IndyMac Bancorp, Inc. today reported a net loss of $202.7 million, or $2.77 per share, for the third quarter — swinging into the red after reporting net earnings of $86.2 million, or $1.19 per share, in the year-ago period. The loss vastly outstripped previous guidance, when the thrift said on September 7 that it expected a loss of up to 50 cents per share. From the company blog:
While we are clearly disappointed with this loss, the bottom line is that no one in the mortgage business came out of the quarter unscathed, and we performed better than most other companies in the business. …as we are rapidly making the transition from being primarily an Alt-A lender to being a GSE lender, we are seeing our mortgage production volumes pick up. Our October rate locks of $8 billion are up 51 percent from September and our pipeline is back up to $9.8 billion as of October 31 from a low of $7.4 billion in September.
From the press release, remarks from the CEO:
“We are clearly disappointed with this quarter’s results, which were driven by deteriorating mortgage delinquencies and a declining housing market combined with an unprecedented collapse in the secondary market for non-GSE loans and securities … Indymac’s primary business,” stated Michael W. Perry, Chairman and CEO. “While this loss is substantially higher than we had been forecasting, it was clearly not unexpected given the magnitude of the losses being reported by others in our industry and the recent decline in our stock price. No one in the mortgage industry came away unscathed in the quarter, and we took $575 million, or $4.79 per share, in combined credit costs and spread widening charges. This led to only our second quarterly loss in the past 15 years since the current management team began running Indymac (the first loss was in Q4-98 during the global liquidity crisis)…”
Calculated Risk notes that while the third quarter results at IndyMac stunk to high heaven, the thrift should at least be commended for putting everything out there – even their forecasts of where key markets are headed. The company pretty much noted that all bets are off during the fourth quarter, with Perry saying that “Indymac could be modestly profitable, or we could struggle and have additional losses” — how’s that for guidance? Indymac also warned that it may have to cut its dividend during the fourth quarter if losses continue. For more information, visit http://www.indymac.com.