##### Table of Contents



UNITED
    STATES SECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
    20549
      Form 10-Q
   þ

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended
    March 31, 2007oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission file number 1-8972
  INDYMAC BANCORP, INC.
 (Exact name of registrant as
    specified in its charter)
  Delaware(State or other
    jurisdiction of
    incorporation or organization)

95-3983415(I.R.S. Employer
    Identification No.)888 East Walnut Street,
    Pasadena, California(Address of principal
    executive offices)

91101-7211(Zip
    Code)    (Registrants
    telephone number, including area code)(800) 669-2300
  þ o
  Rule 12b-2
 þ o o
  Rule 12b-2 o þ
    Common stock
    outstanding as of April 18, 2007: 73,589,134 shares




---



##### 



FORM 10-Q
    QUARTERLY REPORT
    For the Period Ended March 31, 2007
  
  TABLE OF
    CONTENTS
  PagePART I. FINANCIAL
    INFORMATIONForward-Looking
    Statements


2Item 2.
    Managements Discussion and Analysis of Financial Condition
    and Results of Operations


3Highlights for the
    Quarter


3Summary of Business
    Segment Results


7Product
    Profitability Analysis


15Capital
    Management


21Loan
    Production


22Loan
    Sales


27Mortgage Servicing
    Rights (MSRs)


29Mortgage-Backed
    Securities


32Valuation of MSRs,
    Interest-Only, Prepayment Penalty and Residual
    Securities


36Loans Held for
    Investment


37Net Interest
    Margin


44Interest Rate
    Sensitivity


46Credit Risk and
    Reserves


47Expenses


51Share Repurchase
    Activities


52Future
    Outlook


52Liquidity and
    Capital Resources


53Off-Balance Sheet
    Arrangements


57Aggregate
    Contractual Obligations


58Critical Accounting
    Policies and Judgments


58Regulatory
    Update


58Item 3.
    Quantitative and Qualitative Disclosures About Market
    Risk


58Item 1.
    Financial Statements (Unaudited)


59Consolidated
    Balance Sheets


59Consolidated
    Statements of Earnings


60Consolidated
    Statements of Shareholders Equity and Comprehensive
    Income


61Consolidated
    Statements of Cash Flows


62Notes to
    Consolidated Financial Statements


63Item 4.
    Controls and Procedures


70PART II.
    OTHER INFORMATIONItem 1.
    Legal Proceedings


70Item 1A.
    Risk Factors


70Item 2.
    Unregistered Sales of Equity Securities and Use of
    Proceeds


70Item 5.
    Other Information


70Item 6.
    Exhibits


70EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1EXHIBIT 32.2   1




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##### Table of Contents



FORWARD-LOOKING
    STATEMENTS  Form 10-Q Form 10-K, Form 10-Q, Form 8-K. Form 10-K 10-K).
   2




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##### Table of Contents



ITEM 2.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS HIGHLIGHTS
    FOR THE QUARTER    Three Months EndedMarch 31,


March 31,


December 31,2007


2006


2006(Dollars in millions, except per share data)Selected Balance Sheet
    Information (at period end)(1)Cash and cash equivalents

$
577


$
442


$
542Securities (trading and available
    for sale)


5,253



4,564



5,443Loans held for sale


10,511



7,434



9,468Loans held for investment


8,988



8,784



10,177Allowance for loan losses


(68
)


(57
)


(62
)Mortgage servicing rights


2,053



1,354



1,822Other


2,380



1,682



2,105Total Assets


29,694



24,203



29,495Deposits


11,452



8,266



10,898Advances from Federal Home
    Loan Bank


10,350



7,995



10,413Other borrowings


4,313



5,195



4,637Other liabilities


1,525



1,104



1,519Total Liabilities


27,640



22,560



27,467Shareholders
    Equity


2,055



1,644



2,028Income Statement(1)Net interest income before
    provision for loan losses

$
135


$
127


$
133Provision for loan losses


11



4



9Gain on sale of loans


118



141



165Service fee income


49



31



22Loss on mortgage-backed
    securities, net


(5
)


(3
)


(4
)Fee and other income


16



12



13Net revenues


302



305



320Operating expenses


216



172



211Net earnings


52



80



72Basic earnings per share(2)


0.72



1.24



1.02Diluted earnings per share(3)


0.70



1.18



0.97Other Operating DataSingle Family Residence
    (SFR) mortgage production

$
25,569


$
19,977


$
25,946Total loan production(4)


25,930



20,340



26,328Mortgage industry share(5)


3.92
%


3.19
%


3.64
%Pipeline of SFR mortgage loans in
    process(6)


16,112



11,681



11,821Loans sold


24,537



16,708



23,417Loans sold/mortgage loans produced


96
%


84
%


90
%Mortgage loans serviced for others
    (as of period end)(7)


156,144



96,512



139,817Total mortgage loans serviced (as
    of period end)


171,955



109,703



155,656Average full-time equivalent
    employees


8,755



7,229



8,477 3




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##### Table of Contents



Three Months EndedMarch 31,


March 31,


December 31,2007


2006


2006(Dollars in millions, except per share data)Other Per Share DataDividends declared per share

$
0.50


$
0.44


$
0.50Dividend payout ratio(8)


71
%


37
%


52
%Book value per share at period end


27.93



25.00



27.78Closing price per share at period
    end


32.05



40.93



45.16Average Common Shares (in
    thousands)Basic


72,297



64,310



71,059Diluted


74,305



67,528



74,443Performance RatiosReturn on average equity
    (ROE) (annualized)


10.45
%


20.26
%


14.56
%Return on average assets
    (ROA) (annualized)


0.60
%


1.22
%


0.85
%Net interest income to pretax
    income after minority interest


157.24
%


96.25
%


122.52
%Net interest margin


1.77
%


2.15
%


1.76
%Net interest margin, thrift(9)


2.11
%


2.42
%


2.09
%Mortgage banking revenue
    (MBR) margin on loans sold(10)


0.68
%


1.10
%


0.91
%Efficiency ratio(11)


69
%


56
%


64
%Operating expenses to loan
    production


0.83
%


0.84
%


0.80
%Balance Sheet and Asset Quality
    RatiosAverage interest-earning assets

$
31,030


$
24,034


$
29,868Average equity


2,033



1,598



1,969Debt to equity ratio(12)


13.5:1



13.7:1



13.5:1Core capital ratio(13)


7.41
%


7.62
%


7.39
%Risk-based capital ratio(13)


11.28
%


11.26
%


11.72
%Non-performing assets to total
    assets


1.09
%


0.43
%


0.63
%Allowance for loan losses to total
    loans held for investment


0.75
%


0.65
%


0.61
%Allowance for loan losses to
    non-performing loans held for investment


44.11
%


106.12
%


57.51
%Loan Loss ActivityNet charge-offs

$
(3,825
)

$
(1,669
)

$
(7,602
)Allowance for loan losses to
    annualized net charge-offs


4.4
x


8.6
x


2.0xProvision for loan losses to net
    charge-offs


279.40
%


229.00
%


117.77
%Net charge-offs (annualized) to
    average non-performing loans held for investment


11.69
%


13.71
%


32.47
%Net charge-offs (annualized) to
    average loans held for investment


0.15
%


0.08
%


0.31
%     (1)
    
    The items under the balance sheet and income statement sections
    are rounded individually and therefore may not necessarily add
    to the total.(2)
    
    Net earnings for the period divided by weighted average basic
    shares outstanding for the period.(3)
    
    Net earnings for the period divided by weighted average dilutive
    shares outstanding for the period.(4)
    
    Includes newly originated commitments on construction loans.(5)
    
    Our market share is calculated based on our total loan
    production, both purchased (correspondent and conduit) and
    originated (retail and wholesale), in all channels (the
    numerator) divided by the Mortgage Bankers Association
    (MBA) April 23, 2007 Mortgage Finance Long-Term
    Forecast estimate of the overall mortgage 4




---



##### Table of Contents



market (the denominator). As we review industry publications
    such as National Mortgage News, we have confirmed that our
    calculation is consistent with its methodologies for reporting
    market share of Indymac and our mortgage banking peers. It is
    important to note that these industry calculations cause
    purchased mortgages to be counted more than once, i.e., first
    when they are originated and again by the purchasers (through
    correspondent and conduit channels) of the mortgages. Therefore,
    our market share calculation may not be mathematically precise,
    but it is consistent with industry calculations, which provide
    investors with a good view of our relative standing compared to
    the other top mortgage lending peers.(6)
    
