fbc-20221026
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 26, 2022
 
http://api.rkd.refinitiv.com/api/FilingsRetrieval3/.71121118.0001033012-22-000081fbc-20221026_g1.jpg.ashx 
Flagstar Bancorp, Inc.
(Exact Name of Registrant as Specified in Charter)
Michigan 1-16577 38-3150651
(State or Other Jurisdiction
of Incorporation		 (Commission File Number) (IRS 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:
 
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act (17 CFR 230.405) or Rule 12b-2 of the Exchange Act (17 CFR 240.12b-2).
Emerging growth company☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange
Act. ☐

Securities registered pursuant to Section 12(b) of the Exchange Act:
Title of each classTrading symbolName of each exchange on which registered
Common stockFBCNew York Stock Exchange


Item 2.02Results of Operations and Financial Condition

On October 26, 2022, Flagstar Bancorp, Inc. (the "Company") issued a press release regarding its preliminary results of operations and financial condition for the three months ended September 30, 2022. 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 quarter ended September 30, 2022 as part of its Quarterly Report on Form 10-Q.

This Form 8-K includes a copy of the Company’s presentation containing supplemental information related to the earnings press release for the quarter ended September 30, 2022, which is attached as Exhibit 99.2. The information included in Exhibit 99.2 shall be considered furnished, not filed, for purposes of the Exchange Act. The Company also provides supplementary financial information on its website, which is not incorporated by reference in this Form 8-K.

Item 9.01Financial Statements and Exhibits
 
 Exhibits
99.1  
99.2  




SIGNATURE
    Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
 
 FLAGSTAR BANCORP, INC.
Dated:
October 26, 2022
  By: /s/ James K. Ciroli
   James K. Ciroli
   Executive Vice President and Chief Financial Officer

Exhibit Index
 
Exhibit No.  Description
99.1  
99.2  


Document



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EXHIBIT 99.1
NEWS RELEASE
For more information, contact:        
Bryan Marx
FBCInvestorRelations@flagstar.com
(248) 312-5699
                                
                                        
Flagstar Bancorp Reports Third Quarter 2022 Net Income of $73 Million, or $1.35 Per Diluted Share

Key Highlights - Third Quarter 2022

•Generated adjusted net income of $75 million, or $1.41 per diluted share, excluding merger-related costs.
•Expanded net interest margin by 29 basis points to 3.98 percent for the quarter and 4.07 percent for September.
•Grew average commercial loans, excluding warehouse loans, by 15 percent compared to the second quarter.
•Yielded an annualized 12 percent return on our mortgage servicing rights asset.
•Produced a 1.2 percent return on assets.
•Reduced noninterest expense by $20 million and improved the efficiency ratio by 8 percent.
•Maintained strong asset quality with no nonperforming commercial loans.

TROY, Mich., October 26, 2022 – Flagstar Bancorp, Inc. (NYSE: FBC) today reported third quarter 2022 adjusted net income of $75 million, or $1.41 per diluted share, compared to second quarter 2022 adjusted net income of $63 million, or $1.17 per diluted share.

"Once again, our results for the quarter demonstrate the business model we built is working just as it was designed to work,” said Alessandro DiNello, president and chief executive officer of Flagstar Bancorp.

"Overall, all lines of business contributed to earnings growth of 22 percent compared to the second quarter, leading to a strong 1.2 percent return on assets. Our Community bank grew non-warehouse commercial loans by 15 percent and drove new all-time highs for net interest income and net interest margin. Servicing exceeded 1.4 million in serviced and subserviced accounts. Mortgage remained profitable despite unrelenting challenges as our team responded well by managing costs.

"Most noteworthy—and where we continued to shine—is the growth in our net interest margin, which increased 29 basis points for the third quarter to 3.98 percent — a new record for our highest core net interest margin ever, and to 4.07 percent for September – another record. As a result, net interest income grew $26 million, or 13 percent.

"Credit quality continues to hold up well with no nonperforming commercial loans and low levels of delinquency. We also continued to see improvements in forbearance-related delinquencies.

1

"I couldn’t be prouder of how our team has performed. Our results this quarter again showed our ability to find ways to deliver profitability in any economic environment, as all elements of our team came together to deliver their very best.”

Income Statement Highlights
Three Months Ended
September 30,
2022		June 30,
2022		March 31, 2022December 31, 2021September 30,
2021
(Dollars in millions, except per share data)
Net interest income $219 $193 $165 $181 $195 
Provision (benefit) for credit losses 5 (9)(4)(17)(23)
Noninterest income 114 131 160 202 266 
Noninterest expense 236 256 261 291 286 
Income before income taxes 92 77 68 109 198 
Provision for income taxes 19 17 15 24 46 
Net income$73 $60 $53 $85 $152 
Income per share:
Basic$1.36 $1.13 $0.99 $1.62 $2.87 
Diluted$1.35 $1.12 $0.99 $1.60 $2.83 

Adjusted Income Statement Highlights (Non-GAAP)(1)
Three Months Ended
September 30,
2022		June 30,
2022		March 31, 2022December 31, 2021September 30,
2021
(Dollars in millions, except per share data)
Net interest income $219 $193 $165 $181 $195 
Provision (benefit) for credit losses 5 (9)(4)(17)(23)
Noninterest income 114 131 160 202 266 
Noninterest expense 233 253 258 285 281 
Income before income taxes 95 80 71 115 203 
Provision for income taxes 20 17 16 25 47 
Net income$75 $63 $55 $90 $156 
Income per share:
Basic$1.42 $1.18 $1.03 $1.71 $2.94 
Diluted$1.41 $1.17 $1.02 $1.69 $2.90 
(1)See Non-GAAP Reconciliation for further information.


Key Ratios
Three Months Ended
September 30,
2022		June 30,
2022		March 31, 2022December 31, 2021September 30,
2021
Net interest margin 3.98 %3.69 %3.11 %2.96 %3.00 %
Return on average assets1.2 %1.0 %0.9 %1.3 %2.2 %
Return on average common equity 10.4 %8.7 %7.9 %12.7 %23.4 %
Efficiency ratio70.9 %79.1 %80.4 %75.9 %62.2 %
HFI loan-to-deposit ratio85.0 %76.3 %68.5 %67.2 %68.8 %
Adjusted HFI loan-to-deposit ratio (1)88.5 %71.9 %64.1 %60.5 %60.3 %
(1)Excludes warehouse loans and custodial deposits. See Non-GAAP Reconciliation for further information.
2


Average Balance Sheet Highlights
Three Months Ended% Change
September 30,
2022		June 30,
2022		March 31, 2022June 30,
2021		September 30,
2021		SeqYr/Yr
(Dollars in millions)
Average interest-earning assets $21,905 $20,958 $21,569 $24,291 $25,656 5 %(15)%
Average loans held-for-sale (LHFS)2,976 3,571 4,833 6,384 7,839 (17)%(62)%
Average loans held-for-investment (LHFI)14,640 13,339 12,384 13,314 13,540 10 %8 %
Average total deposits 17,216 17,488 18,089 19,816 19,686 (2)%(13)%

Net Interest Income

Net interest income in the third quarter was $219 million, an increase of $26 million, or 13 percent, as compared to the second quarter 2022. The results primarily reflect a $0.9 billion, or 5 percent, increase in average earning assets along with an increase in net interest margin. We grew our loans held for investment by $1.3 billion, led by our residential mortgage and commercial portfolios. This growth was partially offset by a $0.6 billion decrease in our mortgage loans held-for-sale as a result of lower mortgage volume.

Net interest margin in the third quarter was 3.98 percent, a 29 basis points increase compared to 3.69 percent in the prior quarter. The net interest margin rose every month in the quarter with a September net interest income of 4.07 percent which is largely attributable to our asset sensitivity and our management of deposit costs.

Average total deposits were $17.2 billion in the third quarter, down $0.3 billion, or 2 percent, from the second quarter 2022, largely due to a decrease of $0.3 billion, or 4 percent, in average retail deposits. Total interest-bearing deposit costs increased only 15 basis points compared to short term market rates increasing 135 basis points.

Provision for Credit Losses

The provision for credit losses was $5 million for the third quarter, as compared to a $9 million benefit for the second quarter 2022. The third quarter net provision was driven by an increase to the reserve due to HFI loan growth which was focused in well collateralized portfolios. The strong performance of our portfolio continued with a low number of consumer non-accrual loans and no commercial non-accrual loans at September 30, 2022.
Noninterest Income

Noninterest income decreased to $114 million in the third quarter, as compared to $131 million for the second quarter 2022, primarily due to lower loan administration and fee income.

Third quarter net gain on loan sales increased $5 million, to $32 million, as compared to $27 million in the second quarter 2022. Gain on sale margins increased 27 basis points to 66 basis points for the third quarter 2022, compared to 39 basis points for the second quarter 2022. The improved result was driven by improved secondary marketing performance which was partially offset by a 32 percent decline in fallout-adjusted locks.

Our mortgage servicing rights portfolio yielded an annualized 12 percent return for the quarter. The net return on mortgage servicing rights increased $4 million to $26 million for the third quarter 2022, compared to a $22 million net return for the second quarter 2022. We grew the MSR asset by $213 million and our return benefited from our partial hedge position, which we transitioned to a fully hedged position as rates rose during the quarter.

Loan administration income was $18 million for the third quarter 2022, as compared to $33 million for the second quarter 2022. The decline in income was driven primarily by higher LIBOR-based fee credits paid on custodial deposits that are subserviced.

3

Loan fees and charges decreased $9 million to $20 million for the third quarter, compared to $29 million for the second quarter 2022, primarily due to lower originations and lower ancillary fee income driven by lower loss mitigation fees associated with loans coming out of forbearance.

Mortgage Metrics
As of/Three Months EndedChange (% / bps)
September 30,
2022		June 30, 2022March 31, 2022December 31, 2021September 30,
2021		SeqYr/Yr
(Dollars in millions)
Mortgage rate lock commitments (fallout-adjusted) (1) (2)$4,800 $7,100 $7,700 $8,900 $11,300 (32)%(58)%
Mortgage loans closed (1)$6,900 $7,700 $8,200 $10,700 $12,500 (11)%(45)%
Net margin on mortgage rate lock commitments (fallout-adjusted) (2) 0.66 %0.39 %0.58 %1.02 %1.50 %27(84)
Net gain on loan sales$32 $27 $45 $91 $169 19%(81)%
Net return on mortgage servicing rights (MSR)$26 $22 $29 $19 $9 N/MN/M
Gain on loan sales + net return on the MSR$58 $49 $74 $110 $178 18%(67)%
Loans serviced (number of accounts - 000's) (3)1,421 1,383 1,256 1,234 1,203 3%18%
Capitalized value of MSRs1.51 %1.50 %1.31 %1.12 %1.08 %143
N/M - Not meaningful
(1) Rounded to the nearest hundred million
(2) Fallout-adjusted mortgage rate lock commitments are adjusted by a percentage of mortgage loans in the pipeline that are not expected to close based on previous historical experience and the level of interest rates.
(3) Includes loans serviced for Flagstar's own loan portfolio, serviced for others, and subserviced for others.

Noninterest Expense

Noninterest expense decreased to $236 million for the third quarter, compared to $256 million for the second quarter 2022. Excluding $3 million of merger costs in the second and third quarter of 2022, noninterest expense decreased $20 million, or 8 percent, primarily driven by our actions taken to reduce scale in the mortgage business.

Mortgage expenses were $80 million for the third quarter, a decrease of $10 million compared to the prior quarter. The ratio of mortgage expenses to closings—our mortgage expense ratio— was 1.12 percent, a decrease of 2 basis points from the second quarter 2022. The reduction in expense was primarily driven by the actions we have taken to reduce mortgage costs. Additionally, we have taken a significant cost cutting measure at the end of the quarter to reduce our mortgage workforce by another 7 percent.

The efficiency ratio was 71 percent for the third quarter, as compared to 79 percent for the second quarter 2022. Excluding $3 million of merger expenses in the third quarter of 2022, the adjusted efficiency ratio was 70 percent and 78 percent, respectively.

Income Taxes

The third quarter provision for income taxes totaled $19 million, with an effective tax rate of 21.3 percent, compared to an effective tax rate of 21.7 percent for the second quarter 2022.

4

Asset Quality
Credit Quality Ratios
As of/Three Months EndedChange (% / bps)
September 30,
2022		June 30,
2022		March 31, 2022December 31, 2021September 30,
2021		SeqYr/Yr
(Dollars in millions)
Allowance for credit losses (1)$140 $135 $145 $170 $190 4%(26)%
Credit reserves to LHFI0.89 %0.92 %1.10 %1.27 %1.33 %(3)-44
Credit reserves to LHFI excluding warehouse1.14 %1.27 %1.64 %1.96 %2.29 %(13)(115)
Net charge-offs$— $1 $21 $3 $6 (100)%(100)%
Total nonperforming LHFI and TDRs$94 $99 $107 $94 $96 (5)%(2)%
Net charge-offs to LHFI ratio (annualized)— %0.03 %0.69 %0.08 %0.19 %(3)(19)
Ratio of nonperforming LHFI and TDRs to LHFI0.59 %0.68 %0.80 %0.70 %0.66 %(9)(7)
Net charge-offs/(recoveries) to LHFI ratio (annualized) by loan type (2):
Residential first mortgage 0.06 %0.12 %0.31 %0.04 %— %(6)6
Home equity and other consumer0.24 %0.09 %0.07 %0.14 %0.01 %1523
Commercial real estate— %— %— %— %0.03 %—(3)
Commercial and industrial (0.24)%0.02 %4.31 %0.53 %1.87 %(26)(211)
N/M - Not meaningful
(1) Includes the allowance for loan losses and the reserve on unfunded commitments.
(2) Excludes loans carried under the fair value option.

Our portfolio continues to exhibit strong credit quality that resulted in a small net recovery in the third quarter 2022. This compares to net charge-offs of $1 million, or 3 basis points, in the prior quarter.

Nonperforming loans held-for-investment and troubled debt restructurings (TDRs) were $94 million at the end of the third quarter, a decrease of $5 million as compared to the second quarter 2022. Our ratio of nonperforming loans held-for-investment and TDRs to loans held-for-investment was 0.59% basis points at September 30, 2022, a 9 basis point decrease compared to June 30, 2022. At September 30, 2022, early stage loan delinquencies totaled $34 million, or 22 basis points of total loans, compared to $22 million, or 15 basis points, at June 30, 2022.

The allowance for credit losses was $140 million and covered 0.89 percent of loans held-for-investment at September 30, 2022, a 3 basis point decrease from June 30, 2022. Excluding warehouse loans, the allowance coverage ratio was 1.14 percent, a 13 basis point decrease from June 30, 2022. The increase in the allowance for credit losses reflects growth in our HFI loan portfolio. Loan growth occurred in well-collateralized portfolios, including $944 million in residential first mortgage and $340 million in MSR loans (included in our C&I portfolio) which have lower reserve levels. The impact of this loan growth was partially offset by reductions in our reserves related to residential first mortgages, consumer loans and our loans with government guarantees as a result of pay-offs and improvements in the delinquency trends of expired forbearance loans. Overall, our portfolio quality remains solid with low levels of nonperforming loans and low delinquency levels, including no commercial nonperforming loans.

5

Capital
Capital Ratios (Bancorp)Change (% / bps)
September 30,
2022		June 30,
2022		March 31, 2022December 31, 2021September 30,
2021		SeqYr/Yr
Tier 1 leverage (to adj. avg. total assets)11.06 %12.17 %11.83 %10.54 %9.72 %(111)134
Tier 1 common equity (to RWA)11.97 %13.22 %13.89 %13.19 %11.95 %(125)2
Tier 1 capital (to RWA)13.11 %14.41 %15.17 %14.43 %13.11 %(130)—
Total capital (to RWA)14.32 %15.68 %16.59 %15.88 %14.55 %(136)(23)
Tangible common equity to asset ratio (1)9.73 %10.25 %11.13 %10.09 %9.23 %(52)50
Tangible book value per share (1) $46.42 $47.83 $48.61 $48.33 $47.21 (3)%(2)%
(1)See Non-GAAP Reconciliation for further information.

We maintained a strong capital position with regulatory ratios above current regulatory quantitative guidelines for "well capitalized" institutions. Further demonstrating our capital strength, the capital ratios are impacted by a 100 percent risk-weighting of the warehouse loan portfolio—the largest component of the held-for-investment portfolio. Adjusting the risk-weighting of warehouse loans to 50 percent because of historically low levels of losses from this portfolio, coupled with the fact that the portfolio is fully collateralized with assets that would receive a 50 percent risk weighting, we would have had a Tier 1 common equity ratio of 12.97 percent and a total risk-based capital ratio of 15.52 percent at September 30, 2022.

Tangible book value per share declined to $46.42, down $1.41, or 3 percent from last quarter due to a $150 million decline in other comprehensive income primarily driven by the impact of higher interest rates on our investment securities portfolio.

About Flagstar

Flagstar Bancorp, Inc. (NYSE: FBC) is a $25.4 billion savings and loan holding company headquartered in Troy, Mich. Flagstar Bank, FSB, provides commercial, small business, and consumer banking services through 158 branches in Michigan, Indiana, California, Wisconsin and Ohio. It also provides home loans through a wholesale network of brokers and correspondents in all 50 states, as well as 81 retail locations in 26 states. Flagstar is a leading national originator and servicer of mortgage and other consumer loans, handling payments and record keeping for $360 billion of loans representing more than 1.4 million borrowers. For more information, please visit flagstar.com.

6

Use of Non-GAAP Financial Measures

In addition to results presented in accordance with GAAP, this news release includes certain 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. 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 periodic Flagstar reports filed with the U.S. Securities and Exchange Commission, which are available on the Company’s website at flagstar.com.

Cautionary Statements Regarding Forward-Looking Statements

Certain statements in this press release may constitute “forward‐looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, with respect to Flagstar’s beliefs, goals, intentions, and expectations regarding revenues, earnings, loan production, asset quality, capital levels, and acquisitions, among other matters; Flagstar’s estimates of future costs and benefits of the actions each company may take; Flagstar’s assessments of probable losses on loans; Flagstar’s assessments of interest rate and other market risks; and Flagstar’s ability to achieve its respective financial and other strategic goals. Forward‐looking statements are typically identified by such words as “believe,” “expect,” “anticipate,” “intend,” “outlook,” “estimate,” “forecast,” “project,” “should,” and other similar words and expressions, and are subject to numerous assumptions, risks, and uncertainties, which change over time. Forward‐looking statements speak only as of the date they are made; Flagstar does not assume any duty, and does not undertake, to update such forward‐looking statements. Furthermore, because forward‐looking statements are subject to assumptions and uncertainties, actual results or future events could differ, possibly materially, from those indicated in such forward-looking statements depending upon various factors as described in the “Risk Factors” section in Flagstar’s Annual Report on Form 10-K for the year ended December 31, 2021 and in Flagstar’s other filings with SEC, which are available at http://www.sec.gov and in the “Documents” section of Flagstar’s website, https://investors.flagstar.com.


7


Flagstar Bancorp, Inc.
Consolidated Statements of Financial Condition
(Dollars in millions)
(Unaudited)
September 30,
2022		June 30,
2022		December 31,
2021		September 30,
2021
Assets
Cash$313 $198 $277 $103 
Interest-earning deposits105 237 774 46 
Total cash and cash equivalents418 435 1,051 149 
Investment securities available-for-sale2,627 2,346 1,804 1,802 
Investment securities held-to-maturity159 173 205 236 
Loans held-for-sale1,830 3,482 5,054 6,378 
Loans held-for-investment15,793 14,655 13,408 14,268 
Loans with government guarantees1,370 1,144 1,650 1,945 
Less: allowance for loan losses(126)(122)(154)(171)
Total loans held-for-investment and loans with government guarantees, net17,037 15,677 14,904 16,042 
Mortgage servicing rights1,026 622 392 340 
Federal Home Loan Bank stock329 329 377 377 
Premises and equipment, net354 354 360 370 
Goodwill and intangible assets140 142 147 149 
Bank-owned life insurance372 370 365 363 
Other assets1,151 969 824 836 
Total assets$25,443 $24,899 $25,483 $27,042 
Liabilities and Stockholders’ Equity
Noninterest-bearing deposits$6,802 $6,664 $7,088 $8,108 
Interest-bearing deposits9,789 9,984 10,921 11,228 
Total deposits16,591 16,648 18,009 19,336 
Short-term Federal Home Loan Bank advances and other3,450 3,301 1,880 1,870 
Long-term Federal Home Loan Bank advances1,000 700 1,400 1,400 
Other long-term debt390 394 396 396 
Loan with government guarantees repurchase liability156 101 200 163 
Other liabilities1,240 1,062 880 1,232 
Total liabilities22,827 22,206 22,765 24,397 
Stockholders’ Equity
Common stock1 1 1 1 
Additional paid in capital1,361 1,358 1,355 1,362 
Accumulated other comprehensive income(249)(99)35 38 
Retained earnings1,503 1,433 1,327 1,244 
Total stockholders’ equity2,616 2,693 2,718 2,645 
Total liabilities and stockholders’ equity$25,443 $24,899 $25,483 $27,042 

8

Flagstar Bancorp, Inc.
Condensed Consolidated Statements of Operations
(Dollars in millions, except per share data)
(Unaudited)
Change compared to:
Three Months Ended2Q223Q21
September 30,
2022		June 30,
2022		March 31, 2022December 31, 2021September 30,
2021		AmountPercentAmountPercent
Interest Income
Total interest income$254 $209 $177 $196 $209 $45 22 %$45 22 %
Total interest expense35 16 12 15 14 19 119 %21 150 %
Net interest income219 193 165 181 195 26 13 %24 12 %
Provision (benefit) for credit losses5 (9)(4)(17)(23)14 N/M28 (122)%
Net interest income after provision for credit losses214 202 169 198 218 12 6 %(4)(2)%
Noninterest Income
Net gain on loan sales32 27 45 91 169 5 19 %(137)(81)%
Loan fees and charges20 29 27 29 33 (9)(31)%(13)(39)%
Net return on the mortgage servicing rights26 22 29 19 9 4 18 %17 N/M
Loan administration income18 33 33 36 31 (15)(45)%(13)(42)%
Deposit fees and charges8 9 9 8 9 (1)(11)%(1)(11)%
Other noninterest income10 11 17 19 15 (1)(9)%(5)(33)%
Total noninterest income114 131 160 202 266 (17)(13)%(152)(57)%
Noninterest Expense
Compensation and benefits113 122 127 137 130 (9)(7)%(17)(13)%
Occupancy and equipment45 46 45 47 46 (1)(2)%(1)(2)%
Commissions15 22 26 38 44 (7)(32)%(29)(66)%
Loan processing expense21 23 21 21 22 (2)(9)%(1)(5)%
Legal and professional expense11 10 11 13 12 1 10 %(1)(8)%
Federal insurance premiums4 4 4 4 6 — — %(2)(33)%
Intangible asset amortization2 3 2 3 3 (1)(33)%(1)(33)%
Other noninterest expense25 26 25 28 23 (1)(4)%2 9 %
Total noninterest expense236 256 261 291 286 (20)(8)%(50)(17)%
Income before income taxes92 77 68 109 198 15 19 %(106)(54)%
Provision for income taxes19 17 15 24 46 2 12 %(27)(59)%
Net income$73 $60 $53 $85 $152 $13 22 %$(79)(52)%
Income per share
Basic$1.36 $1.13 $0.99 $1.62 $2.87 $0.23 20 %$(1.51)(53)%
Diluted$1.35 $1.12 $0.99 $1.60 $2.83 $0.23 21 %$(1.48)(52)%
Cash dividends declared$0.06 $0.06 $0.06 $0.06 $0.06 $— — %$— — %
N/M - Not meaningful












9

Flagstar Bancorp, Inc.
Condensed Consolidated Statements of Operations
(Dollars in millions, except per share data)
(Unaudited)
Nine Months EndedChange
September 30,
2022		September 30,
2021		AmountPercent
Interest Income
Total interest income$640 $614 $26 4 %
Total interest expense63 48 15 31 %
Net interest income577 566 11 2 %
(Benefit) provision for credit losses(8)(95)87 N/M
Net interest income after provision for credit losses585 661 (76)(11)%
Noninterest Income
Net gain on loan sales104 564 (460)(82)%
Loan fees and charges76 112 (36)(32)%
Net return (loss) on the mortgage servicing rights77 4 73 1,825 %
Loan administration income84 85 (1)(1)%
Deposit fees and charges26 26 — — %
Other noninterest income38 51 (13)(25)%
Total noninterest income405 842 (437)(52)%
Noninterest Expense
Compensation and benefits362 396 (34)(9)%
Occupancy and equipment136 141 (5)(4)%
Commissions63 156 (93)(60)%
Loan processing expense65 65 — — %
Legal and professional expense32 32 — — %
Federal insurance premiums12 16 (4)(25)%
Intangible asset amortization7 8 (1)(13)%
Other noninterest expense76 108 (32)(30)%
Total noninterest expense753 922 (169)(18)%
Income before income taxes237 581 (344)(59)%
Provision for income taxes51 133 (82)(62)%
Net income$186 $448 $(262)(58)%
Income per share
Basic$3.49 $8.48 $(4.99)(59)%
Diluted$3.47 $8.37 $(4.90)(59)%
Cash dividends declared$0.18 $0.18 $— — %
N/M - Not meaningful

