Selected Financial Ratios (Dollars in thousands, except share data)

                                                          For the Three Months Ended
                                                                  March 31,
                                                            2009              2008
Return on average assets                                     (1.68 )%          (0.27 )%
Return on average equity                                    (33.64 )%          (5.93 )%
Efficiency ratio                                              73.8 %            83.0 %
Equity/assets ratio (average for the period)                  5.00 %            4.48 %
Mortgage loans originated or purchased                 $ 9,499,744       $ 7,859,988
Other loans originated or purchased                    $    20,027       $   149,981
Mortgage loans sold and securitized                    $ 7,699,063       $ 7,160,328
Interest rate spread - bank only 1                            1.63 %            1.61 %
Net interest margin - bank only 2                             1.67 %            1.66 %
Interest rate spread - consolidated 1                         1.59 %            1.48 %
Net interest margin - consolidated 2                          1.59 %            1.55 %
Dividend payout ratio                                          N/A               N/A
Average common shares outstanding                           88,210 (4)        60,312
Average fully diluted shares outstanding                    88,210 (4)        60,753
Charge-offs to average investment loans (annualized)          3.00 %            0.80 %



                                                             March 31,            December 31,           March 31,
                                                               2009                   2008                  2008
Equity-to-assets ratio                                            5.54 %                 3.33 %                4.42 %
Core capital ratio 3                                              7.22 %                 4.95 %                5.64 %
Total risk-based capital ratio 3                                 13.58 %                 9.10 %               10.47 %
Book value per common share                               $       4.03 (4)       $       5.65          $      11.66
Number of common shares outstanding                             90,379                 83,627                60,325
Mortgage loans serviced for others                        $ 58,856,128           $ 55,870,207          $ 38,378,056
Capitalized value of mortgage servicing rights                    0.88 %                 0.93 %                1.30 %
Ratio of allowance to non-performing loans                        58.7 %                 59.7 %                47.9 %
Ratio of allowance to loans held for investment                   5.21 %                 4.14 %                1.42 %
Ratio of non-performing assets to total assets                    5.46 %                 5.33 %                2.51 %
Number of banking centers                                          177                    175                   167
Number of home lending centers                                      61                    104                   138
Number of salaried employees                                     3,285                  3,246                 3,170
Number of commissioned employees                                   519                    674                   839

1 Interest rate spread is the difference between the annualized average yield earned on average interest-earning assets for the period and the annualized average rate of interest paid on average interest-bearing liabilities for the period.

2 Net interest margin is the annualized effect of the net interest income divided by that period's average interest-earning assets.

3 Based on adjusted total assets for purposes of tangible capital and core capital, and risk-weighted assets for purposes of risk-based capital and total risk based capital. These ratios are applicable to the Bank only.

4 Does not reflect the 300,000 shares of Series B convertible participating voting preferred stock that upon stockholder approval, will convert to 375,000,000 shares of common stock, the Treasury warrant to purchase 64.5 million shares of common stock, or the May Investor warrant to purchase 14.3 million shares of common stock.

Results of Operations
Net Loss
Net loss applicable to common stockholders for the three months ended March 31, 2009 was $67.4 million, $(0.76) per share-diluted, a $56.8 million increase from the loss of $10.6 million, $(0.18) per share-diluted, reported in the comparable 2008 period. The overall increase resulted from a $93.5 million increase in non-interest expense and a $122.0 million decrease in net interest income after provision for loan losses, offset by a $138.3 million increase in non-interest income and a $23.3 million increase in federal income tax benefit and an increase of $2.9 million preferred stock dividends. Net Interest Income
We recorded $56.7 million in net interest income before provision for loan losses for the three months ended March 31, 2009, a 3.5% increase from $54.8 million recorded for the comparable 2008 period. The increase reflects a $25.9 million decrease in interest income offset by a $27.8 million decrease in interest expense, primarily as a result of rates paid on deposits that decreased more than the decrease in yields earned on loans and mortgage-backed securities. In addition, in the three months ended March 31, 2009, as compared to the same period in 2008, our average interest-earning assets decreased by $0.2 billion and our average interest-paying liabilities increased by $0.1 billion.
Average interest-earning assets as a whole repriced down 67 basis points during the three months ended March 31, 2009 and average interest-bearing liabilities repriced down 78 basis points during the same period, resulting in the increase in our interest rate spread of 11 basis points to 1.59% for the three months ended March 31, 2009, from 1.48% for the comparable 2008 period. The Company recorded a net interest margin of 1.59% at March 31, 2009 as compared to 1.55% at March 31, 2008. At the Bank level, the net interest margin was 1.67% at March 31, 2009, as compared to 1.66% at March 31, 2008.

