IndyMac sees losses till 2nd half of 2008

Pasadena-based IndyMac Bancorp Inc., one of the largest independent U.S. mortgage lenders, said it didn’t expect to be profitable before the second half of 2008 because of the housing slump.

In a Securities and Exchange Commission filing Thursday, Chief Executive Michael Perry said IndyMac was examining ways to shore up capital, such as further cutting its dividend, selling convertible or preferred securities, or shrinking its balance sheet. He rejected a shareholder request that the company buy back stock.

“If all goes well, we can return to modest profitability sometime in the second half of 2008,” Perry wrote. “Until we can ‘see some light at the end of the tunnel,’ maintaining strong capital and liquidity levels is paramount.”

IndyMac shares fell 70 cents, or 8%, to $8.05 on the news, which was announced on the same day that shares of other mortgage lenders rose in response to a plan unveiled by President Bush to help stem home foreclosures. The KBW Mortgage Finance Index gained 4.6%.

On Nov. 6, IndyMac posted a third-quarter loss of $202.7 million, or $2.77 a share, as credit losses quadrupled. It was the company’s first quarterly loss since 1998.

IndyMac also cut its dividend in half, and Perry said at the time that another large cut would be prudent if the company lost money in the fourth quarter.

Last month, Perry projected that IndyMac could be “modestly profitable” in the fourth quarter. He now expects a loss but one significantly smaller than the third quarter’s.

Bruce Harting, a Lehman Bros. Inc. analyst, predicted that IndyMac would be “a survivor of the current downturn,” but he said uncertainty about the company’s profitability would weigh on the stock “for the foreseeable future.” He rates IndyMac “underweight.”