10

Flagstar Bancorp, Inc.
Summary of Selected Consolidated Financial and Statistical Data
(Dollars in millions, except share data)
(Unaudited)
Three Months EndedNine Months Ended
September 30,
2022		June 30, 2022September 30,
2021		September 30,
2022		September 30,
2021
Selected Mortgage Statistics (1):
Mortgage rate lock commitments (fallout-adjusted) (2) $4,800 $7,100 $11,300 $11,800 $36,000 
Mortgage loans closed$6,900 $7,700 $12,500 $14,600 $39,100 
Mortgage loans sold and securitized$7,200 $6,900 $12,400 $14,100 $40,100 
Selected Ratios:
Interest rate spread (3)3.62 %3.47 %2.84 %3.33 %2.70 %
Net interest margin3.98 %3.69 %3.00 %3.60 %2.90 %
Net margin on loans sold and securitized0.4 %0.4 %1.4 %0.7 %1.4 %
Return on average assets1.2 %1.0 %2.2 %1.0 %2.1 %
Adjusted return on average assets (4)1.2 %1.1 %2.2 %1.1 %2.2 %
Return on average common equity10.4 %8.7 %23.4 %9.0 %24.3 %
Return on average tangible common equity (5)11.2 %9.5 %25.2 %9.8 %24.7 %
Adjusted return on average tangible common equity (4) (5)11.9 %10.1 %26.2 %10.4 %27.2 %
Efficiency ratio70.9 %79.1 %62.2 %76.7 %65.5 %
Adjusted efficiency ratio (4)69.8 %78.1 %61.1 %75.8 %62.8 %
Common equity-to-assets ratio (average for the period)11.1 %11.5 %9.2 %11.2 %8.6 %
Average Balances:
Average interest-earning assets$21,905 $20,958 $25,656 $21,479 $26,029 
Average interest-bearing liabilities $14,075 $12,889 $15,590 $13,313 $15,083 
Average stockholders' equity$2,785 $2,754 $2,592 $2,742 $2,454 
(1)Rounded to nearest hundred million.
(2)Fallout-adjusted mortgage rate lock commitments are adjusted by a percentage of mortgage loans in the pipeline that are not expected to close based on previous historical experience and the level of interest rates.
(3)Interest rate spread is the difference between rate of interest earned on interest-earning assets and rate of interest paid on interest-bearing liabilities.
(4)See Non-GAAP Reconciliation for further information.
(5)Excludes goodwill, intangible assets and the associated amortization. See Non-GAAP Reconciliation for further information.
September 30,
2022		June 30,
2022		December 31, 2021September 30,
2021
Selected Statistics:
Book value per common share $49.05 $50.50 $51.09 $50.04 
Tangible book value per share (1)
$46.42 $47.83 $48.33 $47.21 
Number of common shares outstanding 53,330,827 53,329,993 53,197,650 52,862,383 
Number of FTE employees 4,911 5,036 5,395 5,461 
Number of bank branches158 158 158 158 
Ratio of nonperforming assets to total assets (2)
0.39 %0.42 %0.39 %0.37 %
Common equity-to-assets ratio10.3 %10.8 %10.7 %9.8 %
MSR Key Statistics and Ratios:
Weighted average service fee (basis points)30.8 31.7 31.5 32.1 
Capitalized value of mortgage servicing rights1.51 %1.50 %1.12 %1.08 %
(1)Excludes goodwill and intangibles. See Non-GAAP Reconciliation for further information.
(2)Ratio excludes LHFS.
11

Average Balances, Yields and Rates
(Dollars in millions)
(Unaudited)
Three Months Ended
September 30, 2022June 30, 2022September 30, 2021
Average BalanceInterestAnnualized
Yield/Rate		Average BalanceInterestAnnualized
Yield/Rate		Average BalanceInterestAnnualized
Yield/Rate
Interest-Earning Assets
Loans held-for-sale$2,976 $34 4.58%$3,571 $36 4.10%$7,839 $63 3.22%
Loans held-for-investment
Residential first mortgage2,633 26 3.97%1,789 16 3.68%1,706 14 3.14%
Home equity699 11 6.29%614 7 4.74%686 6 3.64%
Other1,381 17 4.99%1,302 16 4.80%1,177 14 4.76%
Total consumer loans 4,713 54 4.61%3,705 39 4.25%3,569 34 3.77%
Commercial real estate3,542 49 5.40%3,366 41 4.78%3,238 28 3.43%
Commercial and industrial2,844 37 5.06%2,169 26 4.65%1,341 12 3.56%
Warehouse lending3,541 42 4.63%4,099 34 3.27%5,392 52 3.76%
Total commercial loans9,927 128 5.03%9,634 101 4.11%9,971 92 3.62%
Total loans held-for-investment14,640 182 4.90%13,339 140 4.15%13,540 126 3.66%
Loans with government guarantees1,275 14 4.39%1,161 15 5.13%2,046 8 1.61%
Investment securities 2,723 22 3.32%2,310 17 2.89%2,058 12 2.15%
Interest-earning deposits291 2 1.83%577 1 0.64%173 — 0.18%
Total interest-earning assets21,905 $254 4.59%20,958 $209 3.96%25,656 $209 3.22%
Other assets3,243 2,909 2,391 
Total assets$25,148 $23,867 $28,047 
Interest-Bearing Liabilities
Retail deposits
Demand deposits$1,640 $1 0.34%$1,725 $1 0.10%$1,603 $— 0.05%
Savings deposits4,082 3 0.27%4,251 2 0.16%4,144 2 0.14%
Money market deposits854 1 0.28%926 — 0.16%840 — 0.08%
Certificates of deposit848 1 0.58%851 1 0.35%1,038 1 0.50%
Total retail deposits7,424 6 0.32%7,753 4 0.17%7,625 3 0.16%
Government deposits1,731 4 0.93%1,699 1 0.32%2,148 1 0.17%
Wholesale deposits and other830 1 0.73%935 2 0.98%1,342 3 0.99%
Total interest-bearing deposits9,985 11 0.46%10,387 7 0.26%11,115 7 0.26%
Short-term FHLB advances and other2,653 15 2.23%1,124 3 1.05%2,736 1 0.18%
Long-term FHLB advances1,041 4 1.35%982 3 1.15%1,343 3 0.92%
Other long-term debt396 5 4.40%396 3 3.07%396 3 3.16%
Total interest-bearing liabilities14,075 $35 0.96%12,889 $16 0.48%15,590 14 0.38%
Noninterest-bearing deposits
Retail deposits and other2,550 2,460 2,391 
Custodial deposits (1)4,681 4,641 6,180 
Total noninterest-bearing deposits7,231 7,101 8,571 
Other liabilities 1,057 1,123 1,294 
Stockholders' equity2,785 2,754 2,592 
Total liabilities and stockholders' equity$25,148 $23,867 $28,047 
Net interest-earning assets$7,830 $8,069 $10,066 
Net interest income$219 $193 $195 
Interest rate spread (2)3.62%3.47%2.84%
Net interest margin (3)3.98%3.69%3.00%
Ratio of average interest-earning assets to interest-bearing liabilities155.6 %162.6 %164.6 %
Total average deposits$17,216 $17,488 $19,686 
(1)Approximately 70 percent of custodial deposits from loans subserviced for which LIBOR based fees are recognized as an offset in net loan administration income.
(2)Interest rate spread is the difference between rate of interest earned on interest-earning assets and rate of interest paid on interest-bearing liabilities.
(3)Net interest margin is net interest income divided by average interest-earning assets.
12

Average Balances, Yields and Rates
(Dollars in millions)
(Unaudited)
Nine Months Ended
September 30, 2022September 30, 2021
Average BalanceInterestAnnualized
Yield/Rate		Average BalanceInterestAnnualized
Yield/Rate
Interest-Earning Assets
Loans held-for-sale$3,787 $111 3.89%$7,403 $169 3.04%
Loans held-for-investment
Residential first mortgage1,978 55 3.72%1,907 46 3.21%
Home equity637 24 5.10%751 20 3.59%
Other1,313 48 4.88%1,106 40 4.78%
Total consumer loans 3,928 127 4.33%3,764 106 3.75%
Commercial real estate3,379 119 4.63%3,125 80 3.38%
Commercial and industrial2,286 78 4.52%1,425 39 3.60%
Warehouse lending3,869 108 3.68%5,729 170 3.91%
Total commercial loans9,534 305 4.22%10,279 289 3.71%
Total loans held-for-investment13,462 432 4.25%14,043 395 3.72%
Loans with government guarantees1,279 44 4.62%2,295 15 0.95%
Investment securities 2,354 50 2.85%2,130 35 2.19%
Interest-earning deposits597 3 0.59%158 — 0.15%
Total interest-earning assets21,479 $640 3.96%26,029 $614 3.13%
Other assets2,918 2,672 
Total assets$24,397 $28,701 
Interest-Bearing Liabilities
Retail deposits
Demand deposits$1,664 $2 0.18%$1,713 $1 0.06%
Savings deposits4,195 6 0.19%4,058 4 0.14%
Money market deposits889 1 0.18%763 — 0.07%
Certificates of deposit876 3 0.43%1,152 6 0.71%
Total retail deposits7,624 12 0.21%7,686 11 0.20%
Government deposits1,769 6 0.47%1,907 3 0.19%
Wholesale deposits and other944 6 0.87%1,182 11 1.27%
Total interest-bearing deposits10,337 24 0.32%10,775 25 0.32%
Short-term FHLB advances and other1,486 18 1.64%2,646 3 0.17%
Long-term FHLB advances1,094 10 1.15%1,248 9 0.99%
Other long-term debt396 11 3.54%414 11 3.50%
Total interest-bearing liabilities13,313 $63 0.63%15,083 $48 0.43%
Noninterest-bearing deposits
Retail deposits and other2,495 2,307 
Custodial deposits (1)4,763 6,517 
Total noninterest-bearing deposits7,258 8,824 
Other liabilities 1,084 2,340 
Stockholders' equity2,742 2,454 
Total liabilities and stockholders' equity$24,397 $28,701 
Net interest-earning assets$8,166 $10,946 
Net interest income$577 $566 
Interest rate spread (2)3.33%2.70%
Net interest margin (3)3.60%2.90%
Ratio of average interest-earning assets to interest-bearing liabilities161.3 %172.6 %
Total average deposits$17,595 $19,598 
(1)Approximately 70 percent of custodial deposits from loans subserviced for which LIBOR based fees are recognized as an offset in net loan administration income.
(2)Interest rate spread is the difference between rate of interest earned on interest-earning assets and rate of interest paid on interest-bearing liabilities.
(3)Net interest margin is net interest income divided by average interest-earning assets.
13

Earnings Per Share
(Dollars in millions, except share data)
(Unaudited)
Three Months EndedNine Months Ended
September 30,
2022		June 30,
2022		September 30,
2021		September 30,
2022		September 30,
2021
Net income $73 $60 $152 $186 $448 
Weighted average common shares outstanding 53,330,518 53,269,631 52,862,288 53,273,743 52,767,923 
Stock-based awards279,748 265,817 797,134 300,947 731,366 
Weighted average diluted common shares53,610,266 53,535,448 53,659,422 53,574,690 53,499,289 
Basic earnings per common share$1.36 $1.13 $2.87 $3.49 $8.48 
Stock-based awards(0.01)(0.01)(0.04)(0.02)(0.11)
Diluted earnings per common share$1.35 $1.12 $2.83 $3.47 $8.37 

Regulatory Capital - Bancorp
(Dollars in millions)
(Unaudited)
September 30, 2022June 30, 2022December 31, 2021September 30, 2021
AmountRatioAmountRatioAmount RatioAmountRatio
Tier 1 leverage (to adjusted avg. total assets)$2,759 11.06 %$2,900 12.17 %$2,798 10.54 %$2,709 9.72 %
Total adjusted avg. total asset base$24,939 $23,835 $26,545 $27,863 
Tier 1 common equity (to risk weighted assets)$2,519 11.97 %$2,660 13.22 %$2,558 13.19 %$2,469 11.95 %
Tier 1 capital (to risk weighted assets)$2,759 13.11 %$2,900 14.41 %$2,798 14.43 %$2,709 13.11 %
Total capital (to risk weighted assets)$3,015 14.32 %$3,155 15.68 %$3,080 15.88 %$3,006 14.55 %
Risk-weighted asset base$21,047 $20,130 $19,397 $20,664 