    The amount includes $3.3 billion, $1.3 billion and
    $1.9 billion of non-specific rate locks on bulk purchases
    in our conduit channel at March 31, 2007, March 31,
    2006 and December 31, 2006, respectively.(7)
    
    Mortgage loans serviced for others represent the unpaid
    principal balance on loans sold with servicing retained by
    Indymac. Total mortgage loans serviced includes mortgage loans
    serviced for others and mortgage loans owned by and serviced for
    Indymac.(8)
    
    Dividends declared per common share as a percentage of diluted
    earnings per share.(9)
    
    Net interest margin, thrift represents the combined margin from
    thrift, elimination and other, and corporate overhead.(10)
    
    Mortgage banking revenue margin is calculated using the sum of
    consolidated gain on sale of loans and the net interest income
    earned on loans held for sale by our mortgage banking production
    divisions divided by total loans sold.(11)
    
    Defined as operating expenses divided by net interest income and
    other income.(12)
    
    Debt includes deposits.(13)
    
    Ratio is for Indymac Bank and excludes unencumbered cash at the
    Parent Company available for investment in Indymac Bank.
    Risk-based capital ratio is calculated based on the regulatory
    standard risk weighting adjusted for the additional risk
    weightings for subprime loans.  SUMMARY
    OF OVERALL RESULTS
  Three
    Months ended March 31, 2007
         5




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##### Table of Contents



average 10-year
     6




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##### Table of Contents



SUMMARY
    OF BUSINESS SEGMENT RESULTS  10-K,
  quarter-over-quarter
  ConsumerMortgage


Commercial


Total








TotalProduction


Mortgage


Banking


Mortgage


Mortgage





Elimination


Operating


Corporate


TotalDivisions


Servicing


Overhead(1)


Banking


Banking


Thrift


& Other


Results


Overhead


Company(Dollars in thousands)Net Income Q107

$
44,035


$
24,905


$
(9,300
)

$
(672
)

$
58,968


$
29,945


$
(7,504
)

$
81,409


$
(29,027
)

$
52,382Net Income Q106


64,555



11,661



(7,948
)






68,268



45,436



(9,821
)


103,883



(24,034
)


79,849$ Change


(20,520
)


13,244



(1,352
)


(672
)


(9,300
)


(15,491
)


2,317



(22,474
)


(4,993
)


(27,467
)% Change


(32
)%


114
%


(17
)%


N/A



(14
)%


(34
)%


24
%


(22
)%


(21
)%


(34
)%Average Capital Q107

$
679,808


$
332,085


$
6,637


$
3


$
1,018,533


$
851,976


$
2,057


$
1,872,566


$
160,333


$
2,032,899Average Capital Q106


510,832



197,253



12,509







720,594



727,465



1,792



1,449,851



148,455



1,598,306% Change


33
%


68
%


(47
)%


N/A



41
%


17
%


15
%


29
%


8
%


27
%ROE Q107


26
%


30
%


N/A



N/A



23
%


14
%


N/A



18
%


N/A



10
%ROE Q106


51
%


24
%


N/A



N/A



38
%


25
%


N/A



29
%


N/A



20
%% Change


(49
)%


27
%


N/A



N/A



(39
)%


(44
)%


N/A



(39
)%


N/A



(48
)%   Mortgage Banking Production DivisionsMortgage Professionals GroupConsumer

















Financial


ProductionDirect


Retail


Wholesale


Correspondent


Conduit


Total


Freedom


Divisions(Dollars in thousands)Net Income Q107

$
110


$
(527
)

$
12,994


$
2,609


$
816


$
15,892


$
28,033


$
44,035Net Income Q106


(688
)


(118
)


41,853



5,842



9,638



57,215



8,028



64,555$ Change

$
798


$
(409
)

$
(28,859
)

$
(3,233
)

$
(8,822
)

$
(41,323
)

$
20,005


$
(20,520
)% Change


(116
)%


(347
)%


(69
)%


(55
)%


(92
)%


(72
)%


249
%


(32
)%Average Capital Q107

$
6,552


$
845


$
234,272


$
64,391


$
239,364


$
538,872


$
134,384


$
679,808Average Capital Q106


12,765







204,467



46,483



179,170



430,120



67,947



510,832% Change


(49
)%


N/A



15
%


39
%


34
%


25
%


98
%


33
%ROE Q107


7
%


N/A



22
%


16
%


1
%


12
%


85
%


26
%ROE Q106


(22
)%


N/A



83
%


51
%


22
%


54
%


48
%


51
%% Change


131
%


N/A



(73
)%


(68
)%


(94
)%


(78
)%


77
%


(49
)%   7




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##### Table of Contents



ThriftConsumerMortgage-


Prime SFR


Home


Construction


BuilderBacked


Mortgage


Equity


and Lot


Construction


Warehouse


DiscontinuedSecurities


Loans


Division


Loans


Financing


Lending


Products


Total Thrift(Dollars in thousands)Net Income Q107

$
9,770


$
(185
)

$
5,293


$
7,637


$
6,740


$
723


$
(33
)

$
29,945Net Income Q106


11,592



12,548



8,317



7,531



5,676



(112
)


(116
)


45,436$ Change

$
(1,822
)

$
(12,733
)

$
(3,024
)

$
106


$
1,064


$
835


$
83


$
(15,491
)% Change


(16
)%


(101
)%


(36
)%


1
%


19
%


746
%


72
%


(34
)%Average Capital Q107

$
219,454


$
253,595


$
122,934


$
127,733


$
106,815


$
18,300


$
3,145


$
851,976Average Capital Q106


136,493



220,742



152,023



113,989



95,000



5,513



3,705



727,465% Change


61
%


15
%


(19
)%


12
%


12
%


232
%


(15
)%


17
%ROE Q107


18
%






17
%


24
%


26
%


16
%


(4
)%


14
%ROE Q106


34
%


23
%


22
%


27
%


24
%


(8
)%


(13
)%


25
%% Change


(48
)%


(101
)%


(21
)%


(10
)%


6
%


294
%


66
%


(44
)%     (1)
    
    Included production division overhead, servicing overhead and
    secondary marketing overhead of $3.2 million,
    $3.1 million and $3.0 million, respectively, for the
    first quarter of 2007. For the first quarter of 2006, the
    production division overhead, servicing overhead and secondary
    marketing overhead were $3.5 million, $2.2 million and
    $2.2 million, respectively.         8




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##### Table of Contents



DETAIL
    CHANNEL SEGMENT RESULTS
    ConsumerMortgage


Commercial


Total








TotalProduction


Mortgage


Banking


Mortgage


Mortgage





Elimination


Operating


Corporate


TotalDivisions


Servicing


O/H(1)


Banking


Banking


Thrift


& Other(2)


Results


Overhead


Company(Dollars in thousands)Three Months Ended
    March 31, 2007Operating ResultsNet interest income

$
49,762


$
(5,052
)

$
58


$
1


$
44,769


$
69,820


$
24,235


$
138,824


$
(3,754
)

$
135,070Provision for loan losses






















(10,687
)






(10,687
)






(10,687
)Gain (loss) on sale of loans


110,387



17,261











127,648



12,004



(22,109
)


117,543







117,543Service fee income


7,190



43,928











51,118



490



(2,421
)


49,187







49,187Gain (loss) on securities






(265
)










(265
)


(5,759
)


677



(5,347
)






(5,347
)Other income


673



3,798



1,206



2



5,679



9,081



931



15,691



625



16,316Net revenues (expense)


168,012



59,670



1,264



3



228,949



74,949



1,313



305,211



(3,129
)


302,082Operating expenses


156,818



21,852



16,535



1,106



196,311



29,700



14,230



240,241



44,535



284,776Deferral of expenses under
    SFAS 91


(61,517
)


(3,077
)










(64,594
)


(3,924
)


(78
)


(68,596
)






(68,596
)Pretax income (loss)


72,711



40,895



(15,271
)


(1,103
)


97,232



49,173



(12,839
)


133,566



(47,664
)


85,902Net income (loss)

$
44,035


$
24,905


$
(9,300
)

$
(672
)

$
58,968


$
29,945


$
(7,504
)

$
81,409


$
(29,027
)

$
52,382Relevant Financial and
    Performance DataAverage interest-earning assets

$
12,751,754


$
908,581


$
2,623


$
22


$
13,662,980


$
17,057,623


$
(90,717
)

$
30,629,886


$
399,712


$
31,029,598Allocated capital


679,808



332,085



6,637



3



1,018,533



851,976



2,057



1,872,566



160,333



2,032,899Loans produced


23,613,994



1,118,417



N/A



1,000



24,733,411



1,196,960



N/A



25,930,371



N/A



25,930,371Loans sold


23,216,581



1,177,631



N/A



N/A



24,394,212



2,167,639



(2,025,039
)


24,536,812



N/A



24,536,812MBR margin


0.69
%


1.47
%


N/A



N/A



0.54
%


0.55
%


N/A



N/A



N/A



0.68
%ROE


26
%


30
%


N/A



N/A



23
%


14
%


N/A



18
%


N/A



10
%ROA


1.37
%


3.14
%


N/A



N/A



1.46
%


0.71
%


N/A



0.98
%


N/A



0.60
%Net interest margin, thrift.


