IndyMac suspends dividend, posts $509 million loss

February 12th, 2008, 8:01 am · 2 Comments · posted by Mathew Padilla, Reporter

IndyMac Bancorp, once the top U.S. lender to folks with mid-range credit, reported a record $509 million loss for the fourth quarter and indefinitely suspended dividend payments, according to the company and Bloomberg. A year earlier it had net income of $72 million.

The Pasadena-based lender, which has operations in Irvine, also reported its first annual loss, taking a hit of $615 million.

CEO Michael Perry, said in a statement, “Consistent with nearly every other large financial institution in the mortgage lending and securitization business, as a result of the rapidly deteriorating housing and mortgage markets, we took major write-downs and established significant credit reserves and recognized a significant loss in the fourth quarter.”

He said the company seeks to become profitable again this year. But some disagree. From Bloomberg…

“A forecast of profitability in 2008 looks optimistic,” said Brian Horey, a general partner at Aurelian Partners LP, a New York-based investment firm that last year moved from betting against shares of subprime lenders to betting against companies focused on better credits, including IndyMac. “The loans they originated in the last two years put them near the eye of the storm, and credit costs are likely to be an ongoing problem.”

To read the release from IndyMac, once the top maker of so-called Alt-A loans before the credit crunch, CLICK HERE.

For Bloomberg’s take, CLICK HERE.

Reader comments: We want this to be a place where people discuss and debate ideas that foster stronger communities. We expect people to differ -- judgment and opinion are subjective -- and we encourage free speech and the exchange of ideas. But you are participating in a community that is intended for all of our users and we prohibit profanity, vulgarity, racial, sexual and homophobic remarks, threats, harassment and personal attacks. Here's the full User Agreement. Thank you for making this a safe place worth preserving and sharing. Share this: The icons below make it easy to share this post with others. First icon e-mails a link.