Indymac addressed its critics Thursday on its company blog, noting that its recent stock price plunge had many questioning its “survivability in the current environment.”
CEO Mike Perry said the company’s first quarter loss will decline by approximately 50-65 percent compared to the fourth quarter loss, and roughly 25 percent of the loss will be tied to a one-time severance and office closing costs.
Additionally, credit costs in the first quarter will be down nearly four times from the $863 million reported in the fourth quarter.
In regard to liquidity, Perry said $670 million in new capital was raised in 2007 and $84 million since the company recommenced its Direct Stock Purchase Plan (DSPP) on February 26.
The Pasadena, CA-based mortgage lender has operating liquidity of about $4 billion, roughly the same level from a year ago, but apparently much less is needed because mortgage loan origination volume is off by two-thirds.
That said, Perry noted that Indymac has continued to convert successfully to GSE/FHA loan/VA loan lender, producing $10 billion in new mortgage loans with “greatly improved credit quality” during the first quarter.
He said that the company’s new production model was coming together, with all nine of their regional wholesale centers and 104 of its 152 retail branches profitable in March.
Lastly, he said that forecasts show continued declines in both credit costs and overall losses, but that downward pressure remains on Indymac stock because of the DSPP program and the fact that as the last major independent home lender, it’s in the eye of the mortgage crisis.
Shares of Indymac rocketed 75 cents, or 23.08 percent, to $4.00 in afternoon trading on Wall Street.
The company is set to report its first quarter earnings on May 12.