N/A



N/A



N/A



N/A



N/A



1.66
%


N/A



N/A



N/A



2.11
%Average FTE


4,958



278



1,186



14



6,436



647



319



7,402



1,353



8,755Three Months Ended
    March 31, 2006Operating ResultsNet interest income

$
43,251


$
(3,296
)

$
(146
)

$



$
39,809


$
75,662


$
13,578


$
129,049


$
(1,839
)

$
127,210Provision for loan losses






















(3,822
)






(3,822
)






(3,822
)Gain (loss) on sale of loans


134,209



4,322











138,531



15,676



(13,008
)


141,199







141,199Service fee income


4,437



36,573











41,010



1,020



(11,141
)


30,889







30,889Gain (loss) on securities






(9,187
)










(9,187
)


979



5,593



(2,615
)






(2,615
)Other income


613



867



866







2,346



9,084



(410
)


11,020



654



11,674Net revenues (expense)


182,510



29,279



720







212,509



98,599



(5,388
)


305,720



(1,185
)


304,535Operating expenses


133,657



11,460



13,771







158,888



27,966



10,459



197,313



38,280



235,593Deferral of expenses under
    SFAS 91


(57,349
)


(1,328
)










(58,677
)


(3,974
)


(575
)


(63,226
)






(63,226
)Pretax income (loss)


106,202



19,147



(13,051
)






112,298



74,607



(15,272
)


171,633



(39,465
)


132,168Net income (loss)

$
64,555


$
11,661


$
(7,948
)

$



$
68,268


$
45,436


$
(9,821
)

$
103,883


$
(24,034
)

$
79,849Relevant Financial and
    Performance DataAverage interest-earning assets

$
8,976,934


$
387,795


$
3,614


$



$
9,368,343


$
13,875,551


$
(84,647
)

$
23,159,247


$
874,926


$
24,034,173Allocated capital


510,832



197,253



12,509







720,594



727,465



1,792



1,449,851



148,455



1,598,306Loans produced


18,836,170



427,355



N/A







19,263,525



1,076,525



N/A



20,340,050



N/A



20,340,050Loans sold


17,265,075



309,466



N/A







17,574,541



1,243,892



(2,110,246
)


16,708,187



N/A



16,708,187MBR margin


1.03
%


1.40
%


N/A



N/A



0.79
%


1.26
%


N/A



N/A



N/A



1.10
%ROE


51
%


24
%


N/A



N/A



38
%


25
%


N/A



29
%


N/A



20
%ROA


2.85
%


2.79
%


N/A



N/A



2.52
%


1.31
%


N/A



1.68
%


N/A



1.22
%Net interest margin, thrift.


N/A



N/A



N/A



N/A



N/A



2.21
%


N/A



N/A



N/A



2.42
%Average FTE


4,021



170



958







5,149



659



295



6,103



1,126



7,229     (1)
    
    Included production division overhead, servicing overhead and
    secondary marketing overhead of $3.2 million,
    $3.1 million and $3.0 million, respectively, for the
    first quarter of 2007. For the first quarter of 2006, the
    production division overhead, servicing overhead and secondary
    marketing overhead were $3.5 million, $2.2 million and
    $2.2 million, respectively.(2)
    
    Included are eliminations, deposits, and treasury items, the
    details of which are provided on page 13. 9




---



##### Table of Contents



Mortgage Professionals GroupTotal


FinancialMortgage


Freedom


TotalConsumer














Professionals


(Reverse


ProductionDirect


Retail


Wholesale


Correspondent


Conduit


Group


Mortgage)


DivisionsThree Months Ended
    March 31, 2007Operating ResultsNet interest income

$
391


$
45


$
18,546


$
4,977


$
20,088


$
43,656


$
5,715


$
49,762Provision for loan losses






























Gain (loss) on sale of loans


3,888



547



48,944



3,816



(9,904
)


43,403



63,096



110,387Gain (loss) on securities


























7,190



7,190Service fee income






























Other income


184



418











(130
)


288



201



673Net revenues (expense)


4,463



1,010



67,490



8,793



10,054



87,347



76,202



168,012Operating expenses


7,805



1,998



89,211



11,818



8,714



111,741



37,272



156,818Deferral of expenses under
    SFAS 91


(3,522
)


(123
)


(43,057
)


(7,309
)






(50,489
)


(7,506
)


(61,517
)Pretax income (loss)


180



(865
)


21,336



4,284



1,340



26,095



46,436



72,711Net income (loss)

$
110


$
(527
)

$
12,994


$
2,609


$
816


$
15,892


$
28,033


$
44,035Relevant Financial and
    Performance DataAverage interest-earning assets

$
133,841


$
17,997



4,664,135


$
1,228,276


$
5,724,044


$
11,634,452


$
983,461


$
12,751,754Allocated capital


6,552



845



234,272



64,391



239,364



538,872



134,384



679,808Loans produced


319,503



49,332



10,632,218



3,023,925



8,367,590



22,073,065



1,221,426



23,613,994Loans sold


329,077



44,730



10,167,185



2,894,620



8,254,935



21,361,470



1,526,034



23,216,581MBR Margin


1.30
%


N/A



0.66
%


0.30
%


0.12
%


0.41
%


4.51
%


0.69
%Pretax/income/loan sold


0.05
%


N/A



0.21
%


0.15
%


0.02
%


0.12
%


3.04
%


0.31
%ROE


7
%


N/A



22
%


16
%


1
%


12
%


85
%


26
%ROA


0.32
%


N/A



1.13
%


0.86
%


0.06
%


0.55
%


9.27
%


1.37
%Net interest margin


1.18
%


N/A



1.61
%


1.64
%


1.42
%


1.52
%


2.36
%


1.58
%Average FTE


281



78



2,690



284



177



3,229



1,448



4,958Three Months Ended
    March 31, 2006Operating ResultsNet interest income

$
766


$



$
16,790


$
3,477


$
20,852


$
41,119


$
1,366


$
43,251Provision for loan losses






























Gain (loss) on sale of loans


9,150







84,698



10,454



1,667



96,819



28,240



134,209Gain (loss) on securities


























4,437



4,437Service fee income






























Other income


(33
)














235



235



411



613Net revenues (expense)


9,883







101,488



13,931



22,754



138,173



34,454



182,510Operating expenses


17,342



193



71,278



9,914



6,928



88,313



28,002



133,657Deferral of expenses under
    SFAS 91


(6,329
)






(38,514
)


(5,576
)






(44,090
)


(6,930
)


(57,349
)Pretax income (loss)


(1,130
)


(193
)


68,724



9,593



15,826



93,950



13,382



106,202Net income (loss)

$
(688
)

$
(118
)

$
41,853


$
5,842


$
9,638


$
57,215


$
8,028


$
64,555Relevant Financial and
    Performance DataAverage interest-earning assets

$
231,300


$



$
3,778,924


$
856,353


$
3,814,192


$
8,449,469


$
296,165


$
8,976,934Allocated capital


12,765







204,467



46,483



179,170



430,120



67,947



510,832Loans produced


525,270







8,780,708



2,276,214



6,135,724



17,192,646



1,118,254



18,836,170Loans sold


509,978







7,968,626



2,095,509



5,645,770



15,709,905



1,045,192



17,265,075MBR Margin


1.94
%






1.27
%


0.66
%


0.40
%


0.88
%


2.83
%


1.03
%Pretax/income/loan sold


(0.22
)%






0.86
%


0.46
%


0.28
%


0.60
%


1.28
%


0.62
%ROE


(22
)%






83
%


0.51
%


22
%


54
%


48
%


51
%ROA


(1.14
)%






4.48
%


2.76
%


1.02
%


2.73
%


7.37
%


2.85
%Net interest margin


1.34
%






1.80
%


1.65
%


2.22
%


1.97
%


1.87
%


1.95
%Average FTE


462



5



2,153



209



135



2,502



1,057



4,021  10




---



##### Table of Contents



Mortgage





TotalServicing


Customer


MortgageRights


Retention


Servicing(Dollars in thousands)Three Months Ended
    March 31, 2007Operating ResultsNet interest income

