FDIC Completes Sale of IndyMac
In a deal originally expected to close in mid-February, the Federal Deposit Insurance Corp. said late Thursday that it had completed the sale of IndyMac Federal Bank to a consortium of private equity investors led by Steven Mnuchin, former Goldman Sachs (GS) partner and current co-CEO of Dune Capital Management LP. That group, IMB Holdco LLC, will run the bank under the name OneWest Bank Group LLC, a newly-formed thrift holding company, according to a press statement. At the end of January, IndyMac Federal had total assets of $23.5 billion and total deposits of $6.4 billion, the FDIC said. OneWest has agreed to purchase all deposits and approximately $20.7 billion in assets at a discount of $4.7 billion -- the FDIC will retain the remaining assets for later disposition. The complete sale of the bank includes 33 branches, a reverse-mortgage unit and a $176 billion residential mortgage servicing portfolio. The FDIC has agreed to share losses on a portfolio of qualifying loans with OneWest, assuming the first 20 percent of losses. From there, the FDIC will split losses 80/20 for the next 10 percent, and 95/5 thereafter. As part of the sale, IMB Holdco and OneWest have agreed to continue the FDIC's much-publicized bulk loan modification program, despite some questions from critics as to the programs effectiveness thus far. The continuation of loss mitigation efforts was a condition to any loss sharing, the FDIC said when the deal was first announced in early January. "We appreciate the support of the FDIC and the OTS in completing this transaction, and we are committed to continuing our work with the FDIC and other government agencies to implement programs to help homeowners," Mnuchin said in a statement. The investor group -- consisting of Dune Capital Management LP, J.C. Flowers & Company, hedge fund firm Paulson & Company, and MSD Capital, LP -- said it had injected $1.55 billion in common equity into the new bank, and that the FDIC will rate the bank "well capitalized" on the basis of total common equity. The group said it intends to focus on deposits and conforming and jumbo mortgage lending for its retail customers in Southern California in the near term. Write to Paul Jackson at email@example.com. Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments.