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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


Form 10-Q

|   |  |                                                                                                 
|-- |  | ------------------------------------------------------------------------------------------------
|þ  |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR
    15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934 
|  
|   |  | For the quarterly period ended
    September 30, 2003                                           
|  
|or
|  
|o  |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR
    15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934
|  
|   |  | For the transition period
    from           to                                                 

Commission file number 1-8972

IndyMac Bancorp, Inc.

(Exact name of registrant as specified in its
charter)


|                                                                                            |  |                                         
|------------------------------------------------------------------------------------------- |  | ----------------------------------------
|Delaware                                                                                    |  | 95-3983415                              
|(State or other jurisdiction of
    incorporation or organization)                          |  | (I.R.S. Employer
    Identification No.)
|                                                                                           
|155 North Lake Avenue,
    Pasadena, California(Address of principal executive
    offices) |  | 91101-7211(Zip Code)                    

Registrants telephone number, including
area code:

(800) 669-2300


Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and
(2) has been subject to such requirements for the past
90 days.     Yes þ          No o

Indicate by check mark whether the registrant is
an accelerated filer (as defined in Rule 12b-2 of the
exchange
act).     Yes þ          No o

Indicate the number of shares outstanding of each
of the issuers classes of common stock, as of the latest
practicable date.

Common stock outstanding as of October 24,
2003, 55,610,448 shares



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TABLE OF CONTENTS



|                                                                         |                                                                                               |  |  |  |  |  |  | 
|------------------------------------------------------------------------ | --------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|                                                                         | FORWARD-LOOKING STATEMENTS                                                                   
|                                                                         | ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|                                                                         | HIGHLIGHTS FOR THE QUARTER                                                                   
|                                                                         | OVERALL RESULTS                                                                              
|                                                                         | OUR BUSINESS                                                                                 
|MORTGAGE BANKING ACTIVITIES                                             
|                                                                         | Loan Production                                                                              
|                                                                         | Mortgage Production by Division and Channel                                                  
|                                                                         | Loan Sales                                                                                   
|INVESTING ACTIVITIES                                                    
|                                                                         | Investment Portfolio Group                                                                   
|Construction Lending                                                    
|HELOC Portfolio                                                         
|                                                                         | NET INTEREST INCOME                                                                          
|                                                                         | OVERALL INTEREST RATE RISK MANAGEMENT                                                        
|                                                                         | CREDIT RISK AND RESERVES                                                                     
|GENERAL                                                                 
|SECONDARY MARKET RESERVES                                               
|                                                                         | OPERATING EXPENSES                                                                           
|                                                                         | DIVIDEND POLICY                                                                              
|                                                                         | FUTURE OUTLOOK                                                                               
|                                                                         | LIQUIDITY AND CAPITAL RESOURCES                                                              
|OVERVIEW                                                                
|PRINCIPAL SOURCES OF CASH                                               
|PRINCIPAL USES OF CASH                                                  
|ACCUMULATED OTHER COMPREHENSIVE LOSS                                    
|REGULATORY CAPITAL REQUIREMENTS                                         
|                                                                         | OFF-BALANCE SHEET ARRANGEMENTS                                                               
|                                                                         | CONTRACTUAL OBLIGATIONS                                                                      
|                                                                         | KEY OPERATING RISKS                                                                          
|INTEREST RATE RISK                                                      
|VALUATION RISK                                                          
|CREDIT RISK                                                             
|LIQUIDITY RISK/ACCESS TO CAPITAL MARKETS                                
|GOVERNMENT REGULATION AND MONETARY POLICY                               
|COMPETITION                                                             
|OTHER RISKS                                                             
|                                                                         | CRITICAL ACCOUNTING POLICIES                                                                 
|ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK       
|                                                                         | ITEM 1. FINANCIAL STATEMENTS                                                                 
|CONSOLIDATED BALANCE SHEETS                                             
|CONSOLIDATED STATEMENTS OF EARNINGS                                     
|CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY AND COMPREHENSIVE INCOME
|CONSOLIDATED STATEMENTS OF CASH FLOWS                                   
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                              
|                                                                         | ITEM 4. CONTROLS AND PROCEDURES                                                              
|PART II. OTHER INFORMATION                                              
|                                                                         | ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K                                                     
|SIGNATURES                                                              
|EXHIBIT 10.1                                                            
|EXHIBIT 10.2                                                            
|EXHIBIT 10.3                                                            
|EXHIBIT 10.4                                                            
|EXHIBIT 10.5                                                            
|EXHIBIT 10.6                                                            
|EXHIBIT 31.1                                                            
|EXHIBIT 31.2                                                            
|EXHIBIT 32.1                                                            
|EXHIBIT 32.2                                                            



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##### Table of Contents



FORM 10-Q QUARTERLY REPORT

For the Period Ended September 30,
2003


TABLE OF CONTENTS

|                                   |  |                                                                                           |  |      |    | 
|---------------------------------- |  | ----------------------------------------------------------------------------------------- |  | ---- | -- | 
|                                   |  |                                                                                           |  | Page
|                                   |  |                                                                                           |  |     
|PART I.  FINANCIAL
    INFORMATION
|                                   |  | Forward-looking Statements                                                                |  |      | 2  | 
|Item 2.                            |  | Managements Discussion and Analysis of
    Financial Condition and Results of Operations |  |      | 2  | 
|                                   |  | Highlights for the Quarter                                                                |  |      | 2  | 
|                                   |  | Overall Results                                                                           |  |      | 3  | 
|                                   |  | Our Business                                                                              |  |      | 4  | 
|                                   |  | Mortgage Banking Activities                                                               |  |      | 14 | 
|                                   |  | Loan Production                                                                           |  |      | 14 | 
|                                   |  | Mortgage Production
    by Division and Channel                                           |  |      | 15 | 
|                                   |  | Loan Sales                                                                                |  |      | 19 | 
|                                   |  | Investing Activities                                                                      |  |      | 23 | 
|                                   |  | Investment
    Portfolio Group                                                            |  |      | 25 | 
|                                   |  | Construction Lending                                                                      |  |      | 33 | 
|                                   |  | HELOC Portfolio                                                                           |  |      | 35 | 
|                                   |  | Net Interest Income                                                                       |  |      | 36 | 
|                                   |  | Overall Interest Rate Risk Management                                                     |  |      | 39 | 
|                                   |  | Credit Risk and Reserves                                                                  |  |      | 40 | 
|                                   |  | General                                                                                   |  |      | 40 | 
|                                   |  | Secondary Market Reserves                                                                 |  |      | 43 | 
|                                   |  | Operating Expenses                                                                        |  |      | 44 | 
|                                   |  | Dividend Policy                                                                           |  |      | 45 | 
|                                   |  | Future Outlook                                                                            |  |      | 45 | 
|                                   |  | Liquidity and Capital Resources                                                           |  |      | 45 | 
|                                   |  | Overview                                                                                  |  |      | 45 | 
|                                   |  | Principal Sources of Cash                                                                 |  |      | 46 | 
|                                   |  | Principal Uses of Cash                                                                    |  |      | 48 | 
|                                   |  | Accumulated Other Comprehensive Loss                                                      |  |      | 48 | 
|                                   |  | Regulatory Capital Requirements                                                           |  |      | 49 | 
|                                   |  | Off-Balance Sheet Arrangements                                                            |  |      | 50 | 
|                                   |  | Contractual Obligations                                                                   |  |      | 50 | 
|                                   |  | Key Operating Risks                                                                       |  |      | 50 | 
|                                   |  | Interest Rate Risk                                                                        |  |      | 50 | 
|                                   |  | Valuation Risk                                                                            |  |      | 51 | 
|                                   |  | Credit Risk                                                                               |  |      | 51 | 
|                                   |  | Liquidity Risk/Access to Capital
    Markets                                              |  |      | 51 | 
|                                   |  | Government Regulation and Monetary
    Policy                                             |  |      | 52 | 
|                                   |  | Competition                                                                               |  |      | 52 | 
|                                   |  | Other Risks                                                                               |  |      | 52 | 
|                                   |  | Critical Accounting Policies                                                              |  |      | 53 | 
|Item 3.                            |  | Quantitative and Qualitative Disclosure about
    Market Risk                             |  |      | 53 | 
|Item 1.                            |  | Financial Statements (Unaudited)                                                          |  |      |    | 
|                                   |  | Consolidated Balance Sheets                                                               |  |      | 54 | 
|                                   |  | Consolidated Statements of Earnings                                                       |  |      | 56 | 
|                                   |  | Consolidated Statements of Shareholders
    Equity and Comprehensive Income              |  |      | 57 | 
|                                   |  | Consolidated Statements of Cash Flows                                                     |  |      | 58 | 
|                                   |  | Notes to Consolidated Financial Statements                                                |  |      | 59 | 
|Item 4.                            |  | Controls and Procedures                                                                   |  |      | 62 | 
|PART II.  OTHER
    INFORMATION   
|Item 6.                            |  | Exhibits and Reports on Form 8-K                                                          |  |      | 63 | 

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FORWARD-LOOKING STATEMENTS

This Form 10-Q contains statements that may
be deemed to be forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934.
Forward-looking statements include statements regarding our
projected financial condition and results of operations, plans,
objectives, future performance and business. Forward-looking
statements typically include the words anticipate,
believe, estimate, expect,
project, plan, forecast,
intend and other similar expressions. These
statements reflect our current views with respect to future
events and financial performance. They are subject to risks and
uncertainties that could cause future results to differ
materially from historical results or from the results
anticipated. Readers are cautioned not to place undue reliance
on these forward-looking statements, which speak only as of
their dates or as of the date hereof if no other date is
identified. We undertake no obligation to update or revise any
forward-looking statements, whether as a result of new
information, future events or otherwise. For further information
on our key operating risks, refer to Key Operating
Risks at page 50 and IndyMacs annual report on
Form 10-K for the year ended December 31, 2002.

References to IndyMac Bancorp or the
Parent Company refer to the parent company alone
while references to IndyMac, the
Company, or we refer to IndyMac Bancorp,
Inc. and its consolidated subsidiaries. References to
IndyMac Bank or the Bank refer to our
subsidiary IndyMac Bank, F.S.B. and its consolidated
subsidiaries. The following discussion addresses the
Companys financial condition and results of operations for
the three and nine months ended September 30, 2003.






ITEM 2.MANAGEMENTS
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS







HIGHLIGHTS FOR THE QUARTER


Highlights for the three and nine months ended
September 30, 2003 were as follows:

|                   |                                                         |                                              |   |                   |        |          |   |               |        |               |   |       |        |  |   |        |        |  |   |       |        | 
|------------------ | ------------------------------------------------------- | -------------------------------------------- | - | ----------------- | ------ | -------- | - | ------------- | ------ | ------------- | - | ----- | ------ |  | - | ------ | ------ |  | - | ----- | ------ | 
|                   |                                                         |                                              |   |                  
|                   |                                                         | Three Months Ended                           |   | Nine Months Ended
|                   |                                                         |                                              |   |                  
|                   |                                                         | September 30,                                |   | September 30,     |        | June 30, |   | September 30, |        | September 30,
|                   |                                                         | 2003                                         |   | 2002              |        | 2003     |   | 2003          |        | 2002         
|                   |                                                         |                                              |   |                   |        |          |   |               |        |              
|                   |                                                         |                                             
|                   |                                                         | (Dollars in millions, except per share data)
|Income Statement   |                                                         |                                              |   |                   |        |          |   |               |        |               |   |       |        |  |   |        |        |  |   |      
|                   | Net interest income after provision for loan
    losses |                                              | $ | 76                |        |          | $ | 48            |        |               | $ | 61    |        |  | $ | 197    |        |  | $ | 143   |       
|                   | Gain on sale of loans                                   |                                              |   | 121               |        |          |   | 77            |        |               |   | 102   |        |  |   | 307    |        |  |   | 226   |       
|                   | Other income                                            |                                              |   | 2                 |        |          |   | 26            |        |               |   | 11    |        |  |   | 26     |        |  |   | 62    |       
|                   | Net revenues                                            |                                              |   | 200               |        |          |   | 151           |        |               |   | 173   |        |  |   | 530    |        |  |   | 431   |       
|                   | Operating expenses                                      |                                              |   | 117               |        |          |   | 89            |        |               |   | 105   |        |  |   | 318    |        |  |   | 249   |       
|                   | Net earnings                                            |                                              | $ | 50                |        |          | $ | 37            |        |               | $ | 41    |        |  | $ | 128    |        |  | $ | 108   |       
|Per Share Data     |                                                         |                                              |   |                   |        |          |   |               |        |               |   |       |        |  |   |        |        |  |   |      
|                   | Basic earnings per share                                |                                              | $ | 0.90              |        |          | $ | 0.65          |        |               | $ | 0.75  |        |  | $ | 2.33   |        |  | $ | 1.83  |       
|                   | Diluted earnings per share                              |                                              |   | 0.87              |        |          |   | 0.64          |        |               |   | 0.73  |        |  |   | 2.26   |        |  |   | 1.78  |       
|                   | Dividends paid per share                                |                                              |   | 0.15              |        |          |   | 0.00          |        |               |   | 0.10  |        |  |   | 0.35   |        |  |   | 0.00  |       
|                   | Book value per share at end of quarter                  |                                              |   | 17.27             |        |          |   | 14.97         |        |               |   | 16.48 |        |  |   | 17.27  |        |  |   | 14.97 |       
|                   | Closing price per share                                 |                                              | $ | 23.17             |        |          | $ | 19.27         |        |               | $ | 25.42 |        |  | $ | 23.17  |        |  | $ | 19.27 |       
|                   | Average common shares (in thousands)                    |                                              |   |                   |        |          |   |               |        |               |   |       |        |  |   |        |        |  |   |       |       
|                   |                                                         | Basic                                        |   |                   | 55,255 |          |   |               | 56,879 |               |   |       | 55,015 |  |   |        | 55,034 |  |   |       | 59,040 | 
|                   |                                                         | Diluted                                      |   |                   | 56,991 |          |   |               | 58,375 |               |   |       | 56,711 |  |   |        | 56,561 |  |   |       | 60,727 | 
|Performance Ratios |                                                         |                                              |   |                   |        |          |   |               |        |               |   |       |        |  |   |        |        |  |   |      
|                   | Return on average equity (annualized)                   |                                              |   | 20.32             | %      |          |   | 17.24         | %      |               |   | 18.34 | %      |  |   | 18.70  | %      |  |   | 16.62 | %     
|                   | Return on average assets (annualized)                   |                                              |   | 1.63              | %      |          |   | 1.82          | %      |               |   | 1.52  | %      |  |   | 1.55   | %      |  |   | 1.90  | %     
|                   | Dividend payout ratio(1)                                |                                              |   | 17.24             | %      |          |   | 0.00          | %      |               |   | 13.70 | %      |  |   | 15.49  | %      |  |   | 0.00  | %     
|                   | Net interest income to pretax income                    |                                              |   | 100.36            | %      |          |   | 81.92         | %      |               |   | 98.74 | %      |  |   | 100.68 | %      |  |   | 84.79 | %     
|                   | Average cost of funds                                   |                                              |   | 2.61              | %      |          |   | 4.09          | %      |               |   | 2.94  | %      |  |   | 2.90   | %      |  |   | 4.38  | %     
|                   | Net interest margin                                     |                                              |   | 2.97              | %      |          |   | 2.71          | %      |               |   | 2.73  | %      |  |   | 2.84   | %      |  |   | 2.98  | %     
|                   | Efficiency ratio(2)                                     |                                              |   | 57                | %      |          |   | 58            | %      |               |   | 58    | %      |  |   | 58     | %      |  |   | 57    | %     

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|                                           |                                                                          |                                              |   |                   |   |          |   |               |   |               |   |        |   |  |   |        |   |  |   |        |  
|------------------------------------------ | ------------------------------------------------------------------------ | -------------------------------------------- | - | ----------------- | - | -------- | - | ------------- | - | ------------- | - | ------ | - |  | - | ------ | - |  | - | ------ | -
|                                           |                                                                          |                                              |   |                  
|                                           |                                                                          | Three Months Ended                           |   | Nine Months Ended
|                                           |                                                                          |                                              |   |                  
|                                           |                                                                          | September 30,                                |   | September 30,     |   | June 30, |   | September 30, |   | September 30,
|                                           |                                                                          | 2003                                         |   | 2002              |   | 2003     |   | 2003          |   | 2002         
|                                           |                                                                          |                                              |   |                   |   |          |   |               |   |              
|                                           |                                                                          |                                             
|                                           |                                                                          | (Dollars in millions, except per share data)
|Performance Ratios, Continued              |                                                                          |                                              |   |                   |   |          |   |               |   |               |   |        |   |  |   |        |   |  |   |       
|                                           | Capital to net revenue ratio(3)                                          |                                              |   | 1.18              | % |          |   | 1.40          | % |               |   | 1.25   | % |  |   | 1.26   | % |  |   | 1.47   | %
|                                           | Capital adjusted efficiency ratio(4)                                     |                                              |   | 67                | % |          |   | 81            | % |               |   | 73     | % |  |   | 73     | % |  |   | 84     | %
|                                           | Operating expenses to loan production                                    |                                              |   | 1.35              | % |          |   | 1.68          | % |               |   | 1.28   | % |  |   | 1.35   | % |  |   | 1.74   | %
|Balance Sheet and Asset Quality
    Ratios |                                                                          |                                              |   |                   |   |          |   |               |   |               |   |        |   |  |   |        |   |  |   |       
|                                           | Debt to equity ratio(5)                                                  |                                              |   | 11.6:1            |   |          |   | 8.4:1         |   |               |   | 10.7:1 |   |  |   | 11.6:1 |   |  |   | 8.4:1  |  
|                                           | Core capital ratio(6)                                                    |                                              |   | 7.92              | % |          |   | 10.15         | % |               |   | 8.53   | % |  |   | 7.92   | % |  |   | 10.15  | %
|                                           | Risk-based capital ratio(6)                                              |                                              |   | 13.58             | % |          |   | 16.85         | % |               |   | 14.46  | % |  |   | 13.58  | % |  |   | 16.85  | %
|                                           | Non-performing assets to total assets                                    |                                              |   | 0.81              | % |          |   | 1.31          | % |               |   | 0.88   | % |  |   | 0.81   | % |  |   | 1.31   | %
|                                           | Allowance for loan losses to total loans held for
    investment         |                                              |   | 0.92              | % |          |   | 1.82          | % |               |   | 1.09   | % |  |   | 0.92   | % |  |   | 1.82   | %
|                                           | Allowance for loan losses and other reserves to
    non-performing loans |                                              |   | 94                | % |          |   | 82            | % |               |   | 97     | % |  |   | 94     | % |  |   | 82     | %
|                                           | Allowance for loan losses to annualized net
    charge-offs              |                                              |   | 349               | % |          |   | 271           | % |               |   | 176    | % |  |   | 272    | % |  |   | 283    | %
|                                           | Provision for loan losses to net charge-offs                             |                                              |   | 164.9             | % |          |   | 54.4          | % |               |   | 97.1   | % |  |   | 111.9  | % |  |   | 73.2   | %
|                                           | Provision to net charge-offs (core loan
    portfolio)(7)                |                                              |   | 263.0             | % |          |   | 56.4          | % |               |   | 119.7  | % |  |   | 150.6  | % |  |   | 110.3  | %
|Other Selected Items                       |                                                                          |                                              |   |                   |   |          |   |               |   |               |   |        |   |  |   |        |   |  |   |       
|                                           | Loans serviced(8)                                                        |                                              | $ | 35,029            |   |          | $ | 27,191        |   |               | $ | 32,974 |   |  | $ | 35,029 |   |  | $ | 27,191 |  
|                                           | Loan production(9)                                                       |                                              |   | 8,681             |   |          |   | 5,312         |   |               |   | 8,193  |   |  |   | 23,459 |   |  |   | 14,304 |  
|                                           | Pipeline of mortgage loans in process                                    |                                              |   | 4,688             |   |          |   | 5,011         |   |               |   | 6,929  |   |  |   | 4,688  |   |  |   | 5,011  |  
|                                           | Loans sold                                                               |                                              | $ | 6,675             |   |          | $ | 4,474         |   |               | $ | 6,336  |   |  | $ | 18,535 |   |  | $ | 12,447 |  



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|    |                                                                                                                                                                                                                                                                                                                                                                                                                       
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Dividends declared per common share as a
    percentage of diluted earnings per share.                                                                                                                                                                                                                                                                                                                                
|   
|(2) | Defined as operating expenses divided by net
    interest income and other income.                                                                                                                                                                                                                                                                                                                                    
|   
|(3) | Average equity divided by net interest income and
    other income.                                                                                                                                                                                                                                                                                                                                                   
|   
|(4) | Efficiency ratio multiplied by the capital to net
    revenue ratio.                                                                                                                                                                                                                                                                                                                                                  
|   
|(5) | Debt includes deposits.                                                                                                                                                                                                                                                                                                                                                                                               
|   
|(6) | IndyMac Bank, F.S.B. (excludes unencumbered cash
    at the Parent Company available for investment in IndyMac Bank).
    Risk based capital ratio is based on the regulatory standard
    risk weighting. With IndyMacs additional subprime risk
    weightings, the ratios are 12.49%, 15.80% and 13.22% for the
    three months ended September 30, 2003, September 30,
    2002 and June 30, 2003, respectively.
|   
|(7) | Excludes provisions and charge-offs of
    discontinued product lines.                                                                                                                                                                                                                                                                                                                                                
|   
|(8) | Represents entire servicing portfolio including
    IndyMac owned loans and loans subserviced for others on an
    interim basis.                                                                                                                                                                                                                                                                                     
|   
|(9) | Includes newly originated commitments on
    construction loans.                                                                                                                                                                                                                                                                                                                                                      




OVERALL RESULTS

Record revenues, earnings and earnings per share
as a result of continued strong mortgage loan production,
characterized IndyMacs overall results for the quarter
ended September 30, 2003. Mortgage loan production of
$8.5 billion during the third quarter of 2003 was 64%
higher than the third quarter of 2002 and the margin on loans
sold improved by nine basis points. In addition, the Company
deployed capital to increase average earning assets by 49%.
Offsetting the strong mortgage production revenues, were lower
servicing-related revenues as prepayments industry-wide
continued at historically high levels. In addition, losses on
the servicing-related hedge instruments were partially offset by
the increases in the value of servicing-related assets.

3



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##### Table of Contents



Comparing third quarter 2003 to third quarter
2002, net revenues increased 32% and operating expenses
increased 31%, resulting in net earnings of $49.7 million,
up 35% over the prior year.




OUR BUSINESS

IndyMac is structured to achieve synergies among
its operations and to enhance customer service. Operating
through its three main segments, IndyMac Mortgage Bank, IndyMac
Consumer Bank and the Investment Portfolio Group, the common
denominator of the Companys business is providing
consumers with single-family residential mortgages through
relationships with each segments core customers via the
channels in which each operates. IndyMac Mortgage Bank is
focused on providing consumers with mortgage products through
relationships with the Companys business
customers  mortgage brokers, mortgage bankers,
community financial institutions, real estate professionals and
homebuilders. IndyMac Consumer Bank provides the platform for
the mortgage and deposit services that IndyMac offers directly
to consumers. The Investment Portfolio Group serves as the main
link to customers whose mortgages we service. Through its
investments in single-family residential (SFR)
mortgages, mortgage-backed securities and mortgage servicing
rights (MSRs), the Investment Portfolio Group
generates core spread and fee income and provides critical
support to IndyMacs mortgage lending operations.

While our segments are structured to achieve
synergies with our varying customer base and marketing
strategies, our operating activities primarily consist of two
broad categories: mortgage banking activities and investing
activities. Both of these activities are performed to varying
degrees by each of our main segments as shown in the tables that
follow. Mortgage banking activities are characterized by high
asset turnover (the production and sale of mortgage loans) and
efficient utilization of capital but can be cyclical in nature
depending on interest rates. Revenues generated by mortgage
banking activities include gain on sale of mortgage loans, fee
income and net spread (interest) income during the period loans
are held pending sale. Investing activities tend to provide a
source of revenues which is generally counter-cyclical to
mortgage banking revenues, comprised primarily of net interest
income and servicing fees. IndyMac is strategically focused on
increasing the relative size of its portfolios of mortgage loans
and HELOC loans held for investment and mortgage servicing to
achieve greater balance between its mortgage banking activities
and its core investing activities. We believe that our investing
activities will increasingly act to stabilize IndyMacs
core income. In addition to its revenue contribution, the
Investment Portfolio Group performs the mortgage servicing
function, which includes payment processing, customer service,
default management and reporting to investors in our
securitizations. The mortgage servicing function creates added
opportunities to retain customers when the interest rate
environment makes it attractive for them to refinance, and
cross-market customers with other Company products. Default
management, which includes the processes of collections,
foreclosures, bankruptcies, claims, and foreclosed assets
management, enables IndyMac to proactively manage credit risk
for the Company and its investors in its securities.

The following tables summarize the Companys
financial results for the three months ended September 30,
2003, illustrating the revenues earned in its mortgage banking
activities and investing activities by each of its divisions.
The profitability of each operating segment is measured on a
fully-leveraged basis after allocating capital based on
regulatory capital rules. The Company uses a fund transfer
pricing (FTP) system to allocate net interest income
to the operating segments. Each operating segment is allocated
funding with maturities and interest rates matched with the
expected lives, repricing frequencies and financing liquidities
of the segments assets. The Retail Bank division within
the Consumer Banking Group receives a funding credit for
deposits using a similar methodology. The difference between
these allocations and the Companys actual net interest
income and capital levels resulting from centralized management
of funding costs is reported in the Treasury unit. Corporate
overhead costs related to managing the Company as a whole are
not allocated to the operating segments.

4



---



##### Table of Contents



The following table summarizes the segment
financial highlights for the three months ended
September 30, 2003:

|                                                 |                    |                        |                     |            |        |            |           |        |        |         |           |        |         |       |         |         |         |         |            |         |         |        |        | 
|------------------------------------------------ | ------------------ | ---------------------- | ------------------- | ---------- | ------ | ---------- | --------- | ------ | ------ | ------- | --------- | ------ | ------- | ----- | ------- | ------- | ------- | ------- | ---------- | ------- | ------- | ------ | ------ | 
|                                                 |                    | Mortgage               |                     | Consumer   |        | Investment |           |        |        | Total  
|                                                 |                    | Bank                   |                     | Bank       |        | Portfolio  |           | Other  |        | Company
|                                                 |                    |                        |                     |            |        |            |           |        |        |        
|                                                 |                    |                       
|                                                 |                    | (Dollars in thousands)
|Operating Results                                |                    |                        |                     |            |        |            |           |        |        |         |           |        |         |       |         |         |         |         |            |        
|Mortgage Banking Activities                      |                    |                        |                     |            |        |            |           |        |        |         |           |        |         |       |         |         |         |         |            |        
|Net interest income                              |                    | $                      | 33,268              |            |        | $          | 6,683     |        |        | $       | 8,903     |        |         | $     |        |         |         | $       | 48,854     |        
|Gain on sale of loans                            |                    |                        | 96,238              |            |        |            | 33,509    |        |        |         | 16,293    |        |         |       | (24,542 | )       |         |         | 121,498    |        
|Other income                                     |                    |                        | 11,467              |            |        |            | 6,498     |        |        |         |          |        |         |       | 44      |         |         |         | 18,009     |        
|                                                 |                    |                        |                     |            |        |            |           |        |        |         |           |        |         |       |         |         |         |         |            |        
|                                                 | Net revenues       |                        |                     | 140,973    |        |            |           | 46,690 |        |         |           | 25,196 |         |       |         | (24,498 | )       |         |            | 188,361 |        
|                                                 | Operating expenses |                        |                     | 42,700     |        |            |           | 19,213 |        |         |           | 408    |         |       |         |        |         |         |            | 62,321  |        
|                                                 |                    |                        |                     |            |        |            |           |        |        |         |           |        |         |       |         |         |         |         |            |        
|                                                 |                    | Pretax income          |                     |            | 98,273 |            |           |        | 27,477 |         |           |        | 24,788  |       |         |         | (24,498 | )       |            |         | 126,040 |       
|                                                 |                    |                        |                     |            |        |            |           |        |        |         |           |        |         |       |         |         |         |         |            |        
|Investing Activities                             |                    |                        |                     |            |        |            |           |        |        |         |           |        |         |       |         |         |         |         |            |        
|Net interest income                              |                    |                        | 16,926              |            |        |            | 3,644     |        |        |         | 19,142    |        |         |       | 1,107   |         |         |         | 40,819     |        
|Provision for loan losses                        |                    |                        | (712                | )          |        |            | (1,921    | )      |        |         | (3,564    | )      |         |       | (3      | )       |         |         | (6,200     | )      
|Service fee income                               |                    |                        |                    |            |        |            |          |        |        |         | (13,971   | )      |         |       | 2,858   |         |         |         | (11,113    | )      
|Loss on sale of securities                       |                    |                        |                    |            |        |            |          |        |        |         | (10,870   | )      |         |       | 2,223   |         |         |         | (8,647     | )      
|Other income                                     |                    |                        | 1,359               |            |        |            | 615       |        |        |         | 1,028     |        |         |       | 5       |         |         |         | 3,007      |        
|                                                 |                    |                        |                     |            |        |            |           |        |        |         |           |        |         |       |         |         |         |         |            |        
|                                                 | Net revenues       |                        |                     | 17,573     |        |            |           | 2,338  |        |         |           | (8,235 | )       |       |         | 6,190   |         |         |            | 17,866  |        
|                                                 | Operating expenses |                        |                     | 9,433      |        |            |           | 1,393  |        |         |           | 10,796 |         |       |         |         |         |         |            | 21,622  |        
|                                                 |                    |                        |                     |            |        |            |           |        |        |         |           |        |         |       |         |         |         |         |            |        
|                                                 |                    | Pretax income          |                     |            | 8,140  |            |           |        | 945    |         |           |        | (19,031 | )     |         |         | 6,190   |         |            |         | (3,756  | )     
|                                                 |                    |                        |                     |            |        |            |           |        |        |         |           |        |         |       |         |         |         |         |            |        
|Financing and Other Activities                   |                    |                        |                     |            |        |            |           |        |        |         |           |        |         |       |         |         |         |         |            |        
|Net interest income                              |                    |                        |                    |            |        |            | 3,987     |        |        |         |          |        |         |       | (11,207 | )       |         |         | (7,220     | )      
|Other income                                     |                    |                        |                    |            |        |            | 538       |        |        |         |          |        |         |       | 101     |         |         |         | 639        |        
|                                                 |                    |                        |                     |            |        |            |           |        |        |         |           |        |         |       |         |         |         |         |            |        
|                                                 | Net revenues       |                        |                     |           |        |            |           | 4,525  |        |         |           |       |         |       |         | (11,106 | )       |         |            | (6,581  | )      
|                                                 | Operating expenses |                        |                     |           |        |            |           | 5,405  |        |         |           |       |         |       |         | 28,142  |         |         |            | 33,547  |        
|                                                 |                    |                        |                     |            |        |            |           |        |        |         |           |        |         |       |         |         |         |         |            |        
|                                                 |                    | Pretax income          |                     |            |       |            |           |        | (880   | )       |           |        |         |       |         |         | (39,248 | )       |            |         | (40,128 | )     
|                                                 |                    |                        |                     |            |        |            |           |        |        |         |           |        |         |       |         |         |         |         |            |        
|                                                 |                    |                        | Total pretax income |            |        | 106,413    |           |        |        | 27,542  |           |        |         | 5,757 |         |         |         | (57,556 | )          |         |         | 82,156 |       
|                                                 |                    |                        |                     |            |        |            |           |        |        |         |           |        |         |       |         |         |         |         |            |        
|                                                 |                    |                        |                     | Net income |        | $          | 64,380    |        |        | $       | 16,663    |        |         | $     | 3,483   |         |         | $       | (34,822    | )       |         | $      | 49,704 | 
|                                                 |                    |                        |                     |            |        |            |           |        |        |         |           |        |         |       |         |         |         |         |            |        
|Ratios                                           |                    |                        |                     |            |        |            |           |        |        |         |           |        |         |       |         |         |         |         |            |        
|Percentage of assets                             |                    |                        | 36.59               | %          |        |            | 10.22     | %      |        |         | 49.01     | %      |         |       | 4.18    | %       |         |         | 100        | %      
|Percentage of total revenue                      |                    |                        | 79.41               | %          |        |            | 26.82     | %      |        |         | 8.50      | %      |         |       | (14.73  | )%      |         |         | 100        | %      
|Percentage of pretax income                      |                    |                        | 129.53              | %          |        |            | 33.52     | %      |        |         | 7.01      | %      |         |       | (70.06  | )%      |         |         | 100        | %      
|Balance Sheet Data                               |                    |                        |                     |            |        |            |           |        |        |         |           |        |         |       |         |         |         |         |            |        
|Average interest-earning assets                  |                    | $                      | 4,322,736           |            |        | $          | 1,174,783 |        |        | $       | 5,237,312 |        |         | $     | 284,369 |         |         | $       | 11,019,200 |        
|Average total assets                             |                    | $                      | 4,436,153           |            |        | $          | 1,239,312 |        |        | $       | 5,942,191 |        |         | $     | 507,338 |         |         | $       | 12,124,994 |        
|Allocated capital                                |                    | $                      | 283,076             |            |        | $          | 91,069    |        |        | $       | 360,719   |        |         | $     | 235,506 |         |         | $       | 970,370    |        
|Capital allocated to mortgage banking activities |                    | $                      | 154,803             |            |        | $          | 37,789    |        |        | $       | 35,588    |        |         | $     |        |         |         | $       | 228,180    |        
|Capital allocated to investing activities        |                    | $                      | 128,273             |            |        | $          | 51,970    |        |        | $       | 325,131   |        |         | $     |        |         |         | $       | 505,374    |        
|Capital allocated to corporate & excess          |                    | $                      |                    |            |        | $          | 1,310     |        |        | $       |          |        |         | $     | 235,506 |         |         | $       | 236,816    |        
|Allocated capital/total average assets           |                    |                        | 6.38                | %          |        |            | 7.35      | %      |        |         | 6.07      | %      |         |       | 46.42   | %       |         |         | 8.00       | %      
|Loans Produced                                   |                    | $                      | 6,329,084           |            |        | $          | 1,940,863 |        |        | $       | 410,828   |        |         | $     |        |         |         | $       | 8,680,775  |        
|Purchase mortgages                               |                    |                        | 43                  | %          |        |            | 7         | %      |        |         |          |        |         |       | N/A     |         |         |         | 36         | %      
|Cash out refinance mortgages                     |                    |                        | 34                  | %          |        |            | 41        | %      |        |         |          |        |         |       | N/A     |         |         |         | 35         | %      
|Rate and term refinance mortgages                |                    |                        | 23                  | %          |        |            | 52        | %      |        |         |          |        |         |       | N/A     |         |         |         | 29         | %      
|Performance Ratios                               |                    |                        |                     |            |        |            |           |        |        |         |           |        |         |       |         |         |         |         |            |        
|Return on equity (ROE)                           |                    |                        | 90                  | %          |        |            | 73        | %      |        |         | 4         | %      |         |       | N/A     |         |         |         | 20         | %      
|ROE  mortgage banking activities                |                    |                        | 152                 | %          |        |            | 175       | %      |        |         | 167       | %      |         |       | N/A     |         |         |         | 133        | %      
|ROE  investing activities                       |                    |                        | 15                  | %          |        |            | 4         | %      |        |         | (14       | )%     |         |       | N/A     |         |         |         | (2         | )%     
|ROE  corporate                                  |                    |                        |                    |            |        |            | (161      | )%     |        |         |          |        |         |       | N/A     |         |         |         | (41        | )%     
|Return on assets (ROA)                           |                    |                        | 5.76                | %          |        |            | 5.33      | %      |        |         | 0.23      | %      |         |       | N/A     |         |         |         | 1.63       | %      
|Net interest margin                              |                    |                        | 4.61                | %          |        |            | 4.83      | %      |        |         | 2.12      | %      |         |       | N/A     |         |         |         | 2.97       | %      
|Efficiency ratio                                 |                    |                        | 33                  | %          |        |            | 47        | %      |        |         | 55        | %      |         |       | N/A     |         |         |         | 57         | %      
|Capital adjusted efficiency ratio                |                    |                        | 15                  | %          |        |            | 19        | %      |        |         | 240       | %      |         |       | N/A     |         |         |         | 67         | %      
|Average FTE                                      |                    |                        | 1,875               |            |        |            | 897       |        |        |         | 433       |        |         |       | 521     |         |         |         | 3,726      |        

5



---



##### Table of Contents



The following table provides additional detail on
the segment results for IndyMac Mortgage Bank for the three
months ended September 30, 2003:

|                                                 |                    |                           |                     |            |        |        |         |       |       |       |           |        |       |        |         |       |       |       |           |         |        |         |        | 
|------------------------------------------------ | ------------------ | ------------------------- | ------------------- | ---------- | ------ | ------ | ------- | ----- | ----- | ----- | --------- | ------ | ----- | ------ | ------- | ----- | ----- | ----- | --------- | ------- | ------ | ------- | ------ | 
|                                                 |                    |                          
|                                                 |                    | Relationship Businesses 
|                                                 |                    | IndyMac Mortgage Bank    
|                                                 |                    |                          
|                                                 |                    | B2B                       |                     | B2R        |        | HCL    |         | HBD   |       | Total
|                                                 |                    |                           |                     |            |        |        |         |       |       |      
|                                                 |                    |                          
|                                                 |                    | (Dollars in thousands)   
|Operating Results                                |                    |                           |                     |            |        |        |         |       |       |       |           |        |       |        |         |       |       |       |           |        
|Mortgage Banking Activities                      |                    |                           |                     |            |        |        |         |       |       |       |           |        |       |        |         |       |       |       |           |        
|Net interest income                              |                    | $                         | 27,369              |            |        | $      | 1,132   |       |       | $     | 4,014     |        |       | $      | 753     |       |       | $     | 33,268    |        
|Gain on sale of loans                            |                    |                           | 84,724              |            |        |        | 4,548   |       |       |       | 4,916     |        |       |        | 2,050   |       |       |       | 96,238    |        
|Other income                                     |                    |                           | 8,943               |            |        |        | 807     |       |       |       | 1,522     |        |       |        | 195     |       |       |       | 11,467    |        
|                                                 |                    |                           |                     |            |        |        |         |       |       |       |           |        |       |        |         |       |       |       |           |        
|                                                 | Net revenues       |                           |                     | 121,036    |        |        |         | 6,487 |       |       |           | 10,452 |       |        |         | 2,998 |       |       |           | 140,973 |       
|                                                 | Operating expenses |                           |                     | 35,950     |        |        |         | 4,146 |       |       |           | 912    |       |        |         | 1,692 |       |       |           | 42,700  |       
|                                                 |                    |                           |                     |            |        |        |         |       |       |       |           |        |       |        |         |       |       |       |           |        
|                                                 |                    | Pretax income             |                     |            | 85,086 |        |         |       | 2,341 |       |           |        | 9,540 |        |         |       | 1,306 |       |           |         | 98,273 |        
|                                                 |                    |                           |                     |            |        |        |         |       |       |       |           |        |       |        |         |       |       |       |           |        
|Investing Activities                             |                    |                           |                     |            |        |        |         |       |       |       |           |        |       |        |         |       |       |       |           |        
|Net interest income                              |                    |                           |                    |            |        |        |        |       |       |       | 9,739     |        |       |        | 7,187   |       |       |       | 16,926    |        
|Provision for loan losses                        |                    |                           |                    |            |        |        |        |       |       |       | (400      | )      |       |        | (312    | )     |       |       | (712      | )      
|Service fee income                               |                    |                           |                    |            |        |        |        |       |       |       |          |        |       |        |        |       |       |       |          |        
|Loss on sale of securities                       |                    |                           |                    |            |        |        |        |       |       |       |          |        |       |        |        |       |       |       |          |        
|Other income                                     |                    |                           |                    |            |        |        |        |       |       |       | 1,159     |        |       |        | 200     |       |       |       | 1,359     |        
|                                                 |                    |                           |                     |            |        |        |         |       |       |       |           |        |       |        |         |       |       |       |           |        
|                                                 | Net revenues       |                           |                     |           |        |        |         |      |       |       |           | 10,498 |       |        |         | 7,075 |       |       |           | 17,573  |       
|                                                 | Operating expenses |                           |                     |           |        |        |         |      |       |       |           | 7,714  |       |        |         | 1,719 |       |       |           | 9,433   |       
|                                                 |                    |                           |                     |            |        |        |         |       |       |       |           |        |       |        |         |       |       |       |           |        
|                                                 |                    | Pretax income             |                     |            |       |        |         |       |      |       |           |        | 2,784 |        |         |       | 5,356 |       |           |         | 8,140  |        
|                                                 |                    |                           |                     |            |        |        |         |       |       |       |           |        |       |        |         |       |       |       |           |        
|Financing and Other Activities                   |                    |                           |                     |            |        |        |         |       |       |       |           |        |       |        |         |       |       |       |           |        
|Net interest income                              |                    |                           |                    |            |        |        |        |       |       |       |          |        |       |        |        |       |       |       |          |        
|Other income                                     |                    |                           |                    |            |        |        |        |       |       |       |          |        |       |        |        |       |       |       |          |        
|                                                 |                    |                           |                     |            |        |        |         |       |       |       |           |        |       |        |         |       |       |       |           |        
|                                                 | Net revenues       |                           |                     |           |        |        |         |      |       |       |           |       |       |        |         |      |       |       |           |        |       
|                                                 | Operating expenses |                           |                     |           |        |        |         |      |       |       |           |       |       |        |         |      |       |       |           |        |       
|                                                 |                    |                           |                     |            |        |        |         |       |       |       |           |        |       |        |         |       |       |       |           |        
|                                                 |                    | Pretax income             |                     |            |       |        |         |       |      |       |           |        |      |        |         |       |      |       |           |         |       |        
|                                                 |                    |                           |                     |            |        |        |         |       |       |       |           |        |       |        |         |       |       |       |           |        
|                                                 |                    |                           | Total pretax income |            |        | 85,086 |         |       |       | 2,341 |           |        |       | 12,324 |         |       |       | 6,662 |           |         |        | 106,413 |       
|                                                 |                    |                           |                     |            |        |        |         |       |       |       |           |        |       |        |         |       |       |       |           |        
|                                                 |                    |                           |                     | Net income |        | $      | 51,477  |       |       | $     | 1,416     |        |       | $      | 7,456   |       |       | $     | 4,031     |         |        | $       | 64,380 | 
|                                                 |                    |                           |                     |            |        |        |         |       |       |       |           |        |       |        |         |       |       |       |           |        
|Ratios                                           |                    |                           |                     |            |        |        |         |       |       |       |           |        |       |        |         |       |       |       |           |        
|Percentage of assets                             |                    |                           | 19.27               | %          |        |        | 1.00    | %     |       |       | 10.78     | %      |       |        | 5.54    | %     |       |       | 36.59     | %      
|Percentage of total revenue                      |                    |                           | 60.63               | %          |        |        | 3.25    | %     |       |       | 10.49     | %      |       |        | 5.05    | %     |       |       | 79.41     | %      
|Percentage of pretax income                      |                    |                           | 103.57              | %          |        |        | 2.85    | %     |       |       | 15.00     | %      |       |        | 8.11    | %     |       |       | 129.53    | %      
|Balance Sheet Data                               |                    |                           |                     |            |        |        |         |       |       |       |           |        |       |        |         |       |       |       |           |        
|Average interest-earning assets                  |                    | $                         | 2,237,128           |            |        | $      | 115,726 |       |       | $     | 1,303,881 |        |       | $      | 666,001 |       |       | $     | 4,322,736 |        
|Average total assets                             |                    | $                         | 2,336,410           |            |        | $      | 121,129 |       |       | $     | 1,307,059 |        |       | $      | 671,555 |       |       | $     | 4,436,153 |        
|Allocated capital                                |                    | $                         | 139,112             |            |        | $      | 6,714   |       |       | $     | 70,858    |        |       | $      | 66,392  |       |       | $     | 283,076   |        
|Capital allocated to mortgage banking activities |                    | $                         | 139,112             |            |        | $      | 6,714   |       |       | $     | 4,744     |        |       | $      | 4,233   |       |       | $     | 154,803   |        
|Capital allocated to investing activities        |                    | $                         |                    |            |        | $      |        |       |       | $     | 66,114    |        |       | $      | 62,159  |       |       | $     | 128,273   |        
|Capital allocated to corporate & excess          |                    | $                         |                    |            |        | $      |        |       |       | $     |          |        |       | $      |        |       |       | $     |          |        
|Allocated capital/total average assets           |                    |                           | 5.95                | %          |        |        | 5.54    | %     |       |       | 5.42      | %      |       |        | 9.89    | %     |       |       | 6.38      | %      
|Loans Produced                                   |                    | $                         | 4,891,082           |            |        | $      | 302,654 |       |       | $     | 821,238   |        |       | $      | 314,110 |       |       | $     | 6,329,084 |        
|Purchase mortgages                               |                    |                           | 33                  | %          |        |        | 29      | %     |       |       | 98        | %      |       |        | 74      | %     |       |       | 43        | %      
|Cash out refinance mortgages                     |                    |                           | 41                  | %          |        |        | 34      | %     |       |       | 0         | %      |       |        | 14      | %     |       |       | 34        | %      
|Rate and term refinance mortgages                |                    |                           | 26                  | %          |        |        | 37      | %     |       |       | 2         | %      |       |        | 12      | %     |       |       | 23        | %      
|Performance Ratios                               |                    |                           |                     |            |        |        |         |       |       |       |           |        |       |        |         |       |       |       |           |        
|Return on equity (ROE)                           |                    |                           | 147                 | %          |        |        | 84      | %     |       |       | 42        | %      |       |        | 24      | %     |       |       | 90        | %      
|ROE  mortgage banking activities                |                    |                           | 147                 | %          |        |        | 84      | %     |       |       | 483       | %      |       |        | 74      | %     |       |       | 152       | %      
|ROE  investing activities                       |                    |                           |                    |            |        |        |        |       |       |       | 10        | %      |       |        | 21      | %     |       |       | 15        | %      
|ROE  corporate                                  |                    |                           |                    |            |        |        |        |       |       |       |          |        |       |        |        |       |       |       |          |        
|Return on assets (ROA)                           |                    |                           | 8.74                | %          |        |        | 4.64    | %     |       |       | 2.26      | %      |       |        | 2.38    | %     |       |       | 5.76      | %      
|Net interest margin                              |                    |                           | 4.85                | %          |        |        | 3.88    | %     |       |       | 4.18      | %      |       |        | 4.73    | %     |       |       | 4.61      | %      
|Efficiency ratio                                 |                    |                           | 30                  | %          |        |        | 64      | %     |       |       | 40        | %      |       |        | 33      | %     |       |       | 33        | %      
|Capital adjusted efficiency ratio                |                    |                           | 9                   | %          |        |        | 17      | %     |       |       | 34        | %      |       |        | 52      | %     |       |       | 15        | %      
|Average FTE                                      |                    |                           | 1,355               |            |        |        | 171     |       |       |       | 228       |        |       |        | 121     |       |       |       | 1,875     |        

|                                |  |                                                                                                                                                            
|------------------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------
|                               
|IndyMac Mortgage Bank Divisions
|                               
|B2B                             |  | Business-to-Business division, whose major
    lending channels are mortgage brokers and bankers                                                           
|B2R                             |  | Business-to-Realtor division, whose lending
    customers are realtors                                                                                     
|HCL                             |  | Home Construction Lending division, whose primary
    customers are individuals who are in the process of building
    their own homes and mortgage brokers
|HBD                             |  | Homebuilder division, whose customers are mainly
    subdivision developers                                                                                

6



---



##### Table of Contents



The following table provides additional details
on the segment results for IndyMac Consumer Bank for the three
months ended September 30, 2003:

|                                                 |                    |                                                    |                     |            |        |        |         |       |     |     |         |       |       |     |           |        |        |        |        | 
|------------------------------------------------ | ------------------ | -------------------------------------------------- | ------------------- | ---------- | ------ | ------ | ------- | ----- | --- | --- | ------- | ----- | ----- | --- | --------- | ------ | ------ | ------ | ------ | 
|                                                 |                    |                                                   
|                                                 |                    | Consumer Direct Businesses  IndyMac Consumer Bank
|                                                 |                    |                                                   
|                                                 |                    |                                                    |                     | Retail     |        |       
|                                                 |                    | B2C                                                |                     | HELOC      |        | Bank   |         | Total
|                                                 |                    |                                                    |                     |            |        |        |         |      
|                                                 |                    |                                                   
|                                                 |                    | (Dollars in thousands)                            
|Operating Results                                |                    |                                                    |                     |            |        |        |         |       |     |     |         |       |       |     |           |       
|Mortgage Banking Activities                      |                    |                                                    |                     |            |        |        |         |       |     |     |         |       |       |     |           |       
|Net interest income                              |                    | $                                                  | 6,109               |            |        | $      |        |       |     | $   | 574     |       |       | $   | 6,683     |       
|Gain on sale of loans                            |                    |                                                    | 31,151              |            |        |        |        |       |     |     | 2,358   |       |       |     | 33,509    |       
|Other income                                     |                    |                                                    | 6,219               |            |        |        |        |       |     |     | 279     |       |       |     | 6,498     |       
|                                                 |                    |                                                    |                     |            |        |        |         |       |     |     |         |       |       |     |           |       
|                                                 | Net revenues       |                                                    |                     | 43,479     |        |        |         |      |     |     |         | 3,211 |       |     |           | 46,690 |       
|                                                 | Operating expenses |                                                    |                     | 17,809     |        |        |         |      |     |     |         | 1,404 |       |     |           | 19,213 |       
|                                                 |                    |                                                    |                     |            |        |        |         |       |     |     |         |       |       |     |           |       
|                                                 |                    | Pretax income                                      |                     |            | 25,670 |        |         |       |    |     |         |       | 1,807 |     |           |        | 27,477 |       
|                                                 |                    |                                                    |                     |            |        |        |         |       |     |     |         |       |       |     |           |       
|Investing Activities                             |                    |                                                    |                     |            |        |        |         |       |     |     |         |       |       |     |           |       
|Net interest income                              |                    |                                                    |                    |            |        |        | 3,644   |       |     |     |        |       |       |     | 3,644     |       
|Provision for loan losses                        |                    |                                                    |                    |            |        |        | (1,921  | )     |     |     |        |       |       |     | (1,921    | )     
|Service fee income                               |                    |                                                    |                    |            |        |        |        |       |     |     |        |       |       |     |          |       
|Loss on sale of securities                       |                    |                                                    |                    |            |        |        |        |       |     |     |        |       |       |     |          |       
|Other income                                     |                    |                                                    |                    |            |        |        | 615     |       |     |     |        |       |       |     | 615       |       
|                                                 |                    |                                                    |                     |            |        |        |         |       |     |     |         |       |       |     |           |       
|                                                 | Net revenues       |                                                    |                     |           |        |        |         | 2,338 |     |     |         |      |       |     |           | 2,338  |       
|                                                 | Operating expenses |                                                    |                     |           |        |        |         | 1,393 |     |     |         |      |       |     |           | 1,393  |       
|                                                 |                    |                                                    |                     |            |        |        |         |       |     |     |         |       |       |     |           |       
|                                                 |                    | Pretax income                                      |                     |            |       |        |         |       | 945 |     |         |       |      |     |           |        | 945    |       
|                                                 |                    |                                                    |                     |            |        |        |         |       |     |     |         |       |       |     |           |       
|Financing and Other Activities                   |                    |                                                    |                     |            |        |        |         |       |     |     |         |       |       |     |           |       
|Net interest income                              |                    |                                                    |                    |            |        |        |        |       |     |     | 3,987   |       |       |     | 3,987     |       
|Other income                                     |                    |                                                    |                    |            |        |        |        |       |     |     | 538     |       |       |     | 538       |       
|                                                 |                    |                                                    |                     |            |        |        |         |       |     |     |         |       |       |     |           |       
|                                                 | Net revenues       |                                                    |                     |           |        |        |         |      |     |     |         | 4,525 |       |     |           | 4,525  |       
|                                                 | Operating expenses |                                                    |                     |           |        |        |         |      |     |     |         | 5,405 |       |     |           | 5,405  |       
|                                                 |                    |                                                    |                     |            |        |        |         |       |     |     |         |       |       |     |           |       
|                                                 |                    | Pretax income                                      |                     |            |       |        |         |       |    |     |         |       | (880  | )   |           |        | (880   | )     
|                                                 |                    |                                                    |                     |            |        |        |         |       |     |     |         |       |       |     |           |       
|                                                 |                    |                                                    | Total pretax income |            |        | 25,670 |         |       |     | 945 |         |       |       | 927 |           |        |        | 27,542 |       
|                                                 |                    |                                                    |                     |            |        |        |         |       |     |     |         |       |       |     |           |       
|                                                 |                    |                                                    |                     | Net income |        | $      | 15,530  |       |     | $   | 572     |       |       | $   | 561       |        |        | $      | 16,663 | 
|                                                 |                    |                                                    |                     |            |        |        |         |       |     |     |         |       |       |     |           |       
|Ratios                                           |                    |                                                    |                     |            |        |        |         |       |     |     |         |       |       |     |           |       
|Percentage of assets                             |                    |                                                    | 5.03                | %          |        |        | 4.46    | %     |     |     | 0.73    | %     |       |     | 10.22     | %     
|Percentage of total revenue                      |                    |                                                    | 21.78               | %          |        |        | 1.17    | %     |     |     | 3.87    | %     |       |     | 26.82     | %     
|Percentage of pretax income                      |                    |                                                    | 31.25               | %          |        |        | 1.15    | %     |     |     | 1.13    | %     |       |     | 33.52     | %     
|Balance Sheet Data                               |                    |                                                    |                     |            |        |        |         |       |     |     |         |       |       |     |           |       
|Average interest-earning assets                  |                    | $                                                  | 579,195             |            |        | $      | 532,186 |       |     | $   | 63,402  |       |       | $   | 1,174,783 |       
|Average total assets                             |                    | $                                                  | 609,372             |            |        | $      | 541,349 |       |     | $   | 88,591  |       |       | $   | 1,239,312 |       
|Allocated capital                                |                    | $                                                  | 34,462              |            |        | $      | 51,970  |       |     | $   | 4,637   |       |       | $   | 91,069    |       
|Capital allocated to mortgage banking activities |                    | $                                                  | 34,462              |            |        | $      |        |       |     | $   | 3,327   |       |       | $   | 37,789    |       
|Capital allocated to investing activities        |                    | $                                                  |                    |            |        | $      | 51,970  |       |     | $   |        |       |       | $   | 51,970    |       
|Capital allocated to corporate & excess          |                    | $                                                  |                    |            |        | $      |        |       |     | $   | 1,310   |       |       | $   | 1,310     |       
|Allocated capital/total average assets           |                    |                                                    | 5.66                | %          |        |        | 9.60    | %     |     |     | 5.23    | %     |       |     | 7.35      | %     
|Loans Produced(1)                                |                    | $                                                  | 1,533,119           |            |        | $      | 263,802 |       |     | $   | 143,942 |       |       | $   | 1,940,863 |       
|Purchase mortgages                               |                    |                                                    | 5                   | %          |        |        | N/A     |       |     |     | 23      | %     |       |     | 7         | %     
|Cash out refinance mortgages                     |                    |                                                    | 43                  | %          |        |        | N/A     |       |     |     | 27      | %     |       |     | 41        | %     
|Rate and term refinance mortgages                |                    |                                                    | 52                  | %          |        |        | N/A     |       |     |     | 50      | %     |       |     | 52        | %     
|Performance Ratios                               |                    |                                                    |                     |            |        |        |         |       |     |     |         |       |       |     |           |       
|Return on equity (ROE)                           |                    |                                                    | 179                 | %          |        |        | 4       | %     |     |     | 48      | %     |       |     | 73        | %     
|ROE  mortgage banking activities                |                    |                                                    | 179                 | %          |        |        |        |       |     |     | 130     | %     |       |     | 175       | %     
|ROE  investing activities                       |                    |                                                    |                    |            |        |        | 4       | %     |     |     |        |       |       |     | 4         | %     
|ROE  corporate                                  |                    |                                                    |                    |            |        |        |        |       |     |     | (161    | )%    |       |     | (161      | )%    
|Return on assets (ROA)                           |                    |                                                    | 10.11               | %          |        |        | 0.42    | %     |     |     | N/A     |       |       |     | 5.33      | %     
|Net interest margin                              |                    |                                                    | 4.18                | %          |        |        | 2.72    | %     |     |     | N/A     |       |       |     | 4.83      | %     
|Efficiency ratio                                 |                    |                                                    | 41                  | %          |        |        | 33      | %     |     |     | 88      | %     |       |     | 47        | %     
|Capital adjusted efficiency ratio                |                    |                                                    | 8                   | %          |        |        | 100     | %     |     |     | 13      | %     |       |     | 19        | %     
|Average FTE                                      |                    |                                                    | 650                 |            |        |        | 12      |       |     |     | 235     |       |       |     | 897       |       

|                                |  |                                                                                                                             
|------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------
|                                |  |                                                                                                                             
|                               
|IndyMac Consumer Bank Divisions
|                               
|B2C                             |  | Business-to-Consumer division, offers direct
    lending to consumers                                                       
|HELOC                           |  | Home Equity Line of Credit division, provides
    home equity lines of credit and seconds to consumers                      
|Retail Bank                     |  | Retail Bank division, offers direct lending and
    deposit products to our depositors through our retail branch
    network



|    |                                                                                                                                                            
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | All HELOC products produced by the business units
    during the third quarter of 2003 were consolidated into the
    HELOC division for segment reporting.

7



---



##### Table of Contents



The following table provides additional details
on the segment results for the Investment Portfolio Group for
the three months ended September 30, 2003:

|                                                 |                    |                            |                     |            |         |        |           |              |       |       |           |       |       |       |        |      |        |        |           |        |         |       |       | 
|------------------------------------------------ | ------------------ | -------------------------- | ------------------- | ---------- | ------- | ------ | --------- | ------------ | ----- | ----- | --------- | ----- | ----- | ----- | ------ | ---- | ------ | ------ | --------- | ------ | ------- | ----- | ----- | 
|                                                 |                    |                           
|                                                 |                    | Investment Portfolio Group
|                                                 |                    |                           
|                                                 |                    | Mortgage                   |                     |           
|                                                 |                    | Servicing-                 |                     |           
|                                                 |                    | Related                    |                     | Whole      |         |        |           | Discontinued |       |      
|                                                 |                    | Assets(1)                  |                     | Loans(2)   |         | MBS(3) |           | Products(4)  |       | Total
|                                                 |                    |                            |                     |            |         |        |           |              |       |      
|                                                 |                    |                           
|                                                 |                    | (Dollars in thousands)    
|Operating Results                                |                    |                            |                     |            |         |        |           |              |       |       |           |       |       |       |        |      |        |        |           |       
|Mortgage Banking Activities                      |                    |                            |                     |            |         |        |           |              |       |       |           |       |       |       |        |      |        |        |           |       
|Net interest income                              |                    | $                          | 8,903               |            |         | $      |          |              |       | $     |          |       |       | $     |       |      |        | $      | 8,903     |       
|Gain on sale of loans                            |                    |                            | 16,293              |            |         |        |          |              |       |       |          |       |       |       |       |      |        |        | 16,293    |       
|Other income                                     |                    |                            |                    |            |         |        |          |              |       |       |          |       |       |       |       |      |        |        |          |       
|                                                 |                    |                            |                     |            |         |        |           |              |       |       |           |       |       |       |        |      |        |        |           |       
|                                                 | Net revenues       |                            |                     | 25,196     |         |        |           |             |       |       |           |      |       |       |        |     |        |        |           | 25,196 |        
|                                                 | Operating expenses |                            |                     | 408        |         |        |           |             |       |       |           |      |       |       |        |     |        |        |           | 408    |        
|                                                 |                    |                            |                     |            |         |        |           |              |       |       |           |       |       |       |        |      |        |        |           |       
|                                                 |                    | Pretax income              |                     |            | 24,788  |        |           |              |      |       |           |       |      |       |        |      |       |        |           |        | 24,788  |      
|                                                 |                    |                            |                     |            |         |        |           |              |       |       |           |       |       |       |        |      |        |        |           |       
|Investing Activities                             |                    |                            |                     |            |         |        |           |              |       |       |           |       |       |       |        |      |        |        |           |       
|Net interest income                              |                    |                            | 11,104              |            |         |        | 5,535     |              |       |       | 1,158     |       |       |       | 1,345  |      |        |        | 19,142    |       
|Provision for loan losses                        |                    |                            |                    |            |         |        | (1,464    | )            |       |       |          |       |       |       | (2,100 | )    |        |        | (3,564    | )     
|Service fee income                               |                    |                            | (13,971             | )          |         |        |          |              |       |       |          |       |       |       |       |      |        |        | (13,971   | )     
|Loss on sale of securities                       |                    |                            | (10,870             | )          |         |        |          |              |       |       |          |       |       |       |       |      |        |        | (10,870   | )     
|Other income                                     |                    |                            | 539                 |            |         |        | 489       |              |       |       |          |       |       |       |       |      |        |        | 1,028     |       
|                                                 |                    |                            |                     |            |         |        |           |              |       |       |           |       |       |       |        |      |        |        |           |       
|                                                 | Net revenues       |                            |                     | (13,198    | )       |        |           | 4,560        |       |       |           | 1,158 |       |       |        | (755 | )      |        |           | (8,235 | )      
|                                                 | Operating expenses |                            |                     | 9,253      |         |        |           | 605          |       |       |           | 126   |       |       |        | 812  |        |        |           | 10,796 |        
|                                                 |                    |                            |                     |            |         |        |           |              |       |       |           |       |       |       |        |      |        |        |           |       
|                                                 |                    | Pretax income              |                     |            | (22,451 | )      |           |              | 3,955 |       |           |       | 1,032 |       |        |      | (1,567 | )      |           |        | (19,031 | )    
|                                                 |                    |                            |                     |            |         |        |           |              |       |       |           |       |       |       |        |      |        |        |           |       
|Financing and Other Activities                   |                    |                            |                     |            |         |        |           |              |       |       |           |       |       |       |        |      |        |        |           |       
|Net interest income                              |                    |                            |                    |            |         |        |          |              |       |       |          |       |       |       |       |      |        |        |          |       
|Other income                                     |                    |                            |                    |            |         |        |          |              |       |       |          |       |       |       |       |      |        |        |          |       
|                                                 |                    |                            |                     |            |         |        |           |              |       |       |           |       |       |       |        |      |        |        |           |       
|                                                 | Net revenues       |                            |                     |           |         |        |           |             |       |       |           |      |       |       |        |     |        |        |           |       |        
|                                                 | Operating expenses |                            |                     |           |         |        |           |             |       |       |           |      |       |       |        |     |        |        |           |       |        
|                                                 |                    |                            |                     |            |         |        |           |              |       |       |           |       |       |       |        |      |        |        |           |       
|                                                 |                    | Pretax income              |                     |            |        |        |           |              |      |       |           |       |      |       |        |      |       |        |           |        |        |      
|                                                 |                    |                            |                     |            |         |        |           |              |       |       |           |       |       |       |        |      |        |        |           |       
|                                                 |                    |                            | Total pretax income |            |         | 2,337  |           |              |       | 3,955 |           |       |       | 1,032 |        |      |        | (1,567 | )         |        |         | 5,757 |      
|                                                 |                    |                            |                     |            |         |        |           |              |       |       |           |       |       |       |        |      |        |        |           |       
|                                                 |                    |                            |                     | Net income |         | $      | 1,414     |              |       | $     | 2,393     |       |       | $     | 624    |      |        | $      | (948      | )      |         | $     | 3,483 | 
|                                                 |                    |                            |                     |            |         |        |           |              |       |       |           |       |       |       |        |      |        |        |           |       
|Ratios                                           |                    |                            |                     |            |         |        |           |              |       |       |           |       |       |       |        |      |        |        |           |       
|Percentage of assets                             |                    |                            | 15.41               | %          |         |        | 22.87     | %            |       |       | 10.13     | %     |       |       | 0.60   | %    |        |        | 49.01     | %     
|Percentage of total revenue                      |                    |                            | 6.01                | %          |         |        | 2.28      | %            |       |       | 0.58      | %     |       |       | (0.38  | )%   |        |        | 8.50      | %     
|Percentage of pretax income                      |                    |                            | 2.84                | %          |         |        | 4.81      | %            |       |       | 1.26      | %     |       |       | (1.91  | )%   |        |        | 7.01      | %     
|Balance Sheet Data                               |                    |                            |                     |            |         |        |           |              |       |       |           |       |       |       |        |      |        |        |           |       
|Average interest-earning assets                  |                    | $                          | 1,275,519           |            |         | $      | 2,774,522 |              |       | $     | 1,106,943 |       |       | $     | 80,328 |      |        | $      | 5,237,312 |       
|Average total assets                             |                    | $                          | 1,868,091           |            |         | $      | 2,773,516 |              |       | $     | 1,228,041 |       |       | $     | 72,543 |      |        | $      | 5,942,191 |       
|Allocated capital                                |                    | $                          | 196,584             |            |         | $      | 120,265   |              |       | $     | 36,841    |       |       | $     | 7,029  |      |        | $      | 360,719   |       
|Capital allocated to mortgage banking activities |                    | $                          | 35,588              |            |         | $      |          |              |       | $     |          |       |       | $     |       |      |        | $      | 35,588    |       
|Capital allocated to investing activities        |                    | $                          | 160,996             |            |         | $      | 120,265   |              |       | $     | 36,841    |       |       | $     | 7,029  |      |        | $      | 325,131   |       
|Allocated capital/total average assets           |                    |                            | 10.52               | %          |         |        | 4.34      | %            |       |       | 3.00      | %     |       |       | 9.69   | %    |        |        | 6.07      | %     
|Loans Produced                                   |                    | $                          | 410,828             |            |         | $      |          |              |       | $     |          |       |       | $     |       |      |        | $      | 410,828   |       
|Performance Ratios                               |                    |                            |                     |            |         |        |           |              |       |       |           |       |       |       |        |      |        |        |           |       
|Return on equity (ROE)                           |                    |                            | 3                   | %          |         |        | 8         | %            |       |       | 7         | %     |       |       | (54    | )%   |        |        | 4         | %     
|ROE-mortgage banking activities                  |                    |                            | 167                 | %          |         |        | N/A       |              |       |       | N/A       |       |       |       | N/A    |      |        |        | 167       | %     
|ROE-investing activities                         |                    |                            | (33                 | )%         |         |        | 8         | %            |       |       | 7         | %     |       |       | (54    | )%   |        |        | (14       | )%    
|Return on assets (ROA)                           |                    |                            | 0.30                | %          |         |        | 0.34      | %            |       |       | 0.20      | %     |       |       | (5.18  | )%   |        |        | 0.23      | %     
|Net interest margin                              |                    |                            | 6.22                | %          |         |        | 0.79      | %            |       |       | 0.42      | %     |       |       | 6.64   | %    |        |        | 2.12      | %     
|Efficiency ratio                                 |                    |                            | 81                  | %          |         |        | 10        | %            |       |       | 11        | %     |       |       | 60     | %    |        |        | 55        | %     
|Capital adjusted efficiency ratio                |                    |                            | 330                 | %          |         |        | 50        | %            |       |       | 87        | %     |       |       | 79     | %    |        |        | 240       | %     
|Average FTE                                      |                    |                            | 387                 |            |         |        | 6         |              |       |       | 6         |       |       |       | 33     |      |        |        | 433       |       



|    |                                                                                                                                                                                                                                                                                                                                                                                                                          
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Mortgage servicing-related assets include the
    following: (i) MSRs, interest-only strips and residual
    securities, (ii) securities held as hedges of such assets,
    including principal-only securities and U.S. treasury bonds,
    (iii) loans acquired through clean-up calls or through the
    Investment Portfolio Groups other customer retention
    programs, and (iv) non-investment grade securities.
|(2) | Assets include all single-family residential
    loans held for investment other than discontinued products.                                                                                                                                                                                                                                                                                                             
|(3) | Assets include AAA-rated agency and private label
    MBS portfolio and other investment grade bonds.                                                                                                                                                                                                                                                                                                                    
|(4) | Discontinued products are home improvement and
    manufactured housing loans.                                                                                                                                                                                                                                                                                                                                           

8



---



##### Table of Contents



The following table provides additional details
on the segment results for all others for the three months ended
September 30, 2003:

|                                          |                    |                        |                     |            |         |           |            |              |         |         |         |        |         |         |         |         |         |         |            |         |         |        |        | 
|----------------------------------------- | ------------------ | ---------------------- | ------------------- | ---------- | ------- | --------- | ---------- | ------------ | ------- | ------- | ------- | ------ | ------- | ------- | ------- | ------- | ------- | ------- | ---------- | ------- | ------- | ------ | ------ | 
|                                          |                    | Treasury               |                     |            |         | Corporate |            |              |         | Total  
|                                          |                    | Group(1)               |                     | Subtotal   |         | Overhead  |            | Eliminations |         | Company
|                                          |                    |                        |                     |            |         |           |            |              |         |        
|                                          |                    |                       
|                                          |                    | (Dollars in thousands)
|Operating Results                         |                    |                        |                     |            |         |           |            |              |         |         |         |        |         |         |         |         |         |         |            |        
|Mortgage Banking Activities               |                    |                        |                     |            |         |           |            |              |         |         |         |        |         |         |         |         |         |         |            |        
|Net interest income                       |                    | $                      |                    |            |         | $         | 48,854     |              |         | $       |        |        |         | $       |        |         |         | $       | 48,854     |        
|Gain on sale of loans                     |                    |                        |                    |            |         |           | 146,040    |              |         |         |        |        |         |         | (24,542 | )       |         |         | 121,498    |        
|Other income                              |                    |                        |                    |            |         |           | 17,965     |              |         |         |        |        |         |         | 44      |         |         |         | 18,009     |        
|                                          |                    |                        |                     |            |         |           |            |              |         |         |         |        |         |         |         |         |         |         |            |        
|                                          | Net revenues       |                        |                     |           |         |           |            | 212,859      |         |         |         |       |         |         |         | (24,498 | )       |         |            | 188,361 |        
|                                          | Operating expenses |                        |                     |           |         |           |            | 62,321       |         |         |         |       |         |         |         |        |         |         |            | 62,321  |        
|                                          |                    |                        |                     |            |         |           |            |              |         |         |         |        |         |         |         |         |         |         |            |        
|                                          |                    | Pretax income          |                     |            |        |           |            |              | 150,538 |         |         |        |        |         |         |         | (24,498 | )       |            |         | 126,040 |       
|                                          |                    |                        |                     |            |         |           |            |              |         |         |         |        |         |         |         |         |         |         |            |        
|Investing Activities                      |                    |                        |                     |            |         |           |            |              |         |         |         |        |         |         |         |         |         |         |            |        
|Net interest income                       |                    |                        |                    |            |         |           | 39,712     |              |         |         |        |        |         |         | 1,107   |         |         |         | 40,819     |        
|Provision for loan losses                 |                    |                        |                    |            |         |           | (6,197     | )            |         |         |        |        |         |         | (3      | )       |         |         | (6,200     | )      
|Service fee income                        |                    |                        |                    |            |         |           | (13,971    | )            |         |         |        |        |         |         | 2,858   |         |         |         | (11,113    | )      
|Loss on sale of securities                |                    |                        |                    |            |         |           | (10,870    | )            |         |         |        |        |         |         | 2,223   |         |         |         | (8,647     | )      
|Other income                              |                    |                        |                    |            |         |           | 3,002      |              |         |         | 5       |        |         |         |        |         |         |         | 3,007      |        
|                                          |                    |                        |                     |            |         |           |            |              |         |         |         |        |         |         |         |         |         |         |            |        
|                                          | Net revenues       |                        |                     |           |         |           |            | 11,676       |         |         |         | 5      |         |         |         | 6,185   |         |         |            | 17,866  |        
|                                          | Operating expenses |                        |                     |           |         |           |            | 21,622       |         |         |         |       |         |         |         |        |         |         |            | 21,622  |        
|                                          |                    |                        |                     |            |         |           |            |              |         |         |         |        |         |         |         |         |         |         |            |        
|                                          |                    | Pretax income          |                     |            |        |           |            |              | (9,946  | )       |         |        | 5       |         |         |         | 6,185   |         |            |         | (3,756  | )     
|                                          |                    |                        |                     |            |         |           |            |              |         |         |         |        |         |         |         |         |         |         |            |        
|Financing and Other Activities            |                    |                        |                     |            |         |           |            |              |         |         |         |        |         |         |         |         |         |         |            |        
|Net interest income                       |                    |                        | (11,064             | )          |         |           | (7,077     | )            |         |         | (143    | )      |         |         |        |         |         |         | (7,220     | )      
|Other income                              |                    |                        | 98                  |            |         |           | 636        |              |         |         |        |        |         |         | 3       |         |         |         | 639        |        
|                                          |                    |                        |                     |            |         |           |            |              |         |         |         |        |         |         |         |         |         |         |            |        
|                                          | Net revenues       |                        |                     | (10,966    | )       |           |            | (6,441       | )       |         |         | (143   | )       |         |         | 3       |         |         |            | (6,581  | )      
|                                          | Operating expenses |                        |                     | 782        |         |           |            | 6,187        |         |         |         | 27,360 |         |         |         |        |         |         |            | 33,547  |        
|                                          |                    |                        |                     |            |         |           |            |              |         |         |         |        |         |         |         |         |         |         |            |        
|                                          |                    | Pretax income          |                     |            | (11,748 | )         |            |              | (12,628 | )       |         |        | (27,503 | )       |         |         | 3       |         |            |         | (40,128 | )     
|                                          |                    |                        |                     |            |         |           |            |              |         |         |         |        |         |         |         |         |         |         |            |        
|                                          |                    |                        | Total pretax income |            |         | (11,748   | )          |              |         | 127,964 |         |        |         | (27,498 | )       |         |         | (18,310 | )          |         |         | 82,156 |       
|                                          |                    |                        |                     |            |         |           |            |              |         |         |         |        |         |         |         |         |         |         |            |        
|                                          |                    |                        |                     | Net income |         | $         | (7,108     | )            |         | $       | 77,418  |        |         | $       | (16,636 | )       |         | $       | (11,078    | )       |         | $      | 49,704 | 
|                                          |                    |                        |                     |            |         |           |            |              |         |         |         |        |         |         |         |         |         |         |            |        
|Ratios                                    |                    |                        |                     |            |         |           |            |              |         |         |         |        |         |         |         |         |         |         |            |        
|Percentage of assets                      |                    |                        | 3.06                | %          |         |           | 98.88      | %            |         |         | 1.12    | %      |         |         | 0.00    | %       |         |         | 100        | %      
|Percentage of total revenue               |                    |                        | (5.49               | )%         |         |           | 109.24     | %            |         |         | (0.07   | )%     |         |         | (9.17   | )%      |         |         | 100        | %      
|Percentage of pretax income               |                    |                        | (14.30              | )%         |         |           | 155.76     | %            |         |         | (33.47  | )%     |         |         | (22.29  | )%      |         |         | 100        | %      
|Balance Sheet Data                        |                    |                        |                     |            |         |           |            |              |         |         |         |        |         |         |         |         |         |         |            |        
|Average interest-earning assets           |                    | $                      | 250,083             |            |         | $         | 10,984,914 |              |         | $       | 34,286  |        |         | $       |        |         |         | $       | 11,019,200 |        
|Average total assets                      |                    | $                      | 371,528             |            |         | $         | 11,989,184 |              |         | $       | 135,810 |        |         | $       |        |         |         | $       | 12,124,994 |        
|Allocated capital                         |                    | $                      | 18,606              |            |         | $         | 753,470    |              |         | $       | 216,900 |        |         | $       |        |         |         | $       | 970,370    |        
|Capital allocated to mortgage banking     |                    | $                      |                    |            |         | $         | 228,180    |              |         | $       |        |        |         | $       |        |         |         | $       | 228,180    |        
|Capital allocated to investing activities |                    | $                      |                    |            |         | $         | 505,374    |              |         | $       |        |        |         | $       |        |         |         | $       | 505,374    |        
|Capital allocated to corporate & excess   |                    | $                      | 18,606              |            |         | $         | 19,916     |              |         | $       | 216,900 |        |         | $       |        |         |         | $       | 236,816    |        
|Allocated capital/total average assets    |                    |                        | 5.01                | %          |         |           | 6.28       | %            |         |         | 159.71  | %      |         |         |        |         |         |         | 8.00       | %      
|Loans Produced                            |                    | $                      |                    |            |         | $         | 8,680,775  |              |         | $       |        |        |         | $       |        |         |         | $       | 8,680,775  |        
|Purchase mortgages                        |                    |                        | N/A                 |            |         |           | N/A        |              |         |         | N/A     |        |         |         | N/A     |         |         |         | 36         | %      
|Cash out refinance mortgages              |                    |                        | N/A                 |            |         |           | N/A        |              |         |         | N/A     |        |         |         | N/A     |         |         |         | 35         | %      
|Rate and term refinance mortgages         |                    |                        | N/A                 |            |         |           | N/A        |              |         |         | N/A     |        |         |         | N/A     |         |         |         | 29         | %      
|Performance Ratios                        |                    |                        |                     |            |         |           |            |              |         |         |         |        |         |         |         |         |         |         |            |        
|Return on equity (ROE)                    |                    |                        | N/A                 |            |         |           | 41         | %            |         |         | N/A     |        |         |         | N/A     |         |         |         | 20         | %      
|ROE  mortgage banking                    |                    |                        | N/A                 |            |         |           | 158        | %            |         |         | N/A     |        |         |         | N/A     |         |         |         | 133        | %      
|ROE  investing activities                |                    |                        | N/A                 |            |         |           | (5         | )%           |         |         | N/A     |        |         |         | N/A     |         |         |         | (2         | )%     
|ROE  corporate                           |                    |                        | N/A                 |            |         |           | (152       | )%           |         |         | N/A     |        |         |         | N/A     |         |         |         | (41        | )%     
|Return on assets (ROA)                    |                    |                        | N/A                 |            |         |           | 2.56       | %            |         |         | N/A     |        |         |         | N/A     |         |         |         | 1.63       | %      
|Net interest margin                       |                    |                        | N/A                 |            |         |           | 2.94       | %            |         |         | N/A     |        |         |         | N/A     |         |         |         | 2.97       | %      
|Efficiency ratio                          |                    |                        | N/A                 |            |         |           | 40         | %            |         |         | N/A     |        |         |         | N/A     |         |         |         | 57         | %      
|Capital adjusted efficiency ratio         |                    |                        | N/A                 |            |         |           | 34         | %            |         |         | N/A     |        |         |         | N/A     |         |         |         | 67         | %      
|Average FTE                               |                    |                        | 23                  |            |         |           | 3,228      |              |         |         | 498     |        |         |         | N/A     |         |         |         | 3,726      |        



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | During the three months ended September 30,
    2003, the Treasury Group reported net interest expense of
    $11 million. This loss includes interest expenses related
    to the trust preferred securities issued by the Company in
    November 2001 and July 2003, the vast majority of which is not
    allocated to the business units. The Treasury Group also credits
    the Retail Bank and Investment Portfolio Group amounts in
    addition to their normal FTP credit to reward their raising of
    core deposits. Additionally, the net expense in Treasury
    reflects fixed rate liabilities assumed in prior years with
    maturities longer than the related assets and the subsequent
    decline in net interest income as interest rates fell.

9



---



##### Table of Contents



The following table compares the quarterly detail
segment results of operations by period:

|                                  |  |                           |        |     |  |     |       |     |  |       |        |    |  |   |       |    |  |   |        |   
|--------------------------------- |  | ------------------------- | ------ | --- |  | --- | ----- | --- |  | ----- | ------ | -- |  | - | ----- | -- |  | - | ------ | --
|                                  |  |                          
|                                  |  | Relationship Businesses 
|                                  |  | IndyMac Mortgage Bank    
|                                  |  |                          
|                                  |  | B2B                       |        | B2R |  | HCL |       | HBD |  | Total
|                                  |  |                           |        |     |  |     |       |     |  |      
|                                  |  |                          
|                                  |  | (Dollars in thousands)   
|Mortgage Banking Activities       |  |                           |        |     |  |     |       |     |  |       |        |    |  |   |       |    |  |   |        |   
|Q3 03  Pretax income             |  | $                         | 85,086 |     |  | $   | 2,341 |     |  | $     | 9,540  |    |  | $ | 1,306 |    |  | $ | 98,273 |   
|Q2 03  Pretax income             |  |                           | 60,634 |     |  |     | 1,074 |     |  |       | 7,994  |    |  |   | 1,254 |    |  |   | 70,956 |   
|Annualized Variance Percent       |  |                           | 161    | %   |  |     | 472   | %   |  |       | 77     | %  |  |   | 17    | %  |  |   | 154    | % 
|Q3 02  Pretax income             |  |                           | 52,413 |     |  |     | 305   |     |  |       | 10,307 |    |  |   | (579  | )  |  |   | 62,446 |   
|Variance Percent                  |  |                           | 62     | %   |  |     | 668   | %   |  |       | (7     | )% |  |   | NM    |    |  |   | 57     | % 
|Investing Activities              |  |                           |        |     |  |     |       |     |  |       |        |    |  |   |       |    |  |   |        |   
|Q3 03  Pretax income             |  |                           |       |     |  |     |      |     |  |       | 2,784  |    |  |   | 5,356 |    |  |   | 8,140  |   
|Q2 03  Pretax income             |  |                           |       |     |  |     |      |     |  |       | 3,690  |    |  |   | 6,270 |    |  |   | 9,960  |   
|Annualized Variance Percent       |  |                           | NM     |     |  |     | NM    |     |  |       | (98    | )% |  |   | (58   | )% |  |   | (73    | )%
|Q3 02  Pretax income             |  |                           |       |     |  |     |      |     |  |       | 3,771  |    |  |   | 6,096 |    |  |   | 9,867  |   
|Variance Percent                  |  |                           | NM     |     |  |     | NM    |     |  |       | (26    | )% |  |   | (12   | )% |  |   | (18    | )%
|Financing and Other Activities    |  |                           |        |     |  |     |       |     |  |       |        |    |  |   |       |    |  |   |        |   
|Q3 03  Pretax income             |  |                           |       |     |  |     |      |     |  |       |       |    |  |   |      |    |  |   |       |   
|Q2 03  Pretax income             |  |                           |       |     |  |     |      |     |  |       |       |    |  |   |      |    |  |   |       |   
|Q3 02  Pretax income             |  |                           |       |     |  |     |      |     |  |       |       |    |  |   |      |    |  |   |       |   
|Net Income                        |  |                           |        |     |  |     |       |     |  |       |        |    |  |   |       |    |  |   |        |   
|Q3 03  Net Income                |  |                           | 51,477 |     |  |     | 1,416 |     |  |       | 7,456  |    |  |   | 4,031 |    |  |   | 64,380 |   
|Q2 03  Net Income                |  |                           | 36,684 |     |  |     | 650   |     |  |       | 7,069  |    |  |   | 4,552 |    |  |   | 48,955 |   
|Annualized Variance Percent       |  |                           | 161    | %   |  |     | 471   | %   |  |       | 22     | %  |  |   | (46   | )% |  |   | 126    | % 
|Q3 02  Net Income                |  |                           | 31,709 |     |  |     | 184   |     |  |       | 8,516  |    |  |   | 3,338 |    |  |   | 43,747 |   
|Variance Percent                  |  |                           | 62     | %   |  |     | 670   | %   |  |       | (12    | )% |  |   | 21    | %  |  |   | 47     | % 
|Performance Ratios                |  |                           |        |     |  |     |       |     |  |       |        |    |  |   |       |    |  |   |        |   
|Q3 03                             |  |                           |        |     |  |     |       |     |  |       |        |    |  |   |       |    |  |   |        |   
|ROE                               |  |                           | 147    | %   |  |     | 84    | %   |  |       | 42     | %  |  |   | 24    | %  |  |   | 90     | % 
|ROA                               |  |                           | 8.74   | %   |  |     | 4.64  | %   |  |       | 2.26   | %  |  |   | 2.38  | %  |  |   | 5.76   | % 
|NIM                               |  |                           | 4.85   | %   |  |     | 3.88  | %   |  |       | 4.18   | %  |  |   | 4.73  | %  |  |   | 4.61   | % 
|Efficiency ratio                  |  |                           | 30     | %   |  |     | 64    | %   |  |       | 40     | %  |  |   | 33    | %  |  |   | 33     | % 
|Capital adjusted efficiency ratio |  |                           | 9      | %   |  |     | 17    | %   |  |       | 34     | %  |  |   | 52    | %  |  |   | 15     | % 
|Average FTE                       |  |                           | 1,355  |     |  |     | 171   |     |  |       | 228    |    |  |   | 121   |    |  |   | 1,875  |   
|Q2 03                             |  |                           |        |     |  |     |       |     |  |       |        |    |  |   |       |    |  |   |        |   
|ROE                               |  |                           | 106    | %   |  |     | 45    | %   |  |       | 45     | %  |  |   | 26    | %  |  |   | 71     | % 
|ROA                               |  |                           | 6.55   | %   |  |     | 2.59  | %   |  |       | 2.47   | %  |  |   | 2.73  | %  |  |   | 4.71   | % 
|NIM                               |  |                           | 4.50   | %   |  |     | 4.04  | %   |  |       | 4.26   | %  |  |   | 4.91  | %  |  |   | 4.49   | % 
|Efficiency ratio                  |  |                           | 34     | %   |  |     | 79    | %   |  |       | 37     | %  |  |   | 21    | %  |  |   | 36     | % 
|Capital adjusted efficiency ratio |  |                           | 13     | %   |  |     | 22    | %   |  |       | 30     | %  |  |   | 37    | %  |  |   | 19     | % 
|Average FTE                       |  |                           | 1,231  |     |  |     | 158   |     |  |       | 204    |    |  |   | 101   |    |  |   | 1,694  |   
|Q3 02                             |  |                           |        |     |  |     |       |     |  |       |        |    |  |   |       |    |  |   |        |   
|ROE                               |  |                           | 146    | %   |  |     | 23    | %   |  |       | 67     | %  |  |   | 16    | %  |  |   | 78     | % 
|ROA                               |  |                           | 8.19   | %   |  |     | 1.31  | %   |  |       | 3.54   | %  |  |   | 1.82  | %  |  |   | 5.30   | % 
|NIM                               |  |                           | 4.55   | %   |  |     | 4.06  | %   |  |       | 4.15   | %  |  |   | 5.01  | %  |  |   | 4.53   | % 
|Efficiency ratio                  |  |                           | 32     | %   |  |     | 90    | %   |  |       | 30     | %  |  |   | 45    | %  |  |   | 35     | % 
|Capital adjusted efficiency ratio |  |                           | 9      | %   |  |     | 24    | %   |  |       | 20     | %  |  |   | 93    | %  |  |   | 18     | % 
|Average FTE                       |  |                           | 1,010  |     |  |     | 93    |     |  |       | 170    |    |  |   | 134   |    |  |   | 1,407  |   

The Mortgage Bank segments net income, from
both mortgage banking and investing activities, grew by an
annualized rate of 126% since second quarter 2003. This increase
was primarily related to the higher volume of loans sold and the
resulting gains recognized. The gain on sale of loan margin
increased from 1.61% in the second quarter 2003 to 1.82% in the
third quarter 2003. Compared with third quarter 2002, the
Mortgage Bank segments net income grew 47% year over year,
primarily due to 49% increase in production volume from prior
year.

10



---



##### Table of Contents



The following table compares the quarterly detail
segment results of operations by period, continued:

|                                  |  |                              |        |       |  |             |       |       |  |   |        |   |  |   |        |   
|--------------------------------- |  | ---------------------------- | ------ | ----- |  | ----------- | ----- | ----- |  | - | ------ | - |  | - | ------ | --
|                                  |  |                             
|                                  |  | Consumer Direct Businesses 
|                                  |  | IndyMac Consumer Bank       
|                                  |  |                             
|                                  |  | B2C                          |        | HELOC |  | Retail Bank |       | Total
|                                  |  |                              |        |       |  |             |       |      
|                                  |  |                             
|                                  |  | (Dollars in thousands)      
|Mortgage Banking Activities       |  |                              |        |       |  |             |       |       |  |   |        |   |  |   |        |   
|Q3 03  Pretax income             |  | $                            | 25,670 |       |  | $           |      |       |  | $ | 1,807  |   |  | $ | 27,477 |   
|Q2 03  Pretax income             |  |                              | 22,789 |       |  |             |      |       |  |   | 1,363  |   |  |   | 24,152 |   
|Annualized Variance Percent       |  |                              | 51     | %     |  |             | NM    |       |  |   | 130    | % |  |   | 55     | % 
|Q3 02  Pretax income             |  |                              | 11,863 |       |  |             |      |       |  |   | 406    |   |  |   | 12,269 |   
|Variance Percent                  |  |                              | 116    | %     |  |             | NM    |       |  |   | 345    | % |  |   | 124    | % 
|Investing Activities              |  |                              |        |       |  |             |       |       |  |   |        |   |  |   |        |   
|Q3 03  Pretax income             |  |                              |       |       |  |             | 945   |       |  |   |       |   |  |   | 945    |   
|Q2 03  Pretax income             |  |                              |       |       |  |             | 1,313 |       |  |   |       |   |  |   | 1,313  |   
|Annualized Variance Percent       |  |                              | NM     |       |  |             | (112  | )%    |  |   | NM     |   |  |   | (112   | )%
|Q3 02  Pretax income             |  |                              |       |       |  |             | 1,156 |       |  |   |       |   |  |   | 1,156  |   
|Variance Percent                  |  |                              | NM     |       |  |             | (18   | )%    |  |   | NM     |   |  |   | (18    | )%
|Financing and Other Activities    |  |                              |        |       |  |             |       |       |  |   |        |   |  |   |        |   
|Q3 03  Pretax income             |  |                              |       |       |  |             |      |       |  |   | (880   | ) |  |   | (880   | ) 
|Q2 03  Pretax income             |  |                              |       |       |  |             |      |       |  |   | (2,404 | ) |  |   | (2,404 | ) 
|Q3 02  Pretax income             |  |                              |       |       |  |             |      |       |  |   | (2,216 | ) |  |   | (2,216 | ) 
|Net Income                        |  |                              |        |       |  |             |       |       |  |   |        |   |  |   |        |   
|Q3 03  Net Income                |  |                              | 15,530 |       |  |             | 572   |       |  |   | 561    |   |  |   | 16,663 |   
|Q2 03  Net Income                |  |                              | 13,787 |       |  |             | 794   |       |  |   | (630   | ) |  |   | 13,951 |   
|Annualized Variance Percent       |  |                              | 51     | %     |  |             | (112  | )%    |  |   | NM     |   |  |   | 78     | % 
|Q3 02  Net Income                |  |                              | 7,177  |       |  |             | 700   |       |  |   | (1,094 | ) |  |   | 6,783  |   
|Variance Percent                  |  |                              | 116    | %     |  |             | (18   | )%    |  |   | NM     |   |  |   | 146    | % 
|Performance Ratios                |  |                              |        |       |  |             |       |       |  |   |        |   |  |   |        |   
|Q3 03                             |  |                              |        |       |  |             |       |       |  |   |        |   |  |   |        |   
|ROE                               |  |                              | 179    | %     |  |             | 4     | %     |  |   | 48     | % |  |   | 73     | % 
|ROA                               |  |                              | 10.11  | %     |  |             | 0.42  | %     |  |   |       |   |  |   | 5.33   | % 
|NIM                               |  |                              | 4.18   | %     |  |             | 2.72  | %     |  |   |       |   |  |   | 4.83   | % 
|Efficiency ratio                  |  |                              | 41     | %     |  |             | 33    | %     |  |   | 88     | % |  |   | 47     | % 
|Capital adjusted efficiency ratio |  |                              | 8      | %     |  |             | 100   | %     |  |   | 13     | % |  |   | 19     | % 
|Average FTE                       |  |                              | 650    |       |  |             | 12    |       |  |   | 235    |   |  |   | 897    |   
|Q2 03                             |  |                              |        |       |  |             |       |       |  |   |        |   |  |   |        |   
|ROE                               |  |                              | 163    | %     |  |             | 7     | %     |  |   | NM     |   |  |   | 66     | % 
|ROA                               |  |                              | 9.42   | %     |  |             | 0.72  | %     |  |   | NM     |   |  |   | 5.06   | % 
|NIM                               |  |                              | 4.17   | %     |  |             | 2.89  | %     |  |   | NM     |   |  |   | 4.45   | % 
|Efficiency ratio                  |  |                              | 43     | %     |  |             | 24    | %     |  |   | NM     |   |  |   | 50     | % 
|Capital adjusted efficiency ratio |  |                              | 9      | %     |  |             | 72    | %     |  |   | NM     |   |  |   | 22     | % 
|Average FTE                       |  |                              | 622    |       |  |             | 11    |       |  |   | 219    |   |  |   | 852    |   
|Q3 02                             |  |                              |        |       |  |             |       |       |  |   |        |   |  |   |        |   
|ROE                               |  |                              | 135    | %     |  |             | 13    | %     |  |   | NM     |   |  |   | 55     | % 
|ROA                               |  |                              | 7.59   | %     |  |             | 1.35  | %     |  |   | NM     |   |  |   | 4.31   | % 
|NIM                               |  |                              | 4.06   | %     |  |             | 3.48  | %     |  |   | NM     |   |  |   | 5.59   | % 
|Efficiency ratio                  |  |                              | 56     | %     |  |             | 35    | %     |  |   | NM     |   |  |   | 65     | % 
|Capital adjusted efficiency ratio |  |                              | 11     | %     |  |             | 101   | %     |  |   | NM     |   |  |   | 24     | % 
|Average FTE                       |  |                              | 421    |       |  |             | 7     |       |  |   | 183    |   |  |   | 611    |   

The Consumer Bank segments net income was
up $2.7 million compared with the second quarter of 2003
and was up $9.9 million versus last years third
quarter. These increases were largely due to the higher levels
of mortgages produced and sold. The Consumer Banks loan
production increased at an annualized rate of 21% over the
second quarter of this year, and grew 87% compared to the prior
year.

11



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##### Table of Contents



The following table compares the quarterly detail
segment results of operations by period, continued:

|                                  |  |                            |         |       |  |     |        |              |  |       |        |    |  |   |        |    |  |   |         |   
|--------------------------------- |  | -------------------------- | ------- | ----- |  | --- | ------ | ------------ |  | ----- | ------ | -- |  | - | ------ | -- |  | - | ------- | --
|                                  |  |                           
|                                  |  | Investment Portfolio Group
|                                  |  |                           
|                                  |  |                            |         |      
|                                  |  | Mortgage                   |         |      
|                                  |  | Servicing-                 |         |       |  |     |        |              |  |      
|                                  |  | Related                    |         | Whole |  |     |        | Discontinued |  |      
|                                  |  | Assets                     |         | Loans |  | MBS |        | Products     |  | Total
|                                  |  |                            |         |       |  |     |        |              |  |      
|                                  |  |                           
|                                  |  | (Dollars in thousands)    
|Mortgage Banking Activities       |  |                            |         |       |  |     |        |              |  |       |        |    |  |   |        |    |  |   |         |   
|Q3 03  Pretax income             |  | $                          | 24,788  |       |  | $   |       |              |  | $     |       |    |  | $ |       |    |  | $ | 24,788  |   
|Q2 03  Pretax income             |  |                            | 15,901  |       |  |     | 2,732  |              |  |       |       |    |  |   |       |    |  |   | 18,633  |   
|Annualized Variance Percent       |  |                            | 224     | %     |  |     | NM     |              |  |       | NM     |    |  |   | NM     |    |  |   | 132     | % 
|Q3 02  Pretax income             |  |                            |        |       |  |     | 12,670 |              |  |       |       |    |  |   |       |    |  |   | 12,670  |   
|Variance Percent                  |  |                            | 100     | %     |  |     | (100   | )%           |  |       | NM     |    |  |   | NM     |    |  |   | 96      | % 
|Investing Activities              |  |                            |         |       |  |     |        |              |  |       |        |    |  |   |        |    |  |   |         |   
|Q3 03  Pretax income             |  |                            | (22,451 | )     |  |     | 3,955  |              |  |       | 1,032  |    |  |   | (1,567 | )  |  |   | (19,031 | ) 
|Q2 03  Pretax income             |  |                            | (13,596 | )     |  |     | 3,313  |              |  |       | (1,427 | )  |  |   | (1,210 | )  |  |   | (12,920 | ) 
|Annualized Variance Percent       |  |                            | 261     | %     |  |     | 78     | %            |  |       | 689    | %  |  |   | 118    | %  |  |   | (189    | )%
|Q3 02  Pretax income             |  |                            | 8,634   |       |  |     | 3,570  |              |  |       | 1,580  |    |  |   | (145   | )  |  |   | 13,639  |   
|Variance Percent                  |  |                            | (360    | )%    |  |     | 11     | %            |  |       | (35    | )% |  |   | NM     |    |  |   | (240    | )%
|Financing and Other Activities    |  |                            |         |       |  |     |        |              |  |       |        |    |  |   |        |    |  |   |         |   
|Q3 03  Pretax income             |  |                            |        |       |  |     |       |              |  |       |       |    |  |   |       |    |  |   |        |   
|Q2 03  Pretax income             |  |                            |        |       |  |     |       |              |  |       |       |    |  |   |       |    |  |   |        |   
|Q3 02  Pretax income             |  |                            |        |       |  |     |       |              |  |       |       |    |  |   |       |    |  |   |        |   
|Net Income                        |  |                            |         |       |  |     |        |              |  |       |        |    |  |   |        |    |  |   |         |   
|Q3 03  Net Income                |  |                            | 1,414   |       |  |     | 2,393  |              |  |       | 624    |    |  |   | (948   | )  |  |   | 3,483   |   
|Q2 03  Net Income                |  |                            | 1,395   |       |  |     | 3,657  |              |  |       | (863   | )  |  |   | (733   | )  |  |   | 3,456   |   
|Annualized Variance Percent       |  |                            | 5       | %     |  |     | (138   | )%           |  |       | 689    | %  |  |   | 117    | %  |  |   | 3       | % 
|Q3 02  Net Income                |  |                            | 5,224   |       |  |     | 9,825  |              |  |       | 956    |    |  |   | (88    | )  |  |   | 15,917  |   
|Variance Percent                  |  |                            | (73     | )%    |  |     | (76    | )%           |  |       | (35    | )% |  |   | 977    | %  |  |   | (78     | )%
|Performance Ratios                |  |                            |         |       |  |     |        |              |  |       |        |    |  |   |        |    |  |   |         |   
|Q3 03                             |  |                            |         |       |  |     |        |              |  |       |        |    |  |   |        |    |  |   |         |   
|ROE                               |  |                            | 3       | %     |  |     | 8      | %            |  |       | 7      | %  |  |   | (54    | )% |  |   | 4       | % 
|ROA                               |  |                            | 0.30    | %     |  |     | 0.34   | %            |  |       | 0.20   | %  |  |   | (5.18  | )% |  |   | 0.23    | % 
|NIM                               |  |                            | 6.22    | %     |  |     | 0.79   | %            |  |       | 0.42   | %  |  |   | 6.64   | %  |  |   | 2.12    | % 
|Efficiency ratio                  |  |                            | 81      | %     |  |     | 10     | %            |  |       | 11     | %  |  |   | 60     | %  |  |   | 55      | % 
|Capital adjusted efficiency ratio |  |                            | 330     | %     |  |     | 50     | %            |  |       | 87     | %  |  |   | 79     | %  |  |   | 240     | % 
|Average FTE                       |  |                            | 387     |       |  |     | 6      |              |  |       | 6      |    |  |   | 33     |    |  |   | 433     |   
|Q2 03                             |  |                            |         |       |  |     |        |              |  |       |        |    |  |   |        |    |  |   |         |   
|ROE                               |  |                            | 3       | %     |  |     | 13     | %            |  |       | (9     | )% |  |   | (38    | )% |  |   | 4       | % 
|ROA                               |  |                            | 0.45    | %     |  |     | 0.57   | %            |  |       | (0.27  | )% |  |   | (3.72  | )% |  |   | 0.27    | % 
|NIM                               |  |                            | 7.40    | %     |  |     | 1.04   | %            |  |       | (1.01  | )% |  |   | 7.05   | %  |  |   | 1.65    | % 
|Efficiency ratio                  |  |                            | 80      | %     |  |     | 7      | %            |  |       | (15    | )% |  |   | 55     | %  |  |   | 50      | % 
|Capital adjusted efficiency ratio |  |                            | 343     | %     |  |     | 21     | %            |  |       | 121    | %  |  |   | 69     | %  |  |   | 212     | % 
|Average FTE                       |  |                            | 382     |       |  |     | 8      |              |  |       | 6      |    |  |   | 34     |    |  |   | 430     |   
|Q3 02                             |  |                            |         |       |  |     |        |              |  |       |        |    |  |   |        |    |  |   |         |   
|ROE                               |  |                            | 14      | %     |  |     | 48     | %            |  |       | 12     | %  |  |   | (3     | )% |  |   | 23      | % 
|ROA                               |  |                            | 1.77    | %     |  |     | 2.93   | %            |  |       | 0.27   | %  |  |   | (0.28  | )% |  |   | 1.57    | % 
|NIM                               |  |                            | 4.48    | %     |  |     | 1.69   | %            |  |       | 0.51   | %  |  |   | 4.73   | %  |  |   | 1.95    | % 
|Efficiency ratio                  |  |                            | 45      | %     |  |     | 2      | %            |  |       | 7      | %  |  |   | 36     | %  |  |   | 22      | % 
|Capital adjusted efficiency ratio |  |                            | 109     | %     |  |     | 3      | %            |  |       | 35     | %  |  |   | 53     | %  |  |   | 40      | % 
|Average FTE                       |  |                            | 370     |       |  |     | 8      |              |  |       | 6      |    |  |   | 41     |    |  |   | 425     |   

The Investment Portfolio Group segments net
income in the third quarter of 2003 declined slightly in
comparison to the second quarter of 2003 and declined
$12.4 million in comparison to the third quarter of 2002.
These decreases are primarily the result of reduction in
earnings related to the segments investment in mortgage
servicing and related assets and spread compression in its whole
loan and MBS portfolios. Interest rates at 45-year lows have
resulted in significant mortgage refinancing causing the
underlying mortgages to prepay quickly, which created
accelerated amortization and impairment of the servicing-related
assets. Partially offsetting the decline in servicing fee income
were gains on the sale of mortgage loans obtained through the
exercise of the Companys right as the master servicer on
mortgage-backed securities to call loans at par when the balance
of the pool of loans sold falls below 10% of the original pool
balance and other loan sale activities. These called loans have
higher coupons than prevailing market rates and the Company is
then able to resell these loans at gains. This right to call the
loans serves as a partial hedge on the servicing investments in
this period of intense prepayment activity. In addition, gains
generated through customer retention programs implemented in the
third quarter 2003, also mitigated the negative impact of rapid
prepayments. Investment portfolio retention gains do not include
portfolio refinancing volume generated through the B2C channel.

12



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##### Table of Contents



The following table compares the quarterly detail
segment results of operations by period, continued:

|                                  |  |                        |         |          |  |           |         |              |  |         |         |    |  |   |         |   |  |   |         |   
|--------------------------------- |  | ---------------------- | ------- | -------- |  | --------- | ------- | ------------ |  | ------- | ------- | -- |  | - | ------- | - |  | - | ------- | --
|                                  |  | Treasury               |         |          |  | Corporate |         |              |  | Total  
|                                  |  | Group                  |         | Subtotal |  | Overhead  |         | Eliminations |  | Company
|                                  |  |                        |         |          |  |           |         |              |  |        
|                                  |  |                       
|                                  |  | (Dollars in thousands)
|Mortgage Banking Activities       |  |                        |         |          |  |           |         |              |  |         |         |    |  |   |         |   |  |   |         |   
|Q3 03  Pretax income             |  | $                      |        |          |  | $         | 150,538 |              |  | $       |        |    |  | $ | (24,498 | ) |  | $ | 126,040 |   
|Q2 03  Pretax income             |  |                        |        |          |  |           | 113,741 |              |  |         |        |    |  |   | (9,796  | ) |  |   | 103,945 |   
|Annualized Variance Percent       |  |                        | NM      |          |  |           | 129     | %            |  |         | NM      |    |  |   | 600     | % |  |   | 85      | % 
|Q3 02  Pretax income             |  |                        |        |          |  |           | 87,385  |              |  |         | (106    | )  |  |   | (19,406 | ) |  |   | 67,873  |   
|Variance Percent                  |  |                        | NM      |          |  |           | 72      | %            |  |         | NM      |    |  |   | 26      | % |  |   | 86      | % 
|Investing Activities              |  |                        |         |          |  |           |         |              |  |         |         |    |  |   |         |   |  |   |         |   
|Q3 03  Pretax income             |  |                        |        |          |  |           | (9,946  | )            |  |         | 5       |    |  |   | 6,185   |   |  |   | (3,756  | ) 
|Q2 03  Pretax income             |  |                        |        |          |  |           | (1,647  | )            |  |         | 105     |    |  |   | 2,696   |   |  |   | 1,154   |   
|Annualized Variance Percent       |  |                        | NM      |          |  |           | (2,016  | )%           |  |         | (381    | )% |  |   | 518     | % |  |   | (1,702  | )%
|Q3 02  Pretax income             |  |                        |        |          |  |           | 24,662  |              |  |         | 5       |    |  |   | 4,907   |   |  |   | 29,574  |   
|Variance Percent                  |  |                        | NM      |          |  |           | (140    | )%           |  |         |        |    |  |   | 26      | % |  |   | (113    | )%
|Financing and Other Activities    |  |                        |         |          |  |           |         |              |  |         |         |    |  |   |         |   |  |   |         |   
|Q3 03  Pretax income             |  |                        | (11,748 | )        |  |           | (12,628 | )            |  |         | (27,503 | )  |  |   | 3       |   |  |   | (40,128 | ) 
|Q2 03  Pretax income             |  |                        | (10,308 | )        |  |           | (12,712 | )            |  |         | (24,017 | )  |  |   | 8       |   |  |   | (36,721 | ) 
|Q3 02  Pretax income             |  |                        | (13,990 | )        |  |           | (16,206 | )            |  |         | (19,747 | )  |  |   |        |   |  |   | (35,953 | ) 
|Net Income                        |  |                        |         |          |  |           |         |              |  |         |         |    |  |   |         |   |  |   |         |   
|Q3 03  Net Income                |  |                        | (7,108  | )        |  |           | 77,418  |              |  |         | (16,636 | )  |  |   | (11,078 | ) |  |   | 49,704  |   
|Q2 03  Net Income                |  |                        | (6,236  | )        |  |           | 60,126  |              |  |         | (14,467 | )  |  |   | (4,290  | ) |  |   | 41,369  |   
|Annualized Variance Percent       |  |                        | (56     | )%       |  |           | 115     | %            |  |         | 60      | %  |  |   | 633     | % |  |   | 81      | % 
|Q3 02  Net Income                |  |                        | (8,464  | )        |  |           | 57,983  |              |  |         | (12,008 | )  |  |   | (8,771  | ) |  |   | 37,204  |   
|Variance Percent                  |  |                        | (16     | )%       |  |           | 34      | %            |  |         | 39      | %  |  |   | 26      | % |  |   | 34      | % 
|Performance Ratios                |  |                        |         |          |  |           |         |              |  |         |         |    |  |   |         |   |  |   |         |   
|Q3 03                             |  |                        |         |          |  |           |         |              |  |         |         |    |  |   |         |   |  |   |         |   
|ROE                               |  |                        |        |          |  |           | 41      | %            |  |         |        |    |  |   |        |   |  |   | 20      | % 
|ROA                               |  |                        |        |          |  |           | 2.56    | %            |  |         |        |    |  |   |        |   |  |   | 1.63    | % 
|NIM                               |  |                        |        |          |  |           | 2.94    | %            |  |         |        |    |  |   |        |   |  |   | 2.97    | % 
|Efficiency ratio                  |  |                        |        |          |  |           | 40      | %            |  |         |        |    |  |   |        |   |  |   | 57      | % 
|Capital adjusted efficiency ratio |  |                        |        |          |  |           | 34      | %            |  |         |        |    |  |   |        |   |  |   | 67      | % 
|Average FTE                       |  |                        | 23      |          |  |           | 3,228   |              |  |         | 498     |    |  |   |        |   |  |   | 3,726   |   
|Q2 03                             |  |                        |         |          |  |           |         |              |  |         |         |    |  |   |         |   |  |   |         |   
|ROE                               |  |                        |        |          |  |           | 33      | %            |  |         |        |    |  |   |        |   |  |   | 18      | % 
|ROA                               |  |                        |        |          |  |           | 2.24    | %            |  |         |        |    |  |   |        |   |  |   | 1.52    | % 
|NIM                               |  |                        |        |          |  |           | 2.67    | %            |  |         |        |    |  |   |        |   |  |   | 2.73    | % 
|Efficiency ratio                  |  |                        |        |          |  |           | 43      | %            |  |         |        |    |  |   |        |   |  |   | 58      | % 
|Capital adjusted efficiency ratio |  |                        |        |          |  |           | 42      | %            |  |         |        |    |  |   |        |   |  |   | 73      | % 
|Average FTE                       |  |                        | 23      |          |  |           | 2,999   |              |  |         | 506     |    |  |   |        |   |  |   | 3,505   |   
|Q3 02                             |  |                        |         |          |  |           |         |              |  |         |         |    |  |   |         |   |  |   |         |   
|ROE                               |  |                        |        |          |  |           | 41      | %            |  |         |        |    |  |   |        |   |  |   | 17      | % 
|ROA                               |  |                        |        |          |  |           | 2.86    | %            |  |         |        |    |  |   |        |   |  |   | 1.82    | % 
|NIM                               |  |                        |        |          |  |           | 2.62    | %            |  |         |        |    |  |   |        |   |  |   | 2.71    | % 
|Efficiency ratio                  |  |                        |        |          |  |           | 41      | %            |  |         |        |    |  |   |        |   |  |   | 58      | % 
|Capital adjusted efficiency ratio |  |                        |        |          |  |           | 34      | %            |  |         |        |    |  |   |        |   |  |   | 81      | % 
|Average FTE                       |  |                        | 28      |          |  |           | 2,471   |              |  |         | 456     |    |  |   |        |   |  |   | 2,927   |   

13



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##### Table of Contents






MORTGAGE BANKING ACTIVITIES




Loan Production

During the three months ended September 30,
2003, the Company produced $8.7 billion of loans, which was
a 63% increase over the $5.3 billion of loans produced
during the three months ended September 30, 2002, and a 6%
increase over the $8.2 billion of loans produced during the
second quarter of 2003. The strong production volume reflects
the continued unprecedented levels of production in the mortgage
industry, continued penetration of the purchase market, growth
in our products that are less interest rate sensitive, and the
success of our Investment Portfolios customer retention
program.

Total production by loan type was as follows:

|                                     |                   |                              |       |               |       |          |       |          |       |          |     |    |    |   |       |       |       |  |     |    |    |  
|------------------------------------ | ----------------- | ---------------------------- | ----- | ------------- | ----- | -------- | ----- | -------- | ----- | -------- | --- | -- | -- | - | ----- | ----- | ----- |  | --- | -- | -- | -
|                                     |                   |                             
|                                     |                   | Three Months Ended          
|                                     |                   |                             
|                                     |                   | September 30,                |       | September 30, |       | Variance |       | June 30, |       | Variance
|                                     |                   | 2003                         |       | 2002          |       | Percent  |       | 2003     |       | Percent 
|                                     |                   |                              |       |               |       |          |       |          |       |         
|                                     |                   |                             
|                                     |                   | (Dollars in millions)       
|Volume by product                    |                   |                              |       |               |       |          |       |          |       |          |     |    |    |   |       |       |       |  |     |   
|Prime(1)                             |                   |                              |       |               |       |          |       |          |       |          |     |    |    |   |       |       |       |  |     |   
|                                     | Agency conforming |                              | $     | 1,503         |       |          | $     | 935      |       |          |     | 61 | %  |   | $     | 1,471 |       |  |     | 2  | % 
|                                     | Alt-A             |                              |       | 4,505         |       |          |       | 2,417    |       |          |     | 86 | %  |   |       | 4,081 |       |  |     | 10 | % 
|                                     | Jumbo             |                              |       | 1,154         |       |          |       | 948      |       |          |     | 22 | %  |   |       | 1,192 |       |  |     | (3 | )%
|                                     | Subprime(1)       |                              |       | 520           |       |          |       | 380      |       |          |     | 37 | %  |   |       | 465   |       |  |     | 12 | % 
|Home equity line of credit(2)        |                   |                              | 264   |               |       |          | 119   |          |       |          | 122 | %  |    |   | 229   |       |       |  | 15  | % 
|Consumer construction(2)             |                   |                              | 586   |               |       |          | 409   |          |       |          | 43  | %  |    |   | 518   |       |       |  | 13  | % 
|                                     |                   |                              |       |               |       |          |       |          |       |          |     |    |    |   |       |       |       |  |     |   
|                                     |                   | Subtotal mortgage production |       |               | 8,532 |          |       |          | 5,208 |          |     |    | 64 | % |       |       | 7,956 |  |     |    | 7  | %
|Subdivision construction commitments |                   |                              | 149   |               |       |          | 104   |          |       |          | 43  | %  |    |   | 237   |       |       |  | (37 | )%
|                                     |                   |                              |       |               |       |          |       |          |       |          |     |    |    |   |       |       |       |  |     |   
|                                     |                   | Total production volume      |       | $             | 8,681 |          |       | $        | 5,312 |          |     |    | 63 | % |       | $     | 8,193 |  |     |    | 6  | %
|                                     |                   |                              |       |               |       |          |       |          |       |          |     |    |    |   |       |       |       |  |     |   
|Mortgage  Web-based
    production  |                   | $                            | 5,983 |               |       | $        | 3,918 |          |       |          | 53  | %  |    | $ | 5,994 |       |       |  | 0   | % 
|Mortgage pipeline at period end(3)   |                   | $                            | 4,688 |               |       | $        | 5,011 |          |       |          | (6  | )% |    | $ | 6,929 |       |       |  | (32 | )%



---



|    |                                                                                                                                         
|--- | ----------------------------------------------------------------------------------------------------------------------------------------
|(1) | Fundings.                                                                                                                               
|   
|(2) | New commitments.                                                                                                                        
|   
|(3) | Includes rate lock commitments for loans in
    process plus loans that have been submitted for processing, but
    not yet rate locked.

In addition to the record production volume, the
mix of our pipeline has shifted favorably to even stronger
penetration of the purchase market. The following table details
the mix of our pipeline between purchase, cash out refinance,
and rate/term refinance transactions at September 30, 2003,
September 30, 2002 and June 30, 2003:

|                                 |  |                       |       |               |  |          |       |          |  |          |     |    |  |   |       |  |  |  |     |   
|-------------------------------- |  | --------------------- | ----- | ------------- |  | -------- | ----- | -------- |  | -------- | --- | -- |  | - | ----- |  |  |  | --- | --
|                                 |  |                      
|                                 |  | As of                
|                                 |  |                      
|                                 |  | September 30,         |       | September 30, |  | Variance |       | June 30, |  | Variance
|                                 |  | 2003                  |       | 2002          |  | Percent  |       | 2003     |  | Percent 
|                                 |  |                       |       |               |  |          |       |          |  |         
|                                 |  |                      
|                                 |  | (Dollars in millions)
|Purchase transactions            |  | $                     | 1,839 |               |  | $        | 1,067 |          |  |          | 72  | %  |  | $ | 1,714 |  |  |  | 7   | % 
|Cash-out refinance transactions  |  |                       | 1,698 |               |  |          | 1,857 |          |  |          | (9  | )% |  |   | 2,560 |  |  |  | (34 | )%
|Rate/term refinance transactions |  |                       | 1,151 |               |  |          | 2,087 |          |  |          | (45 | )% |  |   | 2,655 |  |  |  | (57 | )%
|                                 |  |                       |       |               |  |          |       |          |  |          |     |    |  |   |       |  |  |  |     |   
|Mortgage pipeline at period end  |  | $                     | 4,688 |               |  | $        | 5,011 |          |  |          | (6  | )% |  | $ | 6,929 |  |  |  | (32 | )%
|                                 |  |                       |       |               |  |          |       |          |  |          |     |    |  |   |       |  |  |  |     |   

14



---



##### Table of Contents



While our total pipeline declined 32% from the
second quarter, this compares favorably to the Mortgage Bankers
Association of Americas reported decline of 57% in its
Mortgage Application Index. In addition, the mix of our pipeline
has shifted favorably from refinance mortgages to purchase
mortgages. Comparing to the June 30, 2003 level, purchase
mortgages now represent 39% of the total pipeline compared with
21% a year ago.

During the nine months ended September 30,
2003, the Company produced $23.5 billion of loans, which
was a 64% increase over the $14.3 billion of loans produced
during the nine months ended September 30, 2002. Total
production by loan type was as follows:

|                                     |                   |                              |        |               |        |          |        |       |        |  |     |     |    |  
|------------------------------------ | ----------------- | ---------------------------- | ------ | ------------- | ------ | -------- | ------ | ----- | ------ |  | --- | --- | -- | -
|                                     |                   |                             
|                                     |                   | Nine Months Ended           
|                                     |                   |                             
|                                     |                   | September 30,                |        | September 30, |        | Variance
|                                     |                   | 2003                         |        | 2002          |        | Percent 
|                                     |                   |                              |        |               |        |         
|                                     |                   |                             
|                                     |                   | (Dollars in millions)       
|Volume by product                    |                   |                              |        |               |        |          |        |       |        |  |     |    
|Prime(1)                             |                   |                              |        |               |        |          |        |       |        |  |     |    
|                                     | Agency conforming |                              | $      | 4,395         |        |          | $      | 2,751 |        |  |     | 60  | % 
|                                     | Alt-A             |                              |        | 11,603        |        |          |        | 5,597 |        |  |     | 107 | % 
|                                     | Jumbo             |                              |        | 3,359         |        |          |        | 2,980 |        |  |     | 13  | % 
|Subprime(1)                          |                   |                              | 1,369  |               |        |          | 1,106  |       |        |  | 24  | %  
|Home equity line of credit(2)        |                   |                              | 673    |               |        |          | 258    |       |        |  | 161 | %  
|Consumer construction(2)             |                   |                              | 1,544  |               |        |          | 1,175  |       |        |  | 31  | %  
|                                     |                   |                              |        |               |        |          |        |       |        |  |     |    
|                                     |                   | Subtotal mortgage production |        |               | 22,943 |          |        |       | 13,867 |  |     |     | 65 | %
|Subdivision construction commitments |                   |                              | 516    |               |        |          | 437    |       |        |  | 18  | %  
|                                     |                   |                              |        |               |        |          |        |       |        |  |     |    
|                                     |                   | Total production volume      |        | $             | 23,459 |          |        | $     | 14,304 |  |     |     | 64 | %
|                                     |                   |                              |        |               |        |          |        |       |        |  |     |    
|Mortgage  Web-based
    production  |                   | $                            | 16,897 |               |        | $        | 10,301 |       |        |  | 64  | %  
|Mortgage pipeline at period end(3)   |                   | $                            | 4,688  |               |        | $        | 5,011  |       |        |  | (6  | )% 



---



|    |                                                                                                                                         
|--- | ----------------------------------------------------------------------------------------------------------------------------------------
|(1) | Fundings.                                                                                                                               
|   
|(2) | New commitments.                                                                                                                        
|   
|(3) | Includes rate lock commitments for loans in
    process plus loans that have been submitted for processing, but
    not yet rate locked.






Mortgage Production by Division and
Channel


IndyMac generates its mortgage production through
multiple channels on a nationwide basis with a concentration in
those regions of the country in which we have regional offices
or in which there are higher home prices, including California,
Florida, New Jersey and New York. Our highest concentration of
mortgage loans relates to properties in California. Mortgages
secured by California properties accounted for 50% of the
mortgage loans produced in the three months ended
September 30, 2003 based on dollar value, and 41% based on
number of loans.

IndyMac Mortgage Bank produces mortgages through
its Business-to-Business (B2B), Business-to-Realtor
(B2R), Consumer Construction (Home
Construction Lending or HCL) and Homebuilder
(HBD) divisions. IndyMac Consumer Bank produces
mortgages through its Business-to-Consumer (B2C),
HELOC and Retail Bank divisions.

15



---



##### Table of Contents



The following table shows production and key
performance indicators of the various relationship businesses of
IndyMac Mortgage Bank during the three and nine months ended
September 30, 2003.

|                                                                                               |                                                  |                                                 |     |       |       |     |     |     |     |       |    |     |     |   |     |     |     |    |     |       |       |  
|---------------------------------------------------------------------------------------------- | ------------------------------------------------ | ----------------------------------------------- | --- | ----- | ----- | --- | --- | --- | --- | ----- | -- | --- | --- | - | --- | --- | --- | -- | --- | ----- | ----- | -
|                                                                                               |                                                  |                                                
|                                                                                               |                                                  | Relationship Businesses                       
|                                                                                               |                                                  | IndyMac Mortgage Bank                          
|                                                                                               |                                                  |                                                
|Three Months Ended September 30, 2003                                                          |                                                  | B2B                                             |     | B2R   |       | HCL |     | HBD |     | Total
|                                                                                               |                                                  |                                                 |     |       |       |     |     |     |     |      
|                                                                                               |                                                  |                                                
|                                                                                               |                                                  | (Dollars in millions)                          
|Volume by Channel and Customer
    Source                                                      |                                                  |                                                 |     |       |       |     |     |     |     |       |    |     |     |   |     |     |     |    |     |      
|                                                                                               | Mortgage brokers                                 |                                                 | $   | 2,976 |       |     | $   |    |     |       | $  | 420 |     |   | $   |    |     |    | $   | 3,396 |      
|                                                                                               | Mortgage bankers                                 |                                                 |     | 1,283 |       |     |     |    |     |       |    | 233 |     |   |     |    |     |    |     | 1,516 |      
|                                                                                               | Conduit                                          |                                                 |     | 625   |       |     |     |    |     |       |    |    |     |   |     |    |     |    |     | 625   |      
|                                                                                               | Realtors                                         |                                                 |     |      |       |     |     | 311 |     |       |    |    |     |   |     |    |     |    |     | 311   |      
|                                                                                               | Builder/ Builder affiliates                      |                                                 |     |      |       |     |     |    |     |       |    | 21  |     |   |     | 168 |     |    |     | 189   |      
|                                                                                               | Financial institutions                           |                                                 |     | 108   |       |     |     |    |     |       |    |    |     |   |     |    |     |    |     | 108   |      
|                                                                                               | Consumer direct marketing                        |                                                 |     |      |       |     |     |    |     |       |    | 147 |     |   |     |    |     |    |     | 147   |      
|                                                                                               |                                                  |                                                 |     |       |       |     |     |     |     |       |    |     |     |   |     |     |     |    |     |      
|                                                                                               |                                                  | Subtotal mortgage production                    |     |       | 4,992 |     |     | $   | 311 |       |    |     | 821 |   |     |     | 168 |    |     |       | 6,292 |  
|                                                                                               | Builder and subdivision construction commitments |                                                 |     |      |       |     |     |    |     |       |    |    |     |   |     | 149 |     |    |     | 149   |      
|                                                                                               |                                                  |                                                 |     |       |       |     |     |     |     |       |    |     |     |   |     |     |     |    |     |      
|                                                                                               |                                                  | Total relationship businesses production volume |     | $     | 4,992 |     |     | $   | 311 |       |    | $   | 821 |   |     | $   | 317 |    |     | $     | 6,441 |  
|                                                                                               |                                                  |                                                 |     |       |       |     |     |     |     |       |    |     |     |   |     |     |     |    |     |      
|Percentage of total production                                                                 |                                                  |                                                 | 57  | %     |       |     | 4   | %   |     |       | 9  | %   |     |   | 4   | %   |     |    | 74  | %    
|Percentage change relative to:                                                                 |                                                  |                                                 |     |       |       |     |     |     |     |       |    |     |     |   |     |     |     |    |     |      
|                                                                                               |                                                  | 3rd quarter 2002                                |     |       | 44    | %   |     |     | 125 | %     |    |     | 36  | % |     |     | 144 | %  |     |       | 49    | %
|                                                                                               |                                                  | 2nd quarter 2003                                |     |       | (2    | )%  |     |     | 11  | %     |    |     | 10  | % |     |     | (11 | )% |     |       | 0     | %
|Composition of mortgage production:                                                            |                                                  |                                                 |     |       |       |     |     |     |     |       |    |     |     |   |     |     |     |    |     |      
|                                                                                               |                                                  | Purchase transactions                           |     |       | 33    | %   |     |     | 29  | %     |    |     | 100 | % |     |     | 73  | %  |     |       | 41    | %
|                                                                                               |                                                  | Cash-out refinance transactions                 |     |       | 42    | %   |     |     | 35  | %     |    |     | 0   | % |     |     | 14  | %  |     |       | 36    | %
|                                                                                               |                                                  | Rate/term refinance transactions                |     |       | 25    | %   |     |     | 36  | %     |    |     | 0   | % |     |     | 13  | %  |     |       | 23    | %
|Key Performance Indicators for the Three
    Months Ended September 30, 2003                   |                                                  |                                                 |     |       |       |     |     |     |     |       |    |     |     |   |     |     |     |    |     |      
|Active Customers:(1)                                                                           |                                                  |                                                 |     |       |       |     |     |     |     |       |    |     |     |   |     |     |     |    |     |      
|                                                                                               | Average monthly active customers                 |                                                 |     | 2,244 |       |     |     | 280 |     |       |    | 311 |     |   |     | 30  |     |    |     | 2,865 |      
|                                                                                               | Active customers during the quarter              |                                                 |     | 3,540 |       |     |     | 557 |     |       |    | 732 |     |   |     | 45  |     |    |     | 4,874 |      
|                                                                                               | Net new customers during the quarter(2)          |                                                 |     | 658   |       |     |     | 347 |     |       |    | N/A |     |   |     | 15  |     |    |     | 1,020 |      
|Sales and marketing personnel                                                                  |                                                  |                                                 | 360 |       |       |     | 78  |     |     |       | 84 |     |     |   | 30  |     |     |    | 552 |      
|Cost per funded mortgage loan (bps)                                                            |                                                  |                                                 | 69  |       |       |     | 154 |     |     |       | 80 |     |     |   | 115 |     |     |    | N/A |      
|Percentage Change for the Three Months
    Ended
    September 30, 2003 vs. September 30, 2002 |                                                  |                                                 |     |       |       |     |     |     |     |       |    |     |     |   |     |     |     |    |     |      
|Active Customers:(1)                                                                           |                                                  |                                                 |     |       |       |     |     |     |     |       |    |     |     |   |     |     |     |    |     |      
|                                                                                               | Average monthly active customers                 |                                                 |     | 13    | %     |     |     | 100 | %   |       |    | 27  | %   |   |     | 275 | %   |    |     | 21    | %    
|                                                                                               | Active customers during the quarter              |                                                 |     | 13    | %     |     |     | 85  | %   |       |    | 30  | %   |   |     | 125 | %   |    |     | 22    | %    
|Sales and marketing personnel                                                                  |                                                  |                                                 | 55  | %     |       |     | 129 | %   |     |       | 58 | %   |     |   | 58  | %   |     |    | 44  | %    
|Cost per funded mortgage loan (bps)                                                            |                                                  |                                                 | 17  | %     |       |     | (11 | )%  |     |       | 16 | %   |     |   | (47 | )%  |     |    | N/A |      

16



---



##### Table of Contents



|                                                                                          |                                                  |                                                 |    |       |        |     |     |     |     |       |    |       |       |   |     |     |     |   |     |       |        |  
|----------------------------------------------------------------------------------------- | ------------------------------------------------ | ----------------------------------------------- | -- | ----- | ------ | --- | --- | --- | --- | ----- | -- | ----- | ----- | - | --- | --- | --- | - | --- | ----- | ------ | -
|                                                                                          |                                                  |                                                
|                                                                                          |                                                  | Relationship Businesses                       
|                                                                                          |                                                  | IndyMac Mortgage Bank                          
|                                                                                          |                                                  |                                                
|Nine Months Ended September 30, 2003                                                      |                                                  | B2B                                             |    | B2R   |        | HCL |     | HBD |     | Total
|                                                                                          |                                                  |                                                 |    |       |        |     |     |     |     |      
|                                                                                          |                                                  |                                                
|                                                                                          |                                                  | (Dollars in millions)                          
|Volume by Channel and Customer
    Source                                                 |                                                  |                                                 |    |       |        |     |     |     |     |       |    |       |       |   |     |     |     |   |     |      
|                                                                                          | Mortgage brokers                                 |                                                 | $  | 8,471 |        |     | $   |    |     |       | $  | 1,116 |       |   | $   |    |     |   | $   | 9,587 |       
|                                                                                          | Mortgage bankers                                 |                                                 |    | 3,799 |        |     |     |    |     |       |    | 694   |       |   |     |    |     |   |     | 4,493 |       
|                                                                                          | Conduit                                          |                                                 |    | 1,461 |        |     |     |    |     |       |    |      |       |   |     |    |     |   |     | 1,461 |       
|                                                                                          | Realtors                                         |                                                 |    |      |        |     |     | 836 |     |       |    |      |       |   |     |    |     |   |     | 836   |       
|                                                                                          | Builder/ Builder affiliates                      |                                                 |    |      |        |     |     |    |     |       |    | 54    |       |   |     | 381 |     |   |     | 435   |       
|                                                                                          | Financial institutions                           |                                                 |    | 336   |        |     |     |    |     |       |    |      |       |   |     |    |     |   |     | 336   |       
|                                                                                          | Consumer direct marketing                        |                                                 |    |      |        |     |     |    |     |       |    | 385   |       |   |     |    |     |   |     | 385   |       
|                                                                                          |                                                  |                                                 |    |       |        |     |     |     |     |       |    |       |       |   |     |     |     |   |     |      
|                                                                                          |                                                  | Subtotal mortgage production                    |    |       | 14,067 |     |     | $   | 836 |       |    |       | 2,249 |   |     |     | 381 |   |     |       | 17,533 |  
|                                                                                          | Builder and subdivision construction commitments |                                                 |    |      |        |     |     |    |     |       |    |      |       |   |     | 516 |     |   |     | 516   |       
|                                                                                          |                                                  |                                                 |    |       |        |     |     |     |     |       |    |       |       |   |     |     |     |   |     |      
|                                                                                          |                                                  | Total relationship businesses production volume |    | $     | 14,067 |     |     | $   | 836 |       |    | $     | 2,249 |   |     | $   | 897 |   |     | $     | 18,049 |  
|                                                                                          |                                                  |                                                 |    |       |        |     |     |     |     |       |    |       |       |   |     |     |     |   |     |      
|Percentage of total production                                                            |                                                  |                                                 | 59 | %     |        |     | 4   | %   |     |       | 10 | %     |       |   | 4   | %   |     |   | 77  | %    
|Percentage change relative to:                                                            |                                                  |                                                 |    |       |        |     |     |     |     |       |    |       |       |   |     |     |     |   |     |      
|                                                                                          |                                                  | Nine months ended September 30, 2002            |    |       | 47     | %   |     |     | 159 | %     |    |       | 27    | % |     |     | 86  | % |     |       | 49     | %
|Composition of mortgage production:                                                       |                                                  |                                                 |    |       |        |     |     |     |     |       |    |       |       |   |     |     |     |   |     |      
|                                                                                          |                                                  | Purchase transactions                           |    |       | 29     | %   |     |     | 29  | %     |    |       | 99    | % |     |     | 73  | % |     |       | 36     | %
|                                                                                          |                                                  | Cash-out refinance transactions                 |    |       | 45     | %   |     |     | 35  | %     |    |       | 0     | % |     |     | 14  | % |     |       | 40     | %
|                                                                                          |                                                  | Rate/term refinance transactions                |    |       | 26     | %   |     |     | 36  | %     |    |       | 1     | % |     |     | 13  | % |     |       | 24     | %
|Key Performance Indicators for the Nine Months
    Ended September 30, 2003               |                                                  |                                                 |    |       |        |     |     |     |     |       |    |       |       |   |     |     |     |   |     |      
|Active Customers:(1)                                                                      |                                                  |                                                 |    |       |        |     |     |     |     |       |    |       |       |   |     |     |     |   |     |      
|                                                                                          | Average monthly active customers                 |                                                 |    | 2,149 |        |     |     | 251 |     |       |    | 256   |       |   |     | 28  |     |   |     | 2,684 |       
|                                                                                          | Active customers during the nine months          |                                                 |    | 4,920 |        |     |     | 938 |     |       |    | 1,360 |       |   |     | 79  |     |   |     | 7,297 |       
|                                                                                          | Net new customers during the nine months(2)      |                                                 |    | 1,645 |        |     |     | 202 |     |       |    | N/A   |       |   |     | 30  |     |   |     | 1,877 |       
|Cost per funded mortgage loan (bps)                                                       |                                                  |                                                 | 68 |       |        |     | 173 |     |     |       | 75 |       |       |   | 107 |     |     |   | N/A |      
|Percentage Change for the Nine Months Ended
    September 30, 2003 vs. September 30, 2002 |                                                  |                                                 |    |       |        |     |     |     |     |       |    |       |       |   |     |     |     |   |     |      
|Active Customers:(1)                                                                      |                                                  |                                                 |    |       |        |     |     |     |     |       |    |       |       |   |     |     |     |   |     |      
|                                                                                          | Average monthly active customers                 |                                                 |    | 23    | %      |     |     | 106 | %   |       |    | 24    | %     |   |     | 117 | %   |   |     | 28    | %     
|                                                                                          | Active customers during the nine months          |                                                 |    | 27    | %      |     |     | 76  | %   |       |    | 30    | %     |   |     | 31  | %   |   |     | 32    | %     
|Cost per funded mortgage loan (bps)                                                       |                                                  |                                                 | (1 | )%    |        |     | (17 | )%  |     |       | 7  | %     |       |   | (40 | )%  |     |   | N/A |      



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Active customers are defined as customers who
    funded at least one loan during the period. The HCL division
    utilizes the B2B marketing relationships with mortgage brokers
    and mortgage bankers to produce consumer construction loans. As
    a result, there is some overlap of the two active customer
    statistics and new customers. The sales and marketing personnel
    under the HCL division are primarily focused on marketing the
    consumer construction product directly to consumers.
|   
|(2) | Net new customers are the number of new customers
    signed up during the period less those terminated.                                                                                                                                                                                                                                                                                                                                                                                                           

IndyMac Mortgage Banks production increase
of 49% from the three months ended September 30, 2002 to
the three months ended September 30, 2003 was driven by 44%
growth in the core B2B channel and bolstered by even faster
growth in our newer channels including B2R and HBD partially
offset by the slower

17



---



##### Table of Contents



growth in HCL as its volume is not driven by
refinance. The mix of business was weighted heavily towards
refinance activity, reflecting the overall refinance
environment, although the purchase mix improved from the second
quarter. In addition, we continue to focus on activating new
customers and made progress in all channels. At the same time,
we have been more disciplined in adding new customers that are
more likely to remain active over the long term due to their
product mix and technology focus. Our active customer base has
increased by 22% from the third quarter of 2002. Consistent with
our focus on new customers, we are expanding our sales staff in
all channels, focusing on under-penetrated markets consistent
with our overall strategy to expand the geographic distribution
of our operating centers. During the third quarter 2003, we
opened our Bellevue Washington Operations Center and plan to
open one or more Regional Operations Centers in the first
quarter of 2004.


HCL continues to take advantage of the strong
purchase market as new home construction starts and permits
remained at second quarter record levels. New commitment
origination volumes grew 10% over the quarter representing
approximately 5% of the estimated $40 billion custom
residential construction market. Our continued growth in
originations is due to increases in active customers by 20% and
marketing leads. Leveraging upon the mortgage banks
regional operations strategy, new commitment volumes are aligned
with strong housing growth regions as follows: Atlanta
Operations  Southeast & Mid Atlantic;
Dallas  Midwest & Intermountain;
Pasadena  Southwest & West coast. Overall,
HCL enters the fourth quarter as the second largest custom
residential lender in the nation and the largest in California.

The following tables show production and other
key performance indicators of the various consumer direct
businesses of IndyMac Consumer Bank during the three and nine
months ended September 30, 2003. In addition, our
Investment Portfolio Group initiated a new customer retention
program in connection with its servicing portfolio during the
third quarter 2003, as disclosed below.

|                                                                                          |                                         |                              |       |            |    |             |     |       |     |       |     |     |     |   |       |       |    |   |     |     |     | 
|----------------------------------------------------------------------------------------- | --------------------------------------- | ---------------------------- | ----- | ---------- | -- | ----------- | --- | ----- | --- | ----- | --- | --- | --- | - | ----- | ----- | -- | - | --- | --- | --- | 
|                                                                                          |                                         |                              |       |           
|                                                                                          |                                         | Consumer Direct Businesses  |       |           
|                                                                                          |                                         | IndyMac Consumer Bank        |       | Investment
|                                                                                          |                                         |                              |       | Portfolio 
|Three Months Ended September 30, 2003                                                     |                                         | B2C                          |       | HELOC      |    | Retail Bank |     | Total |     | Group
|                                                                                          |                                         |                              |       |            |    |             |     |       |     |      
|                                                                                          |                                         |                             
|                                                                                          |                                         | (Dollars in millions)       
|Volume by Channel and Source(1)                                                           |                                         |                              |       |            |    |             |     |       |     |       |     |     |     |   |       |       |    |   |     |    
|Web-based production:                                                                     |                                         |                              |       |            |    |             |     |       |     |       |     |     |     |   |       |       |    |   |     |    
|                                                                                          | Direct at www.indymacmortgage.com       |                              | $     | 316        |    |             | $   |      |     |       | $   |    |     |   | $     | 316   |    |   | $   |    |    
|                                                                                          | Indirect Web-based leads                |                              |       | 187        |    |             |     |      |     |       |     |    |     |   |       | 187   |    |   |     |    |    
|Cross-marketing and portfolio refinancing                                                 |                                         |                              | 918   |            |    |             |    |       |     |       | 76  |     |     |   | 994   |       |    |   | 411 |    
|Direct telemarketing and affinity relationships                                           |                                         |                              | 201   |            |    |             | 55  |       |     |       |    |     |     |   | 256   |       |    |   |    |    
|Retail banking branches                                                                   |                                         |                              |      |            |    |             |    |       |     |       | 76  |     |     |   | 76    |       |    |   |    |    
|                                                                                          |                                         |                              |       |            |    |             |     |       |     |       |     |     |     |   |       |       |    |   |     |    
|                                                                                          | Total consumer direct production volume |                              | $     | 1,622      |    |             | $   | 55    |     |       | $   | 152 |     |   | $     | 1,829 |    |   | $   | 411 |    
|                                                                                          |                                         |                              |       |            |    |             |     |       |     |       |     |     |     |   |       |       |    |   |     |    
|Percentage of total production                                                            |                                         |                              | 18    | %          |    |             | 1   | %     |     |       | 2   | %   |     |   | 21    | %     |    |   | 5   | %  
|Percentage change relative to:                                                            |                                         |                              |       |            |    |             |     |       |     |       |     |     |     |   |       |       |    |   |     |    
|                                                                                          |                                         | 3rd quarter 2002             |       |            | 73 | %           |     |       | N/A |       |     |     | 294 | % |       |       | 87 | % |     |     | N/A | 
|                                                                                          |                                         | 2nd quarter 2003             |       |            | 3  | %           |     |       | 20  | %     |     |     | 27  | % |       |       | 5  | % |     |     | N/A | 
|Composition of mortgage production:                                                       |                                         |                              |       |            |    |             |     |       |     |       |     |     |     |   |       |       |    |   |     |    
|                                                                                          | Purchase transactions                   |                              |       | 5          | %  |             |     | N/A   |     |       |     | 23  | %   |   |       | 7     | %  |   |     | 0   | %  
|                                                                                          | Cash-out refinance transactions         |                              |       | 45         | %  |             |     | N/A   |     |       |     | 30  | %   |   |       | 44    | %  |   |     | 0   | %  
|                                                                                          | Rate/term refinance transactions        |                              |       | 50         | %  |             |     | N/A   |     |       |     | 47  | %   |   |       | 49    | %  |   |     | 100 | %  
|Key Drivers of Growth and Profitability for
    the Three Months Ended September 30, 2003 |                                         |                              |       |            |    |             |     |       |     |       |     |     |     |   |       |       |    |   |     |    
|Marketing costs (in thousands)                                                            |                                         | $                            | 3,889 |            |    |             | N/A |       |     | $     | 3   |     |     | $ | 3,892 |       |    |   | N/A |    
|Marketing cost per funded loan (dollars)                                                  |                                         | $                            | 435   |            |    |             | N/A |       |     | $     | 4   |     |     | $ | 439   |       |    |   | N/A |    
|Cost per funded mortgage loan (bps)                                                       |                                         |                              | 149   |            |    |             | N/A |       |     |       | 118 |     |     |   | N/A   |       |    |   | N/A |    

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|                                                                                         |                                         |                                       |        |            |     |             |     |       |     |       |     |     |     |   |        |       |     |   |     |     |     | 
|---------------------------------------------------------------------------------------- | --------------------------------------- | ------------------------------------- | ------ | ---------- | --- | ----------- | --- | ----- | --- | ----- | --- | --- | --- | - | ------ | ----- | --- | - | --- | --- | --- | 
|                                                                                         |                                         |                                       |        |           
|                                                                                         |                                         | Consumer Direct Businesses           |        |           
|                                                                                         |                                         | IndyMac Consumer Bank                 |        | Investment
|                                                                                         |                                         |                                       |        | Portfolio 
|Nine Months Ended September 30, 2003                                                     |                                         | B2C                                   |        | HELOC      |     | Retail Bank |     | Total |     | Group
|                                                                                         |                                         |                                       |        |            |     |             |     |       |     |      
|                                                                                         |                                         |                                      
|                                                                                         |                                         | (Dollars in millions)                
|Volume by Channel and Source(1)                                                          |                                         |                                       |        |            |     |             |     |       |     |       |     |     |     |   |        |       |     |   |     |    
|Web-based production:                                                                    |                                         |                                       |        |            |     |             |     |       |     |       |     |     |     |   |        |       |     |   |     |    
|                                                                                         | Direct at www.indymacmortgage.com       |                                       | $      | 975        |     |             | $   |      |     |       | $   |    |     |   | $      | 975   |     |   | $   |    |    
|                                                                                         | Indirect Web-based leads                |                                       |        | 437        |     |             |     |      |     |       |     |    |     |   |        | 437   |     |   |     |    |    
|Cross-marketing and portfolio refinancing                                                |                                         |                                       | 2,475  |            |     |             |    |       |     |       | 200 |     |     |   | 2,675  |       |     |   | 411 |    
|Direct telemarketing and affinity relationships                                          |                                         |                                       | 621    |            |     |             | 142 |       |     |       |    |     |     |   | 763    |       |     |   |    |    
|Retail banking branches                                                                  |                                         |                                       |       |            |     |             |    |       |     |       | 149 |     |     |   | 149    |       |     |   |    |    
|                                                                                         |                                         |                                       |        |            |     |             |     |       |     |       |     |     |     |   |        |       |     |   |     |    
|                                                                                         | Total consumer direct production volume |                                       | $      | 4,508      |     |             | $   | 142   |     |       | $   | 349 |     |   | $      | 4,999 |     |   | $   | 411 |    
|                                                                                         |                                         |                                       |        |            |     |             |     |       |     |       |     |     |     |   |        |       |     |   |     |    
|Percentage of total production                                                           |                                         |                                       | 19     | %          |     |             | 1   | %     |     |       | 1   | %   |     |   | 21     | %     |     |   | 2   | %  
|Percentage change relative to:                                                           |                                         |                                       |        |            |     |             |     |       |     |       |     |     |     |   |        |       |     |   |     |    
|                                                                                         |                                         | Nine months ended September 30, 2002. |        |            | 117 | %           |     |       | N/A |       |     |     | 289 | % |        |       | 130 | % |     |     | N/A | 
|Composition of mortgage production:                                                      |                                         |                                       |        |            |     |             |     |       |     |       |     |     |     |   |        |       |     |   |     |    
|                                                                                         | Purchase transactions                   |                                       |        | 5          | %   |             |     | N/A   |     |       |     | 20  | %   |   |        | 6     | %   |   |     | N/A |    
|                                                                                         | Cash-out refinance transactions         |                                       |        | 43         | %   |             |     | N/A   |     |       |     | 32  | %   |   |        | 42    | %   |   |     | 0   | %  
|                                                                                         | Rate/term refinance transactions        |                                       |        | 52         | %   |             |     | N/A   |     |       |     | 48  | %   |   |        | 52    | %   |   |     | 100 | %  
|Key Drivers of Growth and Profitability for
    the Nine Months Ended September 30, 2003 |                                         |                                       |        |            |     |             |     |       |     |       |     |     |     |   |        |       |     |   |     |    
|Marketing costs (in thousands)                                                           |                                         | $                                     | 10,159 |            |     |             | N/A |       |     | $     | 66  |     |     | $ | 10,225 |       |     |   | N/A |    
|Marketing cost per funded loan (dollars)                                                 |                                         | $                                     | 420    |            |     |             | N/A |       |     | $     | 38  |     |     | $ | 458    |       |     |   | N/A |    
|Cost per funded mortgage loan (bps)                                                      |                                         |                                       | 146    |            |     |             | N/A |       |     |       | 116 |     |     |   | N/A    |       |     |   | N/A |    



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | HELOC amounts represent the loans produced only
    by the HELOC division. HELOC loans produced by other business
    divisions totaled $209 million and $531 million during
    the three and nine months ended September 30, 2003,
    respectively. HELOC loans produced by business divisions other
    than the HELOC division are included in the production volume of
    the respective originating business division.

B2Cs production volume grew 73% for the
three months ended September 30, 2003 compared to the three
months ended September 30, 2002. The B2C division is
currently our most established consumer-direct business,
generating 18% of the total consumer-direct business in the
third quarter 2003. This business is expected to be more
cyclical as a result of changes in interest rates. The HELOC
division was established during 2002 to facilitate targeted
marketing of our HELOC product directly to consumers in addition
to the production of HELOCs within our other production
channels. Through a streamlined application process and
competitive pricing, this division provides homeowners the
ability to easily access the excess equity in their homes for a
variety of uses. Currently, we hold the HELOCs generated by the
HELOC division for investment, as these HELOCs are prime rate
based, and typically have high FICO scores and low combined
loan-to-value ratios. The HELOC product also tends to be
somewhat counter-cyclical to the mortgage industry. As interest
rates rise, consumers who want to access the equity in their
home are more inclined to utilize a HELOC product rather than a
cash-out refinance of their existing low-rate mortgage loan. As
a result, we expect the HELOC divisions production to
increase now that the mortgage refinancing boom has abated.




Loan Sales

The Company sold $6.7 billion and
$4.5 billion of loans during the three months ended
September 30, 2003 and 2002, respectively, and
$18.5 billion and $12.4 billion for the nine months
then ended. The Companys gain on sale of loans increased
57% in the third quarter of 2003 to $121.5 million, from

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$77.3 million in the third quarter of 2002.
The increase in the gain on sale was a result of a 49% increase
in the amount of loans sold, along with a nine basis point
increase in net profit margin, from 1.73% in the third quarter
of 2002 to 1.82% in the third quarter of 2003. The increase in
the net margin is due to more favorable product mix and lower
hedge costs.


The Company hedges the interest rate risk
inherent in its pipeline of mortgage loans held for sale to
protect its margin on sale of loans. Hedging practices can vary
significantly from company to company ranging across a broad
spectrum. At one extreme, a mortgage banker may choose to not
hedge its pipeline at all. Mortgage bankers who choose to not
hedge their pipeline will typically report higher earnings and
profit margins in a falling interest rate environment, and lower
earnings and profit margins in a rising interest rate
environment. This will be the most profitable strategy over an
indefinite period of time as more production is done in the
declining rate environment, assuming the rates rise as often as
they fall. However, this strategy results in highly volatile
earnings and could result in losses for an extended period of
time potentially risking the depletion of capital reserves.
Conversely at the other extreme, a mortgage banker can choose to
hedge 100% of its pipeline with option-based instruments to
closely offset the free option enjoyed by the
mortgage loan applicant to not close on his or her loan (i.e.
fallout). This hedging strategy will generally
produce stable and consistent results, but profitability is
significantly reduced as the cost of the options can be
prohibitive.

Generally, prudent mortgage bankers will choose a
strategy that falls along the spectrum of the above extremes.
IndyMac tends to utilize instruments such as forward sale
agreements whose change in value as interest rates change is
expected to offset the change in value of its underlying
mortgage pipeline based on expected closing ratios. Utilizing
this strategy we focus on trying to maintain stable profit
margins with an emphasis on forecasting expected fallout to more
precisely estimate our required hedge coverage ratio and
minimize hedge costs. By closely monitoring key factors such as
product type, business units, progress or status of
transactions, as well as changes in market interest rates since
we committed a rate to the borrower (rate lock
commitments), the Company seeks to quantify the optional
component of each rate lock, and in turn, the aggregate rate
lock pipeline. By accurately evaluating these factors, the
Company has been able to minimize the purchase of options and
also stabilize gain on sale margins over different rate
environments. Companies with lower coverage ratios may tend to
follow the market increasing their hedge costs and reducing
their profit margins as interest rates rise. In comparing
financial results, investors should be aware of the varying
results that can be achieved under different hedge strategies.

The table below illustrates the impact of the
Companys pipeline hedging activities.

|                                  |  |                       |      |               |  |          |      |          |  |          |     |    |  |   |      |   |  |  |      |   
|--------------------------------- |  | --------------------- | ---- | ------------- |  | -------- | ---- | -------- |  | -------- | --- | -- |  | - | ---- | - |  |  | ---- | --
|                                  |  |                      
|                                  |  | Three Months Ended   
|                                  |  |                      
|                                  |  | September 30,         |      | September 30, |  |          |      | June 30, |  |         
|                                  |  | 2003                  |      | 2002          |  | % Change |      | 2003     |  | % Change
|                                  |  |                       |      |               |  |          |      |          |  |         
|                                  |  |                      
|                                  |  | (Dollars in millions)
|Gross gain on mortgage loan sales |  | $                     | 40   |               |  | $        | 155  |          |  |          | (74 | )% |  | $ | 163  |   |  |  | (75  | )%
|Gross margin before hedging       |  |                       | 0.60 | %             |  |          | 3.48 | %        |  |          | (83 | )% |  |   | 2.57 | % |  |  | (77  | )%
|Hedging gains (losses)            |  | $                     | 81   |               |  | $        | (78  | )        |  |          | 204 | %  |  | $ | (61  | ) |  |  | 233% |   
|Net gains on sale                 |  | $                     | 121  |               |  | $        | 77   |          |  |          | 57  | %  |  | $ | 102  |   |  |  | 19%  |   
|Net margin after hedging          |  |                       | 1.82 | %             |  |          | 1.73 | %        |  |          | 5   | %  |  |   | 1.61 | % |  |  | 13%  |   

|                                  |  |                       |      |               |  |          |      |   |  |  |     |   
|--------------------------------- |  | --------------------- | ---- | ------------- |  | -------- | ---- | - |  |  | --- | --
|                                  |  |                      
|                                  |  | Nine Months Ended    
|                                  |  |                      
|                                  |  | September 30,         |      | September 30, |  |         
|                                  |  | 2003                  |      | 2002          |  | % Change
|                                  |  |                       |      |               |  |         
|                                  |  |                      
|                                  |  | (Dollars in millions)
|Gross gain on mortgage loan sales |  | $                     | 322  |               |  | $        | 379  |   |  |  | (15 | )%
|Gross margin before hedging       |  |                       | 1.74 | %             |  |          | 3.05 | % |  |  | (43 | )%
|Hedging (losses)                  |  | $                     | (14  | )             |  | $        | (153 | ) |  |  | 91  | % 
|Net gains on sale                 |  | $                     | 307  |               |  | $        | 226  |   |  |  | 36  | % 
|Net margin after hedging          |  |                       | 1.66 | %             |  |          | 1.82 | % |  |  | (9  | )%

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Included in the pipeline are rate lock
commitments in addition to mortgage loans held for sale. Rate
lock commitments on mortgage loans that are intended to be sold
are considered to be derivatives pursuant to
SFAS No. 133, Accounting for Derivative
Instruments and Hedging Activities,(SFAS 133) and, therefore, are recorded at
fair value. The Company hedges the risk of changes in fair value
of rate lock commitments by selling forward contracts on
securities of Fannie Mae or Freddie Mac as the Company deems
appropriate to prudently manage this risk. These forward
contracts are also accounted for as derivatives and recorded at
fair value.

In measuring the fair value of rate lock
commitments, the proceeds expected upon eventual loan sale are
used. This value excludes the value of the MSRs inherent in the
loan except for certain high quality, liquid, conventional
mortgages where whole loan sale prices including servicing
rights are readily available. These values are calculated using
the same methodologies that are used in our loan sales, adjusted
using an anticipated fallout factor for rate lock commitments
that will likely not be funded. This method of calculating the
value of the derivative has the effect of recognizing a portion
of the gain from mortgage loans before the loans are funded. It
is important to note that the time from rate lock commitment to
loan sale is generally less than 90 days; therefore, any
change to current practice would have only a short-term impact
on revenues and net income. As of September 30, 2003, the
fair value of the rate lock commitments, net of related hedges,
was $11.3 million.

The following table presents the gain on sale
margins by product type for the quarters ended September 30
and June 30, 2003:

|                                      |  |                       |       |                    |  |        |       |             |  |              |      |        |  |   |       |  |  |   |       |  |  |  |      |  
|------------------------------------- |  | --------------------- | ----- | ------------------ |  | ------ | ----- | ----------- |  | ------------ | ---- | ------ |  | - | ----- |  |  | - | ----- |  |  |  | ---- | -
|                                      |  |                       |       |                   
|                                      |  | Three Months Ended    |       | Three Months Ended
|                                      |  | September 30, 2003    |       | June 30, 2003     
|Gain on Sale Margins                  |  |                       |       |                   
|by Product Type                       |  | Amount Sold           |       | Gain on Sale       |  | Margin |       | Amount Sold |  | Gain on Sale |      | Margin
|                                      |  |                       |       |                    |  |        |       |             |  |              |      |       
|                                      |  |                      
|                                      |  | (Dollars in millions)
|Agency conforming                     |  | $                     | 1,864 |                    |  | $      | 22.8  |             |  |              | 1.22 | %      |  | $ | 1,589 |  |  | $ | 18.4  |  |  |  | 1.16 | %
|Alt-A and Jumbo                       |  |                       | 4,155 |                    |  |        | 79.2  |             |  |              | 1.90 | %      |  |   | 4,326 |  |  |   | 69.9  |  |  |  | 1.62 | %
|Subprime                              |  |                       | 444   |                    |  |        | 12.5  |             |  |              | 2.81 | %      |  |   | 264   |  |  |   | 6.6   |  |  |  | 2.50 | %
|Loans acquired through clean-up calls |  |                       | 212   |                    |  |        | 7.0   |             |  |              | 3.30 | %      |  |   | 157   |  |  |   | 7.2   |  |  |  | 4.59 | %
|                                      |  |                       |       |                    |  |        |       |             |  |              |      |        |  |   |       |  |  |   |       |  |  |  |      |  
|Total gain on sale of loans           |  | $                     | 6,675 |                    |  | $      | 121.5 |             |  |              | 1.82 | %      |  | $ | 6,336 |  |  | $ | 102.1 |  |  |  | 1.61 | %
|                                      |  |                       |       |                    |  |        |       |             |  |              |      |        |  |   |       |  |  |   |       |  |  |  |      |  

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In addition to the gain on sale, IndyMac earns
spread and fee income on its mortgage loans held for sale. It is
important to look at the entire mortgage banking revenue stream
in evaluating performance as these components may vary in
differing interest rate environments and sale strategies. The
following table depicts the total revenue margin on mortgage
loans sold, which is calculated by dividing the sum of gain on
sale of loans, net interest income (refer to Note 4:
Segment Reporting in the accompanying notes to the
consolidated financial statements for further information on our
method of allocating interest expense to the operating
segments), and fee income by the amount of loans sold:

|                               |  |                        |           |            |  |               |      |            |  |          |           |            |  |  |      |   |  |   |           |  |  |  |      |  
|------------------------------ |  | ---------------------- | --------- | ---------- |  | ------------- | ---- | ---------- |  | -------- | --------- | ---------- |  |  | ---- | - |  | - | --------- |  |  |  | ---- | -
|                               |  |                       
|                               |  | Three Months Ended    
|                               |  |                       
|                               |  | September 30,          |           | % of loans |  | September 30, |      | % of loans |  | June 30, |           | % of loans
|                               |  | 2003                   |           | sold       |  | 2002          |      | sold       |  | 2003     |           | sold      
|                               |  |                        |           |            |  |               |      |            |  |          |           |           
|                               |  |                       
|                               |  | (Dollars in thousands)
|Gain on sale of loans          |  | $                      | 121,498   |            |  |               | 1.82 | %          |  | $        | 77,279    |            |  |  | 1.73 | % |  | $ | 102,146   |  |  |  | 1.61 | %
|Net interest income            |  |                        | 48,854    |            |  |               | 0.73 | %          |  |          | 23,498    |            |  |  | 0.52 | % |  |   | 39,467    |  |  |  | 0.63 | %
|Fee income                     |  |                        | 18,009    |            |  |               | 0.27 | %          |  |          | 12,130    |            |  |  | 0.27 | % |  |   | 18,011    |  |  |  | 0.28 | %
|                               |  |                        |           |            |  |               |      |            |  |          |           |            |  |  |      |   |  |   |           |  |  |  |      |  
|Total mortgage banking revenue |  | $                      | 188,361   |            |  |               | 2.82 | %          |  | $        | 112,907   |            |  |  | 2.52 | % |  | $ | 159,624   |  |  |  | 2.52 | %
|                               |  |                        |           |            |  |               |      |            |  |          |           |            |  |  |      |   |  |   |           |  |  |  |      |  
|Loans sold                     |  | $                      | 6,674,915 |            |  |               |      |            |  | $        | 4,473,620 |            |  |  |      |   |  | $ | 6,335,907 |  |  |  |      |  
|                               |  |                        |           |            |  |               |      |            |  |          |           |            |  |  |      |   |  |   |           |  |  |  |      |  

|                               |  |                        |            |            |  |               |      |            |  |   |            |  |  |  |      |  
|------------------------------ |  | ---------------------- | ---------- | ---------- |  | ------------- | ---- | ---------- |  | - | ---------- |  |  |  | ---- | -
|                               |  |                       
|                               |  | Nine Months Ended     
|                               |  |                       
|                               |  | September 30,          |            | % of loans |  | September 30, |      | % of loans
|                               |  | 2003                   |            | sold       |  | 2002          |      | sold      
|                               |  |                        |            |            |  |               |      |           
|                               |  |                       
|                               |  | (Dollars in thousands)
|Gain on sale of loans          |  | $                      | 307,427    |            |  |               | 1.66 | %          |  | $ | 226,025    |  |  |  | 1.82 | %
|Net interest income            |  |                        | 120,065    |            |  |               | 0.65 | %          |  |   | 68,192     |  |  |  | 0.55 | %
|Fee income                     |  |                        | 50,811     |            |  |               | 0.27 | %          |  |   | 31,574     |  |  |  | 0.25 | %
|                               |  |                        |            |            |  |               |      |            |  |   |            |  |  |  |      |  
|Total mortgage banking revenue |  | $                      | 478,303    |            |  |               | 2.58 | %          |  | $ | 325,791    |  |  |  | 2.62 | %
|                               |  |                        |            |            |  |               |      |            |  |   |            |  |  |  |      |  
|Loans sold                     |  | $                      | 18,534,523 |            |  |               |      |            |  | $ | 12,447,009 |  |  |  |      |  
|                               |  |                        |            |            |  |               |      |            |  |   |            |  |  |  |      |  

The following table shows the various channels
through which loans were distributed:

|                                     |                         |                       |       |              |  |               |    |              |   |          |       |              |  |  |    |     |   |   |       |       |  |  |    |     |  
|------------------------------------ | ----------------------- | --------------------- | ----- | ------------ |  | ------------- | -- | ------------ | - | -------- | ----- | ------------ |  |  | -- | --- | - | - | ----- | ----- |  |  | -- | --- | -
|                                     |                         |                      
|                                     |                         | Three Months Ended   
|                                     |                         |                      
|                                     |                         | September 30,         |       | Distribution |  | September 30, |    | Distribution |   | June 30, |       | Distribution
|                                     |                         | 2003                  |       | Percentages  |  | 2002          |    | Percentages  |   | 2003     |       | Percentages 
|                                     |                         |                       |       |              |  |               |    |              |   |          |       |             
|                                     |                         |                      
|                                     |                         | (Dollars in millions)
|Sales to the GSEs(1)                 |                         | $                     | 4,170 |              |  |               | 53 | %            |   | $        | 1,885 |              |  |  | 39 | %   |   | $ | 3,459 |       |  |  | 48 | %  
|Private-label securitizations        |                         |                       | 1,672 |              |  |               | 21 | %            |   |          | 1,947 |              |  |  | 41 | %   |   |   | 1,617 |       |  |  | 23 | %  
|Whole loan sales                     |                         |                       | 833   |              |  |               | 11 | %            |   |          | 642   |              |  |  | 13 | %   |   |   | 1,260 |       |  |  | 18 | %  
|                                     |                         |                       |       |              |  |               |    |              |   |          |       |              |  |  |    |     |   |   |       |       |  |  |    |    
|                                     | Subtotal sales          |                       |       | 6,675        |  |               |    | 85           | % |          |       | 4,474        |  |  |    | 93  | % |   |       | 6,336 |  |  |    | 89  | %
|Investment portfolio acquisitions(2) |                         |                       | 1,223 |              |  |               | 15 | %            |   |          | 315   |              |  |  | 7  | %   |   |   | 798   |       |  |  | 11 | %  
|                                     |                         |                       |       |              |  |               |    |              |   |          |       |              |  |  |    |     |   |   |       |       |  |  |    |    
|                                     | Total loan distribution |                       | $     | 7,898        |  |               |    | 100          | % |          | $     | 4,789        |  |  |    | 100 | % |   | $     | 7,134 |  |  |    | 100 | %
|                                     |                         |                       |       |              |  |               |    |              |   |          |       |              |  |  |    |     |   |   |       |       |  |  |    |    

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|                                     |                         |                       |        |              |  |               |    |              |   |   |       |        |  |  |    |     |  
|------------------------------------ | ----------------------- | --------------------- | ------ | ------------ |  | ------------- | -- | ------------ | - | - | ----- | ------ |  |  | -- | --- | -
|                                     |                         |                      
|                                     |                         | Nine Months Ended    
|                                     |                         |                      
|                                     |                         | September 30,         |        | Distribution |  | September 30, |    | Distribution
|                                     |                         | 2003                  |        | Percentages  |  | 2002          |    | Percentages 
|                                     |                         |                       |        |              |  |               |    |             
|                                     |                         |                      
|                                     |                         | (Dollars in millions)
|Sales to the GSEs(1)                 |                         | $                     | 11,093 |              |  |               | 53 | %            |   | $ | 6,535 |        |  |  | 48 | %  
|Private-label securitizations        |                         |                       | 4,760  |              |  |               | 22 | %            |   |   | 4,766 |        |  |  | 35 | %  
|Whole loan sales                     |                         |                       | 2,682  |              |  |               | 13 | %            |   |   | 1,146 |        |  |  | 8  | %  
|                                     |                         |                       |        |              |  |               |    |              |   |   |       |        |  |  |    |    
|                                     | Subtotal sales          |                       |        | 18,535       |  |               |    | 88           | % |   |       | 12,447 |  |  |    | 91  | %
|Investment portfolio acquisitions(2) |                         |                       | 2,423  |              |  |               | 12 | %            |   |   | 1,148 |        |  |  | 9  | %  
|                                     |                         |                       |        |              |  |               |    |              |   |   |       |        |  |  |    |    
|                                     | Total loan distribution |                       | $      | 20,958       |  |               |    | 100          | % |   | $     | 13,595 |  |  |    | 100 | %
|                                     |                         |                       |        |              |  |               |    |              |   |   |       |        |  |  |    |    



---



|    |                                                                                
|--- | -------------------------------------------------------------------------------
|(1) | Government-sponsored enterprises.                                              
|   
|(2) | Loan production that IndyMac elected to retain in
    its investment portfolio.

In conjunction with the sale of mortgage loans in
private-label securitizations and government-sponsored
enterprises (GSEs) transactions, the Company generally retains
certain assets. The primary assets retained include MSRs and, to
a lesser degree, AAA-rated securities and agency interest-only
strips, non-investment grade securities and residual securities.
The allocated cost of the retained assets at the time of sale is
recorded as an asset with an offsetting increase to the gain on
sale of loans (or a reduction in the cost basis of the loans
sold). The calculation of the $121.5 million in gain on
sale of loans earned during the three months ended
September 30, 2003 included the retention of
$121.2 million of servicing-related assets. Cash flow
collected during the three months ended September 30, 2003
from assets previously retained amounted to $52.4 million.
More information on the valuation assumptions related to
IndyMacs retained assets can be found on page 29.




INVESTING ACTIVITIES

IndyMacs Investment Portfolio Group
complements the Companys mortgage banking activities and
serves to diversify the Companys revenue stream through
its investments in single-family residential mortgage loans,
mortgage-backed securities and servicing-related assets.

The Investment Portfolio Groups investment
in prime SFR loans, mortgage-backed securities and mortgage loan
servicing related assets also helps to provide a source of
income to counterbalance the cyclical nature of mortgage
production. Should loan production decline due to factors such
as increasing interest rates, the value and fee income of the
Investment Portfolio Groups MSRs generally rises, as there
is less incentive for borrowers to refinance at a higher
interest rate. Similarly, when loan production increases, the
value of the MSRs generally decreases. We believe this serves to
stabilize the Companys revenue stream through increased
interest and servicing fee income when production slows.

In addition to the Investment Portfolio
Groups investments, certain investing activities also take
place in IndyMac Mortgage Bank and IndyMac Consumer Bank. These
activities include the investment in construction loans and
HELOCs by these business units.

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The following table shows average annualized net
returns for all of our investing activities, which is calculated
by dividing the sum of net interest income after allocated
interest expense (see Note 4: Segment Reporting
in the accompanying notes to the consolidated financial
statements for further information on our method of allocating
interest expense to the operating segments) and provision for
loan losses, service fee income and related net gains or losses
by the average balance of investment assets. Service fee income
includes gross service fee income, amortization of MSRs,
valuation adjustments and net hedging gains and losses. Gross
service fee income includes reinvestment income, prepayment and
late fee income net of compensating interest paid to borrowers
and investors in addition to the contractual servicing fees.

|                                                                                                                |  |                        |           |               |  |          |           |   |  |   |           |  
|--------------------------------------------------------------------------------------------------------------- |  | ---------------------- | --------- | ------------- |  | -------- | --------- | - |  | - | --------- | -
|                                                                                                                |  |                       
|                                                                                                                |  | Three Months Ended    
|                                                                                                                |  |                       
|                                                                                                                |  | September 30,          |           | September 30, |  | June 30,
|                                                                                                                |  | 2003                   |           | 2002          |  | 2003    
|                                                                                                                |  |                        |           |               |  |         
|                                                                                                                |  |                       
|                                                                                                                |  | (Dollars in thousands)
|Net interest income after provision for loan
    losses                                                         |  | $                      | 34,619    |               |  | $        | 33,888    |   |  | $ | 28,237    |  
|Service fee (loss) income                                                                                       |  |                        | (11,113   | )             |  |          | 3,593     |   |  |   | (1,401    | )
|(Loss) gain on mortgage-backed securities, net                                                                  |  |                        | (8,647    | )             |  |          | 7,674     |   |  |   | (9,258    | )
|Other income                                                                                                    |  |                        | 3,007     |               |  |          | 1,915     |   |  |   | 2,761     |  
|Average balance of interest-earning assets and
    MSRs                                                         |  | $                      | 7,200,472 |               |  | $        | 5,307,286 |   |  | $ | 6,443,855 |  
|Investing activities return before
    operating expenses on interest-earning assets and MSRs
    (annualized) |  |                        | 0.98      | %             |  |          | 3.52      | % |  |   | 1.27      | %
|                                                                                                                |  |                        |           |               |  |          |           |   |  |   |           |  

|                                                                                                                |  |                        |           |               |  |   |           |  
|--------------------------------------------------------------------------------------------------------------- |  | ---------------------- | --------- | ------------- |  | - | --------- | -
|                                                                                                                |  |                       
|                                                                                                                |  | Nine Months Ended     
|                                                                                                                |  |                       
|                                                                                                                |  | September 30,          |           | September 30,
|                                                                                                                |  | 2003                   |           | 2002         
|                                                                                                                |  |                        |           |              
|                                                                                                                |  |                       
|                                                                                                                |  | (Dollars in thousands)
|Net interest income after provision for loan
    losses                                                         |  | $                      | 94,820    |               |  | $ | 108,064   |  
|Service fee income                                                                                              |  |                        | (10,130   | )             |  |   | 17,820    |  
|(Loss) gain on mortgage-backed securities, net                                                                  |  |                        | (24,816   | )             |  |   | 3,387     |  
|Other income                                                                                                    |  |                        | 8,262     |               |  |   | 8,004     |  
|Average balance of interest-earning assets and
    MSRs                                                         |  | $                      | 6,618,571 |               |  | $ | 5,055,692 |  
|Investing activities return before
    operating expenses on interest-earning assets and MSRs
    (annualized) |  |                        | 1.38      | %             |  |   | 3.63      | %
|                                                                                                                |  |                        |           |               |  |   |           |  

The decrease in return primarily results from the
impact of higher prepayment rates on MSRs and mortgage-backed
securities in this low interest rate environment.

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Investment Portfolio Group

The following table sets forth the composition of
the Investment Portfolio Groups assets as of
September 30, 2003 and December 31, 2002, respectively:

|                                                              |                                |                                                          |                                                   |              |           |           |           |   |           |           | 
|------------------------------------------------------------- | ------------------------------ | -------------------------------------------------------- | ------------------------------------------------- | ------------ | --------- | --------- | --------- | - | --------- | --------- | 
|                                                              |                                | September 30,                                            |                                                   | December 31,
|                                                              |                                | 2003                                                     |                                                   | 2002        
|                                                              |                                |                                                          |                                                   |             
|                                                              |                                |                                                         
|                                                              |                                | (Dollars in thousands)                                  
|SFR mortgage loans held for
    investment                    |                                | $                                                        | 3,406,052                                         |              |           | $         | 2,096,517 |  
|SFR mortgage loans held for sale                              |                                |                                                          | 756,375                                           |              |           |           |          |  
|Mortgage-backed, U.S. Treasury securities and
    notes:      |                                |                                                          |                                                   |              |           |           |           |  
|                                                              | Trading securities:            |                                                          |                                                   |              |           |           |           |   |          
|                                                              |                                | AAA-rated securities and agency interest-only
    strips |                                                   |              | 155,258   |           |           |   | 187,060   |          
|                                                              |                                | AAA-rated principal-only securities                      |                                                   |              | 5,647     |           |           |   | 79,554    |          
|                                                              |                                | U.S. Treasury securities                                 |                                                   |              |          |           |           |   | 282,219   |          
|                                                              |                                | AAA-rated non-agency securities                          |                                                   |              |          |           |           |   | 101,185   |          
|                                                              |                                | AAA-rated agency securities                              |                                                   |              |          |           |           |   | 25,055    |          
|                                                              |                                | Other investment grade securities                        |                                                   |              | 8,851     |           |           |   | 9,114     |          
|                                                              |                                | Other non-investment grade securities                    |                                                   |              | 1,752     |           |           |   | 2,956     |          
|                                                              |                                | Residual securities                                      |                                                   |              | 54,743    |           |           |   | 78,740    |          
|                                                              |                                |                                                          |                                                   |              |           |           |           |  
|                                                              |                                |                                                          | Subtotal  trading securities                     |              |           | 226,251   |           |   |           | 765,883   | 
|                                                              | Available for sale securities: |                                                          |                                                   |              |           |           |           |   |          
|                                                              |                                | AAA-rated non-agency securities                          |                                                   |              | 1,306,531 |           |           |   | 1,406,321 |          
|                                                              |                                | AAA-rated agency securities                              |                                                   |              | 33,762    |           |           |   | 123,269   |          
|                                                              |                                | AAA-rated agency notes                                   |                                                   |              | 146,631   |           |           |   |          |          
|                                                              |                                | Other investment grade securities                        |                                                   |              | 23,551    |           |           |   | 39,258    |          
|                                                              |                                | Other non-investment grade securities                    |                                                   |              | 6,805     |           |           |   | 4,362     |          
|                                                              |                                |                                                          |                                                   |              |           |           |           |  
|                                                              |                                |                                                          | Subtotal  available for sale securities          |              |           | 1,517,280 |           |   |           | 1,573,210 | 
|                                                              |                                |                                                          |                                                   |              |           |           |           |  
|                                                              |                                |                                                          | Total mortgage-backed securities and agency notes |              |           | 1,743,531 |           |   |           | 2,339,093 | 
|Mortgage servicing rights                                     |                                |                                                          | 406,917                                           |              |           |           | 300,539   |  
|                                                              |                                |                                                          |                                                   |              |           |           |           |  
|                                                              |                                |                                                          | Total                                             |              | $         | 6,312,875 |           |   | $         | 4,736,149 | 
|                                                              |                                |                                                          |                                                   |              |           |           |           |  
|Percentage of securities portfolio rated
    investment grade |                                |                                                          | 96                                                | %            |           |           | 96        | %
|Percentage of securities portfolio rated AAA                  |                                |                                                          | 95                                                | %            |           |           | 94        | %

AAA-rated securities and agency interest-only
strips and residual securities and securities used to hedge
these assets, are classified as trading securities. Changes in
the fair value of these securities are recorded in earnings. All
other mortgage-backed securities are classified as available for
sale, and changes in fair value of these assets are recorded in
equity.

SFR Mortgage Loans Held for
Investment

The Companys portfolio of mortgage loans
held for investment is comprised primarily of SFR mortgage
loans, with a concentration in adjustable-rate loans to mitigate
interest rate risk. The Company is focused on increasing its
portfolio of mortgage loans held for investment to achieve
better balance in its investing activities relative to its
mortgage banking activities, which tends to be more cyclical.
During the third quarter of 2003, the Company added $1.2 billion
of mortgage loans in accordance with this strategy. The following

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table shows the composition of this portfolio as
of September 30, 2003 and December 31, 2002, respectively,
and relevant credit quality characteristics at
September 30, 2003:


|                                                  |  |                        |           |              |  |   |           |  
|------------------------------------------------- |  | ---------------------- | --------- | ------------ |  | - | --------- | -
|                                                  |  | September 30,          |           | December 31,
|                                                  |  | 2003                   |           | 2002        
|                                                  |  |                        |           |             
|                                                  |  |                       
|                                                  |  | (Dollars in thousands)
|SFR mortgage loans held for investment            |  | $                      | 3,406,052 |              |  | $ | 2,096,517 |  
|Average loan size                                 |  |                        | 291       |              |  |   | 227       |  
|Non-performing loans as a percentage of SFR loans |  |                        | 0.54      | %            |  |   | 1.20      | %
|Estimated average life in years(1)                |  |                        | 4.01      |              |  |   | 3.36      |  
|Estimated average duration in years(2)            |  |                        | 1.62      |              |  |   | 1.39      |  
|Yield                                             |  |                        | 4.31      | %            |  |   | 5.69      | %
|Fixed-rate mortgages                              |  |                        | 20        | %            |  |   | 23        | %
|Adjustable-rate mortgages                         |  |                        | 29        | %            |  |   | 28        | %
|Hybrid adjustable-rate mortgages                  |  |                        | 51        | %            |  |   | 49        | %

|                                                    |                                        |       |     |    |     |   |  |  |  | 
|--------------------------------------------------- | -------------------------------------- | ----- | --- | -- | --- | - |  |  |  | 
|Additional Information as of
    September 30, 2003
|Average FICO score(3)                               |                                        |       | 710 |    |     |   |  | 
|Average loan to value ratio                         |                                        |       | 72  | %  |     |   |  | 
|Geographic distribution:                            |                                        |       |     |    |     |   |  | 
|                                                    | Southern California                    |       |     | 30 | %   |   |  |  | 
|                                                    | Northern California                    |       |     | 15 | %   |   |  |  | 
|                                                    | Michigan                               |       |     | 8  | %   |   |  |  | 
|                                                    | New York                               |       |     | 5  | %   |   |  |  | 
|                                                    | Florida                                |       |     | 3  | %   |   |  |  | 
|                                                    | Georgia                                |       |     | 3  | %   |   |  |  | 
|                                                    | Colorado                               |       |     | 2  | %   |   |  |  | 
|                                                    | New Jersey                             |       |     | 2  | %   |   |  |  | 
|                                                    | Washington                             |       |     | 2  | %   |   |  |  | 
|                                                    | Other (each individually less than 2%) |       |     | 30 | %   |   |  |  | 
|                                                    |                                        |       |     |    |     |   |  | 
|                                                    |                                        | Total |     |    | 100 | % |  |  |  | 
|                                                    |                                        |       |     |    |     |   |  | 



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                        
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Represents the estimated length of time, on
    average, the SFR loan portfolio will remain outstanding based on
    the Banks estimates for prepayments.                                                                                                                                                                                                                                                             
|   
|(2) | Average duration measures the expected
    variability of the value of a financial instrument in response
    to changes in interest rates.                                                                                                                                                                                                                                                                            
|   
|(3) | FICO scores reflect a credit scoring system
    developed by Fair Isaacs and Co. and are generally used by
    lenders to evaluate a borrowers credit history. FICO
    scores of 700 or higher are generally considered in the mortgage
    industry to be very high quality borrowers with low risk of
    default, but in general, the secondary market will consider FICO
    scores of 620 or higher to be prime.

SFR Mortgage Loans Held for
Sale

Loans held for sale in the Investment Portfolio
Group are substantially comprised of SFR mortgage loans acquired
through exercising our right to call selected transactions as
Master Servicer and loans generated through portfolio retention
programs. The Company maintains the right to call selected deals
when the outstanding loan balances in the securitization trust
decline to a specified level, typically 10% of the original
collateral balance. During the quarter ended September 30,
2003, we sold approximately $212 million of loans, a
significant portion of which was acquired through clean-up call
exercises, for a pretax gain of $7.0 million. Additionally,
we have recognized a pretax gain of $9.3 million related to
the loans acquired through our

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retention program in the third quarter 2003. The
balance at September 30, 2003 of loans held for sale for
the Investment Portfolio Group represents the inventory of
called loans and loans acquired through retention programs that
remain unsold. We expect to exercise our option to call
additional loans of approximately $500 million during the
remainder of the year, the exact timing and amount of which is
dependent upon the future interest rate environment and borrower
prepayment behavior.


Mortgage-backed Securities and U.S.
Treasury Securities

The Companys portfolio of mortgage-backed
securities and U.S. Treasury securities totaled
$1.6 billion and $2.3 billion at September 30,
2003 and December 31, 2002, respectively. These securities
are recorded at fair value. The Company invests in high quality
mortgage-backed securities to provide net interest income. The
extreme prepayment environment has negatively impacted interest
spreads on these securities for most of 2003; however spreads
began to recover in the third quarter. At September 30,
2003, 95% of the portfolio was rated AAA with an expected
weighted average life of 4.1 years. U.S. Treasury
securities in the trading portfolio are purchased to hedge the
interest rate risk associated with servicing-related assets,
among other types of investments. AAA rated principal-only
securities are retained from securities purchased in the
secondary market to hedge MSR related assets. The Company
periodically trades its hedging instruments to rebalance its
portfolio into instruments we believe will most effectively
hedge the underlying asset, after considering changing market
conditions.

The fair value of other investment grade and
non-investment grade securities by credit rating as of
September 30, 2003 and December 31, 2002 follows:

|                                                     |                                                                 |               |   |                        |  |           |   |         |   |            |   |        |  |  |   |        |  |  |   |        | 
|---------------------------------------------------- | --------------------------------------------------------------- | ------------- | - | ---------------------- |  | --------- | - | ------- | - | ---------- | - | ------ |  |  | - | ------ |  |  | - | ------ | 
|                                                     |                                                                 |               |   |                       
|                                                     |                                                                 | September 30, |   | December 31,          
|                                                     |                                                                 | 2003          |   | 2002                  
|                                                     |                                                                 |               |   |                       
|                                                     |                                                                 | Current       |   | Discount               |  |           |   |        
|                                                     |                                                                 | Face          |   | To Face                |  | Amortized |   | Fair    |   |           
|                                                     |                                                                 | Value         |   | Value                  |  | Cost      |   | Value   |   | Fair Value
|                                                     |                                                                 |               |   |                        |  |           |   |         |   |           
|                                                     |                                                                 |               |   |                        |  |          
|                                                     |                                                                 |               |   | (Dollars in thousands) |  |          
|Investment grade mortgage-backed
    securities:     |                                                                 |               |   |                        |  |           |   |         |   |            |   |        |  |  |   |        |  |  |   |       
|                                                     | AAA                                                             |               | $ | 8,020                  |  |           | $ | 75      |   |            | $ | 8,095  |  |  | $ | 8,119  |  |  | $ |       | 
|                                                     | AA                                                              |               |   |                       |  |           |   |        |   |            |   |       |  |  |   |       |  |  |   | 22,133 | 
|                                                     | A                                                               |               |   |                       |  |           |   |        |   |            |   |       |  |  |   |       |  |  |   | 2,445  | 
|                                                     | BBB+                                                            |               |   | 2,247                  |  |           |   | (176    | ) |            |   | 2,071  |  |  |   | 2,175  |  |  |   |       | 
|                                                     | BBB                                                             |               |   | 19,372                 |  |           |   | (1,299  | ) |            |   | 18,073 |  |  |   | 18,457 |  |  |   | 18,450 | 
|                                                     | BBB-                                                            |               |   | 4,000                  |  |           |   | (349    | ) |            |   | 3,651  |  |  |   | 3,651  |  |  |   | 5,344  | 
|                                                     |                                                                 |               |   |                        |  |           |   |         |   |            |   |        |  |  |   |        |  |  |   |       
|                                                     | Total other investment grade mortgage-backed
    securities     |               | $ | 33,639                 |  |           | $ | (1,749  | ) |            | $ | 31,890 |  |  | $ | 32,402 |  |  | $ | 48,372 | 
|                                                     |                                                                 |               |   |                        |  |           |   |         |   |            |   |        |  |  |   |        |  |  |   |       
|Non-investment grade mortgage-backed
    securities: |                                                                 |               |   |                        |  |           |   |         |   |            |   |        |  |  |   |        |  |  |   |       
|                                                     | BB                                                              |               | $ | 4,683                  |  |           | $ | (801    | ) |            | $ | 3,882  |  |  | $ | 4,010  |  |  | $ | 3,661  | 
|                                                     | B                                                               |               |   | 841                    |  |           |   | (556    | ) |            |   | 285    |  |  |   | 336    |  |  |   | 351    | 
|                                                     | CCC                                                             |               |   | 5,435                  |  |           |   | (4,422  | ) |            |   | 1,013  |  |  |   | 1,146  |  |  |   | 2,955  | 
|                                                     | C                                                               |               |   | 7,043                  |  |           |   | (5,202  | ) |            |   | 1,841  |  |  |   | 1,919  |  |  |   |       | 
|                                                     | D                                                               |               |   | 3,397                  |  |           |   | (2,610  | ) |            |   | 787    |  |  |   | 810    |  |  |   |       | 
|                                                     | NR                                                              |               |   | 840                    |  |           |   | (555    | ) |            |   | 285    |  |  |   | 336    |  |  |   | 351    | 
|                                                     |                                                                 |               |   |                        |  |           |   |         |   |            |   |        |  |  |   |        |  |  |   |       
|                                                     | Total other non-investment grade mortgage-backed
    securities |               | $ | 22,239                 |  |           | $ | (14,146 | ) |            | $ | 8,093  |  |  | $ | 8,557  |  |  | $ | 7,318  | 
|                                                     |                                                                 |               |   |                        |  |           |   |         |   |            |   |        |  |  |   |        |  |  |   |       

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At September 30, 2003, of the total other
investment grade and non-investment grade mortgage-backed
securities, $23.5 million was collateralized by prime
loans, $15.7 million by subprime loans and
$1.8 million by manufactured housing loans.