$
(8,135
)

$
3,083


$
(5,052
)Provision for loan losses










Gain (loss) on sale of loans


532



16,729



17,261Service fee income


43,928







43,928Gain (loss) on sale of securities


(265
)






(265
)Other income


1,799



1,999



3,798Net revenues (expense)


37,859



21,811



59,670Operating expenses


11,188



10,664



21,852Deferral of expenses under
    SFAS 91






(3,077
)


(3,077
)Pretax income (loss)


26,671



14,224



40,895Net income (loss)

$
16,243


$
8,662


$
24,905Relevant Financial and
    Performance DataAverage interest-earning assets

$
214,057


$
694,524


$
908,581Allocated capital


300,419



31,666



332,085Loans produced






1,118,417



1,118,417Loans sold






1,177,631



1,177,631MBR Margin


N/A



1.42
%


1.47
%Pretax income/loan sold


N/A



N/A



N/AROE


22
%


111
%


30
%ROA


2.61
%


5.04
%


3.14
%Net interest margin


N/A



N/A



N/AAverage FTE


91



187



278Three Months Ended
    March 31, 2006Operating ResultsNet interest income

$
(4,083
)

$
787


$
(3,296
)Provision for loan losses










Gain (loss) on sale of loans


670



3,652



4,322Service fee income


36,581



(8
)


36,573Gain (loss) on sale of securities


(9,187
)






(9,187
)Other income






867



867Net revenues (expense)


23,981



5,298



29,279Operating expenses


6,591



4,869



11,460Deferral of expenses under
    SFAS 91






(1,328
)


(1,328
)Pretax income (loss)


17,390



1,757



19,147Net income (loss)

$
10,591


$
1,070


$
11,661Relevant Financial and
    Performance DataAverage interest-earning assets

$
184,453


$
203,342


$
387,795Allocated capital


186,904



10,349



197,253Loans produced






427,355



427,355Loans sold


4,934



304,532



309,466MBR Margin


N/A



1.20
%


1.40
%Pretax income/loan sold


N/A



N/A



N/AROE


23
%


42
%


24
%ROA


2.88
%


2.12
%


2.79
%Net interest margin


N/A



N/A



N/AAverage FTE


79



91



170  11




---



##### Table of Contents



ThriftNon-Investment


TotalInvestment


Grade and


Mortgage-


Prime SFR


Home


ConsumerGrade


Residual


Backed


Mortgage


Equity


Construction


Homebuilder


Warehouse


Discontinued


TotalSecurities


Securities


Securities


Loans


Division


Division


Division


Lending


Products


Thrift(Dollars in thousands)Three Months Ended
    March 31, 2007Operating ResultsNet interest income

$
6,956


$
10,718


$
17,674


$
14,251


$
7,030


$
13,781


$
15,119


$
1,466


$
499


$
69,820Provision for loan losses














(8,500
)


(170
)


(1,402
)






(115
)


(500
)


(10,687
)Gain (loss) on sale of loans














(4,967
)


8,084



8,887















12,004Service fee income


















490



















490Gain (loss) on securities


(222
)


(1,377
)


(1,599
)






(4,120
)


(40
)














(5,759
)Other income


613







613



503



1,668



5,312



294



691







9,081Net revenues (expense)


7,347



9,341



16,688



1,287



12,982



26,538



15,413



2,042



(1
)


74,949Operating expenses


284



360



644



1,590



4,592



15,896



6,070



854



54



29,700Deferral of expenses under
    SFAS 91


















(302
)


(1,898
)


(1,724
)










(3,924
)Pretax income (loss)


7,063



8,981



16,044



(303
)


8,692



12,540



11,067



1,188



(55
)


49,173Net income (loss)

$
4,301


$
5,469


$
9,770


$
(185
)

$
5,293


$
7,637


$
6,740


$
723


$
(33
)

$
29,945Relevant Financial and Performance
    DataAverage interest-earning assets

$
4,406,164


$
270,994


$
4,677,158


$
6,724,536


$
1,563,737


$
2,646,508


$
1,182,040


$
229,115


$
34,529


$
17,057,623Allocated capital


82,473



136,981



219,454



253,595



122,934



127,733



106,815



18,300



3,145



851,976Loans produced


















24,676



812,508



359,776











1,196,960Loans sold














737,527



740,327



689,785















2,167,639ROE


21
%


16
%


18
%


0
%


17
%


24
%


26
%


16
%


(4
)%


14
%ROA


0.39
%


7.08
%


0.83
%


(0.01
)%


1.33
%


1.17
%


2.33
%


1.28
%


(0.44
)%


0.71
%Net interest margin, thrift.


0.64
%


16.04
%


1.53
%


0.86
%


1.82
%


2.11
%


5.19
%


2.59
%


5.86
%


1.66
%Efficiency ratio


4
%


4
%


4
%


16
%


33
%


50
%


28
%


40
%


11
%


30
%Average FTE


4



5



9



11



82



391



125



29







647Three Months Ended
    March 31, 2006Operating ResultsNet interest income

$
11,152


$
6,824


$
17,976


$
22,373


$
10,235


$
11,295


$
12,665


$
414


$
704


$
75,662Provision for loan losses














(1,750
)






(941
)


(250
)


(71
)


(810
)


(3,822
)Gain (loss) on sale of loans














122



6,454



9,100















15,676Service fee income


















1,020



















1,020Gain (loss) on securities


(832
)


2,625



1,793



384



(1,523
)


325















979Other income














332



1,991



6,230



236



295







9,084Net revenues (expense)


10,320



9,449



19,769



21,461



18,177



26,009



12,651



638



(106
)


98,599Operating expenses


228



507



735



857



4,787



15,901



4,780



822



84



27,966Deferral of expenses under
    SFAS 91


















(266
)


(2,258
)


(1,450
)










(3,974
)Pretax income (loss)


10,092



8,942



19,034



20,604



13,656



12,366



9,321



(184
)


(190
)


74,607Net income (loss)

$
6,146


$
5,446


$
11,592


$
12,548


$
8,317


$
7,531


$
5,676


$
(112
)

$
(116
)

$
45,436Relevant Financial and Performance
    DataAverage interest-earning assets

$
2,723,048


$
146,080


$
2,869,128


$
5,541,875


$
2,038,001


$
2,354,582


$
971,064


$
56,218


$
44,683


$
13,875,551Allocated capital


55,854



80,639



136,493



220,742



152,023



113,989



95,000



5,513



3,705



727,465Loans produced


















29,584



684,156



362,785











1,076,525Loans sold


















586,055



657,837















1,243,892ROE


45
%


27
%


34
%


23
%


22
%


27
%


24
%


(8
)%


(13
)%


25
%ROA


0.90
%


11.62
%


1.59
%


0.91
%


1.62
%


1.30
%


2.39
%


(0.81
)%


(1.21
)%


1.31
%Net interest margin, thrift.


