Analysts have zero hopes for IndyMac

It announced after the stock market closed Monday that regulators no longer considered it well capitalized. It said it would shut all home lending except for reverse mortgages, which help older people access their home equity, and refinancings for current customers.

The lender's stock sank 27 cents, or 38%, on Tuesday to 44 cents. The shares peaked at $50.11 in 2006.

Hope, however, emerged Tuesday for some of the IndyMac employees heading for joblessness.

Prospect Mortgage Co., a 2-year-old company backed by Chicago private equity firm Sterling Partners, said it would take over 60 to 75 of the Pasadena savings and loan's retail offices, putting about 750 IndyMac employees on its payroll.

The deal's terms weren't disclosed, but it wasn't expected to generate significant cash for IndyMac.

Earlier Tuesday, Paul Miller, an analyst at Friedman, Billings, Ramsey & Co., cut his price forecast for IndyMac stock from $1 to zero, citing the thrift's statement that it had failed in an effort to raise new capital.

"Next Stop, Receivership," was the headline on a note from Jason Arnold, an analyst at RBC Capital Markets who also reduced his price target to zero, from $1.50.

IndyMac "will not survive without a material capital injection," Arnold wrote, calling the prospect of one unlikely because regulatory restrictions and mounting losses had left IndyMac's business model "arguably in shambles."

"We think IndyMac is painted into a corner and can't get out," he said in an interview.

IndyMac, which operates under a federal savings and loan charter, declined to comment on analysts' bleak projections for the company.

The lender's stock has been suspended from trading on the New York Stock Exchange floor since June 26, when it first closed below $1, and is trading instead on the NYSE's all-electronic ARCA market.

The exchange can permanently delist a company if the average trading price of its shares over 30 days falls below $1. Such low-priced stocks normally end up in the over-the-counter market, where they're generally of interest only to hard-core speculators and day traders.

Most of the IndyMac branches being acquired by Northbrook, Ill.-based Prospect are former offices of American Home Mortgage Investment Corp. of Melville, N.Y., another casualty of the meltdown in home loans, which filed for bankruptcy protection in August.

The locations of the offices weren't disclosed.

IndyMac had taken over the leases on about 90 American Home Mortgage offices and kept its employees on as part of a push to diversify into direct-to-consumer loans from its traditional business of loans made through independent brokers.

In a regulatory filing Tuesday, IndyMac repeated its earlier statements that depositors had been withdrawing funds at an "elevated" pace since late last month, when Sen. Charles E. Schumer (D-N.Y.), chairman of the Joint Economic Committee, publicly questioned its ability to survive.

But several offices visited Tuesday were calm.

At the Arcadia branch, Joseph Gadoury, 43, said he had one account left with IndyMac after liquidating about $60,000 in certificates of deposit last week. He said he had shut the CD accounts after seeing dozens of anxious customers withdrawing their money.