IndyMac Bancorp announced earnings this morning, beating street estimates, but seeing a 57% drop in second quarter net income as a result of the mortgage woes felt nationwide.Net income dipped to $44.6 million, or 60 cents per share, from $104.7 million, or $1.49 a share a year earlier.
Indymac saw profit beat the street by a hearty 4 cents per share on revenue of $297.8 million, a 21% drop that still topped the $280 million analyst forecast.
They did see a reduction in their mortgage industry market share, falling from 3.90% in the first quarter to 3.07%, due mainly to harsher underwriting standards which eliminated a good chunk of business.
Mortgage production was down 12% from the first quarter at $22.5 billion, with a 31% decline in subprime activity and a 49% decrease in home equity lines of credit.
Indymac is a national Alt-A lender, a level firmly above subprime but somewhat more risky than prime loans.
However, in recent months, the company has tightened standards more and more to the point where a year ago their current offerings may have been considered prime.
As a result of credit woes nationwide, Indymac has had to elevate the quality of underwriting standards, dropping more high-risk money-making mortgage programs along the way.
The portfolio of products is a little bit smaller these days, as it is industry wide and mortgage companies large and small are suffering because of it.
IndyMac also laid off roughly 400 workers this month, and expects a $6.5 million pretax charge in the current quarter for those mortgage layoffs.
Shares of IndyMac Bancorp were up over 10% in midday trading on Wall Street to roughly $24 a share.
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