IndyMac Earnings Up 47.6%

Pasadena mortgage lender IndyMac Bancorp reported a 47.6% surge in first-quarter earnings Wednesday as low interest rates produced record numbers of loans made or in the pipeline.

IndyMac, which specializes in online lending, earned $36.9 million, or 66 cents a share, compared with $25 million, or 39 cents, in the first quarter of 2002.

Completed mortgage loans totaled $6.5 billion, up 59% from a year earlier. IndyMac’s portfolio of loans serviced for others was up 22% to $28 billion despite substantial prepayments. IndyMac said bad loans and other nonperforming assets were 1% of total assets, down from 1.7% a year earlier.

The financial results were reported a day after IndyMac’s former parent, Calabasas mortgage lender Countrywide Financial Corp., reported sharply higher- than-expected earnings. That helped IndyMac’s shares rise 62 cents to $22.25 on Tuesday; they rose an additional 3 cents on Wednesday to $22.28 on the New York Stock Exchange.

Even if the refinancing boom subsides as expected, IndyMac’s earnings should continue to grow into 2004, said Charlotte Chamberlain, a Jefferies & Co. analyst. She said the company has $200 million in so-called reversible impairment reserves and will have more than $100 million in capital freed up when some regulatory restrictions are eased in June.

IndyMac, sometimes known as “son of Countrywide,” was created as a repository for hard-to-sell Countrywide loans. Spun off as a real estate investment trust, it had trouble selling its loans and skirted illiquidity in mid-2000, when it became a savings and loan by purchasing SGV Bancorp. That allowed IndyMac to tap the deposits of the thrift and a Federal Home Loan Bank line of credit for funds to make home loans.