1.66
%


18.95
%


2.54
%


1.64
%


2.04
%


1.95
%


5.29
%


2.99
%


6.39
%


2.21
%Efficiency ratio


2
%


5
%


4
%


4
%


25
%


51
%


26
%


116
%


12
%


23
%Average FTE


5



7



12



13



67



441



102



24







659  12




---



##### Table of Contents



EliminationsInterdivisionInterdivision


HedgeDeposits


Treasury


Loan Sales


Transactions


Other


Total(Dollars in thousands)Three Months Ended
    March 31, 2007Operating ResultsNet interest income

$



$
9,634


$
9,054


$



$
5,547


$
24,235Provision for loan losses






















Gain (loss) on sale of loans










(14,381
)


(7,728
)






(22,109
)Service fee income










(1,340
)


7,728



(8,809
)


(2,421
)Gain (loss) on sale of securities










677











677Other income


958



563











(590
)


931Net revenues (expense)


958



10,197



(5,990
)






(3,852
)


1,313Operating expenses


6,501



11,709











(3,980
)


14,230Deferral of expenses under
    SFAS 91


















(78
)


(78
)Pretax income (loss)


(5,543
)


(1,512
)


(5,990
)






206



(12,839
)Net income (loss)

$
(3,376
)

$
(921
)

$
(3,648
)

$



$
441


$
(7,504
)Relevant Financial and
    Performance DataAverage interest-earning assets

$
179


$



$
(90,896
)

$



$



$
(90,717
)Allocated capital


2,057



















2,057Loans produced


N/A



N/A



N/A



N/A



N/A



N/ALoans sold


N/A



N/A



(2,025,039
)


N/A



N/A



(2,025,039
)ROE


N/A



N/A



N/A



N/A



N/A



N/AROA


N/A



N/A



N/A



N/A



N/A



N/ANet interest margin


N/A



N/A



N/A



N/A



N/A



N/AAverage FTE


277



42















319Three Months Ended
    March 31, 2006Operating ResultsNet interest income

$



$
3,556


$
6,799


$



$
3,223


$
13,578Provision for loan losses






















Gain (loss) on sale of loans










(13,008
)










(13,008
)Service fee income










(5,138
)






(6,003
)


(11,141
)Gain (loss) on sale of securities










5,593











5,593Other income


790



180











(1,380
)


(410
)Net revenues (expense)


790



3,736



(5,754
)






(4,160
)


(5,388
)Operating expenses


5,969



7,742











(3,252
)


10,459Deferral of expenses under
    SFAS 91


















(575
)


(575
)Pretax income (loss)


(5,179
)


(4,006
)


(5,754
)






(333
)


(15,272
)Net income (loss)

$
(3,154
)

$
(2,440
)

$
(3,504
)

$



$
(723
)

$
(9,821
)Relevant Financial and
    Performance DataAverage interest-earning assets

$
192


$



$
(84,839
)

$



$



$
(84,647
)Allocated capital


1,792



















1,792Loans produced


N/A



N/A



N/A



N/A



N/A



N/ALoans sold


N/A



N/A



(2,110,246
)


N/A



N/A



(2,110,246
)ROE


N/A



N/A



N/A



N/A



N/A



N/AROA


N/A



N/A



N/A



N/A



N/A



N/ANet interest margin


N/A



N/A



N/A



N/A



N/A



N/AAverage FTE


256



39















295  13




---



##### Table of Contents



Accounting
    Methodology for Reporting Segment Financial Results
             14




---



##### Table of Contents



PRODUCT
    PROFITABILITY ANALYSIS  and/or 10-K,
    HomeStandard


Specialty


Loans &


SpecialtyConsumer


Consumer


Related


Commercial








TotalHome Loans


Home Loans


Investments


Loans


Treasury


Overhead


Company(Dollars in thousands)Three Months Ended
    March 31, 2007Operating ResultsNet interest income

$
37,219


$
42,225


$
34,704


$
19,322


$
280


$
1,320


$
135,070Provision for loan losses






(1,923
)


(8,500
)


(264
)










(10,687
)Gain (loss) on sale of loans


25,680



79,569



12,294















117,543Service fee income






11,700



36,942











545



49,187Gain (loss) on sale of securities






27



(5,374
)














(5,347
)Other income






8,269



3,116



1,697



563



2,671



16,316Net revenue (expense)


62,899



139,867



73,182



20,755



843



4,536



302,082Variable expenses


60,035



41,715



4,451



3,155











109,356Deferral of expenses under
    SFAS 91


(47,452
)


(17,014
)


(2,312
)


(1,818
)










(68,596
)Fixed expenses


51,827



25,165



16,960



6,168



2,355



72,945



175,420Pretax income (loss)


(1,511
)


90,001



54,083



13,250



(1,512
)


(68,409
)


85,902Net income (loss)

$
(920
)

$
54,564


$
32,937


$
8,069


$
(921
)

$
(41,347
)

$
52,382Balance Sheet DataAverage interest-earning assets

$
11,212,591


$
5,655,547


$
12,156,616


$
1,623,528


$



$
381,316


$
31,029,598Allocated capital

$
500,702


$
395,620


$
741,762


$
140,667


$



$
254,148


$
2,032,899Performance RatiosROE


(1
)%


56
%


18
%


23
%


N/A



N/A



10
%Net interest margin


1.35
%


3.03
%


1.16
%


4.83
%


N/A



N/A



1.77
%MBR margin


0.34
%


2.36
%


0.64
%


N/A



N/A



N/A



0.68
%Efficiency ratio


102
%


35
%


23
%


36
%


N/A



N/A



69
%Operating DataLoan production

$
20,346,404


$
4,187,584


$
969,709


$
426,674


$



$



$
25,930,371Loans sold

$
18,658,889


$
3,962,765


$
1,915,158


$



$



$



$
24,536,812Three Months Ended
    March 31, 2006Operating ResultsNet interest income

$
30,281


$
37,218


$
44,651


$
16,550


$
(2,447
)

$
957


$
127,210Provision for loan losses






(1,679
)


(1,750
)


(393
)










(3,822
)Gain (loss) on sale of loans


101,369



35,002



4,828















141,199Service fee income






5,457



25,041











391



30,889Gain (loss) on sale of securities






(1,198
)


(1,417
)














(2,615
)Other income






7,755



1,199



1,408



180



1,132



11,674Net revenue (expense)


131,650



82,555



72,552



17,565



(2,267
)


2,480



304,535Variable expenses


57,065



38,270



987



3,258











99,580Deferral of expenses under
    SFAS 91


(43,545
)


(17,327
)


(827
)


(1,527
)










(63,226
)Fixed expenses


39,093



19,684



11,386



3,340



1,739



60,771



136,013Pretax income (loss)


79,037



41,928



61,006



12,494



(4,006
)


(58,291
)


132,168Net income (loss)

$
48,134


$
25,412


$
37,153


$
7,608


$
(2,440
)

$
(36,018
)

$
79,849Balance Sheet DataAverage interest-earning assets

$
7,712,367


$
5,426,475


$
8,778,529


$
1,268,342


$
811,173


$
37,287


$
24,034,173Allocated capital

$
362,914


$
347,900


$
553,657


$
118,992


$
43,332


$
171,511


$
1,598,306Performance RatiosROE


54
%


30
%


27
%


26
%


N/A



N/A



20
%Net interest margin


1.59
%


2.78
%


2.06
%


5.29
%


N/A



N/A



2.15
%MBR margin


0.98
%


1.60
%


1.56
%


N/A



N/A



N/A



1.10
%Efficiency ratio


40
%


48
%


16
%


28
%


N/A



N/A



56
%Operating DataLoan production

$
15,535,796


$
4,077,455


$
317,525


$
409,274


$



$



$
20,340,050Loans sold

$
13,395,747


$
3,002,974


$
309,466


$



$



$



$
16,708,187  15




---



##### Table of Contents



Standard Consumer Home Loans Held for SaleAgencyConforming/Jumbo


Alt-A


Subprime


Total(Dollars in thousands)Three Months Ended
    March 31, 2007Operating ResultsNet interest income

$
602


$
32,782


$
3,835


$
37,219Provision for loan losses














Gain (loss) on sale of loans


(897
)


31,738



(5,161
)


25,680Service fee income














Gain (loss) on sale of securities














Other income














Net revenues (expense)


(295
)


64,520



(1,326
)


62,899Variable expenses


3,155



48,083



8,797



60,035Deferral of expenses under
    SFAS 91


(2,494
)


(38,005
)


(6,953
)


(47,452
)Fixed expenses


2,578



43,363



5,886



51,827Pretax income (loss)


(3,534
)


11,079



(9,056
)


(1,511
)Net income (loss)

$
(2,152
)

$
6,747


$
(5,515
)

$
(920
)Balance Sheet DataAverage interest-earning assets

$
234,313


$
10,406,526


$
571,752


$
11,212,591Allocated capital

$
9,485


$
456,639


$
34,578


$
500,702Performance RatiosROE


(92
)%


6
%


(65
)%


(1
)%Net interest margin


1.04
%


1.28
%


2.72
%


1.35
%MBR margin


(0.05
)%


0.38
%


(0.14
)%


0.34
%Efficiency ratio


N/M



83
%


(583
)%


102
%Operating DataLoan production

$
578,339


$
18,704,030


$
1,064,035


$
20,346,404Loans sold

$
580,450


$
17,101,239


$
977,200


$
18,658,889Three Months Ended
    March 31, 2006Operating ResultsNet interest income