Regulatory Capital - Bank
(Dollars in millions)
(Unaudited)
September 30, 2022June 30, 2022December 31, 2021September 30, 2021
AmountRatioAmountRatioAmountRatioAmountRatio
Tier 1 leverage (to adjusted avg. total assets)$2,741 10.99 %$2,824 11.87 %$2,706 10.21 %$2,619 9.40 %
Total adjusted avg. total asset base$24,938 $23,786 $26,502 $27,851 
Tier 1 common equity (to risk weighted assets)$2,741 12.96 %$2,824 14.04 %$2,706 13.96 %$2,619 12.71 %
Tier 1 capital (to risk weighted assets)$2,741 12.96 %$2,824 14.04 %$2,706 13.96 %$2,619 12.71 %
Total capital (to risk weighted assets)$2,853 13.49 %$2,931 14.57 %$2,839 14.65 %$2,766 13.42 %
Risk-weighted asset base$21,144 $20,113 $19,383 $20,609 

Loans Serviced and Subserviced
(Dollars in millions)
(Unaudited)
September 30, 2022June 30, 2022December 31, 2021September 30, 2021
Unpaid Principal Balance (1)Number of accountsUnpaid Principal Balance (1)Number of accountsUnpaid Principal Balance (1)Number of accountsUnpaid Principal Balance (1)Number of accounts
Subserviced for others (2)$284,120 1,090,130 $293,808 1,160,087 $246,858 1,032,923 $230,045 1,007,557 
Serviced for others (3)67,918 267,416 41,557 160,387 35,074 137,243 31,354 124,665 
Serviced for own loan portfolio (4)7,801 63,461 7,959 62,217 8,793 63,426 10,410 70,738 
Total loans serviced and subserviced$359,839 1,421,007 $343,324 1,382,691 $290,725 1,233,592 $271,809 1,202,960 
(1)UPB, net of write downs, does not include premiums or discounts.
(2)Loans subserviced for a fee for non-Flagstar owned loans or MSRs. Includes temporary short-term subservicing performed as a result of sales of servicing-released MSRs.
(3)Loans for which Flagstar owns the MSR.
(4)Includes LHFI (residential first mortgage, home equity and other consumer), LHFS (residential first mortgage), loans with government guarantees (residential first mortgage), and repossessed assets.

14

Loans Held-for-Investment
(Dollars in millions)
(Unaudited)
September 30, 2022June 30, 2022December 31, 2021September 30, 2021
Consumer loans
Residential first mortgage$3,147 19.9 %$2,205 15.0 %$1,536 11.5 %$1,626 11.5 %
Home equity769 4.9 %645 4.4 %613 4.6 %657 4.6 %
Other1,411 8.9 %1,331 9.1 %1,236 9.2 %1,203 8.3 %
Total consumer loans5,327 33.7 %4,181 28.5 %3,385 25.3 %3,486 24.4 %
Commercial loans
Commercial real estate3,721 23.6 %3,387 23.1 %3,223 24.0 %3,216 22.6 %
Commercial and industrial3,188 20.2 %2,653 18.1 %1,826 13.6 %1,387 9.7 %
Warehouse lending3,557 22.5 %4,434 30.3 %4,974 37.1 %6,179 43.3 %
Total commercial loans10,466 66.3 %10,474 71.5 %10,023 74.7 %10,782 75.6 %
Total loans held-for-investment$15,793 100.0 %$14,655 100.0 %$13,408 100.0 %$14,268 100.0 %

Other Consumer Loans Held-for-Investment
(Dollars in millions)
(Unaudited)
September 30, 2022June 30, 2022December 31, 2021September 30, 2021
Indirect lending$1,071 75.9 %$972 73.0 %$926 74.8 %$916 76.2 %
Point of sale283 20.1 %300 22.6 %272 22.0 %248 20.6 %
Other57 4.0 %59 4.4 %38 3.2 %39 3.2 %
Total other consumer loans$1,411 100.0 %$1,331 100.0 %$1,236 100.0 %$1,203 100.0 %

Allowance for Credit Losses
(Dollars in millions)
(Unaudited)
September 30, 2022June 30, 2022September 30, 2021
Residential first mortgage$32 $33 $43 
Home equity23 21 15 
Other29 31 32 
Total consumer loans84 85 90 
Commercial real estate26 22 35 
Commercial and industrial16 11 43 
Warehouse lending 1 4 3 
Total commercial loans43 37 81 
Allowance for loan losses127 122 171 
Reserve for unfunded commitments13 13 19 
Allowance for credit losses$140 $135 $190 

15

Allowance for Credit Losses
(Dollars in millions)
(Unaudited)
Three Months Ended September 30, 2022
Residential First MortgageHome EquityOther ConsumerCommercial Real EstateCommercial and IndustrialWarehouse LendingTotal LHFI Portfolio (1)Unfunded Commitments
Beginning balance$33 $21 $31 $22 $11 $4 $122 $13 
Provision (benefit) for credit losses:
Loan volume10 2 2 2 4 — 20 — 
Economic forecast (2)— — — 1 (1)— — — 
Credit (3)(10)— (3)2 (1)— (12)— 
Qualitative factor adjustments— — — (1)1 (3)(3)— 
Charge-offs(1)— (2)— — — (3)— 
Recoveries— — 1 — 2 — 3 — 
Ending allowance balance$32 $23 $29 $26 $16 $1 $127 $13 
(1)Excludes loans carried under the fair value option.
(2)Includes changes in the lifetime loss rate based on current economic forecasts as compared to forecasts used in the prior quarter.
(3)Includes changes in the probability of default and severity of default based on current borrower and guarantor characteristics, changes in duration, as well as individually evaluated reserves.

Allowance for Credit Losses
(Dollars in millions)
(Unaudited)
Nine Months Ended September 30, 2022
Residential First MortgageHome EquityOther ConsumerCommercial Real EstateCommercial and IndustrialWarehouse LendingTotal LHFI Portfolio (1)Unfunded Commitments
Beginning balance$40 $14 $36 $28 $32 $4 $154 $16 
Provision (benefit) for credit losses:
Loan volume14 3 5 3 11 — 36 (3)
Economic forecast (2)3 3 (4)2 (4)— — — 
Credit (3)(23)2 (5)(5)(2)— (33)— 
Qualitative factor adjustments— — — (2)(3)(3)(8)— 
Charge-offs(2)— (7)— (20)— (29)— 
Recoveries— 1 4 — 2 — 7 — 
Ending allowance balance$32 $23 $29 $26 $16 $1 $127 $13 
(1)Excludes loans carried under the fair value option.
(2)Includes changes in the lifetime loss rate based on current economic forecasts as compared to forecasts used in the prior quarter.
(3)Includes changes in the probability of default and severity of default based on current borrower and guarantor characteristics, changes in duration, as well as individually evaluated reserves.
16


Nonperforming Loans and Assets
(Dollars in millions)
(Unaudited)
September 30,
2022		June 30,
2022		December 31, 2021September 30,
2021
Nonperforming LHFI$64 $79 $81 $82 
Nonperforming TDRs6 6 8 5 
Nonperforming TDRs at inception but performing for less than six months24 14 5 9 
Total nonperforming LHFI and TDRs (1)94 99 94 96 
Other nonperforming assets, net6 5 6 6 
LHFS17 20 17 10 
Total nonperforming assets$117 $124 $117 $112 
Ratio of nonperforming assets to total assets (2)0.39 %0.42 %0.39 %0.37 %
Ratio of nonperforming LHFI and TDRs to LHFI0.59 %0.68 %0.70 %0.66 %
Ratio of nonperforming assets to LHFI and repossessed assets (2)0.63 %0.71 %0.74 %0.70 %
(1)Includes $44 million of first residential mortgage loans that are current in accordance with their forbearance exit plan and not yet returned to accrual status as of September 30, 2022.
(2)Ratio excludes nonperforming LHFS.

Asset Quality - Loans Held-for-Investment
(Dollars in millions)
(Unaudited)
30-59 Days Past Due60-89 Days Past DueGreater than 90 daysTotal Past DueTotal LHFI
September 30, 2022
Consumer loans$16 $7 $94 $117 $5,327 
Commercial loans 2 9 2 13 10,466 
Total loans$18 $16 $96 $130 $15,793 
June 30, 2022
Consumer loans (1)$15 $7 $99 $121 $4,181 
Commercial loans — — — — 10,474 
     Total loans$15 $7 $99 $121 $14,655 
December 31, 2021
Consumer loans$26 $36 $62 $124 $3,385 
Commercial loans— — 32 32 10,023 
Total loans$26 $36 $94 $156 $13,408 
September 30, 2021
Consumer loans $12 $2 $58 $72 $3,486 
Commercial loans — — 35 35 10,782 
     Total loans$12 $2 $93 $107 $14,268 
(1)Includes $44 million of first residential mortgage loans that are current in accordance with their forbearance exit plan and not yet returned to accrual status as of September 30, 2022.
17

Troubled Debt Restructurings
(Dollars in millions)
(Unaudited)
 TDRs
 PerformingNonperformingTotal
September 30, 2022
Consumer loans$25 $30 $55 
Commercial loans— — — 
Total TDR loans$25 $30 $55 
June 30, 2022
Consumer loans$22 $20 $42 
Commercial loans— — — 
Total TDR loans$22 $20 $42 
December 31, 2021
Consumer loans$22 $13 $35 
Commercial loans2 — 2 
Total TDR loans$24 $13 $37 
September 30, 2021
Consumer loans$34 $12 $46 
Commercial loans— 2 2 
Total TDR loans$34 $14 $48 


Non-GAAP Reconciliation
(Unaudited)

    In addition to analyzing the Company's results on a reported basis, management reviews the Company's results on an adjusted basis. The non-GAAP measures presented in the tables below 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 DOJ settlement expense and loans with government guarantees that have not been repurchased and don't accrue interest are not reflective of our ongoing operations and, therefore, have been excluded from our U.S. GAAP results. The Company believes that tangible book value per share, tangible common equity to assets ratio, return on average tangible common equity, adjusted return on average tangible common equity, adjusted return on average assets, adjusted HFI loan-to-deposit ratio, adjusted noninterest expense, adjusted income before income taxes, adjusted provision for income taxes, adjusted net income, adjusted basic earnings per share, adjusted diluted earnings per share and adjusted efficiency ratio provide a meaningful representation of its operating performance on an ongoing basis.

    The following tables provide a reconciliation of non-GAAP financial measures.

Tangible book value per share and tangible common equity to assets ratio.
September 30,
2022		June 30,
2022		March 31,
2022		December 31, 2021September 30,
2021
(Dollars in millions, except share data)
Total stockholders' equity$2,616 $2,693 $2,733 $2,718 $2,645 
Less: Goodwill and intangible assets140 142 145 147 149 
Tangible book value$2,476 $2,551 $2,588 $2,571 $2,496 
Number of common shares outstanding 53,330,827 53,329,993 53,236,067 53,197,650 52,862,383 
Tangible book value per share$46.42 $47.83 $48.61 $48.33 $47.21 
Total assets$25,443 $24,899 $23,244 $25,483 $27,042 
Tangible common equity to assets ratio9.7 %10.2 %11.1 %10.1 %9.2 %

18

Return on average tangible common equity, adjusted return on average tangible common equity and adjusted return on average assets.
Three Months EndedNine Months Ended
September 30,
2022		June 30,
2022		September 30,
2021		September 30,
2022		September 30,
2021
(Dollars in millions)
Net income$73 $60 $152 $186 $448 
Add: Intangible asset amortization, net of tax2 3 2 5 6 
Tangible net income$75 $63 $154 $191 $454 
Total average equity$2,785 $2,754 $2,592 $2,742 $2,454 
Less: Average goodwill and intangible assets141 144 151 144 — 
Total tangible average equity$2,644 $2,610 $2,441 $2,598 $2,454 
Return on average tangible common equity11.2 %9.5 %25.2 %9.8 %24.7 %
Adjustment to remove DOJ settlement expense— %— %— %— %2.3 %
Adjustment for former CEO SERP agreement— %— %— %— %(0.7)%
Adjustment for merger costs0.7 %0.6 %1.0 %0.6 %0.9 %
Adjusted return on average tangible common equity11.9 %10.1 %26.2 %10.4 %27.2 %
Return on average assets1.2 %1.0 %2.2 %1.0 %2.1 %
Adjustment to remove DOJ settlement expense— %— %— %— %0.1 %
Adjustment for former CEO SERP settlement agreement— %— %— %— %— %
Adjustment for merger costs— %— %0.1 %— %— %
Adjusted return on average assets 1.2 %1.0 %2.3 %1.0 %2.2 %

