1033012--3/13/2009--FLAGSTAR_BANCORP

related topics

{loss, insurance, financial}

{loan, real, estate}

{tax, income, asset}

{competitive, industry, competition}

{capital, credit, financial}

{debt, indebtedness, cash}

{stock, price, share}

{system, service, information}

{personnel, key, retain}

{acquisition, growth, future}

{stock, price, operating}

We depend on our institutional counterparties to provide services that are critical to our business. If one or more of our institutional counterparties defaults on its obligations to us or becomes insolvent, it could have a material adverse affect our earnings, liquidity, capital position and financial condition. Defaults by another larger financial institution could adversely affect financial markets generally. If we cannot effectively manage the impact of the volatility of interest rates our earnings could be adversely affected. The value of our mortgage servicing rights could decline with reduction in interest rates. Certain hedging strategies that we use to manage our investment in mortgage servicing rights may be ineffective to offset any adverse changes in the fair value of these assets due to changes in interest rates. We use estimates in determining the fair value of certain of our assets, which estimates may prove to be incorrect and result in significant declines in valuation. Changes in the fair value or ratings downgrades of our securities may reduce our stockholders equity, net earnings, or regulatory capital ratios. Current and further deterioration in the housing and commercial real estate markets may lead to increased loss severities and further increases in delinquencies and non-performing assets in our loan portfolios. Additionally, the performance of our standby and commercial letters of credit may be adversely affected as well. Consequently, our allowance for loan losses and guarantee liability may not be adequate to cover actual losses, and we may be required to materially increase our reserves. Our secondary market reserve for losses could be insufficient. Our home lending profitability could be significantly reduced if we are not able to resell mortgages. Our commercial real estate and commercial business loan portfolios carry heightened credit risk. Our ability to borrow funds, maintain or increase deposits or raise capital could be limited, which could adversely affect our liquidity and earnings. Our inability to realize our deferred tax assets may have a material adverse affect on our consolidated results of operations and our financial condition. We may be required to raise capital at terms that are materially adverse to our shareholders. Our holding company is dependent on the Bank for funding of obligations and dividends. Future dividend payments and common stock repurchases are restricted by the terms of the Treasury s equity investment in us. We may not be able to replace key members of senior management or attract and retain qualified relationship managers in the future. The network and computer systems on which we depend could fail or experience a security breach. Our business is highly regulated. Our business has volatile earnings because it operates based on a multi-year cycle.

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1033012--3/13/2009--FLAGSTAR_BANCORP_INC