IndyMac Sees EPS Declines, Revises MBS Plans

IndyMac Bancorp Inc., Pasadena, Calif., has announced that it expects earnings per share to decline this year and that it has revised plans regarding its whole-loan and mortgage-backed securities portfolios.In IndyMac's 2006 annual shareholder letter, company chief executive Michael W. Perry says return on equity has declined in the whole-loan and MBS portfolios, falling below the company's cost of capital at times for some assets, "such that it does not make economic sense" to expand the portfolios as much as previously planned. "Frankly, we have also not received the price/earnings multiple increase we had expected from growing our investment portfolio and building more 'stable, core' spread income into our overall earnings picture," Mr. Perry says. "Accordingly, our capital deployment and profit growth will be more focused in the future on the two broad segments of our mortgage banking business [production and servicing]." IndyMac, the holding company for IndyMac Bank, can be found online at http://www.indymacbank.com.