Mortgage Servicing and Mortgage Servicing
Rights

In addition to its own loans, IndyMac serviced
$30.6 billion of mortgage loans owned by others at
September 30, 2003 with a weighted average coupon of 6.67%.
In comparison, IndyMac serviced $28.4 billion of mortgage
loans at December 31, 2002. The table below shows the
activity in the servicing portfolio during the quarter and nine
months ended September 30, 2003:

|                                                   |  |                       |        |                    |  |   |         |  
|-------------------------------------------------- |  | --------------------- | ------ | ------------------ |  | - | ------- | -
|                                                   |  | Three Months          |        | Nine Months       
|                                                   |  | Ended                 |        | Ended             
|                                                   |  | September 30, 2003    |        | September 30, 2003
|                                                   |  |                       |        |                   
|                                                   |  |                      
|                                                   |  | Servicing Portfolio  
|                                                   |  |                      
|                                                   |  |                      
|                                                   |  | (Dollars in millions)
|Unpaid principal balance at beginning of period    |  | $                     | 29,858 |                    |  | $ | 28,376  |  
|Additions                                          |  |                       | 5,951  |                    |  |   | 16,606  |  
|Clean-up calls exercised                           |  |                       | (392   | )                  |  |   | (1,324  | )
|Loan payments and prepayments                      |  |                       | (4,780 | )                  |  |   | (13,021 | )
|                                                   |  |                       |        |                    |  |   |         |  
|Unpaid principal balance at September 30,
    2003 |  | $                     | 30,637 |                    |  | $ | 30,637  |  
|                                                   |  |                       |        |                    |  |   |         |  

The capitalized value of MSRs totaled
$406.9 million as of September 30, 2003 and
$300.5 million as of December 31, 2002, reflecting an
increase of $106.4 million. The table below shows the
activity in MSRs:

|                                         |  |                        |         |                   |  |          |         |               |  |               |         |   |  |   |         |   |  |   |          |  
|---------------------------------------- |  | ---------------------- | ------- | ----------------- |  | -------- | ------- | ------------- |  | ------------- | ------- | - |  | - | ------- | - |  | - | -------- | -
|                                         |  |                        |         |                  
|                                         |  | Three Months Ended     |         | Nine Months Ended
|                                         |  |                        |         |                  
|                                         |  | September 30,          |         | September 30,     |  | June 30, |         | September 30, |  | September 30,
|                                         |  | 2003                   |         | 2002              |  | 2003     |         | 2003          |  | 2002         
|                                         |  |                        |         |                   |  |          |         |               |  |              
|                                         |  |                       
|                                         |  | (Dollars in thousands)
|Balance at beginning of period           |  | $                      | 335,727 |                   |  | $        | 316,779 |               |  | $             | 343,544 |   |  | $ | 300,539 |   |  | $ | 321,316  |  
|Additions                                |  |                        | 98,928  |                   |  |          | 53,100  |               |  |               | 73,732  |   |  |   | 240,402 |   |  |   | 178,241  |  
|Transfers to agency interest-only strips |  |                        | (29,499 | )                 |  |          |        |               |  |               | (17,812 | ) |  |   | (47,311 | ) |  |   | (66,288  | )
|Clean-up calls exercised                 |  |                        | (2,546  | )                 |  |          |        |               |  |               | (1,481  | ) |  |   | (6,502  | ) |  |   |         |  
|Scheduled amortization                   |  |                        | (22,559 | )                 |  |          | (15,657 | )             |  |               | (21,832 | ) |  |   | (65,541 | ) |  |   | (51,468  | )
|Valuation/impairment                     |  |                        | 26,866  |                   |  |          | (76,181 | )             |  |               | (40,424 | ) |  |   | (14,670 | ) |  |   | (103,760 | )
|                                         |  |                        |         |                   |  |          |         |               |  |               |         |   |  |   |         |   |  |   |          |  
|Balance at end of period                 |  | $                      | 406,917 |                   |  | $        | 278,041 |               |  | $             | 335,727 |   |  | $ | 406,917 |   |  | $ | 278,041  |  
|                                         |  |                        |         |                   |  |          |         |               |  |               |         |   |  |   |         |   |  |   |          |  

Each quarter, we evaluate the MSRs for impairment
in accordance with SFAS No. 140, Accounting
for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities.We first stratify our
MSRs based on predominant risk characteristics, underlying loan
type, interest rate type, and interest rate band. Then, for each
stratum, we determine the fair value of MSRs using our valuation
models, which are periodically validated by third party opinions
of value. If the carrying value exceeds the fair value by
individual stratum, a valuation allowance is recorded as a
charge to service fee income in current earnings. However, if
such impairment is determined to be other-than-temporary and the
recoverability of the value is remote, we recognize a direct
write-down. Unlike a valuation allowance, a direct write-down
permanently reduces the carrying value of the MSR asset and the
related valuation allowance, precluding subsequent reversals. As
of September 30, 2003, the valuation allowance on MSRs
totaled $75.5 million.

As of October 1, 2003, we made certain
changes to our MSR stratification to better reflect the
predominant risk characteristics of the portfolio as a result of
the change in the portfolio during the historic refinance boom.
We will evaluate the MSRs for impairment based on this new
stratification prospectively. There was no earning impact at the
date of restratification.

28



---



##### Table of Contents



AAA-Rated Securities and Agency
Interest-Only Strips and Residuals

We evaluate the carrying value of our AAA-rated
securities and agency interest-only strips and residual
securities by discounting estimated net future cash flows. For
these securities, estimated net future cash flows are primarily
based on assumptions related to prepayment speeds, in addition
to expected credit loss assumptions on the residual and
non-investment grade securities.

A summary of the activity in the AAA-rated
securities and agency interest-only strips and residual
securities portfolios for the three and nine months ended
September 30, 2003 and 2002 and for the three months ended
June 30, 2003, follows:

|                                                          |                                           |                        |   |                   |   |          |   |               |   |               |   |         |   |  |   |         |   |  |   |         |  
|--------------------------------------------------------- | ----------------------------------------- | ---------------------- | - | ----------------- | - | -------- | - | ------------- | - | ------------- | - | ------- | - |  | - | ------- | - |  | - | ------- | -
|                                                          |                                           |                        |   |                  
|                                                          |                                           | Three Months Ended     |   | Nine Months Ended
|                                                          |                                           |                        |   |                  
|                                                          |                                           | September 30,          |   | September 30,     |   | June 30, |   | September 30, |   | September 30,
|                                                          |                                           | 2003                   |   | 2002              |   | 2003     |   | 2003          |   | 2002         
|                                                          |                                           |                        |   |                   |   |          |   |               |   |              
|                                                          |                                           |                       
|                                                          |                                           | (Dollars in thousands)
|AAA-rated securities and agency interest-only
    strips: |                                           |                        |   |                   |   |          |   |               |   |               |   |         |   |  |   |         |   |  |   |        
|                                                          | Beginning balance                         |                        | $ | 135,264           |   |          | $ | 232,154       |   |               | $ | 156,212 |   |  | $ | 187,060 |   |  | $ | 211,104 |  
|                                                          | Retained investments from securitizations |                        |   | 11,065            |   |          |   | 16,424        |   |               |   | 12,017  |   |  |   | 36,498  |   |  |   | 18,516  |  
|                                                          | Transfers from MSRs                       |                        |   | 29,499            |   |          |   |              |   |               |   | 17,812  |   |  |   | 47,311  |   |  |   | 66,288  |  
|                                                          | Clean-up calls exercised                  |                        |   | (7,272            | ) |          |   |              |   |               |   | (7,077  | ) |  |   | (26,397 | ) |  |   |        |  
|                                                          | Cash received, net of accretion           |                        |   | (12,496           | ) |          |   | (15,767       | ) |               |   | (13,629 | ) |  |   | (40,196 | ) |  |   | (37,119 | )
|                                                          | Valuation losses before hedges            |                        |   | (802              | ) |          |   | (43,287       | ) |               |   | (30,071 | ) |  |   | (49,018 | ) |  |   | (69,265 | )
|                                                          |                                           |                        |   |                   |   |          |   |               |   |               |   |         |   |  |   |         |   |  |   |        
|                                                          | Ending balance                            |                        | $ | 155,258           |   |          | $ | 189,524       |   |               | $ | 135,264 |   |  | $ | 155,258 |   |  | $ | 189,524 |  
|                                                          |                                           |                        |   |                   |   |          |   |               |   |               |   |         |   |  |   |         |   |  |   |        
|Residual securities:                                      |                                           |                        |   |                   |   |          |   |               |   |               |   |         |   |  |   |         |   |  |   |        
|                                                          | Beginning balance                         |                        | $ | 66,031            |   |          | $ | 67,992        |   |               | $ | 77,998  |   |  | $ | 78,740  |   |  | $ | 43,123  |  
|                                                          | Retained investments from securitizations |                        |   | 3,935             |   |          |   | 37,501        |   |               |   | 112     |   |  |   | 18,673  |   |  |   | 69,054  |  
|                                                          | Sales                                     |                        |   |                  |   |          |   |              |   |               |   |        |   |  |   | (10,525 | ) |  |   |        |  
|                                                          | Cash received, net of accretion           |                        |   | (8,185            | ) |          |   | (7,729        | ) |               |   | (6,189  | ) |  |   | (21,239 | ) |  |   | (16,159 | )
|                                                          | Valuation losses before hedges            |                        |   | (7,038            | ) |          |   | (3,531        | ) |               |   | (5,890  | ) |  |   | (10,906 | ) |  |   | (1,785  | )
|                                                          |                                           |                        |   |                   |   |          |   |               |   |               |   |         |   |  |   |         |   |  |   |        
|                                                          | Ending balance                            |                        | $ | 54,743            |   |          | $ | 94,233        |   |               | $ | 66,031  |   |  | $ | 54,743  |   |  | $ | 94,233  |  
|                                                          |                                           |                        |   |                   |   |          |   |               |   |               |   |         |   |  |   |         |   |  |   |        

Valuation of Servicing-Related
Assets

AAA-rated securities and agency interest-only
strips and residual securities are recorded at fair market
value. MSRs are subject to lower of cost or market limitations.
We determine the fair value of MSRs using our valuation models,
which are periodically validated by third party opinions of
value. Relevant information and assumptions used to value the
Companys servicing related assets at September 30,
2003, June 30, 2003 and December 31, 2002 are shown
below:

|                                                         |  |                        |         |                       |  |           |            |              |  |            |      |          |  |            |      |            |  |           |      |              |  |  |      |  |  |  |      |   |  |  |      |   |  |  |      |   |  |  |     |  
|-------------------------------------------------------- |  | ---------------------- | ------- | --------------------- |  | --------- | ---------- | ------------ |  | ---------- | ---- | -------- |  | ---------- | ---- | ---------- |  | --------- | ---- | ------------ |  |  | ---- |  |  |  | ---- | - |  |  | ---- | - |  |  | ---- | - |  |  | --- | -
|                                                         |  |                        |         |                      
|                                                         |  | Actual                 |         | Valuation Assumptions
|                                                         |  |                        |         |                      
|                                                         |  |                        |         | Gross Wtd.            |  | Servicing |            | 3-Month      |  | Weighted   |      | Lifetime |  | 3-Month    |      |            |  | Remaining
|                                                         |  | Book                   |         | Collateral            |  | Average   |            | Fee/Interest |  | Prepayment |      | Average  |  | Prepayment |      | Prepayment |  | Discount  |      | Cumulative  
|                                                         |  | Value                  |         | Balance               |  | Coupon    |            | Strip        |  | Speeds     |      | Multiple |  | Speeds(1)  |      | Speeds(1)  |  | Yield     |      | Loss Rate(2)
|                                                         |  |                        |         |                       |  |           |            |              |  |            |      |          |  |            |      |            |  |           |      |             
|                                                         |  |                       
|                                                         |  | (Dollars in thousands)
|September 30, 2003                                       |  |                        |         |                       |  |           |            |              |  |            |      |          |  |            |      |            |  |           |      |              |  |  |      |  |  |  |      |   |  |  |      |   |  |  |      |   |  |  |     |  
|AAA-rated securities and agency interest-only
    strips |  | $                      | 155,258 |                       |  | $         | 15,442,718 |              |  |            | 7.01 | %        |  |            | 0.39 | %          |  |           | 45.6 | %            |  |  | 2.58 |  |  |  | 19.6 | % |  |  | 39.1 | % |  |  | 9.2  | % |  |  | N/A |  
|                                                         |  |                        |         |                       |  |           |            |              |  |            |      |          |  |            |      |            |  |           |      |              |  |  |      |  |  |  |      |   |  |  |      |   |  |  |      |   |  |  |     |  
|Prime residual securities                                |  | $                      | 22,778  |                       |  | $         | 2,932,148  |              |  |            | 7.14 | %        |  |            | 0.85 | %          |  |           | 69.9 | %            |  |  | 0.91 |  |  |  | 26.1 | % |  |  | 40.8 | % |  |  | 15.3 | % |  |  | 0.6 | %
|Subprime residual securities                             |  |                        | 31,965  |                       |  | $         | 1,477,988  |              |  |            | 8.76 | %        |  |            | 4.25 | %          |  |           | 42.6 | %            |  |  | 0.51 |  |  |  | 33.5 | % |  |  | 28.9 | % |  |  | 23.6 | % |  |  | 2.4 | %
|                                                         |  |                        |         |                       |  |           |            |              |  |            |      |          |  |            |      |            |  |           |      |              |  |  |      |  |  |  |      |   |  |  |      |   |  |  |      |   |  |  |     |  
|Total noninvestment grade residual securities            |  | $                      | 54,743  |                       |  |           |            |              |  |            |      |          |  |            |      |            |  |           |      |              |  |  |      |  |  |  |      |   |  |  |      |   |  |  |      |   |  |  |     |  
|                                                         |  |                        |         |                       |  |           |            |              |  |            |      |          |  |            |      |            |  |           |      |              |  |  |      |  |  |  |      |   |  |  |      |   |  |  |      |   |  |  |     |  
|MSRs(3)(4)                                               |  | $                      | 406,917 |                       |  | $         | 30,636,605 |              |  |            | 6.67 | %        |  |            | 0.32 | %          |  |           | 50.5 | %            |  |  | 4.15 |  |  |  | 19.6 | % |  |  | 38.4 | % |  |  | 10.1 | % |  |  | N/A |  
|                                                         |  |                        |         |                       |  |           |            |              |  |            |      |          |  |            |      |            |  |           |      |              |  |  |      |  |  |  |      |   |  |  |      |   |  |  |      |   |  |  |     |  

29



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##### Table of Contents



|                  |                                                          |                        |   |                       |  |           |   |              |  |            |  |          |   |            |  |            |   |           |  |              |   |  |  |      |  |  |  |      |   |  |  |      |   |  |  |      |   |  |  |     |  
|----------------- | -------------------------------------------------------- | ---------------------- | - | --------------------- |  | --------- | - | ------------ |  | ---------- |  | -------- | - | ---------- |  | ---------- | - | --------- |  | ------------ | - |  |  | ---- |  |  |  | ---- | - |  |  | ---- | - |  |  | ---- | - |  |  | --- | -
|                  |                                                          |                        |   |                      
|                  |                                                          | Actual                 |   | Valuation Assumptions
|                  |                                                          |                        |   |                      
|                  |                                                          |                        |   | Gross Wtd.            |  | Servicing |   | 3-Month      |  | Weighted   |  | Lifetime |   | 3-Month    |  |            |   | Remaining
|                  |                                                          | Book                   |   | Collateral            |  | Average   |   | Fee/Interest |  | Prepayment |  | Average  |   | Prepayment |  | Prepayment |   | Discount  |  | Cumulative  
|                  |                                                          | Value                  |   | Balance               |  | Coupon    |   | Strip        |  | Speeds     |  | Multiple |   | Speeds(1)  |  | Speeds(1)  |   | Yield     |  | Loss Rate(2)
|                  |                                                          |                        |   |                       |  |           |   |              |  |            |  |          |   |            |  |            |   |           |  |             
|                  |                                                          |                       
|                  |                                                          | (Dollars in thousands)
|June 30, 2003     |                                                          |                        |   |                       |  |           |   |              |  |            |  |          |   |            |  |            |   |           |  |              |   |  |  |      |  |  |  |      |   |  |  |      |   |  |  |      |   |  |  |    
|                  | AAA-rated securities and agency interest-only
    strips |                        | $ | 135,264               |  |           | $ | 14,684,652   |  |            |  | 7.30     | % |            |  | 0.44       | % |           |  | 42.5         | % |  |  | 2.09 |  |  |  | 24.5 | % |  |  | 51.3 | % |  |  | 7.6  | % |  |  | N/A |  
|                  |                                                          |                        |   |                       |  |           |   |              |  |            |  |          |   |            |  |            |   |           |  |              |   |  |  |      |  |  |  |      |   |  |  |      |   |  |  |      |   |  |  |    
|                  | Prime residual securities                                |                        | $ | 32,211                |  |           | $ | 3,422,320    |  |            |  | 7.22     | % |            |  | 1.24       | % |           |  | 55.3         | % |  |  | 0.76 |  |  |  | 24.8 | % |  |  | 53.9 | % |  |  | 15.2 | % |  |  | 0.5 | %
|                  | Subprime residual securities                             |                        |   | 33,820                |  |           | $ | 1,430,135    |  |            |  | 9.24     | % |            |  | 4.20       | % |           |  | 37.9         | % |  |  | 0.56 |  |  |  | 33.2 | % |  |  | 34.4 | % |  |  | 22.7 | % |  |  | 2.5 | %
|                  |                                                          |                        |   |                       |  |           |   |              |  |            |  |          |   |            |  |            |   |           |  |              |   |  |  |      |  |  |  |      |   |  |  |      |   |  |  |      |   |  |  |    
|                  | Total non-investment grade residual securities           |                        | $ | 66,031                |  |           |   |              |  |            |  |          |   |            |  |            |   |           |  |              |   |  |  |      |  |  |  |      |   |  |  |      |   |  |  |      |   |  |  |     |  
|                  |                                                          |                        |   |                       |  |           |   |              |  |            |  |          |   |            |  |            |   |           |  |              |   |  |  |      |  |  |  |      |   |  |  |      |   |  |  |      |   |  |  |    
|                  | MSRs(3)                                                  |                        | $ | 335,727               |  |           | $ | 29,858,219   |  |            |  | 6.97     | % |            |  | 0.33       | % |           |  | 46.6         | % |  |  | 3.41 |  |  |  | 25.6 | % |  |  | 48.6 | % |  |  | 9.1  | % |  |  | N/A |  
|                  |                                                          |                        |   |                       |  |           |   |              |  |            |  |          |   |            |  |            |   |           |  |              |   |  |  |      |  |  |  |      |   |  |  |      |   |  |  |      |   |  |  |    
|December 31, 2002 |                                                          |                        |   |                       |  |           |   |              |  |            |  |          |   |            |  |            |   |           |  |              |   |  |  |      |  |  |  |      |   |  |  |      |   |  |  |      |   |  |  |    
|                  | AAA-rated securities and agency interest-only
    strips |                        | $ | 187,060               |  |           | $ | 14,214,229   |  |            |  | 7.77     | % |            |  | 0.53       | % |           |  | 38.5         | % |  |  | 2.48 |  |  |  | 23.6 | % |  |  | 39.7 | % |  |  | 8.7  | % |  |  | N/A |  
|                  |                                                          |                        |   |                       |  |           |   |              |  |            |  |          |   |            |  |            |   |           |  |              |   |  |  |      |  |  |  |      |   |  |  |      |   |  |  |      |   |  |  |    
|                  | Prime residual securities                                |                        | $ | 33,400                |  |           | $ | 2,968,794    |  |            |  | 7.51     | % |            |  | 1.44       | % |           |  | 35.5         | % |  |  | 0.78 |  |  |  | 18.9 | % |  |  | 40.3 | % |  |  | 15.2 | % |  |  | 0.7 | %
|                  | Subprime residual securities                             |                        |   | 45,340                |  |           | $ | 1,968,041    |  |            |  | 9.54     | % |            |  | 4.21       | % |           |  | 30.3         | % |  |  | 0.55 |  |  |  | 32.1 | % |  |  | 35.0 | % |  |  | 27.1 | % |  |  | 2.8 | %
|                  |                                                          |                        |   |                       |  |           |   |              |  |            |  |          |   |            |  |            |   |           |  |              |   |  |  |      |  |  |  |      |   |  |  |      |   |  |  |      |   |  |  |    
|                  | Total non-investment grade residual securities           |                        | $ | 78,740                |  |           |   |              |  |            |  |          |   |            |  |            |   |           |  |              |   |  |  |      |  |  |  |      |   |  |  |      |   |  |  |      |   |  |  |     |  
|                  |                                                          |                        |   |                       |  |           |   |              |  |            |  |          |   |            |  |            |   |           |  |              |   |  |  |      |  |  |  |      |   |  |  |      |   |  |  |      |   |  |  |    
|                  | MSRs                                                     |                        | $ | 300,539               |  |           | $ | 28,375,897   |  |            |  | 7.56     | % |            |  | 0.33       | % |           |  | 40.7         | % |  |  | 3.21 |  |  |  | 22.0 | % |  |  | 36.3 | % |  |  | 9.5  | % |  |  | N/A |  
|                  |                                                          |                        |   |                       |  |           |   |              |  |            |  |          |   |            |  |            |   |           |  |              |   |  |  |      |  |  |  |      |   |  |  |      |   |  |  |      |   |  |  |    



---



|    |                                                                                                                                                                                                                                                                                                                                                                               
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Assumed prepayment speeds are higher in the short
    term and lower in the long term based on the market forward
    curve for interest rates rising over the life of the asset.                                                                                                                                                                                             
|   
|(2) | As a percentage of the original pool balance, the
    actual cumulative loss rate to date totaled 0.04% and 1.27% for
    prime and subprime residuals, respectively, at
    September 30, 2003.                                                                                                                                                                              
|   
|(3) | At September 30, 2003, the capitalized
    servicing asset includes servicing of $30.6 billion of
    loans serviced by us. In addition to the primary servicing of
    $30.6 billion in loans, we also service $5.2 billion
    of IndyMac-owned loans and loans subserviced for others on an
    interim basis for a total primary servicing portfolio of
    $35.2 billion.

The lifetime prepayment speeds represent the
annual constant prepayment rate (CPR) we estimate
for the remaining life of the collateral supporting the asset.
For MSRs and AAA-rated securities and agency interest-only
strips, we project prepayment rates using four-factor prepayment
models which incorporate relative weighted average note rate,
seasoning, seasonality and burn-out of the pool of loans
relative to expectations of future rates implied by the market
forward LIBOR/swap curve.

The weighted average multiple for MSRs, AAA-rated
securities and agency interest-only strips and residual
securities represents the book value divided by the product of
collateral balance and servicing fee/interest strip. While the
weighted average life of such assets is a function of the
undiscounted cash flows, the multiple is a function of the
discounted cash flows. With regard to AAA-rated securities and
agency interest-only strips, the marketplace frequently uses
calculated multiples to assess the overall impact valuation
assumptions have on value. Collateral type, coupon, loan age and
the size of the interest strip must be considered when comparing
these multiples. The mix of collateral types supporting
servicing-related assets is primarily non-conforming/
conventional, which may make comparisons of the Companys
MSR multiples misleading relative to peer multiples whose
product mix is different.

Lifetime prepayment assumptions for AAA-rated
securities and agency interest-only strips and MSRs decreased at
September 30, 2003 compared to June 30, 2003, while
the lifetime prepayment assumption for prime and subprime
residuals increased slightly. The increase in prepayment
assumption for prime and subprime residuals was the result of
higher actual prepayment speeds compared to June 30, 2003.
The lifetime prepayment speeds for AAA-rated securities and
agency interest-only strips and MSRs are expected to be lower as
the interest rates rise. Discount yields increased at
September 30, 2003 as compared to June 30, 2003 also
reflecting the rise in interest rates and increase in expected
lives.

Hedging Interest Rate Risk on
Servicing-Related Assets

With respect to the investment in
servicing-related assets (AAA-rated securities and agency
interest-only strips, non-investment grade residual securities
and MSRs), the Company is exposed to interest rate risk as a

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result of other than predicted prepayment of
loans. Our Investment Portfolio Group is responsible for the
management of interest rate and prepayment risks in the
investment portfolio, subject to policies and procedures
established by, and oversight from, our management level Asset
and Liability Committee (ALCO) and Board of
Directors level ALCO.


The objective of our hedging strategy is to
mitigate the impact of changes in interest rates on the net
economic value of the balance sheet and quarterly earnings, not
to speculate on interest rates. As such, we manage the
comprehensive interest rate risk of our servicing-related assets
using financial instruments and our portfolio retention efforts.
Historically, we have hedged servicing-related assets using a
mix of securities on balance sheet, such as AAA-rated
principal-only securities, buying and/or selling mortgage-backed
or U.S. Treasury securities, as well as derivatives such as
futures, floors, swaps, or options. Recently, clean-up call
revenues and retention programs have also been added to our
overall hedging program. As there are no hedge instruments that
would be perfectly correlated with these hedged assets, we use a
mix of the above instruments designed to correlate well with the
hedged assets.

During 2003, interest rates remained extremely
volatile, reaching historic lows in mid June and abruptly
reversing during the third quarter. During the first half of
2003, valuation losses of $93.6 million were offset by
hedging gains and net interest on hedging instruments totaling
$74.6 million. During the third quarter of 2003, valuation
gains recorded as a result of decelerated prepayments on the
servicing-related assets totaled $19.0 million. In addition
to these gains, $3.1 million of net interest income was
earned on the hedging instruments. These gains were offset by
$43.5 million of losses on financial instruments utilized
to hedge the interest rate risk on the servicing-related assets.

As shown in the segment disclosures on
page 12, the overall returns for the servicing-related
assets were essentially flat, as clean-up call gains and
portfolio retention efforts offset net hedging losses.

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The following breaks out the components of
service fee income and the gain on mortgage-backed securities,
net.

|                               |                                                                                                                                                        |                                                          |   |                   |         |          |   |               |       |               |   |         |        |   |   |         |         |   |   |          |        | 
|------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------ | -------------------------------------------------------- | - | ----------------- | ------- | -------- | - | ------------- | ----- | ------------- | - | ------- | ------ | - | - | ------- | ------- | - | - | -------- | ------ | 
|                               |                                                                                                                                                        |                                                          |   |                  
|                               |                                                                                                                                                        | Three Months Ended                                       |   | Nine Months Ended
|                               |                                                                                                                                                        |                                                          |   |                  
|                               |                                                                                                                                                        | September 30,                                            |   | September 30,     |         | June 30, |   | September 30, |       | September 30,
|                               |                                                                                                                                                        | 2003                                                     |   | 2002              |         | 2003     |   | 2003          |       | 2002         
|                               |                                                                                                                                                        |                                                          |   |                   |         |          |   |               |       |              
|                               |                                                                                                                                                        |                                                         
|                               |                                                                                                                                                        | (Dollars in thousands)                                  
|Service fee income:            |                                                                                                                                                        |                                                          |   |                   |         |          |   |               |       |               |   |         |        |   |   |         |         |   |   |         
|                               | Gross service fee income                                                                                                                               |                                                          | $ | 28,007            |         |          | $ | 21,181        |       |               | $ | 25,510  |        |   | $ | 77,574  |         |   | $ | 73,168   |       
|                               | Amortization                                                                                                                                           |                                                          |   | (22,559           | )       |          |   | (15,657       | )     |               |   | (21,832 | )      |   |   | (65,541 | )       |   |   | (51,469  | )     
|                               |                                                                                                                                                        |                                                          |   |                   |         |          |   |               |       |               |   |         |        |   |   |         |         |   |   |         
|                               | Service fee income net of amortization                                                                                                                 |                                                          |   | 5,448             |         |          |   | 5,524         |       |               |   | 3,678   |        |   |   | 12,033  |         |   |   | 21,699   |       
|                               | Valuation adjustments on MSRs                                                                                                                          |                                                          |   | 26,866            |         |          |   | (76,181       | )     |               |   | (40,424 | )      |   |   | (14,670 | )       |   |   | (103,760 | )     
|                               | Hedges (losses) gains                                                                                                                                  |                                                          |   | (43,427           | )       |          |   | 74,250        |       |               |   | 35,345  |        |   |   | (7,493  | )       |   |   | 99,880   |       
|                               |                                                                                                                                                        |                                                          |   |                   |         |          |   |               |       |               |   |         |        |   |   |         |         |   |   |         
|                               |                                                                                                                                                        | Total service fee (expense) income                       |   | $                 | (11,113 | )        |   | $             | 3,593 |               |   | $       | (1,401 | ) |   | $       | (10,130 | ) |   | $        | 17,819 | 
|                               |                                                                                                                                                        |                                                          |   |                   |         |          |   |               |       |               |   |         |        |   |   |         |         |   |   |         
|Net (loss) gain on securities: |                                                                                                                                                        |                                                          |   |                   |         |          |   |               |       |               |   |         |        |   |   |         |         |   |   |         
|                               | Realized gain on available-for-sale securities                                                                                                         |                                                          | $ |                  |         |          | $ |              |       |               | $ | 2,022   |        |   | $ | 2,022   |         |   | $ | 7,478    |       
|                               | Impairment on available-for-sale securities                                                                                                            |                                                          |   | (745              | )       |          |   |              |       |               |   | (808    | )      |   |   | (2,135  | )       |   |   | (2,431   | )     
|                               | Unrealized loss on AAA-rated securities and
    agency interest only strips and residual securities                                                    |                                                          |   | (7,840            | )       |          |   | (43,287       | )     |               |   | (35,962 | )      |   |   | (59,924 | )       |   |   | (69,265  | )     
|                               | Transfer of residual securities to trading
    classification                                                                                          |                                                          |   |                  |         |          |   | 5,492         |       |               |   |        |        |   |   |        |         |   |   | 5,492    |       
|                               | Transfer of instruments used to hedge AAA IOs and
    residual securities to trading                                                                   |                                                          |   |                  |         |          |   | 1,127         |       |               |   |        |        |   |   |        |         |   |   | 1,127    |       
|                               | Net (loss) gain on securities and other
    instruments used to hedge AAA-rated securities and agency
    interest-only strips and residual securities |                                                          |   | (62               | )       |          |   | 44,342        |       |               |   | 25,490  |        |   |   | 35,221  |         |   |   | 60,986   |       
|                               |                                                                                                                                                        |                                                          |   |                   |         |          |   |               |       |               |   |         |        |   |   |         |         |   |   |         
|                               |                                                                                                                                                        | Total (loss) gain on mortgage-backed
    securities, net |   | $                 | (8,647  | )        |   | $             | 7,674 |               |   | $       | (9,258 | ) |   | $       | (24,816 | ) |   | $        | 3,387  | 
|                               |                                                                                                                                                        |                                                          |   |                   |         |          |   |               |       |               |   |         |        |   |   |         |         |   |   |         

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Construction Lending

IndyMac provides construction financing for
individual consumers who are in the process of building their
own home (consumer construction) and for residential subdivision
developers (builder construction). With respect to consumer
construction, the primary product is a construction-to-permanent
residential mortgage loan. This product provides financing for
the 9-12 month term of construction and automatically
converts to a permanent mortgage loan at the end of
construction. As a result, this product represents a hybrid
activity between our portfolio lending activities and mortgage
banking activities. The Company earns net interest income during
the construction phase. When the loan converts to permanent
status the loan is transferred into the Companys pipeline
of mortgage loans held for sale. These loans are typically
fixed-rate loans. Consumer construction loan origination grew
10% over the second quarter 2003, consistent with seasonal
increases in single-family residence construction, and 36% over
the same quarter of 2002. Increases in both origination channels
(B2B and B2C) were driven by growth in active customers and
marketing leads. The cost of funding an HCL construction loan
increased 7% from the same quarter of 2002. Consumer
construction loans outstanding at September 30, 2003 were
$1,094 million, up 25.0% compared to the amount at
December 31, 2002.

With respect to builder construction loans, our
activities have been increasingly focused on those homebuilders
that provide our mortgage loans to their customers when they
sell the completed residence. New production is limited to nine
states for new commitments (California, Illinois, Nevada, Utah,
Arizona, Colorado, Washington, Oregon and Florida). Builder
construction loans are typically based on prime rates. Builder
loans outstanding, including construction and land and other
mortgage loans, declined $65.2 million or 10.8% as compared
to December 31, 2002. Commitments related to these
outstanding loans declined $106.8 million or 9.7% over the
same period. This decline is the result of loan payoffs
exceeding new production and is expected to continue through the
fourth quarter 2003. A substantial portion of our builder
construction loans carries the guarantee of the builder.

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The following tables present further information
on our construction loan portfolios.

|                                     |  |                        |           |                   |  |              |         |              |  |   |           |   |  |   |           |  
|------------------------------------ |  | ---------------------- | --------- | ----------------- |  | ------------ | ------- | ------------ |  | - | --------- | - |  | - | --------- | -
|                                     |  |                       
|                                     |  | As of                 
|                                     |  |                       
|                                     |  |                        |           |                  
|                                     |  | September 30, 2003     |           | December 31, 2002
|                                     |  |                        |           |                  
|                                     |  | Consumer               |           | Builder           |  | Consumer     |         | Builder     
|                                     |  | Construction           |           | Construction      |  | Construction |         | Construction
|                                     |  | Loans                  |           | Loans             |  | Loans        |         | Loans       
|                                     |  |                        |           |                   |  |              |         |             
|                                     |  |                       
|                                     |  | (Dollars in thousands)
|Construction loans                   |  | $                      | 1,093,918 |                   |  | $            | 446,413 |              |  | $ | 875,335   |   |  | $ | 482,408   |  
|Land and other mortgage loans        |  | $                      | 182,002   |                   |  | $            | 93,875  |              |  | $ | 81,885    |   |  | $ | 123,066   |  
|Outstanding commitments              |  | $                      | 2,079,394 |                   |  | $            | 997,323 |              |  | $ | 1,531,011 |   |  | $ | 1,104,160 |  
|Average construction loan commitment |  | $                      | 378       |                   |  | $            | 2,415   |              |  | $ | 415       |   |  | $ | 1,982     |  
|Non-performing loans                 |  |                        | 0.70      | %                 |  |              | 2.20    | %            |  |   | 1.08      | % |  |   | 2.92      | %
|Yield                                |  |                        | 6.20      | %                 |  |              | 6.47    | %            |  |   | 7.13      | % |  |   | 7.06      | %
|Fixed-rate loans                     |  |                        | 94        | %                 |  |              | 0       | %            |  |   | 94        | % |  |   | 1         | %
|Adjustable-rate loans                |  |                        | 0         | %                 |  |              | 98      | %            |  |   | 0         | % |  |   | 96        | %
|Hybrid adjustable-rate loans         |  |                        | 6         | %                 |  |              | 2       | %            |  |   | 6         | % |  |   | 3         | %

Additional Information as of
September 30, 2003

|                               |                               |              |     |     |   |              |                               |  |     |     |  
|------------------------------ | ----------------------------- | ------------ | --- | --- | - | ------------ | ----------------------------- |  | --- | --- | -
|                               |                               | Consumer     |     |     |   | Builder     
|                               |                               | Construction |     |     |   | Construction
|                               |                               | Loans        |     |     |   | Loans       
|                               |                               |              |     |     |   |             
|Average loan to value ratio(1) |                               |              | 74  | %   |   |              |                               |  | 71  | %  
|Average FICO score(2)          |                               |              | 707 |     |   |              |                               |  | N/A |    
|Geographic distribution(3)     |                               |              |     |     |   |              |                               |  |     |    
|                               | Southern California           |              |     | 31  | % |              | Southern California           |  |     | 41  | %
|                               | Northern California           |              |     | 20  | % |              | Northern California           |  |     | 28  | %
|                               | New York                      |              |     | 6   | % |              | Illinois                      |  |     | 15  | %
|                               | Hawaii                        |              |     | 4   | % |              | Colorado                      |  |     | 3   | %
|                               | Florida                       |              |     | 3   | % |              | Texas                         |  |     | 2   | %
|                               | Colorado                      |              |     | 3   | % |              | Nevada                        |  |     | 2   | %
|                               | New Jersey                    |              |     | 3   | % |              |                               |  |     |     |  
|                               | Nevada                        |              |     | 3   | % |              |                               |  |     |     |  
|                               | Washington                    |              |     | 2   | % |              |                               |  |     |     |  
|                               | Connecticut                   |              |     | 2   | % |              |                               |  |     |     |  
|                               | Other (each individually< 2%) |              |     | 23  | % |              | Other (each individually< 2%) |  |     | 9   | %
|                               |                               |              |     |     |   |              |                               |  |     |    
|                               | Total Consumer Construction   |              |     | 100 | % |              | Total Builder Construction    |  |     | 100 | %
|                               |                               |              |     |     |   |              |                               |  |     |    



---



|    |                                                                                                                                                                    
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The average loan to value ratio is based on the
    estimated appraised value of the completed project compared to
    the commitment amount at September 30, 2003.
|   
|(2) | FICO scores are not calculated for corporate
    entities and, therefore, are not applicable to the builder
    construction portfolio.                            
|   
|(3) | Geographic distribution is based on outstanding
    balances. Some projects are continuing to be built out in states
    in which we no longer solicit new loans.  

For information related to the Companys
balance of non-performing assets and related credit reserves,
see discussion in Credit Risk and Reserves at
page 40.

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HELOC Portfolio

The following table presents information on our
HELOCs as of September 30, 2003, June 30, 2003, and
December 31, 2002. All HELOC loans are adjustable rate
loans and indexed to the prime rate.

|                           |  |                        |         |          |  |              |         |   |  |   |         |  
|-------------------------- |  | ---------------------- | ------- | -------- |  | ------------ | ------- | - |  | - | ------- | -
|                           |  | September 30,          |         | June 30, |  | December 31,
|                           |  | 2003                   |         | 2003     |  | 2002        
|                           |  |                        |         |          |  |             
|                           |  |                       
|                           |  | (Dollars in thousands)
|Outstanding book value     |  | $                      | 587,364 |          |  | $            | 485,471 |   |  | $ | 312,881 |  
|Outstanding commitments(1) |  | $                      | 999,701 |          |  | $            | 763,504 |   |  | $ | 459,537 |  
|Average spread over prime  |  |                        | 1.94    | %        |  |              | 1.97    | % |  |   | 1.78    | %
|Average FICO score         |  |                        | 712     |          |  |              | 712     |   |  |   | 711     |  
|Average CLTV ratio(2)      |  |                        | 77      | %        |  |              | 77      | % |  |   | 78      | %

Additional Information as of
September 30, 2003

|                 |       |                        |         |              |  |                |    |         |  |             |      |   |  |  |     |  |  |  |      |   | 
|---------------- | ----- | ---------------------- | ------- | ------------ |  | -------------- | -- | ------- |  | ----------- | ---- | - |  |  | --- |  |  |  | ---- | - | 
|                 |       | Total                  |         | Average Loan |  |                |    |         |  | 30+ Days   
|                 |       | Outstanding            |         | Commitment   |  | Average Spread |    | Average |  | Delinquency
|CLTV             |       | Book Value             |         | Balance      |  | Over Prime     |    | FICO    |  | Percentage 
|                 |       |                        |         |              |  |                |    |         |  |            
|                 |       |                       
|                 |       | (Dollars in thousands)
|>= 96% &< = 100% |       | $                      | 15,553  |              |  | $              | 47 |         |  |             | 4.39 | % |  |  | 723 |  |  |  | 0.55 | %
|>= 91% &< = 95%  |       |                        | 83,673  |              |  |                | 52 |         |  |             | 3.51 | % |  |  | 715 |  |  |  | 0.59 | %
|>= 81% &< = 90%  |       |                        | 233,597 |              |  |                | 51 |         |  |             | 2.31 | % |  |  | 695 |  |  |  | 0.59 | %
|>= 71% &< = 80%  |       |                        | 139,562 |              |  |                | 81 |         |  |             | 1.00 | % |  |  | 716 |  |  |  | 0.76 | %
|70%              |       |                        | 114,979 |              |  |                | 87 |         |  |             | 0.88 | % |  |  | 728 |  |  |  | 0.42 | %
|                 |       |                        |         |              |  |                |    |         |  |             |      |   |  |  |     |  |  |  |      |  
|                 | Total |                        | $       | 587,364      |  |                |    |         |  |             |      |   |  |  |     |  |  |  |      |   | 
|                 |       |                        |         |              |  |                |    |         |  |             |      |   |  |  |     |  |  |  |      |  



---



|    |                                                                                       
|--- | --------------------------------------------------------------------------------------
|(1) | On funded loans.                                                                      
|   
|(2) | The CLTV combines the loan to value on both the
    first mortgage loan and the HELOC.