Average Yields Earned and Rates Paid. The following table presents interest income from average interest-earning assets, expressed in dollars and yields, and interest expense on average interest-bearing liabilities, expressed in dollars and rates at the Company rather than the Bank. Interest income from earning assets includes the amortization of net premiums and net deferred loan origination costs of $1.7 million and $3.1 million for the three months ended March 31, 2009 and 2008, respectively. Non-accruing loans were included in the average loan amounts outstanding.

                                                                For the Three Months Ended March 31,
                                                    2009                                                    2008
                                Average                            Annualized           Average                            Annualized
                                Balance           Interest         Yield/Rate           Balance           Interest         Yield/Rate
                                                                       (Dollars in thousands)
Interest-earning assets:
Loans available for sale      $  2,852,951        $  36,199               5.08 %      $  3,028,584        $  49,785               6.58 %
Loans held for
investment                       9,090,561          122,423               5.41 %         8,519,898          126,509               5.94 %
Mortgage-backed
securities held to
maturity                                 -                -                  -           1,204,907           15,576               5.20 %
Securities classified as
available for sale or
trading                          1,822,084           25,477               5.63 %         1,098,405           15,591               5.71 %
Interest-bearing
deposits                           225,940              856               1.54 %           294,170            2,768               3.78 %
Other                               35,410               23               0.26 %            37,332              624               6.72 %

Total interest-earning
assets                          14,026,946        $ 184,978               5.29 %        14,183,296        $ 210,853               5.96 %
Other assets                     2,000,834                                               1,795,670

Total assets                  $ 16,027,780                                            $ 15,978,966

Interest-bearing
liabilities
Deposits                      $  8,430,158        $  67,350               3.24 %      $  7,417,013        $  84,050               4.56 %
FHLB advances                    5,270,548           56,809               4.37 %         6,008,462           64,558               4.32 %
Security repurchase
agreements                         108,000            1,153               4.33 %           332,936            3,155               3.81 %
Other                              248,660            2,936               4.79 %           248,695            4,292               6.94 %

Total interest-bearing
liabilities                     14,057,366        $ 128,248               3.70 %        14,007,106        $ 156,055               4.48 %
Other liabilities                1,168,880                                               1,256,598
Stockholders' equity               801,534                                                 715,262

Total liabilities and
stockholders' equity          $ 16,027,780                                            $ 15,978,966

Net interest-earning
assets                        $    (30,420 )                                          $    176,190

Net interest income                               $  56,730                                               $  54,798

Interest rate spread 1                                                    1.59 %                                                  1.48 %

Net interest margin 2                                                     1.59 %                                                  1.55 %

Ratio of average
interest-earning assets
to average
interest-bearing
liabilities                                                                100 %                                                   101 %

1 Interest rate spread is the difference between the annualized average yield earned on average interest-earning assets for the period and the annualized average rate of interest paid on average interest-bearing liabilities for the period.

2 Net interest margin is the annualized effect of the net interest income divided by that period's average interest-earning assets.

Rate/Volume Analysis. The following table presents the dollar amount of changes in interest income and interest expense for the components of interest-earning assets and interest-bearing liabilities, which are presented in the preceding table. The table below distinguishes between the changes related to average outstanding balances (changes in volume while holding the initial average rate constant) and the changes related to average interest rates (changes in average rates while holding the initial average balance constant). Changes attributable to both a change in volume and a change in rates are included as changes in rate.

