Downey Financial 8-K Regulation FD Disclosure

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EXHIBIT 99.1

DOWNEY FINANCIAL CORP.
N E W S   R E L E A S E	For further information contact: Brian E. Côté Chief Financial Officer (949) 509-4420

DOWNEY FINANCIAL CORP. ANNOUNCES THIRTEEN
MONTH SELECTED FINANCIAL DATA

          Newport Beach, California — September 18, 2008 — Downey Financial Corp. (NYSE: DSL) today released monthly selected financial data for the thirteen months ended August 31, 2008.

          Downey Financial Corp. is the parent company of Downey Savings and Loan Association, F.A., with assets of $13.9 billion and 169 branches throughout California and five in Arizona.

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DOWNEY FINANCIAL CORP. AND SUBSIDIARIES
Monthly Selected Financial Data (Unaudited)

(Dollars in Thousands)			Aug. 31, 2008			Jul. 31, 2008			Jun. 30, 2008			May 31, 2008			Apr. 30, 2008			Mar. 31, 2008			Feb. 29, 2008			Jan. 31, 2008			Dec. 31, 2007			Nov. 30, 2007			Oct. 31, 2007			Sep. 30, 2007			Aug. 31, 2007
Balance sheet summary
Total assets			$13,886,200			$13,379,950			$12,632,319			$12,783,866			$13,145,120			$13,131,349			$13,415,108			$13,555,878			$13,409,057			$13,535,656			$14,182,233			$14,417,717			$14,366,680
Loans receivable held for investment, net			10,743,384			10,703,276			10,631,012			10,739,610			10,674,245			10,616,503			10,794,894			10,943,458			11,033,160			11,324,527			11,477,114			11,601,845			11,725,121
Loans held for sale, at lower of cost or fair value			82,981			84,516			85,558			113,042			106,635			109,253			116,632			86,075			103,384			79,245			104,265			90,228			94,912
MBS available for sale, at fair value			104			105			106			107			108			109			110			111			111			111			111			112			113
Cash, investment securities and FHLB stock			2,324,489			1,823,057			1,170,402			1,206,941			1,689,314			1,763,273			1,873,535			1,935,470			1,710,583			1,690,570			2,173,884			2,299,959			2,145,314
Deposits			9,850,174			9,373,703			9,880,978			10,046,208			10,062,116			10,244,289			10,310,251			10,338,286			10,496,041			10,612,031			10,616,627			10,662,618			10,804,339
FHLB advances and other borrowings			2,906,674			2,909,431			1,622,872			1,428,871			1,752,122			1,537,602			1,507,585			1,355,679			1,197,100			1,194,828			1,576,505			1,875,217			1,769,081
Senior notes			198,575			198,559			198,543			198,526			198,510			198,494			198,477			198,461			198,445			198,429			198,413			198,398			198,382
Non-performing assets as a % of total assets
Performing troubled debt restructurings(a)			3.23	%		3.64	%		4.34	%		4.56	%		4.59	%		4.49	%		4.12	%		3.57	%		2.99	%		2.05	%		1.09	%		0.67	%		0.31	%
All other non-performing assets			11.45			11.44			11.16			9.77			8.65			7.41			6.63			5.55			4.78			3.72			2.77			2.27			1.96
	Total non-performing assets		14.68	%		15.08	%		15.50	%		14.33	%		13.24	%		11.90	%		10.75	%		9.12	%		7.77	%		5.77	%		3.86	%		2.94	%		2.27	%
Loan activity for the month ended
Loans for investment portfolio:
	Originations and purchases:
		Residential one-to-four units	$189,036			$231,224			$196,878			$271,920			$281,780			$232,127			$75,740			$127,459			$192,208			$98,410			$103,877			$165,724			$171,857
		All other	25,433			18,131			36,236			13,580			14,949			1,175			1,513			694			19,915			10,862			905			738			7,755
	Repayments		(101,285		)	(117,429		)	(111,176		)	(131,520		)	(170,055		)	(174,645		)	(192,639		)	(185,658		)	(276,819		)	(240,038		)	(231,005		)	(223,419		)	(370,405		)
Loans for sale:
	Originations and purchases		50,590			69,551			64,024			73,954			73,748			83,090			90,150			64,116			59,626			59,159			73,268			64,144			71,983
	Sales		(50,067		)	(69,242		)	(90,538		)	(65,869		)	(78,706		)	(89,024		)	(58,158		)	(81,805		)	(33,284		)	(84,441		)	(58,183		)	(66,137		)	(120,636		)
Mortgage loans serviced for others
Total			$5,338,529			$5,377,801			$5,435,529			$5,390,280			$5,449,562			$5,431,475			$5,462,334			$5,549,517			$5,525,357			$5,553,615			$5,608,891			$5,622,331			$5,743,797
With capitalized mortgage servicing rights:(b)
	Amount		2,473,754			2,473,370			2,471,000			2,440,693			2,436,523			2,428,098			2,416,947			2,431,570			2,436,278			2,429,506			2,418,279			2,419,432			2,418,387
	Weighted average interest rate		5.88	%		5.87	%		5.87	%		5.87	%		5.87	%		5.88	%		5.88	%		5.88	%		5.88	%		5.86	%		5.85	%		5.83	%		5.81	%
Interest rate spread data(c)
Weighted average yield:
	Loans and MBS		6.35	%		6.46	%		6.57	%		6.73	%		6.96	%		7.10	%		7.22	%		7.31	%		7.41	%		7.45	%		7.42	%		7.45	%		7.47	%
	Investment securities(d)		3.88			4.65			4.88			4.89			4.99			5.01			5.03			5.03			5.09			5.23			5.41			5.50			5.52
		Interest-earning assets yield	6.06			6.28			6.44			6.58			6.73			6.84			6.93			7.00			7.14			7.18			7.12			7.15			7.19
Weighted average cost:
	Deposits		2.95			2.86			2.95			3.08			3.25			3.47			3.69			3.87			3.92			3.93			3.97			3.96			3.94
	FHLB advances and other borrowings(e)		3.48			3.49			3.29			3.48			3.25			3.46			4.31			4.89			5.61			5.75			5.68			5.71			5.80
	Senior notes		6.50			6.50			6.50			6.50			6.50			6.50			6.50			6.50			6.50			6.50			6.50			6.50			6.50
		Combined funds cost	3.13			3.06			3.06			3.18			3.31			3.52			3.82			4.03			4.14			4.16			4.23			4.26			4.24
Interest rate spread			2.93	%		3.22	%		3.38	%		3.40	%		3.42	%		3.32	%		3.11	%		2.97	%		3.00	%		3.02	%		2.89	%		2.89	%		2.95	%

