A fresh start for IndyMac? New owners to rename failed bank
Say goodbye to IndyMac. The name, at least.
The investors buying failed IndyMac Federal Bank from regulators intend to rename the Pasadena savings and loan, although they haven’t yet picked a new name, a spokesman said Monday.
The old name is “obviously” a liability, said George Sard, a spokesman for the investment group, IMB Management Holdings.
IndyMac was one of the largest bank failures in U.S. history, brought down last summer by soured variable-rate mortgages and a run on deposits. Images of long lines of customers waiting hours to find out whether their funds were federally insured, reminiscent of the Great Depression, spooked depositors across the nation.
The new owners include well-known hedge fund operators George Soros and John Paulson, along with J. Christopher Flowers, who has specialized in buyouts of distressed banks. Sard said the group had no plan to seek an investment from the U.S. Treasury, which had been buying stakes in banks and thrifts in an effort to stabilize the nation’s financial system.
The Federal Deposit Insurance Corp., which has operated IndyMac since its failure six months ago, said the sale would be completed in late January or early February.
The deal calls for the investors, headed by Steve Mnuchin of Dune Capital Management, to provide $1.3 billion in new capital to the thrift. The FDIC said the failure would cost the deposit insurance fund as much as $9.4 billion.
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