Adjusted HFI loan-to-deposit ratio.
September 30,
2022		June 30,
2022		March 31, 2022December 31, 2021September 30,
2021
(Dollars in millions)
Average LHFI$14,640 $13,339 $12,384 $13,314 $13,540 
Less: Average warehouse loans3,541 4,099 3,973 5,148 5,392 
Adjusted average LHFI$11,099 $9,240 $8,411 $8,166 $8,148 
Average deposits$17,216 $17,488 $18,089 $19,816 $19,686 
Less: Average custodial deposits4,681 4,641 4,970 6,309 6,180 
Adjusted average deposits$12,535 $12,847 $13,119 $13,507 $13,506 
HFI loan-to-deposit ratio85.0 %76.3 %68.5 %67.2 %68.8 %
Adjusted HFI loan-to-deposit ratio88.5 %71.9 %64.1 %60.5 %60.3 %

19

Adjusted noninterest expense, income before income taxes, provision for income taxes, net income, basic earnings per share, diluted earnings per share, and efficiency ratio.
Three Months Ended
September 30,
2022		June 30,
2022		March 31,
2022		December 31, 2021September 30,
2021
(Dollar in millions)
Noninterest expense$236 $256 $261 $291 $286 
Adjustment for merger costs3 3 3 6 5 
Adjusted noninterest expense$233 $253 $258 $285 $281 
Income before income taxes$92 $77 $68 $109 $198 
Adjustment for merger costs3 3 3 6 5 
Adjusted income before income taxes$95 $80 $71 $115 $203 
Provision for income taxes$19 $17 $15 $24 $46 
Adjustment for merger costs(1)— (1)(1)(1)
Adjusted provision for income taxes$20 $17 $16 $25 $47 
Net income$73 $60 $53 $85 $152 
Adjusted net income$75 $63 $55 $90 $156 
Weighted average common shares outstanding53,330,518 53,269,631 53,219,866 52,867,138 52,862,288 
Weighted average diluted common shares53,610,266 53,535,448 53,578,001 53,577,832 53,659,422 
Adjusted basic earnings per share$1.42 $1.18 $1.03 $1.71 $2.94 
Adjusted diluted earnings per share$1.41 $1.17 $1.02 $1.69 $2.90 
Efficiency ratio70.9 %79.1 %80.4 %75.9 %62.2 %
Adjustment for merger costs(1.1)%(1.0)%(0.8)%(1.5)%(1.1)%
Adjusted efficiency ratio69.8 %78.1 %79.6 %74.4 %61.1 %


Nine Months Ended
September 30,
2022		September 30,
2021
Efficiency ratio76.7 %65.5 %
Adjustment to remove DOJ settlement expense— %(2.5)%
Adjustment for former CEO SERP agreement— %0.7 %
Adjustment for merger costs(1.0)%(1.0)%
Adjusted efficiency ratio75.7 %62.7 %
20
fbc-3q22earningspresenta
1 3rd Quarter 2022 Flagstar Bancorp, Inc. (NYSE: FBC) Earnings Presentation 3rd Quarter 2022 October 26, 2022

 
2 3rd Quarter 2022 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. Cautionary statements

 
3 3rd Quarter 2022 Unique relationship- based business model • Average C&I loans rose 31% to $2.8B for the quarter and CRE loans grew 5% to $3.5B • Maintained discipline in our deposit pricing as retail deposit costs only increased 15 basis points • Maintained strong asset quality with no nonperforming commercial loans Optimize mortgage Grow community banking Highly profitable operations • Net income grew $13M, delivering a 1.2% return on average assets for the quarter • Increased EPS by $0.23, or 21%, in a quarter where gain-on-sale revenue continued to be less than 10% of our total revenue • The efficiency ratio improved to 71% for the third quarter, as compared to 79% for the second quarter 2022 led by strong, positive operating leverage. Revenue increased 3% and expenses declined 8% Positioned to thrive in any market • Our transformation to a commercial bank continues with mortgage revenue comprising only 16% of total revenue compared to 41% in 3Q2021 • The core of our business is now comprised of sustainable revenue streams, delivering superior returns • Net interest income grew 13% as NIM expanded 29 basis points to 3.98% for the quarter • Net interest margin expanded each month in the quarter with a 4.07% NIM for September • Average HFI loans grew $1.3B, or 10%, from the prior quarter led by our residential mortgage and commercial portfolios • Proactive expense management, combined with the variable cost structure of our mortgage business, drove mortgage expenses down 11% • Our mortgage expense ratio declined 3 basis points to 1.11% of closing volume; reduced headcount by 7% at the end of the quarter Strategic highlights • Grew our fee-generating portfolio of loans serviced or subserviced to more than 1.4M accounts • Average custodial deposits remain an important source of liquidity. As we accumulate owned MSR, these balances provide funding at minimal cost Award winning servicing business 1. References non-GAAP number. Please see reconciliations on pages 39 - 40.

 
4 3rd Quarter 2022 1. References non-GAAP number. Please see reconciliations on pages 39 - 40. Solid earnings Growth in community banking and servicing • Strong HFI loan growth of $1.3 billion, or 10%, compared to last quarter led by our residential mortgage and commercial portfolios • Managed total funding costs (interest-bearing liabilities plus noninterest bearing deposits) to 0.65%, up only 0.33% from the prior quarter • Total loans serviced grew to over $0.4 trillion of UPB at period end providing $4.7 billion of low-cost custodial deposits Mortgage revenue Strong asset quality Robust capital position • Total risk based capital ratio at 14.3% • Tier 1 leverage ratio at 11.1% and CET1 ratio at 12.0% reflecting strong capital generation • Over $0.9B of excess total risk-based capital over the minimum level needed to be considered well-capitalized; reflecting a reduction of $0.2 billion due to MSR asset capital deductions • Adjusted net income of $75M(1), or $1.41(1) per diluted share, in 3Q22 • ROA of 1.2% and ROE of 10.4% despite the large amount of excess capital • TBV per share of $46.42(1) at 9/30/2022, as investment valuations negatively impacted AOCI by $2.80 per share vs. 2Q22 • Net gain on sale revenue of $32M, up $5M on improved secondary marketing performance, partially offset by a 32% decline in fallout-adjusted locks • Net return on MSR of $26M, an annualized 12% return for the quarter. We transitioned to a fully hedged position from a partial hedge position as rates rose during the quarter • Credit reserves of $140M at 9/30/22, with a coverage ratio of 0.89% of loans HFI, or 1.14%, excluding warehouse loans • The $5M increase in the allowance for credit losses reflects growth in our HFI loan portfolio as growth occurred in higher quality loan portfolios • Early stage delinquencies were negligible, and there were no nonperforming commercial loans at quarter-end Financial highlights

 
5 3rd Quarter 2022 $mm Observations • Noninterest income decreased $17M, or 13% - Net gain on loan sales was $32M, up $5M, on improved secondary performance - The mortgage servicing rights portfolio yielded an annualized 12% return for the quarter - Loan admin and fee income declined due to lower originations, higher LIBOR fee credits paid on customer balances and lower subservicing ancillary fees Noninterest income • Net interest income increased $26M - Net interest margin was 3.98%, a 29 bp increase largely attributable to our asset sensitivity and managing deposit pricing - September's NIM was 4.07%, a positive sign for the fourth quarter - Total retail deposit costs, including retail DDA, rose 11 bp compared to short term market rates increasing 135bps Net interest income • Noninterest expense decreased $20 million, or 8% • The ratio of mortgage noninterest expense to closings – our mortgage expense ratio – was 1.12 percent, a decrease of 2 basis points Noninterest expense Quarterly income comparison 1. Non-GAAP number, please see reconciliations on pages 39 - 40. 2. Rounded to the nearest hundred million 3Q22 2Q22 $ Variance % Variance Net interest income $219 $193 $26 13 % Provision (benefit) for credit losses 5 (9) 14 (156) % Net interest income after PLL 214 202 12 6 % Net gain on loan sales 32 27 5 19 % Loan fees and charges 20 29 (9) (31) % Net return on mortgage servicing rights 26 22 4 18 % Loan administration income 18 33 (15) (45) % Other noninterest income 18 20 (2) (10) % Total noninterest income 114 131 (17) (13) % Compensation and benefits 113 122 (9) (7) % Commissions and loan processing 36 45 (9) (20) % Other noninterest expenses 84 86 (2) (2) % Total noninterest expense(1) 233 253 (20) (8) % Income before income taxes(1) 95 80 15 19 % Provision for income taxes(1) 20 17 3 18 % Net income (1) $75 $63 $12 19 % Diluted income per share(1) $1.41 $1.17 $0.24 20 % Profitability Net interest margin 3.98 % 3.69 % 29 bps Net gain on loan sales / total revenue 9.8 % 8.1 % 1.6 % Fallout adjusted rate lock commitments(2) $4,800 $7,100 $(2,300) (32) % Mortgage closings(2) $6,900 $7,700 $(800) (10) % Net gain on loan sale margin 0.66 % 0.39 % 28 bps

 
6 3rd Quarter 2022 $mm Observations • Average retail deposits were down slightly. Retail deposit cost increased only 11 bps and average noninterest bearing DDA increased $0.1 billion Interest-bearing liabilities • Average HFI loans grew $1.3B, or 10%, from the prior quarter, primarily due to: ◦ Residential mortgage loan growth of $0.8B, mostly ARMs from our mortgage LOB ◦ C&I loan growth of $0.7B, half of which was MSR loans ◦ CRE loan growth of $0.2B • Average loans held for sale declined $0.6B, or 17%, due to softer mortgage demand. Interest-earning assets • Tangible book value per share declined to $46.42. Retention of net income was outpaced by the reduction in AOCI from rising interest rates. Equity Balance sheet highlights September 30, 2022 Average Balance Sheet 3Q22 Incr (Decr)(1) $ $ $ % Loans held-for-sale $ 1,830 $ 2,976 $ (595) (17) % Consumer loans(2) 5,327 4,713 1,008 27 % Commercial loans(3) 6,909 6,386 293 3 % Warehouse Lending 3,557 3,541 (558) (14) % Total loans held-for-investment(4) 15,667 14,640 1,301 10 % Loans with government guarantees 1,370 1,275 114 10 % Other earning assets(5) 2,891 3,014 241 (32) % Interest-earning assets $ 21,758 $ 21,905 $ 947 5 % Other assets 3,685 3,243 334 11 % Total assets $ 25,443 $ 25,148 $ 1,281 5 % Total retail deposits $ 9,548 $ 9,974 $ (239) (1) % Government deposits 1,851 1,731 32 2 % Custodial deposits and other 5,192 5,511 (65) (10) % Total interest-bearing deposits 16,591 17,216 (402) (4) % Short-term FHLB advances & other 3,450 2,653 1,529 136 % Long-term FHLB advances 1,000 1,041 59 6 % Other long-term debt 390 396 — — % Other liabilities 1,396 1,057 (66) (6) % Total liabilities $ 22,827 $ 22,363 $ 848 123 % Stockholders' equity 2,616 2,785 31 1 % Total liabilities and stockholders' equity $ 25,443 $ 25,148 $ 1,281 5 % Tangible book value per common share(6) $ 46.42 1. Measured vs. the prior quarter 2. Consumer loans include first and second residential mortgages, HELOC and other consumer loans 3. Commercial loans include commercial real estate and commercial & industrial 4. Net of ACL 5. Other earning assets include interest earning deposits and investment securities 6. References a non-GAAP number. Please see reconciliations on page 47 - 48.

 
7 3rd Quarter 2022 • Noninterest mortgage revenue dropped to 16% of total revenue, from 41% in the comparable quarter in the prior year • Net interest margin has expanded to 3.98% from 3.69% last quarter and 3.00% in the year-ago quarter Total Revenue • Our mortgage expense ratio declined to 1.11% of closing volume as staffing reductions across the quarter were made as expected volumes decreased Noninterest expense Total revenue and expense 1. Includes Servicing revenue/expense 2. Non-GAAP number, please see reconciliations on pages 39 - 40. Total revenue ($mm) $461 $383 $325 $324 $333 195 181 165 193 219 79 84 86 87 61 187 118 74 44 53 Net interest income Noninterest income - Non-Mortgage Noninterest income - Mortgage 3Q21 4Q21 1Q22 2Q22 3Q22 Quarterly adjusted noninterest expense2 ($mm) $281 $285 $258 $253 $233 156 164 156 163 153 125 121 102 90 80 1.00% 1.14% 1.24% 1.14% 1.11% Non-Mortgage NIE Mortgage NIE Mortgage expense 3Q21 4Q21 1Q22 2Q22 3Q22 (1) (1)

 
8 3rd Quarter 2022 Deposits and Lending Portfolio and strategy overview • Flagstar gathers deposits from consumers, businesses and select governmental entities – Total deposit cost of 0.27%, up 11 bps compared to 2Q22 as deposit rates lagged market interest rate increases – For the quarter, average retail DDA balances (both interest and noninterest bearing) slightly increased compared to 2Q22 – Government deposits increased 2% and wholesale deposits decreased 11% as we allowed non-relationship deposits to decline Total average deposits $17.2B Total average LHFI $14.6B • Flagstar’s largest category of earning assets consists of loans held-for-investment which averaged $14.6B during 3Q22 – Our loan portfolio exhibits asset sensitivity with a large proportion of variable rate loans in our warehouse, commercial and home equity portfolios – As consumer demand in the current rate environment has shifted to adjustable-rate mortgages, we’ve added to our 1st Mortgage HFI portfolio – We’ve also found strong demand in MSR lending, which comprised $340M of the growth in C&I loans this quarter DDA 24% Savings 24% MMDA 5% CD 5% Custodial 27% Government 10% Brokered 5% Total: $17.2B 0.27 % Cost of total deposits (1) Total: $14.6B 4.90 % LHFI yield 1st Mortgage 18.0% 2nds, HELOC & other 14.2% Warehouse 24.2% CRE 24.2% C&I 19.4% (1) Total deposits include non-interest bearing deposits.

