Flagstar Bancorp (FBC) sold 22 retail branches in Indiana to First Financial Bancorp (FFBC) for $23 million more than the deposits held by the banks. The branches reported $327.9 million in consumer and commercial deposits at the end of the second quarter. First Financial also acquired $197.9 million worth of government and municipal deposits from Flagstar. No loans were a part of the transaction, which is expected to close in December. Flagstar CEO Joseph Campanelli said the move allows the still recovering bank to focus on markets with greater potential for growth such as its home state of Michigan. "We've invested significant resources in transforming Flagstar into a full-service commercial bank, and our ultimate goal is to continue to grow our retail and commercial lines of business to complement our strong market presence in national mortgage banking," Campanelli said. Flagstar narrowed its losses again in the second quarter to $74.9 million, but it still doubled from the previous quarter. Since the housing downturn, the Troy, Mich.-based bank has continually unloaded troubled loans. In July, Flagstar showed an income of $20 million from loan sales. And its mortgage business reported $2.9 billion in locked-rate commitments in July, the highest level since the fourth quarter. Most came through higher finances due to still falling mortgage rates. "Consistent with the overall mortgage industry, the current favorable rate environment has spurred refinancing activity and resulted in significant improvement in our mortgage business," Campanelli said. Write to Jon Prior. Follow him on Twitter @JonAPrior