$
443


$
26,701


$
3,137


$
30,281Provision for loan losses














Gain (loss) on sale of loans


377



95,300



5,692



101,369Service fee income














Gain (loss) on sale of securities














Other income














Net revenues (expense)


820



122,001



8,829



131,650Variable expenses


1,830



48,167



7,068



57,065Deferral of expenses under
    SFAS 91


(1,723
)


(36,355
)


(5,467
)


(43,545
)Fixed expenses


1,178



34,163



3,752



39,093Pretax income (loss)


(465
)


76,026



3,476



79,037Net income (loss)

$
(283
)

$
46,300


$
2,117


$
48,134Balance Sheet DataAverage interest-earning assets

$
114,839


$
7,218,316


$
379,212


$
7,712,367Allocated capital

$
4,790


$
334,582


$
23,542


$
362,914Performance RatiosROE


(24
)%


56
%


36
%


54
%Net interest margin


1.56
%


1.50
%


3.35
%


1.59
%MBR margin


0.40
%


0.97
%


1.31
%


0.98
%Efficiency ratio


157
%


38
%


61
%


40
%Operating DataLoan production

$
208,142


$
14,786,384


$
541,270


$
15,535,796Loans sold

$
206,998


$
12,515,637


$
673,112


$
13,395,747  16




---



##### Table of Contents



and/or
  Specialty Consumer Home Loans Held for Sale
    and/or
    InvestmentHELOCs/


ReverseSeconds


Mortgages


CTP/Lot


Discontinued


Total(Dollars in thousands)Three Months Ended
    March 31, 2007Operating ResultsNet interest income

$
20,890


$
5,715


$
15,121


$
499


$
42,225Provision for loan losses


(170
)






(1,253
)


(500
)


(1,923
)Gain (loss) on sale of loans


6,956



63,096



9,517







79,569Service fee income


4,510



7,190











11,700Gain (loss) on sale of securities


67







(40
)






27Other income


3,466



201



4,602







8,269Net revenues (expense)


35,719



76,202



27,947



(1
)


139,867Variable expenses


11,350



23,012



7,353







41,715Deferral of expenses under
    SFAS 91


(7,704
)


(7,506
)


(1,804
)






(17,014
)Fixed expenses


3,601



14,260



7,250



54



25,165Pretax income (loss)


28,472



46,436



15,148



(55
)


90,001Net income (loss)

$
17,339


$
28,033


$
9,225


$
(33
)

$
54,564Balance Sheet DataAverage interest-earning assets

$
2,210,168


$
983,461


$
2,427,389


$
34,529


$
5,655,547Allocated capital


227,042



53,790



111,643



3,145



395,620Performance RatiosROE


31
%


211
%


34
%


(4
)%


56
%Net interest margin


3.83
%


2.36
%


2.53
%


5.86
%


3.03
%MBR margin


0.86
%


4.51
%


1.38
%


N/A



2.36
%Efficiency ratio


20
%


39
%


44
%


11
%


35
%Operating DataLoan production

$
1,702,862


$
1,221,426


$
1,263,296


$



$
4,187,584Loans sold

$
1,746,946


$
1,526,034


$
689,785


$



$
3,962,765Three Months Ended
    March 31, 2006Operating ResultsNet interest income

$
23,806


$
1,366


$
11,342


$
704


$
37,218Provision for loan losses










(869
)


(810
)


(1,679
)Gain (loss) on sale of loans


(5,563
)


28,240



12,325







35,002Service fee income


1,020



4,437











5,457Gain (loss) on sale of securities


(1,523
)






325







(1,198
)Other income


1,991



411



5,353







7,755Net revenues (expense)


19,731



34,454



28,476



(106
)


82,555Variable expenses


12,307



16,167



9,796







38,270Deferral of expenses under
    SFAS 91


(8,216
)


(6,930
)


(2,181
)






(17,327
)Fixed expenses


2,656



11,835



5,109



84



19,684Pretax income (loss)


12,984



13,382



15,752



(190
)


41,928Net income (loss)

$
7,907


$
8,028


$
9,593


$
(116
)

$
25,412Balance Sheet DataAverage interest-earning assets

$
2,979,563


$
296,165


$
2,106,064


$
44,683


$
5,426,475Allocated capital

$
229,793


$
19,504


$
94,898


$
3,705


$
347,900Performance RatiosROE


14
%


167
%


41
%


(13
)%


30
%Net interest margin


3.24
%


1.87
%


2.18
%


6.39
%


2.78
%MBR margin


0.46
%


2.83
%


1.87
%


N/A



1.60
%Efficiency ratio


34
%


61
%


43
%


12
%


48
%Operating DataLoan production

$
1,643,233


$
1,118,254


$
1,315,968


$



$
4,077,455Loans sold

$
1,299,945


$
1,045,192


$
657,837


$



$
3,002,974  17




---



##### Table of Contents



Home Loans and Related InvestmentsRetained Assets





SFR Loansand Retention





Held forActivities


MBS


Investment


Total(Dollars in thousands)Three Months Ended
    March 31, 2007Operating ResultsNet interest income

$
4,845


$
13,398


$
16,461


$
34,704Provision for loan losses










(8,500
)


(8,500
)Gain (loss) on sale of loans


17,261







(4,967
)


12,294Service fee income


36,942











36,942Gain (loss) on sale of securities


(719
)


(4,655
)






(5,374
)Other income


2,000



613



503



3,116Net revenues (expense)


60,329



9,356



3,497



73,182Variable expenses


4,451











4,451Deferral of expenses under
    SFAS 91


(2,312
)










(2,312
)Fixed expenses


14,726



644



1,590



16,960Pretax income (loss)


43,464



8,712



1,907



54,083Net income (loss)

$
26,470


$
5,306


$
1,161


$
32,937Balance Sheet DataAverage interest-earning assets

$
904,721


$
4,553,556


$
6,698,339


$
12,156,616Allocated capital

$
324,766


$
164,449


$
252,547


$
741,762Performance RatiosROE


33
%


13
%


2
%


18
%Net interest margin


2.17
%


1.19
%


1.00
%


1.16
%MBR margin


1.47
%


N/A



N/A



0.64
%Efficiency ratio


28
%


7
%


13
%


23
%Operating DataLoan production

$
969,709


$



$



$
969,709Loans sold

$
1,177,631


$



$
737,527


$
1,915,158Three Months Ended
    March 31, 2006Operating ResultsNet interest income

$
2,707


$
17,976


$
23,968


$
44,651Provision for loan losses










(1,750
)


(1,750
)Gain (loss) on sale of loans


4,706







122



4,828Service fee income


25,041











25,041Gain (loss) on sale of securities


(3,594
)


1,793



384



(1,417
)Other income


867







332



1,199Net revenues (expense)


29,727



19,769



23,056



72,552Variable expenses


987











987Deferral of expenses under
    SFAS 91


(827
)










(827
)Fixed expenses


9,794



735



857



11,386Pretax income (loss)


19,773



19,034



22,199



61,006Net income (loss)

$
12,042


$
11,592


$
13,519


$
37,153Balance Sheet DataAverage interest-earning assets

$
387,795


$
2,869,128


$
5,521,606


$
8,778,529Allocated capital

$
197,253


$
136,493


$
219,911


$
553,657Performance RatiosROE


25
%


34
%


25
%


27
%Net interest margin


2.83
%


2.54
%


1.76
%


2.06
%MBR margin


1.52
%


N/A



N/A



1.56
%Efficiency ratio


33
%


4
%


3
%


16
%Operating DataLoan production

$
317,525


$



$



$
317,525Loans sold

$
309,466


$



$



$
309,466  18




---



##### Table of Contents



Specialty Commercial Loans Held for Sale
    and/or
    InvestmentWarehouse


CommercialSingle Spec


Subdivision


lending


lending


Total(Dollars in thousands)Three Months Ended
    March 31, 2007Operating ResultsNet interest income

$
2,736


$
15,119


$
1,466


$
1


$
19,322Provision for loan losses


(149
)






(115
)






(264
)Gain (loss) on sale of loans


















Service fee income


















Gain (loss) on sale of securities


















Other income


710



294



691



2



1,697Net revenues (expense)


3,297



15,413



2,042



3



20,755Variable expenses


729



2,426











3,155Deferral of expenses under
    SFAS 91


(94
)


(1,724
)










