,193 2,488Single Family 11,474 0.64% - 65 466 532 4.07% 723 477Land 4,200 0.24% - - 3,048 3,048 72.58% 1,322 175CIP, Premium, FAS 91 (4,717) -0.27% N/A N/A N/A N/A N/A NA NA

Totals $1,779,363 100.00% $16,519 $37,569 $164,496 $218,585 9.24% $99,061 $74,143

Auto Related Loans Amount % of portfolio

Direct (borrower in auto industry) $8,973 1%

Indirect (borrower's tenant(s) in auto industry) 60,979 3%$69,952 4%

* 90 day + matured, calculated using OTS method

As of Dec 31, 2008 *($ in 000’s)


January 30, 2009 23

2008 / 2009 Outlook1

As of Oct 30, 2008 As of Jan 30, 2009

New branches 3 3

Target asset size 1 $15.5 - $17.6 billion $17.0 - $18.5 billion

Residential mortgage loan originations 1 $32 – $42 billion $36 – $44 billion

Loan sales 1 $29 – $39 billion $36 – $44 billion

Gain on loan sale margin 64 – 74 bps 64 – 74 bps

Net interest margin (bank) 195 – 205 bps 240 – 270 bps

Retail deposit growth 2% – 6% 5% – 10%

Net loan administration income $65 - $75 million $60 - $80 million

Loan charge off's $90 - $110 million $90 - $150 million

Allowance as a % of loans held for investment 245 - 300 bps 400 - 500 bps

2009 Outlook

1. Assumes participation by Flagstar in the TARP Capital Purchase Program combined with an infusion of private capital

January 30, 2009 24

Appendix

January 30, 2009 25

Historical Asset Quality

* Calculated using OTS method

• Continue to actively manage allowance in relation to asset quality

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

Dec-01

Mar-02

Jun-02

Sep-02

Dec-02

Mar-03

Jun-03

Sep-03

Dec-03

Mar-04

Jun-04

Sep-04

Dec-04

Mar-05

Jun-05

Sep-05

Dec-05

Mar-06

Jun-06

Sep-06

Dec-06

Mar-07

Jun-07

Sep-07

Dec-07

Mar-08

Jun-08

Sep-08

Dec-08

ALL to LHI 90 + Delinquency rate - LHI * Net Charge off Ratio NPA to Total Assets


January 30, 2009 26

Delinquent Loans by Loan Type - HFI

(unaudited)($ in 000's)

BalanceDelinquentLoans (1)

% of Balance

DelinquentLoans (1)

% of Balance

DelinquentLoans (1)

% of Balance

Mortgage $5,958,748 $127,460 2.14% $85,357 1.43% $432,652 7.26%

Second Mortgage 287,350 4,696 1.63% 4,233 1.47% 10,148 3.53%

HELOC 408,366 3,492 0.86% 4,038 0.99% 13,148 3.22%

Commercial Real Estate 1,779,363 16,519 0.93% 37,569 2.11% 164,496 9.24%

Commercial 24,668 - 0.00% 88 0.36% 1,744 7.07%

Construction 54,749 4,316 7.88% 2,285 4.17% 5,674 10.36%

Warehouse 434,140 - 0.00% - 0.00% - 0.00%

Other Consumer 134,737 1,200 0.89% 1,115 0.83% 1,595 1.18%

Total : $9,082,121 $157,683 1.74% $134,685 1.48% $629,457 6.93%

As of Dec 31, 200830 Day 60 Day 90 Day + Matured

1. Calculated using OTS method


January 30, 2009 27

HFI Residential 1st Mortgage Non Performing Loans – by FICO and by LTV

HFI Residential First Mortgage Non Performing Loans*As of Dec 31, 2008

($ in thousands)

FICO < 70% 70% - 79.99% 80% - 90% > 90% Total

No Score $243 $855 $2,635 $1,681 $5,414

< 580 964 1,847 3,188 8,928 $14,926

580 - 619 892 1,927 4,281 9,732 $16,831

620 - 659 4,140 5,635 4,415 11,568 $25,759

660 - 699 24,916 72,495 31,614 7,244 $136,270

> 700 37,007 92,381 88,219 15,846 $233,453

Total $68,163 $175,139 $134,352 $54,999 $432,652

LTV



January 30, 2009 28

Non Performing Loans – by State - HFINon Performing Loans*

As of Dec 31, 2008($ in thousands)