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##### Table of Contents






NET INTEREST INCOME

The following table sets forth information
regarding our consolidated average balance sheets (Mortgage
Bank, Investment Portfolio and Consumer Bank are combined),
along with the total dollar amounts of interest income and
interest expense and the weighted average interest rates for the
periods presented. Average balances are calculated on a daily
basis. Non-performing loans are included in the average balances
for the periods presented. The allowance for loan losses is
excluded from the average loan balances.

|                                                         |                                            |                        |           |                    |  |               |        |         |  |          |      |       |   |         |           |           |  |       |        |         |  |  |      |      |   |   |           |            |  |   |        |         |  |  |      |      |  
|-------------------------------------------------------- | ------------------------------------------ | ---------------------- | --------- | ------------------ |  | ------------- | ------ | ------- |  | -------- | ---- | ----- | - | ------- | --------- | --------- |  | ----- | ------ | ------- |  |  | ---- | ---- | - | - | --------- | ---------- |  | - | ------ | ------- |  |  | ---- | ---- | -
|                                                         |                                            |                       
|                                                         |                                            | Three Months Ended    
|                                                         |                                            |                       
|                                                         |                                            |                        |           |                    |  |              
|                                                         |                                            | September 30, 2003     |           | September 30, 2002 |  | June 30, 2003
|                                                         |                                            |                        |           |                    |  |              
|                                                         |                                            | Average                |           |                    |  | Yield         |        | Average |  |          |      | Yield |   | Average |           |           |  | Yield
|                                                         |                                            | Balance                |           | Interest           |  | Rate          |        | Balance |  | Interest |      | Rate  |   | Balance |           | Interest  |  | Rate 
|                                                         |                                            |                        |           |                    |  |               |        |         |  |          |      |       |   |         |           |           |  |      
|                                                         |                                            |                       
|                                                         |                                            | (Dollars in thousands)
|Securities                                               |                                            | $                      | 1,665,884 |                    |  | $             | 20,436 |         |  |          | 4.87 | %     |   | $       | 2,004,520 |           |  | $     | 29,246 |         |  |  | 5.79 | %    |   | $ | 1,553,656 |            |  | $ | 16,111 |         |  |  | 4.16 | %   
|Loans held for sale                                      |                                            |                        | 4,043,670 |                    |  |               | 61,934 |         |  |          | 6.08 | %     |   |         | 2,425,306 |           |  |       | 40,395 |         |  |  | 6.61 | %    |   |   | 3,467,140 |            |  |   | 52,460 |         |  |  | 6.07 | %   
|Mortgage loans held for investment                       |                                            |                        | 3,473,840 |                    |  |               | 37,767 |         |  |          | 4.31 | %     |   |         | 1,521,289 |           |  |       | 23,318 |         |  |  | 6.08 | %    |   |   | 3,173,541 |            |  |   | 37,201 |         |  |  | 4.70 | %   
|Builder construction and income property                 |                                            |                        | 549,544   |                    |  |               | 8,977  |         |  |          | 6.48 | %     |   |         | 522,539   |           |  |       | 10,110 |         |  |  | 7.68 | %    |   |   | 570,944   |            |  |   | 9,768  |         |  |  | 6.86 | %   
|Consumer construction                                    |                                            |                        | 1,009,016 |                    |  |               | 15,592 |         |  |          | 6.13 | %     |   |         | 760,955   |           |  |       | 13,568 |         |  |  | 7.07 | %    |   |   | 899,204   |            |  |   | 14,639 |         |  |  | 6.53 | %   
|Investment in Federal Home Loan Bank stock and
    other |                                            |                        | 277,246   |                    |  |               | 2,633  |         |  |          | 3.77 | %     |   |         | 142,763   |           |  |       | 1,537  |         |  |  | 4.27 | %    |   |   | 244,552   |            |  |   | 2,298  |         |  |  | 3.77 | %   
|                                                         |                                            |                        |           |                    |  |               |        |         |  |          |      |       |   |         |           |           |  |       |        |         |  |  |      |      |   |   |           |            |  |   |        |         |  |  |      |     
|                                                         | Total interest-earning assets              |                        |           | 11,019,200         |  |               |        | 147,339 |  |          |      | 5.30  | % |         |           | 7,377,372 |  |       |        | 118,174 |  |  |      | 6.36 | % |   |           | 9,909,037  |  |   |        | 132,477 |  |  |      | 5.36 | %
|                                                         |                                            |                        |           |                    |  |               |        |         |  |          |      |       |   |         |           |           |  |       |        |         |  |  |      |      |   |   |           |            |  |   |        |         |  |  |      |     
|Other                                                    |                                            |                        | 1,105,794 |                    |  |               |        |         |  |          |      |       |   |         | 715,530   |           |  |       |        |         |  |  |      |      |   |   | 972,687   |            |  |   |        |         |  |  |      |     
|                                                         |                                            |                        |           |                    |  |               |        |         |  |          |      |       |   |         |           |           |  |       |        |         |  |  |      |      |   |   |           |            |  |   |        |         |  |  |      |     
|                                                         | Total assets                               |                        | $         | 12,124,994         |  |               |        |         |  |          |      |       |   |         | $         | 8,092,902 |  |       |        |         |  |  |      |      |   |   | $         | 10,881,724 |  |   |        |         |  |  |      |      |  
|                                                         |                                            |                        |           |                    |  |               |        |         |  |          |      |       |   |         |           |           |  |       |        |         |  |  |      |      |   |   |           |            |  |   |        |         |  |  |      |     
|Interest-bearing deposits                                |                                            | $                      | 3,336,257 |                    |  |               | 22,261 |         |  |          | 2.65 | %     |   | $       | 2,476,147 |           |  |       | 23,989 |         |  |  | 3.84 | %    |   | $ | 2,996,427 |            |  |   | 21,950 |         |  |  | 2.94 | %   
|Advances from Federal Home Loan Bank                     |                                            |                        | 4,094,698 |                    |  |               | 28,959 |         |  |          | 2.81 | %     |   |         | 2,068,865 |           |  |       | 26,635 |         |  |  | 5.11 | %    |   |   | 3,588,032 |            |  |   | 28,308 |         |  |  | 3.16 | %   
|Other borrowings                                         |                                            |                        | 2,434,027 |                    |  |               | 13,666 |         |  |          | 2.23 | %     |   |         | 2,032,547 |           |  |       | 17,175 |         |  |  | 3.35 | %    |   |   | 2,276,959 |            |  |   | 14,704 |         |  |  | 2.59 | %   
|                                                         |                                            |                        |           |                    |  |               |        |         |  |          |      |       |   |         |           |           |  |       |        |         |  |  |      |      |   |   |           |            |  |   |        |         |  |  |      |     
|                                                         | Total interest-bearing liabilities         |                        |           | 9,864,982          |  |               |        | 64,886  |  |          |      | 2.61  | % |         |           | 6,577,559 |  |       |        | 67,799  |  |  |      | 4.09 | % |   |           | 8,861,418  |  |   |        | 64,962  |  |  |      | 2.94 | %
|                                                         |                                            |                        |           |                    |  |               |        |         |  |          |      |       |   |         |           |           |  |       |        |         |  |  |      |      |   |   |           |            |  |   |        |         |  |  |      |     
|Other                                                    |                                            |                        | 1,289,642 |                    |  |               |        |         |  |          |      |       |   |         | 659,115   |           |  |       |        |         |  |  |      |      |   |   | 1,115,755 |            |  |   |        |         |  |  |      |     
|                                                         |                                            |                        |           |                    |  |               |        |         |  |          |      |       |   |         |           |           |  |       |        |         |  |  |      |      |   |   |           |            |  |   |        |         |  |  |      |     
|                                                         | Total liabilities                          |                        |           | 11,154,624         |  |               |        |         |  |          |      |       |   |         |           | 7,236,674 |  |       |        |         |  |  |      |      |   |   |           | 9,977,173  |  |   |        |         |  |  |      |      |  
|                                                         | Shareholders equity                       |                        |           | 970,370            |  |               |        |         |  |          |      |       |   |         |           | 856,228   |  |       |        |         |  |  |      |      |   |   |           | 904,551    |  |   |        |         |  |  |      |      |  
|                                                         |                                            |                        |           |                    |  |               |        |         |  |          |      |       |   |         |           |           |  |       |        |         |  |  |      |      |   |   |           |            |  |   |        |         |  |  |      |     
|                                                         | Total liabilities and shareholders equity |                        | $         | 12,124,994         |  |               |        |         |  |          |      |       |   |         | $         | 8,092,902 |  |       |        |         |  |  |      |      |   |   | $         | 10,881,724 |  |   |        |         |  |  |      |      |  
|                                                         |                                            |                        |           |                    |  |               |        |         |  |          |      |       |   |         |           |           |  |       |        |         |  |  |      |      |   |   |           |            |  |   |        |         |  |  |      |     
|Net interest income                                      |                                            |                        |           |                    |  | $             | 82,453 |         |  |          |      |       |   |         |           |           |  | $     | 50,375 |         |  |  |      |      |   |   |           |            |  | $ | 67,515 |         |  |  |      |     
|                                                         |                                            |                        |           |                    |  |               |        |         |  |          |      |       |   |         |           |           |  |       |        |         |  |  |      |      |   |   |           |            |  |   |        |         |  |  |      |     
|Net interest spread                                      |                                            |                        |           |                    |  |               |        |         |  |          | 2.70 | %     |   |         |           |           |  |       |        |         |  |  | 2.27 | %    |   |   |           |            |  |   |        |         |  |  | 2.42 | %   
|                                                         |                                            |                        |           |                    |  |               |        |         |  |          |      |       |   |         |           |           |  |       |        |         |  |  |      |      |   |   |           |            |  |   |        |         |  |  |      |     
|Net interest margin                                      |                                            |                        |           |                    |  |               |        |         |  |          | 2.97 | %     |   |         |           |           |  |       |        |         |  |  | 2.71 | %    |   |   |           |            |  |   |        |         |  |  | 2.73 | %   
|                                                         |                                            |                        |           |                    |  |               |        |         |  |          |      |       |   |         |           |           |  |       |        |         |  |  |      |      |   |   |           |            |  |   |        |         |  |  |      |     

36



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##### Table of Contents



|                                                         |                                            |                        |           |                    |  |       |         |         |  |          |      |       |   |   |           |           |  |   |         |         |  |  |      |      |  
|-------------------------------------------------------- | ------------------------------------------ | ---------------------- | --------- | ------------------ |  | ----- | ------- | ------- |  | -------- | ---- | ----- | - | - | --------- | --------- |  | - | ------- | ------- |  |  | ---- | ---- | -
|                                                         |                                            |                       
|                                                         |                                            | Nine Months Ended     
|                                                         |                                            |                       
|                                                         |                                            |                        |           |                   
|                                                         |                                            | September 30, 2003     |           | September 30, 2002
|                                                         |                                            |                        |           |                   
|                                                         |                                            | Average                |           |                    |  | Yield |         | Average |  |          |      | Yield
|                                                         |                                            | Balance                |           | Interest           |  | Rate  |         | Balance |  | Interest |      | Rate 
|                                                         |                                            |                        |           |                    |  |       |         |         |  |          |      |      
|                                                         |                                            |                       
|                                                         |                                            | (Dollars in thousands)
|Securities                                               |                                            | $                      | 1,713,395 |                    |  | $     | 57,508  |         |  |          | 4.49 | %     |   | $ | 1,727,136 |           |  | $ | 86,061  |         |  |  | 6.66 | %   
|Loans held for sale                                      |                                            |                        | 3,459,452 |                    |  |       | 159,595 |         |  |          | 6.17 | %     |   |   | 2,043,010 |           |  |   | 105,511 |         |  |  | 6.90 | %   
|Mortgage loans held for investment                       |                                            |                        | 3,135,760 |                    |  |       | 110,931 |         |  |          | 4.73 | %     |   |   | 1,688,024 |           |  |   | 85,012  |         |  |  | 6.73 | %   
|Builder construction and income property                 |                                            |                        | 563,791   |                    |  |       | 28,465  |         |  |          | 6.75 | %     |   |   | 555,700   |           |  |   | 32,434  |         |  |  | 7.80 | %   
|Consumer construction                                    |                                            |                        | 915,998   |                    |  |       | 44,627  |         |  |          | 6.51 | %     |   |   | 733,493   |           |  |   | 41,494  |         |  |  | 7.56 | %   
|Investment in Federal Home Loan Bank stock and
    other |                                            |                        | 234,355   |                    |  |       | 6,886   |         |  |          | 3.93 | %     |   |   | 140,248   |           |  |   | 4,904   |         |  |  | 4.68 | %   
|                                                         |                                            |                        |           |                    |  |       |         |         |  |          |      |       |   |   |           |           |  |   |         |         |  |  |      |     
|                                                         | Total interest-earning assets              |                        |           | 10,022,751         |  |       |         | 408,012 |  |          |      | 5.44  | % |   |           | 6,887,611 |  |   |         | 355,416 |  |  |      | 6.90 | %
|                                                         |                                            |                        |           |                    |  |       |         |         |  |          |      |       |   |   |           |           |  |   |         |         |  |  |      |     
|Other                                                    |                                            |                        | 991,042   |                    |  |       |         |         |  |          |      |       |   |   | 695,588   |           |  |   |         |         |  |  |      |     
|                                                         |                                            |                        |           |                    |  |       |         |         |  |          |      |       |   |   |           |           |  |   |         |         |  |  |      |     
|                                                         | Total assets                               |                        | $         | 11,013,793         |  |       |         |         |  |          |      |       |   |   | $         | 7,583,199 |  |   |         |         |  |  |      |      |  
|                                                         |                                            |                        |           |                    |  |       |         |         |  |          |      |       |   |   |           |           |  |   |         |         |  |  |      |     
|Interest-bearing deposits                                |                                            | $                      | 3,023,169 |                    |  |       | 65,899  |         |  |          | 2.91 | %     |   | $ | 2,697,174 |           |  |   | 82,125  |         |  |  | 4.07 | %   
|Advances from Federal Home Loan Bank                     |                                            |                        | 3,463,913 |                    |  |       | 82,825  |         |  |          | 3.20 | %     |   |   | 1,982,686 |           |  |   | 76,028  |         |  |  | 5.13 | %   
|Other borrowings                                         |                                            |                        | 2,507,798 |                    |  |       | 46,296  |         |  |          | 2.47 | %     |   |   | 1,484,197 |           |  |   | 43,931  |         |  |  | 3.96 | %   
|                                                         |                                            |                        |           |                    |  |       |         |         |  |          |      |       |   |   |           |           |  |   |         |         |  |  |      |     
|                                                         | Total interest-bearing liabilities         |                        |           | 8,994,880          |  |       |         | 195,020 |  |          |      | 2.90  | % |   |           | 6,164,057 |  |   |         | 202,084 |  |  |      | 4.38 | %
|                                                         |                                            |                        |           |                    |  |       |         |         |  |          |      |       |   |   |           |           |  |   |         |         |  |  |      |     
|Other                                                    |                                            |                        | 1,103,865 |                    |  |       |         |         |  |          |      |       |   |   | 551,814   |           |  |   |         |         |  |  |      |     
|                                                         |                                            |                        |           |                    |  |       |         |         |  |          |      |       |   |   |           |           |  |   |         |         |  |  |      |     
|                                                         | Total liabilities                          |                        |           | 10,098,745         |  |       |         |         |  |          |      |       |   |   |           | 6,715,871 |  |   |         |         |  |  |      |      |  
|                                                         | Shareholders equity                       |                        |           | 915,048            |  |       |         |         |  |          |      |       |   |   |           | 867,328   |  |   |         |         |  |  |      |      |  
|                                                         |                                            |                        |           |                    |  |       |         |         |  |          |      |       |   |   |           |           |  |   |         |         |  |  |      |     
|                                                         | Total liabilities and shareholders equity |                        | $         | 11,013,793         |  |       |         |         |  |          |      |       |   |   | $         | 7,583,199 |  |   |         |         |  |  |      |      |  
|                                                         |                                            |                        |           |                    |  |       |         |         |  |          |      |       |   |   |           |           |  |   |         |         |  |  |      |     
|Net interest income                                      |                                            |                        |           |                    |  | $     | 212,992 |         |  |          |      |       |   |   |           |           |  | $ | 153,332 |         |  |  |      |     
|                                                         |                                            |                        |           |                    |  |       |         |         |  |          |      |       |   |   |           |           |  |   |         |         |  |  |      |     
|Net interest spread                                      |                                            |                        |           |                    |  |       |         |         |  |          | 2.54 | %     |   |   |           |           |  |   |         |         |  |  | 2.52 | %   
|                                                         |                                            |                        |           |                    |  |       |         |         |  |          |      |       |   |   |           |           |  |   |         |         |  |  |      |     
|Net interest margin                                      |                                            |                        |           |                    |  |       |         |         |  |          | 2.84 | %     |   |   |           |           |  |   |         |         |  |  | 2.98 | %   
|                                                         |                                            |                        |           |                    |  |       |         |         |  |          |      |       |   |   |           |           |  |   |         |         |  |  |      |     

The net interest margin during the third quarter
of 2003 has widened from that of the second quarter 2003 and
third quarter 2002. During the third quarter, the yield on
interest earning assets continued to decline due to high
prepayment speeds. However, the effect of that was partially
offset by higher yielding clean-up call loans we have acquired.
In addition, the rapid amortization of higher premium bonds
which negatively impacted yields in the second quarter 2003 has
substantially abated. Similarly, cost of funds has further
decreased on deposits and borrowings. The decrease in borrowing
rates is largely result of the repricing of higher interest rate
CDs to lower rates and a shift to shorter-term borrowings.

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##### Table of Contents



The dollar amounts of interest income and
interest expense fluctuate depending upon changes in the average
balances and interest rates of interest-earning assets and
interest-bearing liabilities. The following table details
changes attributable to: (1) changes in volume (changes in
average outstanding balances multiplied by the prior
periods rate); (2) changes in the rate (changes in
the average interest rate multiplied by the prior periods
volume); and (3) changes in rate/volume (mix)
(changes in rates times the changes in volume).

|                                                         |                        |                                                |        |        |  |     |         |              |   |   |         |         |   |   |        |        |  
|-------------------------------------------------------- | ---------------------- | ---------------------------------------------- | ------ | ------ |  | --- | ------- | ------------ | - | - | ------- | ------- | - | - | ------ | ------ | -
|                                                         |                        |                                               
|                                                         |                        | Three Months Ended September 30, 2003 vs. 2002
|                                                         |                        |                                               
|                                                         |                        |                                               
|                                                         |                        | Increase/(Decrease) Due to                    
|                                                         |                        |                                               
|                                                         |                        | Volume                                         |        | Rate   |  | Mix |         | Total Change
|                                                         |                        |                                                |        |        |  |     |         |             
|                                                         |                        |                                               
|                                                         |                        | (Dollars in thousands)                        
|Interest income:                                         |                        |                                                |        |        |  |     |         |              |   |   |         |         |   |   |        |       
|Mortgage-backed securities                               |                        | $                                              | (4,941 | )      |  | $   | (4,655  | )            |   | $ | 786     |         |   | $ | (8,810 | )     
|Loans held for sale                                      |                        |                                                | 26,956 |        |  |     | (3,249  | )            |   |   | (2,168  | )       |   |   | 21,539 |       
|Mortgage loans held for investment                       |                        |                                                | 29,929 |        |  |     | (6,779  | )            |   |   | (8,701  | )       |   |   | 14,449 |       
|Builder construction and income property                 |                        |                                                | 522    |        |  |     | (1,574  | )            |   |   | (81     | )       |   |   | (1,133 | )     
|Consumer construction                                    |                        |                                                | 4,423  |        |  |     | (1,809  | )            |   |   | (590    | )       |   |   | 2,024  |       
|Investment in Federal Home Loan Bank stock and
    other |                        |                                                | 1,447  |        |  |     | (181    | )            |   |   | (170    | )       |   |   | 1,096  |       
|                                                         |                        |                                                |        |        |  |     |         |              |   |   |         |         |   |   |        |       
|                                                         | Total interest income  |                                                |        | 58,336 |  |     |         | (18,247      | ) |   |         | (10,924 | ) |   |        | 29,165 |  
|Interest expense:                                        |                        |                                                |        |        |  |     |         |              |   |   |         |         |   |   |        |       
|Interest-bearing deposits                                |                        |                                                | 8,333  |        |  |     | (7,467  | )            |   |   | (2,594  | )       |   |   | (1,728 | )     
|Advances from Federal Home Loan Bank                     |                        |                                                | 26,079 |        |  |     | (12,002 | )            |   |   | (11,753 | )       |   |   | 2,324  |       
|Other borrowings                                         |                        |                                                | 3,394  |        |  |     | (5,764  | )            |   |   | (1,139  | )       |   |   | (3,509 | )     
|                                                         |                        |                                                |        |        |  |     |         |              |   |   |         |         |   |   |        |       
|                                                         | Total interest expense |                                                |        | 37,806 |  |     |         | (25,233      | ) |   |         | (15,486 | ) |   |        | (2,913 | )
|                                                         |                        |                                                |        |        |  |     |         |              |   |   |         |         |   |   |        |       
|                                                         | Net interest income    |                                                | $      | 20,530 |  |     | $       | 6,986        |   |   | $       | 4,562   |   |   | $      | 32,078 |  
|                                                         |                        |                                                |        |        |  |     |         |              |   |   |         |         |   |   |        |       

|                                                         |                        |                                               |        |         |  |     |         |              |   |   |         |         |   |   |         |        |  
|-------------------------------------------------------- | ---------------------- | --------------------------------------------- | ------ | ------- |  | --- | ------- | ------------ | - | - | ------- | ------- | - | - | ------- | ------ | -
|                                                         |                        |                                              
|                                                         |                        | Nine Months Ended September 30, 2003 vs. 2002
|                                                         |                        |                                              
|                                                         |                        |                                              
|                                                         |                        | Increase/(Decrease) Due to                   
|                                                         |                        |                                              
|                                                         |                        | Volume                                        |        | Rate    |  | Mix |         | Total Change
|                                                         |                        |                                               |        |         |  |     |         |             
|                                                         |                        |                                              
|                                                         |                        | (Dollars in thousands)                       
|Interest income:                                         |                        |                                               |        |         |  |     |         |              |   |   |         |         |   |   |         |       
|Mortgage-backed securities                               |                        | $                                             | (685   | )       |  | $   | (28,091 | )            |   | $ | 223     |         |   | $ | (28,553 | )     
|Loans held for sale                                      |                        |                                               | 73,152 |         |  |     | (11,261 | )            |   |   | (7,807  | )       |   |   | 54,084  |       
|Mortgage loans held for investment                       |                        |                                               | 72,911 |         |  |     | (25,297 | )            |   |   | (21,695 | )       |   |   | 25,919  |       
|Builder construction and income property                 |                        |                                               | 472    |         |  |     | (4,377  | )            |   |   | (64     | )       |   |   | (3,969  | )     
|Consumer construction                                    |                        |                                               | 10,324 |         |  |     | (5,758  | )            |   |   | (1,433  | )       |   |   | 3,133   |       
|Investment in Federal Home Loan Bank stock and
    other |                        |                                               | 3,291  |         |  |     | (783    | )            |   |   | (525    | )       |   |   | 1,983   |       
|                                                         |                        |                                               |        |         |  |     |         |              |   |   |         |         |   |   |         |       
|                                                         | Total interest income  |                                               |        | 159,465 |  |     |         | (75,567      | ) |   |         | (31,301 | ) |   |         | 52,597 |  
|Interest expense:                                        |                        |                                               |        |         |  |     |         |              |   |   |         |         |   |   |         |       
|Interest-bearing deposits                                |                        |                                               | 9,926  |         |  |     | (23,332 | )            |   |   | (2,820  | )       |   |   | (16,226 | )     
|Advances from Federal Home Loan Bank                     |                        |                                               | 56,799 |         |  |     | (28,620 | )            |   |   | (21,382 | )       |   |   | 6,797   |       
|Other borrowings                                         |                        |                                               | 30,298 |         |  |     | (16,532 | )            |   |   | (11,401 | )       |   |   | 2,365   |       
|                                                         |                        |                                               |        |         |  |     |         |              |   |   |         |         |   |   |         |       
|                                                         | Total interest expense |                                               |        | 97,023  |  |     |         | (68,484      | ) |   |         | (35,603 | ) |   |         | (7,064 | )
|                                                         |                        |                                               |        |         |  |     |         |              |   |   |         |         |   |   |         |       
|                                                         | Net interest income    |                                               | $      | 62,442  |  |     | $       | (7,083       | ) |   | $       | 4,302   |   |   | $       | 59,661 |  
|                                                         |                        |                                               |        |         |  |     |         |              |   |   |         |         |   |   |         |       

38



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##### Table of Contents






OVERALL INTEREST RATE RISK
MANAGEMENT

In addition to our hedging activities to mitigate
the interest rate risk in our pipeline of mortgage loans held
for sale and our investment in servicing-related assets, we
perform extensive overall interest rate risk analyses. The
primary measurement tool used to evaluate interest rate risk
over the comprehensive balance sheet is a net portfolio value
(NPV) analysis that simulates the effects changes in
interest rates have on the fair value of shareholders
equity.

The following table sets forth the NPV and change
in NPV of the Bank that we estimate might result from a 100
basis point change in interest rates as of September 30,
2003 and December 31, 2002. IndyMacs NPV model has
been built to focus on the Bank alone as the $118.5 million
of assets at the Parent Company have relatively little interest
rate risk exposure.

|                                     |                   |                        |           |                     |  |          |           |                     |  |          |           |            |  |   |           |           |  |   |           |           |  |   |           |           | 
|------------------------------------ | ----------------- | ---------------------- | --------- | ------------------- |  | -------- | --------- | ------------------- |  | -------- | --------- | ---------- |  | - | --------- | --------- |  | - | --------- | --------- |  | - | --------- | --------- | 
|                                     |                   |                        |           |                    
|                                     |                   | September 30, 2003     |           | December 31, 2002  
|                                     |                   |                        |           |                    
|                                     |                   |                        |           |                     |  |          |           |                    
|                                     |                   |                        |           | Effect of Change in |  |          |           | Effect of Change in
|                                     |                   |                        |           | Interest Rates      |  |          |           | Interest Rates     
|                                     |                   |                        |           |                     |  |          |           |                    
|                                     |                   |                        |           | Decrease            |  | Increase |           |                     |  | Decrease |           | Increase  
|                                     |                   | Fair Value             |           | 100 bps             |  | 100 bps  |           | Fair Value          |  | 100 bps  |           | 100 bps   
|                                     |                   |                        |           |                     |  |          |           |                     |  |          |           |           
|                                     |                   |                       
|                                     |                   | (Dollars in thousands)
|Cash and cash equivalents            |                   | $                      | 294,621   |                     |  | $        | 294,621   |                     |  | $        | 294,621   |            |  | $ | 196,589   |           |  | $ | 196,589   |           |  | $ | 196,589   |          
|Trading securities                   |                   |                        | 208,541   |                     |  |          | 162,944   |                     |  |          | 225,923   |            |  |   | 728,602   |           |  |   | 729,055   |           |  |   | 727,761   |          
|Available for sale securities        |                   |                        | 1,515,220 |                     |  |          | 1,565,383 |                     |  |          | 1,471,031 |            |  |   | 1,563,648 |           |  |   | 1,572,911 |           |  |   | 1,542,879 |          
|Loans held for sale                  |                   |                        | 2,990,657 |                     |  |          | 3,055,545 |                     |  |          | 2,901,394 |            |  |   | 2,249,088 |           |  |   | 2,313,001 |           |  |   | 2,170,046 |          
|Loans held for investment            |                   |                        | 5,765,989 |                     |  |          | 5,817,311 |                     |  |          | 5,698,743 |            |  |   | 3,883,039 |           |  |   | 3,913,596 |           |  |   | 3,844,944 |          
|MSRs                                 |                   |                        | 406,917   |                     |  |          | 282,948   |                     |  |          | 492,942   |            |  |   | 300,539   |           |  |   | 226,834   |           |  |   | 365,046   |          
|Other assets                         |                   |                        | 684,294   |                     |  |          | 696,371   |                     |  |          | 672,194   |            |  |   | 465,046   |           |  |   | 473,382   |           |  |   | 459,294   |          
|Derivatives                          |                   |                        | 149,443   |                     |  |          | 208,072   |                     |  |          | 170,047   |            |  |   | 72,445    |           |  |   | 67,868    |           |  |   | 104,189   |          
|                                     |                   |                        |           |                     |  |          |           |                     |  |          |           |            |  |   |           |           |  |   |           |           |  |   |           |          
|                                     | Total assets      |                        | $         | 12,015,682          |  |          | $         | 12,083,195          |  |          | $         | 11,926,895 |  |   | $         | 9,458,996 |  |   | $         | 9,493,236 |  |   | $         | 9,410,748 | 
|                                     |                   |                        |           |                     |  |          |           |                     |  |          |           |            |  |   |           |           |  |   |           |           |  |   |           |          
|Deposits                             |                   | $                      | 4,154,416 |                     |  | $        | 4,186,643 |                     |  | $        | 4,123,579 |            |  | $ | 3,177,911 |           |  | $ | 3,217,410 |           |  | $ | 3,139,628 |          
|Advances from Federal Home Loan Bank |                   |                        | 4,083,857 |                     |  |          | 4,112,223 |                     |  |          | 4,055,934 |            |  |   | 2,786,237 |           |  |   | 2,820,402 |           |  |   | 2,753,314 |          
|Other borrowings                     |                   |                        | 2,417,601 |                     |  |          | 2,419,335 |                     |  |          | 2,415,588 |            |  |   | 2,493,168 |           |  |   | 2,495,465 |           |  |   | 2,490,801 |          
|Other liabilities                    |                   |                        | 175,599   |                     |  |          | 175,691   |                     |  |          | 175,463   |            |  |   | 140,853   |           |  |   | 140,897   |           |  |   | 140,741   |          
|                                     |                   |                        |           |                     |  |          |           |                     |  |          |           |            |  |   |           |           |  |   |           |           |  |   |           |          
|                                     | Total liabilities |                        |           | 10,831,473          |  |          |           | 10,893,892          |  |          |           | 10,770,564 |  |   |           | 8,598,169 |  |   |           | 8,674,174 |  |   |           | 8,524,484 | 
|                                     |                   |                        |           |                     |  |          |           |                     |  |          |           |            |  |   |           |           |  |   |           |           |  |   |           |          
|Shareholders equity (NPV)           |                   | $                      | 1,184,209 |                     |  | $        | 1,189,303 |                     |  | $        | 1,156,331 |            |  | $ | 860,827   |           |  | $ | 819,062   |           |  | $ | 886,264   |          
|                                     |                   |                        |           |                     |  |          |           |                     |  |          |           |            |  |   |           |           |  |   |           |           |  |   |           |          
|% Change from base case              |                   |                        |           |                     |  |          | .43       | %                   |  |          | (2.35     | )%         |  |   |           |           |  |   | (4.85     | )%        |  |   | 2.95      | %        
|                                     |                   |                        |           |                     |  |          |           |                     |  |          |           |            |  |   |           |           |  |   |           |           |  |   |           |          

Retained earnings of $134.9 million
contributed significantly to the $323.4 million increase in
the Banks NPV during the nine months ended
September 30, 2003. This increase also reflects deployment
of excess capital primarily through additions to the SFR
mortgage HFI portfolio. Additionally, the NPV has improved as
the Banks funding mix has become better matched to the
related assets through the maturity and subsequent repricing of
fixed rate FHLB advances and certificates of deposit in addition
to the use of liability hedging strategies. A deposit mix more
heavily weighted towards lower cost transaction accounts has
also added to the NPV. It should be noted that this analysis
does not reflect changes in volumes and profits from our
mortgage banking operations that would be expected to result
from the interest rate environment.

The assumptions inherent in our interest rate
models include expected valuation changes in an instantaneous
and parallel interest rate shock and assumptions as to the
degree of correlation between our hedge positions and the hedged
assets and liabilities. These assumptions may not accurately
predict factors such as the spread-widening or spread-tightening
risk among the changes in rates on Treasury, LIBOR/swap curve
and mortgages. In addition, the sensitivity analysis described
in the prior paragraph is limited by the fact that it is
performed at a particular point in time and does not incorporate
other factors that would impact our financial performance in
these scenarios. These factors include, but are not limited to
expected increases in

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income associated with the expected increase in
production volume that could result from a decrease in interest
rates and changes in the asset, liability and derivative mix
during interest rate changes. Consequently, the preceding
simulation should not be viewed as a forecast, as it is
reasonable to expect that actual results will vary significantly
from the analyses discussed above.


The Companys Board of Directors level and
management level ALCOs monitor our hedging activities to
determine whether the value of our hedge positions, their
correlation to the balance sheet item being hedged, and the
amounts being hedged, continue to provide adequate protection
against interest rate risk. While there can be no assurances
that our interest rate management strategies will be effective,
we believe we have adequate internal controls to monitor and
manage our interest rate risk within reasonable levels.




CREDIT RISK AND RESERVES






GENERAL


The following table summarizes the Companys
allowance for loan losses/ credit discounts and non-performing
assets as of September 30, 2003.

|                                                                |                                      |                                     |           |               |           |                 |        |                |        |             |      |             |        |   |        |        |        |   |       |       |       |   |       |       |        | 
|--------------------------------------------------------------- | ------------------------------------ | ----------------------------------- | --------- | ------------- | --------- | --------------- | ------ | -------------- | ------ | ----------- | ---- | ----------- | ------ | - | ------ | ------ | ------ | - | ----- | ----- | ----- | - | ----- | ----- | ------ | 
|                                                                |                                      |                                     |           | Allowance     |           |                 |        |                |        | QTD Net     |      | YTD Net    
|                                                                |                                      |                                     |           | for Loan      |           | Total Reserves  |        |                |        | Charge      |      | Charge     
|                                                                |                                      |                                     |           | Losses/Credit |           | as a Percentage |        | Non-Performing |        | Offs/Net    |      | Offs/Net   
|Type of Loan                                                    |                                      | Book Value                          |           | Discounts     |           | of Book Value   |        | Assets         |        | REO (Gains) |      | REO (Gains)
|                                                                |                                      |                                     |           |               |           |                 |        |                |        |             |      |            
|                                                                |                                      |                                    
|                                                                |                                      | (Dollars in thousands)             
|Held for investment portfolio                                   |                                      |                                     |           |               |           |                 |        |                |        |             |      |             |        |   |        |        |        |   |       |       |       |   |       |      
|SFR mortgage loans and HELOCs                                   |                                      | $                                   | 3,917,411 |               |           | $               | 18,808 |                |        |             | 0.48 | %           |        | $ | 11,112 |        |        | $ | 1,014 |       |       | $ | 2,870 |      
|Land and other mortgage                                         |                                      |                                     | 99,921    |               |           |                 | 3,178  |                |        |             | 3.18 | %           |        |   | 103    |        |        |   |      |       |       |   |      |      
|Builder construction and income property                        |                                      |                                     | 512,152   |               |           |                 | 12,587 |                |        |             | 2.46 | %           |        |   | 11,884 |        |        |   | 100   |       |       |   | 3,166 |      
|Consumer construction                                           |                                      |                                     | 1,093,918 |               |           |                 | 10,313 |                |        |             | 0.94 | %           |        |   | 8,555  |        |        |   | 446   |       |       |   | 1,017 |      
|                                                                |                                      |                                     |           |               |           |                 |        |                |        |             |      |             |        |   |        |        |        |   |       |       |       |   |       |      
|                                                                | Total core held for investment loans |                                     |           | 5,623,402     |           |                 |        | 44,886         |        |             |      | 0.80        | %      |   |        | 31,654 |        |   |       | 1,560 |       |   |       | 7,053 |       
|                                                                | Discontinued product lines(1)        |                                     |           | 76,005        |           |                 |        | 7,595          |        |             |      | 9.99        | %      |   |        | 7,209  |        |   |       | 2,201 |       |   |       | 7,427 |       
|                                                                |                                      |                                     |           |               |           |                 |        |                |        |             |      |             |        |   |        |        |        |   |       |       |       |   |       |      
|                                                                |                                      | Total held for investment portfolio |           |               | 5,699,407 |                 |        |                | 52,481 |             |      |             | 0.92   | % |        |        | 38,863 |   |       |       | 3,761 |   |       |       | 14,480 | 
|Held for sale portfolio                                         |                                      |                                     | 3,111,909 |               |           |                 | 13,353 |                |        |             | 0.43 | %           |        |   | 31,414 |        |        |   |      |       |       |   |      |      
|                                                                |                                      |                                     |           |               |           |                 |        |                |        |             |      |             |        |   |        |        |        |   |       |       |       |   |       |      
|                                                                |                                      | Total loans                         |           | $             | 8,811,316 |                 |        | $              | 65,834 |             |      |             | 0.75   | % |        |        | 70,277 |   |       | $     | 3,761 |   |       | $     | 14,480 | 
|                                                                |                                      |                                     |           |               |           |                 |        |                |        |             |      |             |        |   |        |        |        |   |       |       |       |   |       |      
|Foreclosed assets                                               |                                      |                                     |           |               |           |                 |        |                |        |             |      |             |        |   |        |        |        |   |       |       |       |   |       |      
|                                                                | Core portfolios                      |                                     |           | 26,120        |           |                 | $      | (101           | )      |             | $    | (1,326      | )     
|                                                                | Discontinued product lines           |                                     |           | 1,556         |           |                 |        | 206            |        |             |      | 69          |       
|                                                                |                                      |                                     |           |               |           |                 |        |                |        |             |      |            
|                                                                |                                      | Total foreclosed assets             |           |               | 27,676    |                 |        | $              | 105    |             |      | $           | (1,257 | )
|                                                                |                                      |                                     |           |               |           |                 |        |                |        |             |      |            
|Total non-performing assets                                     |                                      | $                                   | 97,953    |               |           |                 |        |                |        |             |      |            
|                                                                |                                      |                                     |           |               |           |                 |        |                |        |             |      |            
|Total non-performing assets as a percentage of
    total assets |                                      |                                     | 0.81      | %             |           |                 |        |                |        |             |      |            
|                                                                |                                      |                                     |           |               |           |                 |        |                |        |             |      |            



---



|    |                                                                                                                      
|--- | ---------------------------------------------------------------------------------------------------------------------
|(1) | Discontinued product lines include manufactured
    home loans, home improvement loans and warehouse lines of credit.

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The following tables provide additional
comparative data on non-performing assets relative to the
allowance for loan losses.

|                                                                          |                            |                               |                                      |               |        |              |        |        |        |         |        |        |        |         | 
|------------------------------------------------------------------------- | -------------------------- | ----------------------------- | ------------------------------------ | ------------- | ------ | ------------ | ------ | ------ | ------ | ------- | ------ | ------ | ------ | ------- | 
|                                                                          |                            | September 30,                 |                                      | September 30, |        | December 31,
|                                                                          |                            | 2003                          |                                      | 2002          |        | 2002        
|                                                                          |                            |                               |                                      |               |        |             
|                                                                          |                            |                              
|                                                                          |                            | (Dollars in thousands)       
|Loans held for investment                                                 |                            |                               |                                      |               |        |              |        |        |        |         |        |       
|                                                                          | Portfolio loans            |                               |                                      |               |        |              |        |        |        |         |        |        |       
|                                                                          |                            | SFR mortgage loans            |                                      | $             | 11,112 |              |        | $      | 16,028 |         |        | $      | 15,097 |        
|                                                                          |                            | Land and other mortgage loans |                                      |               | 103    |              |        |        | 14,526 |         |        |        | 8,376  |        
|                                                                          |                            | Builder construction          |                                      |               | 11,884 |              |        |        | 12,997 |         |        |        | 9,275  |        
|                                                                          |                            | Consumer construction         |                                      |               | 8,555  |              |        |        | 10,075 |         |        |        | 10,257 |        
|                                                                          |                            |                               |                                      |               |        |              |        |        |        |         |        |       
|                                                                          |                            |                               | Total portfolio non-performing loans |               |        | 31,654       |        |        |        | 53,626  |        |        |        | 43,005  | 
|                                                                          | Discontinued product lines |                               |                                      | 7,209         |        |              |        | 12,415 |        |         |        | 10,005 |       
|                                                                          |                            |                               |                                      |               |        |              |        |        |        |         |        |       
|Total non-performing loans held for investment                            |                            |                               | 38,863                               |               |        |              | 66,041 |        |        |         | 53,010 |       
|Non-performing loans held for sale                                        |                            |                               | 31,414                               |               |        |              | 10,670 |        |        |         | 10,626 |       
|                                                                          |                            |                               |                                      |               |        |              |        |        |        |         |        |       
|                                                                          |                            |                               | Total non-performing loans           |               |        | 70,277       |        |        |        | 76,711  |        |        |        | 63,636  | 
|Foreclosed assets                                                         |                            |                               | 27,676                               |               |        |              | 26,818 |        |        |         | 36,526 |       
|                                                                          |                            |                               |                                      |               |        |              |        |        |        |         |        |       
|                                                                          |                            |                               | Total non-performing assets          |               | $      | 97,953       |        |        | $      | 103,529 |        |        | $      | 100,162 | 
|                                                                          |                            |                               |                                      |               |        |              |        |        |        |         |        |       
|Total non-performing assets to total assets                               |                            |                               | 0.81                                 | %             |        |              | 1.31   | %      |        |         | 1.05   | %     
|                                                                          |                            |                               |                                      |               |        |              |        |        |        |         |        |       
|Allowance for loan losses to non-performing loans
    held for investment |                            |                               | 135                                  | %             |        |              | 82     | %      |        |         | 96     | %     
|                                                                          |                            |                               |                                      |               |        |              |        |        |        |         |        |       

The following shows the activity in the allowance
for loan losses during the indicated periods:

|                              |                               |                                 |        |                   |        |               |        |               |        |   |        |        |        |   |        |        |        |  
|----------------------------- | ----------------------------- | ------------------------------- | ------ | ----------------- | ------ | ------------- | ------ | ------------- | ------ | - | ------ | ------ | ------ | - | ------ | ------ | ------ | -
|                              |                               |                                 |        |                  
|                              |                               | Three Months Ended              |        | Nine Months Ended
|                              |                               |                                 |        |                  
|                              |                               | September 30,                   |        | September 30,     |        | September 30, |        | September 30,
|                              |                               | 2003                            |        | 2002              |        | 2003          |        | 2002         
|                              |                               |                                 |        |                   |        |               |        |              
|                              |                               |                                
|                              |                               | (Dollars in thousands)         
|Core portfolio loans          |                               |                                 |        |                   |        |               |        |               |        |   |        |        |        |   |        |       
|Balance, beginning of period  |                               | $                               | 42,346 |                   |        | $             | 43,256 |               |        | $ | 41,314 |        |        | $ | 41,771 |       
|Provision for loan losses     |                               |                                 | 4,100  |                   |        |               | 1,251  |               |        |   | 10,625 |        |        |   | 5,554  |       
|Charge-offs net of recoveries |                               |                                 |        |                   |        |               |        |               |        |   |        |        |        |   |        |       
|                              |                               | SFR mortgage loans              |        |                   | (1,014 | )             |        |               | (2,173 | ) |        |        | (2,870 | ) |        |        | (3,916 | )
|                              |                               | Builder construction            |        |                   | (446   | )             |        |               |       |   |        |        | (1,017 | ) |        |        | (1,019 | )
|                              |                               | Consumer construction           |        |                   | (100   | )             |        |               | (46    | ) |        |        | (3,166 | ) |        |        | (102   | )
|                              |                               |                                 |        |                   |        |               |        |               |        |   |        |        |        |   |        |       
|                              | Charge-offs net of recoveries |                                 |        | (1,560            | )      |               |        | (2,219        | )      |   |        | (7,053 | )      |   |        | (5,037 | )     
|                              |                               |                                 |        |                   |        |               |        |               |        |   |        |        |        |   |        |       
|Balance, end of period        |                               |                                 | 44,886 |                   |        |               | 42,288 |               |        |   | 44,886 |        |        |   | 42,288 |       
|Discontinued product lines    |                               |                                 |        |                   |        |               |        |               |        |   |        |        |        |   |        |       
|Balance, beginning of period  |                               |                                 | 7,696  |                   |        |               | 12,880 |               |        |   | 9,447  |        |        |   | 15,929 |       
|Provision for loan losses     |                               |                                 | 2,100  |                   |        |               | 1,449  |               |        |   | 5,575  |        |        |   | 4,900  |       
|                              | Charge-offs net of recoveries |                                 |        | (2,201            | )      |               |        | (2,746        | )      |   |        | (7,427 | )      |   |        | (9,246 | )     
|                              |                               |                                 |        |                   |        |               |        |               |        |   |        |        |        |   |        |       
|Balance, end of period        |                               |                                 | 7,595  |                   |        |               | 11,583 |               |        |   | 7,595  |        |        |   | 11,583 |       
|                              |                               |                                 |        |                   |        |               |        |               |        |   |        |        |        |   |        |       
|                              |                               | Total allowance for loan losses |        | $                 | 52,481 |               |        | $             | 53,871 |   |        | $      | 52,481 |   |        | $      | 53,871 |  
|                              |                               |                                 |        |                   |        |               |        |               |        |   |        |        |        |   |        |       

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|                                 |  |                        |      |                   |  |               |      |               |  |  |      |   |  |  |      |  
|-------------------------------- |  | ---------------------- | ---- | ----------------- |  | ------------- | ---- | ------------- |  |  | ---- | - |  |  | ---- | -
|                                 |  |                        |      |                  
|                                 |  | Three Months Ended     |      | Nine Months Ended
|                                 |  |                        |      |                  
|                                 |  | September 30,          |      | September 30,     |  | September 30, |      | September 30,
|                                 |  | 2003                   |      | 2002              |  | 2003          |      | 2002         
|                                 |  |                        |      |                   |  |               |      |              
|                                 |  |                       
|                                 |  | (Dollars in thousands)
|Net charge-offs to average loans |  |                        | 0.05 | %                 |  |               | 0.13 | %             |  |  | 0.24 | % |  |  | 0.39 | %
|Core portfolio loans only:       |  |                        |      |                   |  |               |      |               |  |  |      |   |  |  |      |  
|Net charge-offs to average loans |  |                        | 0.02 | %                 |  |               | 0.06 | %             |  |  | 0.12 | % |  |  | 0.14 | %

Total credit-related reserves, including the
allowance for loan losses and the lower of cost or market
valuations, amounted to $65.8 million at September 30,
2003, compared to $57.7 million at December 31, 2002.
The allowance for loan losses of $52.5 million for loans
held for investment at September 30, 2003 represented 0.92%
of total loans held for investment. This compares to an
allowance for loan losses of $50.7 million, or 1.28% of
total loans held for investment, at December 31, 2002.

The ratio of non-performing assets to total
assets improved to 0.81% at September 30, 2003 from 1.05%
at December 31, 2002. Total non-performing assets decreased
by $2.2 million, from $100.2 million at
December 31, 2002 to $98.0 million at
September 30, 2003. The decrease is largely due to the
decrease of $8.9 million in foreclosed assets as a result
of liquidations. However, offsetting the decrease in foreclosed
assets, our non-performing loans increased $6.6 million
compared to December 31, 2002. The increase in our
non-performing loans was due to $20.8 million increase in
loans held for sale portfolio, while the non-performing loans
held for investment portfolio decreased $14.1 million. The
decrease in non-performing loans held for investment can be
attributable to overall improved credit quality and strong asset
management. The increase in non-performing loans held for sale
is a result of the loans acquired through clean-up calls
exercised during the third quarter 2003. The clean up call
non-performing loans amounted to $14.4 million at
September 30, 2003, which accounted for 46% of the total
non-performing loans held for sale.

As master servicer for our various
securitizations, we retain the right to call the securities when
the outstanding loan balance in the securitization trust
declines to a specified level, typically 10%, of the original
balance. When the fair value of performing loans remaining
within a securitization exceeds the expected losses on
nonperforming loans and the cost of exercise, we will typically
exercise our option to call. We called a total of
$372.6 million loans during the third quarter of 2003. A
portion of the loans we acquired pursuant to clean-up calls were
delinquent or non-performing. At September 30, 2003,
non-performing assets acquired through clean-up calls amounted
to $17.7 million, of which $14.4 million is
non-performing loans included in loans held for sale. We
anticipate that approximately $500 million in loans will be
eligible for clean-up calls during the fourth quarter of 2003.
Therefore, it is possible that the absolute levels of
non-performing loans held by us may increase temporarily between
the time of the call exercise and the disposition of these loans.

With respect to the portfolio of loans held for
investment in IndyMacs core businesses, the allowance for
loan losses at September 30, 2003 was $52.5 million or
0.92% of loan balance, compared to 1.48% of total loan balance
at September 30, 2002. The overall asset quality improved
due to decreases in non-performing loans held for investment and
disposition of foreclosed assets. Non-performing loans decreased
by $27.2 million from $66.0 million at
September 30, 2002 to $38.9 million at
September 30, 2003. The non-performing loan amount at
September 30, 2003 included one large matured construction
loan in the amount of $9.2 million. Between the collateral
and the guaranty, we expect to collect the full amount of this
loan.

With respect to IndyMacs non-core
liquidating portfolios, consisting primarily of manufactured
housing and home improvement loans, net charge-offs totaled
$2.2 million during the third quarter of 2003, down from
the $2.7 million of charge-offs on these portfolios during
the third quarter of 2002. After provision for loan losses of
$2.1 million, the allowance for loan losses was
$7.6 million, or 10% of the remaining principal balance of
such liquidating portfolios, compared to the 11.2% reserve
coverage at September 30, 2002.

Our determination of the level of the allowance
for loan losses and, correspondingly, the provision for loan
losses, is based on managements judgments and assumptions
regarding various matters, including general economic
conditions, loan portfolio composition, delinquency trends and
prior loan loss experience. In assessing the adequacy of the
allowance for loan losses, management reviews the performance in
the portfolios

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of loans held for investment and the non-core
portfolio of discontinued product lines which consists primarily
of manufactured housing loans and home improvement loans.


While we consider the allowance for loan losses
to be adequate based on information currently available, future
adjustments to the allowance may be necessary due to changes in
economic conditions, delinquency levels, foreclosure rates, or
loss rates. The level of our allowance for loan losses is also
subject to review by our federal regulator, the Office of Thrift
Supervision (OTS). Our regulator may require that
our allowance for loan losses be increased based on their
evaluation of the information available to it at the time of its
examination of the Bank.

With respect to mortgage loans held for sale,
IndyMac does not provide an allowance for loan losses, pursuant
to the applicable accounting rules. Instead, a component for
credit risk related to loans held for sale is embedded in the
lower of cost or market valuation for these loans. The lower of
cost or market on loans held for sale totaled $13.4 million
at September 30, 2003. The increase in non-performing loans
held for sale was largely due to the delinquent loans acquired
as part of the clean-up calls exercised by the Company during
the third quarter 2003. Therefore, the increase in
non-performing loans is not related to our core lending
portfolios and is expected to be temporary until the disposition
of these loans.




SECONDARY MARKET RESERVES

We do not sell loans with recourse in our loan
sale activities. However, we can be required to repurchase loans
from investors when our loan sales contain individual loans that
are not in conformity with the representations and warranties we
make at the time of sale. We have made significant investments
in our pre-production and post-production quality control
processes to identify potential systemic issues that could cause
repurchases. We believe that these efforts have improved our
production quality; however, increases in default rates due to
an economic slowdown could cause the overall rate of repurchases
to remain constant or even increase. Since inception in 1993,
the Company has repurchased only a very small amount of loans
from its securitization trusts. The increase in repurchase
activity in recent years has been primarily a function of
IndyMacs diversification of its loan sale channels to
whole loan and GSE sales. While sales through these channels
generate enhanced cash flows, they tend to have a greater level
of representation and warranty risk. The following table shows
the amount of loans we have repurchased from each distribution
channel, since the Company began active lending operations in
January 1993.

|            |                       |                       |   |            |      |             |   |        |        |  |  |      |      |  
|----------- | --------------------- | --------------------- | - | ---------- | ---- | ----------- | - | ------ | ------ |  |  | ---- | ---- | -
|            |                       | Amount                |   |            |      | Percentage 
|            |                       | Repurchased           |   | Total Sold |      | Repurchased
|            |                       |                       |   |            |      |            
|            |                       |                      
|            |                       | (Dollars in millions)
|Loans sold: |                       |                       |   |            |      |             |   |        |        |  |  |     
|            | GSEs and whole loans  |                       | $ | 81.6       |      |             | $ | 50,287 |        |  |  | 0.16 | %   
|            | Securitization trusts |                       |   | 7.7        |      |             |   | 43,094 |        |  |  | 0.02 | %   
|            |                       |                       |   |            |      |             |   |        |        |  |  |     
|            |                       | Total                 |   | $          | 89.3 |             |   | $      | 93,381 |  |  |      | 0.10 | %
|            |                       |                       |   |            |      |             |   |        |        |  |  |     

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The Company maintains secondary market reserves
for losses that arise in connection with loans that we are
required to repurchase from whole loan sales or securitization
transactions. These reserves, which totaled $36 million at
September 30, 2003, have two general components: reserves
for repurchases arising from representation and warranty claims,
and reserves for disputes with investors and vendors with
respect to contractual obligations pertaining to mortgage
operations. The table below shows the activity in the reserves
during the three and nine months ended September 30, 2003.

|                                                                                    |  |                        |        |        |  |   |         |  
|----------------------------------------------------------------------------------- |  | ---------------------- | ------ | ------ |  | - | ------- | -
|                                                                                    |  | Three                  |        | Nine  
|                                                                                    |  | Months                 |        | Months
|                                                                                    |  |                        |        |       
|                                                                                    |  |                       
|                                                                                    |  | (Dollars in thousands)
|Balance, beginning of period                                                        |  | $                      | 30,100 |        |  | $ | 37,636  |  
|Additions/provisions                                                                |  |                        | 12,202 |        |  |   | 24,013  |  
|Claims reimbursement and estimated discounts on
    loans held for sale/charge-offs |  |                        | (6,302 | )      |  |   | (25,649 | )
|                                                                                    |  |                        |        |        |  |   |         |  
|Balance, September 30, 2003.                                                        |  | $                      | 36,000 |        |  | $ | 36,000  |  
|                                                                                    |  |                        |        |        |  |   |         |  

Reserve levels are a function of expected losses
based on actual pending claims and repurchase requests,
historical experience, loan volume and loan sales distribution
channels and the assessment of probable vendor or investor
claims. While the ultimate amount of repurchases and claims is
uncertain, management believes that the reserves are adequate.
We will continue to evaluate the adequacy of our reserves and
may continue to allocate a portion of its gain on sale proceeds
to these reserves going forward. The entire balances of our
secondary market reserves are included on the consolidated
balance sheets as a component of other liabilities.