 
9 3rd Quarter 2022 Commercial lending Diversified relationship-based approach Commercial & Industrial - $3.2b (9/30/2022) Warehouse - $3.6bn (9/30/2022)Overview Warehouse Commercial Real Estate Commercial & Industrial Collateral Breakdown Agency & Conventional 48.0% Jumbo 5.0% Government 23.0% Non-QM 24.0% Commercial Real Estate - $3.7b (9/30/2022) Property Type Home Building 32% Multi Family 13% Owner Occupied 10% Retail 8% Hotel/Motel 13% Office 7% Other 17% Industry Financial, insurance & real estate 76% Services 11% Manufacturing 10% Healthcare 1% Distribution 3% • Warehouse lines with approximately 589 active relationships nationwide, of which approximately 46% 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 relationships with Michigan based companies and national finance companies

 
10 3rd Quarter 2022 NPLs and performing TDRs ($mm) 1. Includes early stage delinquencies, defined as 30 to 89 days past due 2. Includes $44 million of first residential mortgage loans that are current in accordance with their forbearance exit plan and have not yet returned to accrual status as of September 30, 2022 3. Excludes nonperforming loans held-for-sale 4. There are no commercial NPLs in Q2 and Q3 2022. Allowance coverage (% of loans HFI) Delinquencies(1) (% of loans HFI) Nonperforming loan and asset ratios Asset quality $121 $119$127 $116 $129 34 22 23 22 25 58 62 97 99 94 35 32 9 Performing TDRs Consumer NPLs (2) Commercial NPL(4) 9/30/2020 12/31/2021 3/31/2022 6/30/2022 9/30/2022 1.3% 0.9% 1.1% 0.9% 0.9% 2.3% 1.3% 1.6% 1.3% 1.1% Total Total excl. Warehouse 9/30/2021 12/31/2021 3/31/2022 6/30/2022 9/30/2022 0.66% 0.70% 0.80% 0.68% 0.59% 0.70% 0.74% 0.84% 0.71% 0.63% 0.37% 0.39% 0.48% 0.42% 0.39% NPL & TDRs/LHFI NPA/LHFI & OREOs (3) NPA/Total Assets (3) 9/30/2021 12/31/2021 3/31/2022 6/30/2022 9/30/2022 0.75% 1.16% 0.90% 0.83% 0.82% 9/30/2021 12/31/2021 3/31/2022 6/30/2022 9/30/2022

 
11 3rd Quarter 2022 CECL methodology - Forecast • Used 2-year forecasts as of August 2022 reflecting our forecast of economic conditions weighted 40% base, 30% adverse and 30% growth. • The base forecast contemplates the unemployment rate ending 2022 at 3.7% and moving up slightly through 2023 ending at 4%. • GDP is expected to increase 1.6% and 1.5% in 2022 and 2023, respectively, on an annual average basis. • HPI is expected to remain relatively flat for the remainder of 2022 and slightly decline through 2023. • The ACL increased primarily due to volume growth in our HFI portfolio partially offset by credit quality improvements in our consumer loans loans with government guarantees as a result of pay-offs and improvements in the delinquency trends of expired forbearance loans. Allowance for credit losses ($mm) Current Expected Credit Loss (“CECL”) $122 $127 $13 $13 Modeled Allowance for Loan Losses Reserve for Unfunded Commitments Increase Decrease ACL 6 /30 /20 22 Volu me & P or tfo lio D ur ati on Qua lita tiv e F ac tor s Cre dit C ha ng es ACL 9 /30 /20 22 ($12) ($3) $20

 
12 3rd Quarter 2022 Capacity & QualityRe ca pt ur e an d Re te nt io n Flagstar’s one-stop-shop mortgage model MORTGAGE BANKING & SERVICING Teamwork Customer Satisfaction Risk & Compliance Optimize Results Mortgage Originations Mortgage Servicing Mortgage Operations • Warehouse Lending • MSR and Servicing Advance Lending • Custodial Deposits – fund balance sheet • HELOCs Bank Synergies Sales – multi channel • TPO • Distributed Retail • Direct Lending • People • Products • CRA Secondary & Cap Markets • Pricing & Hedging • Outlets o Sales o Securitizations o Retain on B/S Performing • Growth & Scale • Customer Feedback • Risk and Compliance • Other Revenue Opportunities Default • Risk and compliance • Delinquency Mgt • Forbearance Mgt • Claims process • Minimize losses MSR Creation • Sale and retain subservicing • Retain MSR o Agency o GNMA • Protect asset Mortgage Ops • Service • Multi skilled operators • Risk and Compliance • Variable cost model • SupportSub-servicing Opportunities

 
13 3rd Quarter 2022 Closings by mortgage type ($bn) Net gain on loan sales – revenue and margin Fallout-adjusted locks by channel ($bn) Closings by purpose and expense ratio ($bn) Mortgage originations $169 $91 $45 $27 $32 1.50% 1.02% 0.58% 0.39% 0.66% Gain on loan sale ($mm) Gain on sale margin (HFS) 3Q21 4Q21 1Q22 2Q22 3Q22 $11.3 $8.9 $7.7 $7.1 $4.8 3.4 2.5 2.4 2.4 1.5 2.8 2.7 2.0 2.3 2.1 1.1 0.8 1.0 1.1 0.5 2.1 1.4 1.2 0.9 0.5 1.9 1.5 1.1 0.4 Correspondent Bulk Broker Distributed Retail Direct Lending 3Q21 4Q21 1Q22 2Q22 3Q22 $12.5 $10.7 $8.2 $7.7 $6.9 9.4 7.3 5.5 3.9 3.7 2.0 1.9 0.9 1.3 1.5 1.1 1.5 1.8 2.5 1.7 Conventional Jumbo Government 3Q21 4Q21 1Q22 2Q22 3Q22 $12.5 $10.7 $8.2 $7.7 $6.9 5.7 5.0 4.0 5.6 5.9 6.8 5.7 4.2 2.1 1.0 1.00% 1.14% 1.24% 1.14% 1.11% Purchase originations Refinance originations Mortgage expense 3Q21 4Q21 1Q22 2Q22 3Q22 Retail Mix % 43% 51% 56% 80% 83% 33% 36% 36% 24% 18% Purchase Mix %

 
14 3rd Quarter 2022 MSR / CET1 ratio (Bancorp) Quarter-end loans serviced (000’s) Servicing profitability Average custodial deposits ($bn) Mortgage servicing 1,203 1,234 1,256 1,382 1,420 125 137 155 160 267 1,007 1,033 1,041 1,160 1,090 Serviced for Others Subserviced for Others Flagstar Loans HFI 3Q21 4Q21 1Q22 2Q22 3Q22 $17 $20 $21 $17 $14 1,192 1,218 1,245 1,319 1,402 Earnings before Tax ($mm) Average Loans Serviced ($000's) 3Q21 4Q21 1Q22 2Q22 3Q22 $6.2 $6.3 $5.0 $4.6 $4.7 3Q21 4Q21 1Q22 2Q22 3Q22 14% 15% 20% 23% 35% 3Q21 4Q21 1Q22 2Q22 3Q22 25%

 
15 3rd Quarter 2022 Observations 3Q22Flagstar Bancorp Total Risk Based Capital Ratio • Estimated $0.9 billion of excess capital above our internal target operating range for our regulatory capital ratios • Total risk based capital ratio of 14.3% o Total risk based capital ratio would have been 15.5% if the risk-weighting of warehouse loans were adjusted to 50% • Tier 1 leverage ratio ended the quarter at 11.1% o Almost 400 basis points of tier 1 leverage attributed to warehouse loans, loans held for sale and loans with government guarantees that have not yet been repurchased o A $0.2 billion reduction in CET1 due to MSR asset capital deductions Capital 11.2% 11.3% Tier 1 Leverage CET-1 to RWA Tier 1 to RWA Total RBC to RWA 3Q22 11.1% 12.0% 13.1% 14.3% 2Q22 12.2% 13.2% 14.4% 15.7%

 
Appendix Company overview 17 Financial performance 20 Community banking 23 Mortgage servicing 31 Mortgage originations 33 Capital and liquidity 35 Guidance 37 Non-GAAP reconciliation 38

 
17 3rd Quarter 2022 Community banking •Leading Michigan-based bank with a balanced, diversified lending platform •$25.4bn of assets and $16.6bn of deposits •209k household & over 29k business relationships Mortgage origination •7th largest bank originator of residential mortgages ($33.5bn during twelve months ended September 30, 2022) •Scalable platform originating business in all channels and all 50 states including 81 retail home lending offices •More than 1,200 correspondent and more than 1,800 broker relationships Corporate Overview •Traded on the NYSE (FBC) •Headquartered in Troy, MI •Market capitalization $1.8bn(1) •Member of the Russell 2000 Index 1. Market capitalization as of July 26, 2022 2. Includes eight home lending offices located in banking branches. 81 Retail home lending Offices(2) 158 Flagstar Bank Branches Mortgage servicing •5th largest sub-servicer of mortgage loans nationwide •Servicing 1.4 million loans as of September 30, 2022 •Efficiently priced deposits from escrow balances Flagstar at a glance Company Overview

 
18 3rd Quarter 2022Flagstar has a strong executive team 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 Risk Officer • CRO since 6/14 • Over 40 years of financial services experience with Citizens Republic, Fleet Boston Financial, First Union and Chase Manhattan Mortgage Banking and Servicing • Since September 2020 • Previously COO for 7 years May 2013 – Aug 2020 • Formerly a partner of MatlinPatterson Global Advisors and a Senior Director at Zolfo Cooper • Extensive expe- rience in financial management and operations Operations • Joined Flagstar in 1/21 • Over 30 years of experience in the financial services industry, most recently with TD Bank • CEO since 5/13 • Over 40 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 Karen BuckSteve FigliuoloReggie DavisLee SmithJim Ciroli • More than 35 years of banking experience with Suntrust, Royal Bank of Canada, and Wachovia Chief Audit Officer Meagan Belfinger Sandro DiNello President & CEO Chief Information Officer Jennifer Charters • CIO since 6/18 • Over 25 years of IT and financial services experience with Ally Financial and Accenture Company Overview Chief Human Resources Officer David Hollis Corporate Responsibility Beth Correa General Counsel Paul Borja

 
19 3rd Quarter 2022 Risk management Best-in-class risk management platform with 277 FTEs(1) 1. Does not include 26 FTEs in internal audit as of 3/31/2022. Kristina Janssens Chief Compliance Officer Sandro DiNello President & CEO Board of Directors Steve Figliuolo Chief Risk Officer Risk Committee Enterprise Risk Committee FTEs Regulatory Affairs Chief Credit Officer QC / Appraisal Review MFIU Fraud Investigations Operational Risk Financial Crimes (BSA/AML) Compliance Vendor Management Information Security Company Overview 50 25 58 13 3 15 62 15 36

 
20 3rd Quarter 2022 ● Solid growth in banking and subservicing has created more stable earnings ● Focus on efficiency and expense management Revenue Composition and Earnings Metrics Financial Performance 1. Non-GAAP number for 2020 and 2021. Please see reconciliations on pages 39 - 40. Financial performance Revenue (millions) Nine Months Ended September 30, 2021 Nine Months Ended September 30, 2022 Percentage of Revenue Percentage Increase Community Banking $503 $443 45 % (12) % Mortgage Servicing 188 200 20 % 6 % Subtotal 691 643 65 % (7) % Mortgage Origination 791 315 32 % (60) % Other (74) 24 2 % (132) % Total $ 1,408 $ 982 100 % (30) % Financial Metrics Adjusted Diluted Earnings per Share $ 8.92 $ 3.60 (1) (59.6) % Adjusted Return on Average Assets 2.2 % 1.1 % (1) (116) bps Adjusted ROATCE 27.2 % 10.4 % (1) (1,685) bps