(1,818
)Fixed expenses


564



3,644



854



1,106



6,168Pretax income (loss)


2,098



11,067



1,188



(1,103
)


13,250Net income (loss)

$
1,278


$
6,740


$
723


$
(672
)

$
8,069Balance Sheet DataAverage interest-earning assets

$
212,351


$
1,182,040


$
229,115


$
22


$
1,623,528Allocated capital

$
15,549


$
106,815


$
18,300


$
3


$
140,667Performance RatiosROE


33
%


26
%


16
%


N/A



23
%Net interest margin


5.23
%


5.19
%


2.59
%


N/A



4.83
%Efficiency ratio


35
%


28
%


40
%


N/A



36
%Operating Data


















N/ALoan production

$
65,898


$
359,776


$



$
1,000


$
426,674Loans sold

$



$



$



$



$
Three Months Ended
    March 31, 2006Operating ResultsNet interest income

$
3,471


$
12,665


$
414


$



$
16,550Provision for loan losses


(72
)


(250
)


(71
)






(393
)Gain (loss) on sale of loans


















Service fee income


















Gain (loss) on sale of securities


















Other income


877



236



295







1,408Net revenues (expense)


4,276



12,651



638







17,565Variable expenses


630



2,628











3,258Deferral of expenses under
    SFAS 91


(77
)


(1,450
)










(1,527
)Fixed expenses


366



2,152



822







3,340Pretax income (loss)


3,357



9,321



(184
)






12,494Net income (loss)

$
2,044


$
5,676


$
(112
)

$



$
7,608Balance Sheet DataAverage interest-earning assets

$
241,060


$
971,064


$
56,218


$



$
1,268,342Allocated capital

$
18,479


$
95,000


$
5,513


$



$
118,992Performance RatiosROE


45
%


24
%


N/A



N/A



26
%Net interest margin


5.84
%


5.29
%


N/A



N/A



5.29
%Efficiency ratio


21
%


26
%


N/A



N/A



28
%Operating DataLoan production

$
46,489


$
362,785


$



$



$
409,274Loans sold

$



$



$



$



$
  19




---



##### Table of Contents



Servicing OH


MB OH


Deposit OH


Corporate OH


Total Overhead(Dollars in thousands)Three Months Ended
    March 31, 2007Operating ResultsNet interest income

$
72


$
(14
)

$
5,544


$
(4,282
)

$
1,320Provision for loan losses


















Gain (loss) on sale of loans


















Service fee income














545



545Gain (loss) on sale of securities


















Other income


1,132



74



958



507



2,671Net revenues (expense)


1,204



60



6,502



(3,230
)


4,536Variable expenses


















Deferral of expenses under
    SFAS 91


















Fixed expenses


6,287



10,248



12,045



44,365



72,945Pretax income (loss)


(5,083
)


(10,188
)


(5,543
)


(47,595
)


(68,409
)Net income (loss)

$
(3,096
)

$
(6,204
)

$
(3,376
)

$
(28,671
)

$
(41,347
)Balance Sheet DataAverage interest-earning assets

$



$
2,623


$
179


$
378,514


$
381,316Allocated capital

$
(488
)

$
7,125


$
2,057


$
245,454


$
254,148Performance RatiosROE


N/A



N/A



N/A



N/A



N/ANet interest margin


N/A



N/A



N/A



N/A



N/AEfficiency ratio


N/A



N/A



N/A



N/A



N/AOperating Data


N/A



N/A



N/A



N/A



N/ALoan production

$



$



$



$



$
Loans sold

$



$



$



$



$
Three Months Ended
    March 31, 2006Operating ResultsNet interest income

$
(32
)

$
(114
)

$
2,898


$
(1,795
)

$
957Provision for loan losses


















Gain (loss) on sale of loans


















Service fee income














391



391Gain (loss) on sale of securities


















Other income


669



197



790



(524
)


1,132Net revenues (expense)


637



83



3,688



(1,928
)


2,480Variable expenses


















Deferral of expenses under
    SFAS 91


















Fixed expenses


4,258



9,513



8,867



38,133



60,771Pretax income (loss)


(3,621
)


(9,430
)


(5,179
)


(40,061
)


(58,291
)Net income (loss)

$
(2,205
)

$
(5,743
)

$
(3,154
)

$
(24,916
)

$
(36,018
)Balance Sheet DataAverage interest-earning assets

$



$
3,614


$
192


$
33,481


$
37,287Allocated capital

$
270


$
12,239


$
1,792


$
157,210


$
171,511Performance RatiosROE


N/A



N/A



N/A



N/A



N/ANet interest margin


N/A



N/A



N/A



N/A



N/AEfficiency ratio


N/A



N/A



N/A



N/A



N/AOperating DataLoan production

$



$



$



$



$
Loans sold

$



$



$



$



$
  20




---



##### Table of Contents



CAPITAL
    MANAGEMENT          Total Assets


Core


Risk-Based% of


Avg.


% of








Avg.