OPERATING EXPENSES

A summary of operating expenses follows:

|                                         |  |                        |         |                   |  |          |        |               |  |               |         |  |  |   |         |  |  |   |         | 
|---------------------------------------- |  | ---------------------- | ------- | ----------------- |  | -------- | ------ | ------------- |  | ------------- | ------- |  |  | - | ------- |  |  | - | ------- | 
|                                         |  |                        |         |                  
|                                         |  | Three Months Ended     |         | Nine Months Ended
|                                         |  |                        |         |                  
|                                         |  | September 30,          |         | September 30,     |  | June 30, |        | September 30, |  | September 30,
|                                         |  | 2003                   |         | 2002              |  | 2003     |        | 2003          |  | 2002         
|                                         |  |                        |         |                   |  |          |        |               |  |              
|                                         |  |                       
|                                         |  | (Dollars in thousands)
|Salaries and related                     |  | $                      | 63,100  |                   |  | $        | 51,963 |               |  | $             | 57,030  |  |  | $ | 173,225 |  |  | $ | 148,686 | 
|Premises and equipment                   |  |                        | 9,591   |                   |  |          | 8,137  |               |  |               | 8,138   |  |  |   | 26,035  |  |  |   | 22,731  | 
|Loan purchase costs                      |  |                        | 8,176   |                   |  |          | 6,063  |               |  |               | 7,810   |  |  |   | 23,044  |  |  |   | 16,294  | 
|Professional services                    |  |                        | 5,581   |                   |  |          | 6,402  |               |  |               | 5,086   |  |  |   | 15,277  |  |  |   | 16,213  | 
|Data processing                          |  |                        | 11,430  |                   |  |          | 5,554  |               |  |               | 8,131   |  |  |   | 26,325  |  |  |   | 14,919  | 
|Office                                   |  |                        | 6,296   |                   |  |          | 4,845  |               |  |               | 5,860   |  |  |   | 17,416  |  |  |   | 13,026  | 
|Advertising and promotion                |  |                        | 6,705   |                   |  |          | 3,839  |               |  |               | 6,580   |  |  |   | 19,349  |  |  |   | 9,220   | 
|Operations and sale of foreclosed assets |  |                        | 1,506   |                   |  |          | (812   | )             |  |               | 794     |  |  |   | 3,256   |  |  |   | 164     | 
|Other                                    |  |                        | 4,897   |                   |  |          | 3,004  |               |  |               | 5,329   |  |  |   | 13,772  |  |  |   | 7,998   | 
|                                         |  |                        |         |                   |  |          |        |               |  |               |         |  |  |   |         |  |  |   |         | 
|                                         |  | $                      | 117,282 |                   |  | $        | 88,995 |               |  | $             | 104,758 |  |  | $ | 317,699 |  |  | $ | 249,251 | 
|                                         |  |                        |         |                   |  |          |        |               |  |               |         |  |  |   |         |  |  |   |         | 

General and administrative expenses, including
salaries, increased during the three months ended
September 30, 2003 to $117.3 million, compared to
$89.0 million during the same period in 2002, primarily in
salaries and related expenses. The increase of
$11.1 million in salaries and related expenses over prior
year third quarter is attributable to increases in commission
and bonus expenses as our production volume and net earnings
have increased significantly. During the third quarter 2003, the
Company has continued to open new locations and build
infrastructure to support its projected continued growth in its
operations. Therefore, premises and equipment costs, data
processing expenses, and advertising fees have increased by
approximately $1.5 million, $5.9 million, and
$2.9 million, respectively, over the same quarter of 2002.
Lastly, due to reduced gain on sale of foreclosed assets, the
net expense on operations of foreclosed assets increased by
$2.3 million, as compared to three months ended
September 30, 2002.

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Total general and administrative expenses
increased by $68.4 million from $249.3 million for the
nine months ended September 30, 2002 to $317.7 million
for the nine months ended September 30, 2003. The increase
was again largely driven by the increases in salaries and
infrastructure related expenses as a result of our significantly
increased mortgage loan productions and operational expansions.

Despite the increase in operation expenses, our
efficiency ratio has improved from 58% for the quarter ended
September 30, 2002 to 57% of current year third quarter.




DIVIDEND POLICY

Based on IndyMacs strong operating
performance and strong financial position, including earnings,
capital and liquidity and its commitment to shareholder value,
IndyMacs Board of Directors declared a cash dividend of
$0.20 per share, up 33%, from $0.15 per share in the previous
quarter and double the dividend rate paid in the first two
quarters this year. The cash dividend is payable
December 18, 2003 to shareholders of record on
November 13, 2003.




FUTURE OUTLOOK

On average, U.S. mortgage debt outstanding
has grown approximately 7% to 8% per year over the last 2
decades and is projected, based on economic demographics, to
continue this level of approximate growth. At this rate,
mortgage debt outstanding roughly doubles every decade. We
believe, based on our confidence in our employees, hybrid
thrift/ mortgage banking business model, capital strength and
ability to gain market share, that we are positioned to grow
earnings per share at a compounded growth rate of approximately
15% over the long run, or approximately double the rate of the
industry. In fact IndyMacs historical track record has
exceeded this target over the last decade with compounded annual
growth of 28% under its current management team. During this
period, IndyMac experienced eight years where earnings per share
grew at 20% or more each year with one year of negative growth
due to extraordinary global market factors in 1998 and one year
where earnings per share grew 11%, below this targeted growth
level.

With that said, the past three years have been
extraordinary years for the mortgage industry. Industry mortgage
production has achieved historic highs as a result of
historically low interest rates, which led to record refinancing
of mortgages. The industry is in the midst of a major transition
from these historic highs back to more normalized levels and the
Mortgage Bankers Association of America in its Mortgage Finance
Forecast is projecting that industry production will decline 52%
next year. Given the significant industry transition, IndyMac
expects that its earnings per share next year will lag its
long-term growth rate and may even decline slightly as we make
this transition.

In the midst of this significant industry
transition, forecasting is difficult. While there are many
scenarios that could occur, we currently reasonably forecast
that 2004 earnings per share will range from $2.90 to $3.25.
Following this transition period for our industry which will be
largely completed by the end of next year, we would expect to
continue to grow at our targeted 15% or better annual rate.




LIQUIDITY AND CAPITAL RESOURCES




OVERVIEW

At September 30, 2003, we had operating
liquidity of $942.5 million, which is represented by
unpledged liquid assets on hand plus amounts that may be
immediately raised through the pledging of other available
assets as collateral pursuant to committed financing facilities.
We currently believe that our liquidity level is in excess of
that necessary to satisfy our operating requirements and meet
our obligations and commitments in a timely and cost effective
manner.

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PRINCIPAL SOURCES OF CASH

Our principal financing needs are to fund
acquisitions of mortgage loans and our investment in mortgage
loans, mortgage-backed securities and MSRs. Our primary sources
of funds used to meet these financing needs are loan sales and
securitizations, deposits, advances from the Federal Home Loan
Bank, other borrowings and retained earnings. The sources used
vary depending on such factors as rates paid, maturities and the
impact on our capital.

Loan Sales and
Securitizations

Our business model relies heavily upon selling
the majority of our mortgage loans shortly after acquisition.
The proceeds of these sales are a critical component of the
liquidity necessary for our ongoing operations. During the three
months ended September 30, 2003, we sold our loans through
three channels: (1) GSEs; (2) private label
securitizations; and (3) whole loan sales. If any of our
sales channels were disrupted, our liquidity could be negatively
impacted. Disruptions in our whole loan sales and mortgage
securitization transactions can occur as a result of the
performance of our existing securitizations, as well as economic
events or other factors beyond our control.

Deposits/ Retail Bank

We solicit deposits from the general public and
institutions by offering a variety of accounts and rates through
our network of 10 branches in Southern California,
telebanking, and internet channels. Through our web site at
www.indymacbank.com, consumers can access their accounts
24-hours a day, seven days a week. Online banking allows
customers to access their accounts, view balances, transfer
funds between accounts, view transactions, download account
information and pay their bills conveniently from any computer
terminal.

Our deposit products include regular savings
accounts, demand deposit accounts, money market accounts,
certificates of deposit and individual retirement accounts.

The following table sets forth the balance of
deposits, by deposit category, as of the following period ends:

|                             |                     |                        |           |                    |  |                   |    |          |   |        |           |           |  |  |    |     |   |   |           |           |  |  |    |     |  
|---------------------------- | ------------------- | ---------------------- | --------- | ------------------ |  | ----------------- | -- | -------- | - | ------ | --------- | --------- |  |  | -- | --- | - | - | --------- | --------- |  |  | -- | --- | -
|                             |                     |                        |           |                    |  |                  
|                             |                     | September 30, 2003     |           | September 30, 2002 |  | December 31, 2002
|                             |                     |                        |           |                    |  |                  
|                             |                     |                        |           | % of               |  |                   |    | % of     |   |        |           | % of     
|                             |                     |                        |           | Total              |  |                   |    | Total    |   |        |           | Total    
|                             |                     | Amount                 |           | Deposits           |  | Amount            |    | Deposits |   | Amount |           | Deposits 
|                             |                     |                        |           |                    |  |                   |    |          |   |        |           |          
|                             |                     |                       
|                             |                     | (Dollars in thousands)
|Noninterest-bearing checking |                     | $                      | 42,897    |                    |  |                   | 1  | %        |   | $      | 31,562    |           |  |  | 1  | %   |   | $ | 38,430    |           |  |  | 1  | %  
|Interest-bearing checking    |                     |                        | 37,649    |                    |  |                   | 1  | %        |   |        | 37,460    |           |  |  | 1  | %   |   |   | 37,867    |           |  |  | 1  | %  
|Savings                      |                     |                        | 1,440,208 |                    |  |                   | 35 | %        |   |        | 541,270   |           |  |  | 19 | %   |   |   | 635,608   |           |  |  | 21 | %  
|Custodial accounts           |                     |                        | 683,400   |                    |  |                   | 16 | %        |   |        | 385,702   |           |  |  | 14 | %   |   |   | 497,462   |           |  |  | 16 | %  
|                             |                     |                        |           |                    |  |                   |    |          |   |        |           |           |  |  |    |     |   |   |           |           |  |  |    |    
|                             | Total core deposits |                        |           | 2,204,154          |  |                   |    | 53       | % |        |           | 995,994   |  |  |    | 35  | % |   |           | 1,209,367 |  |  |    | 39  | %
|Certificates of deposit      |                     |                        | 1,942,180 |                    |  |                   | 47 | %        |   |        | 1,859,340 |           |  |  | 65 | %   |   |   | 1,931,135 |           |  |  | 61 | %  
|                             |                     |                        |           |                    |  |                   |    |          |   |        |           |           |  |  |    |     |   |   |           |           |  |  |    |    
|                             | Total deposits      |                        | $         | 4,146,334          |  |                   |    | 100      | % |        | $         | 2,855,334 |  |  |    | 100 | % |   | $         | 3,140,502 |  |  |    | 100 | %
|                             |                     |                        |           |                    |  |                   |    |          |   |        |           |           |  |  |    |     |   |   |           |           |  |  |    |    

The increase in our savings deposits from
$541.3 million to $1,440 million is mainly due to the
introduction of the top tier money market products since October
of last year. As the equity market remains volatile, liquid
saving accounts have been an attractive investment alternative.

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The following table sets forth the balance of
deposits, by deposit channel, as of the following period ends:

|            |                |                        |           |                    |  |                   |    |          |   |        |           |           |  |  |    |     |   |   |           |           |  |  |    |     |  
|----------- | -------------- | ---------------------- | --------- | ------------------ |  | ----------------- | -- | -------- | - | ------ | --------- | --------- |  |  | -- | --- | - | - | --------- | --------- |  |  | -- | --- | -
|            |                |                        |           |                    |  |                  
|            |                | September 30, 2003     |           | September 30, 2002 |  | December 31, 2002
|            |                |                        |           |                    |  |                  
|            |                |                        |           | % of               |  |                   |    | % of     |   |        |           | % of     
|            |                |                        |           | Total              |  |                   |    | Total    |   |        |           | Total    
|            |                | Amount                 |           | Deposits           |  | Amount            |    | Deposits |   | Amount |           | Deposits 
|            |                |                        |           |                    |  |                   |    |          |   |        |           |          
|            |                |                       
|            |                | (Dollars in thousands)
|Branch      |                | $                      | 1,667,092 |                    |  |                   | 40 | %        |   | $      | 1,241,619 |           |  |  | 43 | %   |   | $ | 1,297,668 |           |  |  | 41 | %  
|Telebanking |                |                        | 569,034   |                    |  |                   | 14 | %        |   |        | 502,218   |           |  |  | 18 | %   |   |   | 489,977   |           |  |  | 16 | %  
|Internet    |                |                        | 487,396   |                    |  |                   | 12 | %        |   |        | 301,929   |           |  |  | 11 | %   |   |   | 338,830   |           |  |  | 11 | %  
|Money desk  |                |                        | 739,412   |                    |  |                   | 18 | %        |   |        | 423,866   |           |  |  | 15 | %   |   |   | 516,565   |           |  |  | 16 | %  
|Custodial   |                |                        | 683,400   |                    |  |                   | 16 | %        |   |        | 385,702   |           |  |  | 13 | %   |   |   | 497,462   |           |  |  | 16 | %  
|            |                |                        |           |                    |  |                   |    |          |   |        |           |           |  |  |    |     |   |   |           |           |  |  |    |    
|            | Total deposits |                        | $         | 4,146,334          |  |                   |    | 100      | % |        | $         | 2,855,334 |  |  |    | 100 | % |   | $         | 3,140,502 |  |  |    | 100 | %
|            |                |                        |           |                    |  |                   |    |          |   |        |           |           |  |  |    |     |   |   |           |           |  |  |    |    

Included in deposits at September 30, 2003
and December 31, 2002 were non-interest bearing custodial
accounts, primarily related to our GSE servicing portfolio,
totaling $683.4 million and $497.5 million,
respectively.

Advances from Federal Home Loan
Bank

The Federal Home Loan Bank system functions as a
borrowing source for regulated financial depositories and
similar institutions that are engaged in residential housing
finance. As a member of the FHLB of San Francisco, we are
required to own capital stock of the FHLB and are authorized to
apply for advances from the FHLB, on a secured basis, in amounts
determined by reference to available collateral. SFR mortgage
loans, agency and AAA-rated mortgage-backed securities are the
principal collateral that may be used to secure these
borrowings, although certain other types of loans and other
assets may also be accepted pursuant to FHLB policies and
statutory requirements. Currently, the Bank is approved for
collateralized advances of up to $4.8 billion, of which
$4.1 billion were outstanding at September 30, 2003.
The FHLB offers several credit programs, each with its own fixed
or floating interest rate, and a range of maturities.

Trust Preferred Securities and
Warrants

On November 14, 2001, we completed an
offering of Warrants and Income Redeemable Equity Securities to
investors. Gross proceeds of the transaction were
$175 million. The securities were offered as units
consisting of a trust preferred security, issued by a trust
formed by us, and a warrant to purchase IndyMac Bancorps
common stock. The proceeds from the offering are intended to be
used in ongoing operations and fund future growth and/or
repurchases of IndyMac Bancorp stock under its share repurchase
program. In July 2003, we issued an additional $30 million
of 6.05% trust preferred securities, the proceeds of which will
also be used in operations. These securities did not contain any
warrants on IndyMac Bancorp common stock.

Upon the adoption of FASB Interpretation
No. 46, Consolidation of Variable Interest Entities, an
Interpretation of Accounting Research Bulletin (ARB)
No. 51, on July 1, 2003, the trusts have been
deconsolidated from the financial statements of the company.
Trust preferred debentures, representing the liabilities due
from IndyMac Bancorp to IndyMac Capital Trusts, amounted to
$153.2 million and $117.1 million at
September 30, 2003 and December 31, 2002,
respectively. The increase in balance is primarily due to the
issuance of $30 million trust preferred in July 2003. These
debentures are included in Other Borrowings on the consolidated
balance sheets.

Other Borrowings, excluding Trust
Preferred

Other borrowings, excluding trust preferred,
consist of loans and securities sold under committed financing
facilities and uncommitted agreements to repurchase. Total other
borrowings decreased to $2,417.6 million at
September 30, 2003, from $2,491.7 million at
December 31, 2002. The decrease of

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$74.1 million was the result of using funds
generated from sales of loans and securities, an increase in
FHLB advances and an increase in savings deposits, instead of
borrowings to fund mortgage loans originated during the three
months ended September 30, 2003.


At September 30, 2003, we had
$2.9 billion in committed financing facilities, of which
$1.4 billion was utilized and $636.4 million was
available to use, based on eligible collateral. Decisions by our
lenders and investors to make additional funds available to us
in the future will depend upon a number of factors. These
include our compliance with the terms of existing credit
arrangements, our financial performance, eligible collateral,
changes in our credit rating, industry and market trends in our
various businesses, the general availability and interest rates
applicable to financing and investments, the lenders
and/or investors own resources and policies concerning
loans and investments and the relative attractiveness of
alternative investment or lending opportunities.




PRINCIPAL USES OF CASH

In addition to the financing sources discussed
above, cash uses are funded by net cash flows from operations,
sales of mortgage-backed securities and principal and interest
payments on loans and securities.

As a financial institution, the lending and
borrowing functions are integral parts of our business. When
evaluating our sources and uses of cash, we consider cash used
to grow our investments, and the borrowings used to finance
those investments, separately from the Companys operating
cash flows. Our most significant use of cash is for the
acquisition of mortgage loans and securities. In accordance with
accounting principles generally accepted in the United States of
America (US GAAP), purchases of loans held for sale
and trading securities, net of sales of such loans and
securities, are required to be included in our consolidated
statements of cash flows (see page 58) as a component of net
cash used in operating activities, whereas the borrowings used
to fund a substantial portion of such loan and securities
purchases are required to be recorded in our cash flow
statements as a component of net cash provided by financing
activities. The amounts of net purchases of loans held for sale
and trading securities included as components of net cash (used
in)/provided by operating activities totaled $(137.2) million
during the nine months ended September 30, 2003 and
$197.6 million during the nine months ended
September 30, 2002. Excluding the purchase and sale
activities for loans held for sale and trading securities, the
net cash (used in)/provided by the Companys operating
activities totaled $(34.0) million and $67.5 million for
the nine months ended September 30, 2003 and 2002,
respectively. During the third quarter 2003, the Company started
to purchase swaptions, and more caps and floors to hedge certain
liabilities and servicing-related assets. The net
(increase)/decrease in premiums paid for these derivative
instruments totaled $(118.4) million and $0.6 million for
the nine months ended September 30, 2003 and 2002,
respectively. The net cash provided by the Companys
operating activities before the activities for trading
securities, loans held for sale and purchase of derivative
instruments amounted to $84.4 million and $67.0 million for
the nine months ended September 30, 2003 and 2002,
respectively.




ACCUMULATED OTHER COMPREHENSIVE LOSS

Accumulated other comprehensive loss was ($27.4)
million at September 30, 2003, compared to ($17.7) million
at December 31, 2002. This change was a result of:
(1) the decline in fair value of certain interest rate
swaps and swaptions designated as cash flow hedges of floating
rate borrowings and does not include related increases in the
fair value of loans held for investment that are funded by
borrowings that are hedged by these interest rate swaps and
(2) the decline in the value of securities classified as
available for sale. Accumulated Other Comprehensive Loss is not
a component of the determination of regulatory capital.

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REGULATORY CAPITAL REQUIREMENTS

The Bank is subject to regulatory capital
regulations administered by the federal banking agencies. In
addition, as a condition to its approval of our acquisition of
SGV Bancorp, Inc. in July 2000, the OTS required that the Bank
hold Tier 1 (core) capital of at least 8% of adjusted
assets for three years following the consummation of the
transaction and maintain a total risk-based capital position of
at least 10% of risk-weighted assets. This particular condition
expired on July 1, 2003 and the Bank has committed to the
OTS to maintain total risk-based capital and Tier 1 risk-based
capital (core capital minus the deduction for low-level recourse
and residual interests) equal to at least 10% and 6%,
respectively, of risk-weighted assets. As of September 30,
2003, the Bank met all of the requirements of a
well-capitalized institution under the general
regulatory capital regulations.

During 2001, the OTS issued guidance for subprime
lending programs, which requires a lender to quantify the
additional risks in its subprime lending activities and
determine the appropriate amounts of allowances for loan losses
and capital it needs to offset those risks. The OTS guidance
suggests that subprime portfolios be supported by capital equal
to one and one-half to three times greater than what is
appropriate for similar prime assets. The OTS has accepted the
Banks approach to conform to this guidance, which is based
on the secondary market and rating agency securitization models.
We segment the subprime loans into categories based on
quantifiable, increasing risk levels. Category I includes all
subprime loans with 1.0% to 1.5% estimated lifetime loss;
Category II includes all subprime loans with 1.5% to 2.0%
estimated lifetime loss; and Category III includes all subprime
loans with greater than 2.0% estimated lifetime loss. These
categories are risk-weighted for capital purposes at 150%, 200%
and 300% of the standard risk weighting for the asset type,
respectively. We report our subprime loan calculation in an
addendum to the Thrift Financial Report that we file with the
OTS. The levels and balances within each level were as follows
at September 30, 2003:

|             |                |                        |         |                      |  |            |     |  |  |  |    |    |  
|------------ | -------------- | ---------------------- | ------- | -------------------- |  | ---------- | --- |  |  |  | -- | -- | -
|             |                | 09/30/03               |         | Multiple of Standard |  | Risk-Based
|             |                | Balance                |         | Risk Weighting       |  | Capital % 
|             |                |                        |         |                      |  |           
|             |                |                       
|             |                | (Dollars in thousands)
|Category I   |                | $                      | 428,537 |                      |  |            | 1.5 |  |  |  | 10 | % 
|Category II  |                |                        | 91,219  |                      |  |            | 2.0 |  |  |  | 12 | % 
|Category III |                |                        | 231,161 |                      |  |            | 3.0 |  |  |  | 22 | % 
|             |                |                        |         |                      |  |            |     |  |  |  |    |   
|             | Total subprime |                        | $       | 750,917              |  |            |     |  |  |  |    | 15 | %
|             |                |                        |         |                      |  |            |     |  |  |  |    |   

As of September 30, 2003,
$469.7 million or 62.6% of our subprime loans are held for
sale as calculated for regulatory reporting purposes.

The following table presents the Banks
actual and required capital ratios and the minimum required
capital ratios to be categorized as well-capitalized
at September 30, 2003. Because not all institutions have
uniformly implemented the new subprime guidance, it is possible
that IndyMacs risk-based capital ratios will not be
comparable to other institutions. The impact of the additional
risk weighting criteria had the effect of reducing
IndyMacs risk-based capital by 109 basis points as noted
in the table below.

|                |                   |                |  |                     |   |                  |  |       |   |  |  |       |  
|--------------- | ----------------- | -------------- |  | ------------------- | - | ---------------- |  | ----- | - |  |  | ----- | -
|                |                   | As Reported    |  | Adjusted for        |   |                 
|                |                   | Pre-Subprime   |  | Additional Subprime |   | Well-Capitalized
|                |                   | Risk-Weighting |  | Risk-Weighting      |   | Minimum         
|                |                   |                |  |                     |   |                 
|Capital Ratios: |                   |                |  |                     |   |                  |  |       |   |  |  |      
|                | Tangible          |                |  | 7.92                | % |                  |  | 7.92  | % |  |  | 2.00  | %
|                | Tier 1 core       |                |  | 7.92                | % |                  |  | 7.92  | % |  |  | 5.00  | %
|                | Tier 1 risk-based |                |  | 12.94               | % |                  |  | 11.90 | % |  |  | 6.00  | %
|                | Total risk-based  |                |  | 13.58               | % |                  |  | 12.49 | % |  |  | 10.00 | %

The ratios above do not include
$69.6 million of unencumbered cash at IndyMac Bancorp that
is available for contribution to the Banks regulatory
capital. Including the excess capital held by the Bank and such
cash, we had $260 million of total excess capital at
September 30, 2003.

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We believe that, under current regulations, the
Bank will continue to meet its well-capitalized
minimum capital requirements in the foreseeable future. The
Banks regulatory capital compliance could be impacted,
however, by a number of factors, such as changes to applicable
regulations, adverse action by our regulators, changes in the
Banks mix of assets, interest rate fluctuations or
significant changes in the economy in areas where the Bank has
most of its loans. Any of these factors could cause our actual
future results to vary from anticipated future results and
consequently could have an adverse impact on the ability of the
Bank to meet its future minimum capital requirements.




OFF-BALANCE SHEET ARRANGEMENTS

We are party to various transactions that have an
off-balance sheet component. In connection with loan sales that
are securitization transactions, there are $11.3 billion in
loans owned by off-balance sheet trusts as of September 30,
2003. The trusts have issued bonds secured by these loans. We
have no obligation to provide funding support to either the
third party investors or the off-balance sheet trusts. The third
party investors or the trusts generally have no recourse to our
assets or us and have no ability to require us to repurchase
their securities other than for non-credit-related recourse that
can arise under standard representations and warranties.

We often retain certain interests, which may
include subordinated classes of securities, MSRs, AAA-rated
securities and agency interest-only strips and residual
securities in the securitization trust. The performance of the
loans in the trusts will impact our ability to realize the
current estimated fair value of these assets that are included
on our balance sheet.

As of September 30, 2003, we have utilized
various hedging instruments, including futures, floors, swaps,
and options, to reduce our interest-rate exposure on retained
servicing assets. The hedging instruments carried a fair value
of $122 million at September 30, 2003.




CONTRACTUAL OBLIGATIONS

The following table summarizes our material
contractual obligations as of September 30, 2003. The debt
includes advances from Federal Home Loan Bank, other borrowings,
including trust preferred debentures.

|                 |       |                        |           |                   |  |                   |           |                   |  |   |         |         |  |   |         |         | 
|---------------- | ----- | ---------------------- | --------- | ----------------- |  | ----------------- | --------- | ----------------- |  | - | ------- | ------- |  | - | ------- | ------- | 
|                 |       |                       
|                 |       | Payment Due           
|                 |       |                       
|                 |       | October 1, 2003        |           | January 1, 2004   |  | January 1, 2007   |           |                  
|                 |       | through                |           | through           |  | through           |           | After            
|                 |       | December 31, 2003      |           | December 31, 2006 |  | December 31, 2009 |           | December 31, 2009
|                 |       |                        |           |                   |  |                   |           |                  
|                 |       |                       
|                 |       | (Dollars in thousands)
|Debt             |       | $                      | 4,631,274 |                   |  | $                 | 1,244,979 |                   |  | $ | 526,000 |         |  | $ | 228,374 |        
|Operating Leases |       |                        | 3,967     |                   |  |                   | 43,723    |                   |  |   | 24,808  |         |  |   | 19,299  |        
|                 |       |                        |           |                   |  |                   |           |                   |  |   |         |         |  |   |         |        
|                 | Total |                        | $         | 4,635,241         |  |                   | $         | 1,288,702         |  |   | $       | 550,808 |  |   | $       | 247,673 | 
|                 |       |                        |           |                   |  |                   |           |                   |  |   |         |         |  |   |         |        




KEY OPERATING RISKS

Like all businesses, we assume a certain amount
of risk in order to earn returns on our capital. The following
is a summary discussion of key operating risks. For further
information on these and other key operating risks, refer to
IndyMacs annual report on Form 10-K for the year
ended December 31, 2002.




INTEREST RATE RISK

Due to the characteristics of our financial
assets and liabilities and the nature of our business
activities, our financial position and results of operations may
be materially affected by changes in interest rates in various
ways. While we have devised and implemented a comprehensive
asset/liability management strategy that seeks, on an economic
and an accounting basis, to mitigate significant fluctuations in
our financial position and results of operations likely to be
caused by market interest rate changes, there can be no
assurance that this strategy (including assumptions concerning
the correlation thought to exist among different types of
instruments) or its implementation will be successful in any
particular interest rate environment.

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VALUATION RISK

In connection with the loan sale process, we
retain certain assets for which the market is limited and
illiquid. As a result, valuations are derived using complex
modeling and significant assumptions and judgments, in the
absence of third party market quotations or sale information to
value such assets. The assets include AAA-rated securities and
agency interest-only strips, MSRs, non-investment grade
securities and residuals. In addition, from time to time, we may
acquire these types of securities from third party issuers.
These assets represented 5% of total assets and 65% of total
equity at September 30, 2003. The fair value of these
assets could vary significantly as market conditions change.




CREDIT RISK

A significant portion of our Investment Portfolio
consists of prime residential SFR loans held for investment, and
non-investment grade securities and residuals collateralized by
mortgage loans. We also provide construction lending to
consumers and developers to build residential properties. The
credit risk profile on consumer loans is very similar to that of
our permanent mortgage loans, while builder construction loans
tend to have a higher credit risk profile than permanent
mortgage loans. While the majority of our loans are to prime
quality borrowers and secured by residential property, there is
no guarantee that, in the event of borrower default, we will be
able to recoup the full principal amount and interest due on a
loan. We have adopted underwriting and loan quality monitoring
systems, procedures and credit policies, including the
establishment and review of the allowance for loan losses, that
management believes are prudent and appropriate to minimize this
risk by tracking loan performance, assessing the likelihood of
nonperformance and diversifying our loan portfolio. Such
policies and procedures, however, may not prevent unexpected
losses that could adversely affect our results. In addition,
while we have discontinued our home improvement and manufactured
housing lending programs, we continue to liquidate portfolios of
these loans, which have greater credit risk than that of our
core mortgage loan portfolios. At September 30, 2003, the
book value of these non-core portfolios was $68.4 million, net
of reserves.

We also sell loans to GSEs, to outside investors,
and to securitization trusts. In these instances, we are subject
to repurchase risk in the event of breaches of representations
or warranties we make in connection with the loan sales. While
we have established what we believe to be adequate secondary
marketing reserves, there can be no guarantee that the amount
reserved is sufficient to cover all potential losses resulting
from such repurchases.




LIQUIDITY RISK/ ACCESS TO CAPITAL
MARKETS

We finance a substantial portion of our assets
through consumer deposits insured by the Federal Deposit
Insurance Corporation (FDIC) and through borrowings
from the FHLB. We also obtain financing from investment and
commercial banks. There is no guarantee that these sources of
funds will continue to be available to us, or that our
borrowings can be refinanced upon maturity, although we are not
aware of any trends, events or uncertainties that we believe are
reasonably likely to cause a decrease in our liquidity from
these sources.

We utilize three sales channels to sell loans to
the secondary market: whole loan sales, sales to the GSEs, and
private-label securitizations. A disruption in the
securitization market could adversely impact our ability to fund
mortgage loans and our gains on sale, leading to a corresponding
decrease in revenue and earnings. Likewise, a deterioration in
the performance of our private-label securities could adversely
impact the availability and pricing of future transactions.

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GOVERNMENT REGULATION AND MONETARY
POLICY

The banking industry in general is extensively
regulated at the federal and state levels. Insured depository
institutions and their holding companies are subject to
comprehensive regulation, supervision, and examination by
financial regulatory authorities covering all aspects of their
organization, management and operations. The OTS and the FDIC
are the primary federal regulatory agencies for us and our
affiliated entities. In addition to their regulatory powers,
these two agencies also have significant enforcement authority
that they can use to address unsafe and unsound banking
practices, violations of laws, and capital and operational
deficiencies. Accordingly, the actions of those governmental
authorities responsible for regulatory, fiscal and monetary
affairs can have a significant impact on the activities of
financial services firms such as ours. Our operations are also
subject to regulation at the state level, including a variety of
consumer protection provisions. Banking institutions are further
affected by the various monetary and fiscal policies of the U.S.
government, which can influence financial regulatory actions.




COMPETITION

We face significant competition in acquiring and
selling loans. In our mortgage banking operations, we compete
with other mortgage bankers, GSEs, established third party
lending programs, investment banking firms, banks, savings and
loan associations, and other lenders and entities purchasing
mortgage assets. With regard to mortgage-backed securities
issued through our mortgage banking operations, we face
competition from other investment opportunities available to
prospective investors. We estimate our market share of the U.S.
mortgage market to be less than 1%. A number of our competitors
have significantly larger market share and financial resources.
While we believe our small market share creates opportunities
for growth, there is no assurance that we can effectively
compete with these entities in the future.

The GSEs have made and we believe will continue
to make significant technological and economic advances to
broaden their customer bases. When the GSEs contract or expand,
there are both positive and negative impacts on our mortgage
banking lending operations. As GSEs expand, additional liquidity
is brought to the market, and loan products can be resold more
quickly. Conversely, expanding GSEs increase competition for
loans, which may reduce profit margins on loan sales. We seek to
address these competitive pressures by making a strong effort to
maximize our use of technology, by diversifying into other
residential mortgage products that are less affected by GSEs,
and by operating in a more cost-effective manner than our
competitors. There can be no assurance that these efforts will
be successful.

The primary competition for our Mortgage Banking
Group comes from banks and other financial institutions and
mortgage companies. We seek to compete with financial
institutions and mortgage companies through an emphasis on
quality of service, diversified products and maximum use of
technology.




OTHER RISKS

We are subject to various other risks, including
changes in the demand for mortgage loans, which historically
tends to decrease as interest rates increase. Also, a majority
of our loan acquisitions are geographically concentrated in
certain states, including California, New York, Florida and New
Jersey. Any adverse economic conditions in these markets could
cause the number of loans acquired to decrease and delinquencies
to increase, causing a corresponding decline in revenues.
Lastly, there are no guarantees as to our degree of success in
managing loan portfolio concentrations, anticipating and taking
advantage of technological advances, or executing upon our
growth plans for our mortgage banking operations.

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CRITICAL ACCOUNTING POLICIES

Various elements of our accounting policies, by
their nature, are inherently subject to estimation techniques,
valuation assumptions and other subjective assessments. In
particular, we have identified five policies, that, due to the
judgments, estimates and assumptions inherent in those policies
are critical to an understanding of our financial statements.
These policies relate to: (1) the valuation of AAA-rated
securities and agency interest-only strips; (2) the
valuation of MSRs; (3) the valuation of non-investment
grade securities and residuals; (4) the methodology for
determining our allowance for loan losses; and (5) the
valuation of our secondary market reserves. Management discusses
these critical accounting policies and related judgments with
IndyMacs audit committee and external auditors on a
quarterly basis. We believe that the judgments, estimates and
assumptions used in the preparation of our consolidated
financial statements are appropriate given the factual
circumstances at the time. However, given the sensitivity of our
consolidated financial statements to these critical accounting
policies, the use of other judgments, estimates and assumptions
could result in material differences in our results of
operations or financial condition. For further information on
the Companys critical accounting policies, refer to
IndyMacs annual report on Form 10-K for the year
ended December 31, 2002.






|        |                                                              
|------- | -------------------------------------------------------------
|ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURE
    ABOUT MARKET RISK

See Overall Interest Rate Risk
Management above for quantitative and qualitative
disclosure about market risk on page 39.

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|        |                     
|------- | --------------------
|ITEM 1. | FINANCIAL STATEMENTS

INDYMAC BANCORP, INC. AND
SUBSIDIARIES






CONSOLIDATED BALANCE SHEETS


|                                                                                                                                                                                                                                                                                                                               |                           |                         |                                 |                                                                                                                                           |           |           |            |         |           |           |           | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------- | ----------------------- | ------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------- | --------- | --------- | ---------- | ------- | --------- | --------- | --------- | 
|                                                                                                                                                                                                                                                                                                                               |                           | September 30,           |                                 | December 31,                                                                                                                             
|                                                                                                                                                                                                                                                                                                                               |                           | 2003                    |                                 | 2002                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                               |                           |                         |                                 |                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                               |                           | (Unaudited)             |                                 |                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                               |                           |                        
|                                                                                                                                                                                                                                                                                                                               |                           | (Dollars in thousands) 
|ASSETS                                                                                                                                                                                                                                                                                                                        
|Cash and cash equivalents                                                                                                                                                                                                                                                                                                      |                           | $                       | 294,880                         |                                                                                                                                           |           | $         | 196,720    |        
|Securities classified as trading
    ($81.0 million and $472.0 million pledged as
    collateral for repurchase agreements at September 30, 2003
    and December 31, 2002, respectively)                                                                                                                                      |                           |                         | 226,251                         |                                                                                                                                           |           |           | 765,883    |        
|Mortgage-backed securities and agency notes
    available for sale, amortized cost of $1.5 billion and
    $1.6 billion at September 30, 2003 and December 31,
    2002, respectively ($1.5 billion and $974.2 million
    pledged as collateral for borrowings at September 30, 2003
    and December 31, 2002, respectively) |                           |                         | 1,517,280                       |                                                                                                                                           |           |           | 1,573,210  |        
|Loans receivable:                                                                                                                                                                                                                                                                                                              |                           |                         |                                 |                                                                                                                                           |           |           |            |        
|                                                                                                                                                                                                                                                                                                                               | Loans held for sale       |                         |                                 |                                                                                                                                           |           |           |            |         |          
|                                                                                                                                                                                                                                                                                                                               |                           | Prime                   |                                 |                                                                                                                                           | 2,671,883 |           |            |         | 1,939,780 |          
|                                                                                                                                                                                                                                                                                                                               |                           | Subprime                |                                 |                                                                                                                                           | 250,717   |           |            |         | 213,405   |          
|                                                                                                                                                                                                                                                                                                                               |                           | Consumer lot loans      |                                 |                                                                                                                                           | 175,956   |           |            |         | 74,498    |          
|                                                                                                                                                                                                                                                                                                                               |                           |                         |                                 |                                                                                                                                           |           |           |            |        
|                                                                                                                                                                                                                                                                                                                               |                           |                         | Total loans held for sale       |                                                                                                                                           |           | 3,098,556 |            |         |           | 2,227,683 |          
|                                                                                                                                                                                                                                                                                                                               | Loans held for investment |                         |                                 |                                                                                                                                           |           |           |            |         |          
|                                                                                                                                                                                                                                                                                                                               |                           | SFR mortgage            |                                 |                                                                                                                                           | 3,406,052 |           |            |         | 2,096,517 |          
|                                                                                                                                                                                                                                                                                                                               |                           | Land and other mortgage |                                 |                                                                                                                                           | 99,921    |           |            |         | 130,454   |          
|                                                                                                                                                                                                                                                                                                                               |                           | Builder construction    |                                 |                                                                                                                                           | 466,413   |           |            |         | 482,408   |          
|                                                                                                                                                                                                                                                                                                                               |                           | Consumer construction   |                                 |                                                                                                                                           | 1,093,918 |           |            |         | 875,335   |          
|                                                                                                                                                                                                                                                                                                                               |                           | Income property         |                                 |                                                                                                                                           | 45,739    |           |            |         | 64,053    |          
|                                                                                                                                                                                                                                                                                                                               |                           | HELOC                   |                                 |                                                                                                                                           | 587,364   |           |            |         | 312,881   |          
|                                                                                                                                                                                                                                                                                                                               | Allowance for loan losses |                         |                                 | (52,481                                                                                                                                   | )         |           |            | (50,761 | )        
|                                                                                                                                                                                                                                                                                                                               |                           |                         |                                 |                                                                                                                                           |           |           |            |        
|                                                                                                                                                                                                                                                                                                                               |                           |                         | Total loans held for investment |                                                                                                                                           |           | 5,646,926 |            |         |           | 3,910,887 |          
|                                                                                                                                                                                                                                                                                                                               |                           |                         |                                 |                                                                                                                                           |           |           |            |        
|                                                                                                                                                                                                                                                                                                                               |                           |                         |                                 | Total loans receivable ($1.7 billion pledged
    as collateral for repurchase agreements at September 30,
    2003 and December 31, 2002) |           |           | 8,745,482  |         |           |           | 6,138,570 | 
|Mortgage servicing rights                                                                                                                                                                                                                                                                                                      |                           |                         | 406,917                         |                                                                                                                                           |           |           | 300,539    |        
|Investment in Federal Home Loan Bank stock, at
    cost                                                                                                                                                                                                                                                                        |                           |                         | 267,196                         |                                                                                                                                           |           |           | 155,443    |        
|Interest receivable                                                                                                                                                                                                                                                                                                            |                           |                         | 45,047                          |                                                                                                                                           |           |           | 47,089     |        
|Goodwill and other intangible assets                                                                                                                                                                                                                                                                                           |                           |                         | 33,894                          |                                                                                                                                           |           |           | 34,549     |        
|Foreclosed assets                                                                                                                                                                                                                                                                                                              |                           |                         | 27,676                          |                                                                                                                                           |           |           | 36,526     |        
|Other assets                                                                                                                                                                                                                                                                                                                   |                           |                         | 502,844                         |                                                                                                                                           |           |           | 325,925    |        
|                                                                                                                                                                                                                                                                                                                               |                           |                         |                                 |                                                                                                                                           |           |           |            |        
|                                                                                                                                                                                                                                                                                                                               |                           |                         |                                 | Total assets                                                                                                                              |           | $         | 12,067,467 |         |           | $         | 9,574,454 | 
|                                                                                                                                                                                                                                                                                                                               |                           |                         |                                 |                                                                                                                                           |           |           |            |        

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INDYMAC BANCORP, INC. AND
SUBSIDIARIES


CONSOLIDATED BALANCE SHEETS 
(Continued)

|                                         |                                                                                                                                                                                                                                  |                                            |           |              |            |   |           |           |           | 
|---------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | --------- | ------------ | ---------- | - | --------- | --------- | --------- | 
|                                         |                                                                                                                                                                                                                                  | September 30,                              |           | December 31,
|                                         |                                                                                                                                                                                                                                  | 2003                                       |           | 2002        
|                                         |                                                                                                                                                                                                                                  |                                            |           |             
|                                         |                                                                                                                                                                                                                                  | (Unaudited)                                |           |             
|                                         |                                                                                                                                                                                                                                  |                                           
|                                         |                                                                                                                                                                                                                                  | (Dollars in thousands)                    
|LIABILITIES AND SHAREHOLDERS
    EQUITY
|Deposits                                 |                                                                                                                                                                                                                                  | $                                          | 4,146,334 |              |            | $ | 3,140,502 |          
|Advances from Federal Home Loan Bank     |                                                                                                                                                                                                                                  |                                            | 4,059,899 |              |            |   | 2,721,783 |          
|Other borrowings                         |                                                                                                                                                                                                                                  |                                            | 2,570,728 |              |            |   | 2,608,534 |          
|Other liabilities                        |                                                                                                                                                                                                                                  |                                            | 330,946   |              |            |   | 253,670   |          
|                                         |                                                                                                                                                                                                                                  |                                            |           |              |            |   |           |          
|                                         |                                                                                                                                                                                                                                  | Total liabilities                          |           |              | 11,107,907 |   |           |           | 8,724,489 | 
|Shareholders Equity                     |                                                                                                                                                                                                                                  |                                            |           |              |            |   |           |          
|                                         | Preferred stock  authorized,
    10,000,000 shares of $0.01 par value; none issued                                                                                                                                              |                                            |           |             |            |   |           |          |          
|                                         | Common stock  authorized, 200,000,000
    shares of $0.01 par value; issued 84,715,708 shares (55,561,512
    outstanding) at September 30, 2003 and issued 83,959,547
    shares (54,829,486 outstanding) at December 31, 2002 |                                            |           | 847          |            |   |           | 840       |          
|                                         | Additional paid-in-capital                                                                                                                                                                                                       |                                            |           | 1,018,953    |            |   |           | 1,007,936 |          
|                                         | Accumulated other comprehensive loss                                                                                                                                                                                             |                                            |           | (27,352      | )          |   |           | (17,747   | )        
|                                         | Retained earnings                                                                                                                                                                                                                |                                            |           | 486,349      |            |   |           | 377,707   |          
|                                         | Treasury stock, 29,154,196 shares and 29,130,061
    shares at September 30, 2003 and December 31, 2002,
    respectively                                                                                                        |                                            |           | (519,237     | )          |   |           | (518,771  | )        
|                                         |                                                                                                                                                                                                                                  |                                            |           |              |            |   |           |          
|                                         |                                                                                                                                                                                                                                  | Total shareholders equity                 |           |              | 959,560    |   |           |           | 849,965   | 
|                                         |                                                                                                                                                                                                                                  |                                            |           |              |            |   |           |          
|                                         |                                                                                                                                                                                                                                  | Total liabilities and shareholders equity |           | $            | 12,067,467 |   |           | $         | 9,574,454 | 
|                                         |                                                                                                                                                                                                                                  |                                            |           |              |            |   |           |          

The accompanying notes are an integral part of
these statements.

