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Flagstar Announces Organizational Restructuring to Reduce Costs and Enhance Profitability

Initiative Expected to Ensure Long-Term Sustainability of Earnings

TROY, Mich., Jan. 16, 2014 /PRNewswire/ -- Flagstar Bancorp, Inc. (NYSE: FBC) ("Flagstar" or the "Company") today announced that it has implemented an organizational restructuring to reduce expenses in light of the current operating environment and consistent with its previously communicated strategy of optimizing its cost structure across all business lines.

"In 2013 we made important progress in resolving certain legacy issues, and we are now focused on further strengthening our financial and operational foundation," said Alessandro (Sandro) DiNello, Flagstar's President and Chief Executive Officer.  "We are committed to being a highly efficient and best-in-class operator in each of our businesses, and this restructuring will align our infrastructure with today's business environment, including the significantly reduced mortgage origination market.  The decision to downsize our workforce was not made lightly, but is a necessary step on the path to achieving the Company's long-term goals.  We appreciate the many contributions of our dedicated employees and we remain committed to community banking in Michigan and mortgage origination and servicing nationally.  These organizational changes will have no impact on our clients."

As part of this restructuring initiative, the Company will reduce staffing levels across the organization by approximately 600 positions from its September 30, 2013 headcount level.  Flagstar expects the restructuring will generate annualized cost savings of approximately $40 million when fully-implemented by the end of the first quarter of 2014.  The Company expects to incur a pre-tax charge of approximately $5.2 million related to this restructuring.

About Flagstar

Flagstar is a full-service financial institution offering a range of products and services to consumers, businesses, and homeowners.  With $11.8 billion in total assets at September 30, 2013, Flagstar is the largest bank headquartered in Michigan.  Flagstar operates 111 banking centers, all of which are located in Michigan, and 45 home lending centers located in 19 states, which primarily originate one-to-four family residential first mortgage loans.  Originating loans nationwide, Flagstar is one of the leading originators of residential first mortgage loans.  For more information, please visit flagstar.com.

Forward Looking Statements

This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, as amended.  Forward-looking statements, by their nature, involve estimates, projections, goals, forecasts, assumptions, risks and uncertainties that are difficult to predict and could cause actual results or outcomes to differ materially from those expressed in a forward-looking statement.  Forward-looking statements contained in this press release and any information related to expectations about future events or results are based upon information available to the Company as of the date hereof.  Forward-looking statements can be identified by such words as "anticipates," "intends," "plans," "seeks," "believes," "expects", "estimates," and similar references to future periods.  Examples of forward-looking statements include, but are not limited to, statements made regarding the Company's current expectations, plans or forecasts of its core business drivers, credit related costs, asset quality, capital adequacy and liquidity, the implementation of the Company's business plan and growth strategies, the suspension of dividend payments on preferred stock, the deferral of interest payment on trust preferred securities, the result of improvements to the Company's servicing processes, the Company's strategy for outsourcing its non-core default servicing business and other similar matters.  Although we believe that these forward-looking statements are based on reasonable estimates and assumptions, they are not guarantees of future performance and are subject to known and unknown risks, uncertainties, contingencies, and other factors.  Accordingly, we cannot give you any assurance that our expectations will in fact occur or that actual results will not differ materially from those expressed or implied by such forward-looking statements.  We caution you not to place undue reliance on any forward-looking statement and to consider all of the following uncertainties and risks, as well as those more fully discussed in the Company's filings with the Securities and Exchange Commission ("SEC"), including, but not limited to, our Form 10-K and Forms 10-Q: volatile interest rates that impact, among other things, the mortgage banking business, our ability to originate loans and sell assets at a profit, prepayment speeds and our cost of funds; changes in regulatory capital requirements or an inability to achieve or maintain desired capital ratios; actions of mortgage loan purchasers, guarantors and insurers regarding repurchases and indemnity demands and uncertainty related to foreclosure procedures; uncertainty regarding pending and threatened litigation; our ability to control credit related costs and forecast the adequacy of reserves; the imposition of regulatory enforcement actions against us; our compliance with the Supervisory Agreement with the Board of Governors of the Federal Reserve System and the Consent Order with the Office of the Comptroller of the Currency.  Except to the extent required under the federal securities laws and the rules and regulations promulgated by the SEC, the Company undertakes no obligation to update any such statement to reflect events or circumstances after the date on which it is made.

SOURCE Flagstar Bancorp, Inc.

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