IndyMac Bancorp Evaluating Potential Initial Public Offering of Financial Freedom Senior Funding Corporation
May 01 2006 - 7:00AM
Business Wire
IndyMac Bancorp, Inc. (NYSE:NDE) ("Indymac(R)" or the "Company"),
the holding company for IndyMac Bank, F.S.B. ("Indymac Bank(R)"),
today announced that its board of directors has authorized
management to evaluate and plan for the potential sale of a
minority economic stake of approximately 20 percent in Indymac
Bank's reverse mortgage subsidiary, Financial Freedom Senior
Funding Corporation ("Financial Freedom"), through an initial
public offering. Financial Freedom originated $1.1 billion in
reverse mortgages and earned $8.0 million in the first quarter of
2006, compared to $507 million in originations and $4.2 million in
earnings for the first quarter of 2005. For the full year 2005,
Financial Freedom's national market share is estimated to be 56
percent of reverse mortgage originations and 53 percent of reverse
mortgage servicing. As of March 31, 2006, Financial Freedom had 984
employees. -0- *T The strategic rationale for the potential
offering includes the following: 1. Public company structure
expected to drive growth and opportunities. 2. Creates vehicle to
align Financial Freedom management incentives directly with
performance which, additionally, enhances ability to attract and
retain talent. 3. Provides Indymac the ability to monetize its
initial investment in Financial Freedom while continuing to
maintain a controlling interest. 4. Enhances shareholder value of
Indymac as the investing community could identify more easily the
value of the Financial Freedom franchise. 5. Provides a template to
attract entrepreneurs to Indymac. *T The potential benefits from an
initial public offering to Indymac's shareholders will be offset to
a minor extent by management time and costs that will be incurred
to oversee another public company. The decision to proceed with the
offering remains subject to future board approval and other
factors, including market conditions. This announcement shall not
constitute an offer to sell or the solicitation of an offer to buy
any securities described herein, nor shall there be any sale of
these securities in any state or jurisdiction in which the offer,
solicitation or sale would be unlawful. This announcement is being
issued pursuant to and in accordance with Rule 135 under the
Securities Act of 1933. About Indymac Bank IndyMac Bancorp, Inc.
(NYSE:NDE) (Indymac(R)) is the holding company for IndyMac Bank,
F.S.B. (Indymac Bank(R)), the largest savings and loan in Los
Angeles and the 10th largest mortgage originator in the nation.
Indymac Bank, operating as a hybrid thrift/mortgage banker,
provides cost-efficient financing for the acquisition, development,
and improvement of single-family homes. Indymac also provides
financing secured by single-family homes and other banking products
to facilitate consumers' personal financial goals. With an
increased focus on building customer relationships and a valuable
consumer franchise, Indymac is committed to becoming a top six
mortgage lender in the U.S. by 2010, while maintaining annualized
earnings per share growth in excess of 15 percent. The company is
dedicated to constantly raising expectations and conducting itself
with the highest level of ethics. For more information about
Indymac and its affiliates, or to subscribe to the company's Email
Alert feature for notification of company news and events, please
visit http://about.indymacbank.com/investors. FORWARD-LOOKING
STATEMENTS Certain statements contained in this press release may
be deemed to be forward-looking statements within the meaning of
the federal securities laws. The words "anticipate," "believe,"
"estimate," "expect," "project," "plan," "forecast," "intend,"
"goal," "target," and similar expressions identify forward-looking
statements that are inherently subject to risks and uncertainties,
many of which cannot be predicted or quantified. Actual results and
the timing of certain events could differ materially from those
projected in or contemplated by the forward-looking statements due
to a number of factors, including, the effect of economic and
market conditions including industry volumes and margins(1); the
level and volatility of interest rates(1); the Company's hedging
strategies, hedge effectiveness and asset and liability
management(1); the accuracy of subjective estimates used in
determining the fair value of financial assets of Indymac; the
credit risks with respect to our loans and other financial assets;
the actions undertaken by both current and potential new
competitors(1); the availability of funds from Indymac's lenders
and from loan sales and securitizations, to fund mortgage loan
originations and portfolio investments; the execution of Indymac's
growth plans and ability to gain market share in a significant
market transition(1); the impact of disruptions triggered by
natural disasters, including the assessment of the effects of the
Gulf Coast Hurricanes(1) and the effects of any future hurricanes;
the impact of current, pending or future legislation,
regulations(1) or litigation; and other risk factors described in
the reports that Indymac files with the Securities and Exchange
Commission, including the Annual Report on Form 10-K, Quarterly
Reports on Form 10-Q, and its reports on Form 8-K. (1) While all of
the above items are important, the highlighted items represent
those that, in management's view, merit increased focus given
current conditions.
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