IndyMac’s Profit Up on Higher Mortgage Output

IndyMac Bancorp Inc., which runs one of Southern California’s largest savings and loan associations, said fourth-quarter profit rose 29% as mortgage production surged to a record.

Mortgage production rose 60% to $18 billion, and IndyMac’s U.S. market share increased to 2.85% from 1.66% a year earlier. That helped offset a decline in net interest margin to 1.98% from 2.4% a year earlier and 2.09% in the third quarter.

“Most of our margin decline stems not from competition but from a change in our product mix,” IndyMac Chief Executive Michael Perry said. “That change, however, has reduced our costs and kept our return on capital from mortgage production the same.”

Net income for the Pasadena-based parent of IndyMac Bank rose to $72.3 million, or $1.09 a share, from $56 million, or 87 cents.

Results included 9 cents a share for an accounting change related to mortgage servicing rights. Revenue increased 21% to $281 million.

Analysts polled by Reuters on average had expected profit of $1.16 a share on revenue of $278.6 million. IndyMac raised its quarterly stock dividend to 44 cents from 42 cents.

Its shares rose $1.10 to $39.49.