 
21 3rd Quarter 2022 Average earning assets and net interest income Higher net interest income is stabilizing earnings 1. References non-GAAP number for 4Q18; excludes $29 million of hedging gains reclassified from AOCI to net interest income in conjunction with the payment of long-term FHLB advances. Please see reconciliations on pages 39 - 40. 2. References non-GAAP number as it excludes impact of $0.1 billion(2Q20), $1.4 billion (3Q20), $1.8 billion (4Q20), $1.8 billion (1Q21), $1.3 billion (2Q21), $0.4 billion (3Q21), $0.2 billion (4Q21) and $0.1 billion (1Q22) of average balance of loans with government guarantees that have not been repurchased and do not accrue interest. Please see reconciliations on pages 39 - 40. Community Banking (2)(2) (1) (2) (2)(2) (2)(2)(2)(2)(1) $124 $123 $126 $138 $146 $152 $148 $168 $180 $189 $189 $183 $195 $181 $165 $193 $219 $16.8 $16.4 $16.3 $17.8 $19.0 $20.7 $21.2 $23.6 $24.3 $25.3 $25.4 $23.9 $25.3 $24.1 $21.6 $21.0 $21.9 Net interest income ($mm) Average earning assets ($bn) 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 (1) (2) CAGR 25% CAGR 30% 2.93% 2.99% 3.09% 3.08% 3.05% 2.93% 2.81% 2.88% 2.94% 2.98% 3.02% 3.06% 3.04% 2.98% 3.12% 3.69% 3.98%Adjusted NIM: (1) (2) (2) (2) (2) (2) (2) (2)(2)

 
22 3rd Quarter 2022Strong market position Source: S&P Global Market Intelligence; Note: Deposit data as of June 30, 2022 and projections based on 2022 estimates; MI-based banks highlighted. 1. Oakland County data excludes $4.1bn of custodial deposits held at company headquarters. 2. Fort Wayne, IN deposit data is based on Fort Wayne, IN Fed District. Fort Wayne, IN demographic data is based on counties within Fort Wayne, IN Fed District, deposit weighted based on Flagstar’s portfolio. 3. Key Midwest Markets Median HHI, based on Flagstar’s portfolio. 4. Deposit data is based on High Desert Region of San Bernardino County, CA. projected HHI growth and projected population growth are deposit weighted 5. 2022–2027 growth rates Key Markets Community Banking Michigan deposit share ● Leading deposit share in Michigan, Fort Wayne, IN(1), and San Bernardino County, CA (High Desert Region) ● Provides access to markets with attractive demographics and low-cost, stable liquidity for continued balance sheet growth Flagstar Deposits Deposit Median Proj HHI Proj pop Market $mm % of total mkt share HHI growth (5) growth (5) Oakland County, MI(1) $ 6,032 48.2 % 7.5 % $ 89,480 9.0 % 2.0 % Grand Rapids, MI MSA 321 2.6 % 1.0 % 71,891 10.4 % 3.4 % Ann Arbor, MI MSA 2,551 2.0 % 2.0 % 84,529 11.7 % 2.2 % Fort Wayne, IN(2) 943 7.5 % 7.0 % 64,645 11.4 % 3.3 % Key Midwest Markets(3) 7,548 60.3 % 5.5 % 85,463 9.5 % 2.2 % San Bernardino County, CA (4) 838 6.7 % 1.0 % 78,101 13.9 % 3.1 % National aggregate 2022 Rank Deposits as of 06/30/2022 ($mm) % YoY Overall Institution Branches Total Share Change 1 JPMorgan Chase 182 $ 74,900 24 % — % 2 Huntington 323 38,001 12 % (5) % 3 Comerica 182 37,729 12 % (3) % 4 Bank of America 79 33,990 11 % 11 % 5 PNC 143 25,376 8 % 9 % 6 Fifth Third 173 21,518 7 % (2) % 7 Flagstar 114 14,990 5 % (15) % 8 Citizens 72 6,900 2 % 1 % 9 Independent 63 4,359 1 % 11 % 10 Mercantile Bank Corp. 40 3,892 1 % 6 % Top 10 1,371 $ 261,655 83 % — %

 
23 3rd Quarter 2022Community banking Quarter-end commercial loan commitments ($bn) Average deposit funding(1) ($bn) 1. Includes custodial deposits which are included as part of mortgage servicing. Average commercial loans ($bn) Average consumer loans ($bn) Community Banking $3.6 $3.4 $3.4 $3.7 $4.7 1.7 1.6 1.5 1.8 2.6 1.9 1.8 1.9 1.9 2.1 Residential First Mortgages Other Consumer Loans 3Q21 4Q21 1Q22 2Q22 3Q22 $19.4 $19.8 $18.2 $17.5 $17.2 10.0 10.3 10.2 10.2 10.0 2.0 2.0 1.9 1.7 1.7 6.1 6.3 5.0 4.6 4.7 Retail Government Custodial deposits Brokered deposits 3Q21 4Q21 1Q22 2Q22 3Q22 $10.0 $9.9 $9.0 $9.6 $9.9 1.4 1.5 1.8 2.2 2.8 3.2 3.3 3.2 3.4 3.5 5.4 5.2 4.0 4.1 3.5 Commercial and Industrial Commercial Real Estate Warehouse 3Q21 4Q21 1Q22 2Q22 3Q22 $18.5 $20.6 $21.5 $22.3 $22.9 2.7 3.4 3.5 4.3 4.9 4.9 5.4 5.5 5.9 6.4 10.9 11.8 12.5 12.1 11.6 Commercial and Industrial Commercial Real Estate Warehouse 3Q21 4Q21 1Q22 2Q22 3Q22

 
24 3rd Quarter 2022 • Average LTV ~52% and DSC ~2.1% • 54% LIBOR / 26% Prime Rate / 4% Fixed Rate / 14% SOFR • Shared National Credits ~4% of portfolio Commercial Real Estate ($bn) Commercial real estate portfolio detail Portfolio Characteristics State Breakdown (by collateral location) Community Banking Property Breakdown Collateral Type NBV Commitment % Utilization Home Builder 1.2 2.8 41.5 % Owner Occupied 0.4 0.4 98.6 % Multi Family 0.5 1.1 43.9 % Retail 0.3 0.3 83.8 % Office 0.3 0.3 94.9 % Hotel/Motel 0.5 0.5 90.0 % Senior Living Facility 0.3 0.3 84.2 % Industrial 0.1 0.3 38.3 % Parking Garage/Lot 0.1 0.1 99.9 % All Other 0.2 0.3 76.5 % Total CRE $ 3.7 $ 6.4 57.9 % Michigan 36% Texas 10% California 9% Florida 8% Colorado 6% Other 31% Home Building 32% Multi Family 13% Owner Occupied 10% Hotel/Motel 13% Retail 8%Office 7% Other 17%

 
25 3rd Quarter 2022 Commercial & Industrial ($bn) Commercial and industrial portfolio detail Portfolio Characteristics State Breakdown Community Banking • 28% LIBOR / 56% SOFR / 8% Prime Rate / 5% BSBY / 3% Fixed Rate • Shared national credits ~51% of portfolio • The financial and insurance portfolio includes $1.0 billion in loans that are collateralized by MSR assets with an average amortized cost of $73 million and an average commitment of $98 million Industry Breakdown NBV Commitment % Utilization Financial & Insurance $ 1.6 $ 2.4 66.7 % Services 0.3 0.6 50.0 % Manufacturing 0.3 0.4 75.0 % Home Builder Finance 0.5 0.9 55.6 % Rental & Leasing 0.3 0.4 75.0 % All Other 0.2 0.2 100.0 % Total C&I $ 3.2 $ 4.9 65.3 % MI 21% NY 14% FL 16% CA 6% SC 9% TX 8% MN 7% OH 2% WI 1% OTHER 16% Financial, insurance & real estate 75% Services 11% Manufacturing 10% Healthcare 1% Distribution 3% Government & education —%

 
26 3rd Quarter 2022 FBC warehouse loan commitments ($bn) Warehouse lending Community Banking Lenders ranked by commitments ($mm) Source: Inside Mortgage Finance Report published on September 1, 2022, with balances as of June 2022. ● National relationship-based lending platform ● Attractive asset class with good spreads and low credit risk ● Flagstar is well positioned to hold market share, leveraging relationships in complementary lines of business, including home builder finance and mortgage originations ● Collateral Breakdown: Agency & Conventional 47.6% Government 22.7% / Jumbo 5.6% / Non-QM 24.1% Net charge-offs 6 bps annual loss rate since 2006 $10.8 $11.8 $12.3 $12.1 $11.6 6.2 5.0 4.6 4.4 3.6 4.6 6.8 7.7 7.6 8.0 Outstandings Unfunded Commitments 9/30/2021 12/31/2021 3/31/2022 6/30/2022 9/30/2022 YOY 2Q22 Rank Institution Growth Total Share 1 JPMorgan Chase -5 % $ 21,000 16 % 2 Flagstar 6 % 12,478 10 % 3 First Horizon -1 % 11,200 9 % 4 TIAA FSB -10 % 9,500 7 % 5 Merchants Bank 15 % 8,200 6 % 6 Truist Bank -22 % 7,522 6 % 7 Texas Capital -25 % 6,549 5 % 8 Western Alliance Bank 10 % 5,595 4 % 9 Customers Bank -13 % 4,800 4 % 10 Wells Fargo -27 % 4,500 3 % Top 10 -7 % $ 91,344 70 % $1.0 $1.1 $1.2 $1.1 0 29 22 17 17 0 1 0 0 0 0 0 0 0 0 0 NCO ($mm) NCO Rate 20 07 20 08 20 09 20 10 20 11 20 12 20 13 20 14 20 15 20 16 20 17 20 18 20 19 20 20 20 21 20 22

 
27 3rd Quarter 2022Home builder finance Community Banking Home builder loan commitments(1) ($mm) ● National relationship-based lending platform launched in 1Q16 - Attractive asset class with good spreads (~375 bps) - Meaningful cross-sell opportunities including warehouse loans, commercial deposits and purchase originations ● Flagstar is well positioned - Focused on markets with strong housing fundamentals and higher growth potential - We have direct relationships with 10 of the top 10 and do business with 71 of the top 100 builders nationwide (101 of the top 200) through September 2022. Home builder finance footprint Overview Tightening housing supply 1. Commitments are for loans classified as commercial real estate and commercial & industrial. $2,407 $2,731 $2,960 $3,419 $3,774 $956 $1,041 $1,225 $1,473 $1,687 $1,451 $1,690 $1,735 $1,947 $2,087 Unpaid principal balance Unused 9/30/2021 12/31/2021 3/31/2022 6/30/2022 9/30/2022 Existing home sales (mm) Months supply of existing homes for sale 20 00 20 01 20 02 20 03 20 04 20 05 20 07 20 08 20 09 20 10 20 11 20 12 20 14 20 15 20 16 20 17 20 18 20 19 20 21 20 22 0 1 2 3 4 5 6 7 8 0 2 4 6 8 10 12 Source: Bloomberg (through 9/30/22)

 
28 3rd Quarter 2022 • 91 borrowers, average UPB of $18 million and average commitment of $21 million • Total SNC breakdown: C&I ~84% / CRE ~10% / Warehouse ~6% • No nonperforming loans as of 9/30/2022 • Loans totaling $25 million are rated as special mention or substandard • Average UPB of ~$17 million per loan • Loans totaling $27 million of UPB are rated as special mention or substandard • SNCs comprised $455 million of total leveraged loan UPB Leverage lending commentary Estimates subject to change based on continuing review of models and assumptions, portfolio performance, changes in forecasted macroeconomic conditions and loan mix Leverage lending and SNCs Shared national credits “SNCs” commentary Portfolio Composition - $0.5b UPB (9/30/2022) Community Banking Portfolio Composition - $1.7bn UPB (9/30/2022) Services 30% Financials & Insurance 40% Rental & Leasing 12% Manufacturing 10% Warehouse 6% Other 2%Manufacturing 38% Financials & Insurance 16% Services 34% Healthcare 4% Commodities 4% Distribution 4%

 
29 3rd Quarter 2022Allowance for credit losses Community Banking 1. Includes reserve for unfunded commitment of $13 million and $13 million at 6/30/2022 and 9/30/2022, respectively. June 30, 2022 September 30, 2022 Amount % of LHFI Amount % of LHFI ($ in millions) Consumer: Residential First Mortgage $ 33 1.5 % $ 32 1.0 % Home Equity 21 3.3 % 23 3.0 % Other Consumer 31 2.3 % 29 2.1 % Total Consumer 85 2.0 % 84 1.6 % Commercial: Commercial Real Estate 22 0.6 % 26 0.7 % Commercial and Industrial 11 0.4 % 16 0.5 % Warehouse Lending 4 0.1 % 1 — % Total Commercial 37 0.4 % 43 0.4 % Total Credit Reserve(1) $ 135 0.9 % $ 140 0.9 % Total Credit Reserve Excluding Warehouse $ 131 1.3 % $ 139 1.1 %

