IndyMac Bancorp posts first annual loss

IndyMac Bancorp Inc. reported the first annual loss in company history Tuesday and scrapped its dividend to shore up capital.

The holding company for IndyMac swung to a fourth-quarter loss as weakness in the housing market forced the mortgage lender to boost provisions for future credit losses from rising defaults, repossessions and other costs.

That and the collapse of Wall Street’s demand for home loans led to a loss of $509.1 million, or $6.43 a share, for the quarter that ended Dec. 31.

That compares with a profit of $72.2 million, or 97 cents a share, in the same period a year earlier.

Wall Street analysts surveyed by Thomson Financial expected the Pasadena-based company to post a much smaller loss of $1.57 a share.

Chairman and Chief Executive Michael Perry called 2007 “a terrible year.” He said that though IndyMac’s losses were “significant,” results were consistent with those of other large financial institutions.

For the year, the company posted a loss of $614.8 million, or $8.28 a share, compared with a profit of $342.9 million, or $4.82, for the full year 2006.

The loss was attributable primarily to discontinued operations related to sub-prime, home equity and home construction lending, as well as bulk loan purchases, the company said.

Revenue in 2007 tumbled to $3.6 million from $1.3 billion in 2006.

“Clearly, all of us at IndyMac are disappointed with our results,” Perry said in a call with analysts. “We remain well capitalized.”

In a letter to shareholders assessing the company’s 2007 performance, Perry said he took full responsibility for “errors” made by management as it navigated the housing crisis.

Perry also vowed to resign as chief executive if shareholders decided not to reelect him to the board of directors.

IndyMac shares rose 8.4%, or 64 cents, to $8.24.

Perry said he expected the company to post a $13-million profit this year.