Flagstar Bancorp (FBC) 10-K 2015 FY Annual report

EXHIBIT 12

Statement of Computation of Ratios of Earnings to Fixed Charges and Preferred Dividends

	For the Year Ended December 31,
	2015			2014			2013			2012			2011
	(Dollars in millions)
Income (loss) from continuing operations, before income tax	$	240		$	(103	)	$	(149	)	$	53		$	(181	)
Fixed charges:
Interest on short-term borrowings	$	2		$	2		$	—		$	2		$	17
Interest on long-term debt	25			7			102			112			108
Preferred dividends (1)	30			27			20			19			17
Combined fixed charges, excluding interest on deposits	57			36			122			133			142
Interest on deposits	42			30			43			70			95
Combined fixed charges, including interest on deposits	$	99		$	66		$	165		$	203		$	237
Ratio of earnings to combined fixed charges and preferred stock dividend requirements:
Excluding interest on deposits	4.16		%	(2)			(2)			1.11		%	(2)
Including interest on deposits	2.82		%	(2)			(2)			1.07		%	(2)

(1) Includes $30 million, $26 million, $14 million and $14 million of deferred cumulative preferred stock dividends during the years ended December 31, 2015, 2014, 2013 and 2012, respectively.

(2) Earnings were insufficient to meet fixed charges and preferred stock dividends by approximately $103 million, $149 million and $181 million for the years ended December 31, 2014, 2013, and 2011, respectively.

On January 27, 2012, we provided notice to the U.S. Treasury exercising the contractual right to defer regularly scheduled quarterly payments of dividends, beginning with the February 2012 payment, on preferred stock issued and outstanding in connection with participation in the TARP Capital Purchase Program. Under the terms of the preferred stock, we may defer payments of dividends for up to six quarters in total without default or penalty. Concurrently, we also exercised contractual rights to defer interest payments with respect to trust preferred securities.

On December 18, 2012, the U.S. Treasury announced its intention to auction, during 2013, the preferred stock of a number of institutions, including us, that the U.S. Treasury purchased in 2009 under the TARP Capital Purchase Program.The auction of our Fixed Rate Cumulative Perpetual Preferred Stock, Series C (the "Series C Preferred Stock"), closed on March 28, 2013. That auction closed on June 5, 2013. As a result of the auctions, the Series C Preferred Stock and the TARP Warrant are now held by third party investors unaffiliated with the U.S. government.

We deferred payments of $30 million, $26 million, $14 million and $14 million on cumulative preferred stock dividends during the years ended December 31, 2015, 2014, 2013 and 2012, respectively. A payment of $11.6 million was made on our Series C preferred stock during the year ended December 31, 2011.

For the purpose of computing the consolidated ratio of earnings to fixed charges, "earnings" consist of income before income taxes and extraordinary items plus fixed charges. "Fixed charges" consist of interest on short-term and long-term debt and where indicated, interest on deposits. For the years ended December 31, 2015, 2014, 2013, 2012, and 2011, fixed charges also includes preferred stock dividends. The ratios are based solely on historical financial information, and no pro forma adjustments have been made thereto.