(a)  Represents loans modified pursuant to our borrower retention program, which are considered TDRs and are on non-accrual status. To the extent these loans remain current with their loan payments, we distinguish them from total non-performing assets because their modified interest rates are no less than those offered new borrowers at modification. These performing TDR loans will be removed from both non-accrual status and non-performing assets after six consecutive months of successful payment history; however, they will continue to be reported as TDRs. At August 31, 2008, approximately 74% of these loans had made all payments due and $510 million were returned to accrual status and excluded from non-performing assets.
(b)  The estimated fair value may exceed book value for certain asset strata and excluded loans sold or securitized prior to 1996 and loans sub-serviced without capitalized mortgage servicing rights for periods in 2007.
(c)  Excludes adjustments for non-accrual loans, amortization of net deferred costs to originate loans, premiums and discounts, prepayment and late fees and FHLB stock dividends.
(d)  Includes the yield on investment securities accounted for on a trade-date basis but for which interest income will not be recognized until settlement. Yields for securities available for sale are calculated using historical cost balances and are not adjusted for changes in fair value that are reflected as a separate component of stockholder's equity.
(e)  Includes the impact of interest rate swap contracts, with notional amounts of $430 million of receive-fixed, pay-3-month LIBOR variable interest, which contracts serve as a permitted hedge against a portion of our FHLB advances.

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