 
30 3rd Quarter 2022 154 7 35 MSR portfolio MSR portfolio characteristics (% UPB)MSR portfolio statistics Net return (loss) on mortgage servicing rights ($mm) Mortgage Servicing By Vintage 2022 22% 2021 34% 2020 25% 2019 & prior 19% By Investor Freddie 23% Fannie 61% GNMA 15% Private 1% Measure ($mm) 06/30/2022 09/30/2022 Difference Unpaid principal balance $41,433 $67,830 $26,397 Fair value of MSR $622 $1,026 $404 Capitalized rate (% of UPB) 1.50 % 1.51 % 1 bps Multiple 4.490 4.817 0.327 Note rate 3.45 % 3.61 % 16 bps Service fee 0.31 % 0.31 % 0 bps Average Measure ($000) UPB per loan $259 $254 $ (5) FICO 734 741 7 Loan to value 72.63 % 70.51 % (212) bps $ Return 3Q21 4Q21 1Q22 2Q22 3Q22 Net hedged profit (loss) $3 $7 $7 $10 -$4 Carry on asset 24 22 21 25 42 Run-off (20) (18) (15) (13) (14) EBO MSR Write-off (7) — (1) — — Gross return on the MSR ($) $ — $ 11 $ 12 $ 22 $ 24 Sale transaction & P/L (3) 1 3 — 2 Model changes 12 8 14 — — Net return on the MSR ($) $ 9 $ 20 $ 29 $ 22 $ 26 Average MSR ($) $ 290 $ 358 $ 443 $ 564 $ 842 Net return on the MSR (%) 12.3 % 22.2 % 26.5 % 15.8 % 12.3 %

 
31 3rd Quarter 2022 154 7 35 Servicing Servicing Profitability Mortgage Servicing 1. Expense on custodial deposits from loans subserviced which is included in net loan administration income for GAAP purposes. Includes intersegment allocation. 2. Service fee income and late fee income are included in net loan administration income for GAAP purposes; ancillary fee income is included in loan fees and charges for GAAP purposes. 3. Includes direct allocations. ($mm) 3Q21 4Q21 1Q22 2Q22 3Q22 Net interest income Interest income (FTP) $ 6 $ 6 $ 6 $ 9 $ 11 Interest expense on custodial deposits (1) (2) (2) (3) (5) (5) Total net interest income 4 4 3 4 6 Noninterest income (2) Service fee income 36 42 40 39 38 Ancillary fee income 20 18 21 22 14 Late fee income 4 3 3 5 5 Total noninterest income 60 63 64 66 57 Noninterest expense (3) (47) (48) (46) (53) (49) Earnings before Tax $ 17 $ 19 $ 21 $ 17 $ 14 Average Custodial Deposits ($bn) $ 6.3 $ 6.3 $ 5.0 $ 4.8 $ 4.8 Average Loans Serviced for Others (000's) 1,192 1,218 1,245 1,319 1,402

 
32 3rd Quarter 2022 • 2.8% market share with #9 national ranking(1) • More than 1,200 correspondent partners • Top 10 relationships account for 18% of overall correspondent volume • Warehouse lines with 334 correspondent relationships Mortgage Originations Residential mortgage originations by channel ($bn) BrokerCorrespondent Retail • 1.0% market share with #13 national ranking(1) • 1,800 broker relationships • Top 10 relationships account for 11% of overall brokerage volume 1. Data source: As reported by Inside Mortgage Finance for published 12/31/2021. • 81 retail locations in 26 states • Direct Lending is 21% of retail volume National distribution through multiple channels $7.3 $5.9 $4.5 $4.6 $4.8 4.3 3.0 2.3 2.5 2.4 3.0 2.9 2.2 2.1 2.5 Other Bulk 3Q21 4Q21 1Q22 2Q22 3Q22 $1.1 $1.0 $0.8 $1.2 $0.9 Broker 3Q21 4Q21 1Q22 2Q22 3Q22 $4.1 $3.8 $2.9 $1.9 $1.2 2.1 1.8 1.2 1.1 1.0 2.0 2.0 1.7 0.8 0.3 Distributed Retail Direct Lending 3Q21 4Q21 1Q22 2Q22 3Q22

 
33 3rd Quarter 2022 Flagstar has a scalable origination platform that drives profitability in almost any mortgage origination market Mortgage Originations Source: Mortgage Bankers Association (MBA) for actual periods and a blended average of forecast by Fannie Mae (6/17/2022), Freddie Mac (4/18/2022) and MBA (6/18/2022). 1. Adjusted for historical inflation as reported by Bureau of Labor Statistics (2021 = 100). 2. Adjusted for population growth as reported by the U.S. Census Bureau (2021 = 100). U.S. residential mortgage origination market (historical and projected volumes) 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 2.2 4.1 4.0 2.5 2.3 2.5 1.1 1.6 1.8 1.3 1.1 1.3 1.3 2.6 2.1 1.7 3.3 4.1 5.4 3.8 4.0 3.5 3.0 1.9 2.4 2.0 1.7 2.3 2.1 1.4 1.8 2.2 1.9 1.7 2.2 4.1 4.0 2.5 2.3 2.5 1.4 2.1 2.3 1.7 1.4 1.6 1.7 3.2 2.6 2.0 3.9 4.8 6.2 4.3 4.5 3.9 3.3 2.1 2.6 2.2 1.8 2.5 2.2 1.5 1.9 2.3 1.9 1.8 2.2 4.1 4.0 2.5 2.2 2.5 Nominal ($) Real(1)($) Adj(2)($) 1.4 2.1 2.3 1.7 1.4 1.6 1.7 3.2 2.6 2 3.9 4.8 6.2 4.3 4.5 3.9 3.3 2.1 2.6 2.2 1.8 2.5 2.2 1.5 1.9 2.3 1.9 1.8 2.2 4.1 4 2.5 2.2 2.5 19 91 19 92 19 93 19 94 19 95 19 96 19 97 19 98 19 99 20 00 20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 20 10 20 11 20 12 20 13 20 14 20 15 20 16 20 17 20 18 20 19 20 20 20 21 20 22 F 20 23 F 20 24 F

 
34 3rd Quarter 2022 154 7 35 Balance sheet composition Capital and Liquidity 3Q22 average balance sheet (%) Attractive relationship lending with very low delinquencies Primarily low risk, stable assets (FHLB stock, BOLI, premises & equipment, deferred tax asset, etc.) ~53% 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 Efficiently funds loans held-for-sale and warehouse loans 1) Other LHFI includes home equity and other consumer loans. 10% 34% 14% 12% 16% 11% Assets 11% 15% 19% 49% Liabilities & Equity Other assets 2% MSR Commercial loans and other LHFI (1) Warehouse loans Loans held-for-sale Mortgage loans held- for-investment Agency MBS 1% Cash Equity 5% Other liabilities 2% Other LT debt FHLB borrowings Custodial deposits Deposits excluding custodial deposits

 
35 3rd Quarter 2022Liquidity and funding 154 7 35 1. Adjusted HFI loan-to-deposit ratio is total average loans HFI (excluding warehouse loans) expressed as a percentage of total average deposits (excluding custodial deposits). Please see non-GAAP reconciliations on pages 39 - 40. 2. Cash, investment securities and FHLB borrowing capacity expressed as a percentage of total assets. Adjusted HFI loan-to-deposit ratio(1) Commentary • Flagstar has invested significantly in building its Community Banking business, which provides attractive core deposit funding for its balance sheet • These retail deposits are supplemented by custodial 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) • Over $1.4 billion of additional borrowing capacity through the discount window Liquidity ratio(2) Capital and Liquidity 60% 61% 64% 72% 89% 3Q21 4Q21 1Q22 2Q22 3Q22 12%13% 11% 12% 2% Cash & investment securities FHLB borrowing capacity 2Q22 3Q22

 
36 3rd Quarter 2022 • Flagstar’s Net Interest Income remains asset sensitive Interest rate risk 154 7 35 Capital and Liquidity Earnings at Risk Economic Value of Equity

 
37 3rd Quarter 2022Earnings guidance(1) 1) See cautionary statements on slide 2. Net interest income Net interest income is flat to third quarter • NIM remains unchanged • Earning assets remain flat • Guidance assumes a 75 bps hike in November and a 50 bps hike in December Noninterest income • GOS revenue remains flat • Net return on MSR is 8 - 10% due to lower prepayments • Loan administration income declines consistent with LIBOR-based credits we provide to our subservicing customers on their escrow balances deposited with us Noninterest expense • Noninterest expense of $215 to $225 million, excluding merger costs o Guidance reflects staffing reductions in mortgage that have already been made • Efficiency ratio in the mid to high sixties 4rd Quarter 2022 Outlook (unless otherwise noted) • No further ACL releases are expected • Provision should approximate NCOs, albeit reflecting strong asset quality Provision for Loan Loss

 
38 3rd Quarter 2022Non-GAAP reconciliation Non-GAAP Reconciliation $mm Adjusted ROA, ROE and ROTCE 9 Months ended September 30, 2022 9 Months ended September 30, 2021 Return on Average Assets 1.0 % 2.1 % Adjustment to remove DOJ benefit (net of tax) — % 0.1 % Adjustment for CEO SERP — % — % Adjustment for merger costs — % 0.1 % Adjusted return on average assets 1.0 % 2.3 % Return on average tangible common equity 9.8 % 24.7 % Adjustment to remove DOJ benefit (net of tax) — % 2.3 % Adjustment for CEO SERP — % (0.7) % Adjustment for merger costs 0.6 % 0.9 % Adjusted return on tangible commmon equity 10.4 % 27.2 % Tangible Book Value Per Share and Tangible Common Equity to Assets Ratio As of September 30, 2022 As of June 30, 2022 Total stockholders' equity $ 2,616 $ 2,693 Goodwill and intangible assets 140 142 Tangible book value $ 2,476 $ 2,551 Number of common shares outstanding 53,330,827 53,329,993 Tangible book value per share $ 46.42 $ 47.83 Adjusted HFI Loan-to-Deposit Ratio As of September 30, 2022 As of June 30, 2022 As of March 31, 2022 As of December 31, 2021 As of September 30, 2021 Average LHFI $ 14,640 $ 13,339 $ 12,384 $ 13,314 $ 13,540 Less: Average warehouse loans 3,541 4,099 3,973 5,148 5,392 Adjusted average LHFI $ 11,099 $ 9,240 $ 8,411 $ 8,166 $ 8,148 Average deposits $ 17,216 $ 17,488 $ 18,089 $ 19,816 $ 19,686 Less: Average custodial deposits 4,681 4,641 4,970 6,309 6,180 Adjusted average deposits $ 12,535 $ 12,847 $ 13,119 $ 13,507 $ 13,506 HFI loan-to-deposit ratio 85.0 % 76.3 % 68.5 % 67.2 % 68.8 % Adjusted HFI loan-to-deposit ratio 88.5 % 71.9 % 64.1 % 60.5 % 60.3 %

 
39 3rd Quarter 2022Non-GAAP reconciliation (continued) Non-GAAP Reconciliation $mm Adjusted Total Revenues and Noninterest Expense 9 Months ended September 30, 2022 3 Months ended September 30, 2022 3 Months ended June 30, 2022 3 Months ended March 31, 2022 3 Months ended December 31, 2018 Net interest income $ 152 Adjustment to remove hedging gains (29) Adjusted net interest income $ 123 Noninterest expense $ 753 $ 236 $ 256 $ 261 Adjustment to remove DOJ settlement expense — — — — Adjustment for merger costs 9 3 3 3 Adjusted noninterest expense $ 744 $ 233 $ 253 $ 258 Income before income taxes $ 237 $ 92 $ 77 $ 68 Adjustment to remove DOJ settlement expense — — — — Adjustment for merger costs 9 3 3 3 Adjusted income before income taxes $ 246 $ 95 $ 80 $ 71 Provision for income taxes $ 51 $ 19 $ 17 $ 15 Adjustment to remove DOJ settlement expense — — — — Adjustment for merger costs (2) (1) — (1) Adjusted provision for income taxes $ 53 $ 20 $ 17 $ 16 Net Income $ 186 $ 73 $ 60 $ 53 Adjusted net income $ 193 $ 75 $ 63 $ 55 Weighted average common shares outstanding 53,273,743 53,330,518 53,269,631 53,219,866 Weighted average diluted common shares 53,574,690 53,610,266 53,535,448 53,578,001 Adjusted basic earnings per share $ 3.62 $ 1.42 $ 1.18 $ 1.03 Adjusted diluted earnings per share $ 3.60 $ 1.41 $ 1.17 $ 1.02