                                                                   For the Three Months Ended March 31,
                                                                             2009 Versus 2008
                                                                       Increase (Decrease) due to:
                                                                Rate                Volume             Total
                                                                              (In thousands)
Interest-earning assets:
Loans available for sale                                    $    (10,697 )       $     (2,889 )      $ (13,586 )
Loans held for investment                                        (12,560 )              8,474           (4,086 )
Mortgage-backed securities-held to maturity                            -              (15,576 )        (15,576 )
Securities classified as available for sale or trading              (445 )             10,331            9,886
Interest-earning deposits                                         (1,267 )               (645 )         (1,912 )
Other                                                               (569 )                (32 )           (601 )

Total                                                            (25,538 )               (337 )        (25,875 )

Interest-bearing liabilities:
Deposits                                                         (28,250 )             11,550          (16,700 )
FHLB advances                                                        220               (7,969 )         (7,749 )
Security repurchase agreements                                       140               (2,142 )         (2,002 )
Other                                                             (1,355 )                 (1 )         (1,356 )

Total                                                            (29,245 )              1,438          (27,807 )

Change in net interest income                               $      3,707         $     (1,775 )      $   1,932

Provision for Loan Losses
During the three months ended March 31, 2009, we recorded a provision for loan losses of $158.2 million as compared to $34.3 million recorded during the same period in 2008. The provisions reflect our estimates to maintain the allowance for loan losses at a level management believes is appropriate to cover probable losses inherent in the portfolio and had the effect of increasing our allowance for loan losses by $90.0 million. Net charge-offs increased in the 2009 period to $68.2 million, compared to $16.9 million for the same period in 2008, and as a percentage of investment loans, increased to an annualized 3.00% from 0.80%. The increase in charge-offs as a percentage of investment loans reflects the Bank's worsening credit quality as demonstrated by increases in net charge-offs and non-performing loans. See "Analysis of Items on Statement of Financial Condition - Assets - Allowance for Loan Losses," below, for further information.
Non-Interest Income
Our non-interest income consists of (i) loan fees and charges, (ii) deposit fees and charges, (iii) loan administration, (iv) net gain on loan sales,
(v) net gain (loss) on sales of MSRs, (vi) net gain (loss) on securities available for sale, (vii) net gain (loss) on trading securities and (viii) other fees and charges. During the three months ended March 31, 2009, non-interest income increased to $191.0 million from $52.7 million in the comparable 2008 period. Loan Fees and Charges. Both our home lending operation and banking operation earn loan origination fees and collect other charges in connection with originating residential mortgages and other types of loans. Loan fees recorded during the three months ended March 31, 2009 totaled $32.9 million compared to $0.9 million collected during the comparable 2008 period. During the three month period ending March 31, 2009, we recorded gross loan fees and charges of $33.0 million, an increase of $7.4 million from the $25.6 million recorded in 2008. The increases in loan fees and charges resulted principally from our decision to account for the majority of our loans held for sale at fair value. As such, we no longer apply SFAS 91 to such loans. Prior to December 31, 2008, we recorded fee income net of any fees deferred for the purposes of complying with SFAS 91. In accordance with SFAS 91, loan origination fees are capitalized and added as an adjustment to the basis of the individual loans originated. These fees are accreted into income as an adjustment to the loan yield over the life of the loan or when the loan is sold. During the three month ended March 31, 2009, we deferred

only $35,000 of fee revenue in accordance with SFAS 91 for loans not accounted for under fair value, compared to $24.7 million in 2008.
Deposit Fees and Charges. Our banking operation collects deposit fees and other charges such as fees for non-sufficient funds checks, cashier check fees, ATM fees, overdraft protection, and other account fees for services we provide to our banking customers.
During the three months ended March 31, 2009 we recorded $7.2 million in deposit fees versus $6.0 million in the comparable 2008 period. This increase is attributable to the increase in our deposit base as our banking franchise continues to expand.
Loan Administration. When our home lending operation sells mortgage loans in the secondary market it usually retains the right to continue to service these loans and earn a servicing fee. The majority of our MSRs are accounted for on the fair value method. See Note 10 of the Notes to the Consolidated Financial Statements in Item 1. Financial Statements herein.
The following table summarizes net loan administration loss (in thousands):

                                                                     For the Three Months Ended
                                                                              March 31,
                                                                       2009                 2008
Servicing fees on consumer mortgage servicing
Servicing fees, ancillary income and charges                      $        1,482         $    2,442
Amortization expense - consumer                                             (650 )             (612 )
Impairment (loss) recovery - consumer                                     (1,548 )              119

Total net loan administration (loss) income - consumer                      (716 )            1,949
Servicing fees on residential mortgage servicing
Servicing fees, ancillary income and charges                              38,486             27,967
Gain on hedging activity                                                   7,060             13,128
Fair value adjustments                                                   (76,631 )          (60,090 )

Total net loan administration losses - residential                       (31,085 )          (18,995 )