State Mortgage Percent of Mortgage

Second Mortgage HELOC Commercial

Real Estate Commercial Construction Consumer Total Percent of Total

FL $141,983 33% $1,525 $2,384 $6,625 -$ $0 $239 $152,757 24%

MI 26,184 6% 886 2,413 109,612 782 446 1,116 141,440 22%

CA 80,586 19% 2,655 3,162 8,466 - 448 - 95,317 15%

AZ 20,789 5% 433 973 5,086 - - - 27,280 4%

CO 15,672 4% 54 86 10,948 - - - 26,760 4%

GA 18,491 4% 283 189 3,946 - - 43 22,952 4%

NV 18,294 4% 1,040 299 - - 787 - 20,420 3%

OH 13,500 3% 260 146 4,604 315 - 17 18,842 3%

IL 6,150 1% - 259 9,607 - - - 16,016 3%

NY 4,848 1% 315 753 5,603 - - - 11,519 2%

WA 9,756 2% 127 607 - - - - 10,490 2%

NJ 9,226 2% - 377 - - 764 - 10,366 2%

UT 7,874 2% 285 20 - - 751 - 8,930 1%

OR 5,942 1% 221 50 - - - - 6,213 1%

TX 6,025 1% 181 - - - - - 6,206 1%

Other 47,332 11% 1,884 1,431 - 647 2,478 178 53,949 9%

Total $432,652 100% $10,148 $13,149 $164,496 $1,744 $5,673 $1,594 $629,458 100%



January 30, 2009 29

Non Performing Loans – by Vintage - HFINon Performing Loans*

As of Dec 31, 2008($ in thousands)

Vintage Mortgage Percent of Mortgage

Second Mortgage HELOC Commercial

Real Estate Commercial Construction Consumer Total Percent of Total

Older $8,982 2% $60 $232 $417 -$ $70 $45 $9,806 2%

2001 1,918 0% 236 124 - - - 23 2,301 0%

2002 2,226 1% 85 346 686 - - 37 3,380 1%

2003 13,104 3% 36 1,184 4,016 394 - 6 18,740 3%

2004 46,546 11% 123 2,249 14,501 - - 53 63,472 10%

2005 111,811 26% 170 2,667 58,185 - - 692 173,525 28%

2006 87,426 20% 2,450 1,151 56,324 - 1,061 265 148,677 24%

2007 151,291 35% 6,990 4,945 29,192 1,350 4,542 361 198,671 32%

2008 9,346 2% - 250 1,176 - - 112 10,884 2%

Total $432,652 100% $10,148 $13,149 $164,496 $1,744 $5,673 $1,594 $629,458 100%



January 30, 2009 30

Commercial Real Estate (CRE) Loan Portfolio – by VintageCommercial Real Estate Portfolio*

As of Dec 31, 2008($ in 000’s)

Vintage Office RetailShopping

CenterResidential

Development OtherNon-

Residential Development

Industrial / Warehouse Multi-family Total

1997 $160 -$ -$ -$ $2,462 -$ -$ $10 $2,633

1998 0 342 3,022 - 727 - 1,478 - $5,569

1999 3,258 337 2,755 - 9,869 745 5,897 1,342 $24,202

2000 785 3,438 1,064 - 3,149 - 4,387 222 $13,045

2001 9,766 2,099 3,189 4,376 6,304 - 3,288 440 $29,461

2002 9,906 3,047 4,734 - 7,547 - 23,333 2,570 $51,138

2003 29,055 11,669 14,902 - 16,899 - 17,449 7,317 $97,292

2004 90,568 41,410 10,634 3,664 16,609 - 16,441 6,627 $185,953

2005 49,497 37,041 27,222 62,149 32,745 2,246 22,738 13,204 $246,842

2006 79,578 75,740 119,243 60,287 48,739 14,129 39,308 14,292 $451,315

2007 99,843 57,400 92,432 89,471 25,939 15,738 44,806 49,477 $475,105

2008 36,069 73,244 44,546 2,338 7,794 - 16,520 6,559 $187,070

Total $408,486 $305,766 $323,743 $222,285 $178,784 $32,858 $195,645 $102,059 $1,769,625


* Excludes Commercial Letters of Credit, CIP, Premium and FAS 91

January 30, 2009 31

Commercial Real Estate (CRE) Loan Portfolio – by StateCommercial Real Estate Portfolio*

As of Dec 31, 2008($ in 000’s)

State Office RetailShopping

CenterResidential

Develpoment OtherNon-

Residential Development

Industrial / Warehouse Multi-family Total

MI $230,965 $189,116 $118,060 $102,351 $125,656 $7,048 $117,636 $72,175 $963,007

GA 47,492 34,891 125,006 49,498 7,194 312 7,236 3,400 $275,027

CA 51,507 42,939 13,700 10,377 5,272 - 39,994 2,721 $166,511

IN 6,568 21,390 11,232 543 15,449 7,277 12,688 530 $75,676

AZ 36,771 459 11,167 - - - 552 - $48,950

IL - - 5,255 21,507 1,580 - - 12,089 $40,431

FL - 1,832 4,985 7,748 952 9,593 11,005 - $36,115

VA - 1,134 24,690 - - - - - $25,824

NY 975 - - 5,603 14,909 - - 1,731 $23,218

KY 22,863 - - - - - - - $22,863

ID 2,397 - 2,353 - - 8,443 - - $13,193

CO - - - 10,948 - - 157 - $11,105

OH 1,377 - 1,566 4,604 1,295 - - - $8,842

PA - 719 - - 3,420 - 1,850 2,603 $8,591

NC 6,515 1,432 - - - - - - $7,947

OTHER 1,056 11,855 5,729 9,107 3,057 185 4,527 6,809 $42,325

Total $408,486 $305,766 $323,743 $222,285 $178,784 $32,858 $195,645 $102,059 $1,769,625

* Excludes Commercial Letters of Credit, CIP, Premium and FAS 91

January 30, 2009 32

Economy & Finance

Flagstar Bancorp Q42008 earnings report