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INDYMAC BANCORP, INC. AND
SUBSIDIARIES






CONSOLIDATED STATEMENTS OF EARNINGS


|                                           |                                               |                                                         |        |                     |         |      |        |        |         |   |         |         |         |   |         |         |         | 
|------------------------------------------ | --------------------------------------------- | ------------------------------------------------------- | ------ | ------------------- | ------- | ---- | ------ | ------ | ------- | - | ------- | ------- | ------- | - | ------- | ------- | ------- | 
|                                           |                                               |                                                         |        |                    
|                                           |                                               | For the Three Months                                    |        | For the Nine Months
|                                           |                                               | Ended September 30,                                     |        | Ended September 30,
|                                           |                                               |                                                         |        |                    
|                                           |                                               | 2003                                                    |        | 2002                |         | 2003 |        | 2002  
|                                           |                                               |                                                         |        |                     |         |      |        |       
|                                           |                                               |                                                        
|                                           |                                               | (Unaudited)                                            
|                                           |                                               |                                                        
|                                           |                                               | (Dollars in thousands, except per share data)          
|Interest income                            |                                               |                                                         |        |                     |         |      |        |        |         |   |         |         |         |   |         |        
|Mortgage-backed and other securities       |                                               | $                                                       | 20,437 |                     |         | $    | 29,246 |        |         | $ | 57,508  |         |         | $ | 86,061  |        
|Loans held for sale                        |                                               |                                                         |        |                     |         |      |        |        |         |   |         |         |         |   |         |        
|                                           | Prime                                         |                                                         |        | 52,571              |         |      |        | 32,660 |         |   |         | 133,340 |         |   |         | 92,089  |        
|                                           | Subprime                                      |                                                         |        | 6,784               |         |      |        | 4,327  |         |   |         | 20,170  |         |   |         | 10,014  |        
|                                           | HELOC                                         |                                                         |        |                    |         |      |        | 3,004  |         |   |         |        |         |   |         | 3,004   |        
|                                           | Consumer lot loans                            |                                                         |        | 2,578               |         |      |        | 404    |         |   |         | 6,085   |         |   |         | 404     |        
|                                           |                                               |                                                         |        |                     |         |      |        |        |         |   |         |         |         |   |         |        
|                                           |                                               | Total loans held for sale                               |        |                     | 61,933  |      |        |        | 40,395  |   |         |         | 159,595 |   |         |         | 105,511 | 
|Loans held for investment                  |                                               |                                                         |        |                     |         |      |        |        |         |   |         |         |         |   |         |        
|                                           | SFR mortgage                                  |                                                         |        | 30,140              |         |      |        | 20,272 |         |   |         | 90,113  |         |   |         | 66,289  |        
|                                           | Land and other mortgage                       |                                                         |        | 1,793               |         |      |        | 3,046  |         |   |         | 5,886   |         |   |         | 15,599  |        
|                                           | Builder construction                          |                                                         |        | 8,191               |         |      |        | 8,743  |         |   |         | 25,474  |         |   |         | 28,474  |        
|                                           | Consumer construction                         |                                                         |        | 15,591              |         |      |        | 13,568 |         |   |         | 44,627  |         |   |         | 41,494  |        
|                                           | Income property                               |                                                         |        | 787                 |         |      |        | 1,367  |         |   |         | 2,991   |         |   |         | 3,960   |        
|                                           | HELOC                                         |                                                         |        | 5,834               |         |      |        |       |         |   |         | 14,931  |         |   |         | 3,124   |        
|                                           |                                               |                                                         |        |                     |         |      |        |        |         |   |         |         |         |   |         |        
|                                           |                                               | Total loans held for investment                         |        |                     | 62,336  |      |        |        | 46,996  |   |         |         | 184,022 |   |         |         | 158,940 | 
|Other                                      |                                               |                                                         | 2,633  |                     |         |      | 1,537  |        |         |   | 6,887   |         |         |   | 4,904   |        
|                                           |                                               |                                                         |        |                     |         |      |        |        |         |   |         |         |         |   |         |        
|                                           |                                               | Total interest income                                   |        |                     | 147,339 |      |        |        | 118,174 |   |         |         | 408,012 |   |         |         | 355,416 | 
|Interest expense                           |                                               |                                                         |        |                     |         |      |        |        |         |   |         |         |         |   |         |        
|Deposits                                   |                                               |                                                         | 22,261 |                     |         |      | 23,989 |        |         |   | 65,899  |         |         |   | 82,125  |        
|Advances from Federal Home Loan Bank       |                                               |                                                         | 28,959 |                     |         |      | 26,635 |        |         |   | 82,824  |         |         |   | 76,028  |        
|Other borrowings                           |                                               |                                                         | 13,666 |                     |         |      | 17,175 |        |         |   | 46,297  |         |         |   | 43,931  |        
|                                           |                                               |                                                         |        |                     |         |      |        |        |         |   |         |         |         |   |         |        
|                                           |                                               | Total interest expense                                  |        |                     | 64,886  |      |        |        | 67,799  |   |         |         | 195,020 |   |         |         | 202,084 | 
|                                           |                                               |                                                         |        |                     |         |      |        |        |         |   |         |         |         |   |         |        
|                                           |                                               | Net interest income                                     |        |                     | 82,453  |      |        |        | 50,375  |   |         |         | 212,992 |   |         |         | 153,332 | 
|Provision for loan losses                  |                                               |                                                         | 6,200  |                     |         |      | 2,700  |        |         |   | 16,200  |         |         |   | 10,454  |        
|                                           |                                               |                                                         |        |                     |         |      |        |        |         |   |         |         |         |   |         |        
|                                           |                                               | Net interest income after provision for loan
    losses |        |                     | 76,253  |      |        |        | 47,675  |   |         |         | 196,792 |   |         |         | 142,878 | 
|Other income                               |                                               |                                                         |        |                     |         |      |        |        |         |   |         |         |         |   |         |        
|                                           | Gain on sale of loans                         |                                                         |        | 121,498             |         |      |        | 77,279 |         |   |         | 307,428 |         |   |         | 226,025 |        
|                                           | Service fee (loss) income                     |                                                         |        | (11,113             | )       |      |        | 3,593  |         |   |         | (10,130 | )       |   |         | 17,820  |        
|                                           | (Loss)gain on mortgage-backed securities, net |                                                         |        | (8,647              | )       |      |        | 7,674  |         |   |         | (24,816 | )       |   |         | 3,387   |        
|                                           | Fee and other income                          |                                                         |        | 21,655              |         |      |        | 14,531 |         |   |         | 60,634  |         |   |         | 40,820  |        
|                                           |                                               |                                                         |        |                     |         |      |        |        |         |   |         |         |         |   |         |        
|                                           |                                               | Total other income                                      |        |                     | 123,393 |      |        |        | 103,077 |   |         |         | 333,116 |   |         |         | 288,052 | 
|                                           |                                               |                                                         |        |                     |         |      |        |        |         |   |         |         |         |   |         |        
|                                           |                                               | Net revenues                                            |        |                     | 199,646 |      |        |        | 150,752 |   |         |         | 529,908 |   |         |         | 430,930 | 
|Other expense                              |                                               |                                                         |        |                     |         |      |        |        |         |   |         |         |         |   |         |        
|                                           | Operating expenses                            |                                                         |        | 117,282             |         |      |        | 88,995 |         |   |         | 317,699 |         |   |         | 249,251 |        
|                                           | Amortization of other intangible assets       |                                                         |        | 208                 |         |      |        | 263    |         |   |         | 655     |         |   |         | 842     |        
|                                           |                                               |                                                         |        |                     |         |      |        |        |         |   |         |         |         |   |         |        
|                                           |                                               | Total other expense                                     |        |                     | 117,490 |      |        |        | 89,258  |   |         |         | 318,354 |   |         |         | 250,093 | 
|                                           |                                               |                                                         |        |                     |         |      |        |        |         |   |         |         |         |   |         |        
|Earnings before provision for income taxes |                                               |                                                         | 82,156 |                     |         |      | 61,494 |        |         |   | 211,554 |         |         |   | 180,837 |        
|                                           | Provision for income taxes                    |                                                         |        | 32,452              |         |      |        | 24,290 |         |   |         | 83,564  |         |   |         | 73,040  |        
|                                           |                                               |                                                         |        |                     |         |      |        |        |         |   |         |         |         |   |         |        
|                                           |                                               | Net earnings                                            |        | $                   | 49,704  |      |        | $      | 37,204  |   |         | $       | 127,990 |   |         | $       | 107,797 | 
|                                           |                                               |                                                         |        |                     |         |      |        |        |         |   |         |         |         |   |         |        
|Earnings per share                         |                                               |                                                         |        |                     |         |      |        |        |         |   |         |         |         |   |         |        
|                                           | Basic                                         |                                                         | $      | 0.90                |         |      | $      | 0.65   |         |   | $       | 2.33    |         |   | $       | 1.83    |        
|                                           | Diluted                                       |                                                         | $      | 0.87                |         |      | $      | 0.64   |         |   | $       | 2.26    |         |   | $       | 1.78    |        
|Weighted average shares outstanding        |                                               |                                                         |        |                     |         |      |        |        |         |   |         |         |         |   |         |        
|                                           | Basic                                         |                                                         |        | 55,255              |         |      |        | 56,879 |         |   |         | 55,034  |         |   |         | 59,040  |        
|                                           | Diluted                                       |                                                         |        | 56,991              |         |      |        | 58,375 |         |   |         | 56,561  |         |   |         | 60,727  |        
|Dividends paid per share                   |                                               | $                                                       | 0.15   |                     |         |      |       |        |         | $ | 0.35    |         |         |   |        |        

The accompanying notes are an integral part of
these statements.

56



---



##### Table of Contents



INDYMAC BANCORP, INC. AND
SUBSIDIARIES






CONSOLIDATED STATEMENTS OF SHAREHOLDERS
EQUITY AND COMPREHENSIVE INCOME


|                                                                |  |                        |            |        |  |            |     |               |  |          |           |               |  |          |         |               |  |   |         |   |  |   |         |   |  |   |          |   |  |   |          |  
|--------------------------------------------------------------- |  | ---------------------- | ---------- | ------ |  | ---------- | --- | ------------- |  | -------- | --------- | ------------- |  | -------- | ------- | ------------- |  | - | ------- | - |  | - | ------- | - |  | - | -------- | - |  | - | -------- | -
|                                                                |  |                        |            |        |  |            |     | Accumulated   |  |          |           |               |  |          |         |              
|                                                                |  |                        |            |        |  |            |     | Other         |  |          |           |               |  |          |         |              
|                                                                |  |                        |            |        |  | Additional |     | Comprehensive |  |          |           | Total         |  |          |         | Total        
|                                                                |  | Shares                 |            | Common |  | Paid-In-   |     | Income        |  | Retained |           | Comprehensive |  | Treasury |         | Shareholders
|                                                                |  | Outstanding            |            | Stock  |  | Capital    |     | (Loss)        |  | Earnings |           | Income        |  | Stock    |         | Equity       
|                                                                |  |                        |            |        |  |            |     |               |  |          |           |               |  |          |         |              
|                                                                |  |                       
|                                                                |  | (Unaudited)           
|                                                                |  | (Dollars in thousands)
|Balance at December 31, 2001                                    |  |                        | 60,366,266 |        |  | $          | 833 |               |  | $        | 996,649   |               |  | $        | 570     |               |  | $ | 234,314 |   |  | $ |        |   |  | $ | (387,228 | ) |  | $ | 845,138  |  
|Common stock options exercised                                  |  |                        | 583,669    |        |  |            | 6   |               |  |          | 9,397     |               |  |          |        |               |  |   |        |   |  |   |        |   |  |   |         |   |  |   | 9,403    |  
|Net directors and officers notes
    (receivables)            |  |                        |           |        |  |            |    |               |  |          | (379      | )             |  |          |        |               |  |   |        |   |  |   |        |   |  |   |         |   |  |   | (379     | )
|Deferred compensation, restricted stock                         |  |                        | 21,356     |        |  |            |    |               |  |          | 1,227     |               |  |          |        |               |  |   |        |   |  |   |        |   |  |   |         |   |  |   | 1,227    |  
|Net loss on mortgage securities available for sale              |  |                        |           |        |  |            |    |               |  |          |          |               |  |          | 1,456   |               |  |   |        |   |  |   | 1,456   |   |  |   |         |   |  |   | 1,456    |  
|Net unrealized loss on derivatives used in cash
    flow hedges |  |                        |           |        |  |            |    |               |  |          |          |               |  |          | (16,205 | )             |  |   |        |   |  |   | (16,205 | ) |  |   |         |   |  |   | (16,205  | )
|Dividend reinvestment plan                                      |  |                        | 1,341      |        |  |            |    |               |  |          | 33        |               |  |          |        |               |  |   |        |   |  |   |        |   |  |   |         |   |  |   | 33       |  
|Purchases of common stock                                       |  |                        | (5,013,163 | )      |  |            |    |               |  |          |          |               |  |          |        |               |  |   |        |   |  |   |        |   |  |   | (110,669 | ) |  |   | (110,669 | )
|Net earnings                                                    |  |                        |           |        |  |            |    |               |  |          |          |               |  |          |        |               |  |   | 107,797 |   |  |   | 107,797 |   |  |   |         |   |  |   | 107,797  |  
|                                                                |  |                        |            |        |  |            |     |               |  |          |           |               |  |          |         |               |  |   |         |   |  |   |         |   |  |   |          |   |  |   |          |  
|Total comprehensive income                                      |  |                        |           |        |  |            |    |               |  |          |          |               |  |          |        |               |  |   |        |   |  | $ | 93,048  |   |  |   |         |   |  |   |         |  
|                                                                |  |                        |            |        |  |            |     |               |  |          |           |               |  |          |         |               |  |   |         |   |  |   |         |   |  |   |          |   |  |   |          |  
|Balance at September 30, 2002                                   |  |                        | 55,959,469 |        |  | $          | 839 |               |  | $        | 1,006,927 |               |  | $        | (14,179 | )             |  | $ | 342,111 |   |  |   |         |   |  | $ | (497,897 | ) |  | $ | 837,801  |  
|                                                                |  |                        |            |        |  |            |     |               |  |          |           |               |  |          |         |               |  |   |         |   |  |   |         |   |  |   |          |   |  |   |          |  
|Balance at December 31, 2002                                    |  |                        | 54,829,486 |        |  | $          | 840 |               |  | $        | 1,007,936 |               |  | $        | (17,747 | )             |  | $ | 377,707 |   |  | $ |        |   |  | $ | (518,771 | ) |  | $ | 849,965  |  
|Common stock options exercised                                  |  |                        | 552,148    |        |  |            | 7   |               |  |          | 9,159     |               |  |          |        |               |  |   |        |   |  |   |        |   |  |   |         |   |  |   | 9,166    |  
|Net directors and officers notes
    payments                 |  |                        |           |        |  |            |    |               |  |          | 196       |               |  |          |        |               |  |   |        |   |  |   |        |   |  |   |         |   |  |   | 196      |  
|Deferred compensation, restricted stock                         |  |                        | 204,013    |        |  |            |    |               |  |          | 1,662     |               |  |          |        |               |  |   |        |   |  |   |        |   |  |   |         |   |  |   | 1,662    |  
|Net loss on mortgage securities available for sale              |  |                        |           |        |  |            |    |               |  |          |          |               |  |          | (3,468  | )             |  |   |        |   |  |   | (3,468  | ) |  |   |         |   |  |   | (3,468   | )
|Net unrealized loss on derivatives used in cash
    flow hedges |  |                        |           |        |  |            |    |               |  |          |          |               |  |          | (6,137  | )             |  |   |        |   |  |   | (6,137  | ) |  |   |         |   |  |   | (6,137   | )
|Purchases of common stock                                       |  |                        | (24,135    | )      |  |            |    |               |  |          |          |               |  |          |        |               |  |   |        |   |  |   |        |   |  |   | (466     | ) |  |   | (466     | )
|Cash dividends                                                  |  |                        |           |        |  |            |    |               |  |          |          |               |  |          |        |               |  |   | (19,348 | ) |  |   |        |   |  |   |         |   |  |   | (19,348  | )
|Net earnings                                                    |  |                        |           |        |  |            |    |               |  |          |          |               |  |          |        |               |  |   | 127,990 |   |  |   | 127,990 |   |  |   |         |   |  |   | 127,990  |  
|                                                                |  |                        |            |        |  |            |     |               |  |          |           |               |  |          |         |               |  |   |         |   |  |   |         |   |  |   |          |   |  |   |          |  
|Total comprehensive income                                      |  |                        |           |        |  |            |    |               |  |          |          |               |  |          |        |               |  |   |        |   |  | $ | 118,385 |   |  |   |         |   |  |   |         |  
|                                                                |  |                        |            |        |  |            |     |               |  |          |           |               |  |          |         |               |  |   |         |   |  |   |         |   |  |   |          |   |  |   |          |  
|Balance at September 30, 2003                                   |  |                        | 55,561,512 |        |  | $          | 847 |               |  | $        | 1,018,953 |               |  | $        | (27,352 | )             |  | $ | 486,349 |   |  |   |         |   |  | $ | (519,237 | ) |  | $ | 959,560  |  
|                                                                |  |                        |            |        |  |            |     |               |  |          |           |               |  |          |         |               |  |   |         |   |  |   |         |   |  |   |          |   |  |   |          |  

The accompanying notes are an integral part of
these statements.

57



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##### Table of Contents



INDYMAC BANCORP, INC. AND
SUBSIDIARIES







CONSOLIDATED STATEMENTS OF CASH
FLOWS


|                                                                          |                                                                                                   |                                                                         |                                                                                                                                                      |            |          |            |         |          |          |          |  
|------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------- | ---------- | -------- | ---------- | ------- | -------- | -------- | -------- | -
|                                                                          |                                                                                                   |                                                                        
|                                                                          |                                                                                                   | For the Nine Months                                                    
|                                                                          |                                                                                                   | Ended September 30,                                                    
|                                                                          |                                                                                                   |                                                                        
|                                                                          |                                                                                                   | 2003                                                                    |                                                                                                                                                      | 2002      
|                                                                          |                                                                                                   |                                                                         |                                                                                                                                                      |           
|                                                                          |                                                                                                   |                                                                        
|                                                                          |                                                                                                   | (Unaudited)                                                            
|                                                                          |                                                                                                   | (Dollars in thousands)                                                 
|Cash flows from operating
    activities:                                 |                                                                                                   |                                                                         |                                                                                                                                                      |            |          |            |         |         
|                                                                          | Net earnings                                                                                      |                                                                         | $                                                                                                                                                    | 127,990    |          |            | $       | 107,797  |         
|                                                                          | Adjustments to reconcile net earnings to net cash
    (used in) provided by operating activities: |                                                                         |                                                                                                                                                      |            |          |            |         |          |         
|                                                                          |                                                                                                   | Total amortization and depreciation                                     |                                                                                                                                                      |            | 145,836  |            |         |          | 98,728   |         
|                                                                          |                                                                                                   | Provision for valuation adjustment of mortgage
    servicing rights     |                                                                                                                                                      |            | 14,670   |            |         |          | 103,760  |         
|                                                                          |                                                                                                   | Gain on sale of loans                                                   |                                                                                                                                                      |            | (307,428 | )          |         |          | (226,025 | )       
|                                                                          |                                                                                                   | Loss (gain) on mortgage-backed securities, net                          |                                                                                                                                                      |            | 24,816   |            |         |          | (3,387   | )       
|                                                                          |                                                                                                   | Provision for loan losses                                               |                                                                                                                                                      |            | 16,200   |            |         |          | 10,454   |         
|                                                                          |                                                                                                   | Net decrease (increase) in mortgage servicing
    rights                |                                                                                                                                                      |            | 3,772    |            |         |          | (885     | )       
|                                                                          |                                                                                                   | Net decrease (increase) in other assets and
    liabilities             |                                                                                                                                                      |            | 58,535   |            |         |          | (23,473  | )       
|                                                                          |                                                                                                   |                                                                         |                                                                                                                                                      |            |          |            |         |         
|                                                                          |                                                                                                   |                                                                         | Net cash provided by operating activities before
    activity for trading securities, held for sale loans and
    purchase of derivative instruments |            |          | 84,391     |         |          |          | 66,969   |  
|                                                                          |                                                                                                   | Net sales (purchases) of trading securities                             |                                                                                                                                                      |            | 589,876  |            |         |          | (280,535 | )       
|                                                                          |                                                                                                   | Net (purchases) sales of and payments from
    loans held for sale      |                                                                                                                                                      |            | (727,073 | )          |         |          | 478,140  |         
|                                                                          |                                                                                                   | Net (increase) decrease on premiums paid for
    derivative instruments |                                                                                                                                                      |            | (118,407 | )          |         |          | 563      |         
|                                                                          |                                                                                                   |                                                                         |                                                                                                                                                      |            |          |            |         |         
|                                                                          |                                                                                                   |                                                                         | Net cash (used in) provided by operating
    activities                                                                                              |            |          | (171,213   | )       |          |          | 265,137  |  
|                                                                          |                                                                                                   |                                                                         |                                                                                                                                                      |            |          |            |         |         
|Cash flows from investing
    activities:                                 |                                                                                                   |                                                                         |                                                                                                                                                      |            |          |            |         |         
|                                                                          | Net purchases of and payments from loans held for
    investment                                  |                                                                         |                                                                                                                                                      | (1,925,254 | )        |            |         | (172,055 | )       
|                                                                          | Net sales (purchases) of and payments from
    mortgage-backed securities available for sale      |                                                                         |                                                                                                                                                      | 46,145     |          |            |         | (294,302 | )       
|                                                                          | Net increase in investment in Federal Home Loan
    Bank stock, at cost                           |                                                                         |                                                                                                                                                      | (111,753   | )        |            |         | (8,861   | )       
|                                                                          | Net purchases of property, plant and equipment                                                    |                                                                         |                                                                                                                                                      | (28,236    | )        |            |         | (33,099  | )       
|                                                                          |                                                                                                   |                                                                         |                                                                                                                                                      |            |          |            |         |         
|                                                                          |                                                                                                   |                                                                         | Net cash used in investing activities                                                                                                                |            |          | (2,019,098 | )       |          |          | (508,317 | )
|                                                                          |                                                                                                   |                                                                         |                                                                                                                                                      |            |          |            |         |         
|Cash flows from financing
    activities:                                 |                                                                                                   |                                                                         |                                                                                                                                                      |            |          |            |         |         
|                                                                          | Net increase (decrease) in deposits                                                               |                                                                         |                                                                                                                                                      | 1,005,832  |          |            |         | (383,536 | )       
|                                                                          | Net increase (decrease) in advances from Federal
    Home Loan Bank                               |                                                                         |                                                                                                                                                      | 1,337,914  |          |            |         | (49,799  | )       
|                                                                          | Net (decrease) increase in other borrowings                                                       |                                                                         |                                                                                                                                                      | (74,373    | )        |            |         | 788,313  |         
|                                                                          | Net proceeds from issuance of trust preferred
    debentures                                      |                                                                         |                                                                                                                                                      | 29,550     |          |            |         |         |         
|                                                                          | Net payments from stock options and notes
    receivable                                          |                                                                         |                                                                                                                                                      | 9,362      |          |            |         | 10,284   |         
|                                                                          | Cash dividends paid                                                                               |                                                                         |                                                                                                                                                      | (19,348    | )        |            |         |         |         
|                                                                          | Purchases of common stock                                                                         |                                                                         |                                                                                                                                                      | (466       | )        |            |         | (110,669 | )       
|                                                                          |                                                                                                   |                                                                         |                                                                                                                                                      |            |          |            |         |         
|                                                                          |                                                                                                   |                                                                         | Net cash provided by financing activities                                                                                                            |            |          | 2,288,471  |         |          |          | 254,593  |  
|                                                                          |                                                                                                   |                                                                         |                                                                                                                                                      |            |          |            |         |         
|Net increase in cash and cash equivalents                                 |                                                                                                   |                                                                         | 98,160                                                                                                                                               |            |          |            | 11,413  |         
|Cash and cash equivalents at beginning of period                          |                                                                                                   |                                                                         | 196,720                                                                                                                                              |            |          |            | 153,295 |         
|                                                                          |                                                                                                   |                                                                         |                                                                                                                                                      |            |          |            |         |         
|Cash and cash equivalents at end of period                                |                                                                                                   | $                                                                       | 294,880                                                                                                                                              |            |          | $          | 164,708 |         
|                                                                          |                                                                                                   |                                                                         |                                                                                                                                                      |            |          |            |         |         
|Supplemental cash flow information:                                       |                                                                                                   |                                                                         |                                                                                                                                                      |            |          |            |         |         
|                                                                          |                                                                                                   |                                                                         | Cash paid for interest                                                                                                                               |            | $        | 193,569    |         |          | $        | 195,412  |  
|                                                                          |                                                                                                   |                                                                         |                                                                                                                                                      |            |          |            |         |         
|                                                                          |                                                                                                   |                                                                         | Cash paid for income taxes                                                                                                                           |            | $        | 35,875     |         |          | $        | 25,341   |  
|                                                                          |                                                                                                   |                                                                         |                                                                                                                                                      |            |          |            |         |         
|Supplemental disclosure of noncash investing
    and financing activities |                                                                                                   |                                                                         |                                                                                                                                                      |            |          |            |         |         
|                                                                          |                                                                                                   |                                                                         | Net transfer of loans held for sale to
    (from) loans held for investment                                                                          |            | $        | 1,786,048  |         |          | $        | (176,261 | )
|                                                                          |                                                                                                   |                                                                         |                                                                                                                                                      |            |          |            |         |         
|                                                                          |                                                                                                   |                                                                         | Net transfer of mortgage-backed securities
    available for sale to trading                                                                         |            | $        |           |         |          | $        | 215,050  |  
|                                                                          |                                                                                                   |                                                                         |                                                                                                                                                      |            |          |            |         |         
|                                                                          |                                                                                                   |                                                                         | Net transfer of mortgage-servicing rights to
    trading securities                                                                                  |            | $        | 47,311     |         |          | $        | 66,288   |  
|                                                                          |                                                                                                   |                                                                         |                                                                                                                                                      |            |          |            |         |         

The accompanying notes are an integral part of
these statements.

58



---



##### Table of Contents



INDYMAC BANCORP, INC. AND
SUBSIDIARIES






NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS


September 30, 2003


(Unaudited)


Note 1  Basis of
Presentation

IndyMac Bancorp, Inc. is a savings and loan
holding company. References to IndyMac Bancorp refer
to the parent company alone while references to
IndyMac or we refer to IndyMac Bancorp
and its consolidated subsidiaries. Our primary business is
single family residential mortgage lending, using a hybrid
thrift business model including portfolio lending and thrift
financing. We offer a wide array of home mortgage products using
a technology-based approach, leveraged across multiple products,
channels and customers.

The consolidated financial statements include the
accounts of IndyMac Bancorp and its subsidiaries, including
IndyMac Bank®, F.S.B. (IndyMac Bank). All
significant intercompany balances and transactions with
IndyMacs consolidated subsidiaries have been eliminated in
consolidation. The consolidated financial statements of IndyMac
are prepared in conformity with US GAAP. The foregoing
financial statements are unaudited; however, in the opinion of
management, all adjustments, consisting only of normal recurring
adjustments necessary for a fair statement of the results for
the interim periods have been included. Operating results for
the three and nine months ended September 30, 2003 are not
necessarily indicative of the results that may be expected for
the year ending December 31, 2003. For further information,
refer to the consolidated financial statements and footnotes
thereto included in IndyMacs annual report on
Form 10-K for the year ended December 31, 2002.

Note 2  Newly Adopted or
Issued Accounting Pronouncements

In January 2003, the FASB issued Interpretation
No. 46, Consolidation of Variable Interest
Entities, and Interpretation of Accounting Research Bulletin
(ARB) No. 51, (the
Interpretation). The Interpretation introduces a new
consolidation model  the variable interests
model  which determines control (and
consolidation) based on potential variability in gains or losses
of the entity being evaluated for consolidation. The party with
the majority of the variability in gains or losses of the
variable interest entity (VIE) is required to
consolidate the VIE. However, qualifying special-purpose
entities defined under SFAS No. 140,
Accounting for Transfers and Servicing of Financial
Assets and Extinguishments of Liabilities, are not
required to be consolidated in the financial statements of a
transferor. We adopted the Interpretation on July 1, 2003
and deconsolidated the capital trusts formed in connection with
the issuance of trust preferred securities, which had very
minimal effect on the consolidated financial statements. We also
are not aware of any other relationships or transactions that we
have entered impacted by FIN No. 46. Lastly, the
FIN No. 46 provisions are subject to further
deliberation by the FASB, and accordingly, there could be
further changes to our accounting for the capital trusts formed
for the issuance of trust preferred securities.

The FASB issued SFAS No. 149,
Amendment of Statement 133 on Derivative
Instruments and Hedging Activities
(SFAS No. 149) on April 30, 2003.
SFAS No. 149 does not amend the definition of a
derivative. The provisions of SFAS No. 149 merely
represent the codification of previous Derivatives
Implementation Group decisions, which are already effective and
being applied. SFAS No. 149 is effective for contracts
entered into or modified after June 30, 2003, and hedging
relationships designated after June 30, 2003. The adoption
of SFAS No. 149 did not have a material impact on the
financial condition or the operating results of the Company.

On May 15, 2003, the FASB issued SFAS
No. 150, Accounting for Certain Financial
Instruments with Characteristics of Both Liabilities and
Equity (SFAS No. 150).
SFAS No. 150 requires liability accounting for certain
freestanding financial instruments that are either indexed to,
or potentially settled in shares of the issuer.
SFAS No. 150 does not apply to obligations incurred
pursuant to stock compensation arrangements accounted for under
APB Opinion No. 25, Accounting for Stock
Issued to Employees. SFAS No. 150 is
effective for all financial instruments created or modified
after May 31, 2003, and otherwise effective for the Company
on July 1, 2003. Application of SFAS No. 150 to
instruments that exist on the date

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INDYMAC BANCORP, INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

of adoption should be reported through a
cumulative effect of a change in an accounting principle. The
adoption of SFAS No. 150 did not have any impact on
the financial condition or the operating results of the Company.

Note 3  Securities

The following table details our securities
classified as trading and mortgage-backed and other securities
available for sale as of September 30, 2003 and
December 31, 2002, respectively.

|                                                                    |                                                          |                        |   |              |           |  |   |           |           | 
|------------------------------------------------------------------- | -------------------------------------------------------- | ---------------------- | - | ------------ | --------- |  | - | --------- | --------- | 
|                                                                    |                                                          | September 30,          |   | December 31,
|                                                                    |                                                          | 2003                   |   | 2002        
|                                                                    |                                                          |                        |   |             
|                                                                    |                                                          |                       
|                                                                    |                                                          | (Dollars in thousands)
|Securities classified as trading:                                   |                                                          |                        |   |              |           |  |   |          
|                                                                    | AAA-rated securities and agency interest-only
    strips |                        | $ | 155,258      |           |  | $ | 187,060   |          
|                                                                    | AAA-rated principal-only securities                      |                        |   | 5,647        |           |  |   | 79,554    |          
|                                                                    | U.S. Treasury securities                                 |                        |   |             |           |  |   | 282,219   |          
|                                                                    | AAA-rated non-agency securities                          |                        |   |             |           |  |   | 101,185   |          
|                                                                    | AAA-rated agency securities                              |                        |   |             |           |  |   | 25,055    |          
|                                                                    | Other investment grade securities                        |                        |   | 8,851        |           |  |   | 9,114     |          
|                                                                    | Other non-investment grade securities                    |                        |   | 1,752        |           |  |   | 2,956     |          
|                                                                    | Residual securities                                      |                        |   | 54,743       |           |  |   | 78,740    |          
|                                                                    |                                                          |                        |   |              |           |  |   |          
|                                                                    |                                                          | Total                  |   | $            | 226,251   |  |   | $         | 765,883   | 
|                                                                    |                                                          |                        |   |              |           |  |   |          
|Mortgage-backed securities and agency notes
    available for sale: |                                                          |                        |   |              |           |  |   |          
|                                                                    | AAA-rated non-agency securities                          |                        | $ | 1,306,531    |           |  | $ | 1,406,321 |          
|                                                                    | AAA-rated agency securities                              |                        |   | 33,762       |           |  |   | 123,269   |          
|                                                                    | AAA-rated agency notes                                   |                        |   | 146,631      |           |  |   |          |          
|                                                                    | Other investment grade securities                        |                        |   | 23,551       |           |  |   | 39,258    |          
|                                                                    | Other non-investment grade securities                    |                        |   | 6,805        |           |  |   | 4,362     |          
|                                                                    |                                                          |                        |   |              |           |  |   |          
|                                                                    |                                                          | Total                  |   | $            | 1,517,280 |  |   | $         | 1,573,210 | 
|                                                                    |                                                          |                        |   |              |           |  |   |          

Note 4  Segment
Reporting

IndyMac operates through its three main segments:
IndyMac Mortgage Bank, IndyMac Consumer Bank and the Investment
Portfolio Group. IndyMac Mortgage Bank is centered on providing
consumers with mortgage products through relationships with the
Companys business customers  mortgage
brokers, mortgage bankers, financial institutions, real estate
professionals and homebuilders. IndyMac Consumer Bank provides
the platform for the mortgage and deposit services that IndyMac
offers directly to consumers. Loans produced by IndyMac Mortgage
Bank and IndyMac Consumer Bank are then securitized through the
issuance of mortgage-backed securities, sold to
government-sponsored enterprises, resold in bulk whole loan
sales to investors, or transferred to and retained by our
Investment Portfolio Group. The Investment Portfolio Group
serves as the main link to customers whose mortgages we service.
Through its investments in single-family residential mortgages,
mortgage-backed securities and mortgage servicing rights, it
serves a critical support function for IndyMacs mortgage
lending operations.

Prior to 2003, we managed our business through
only two operating segments: Mortgage Banking and Investment
Portfolio. Previously, our consumer mortgage loan production
business units were included with

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INDYMAC BANCORP, INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Mortgage Banking, and our consumer banking
operations were included as overhead to the Company, or
Other. Segment information for 2002, including a
change in the allocation method of interest expense to the
operating segments, has been adjusted to conform to the current
method of segment disclosure.

The profitability of each operating segment is
measured on a fully-leveraged basis after allocating capital
based on regulatory capital rules. The Company uses a
match-funded transfer pricing system to allocate net interest
income to the operating segments. Each operating segment is
allocated funding with maturities and interest rates matched
with the expected lives, repricing frequencies and financing
liquidities of the segments assets. Deposits receive a
funding credit using a similar methodology. The difference
between these allocations and the Companys actual net
interest income and capital levels resulting from centralized
management of funding costs is reported in Other. Also included
in Other are unallocated corporate costs such as corporate
salaries and related expenses, excess capital, and non-recurring
corporate items.

Segment information for the three and nine months
ended September 30, 2003 and 2002 was as follows:

|                                      |                               |                        |           |          |  |            |           |        |  |              |           |        |  |   |         |         |   |   |            |         | 
|------------------------------------- | ----------------------------- | ---------------------- | --------- | -------- |  | ---------- | --------- | ------ |  | ------------ | --------- | ------ |  | - | ------- | ------- | - | - | ---------- | ------- | 
|                                      |                               | IndyMac                |           | IndyMac  |  | Investment |           |        |  |             
|                                      |                               | Mortgage               |           | Consumer |  | Portfolio  |           |        |  |             
|                                      |                               | Bank                   |           | Bank     |  | Group      |           | Other  |  | Consolidated
|                                      |                               |                        |           |          |  |            |           |        |  |             
|                                      |                               |                       
|                                      |                               | (Dollars in thousands)
|Three months ended September 30, 2003 |                               |                        |           |          |  |            |           |        |  |              |           |        |  |   |         |         |   |   |            |        
|                                      | Net interest income(expense)  |                        | $         | 50,194   |  |            | $         | 14,314 |  |              | $         | 28,045 |  |   | $       | (10,100 | ) |   | $          | 82,453  | 
|                                      | Net revenues (loss)           |                        |           | 158,546  |  |            |           | 53,553 |  |              |           | 16,961 |  |   |         | (29,414 | ) |   |            | 199,646 | 
|                                      | Net earnings (loss)           |                        |           | 64,380   |  |            |           | 16,663 |  |              |           | 3,483  |  |   |         | (34,822 | ) |   |            | 49,704  | 
|Assets as of September 30, 2003       |                               | $                      | 3,651,439 |          |  | $          | 1,119,854 |        |  | $            | 6,661,224 |        |  | $ | 634,950 |         |   | $ | 12,067,467 |        
|Three months ended September 30, 2002 |                               |                        |           |          |  |            |           |        |  |              |           |        |  |   |         |         |   |   |            |        
|                                      | Net interest income (expense) |                        | $         | 36,421   |  |            | $         | 8,066  |  |              | $         | 17,053 |  |   | $       | (11,165 | ) |   | $          | 50,375  | 
|                                      | Net revenues (loss)           |                        |           | 110,037  |  |            |           | 32,607 |  |              |           | 34,662 |  |   |         | (26,554 | ) |   |            | 150,752 | 
|                                      | Net earnings (loss)           |                        |           | 43,747   |  |            |           | 6,783  |  |              |           | 15,917 |  |   |         | (29,243 | ) |   |            | 37,204  | 
|Assets as of September 30, 2002       |                               | $                      | 2,812,371 |          |  | $          | 551,890   |        |  | $            | 4,230,532 |        |  | $ | 298,179 |         |   | $ | 7,892,972  |        

|                                     |                               |                        |           |          |  |            |           |         |  |              |           |        |  |   |         |         |   |   |            |         | 
|------------------------------------ | ----------------------------- | ---------------------- | --------- | -------- |  | ---------- | --------- | ------- |  | ------------ | --------- | ------ |  | - | ------- | ------- | - | - | ---------- | ------- | 
|                                     |                               | IndyMac                |           | IndyMac  |  | Investment |           |         |  |             
|                                     |                               | Mortgage               |           | Consumer |  | Portfolio  |           |         |  |             
|                                     |                               | Bank                   |           | Bank     |  | Group      |           | Other   |  | Consolidated
|                                     |                               |                        |           |          |  |            |           |         |  |             
|                                     |                               |                       
|                                     |                               | (Dollars in thousands)
|Nine months ended September 30, 2003 |                               |                        |           |          |  |            |           |         |  |              |           |        |  |   |         |         |   |   |            |        
|                                     | Net interest income (expense) |                        | $         | 139,245  |  |            | $         | 36,216  |  |              | $         | 65,884 |  |   | $       | (28,353 | ) |   | $          | 212,992 | 
|                                     | Net revenues (loss)           |                        |           | 400,998  |  |            |           | 138,544 |  |              |           | 53,620 |  |   |         | (63,254 | ) |   |            | 529,908 | 
|                                     | Net earnings (loss)           |                        |           | 158,866  |  |            |           | 40,457  |  |              |           | 13,377 |  |   |         | (84,710 | ) |   |            | 127,990 | 
|Assets as of September 30, 2003      |                               | $                      | 3,651,439 |          |  | $          | 1,119,854 |         |  | $            | 6,661,224 |        |  | $ | 634,950 |         |   | $ | 12,067,467 |        
|Nine months ended September 30, 2002 |                               |                        |           |          |  |            |           |         |  |              |           |        |  |   |         |         |   |   |            |        
|                                     | Net interest income (expense) |                        | $         | 116,066  |  |            | $         | 24,136  |  |              | $         | 54,616 |  |   | $       | (41,486 | ) |   | $          | 153,332 | 
|                                     | Net revenues (loss)           |                        |           | 326,952  |  |            |           | 83,697  |  |              |           | 81,983 |  |   |         | (61,702 | ) |   |            | 430,930 | 
|                                     | Net earnings (loss)           |                        |           | 129,093  |  |            |           | 17,605  |  |              |           | 33,466 |  |   |         | (72,367 | ) |   |            | 107,797 | 
|Assets as of September 30, 2002      |                               | $                      | 2,812,371 |          |  | $          | 551,890   |         |  | $            | 4,230,532 |        |  | $ | 298,179 |         |   | $ | 7,892,972  |        

Note 5  Stock-Based
Compensation

We have two stock incentive plans, the 2002
Incentive Plan and the 2000 Stock Incentive Plan (collectively,
the Plans), which provide for the granting of
non-qualified stock options, incentive stock options, restricted
stock awards, performance stock awards, stock bonuses and other
awards to our employees

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INDYMAC BANCORP, INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

(including officers and directors). Awards are
granted at the average market price of our stock on the grant
date, vest over varying periods generally beginning at least one
year from the date of grant, and expire ten years from the date
of grant.

As permitted by SFAS No. 123,
Accounting for Stock-Based Compensation
(SFAS No. 123), we continue to measure and recognize
compensation expense using the intrinsic value method specified
in Accounting Principles Board Opinion No. 25,
Accounting for Stock Issued to Employees(APB No. 25). As required under the provisions of
SFAS No. 148, Accounting for Stock-Based
Compensation  Transition and Disclosure,the following table discloses the pro forma net income and
pro forma basic and diluted earnings per share had the fair
value method been applied to all stock awards for the three and
nine months ended September 30, 2003 and 2002:

|                           |             |                                  |   |                   |        |      |   |        |        |   |   |         |         |   |   |         |         |  
|-------------------------- | ----------- | -------------------------------- | - | ----------------- | ------ | ---- | - | ------ | ------ | - | - | ------- | ------- | - | - | ------- | ------- | -
|                           |             |                                  |   |                  
|                           |             | Three Months Ended               |   | Nine Months Ended
|                           |             | September 30,                    |   | September 30,    
|                           |             |                                  |   |                  
|                           |             | 2003                             |   | 2002              |        | 2003 |   | 2002  
|                           |             |                                  |   |                   |        |      |   |       
|                           |             |                                 
|                           |             | (Dollars in thousands,          
|                           |             | except per share data)          
|Net Earnings               |             |                                  |   |                   |        |      |   |        |        |   |   |         |         |   |   |        
|                           | As reported |                                  | $ | 49,704            |        |      | $ | 37,204 |        |   | $ | 127,990 |         |   | $ | 107,797 |        
|                           |             | Stock-based compensation expense |   |                   | (4,257 | )    |   |        | (5,398 | ) |   |         | (12,546 | ) |   |         | (14,550 | )
|                           |             | Tax effect                       |   |                   | 1,682  |      |   |        | 2,132  |   |   |         | 4,956   |   |   |         | 5,747   |  
|                           |             |                                  |   |                   |        |      |   |        |        |   |   |         |         |   |   |        
|                           | Pro forma   |                                  | $ | 47,129            |        |      | $ | 33,938 |        |   | $ | 120,400 |         |   | $ | 98,994  |        
|                           |             |                                  |   |                   |        |      |   |        |        |   |   |         |         |   |   |        
|Basic Earnings Per Share   |             |                                  |   |                   |        |      |   |        |        |   |   |         |         |   |   |        
|                           | As reported |                                  | $ | 0.90              |        |      | $ | 0.65   |        |   | $ | 2.33    |         |   | $ | 1.83    |        
|                           | Pro forma   |                                  | $ | 0.85              |        |      | $ | 0.60   |        |   | $ | 2.19    |         |   | $ | 1.68    |        
|Diluted Earnings Per Share |             |                                  |   |                   |        |      |   |        |        |   |   |         |         |   |   |        
|                           | As reported |                                  | $ | 0.87              |        |      | $ | 0.64   |        |   | $ | 2.26    |         |   | $ | 1.78    |        
|                           | Pro forma   |                                  | $ | 0.83              |        |      | $ | 0.58   |        |   | $ | 2.13    |         |   | $ | 1.63    |        

In addition, during the three months ended
September 30, 2003 and 2002, we recognized compensation
expense of $612 thousand ($370 thousand, net of taxes)
and $370 thousand ($224 thousand, net of taxes),
respectively, related to restricted stock awards. These expenses
were included in net earnings as reported.




ITEM 4.     CONTROLS
AND PROCEDURES

As of September 30, 2003, an evaluation was
performed under the supervision and with the participation of
the Companys management, including the Chief Executive
Officer (CEO) and Chief Financial Officer
(CFO), of the effectiveness of the design and
operation of the Companys disclosure controls and
procedures. Based on that evaluation, the Companys
management, including the CEO and CFO, concluded that the
Companys disclosure controls and procedures were effective
as of September 30, 2003. There have been no significant
changes in the Companys internal control over financial
reporting or in other factors that could significantly affect
internal control over financial reporting subsequent to
September 30, 2003.

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INDYMAC BANCORP, INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






PART II. OTHER INFORMATION




ITEM 6.     EXHIBITS
AND REPORTS ON FORM 8-K

(a) Exhibits

|     |  |                                                                                                                                                          
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------
|10.1 |  | Employment Agreement dated September 29,
    2003 between IndyMac Bank and Ashwin Adarkar.                                                               
|10.2 |  | Employment Agreement dated September 15,
    2003 between IndyMac Bank and Sherry Dupont.                                                                
|10.3 |  | Employment Agreement dated July 1, 2001
    between IndyMac Bank and Charles Holroyd.                                                                    
|10.4 |  | Employment Agreement dated July 31, 2003
    between IndyMac Bank and Thomas H. Potts.                                                                   
|10.5 |  | Employment Agreement dated July 31, 2003
    between IndyMac Bank and Charles Allen Williams.                                                            
|10.6 |  | IndyMac Bank Deferred Compensation Plan, as
    amended.                                                                                                 
|31.1 |  | Chief Executive Officers Certification
    pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                   
|31.2 |  | Chief Financial Officers Certification
    pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                   
|32.1 |  | Chief Executive Officers Certification
    pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.
|32.2 |  | Chief Financial Officers Certification
    pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.

(b) Reports on Form 8-K

The Company furnished a report on Form 8-K
on September 9, 2003, which included:

|        |  |                                                                                                                                          
|------- |  | -----------------------------------------------------------------------------------------------------------------------------------------
|Item 9. |  | Regulation FD Disclosure regarding
    presentation material for the Roth Capital Partners Conference
    in New York, September 9, 2003.

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SIGNATURES

Pursuant to the requirements of the Securities
Exchange Act of 1934, the Registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Pasadena, State of California, on
October 31, 2003.



| |                      
| | ---------------------
| | INDYMAC BANCORP, INC.



| |     |                     
| | --- | --------------------
| | By: | /s/ MICHAEL W. PERRY

| |                                   
| | ----------------------------------
| |                                   
| | Michael W. Perry                  
| | Chairman of the Board of Directors
| | and Chief Executive Officer       



| |     |               
| | --- | --------------
| | By: | /s/ SCOTT KEYS

| |                            
| | ---------------------------
| |                            
| | Scott Keys                 
| | Executive Vice President   
| | and Chief Financial Officer

64