Total loan administration loss                                    $      (31,801 )       $  (17,046 )

Losses from loan administration increased to $31.8 million for the three months ended March 31, 2009 from $17.0 million for the same period in 2008. Servicing fees, ancillary income, and charges on our residential mortgage servicing increased during the three month period ended March 31, 2009 compared to the same period ended March 31, 2008, primarily as a result of our increased loans serviced for others. The total unpaid principal balance of loans serviced for others was $58.9 billion at March 31, 2009, versus $38.4 billion at March 31, 2008. We recognized a reduction in the fair value of our residential MSRs of $76.6 million for the three months ended March 31, 2009 as compared to $60.1 million for the same period in 2008. The $76.6 million downward adjustment in fair value was primarily due to the write off of fair value for payoffs of $36.3 and the decrease in fair value due to the recognition of service fees collected in the amount of $38.5 million.
The loan administration loss of $31.8 million does not include $23.7 million of gains in mortgage backed securities that were held on our consolidated statement of financial condition as economic hedges of our MSR asset during the three month period ending March 31, 2009. These gains were recorded in gain on trading securities within our consolidated statement of operations, as appropriate.
During the 2009 period, we recorded revenues from servicing fees, ancillary income and charges on our consumer MSRs for $1.5 million, which was offset by amortization of $0.6 million and an impairment of $1.5 million. The decrease in the servicing fees, ancillary income and charges for the three month period ended March 31, 2009 versus the same period ended in 2008 was due to the decrease in consumer loans serviced for others. At March 31, 2009, the total unpaid principal balance of consumer loans serviced for others was $1.1 billion versus $1.3 billion serviced at March 31, 2008. While the impairment of $1.5 million was the result of increased delinquency assumptions.
Net Gain on Loan Sales. Our home lending operation records the transaction fee income it generates from the origination, securitization and sale of mortgage loans in the secondary market. The amount of net gain on loan sales recognized is a function of the volume of mortgage loans originated for sale and the fair value of these loans, net of related selling expenses. Net gain on loan sales is increased or decreased by any mark to market pricing adjustments on loan commitments and forward sales commitments in accordance with SFAS 133, increases to the secondary market reserve related to loans sold during the period, and related administrative expenses. The volatility in the gain on sale spread is attributable to

market pricing, which changes with demand and the general level of interest rates. Generally, we are able to sell loans into the secondary market at a higher margin during periods of low or decreasing interest rates. Typically, as the volume of acquirable loans increases in a lower or falling interest rate environment, we are able to pay less to acquire loans and are then able to achieve higher spreads on the eventual sale of the acquired loans. In contrast, when interest rates rise, the volume of acquirable loans decreases and therefore we may need to pay more in the acquisition phase, thus decreasing our net gain achievable. During 2008 and into 2009, our net gain was also affected by increasing spreads available from securities we sell that are guaranteed by Fannie Mae and Freddie Mac and by a combination of a significant decline in residential mortgage lenders and a significant shift in loan demand to Fannie Mae and Freddie Mac conforming residential mortgage loans and Ginnie Mae insured loans, which have provided us with loan pricing opportunities for conventional residential mortgage products.
The following table indicates the net gain on loan sales reported in our consolidated financial statements to our loans sold or securitized within the period (dollars in thousands):

                                      For the Three Months Ended March 31,
                                          2009                     2008
       Net gain on loan sales      $          195,694       $           63,425

       Loans sold or securitized   $        7,699,063       $        7,160,328
       Spread achieved                           2.54 %                   0.89 %

For the three months ended March 31, 2009, there was a net gain on loan sales of $195.7 million, an increase of $132.3 million over the $63.4 million gain in the 2008 period. The 2009 period reflects the sale of $7.7 billion in loans versus $7.2 billion sold in the 2008 period. Management believes changes in market conditions during the 2009 period resulted in an increased mortgage loan origination volume ($9.5 billion in the 2009 period versus $7.9 billion in the 2008 period) and an increased overall gain on sale spread (254 basis points in the 2009 period versus 89 basis points in the 2008 period). Our calculation of net gain on loan sales reflects our adoption of fair value accounting for the majority of our mortgage loans available for sale beginning January 1, 2009. The effect of our adoption on the current quarter's operations amounted to $22.0 million. This amount represents the recording of the mortgage loans available for sale that remained on our statement of financial condition at March 31, 2009 . . .