% ofAverage


Total


Allocated


Total


Capital/





Allocated


Total


Capital/Assets


Assets


Capital


Capital


Assets


ROE


Capital


Capital


Assets


ROE($ in thousands)Mortgage
    Banking:Consumer Direct

$
138,984



0.4
%

$
7,783



0.4
%


5.6
%


6
%

$
6,552



0.3
%


4.7
%


7
%Retail


18,142



0.1
%


1,016



0.0
%


5.6
%


N/A



845



0.0
%


4.7
%


N/AWholesale


4,677,347



13.2
%


261,931



12.9
%


5.6
%


20
%


234,272



11.5
%


5.0
%


22
%Correspondent


1,230,616



3.5
%


68.914



3.4
%


5.6
%


16
%


64,391



3.2
%


5.2
%


16
%Conduit


5,773,537



16.3
%


323,318



15.9
%


5.6
%


2
%


239,364



11.8
%


4.1
%


1
%Total Mortgage
    Professionals


11,699,642



33.1
%


655,179



32.2
%


5.6
%


10
%


538,872



26.5
%


4.6
%


12
%Financial Freedom


1,226,568



3.5
%


134,384



6.6
%


11.0
%


85
%


134,384



6.6
%


11.0
%


85
%Total Production
    Divisions


13,065,194



37.0
%


797,346



39.2
%


6.1
%


23
%


679,808



33.4
%


5.2
%


26
%Mortgage Servicing Rights


2,520,626



7.1
%


250,046



12.3
%


9.9
%


26
%


300,419



14.8
%


11.9
%


22
%Servicing/Customer Retention


696,988



2.0
%


39,031



1.9
%


5.6
%


91
%


31,666



1.6
%


4.5
%


111
%Total Mortgage
    Servicing


3,217,614



9.1
%


289,077



14.2
%


9.0
%


34
%


332,085



16.3
%


10.3
%


30
%Mortgage Bank Overhead


151,288



0.4
%


8,472



0.4
%


5.6
%


N/A



6,637



0.3
%


4.4
%


N/ATotal Consumer Mortgage
    Banking


16,434,096



46.5
%


1,094,895



53.9
%


6.7
%


22
%


1,018,530



50.1
%


6.2
%


24
%Commercial Mortgage Banking


37



0.0
%


2



0.0
%


5.4
%


N/A



3



0.0
%


8.1
%


N/ATotal Mortgage Banking


16,434,133



46.5
%


1,094,897



53.9
%


6.7
%


22
%


1,018,533



50.1
%


6.2
%


23
%Thrift:Investment grade securities


4,432,220



12.5
%


248,204



12.2
%


5.6
%


9
%


82,473



4.1
%


1.9
%


21
%Non-investment grade and residuals


313,441



0.9
%


17,553



0.9
%


5.6
%


104
%


136,981



6.7
%


43.7
%


16
%Total Mortgage-Backed
    Securities


4,745,661



13.4
%


265,757



13.1
%


5.6
%


15
%


219,454



10.8
%


4.6
%


18
%Consumer lending portfolioPrime SFR mortgage loans


6,757,210



19.1
%


378,404



18.6
%


5.6
%


1
%


253,595



12.5
%


3.8
%


Home equity division


1,609,056



4.6
%


90,477



4.5
%


5.6
%


23
%


122,934



6.0
%


7.6
%


17
%Total Consumer Loans


8,366,266



23.7
%


468,881



23.1
%


5.6
%


5
%


376,529



18.5
%


4.5
%


6
%Consumer construction division


2,651,736



7.5
%


148,497



7.3
%


5.6
%


21
%


127,733



6.3
%


4.8
%


24
%Total Consumer Thrift
    Activities


11,018,002



31.2
%


617,378



30.4
%


5.6
%


9
%


504,262



24.8
%


4.6
%


10
%Home builder division


1,171,999



3.3
%


65,632



3.2
%


5.6
%


40
%


106,815



5.3
%


9.1
%


26
%Warehouse Lending


229,385



0.6
%


12,846



0.6
%


5.6
%


21
%


18,300



0.9
%


8.0
%


16
%Total Commercial Thrift
    Activities


1,401,384



4.0
%


78,478



3.9
%


5.6
%


37
%


125,115



6.2
%


8.9
%


24
%Discontinued products


30,192



0.1
%


1,691



0.1
%


5.6
%


(11
)%


3,145



0.2
%


10.4
%


(4
)%Total Thrift
    Activities


17,195,239



48.7
%


963,304



47.4
%


5.6
%


13
%


851,976



41.9
%


5.0
%


14
%Consumer Bank  Deposits


50,341



0.1
%


2,819



0.1
%


5.6
%


N/A



2,057



0.1
%


4.1
%


N/ATreasury


















N/A



N/A











N/A



N/AEliminations


















N/A



N/A











N/A



N/ATotal Operating
    Activities


33,679,713



95.3
%


2,061,020



101.4
%


6.1
%


16
%


1,872,566



92.1
%


5.6
%


18
%Corporate overhead


1,661,208



4.7
%


(28,121
)


(1.4
)%


(1.7
)%


N/A



160,333



7.9
%


9.7
%


N/A
%Total Company

$
35,340,921



100.0
%

$
2,032,899



100.0
%


5.8
%


10
%

$
2,032,899



100.0
%


5.8
%


10
%  21




---



##### Table of Contents



LOAN
    PRODUCTION        Three Months EndedMarch 31,


March 31,


Percent


December 31,


Percent2007


2006


Change


2006


Change(Dollars in millions)Production by
    Channel:SFR Mortgage Loan
    Production:Mortgage Professionals Group:Wholesale(1)

$
10,632


$
8,781



21
%

$
9,972



7
%Correspondent


3,024



2,276



33
%


2,957



2
%Conduit


8,368



6,136



36
%


9,416



(11
)%Retail


49







N/M



7



543
%Consumer Direct


320



525



(39
)%


418



(23
)%Financial Freedom


1,221



1,118



9
%


1,441



(15
)%Servicing Retention


1,118



427



162
%


1,010



11
%Home Equity Division


25



30



(17
)%


17



47
%Consumer Construction and Lot


812



684



19
%


708



15
%Total SFR Mortgage Loan Production


25,569



19,977



28
%


25,946



(1
)%Commercial Loan
    Production:Commercial Real Estate


1







N/M







N/MBuilder Construction


360



363



(1
)%


382



(6
)%Total Production

$
25,930


$
20,340



27
%

$
26,328



(2
)%     (1)
    
    Wholesale channel includes $1.3 billion, $627 million,
    and $1.1 billion of production from wholesale inside sales
    for the quarters ended March 31, 2007 and 2006 and
    December 31, 2006, respectively. The wholesale inside sales
    force focuses on small and geographically remote mortgage
    brokers through centralized in-house sales personnel instead of
    field sales personnel. 22




---



##### Table of Contents



Three Months EndedMarch 31,


March 31,


Percent


December 31,


Percent2007


2006


Change


2006


ChangeKey Production
    Drivers:Active customers(1)


8,290



7,174



16
%


7,927



5
%Sales personnel


1,182



811



46
%


1,025



15
%Number of regional offices


16



13



23
%


16



     (1)
    
    Active customers are defined as customers who funded at least
    one loan during the most recent 90-day period.    Three Months EndedMarch 31,


March 31,


Percent


December 31,


Percent2007


2006


Change


2006


Change(Dollars in millions)Production by Product
    Type:Standard First Mortgage Products:Alt-A

$
19,996


$
15,449



29
%

$
20,504



(2
)%Agency conforming


723



279



159
%


474



53
%Subprime


1,084



554



96
%


886



22
%Total standard first mortgage
    products (S&P evaluated)


21,803



16,282



34
%


21,864



Specialty Consumer Home Mortgage
    Products:Home equity line of
    credit(1)/Seconds


1,703



1,643



4
%


1,856



(8
)%Reverse mortgages


1,221



1,118



9
%


1,441



(15
)%Consumer construction(1)


842



934



(10
)%


785



7
%Subtotal SFR mortgage production


25,569



19,977



28
%


25,946



(1
)%Commercial Loan Products:Commercial Real Estate


1







N/M







N/MBuilder construction commitments(1)


360



363



(1
)%


382



(6
)%Total production

$
25,930


$
20,340



27
%

$
26,328



(2
)%     (1)
    
    Amounts represent total commitments. 23




---



##### Table of Contents



As of and for the Three Months EndedMarch 31,


March 31,


Percent


December 31,


Percent2007


2006


Change


2006


Change(Dollars in millions)Production and Pipeline by
    Purpose:SFR mortgage loan
    production:Purchase transactions

$
9,274


$
7,778



19
%

$
9,445



(2
)%Cash-out refinance transactions


11,226



9,779



15
%


11,956



(6
)%Rate/term refinance transactions


5,069



2,420



109
%


4,545



12
%Total single-family mortgage
    production

$
25,569


$
19,977



28
%

$
25,946



(1
)%% purchase and cash-out
    refinance transactions


80
%


88
%






82
%Mortgage industry market
    share


3.92
%


3.19
%


23
%


3.64
%


8
%Mortgage pipeline:Purchase transactions

$
5,278


$
4,517



17
%

$
3,914



35
%Cash-out refinance transactions


5,054



4,558



11
%


4,193



21
%Rate/term refinance transactions


2,512



1,349



86
%


1,792



40
%Total specific rate locks


12,844



10,424



23
%


9,899



30
%Non-specific rate locks on bulk
    purchases


3,268



1,257



160
%


1,922



70
%Total pipeline at period end(1)

$
16,112


$
11,681



38
%

$
11,821



36
%     (1)
    
    Total pipeline of loans in process includes rate lock
    commitments we have provided on loans that are specifically
    identified or non-specific bulk packages, and loan applications
    we have received for which the borrower has not yet locked in
    the interest rate commitment. Non-specific bulk packages
    represent pools of loans we have committed to purchase, where
    the pool characteristics are specified but the actual loans are
    not.  Three Months EndedMarch 31,


March 31,


December 31,2007


2006


2006SFR Mortgage Production by
    Amortization Type:Fixed-rate mortgages


25
%


21
%


22
%Intermediate term fixed-rate loans


7
%


7
%


7
%Interest-only loans


47
%


32
%


39
%Pay option ARMs


11
%


27
%


21
%Other ARMs


10
%


13
%


11
%100
%


100
%


100
%   24




---



##### Table of Contents



Three Months EndedMarch 31,


March 31,


December 31,2007


2006


2006Geographic
    distribution:California


45
%


44
%


47
%Florida


8
%


9
%


7
%New York


6
%


6
%


6
%New Jersey


4
%


4
%


4
%Maryland


3
%


3
%


4
%Other


34
%


34
%


32
%Total


100
%


100
%


100
%     Type 1

Borrower documents income,
    employment and assets. Lender verifiers income, employment,
    assets, credit history and home value (by appraisal).Type 2

Borrower states income and
    documents employment and assets. Lender assesses income for
    reasonableness and verifies employment, assets, credit history
    and home value (by appraisal).Type 3

Borrower does not document or
    state income but does document employment and assets. Lender
    verifies employment, assets, credit history and home value (by
    appraisal).Type 4

Borrower does not document or
    state income or assets. Lender verifies credit history and home
    value (by appraisal).Type 5

Reverse mortgages. Borrower does
    not document or state income or assets.  Lender verifies home
    value (by appraisal).     Production
    by Documentation Type and CLTV Ratio
  DocumentationType/CLTV Ratio

<60


360<70


370£80


>80<90


390£95


>95£100


Total1


2
%


2
%


11
%


1
%


2
%


2
%


20
%2


5
%


6
%


30
%


2
%


3
%


7
%


53
%3


1
%


1
%


6
%






1
%


2
%


11
%4


3
%


3
%


5
%














11
%5


4
%


1
%


















5
%Total


15
%


13
%


52
%


3
%


6
%


11
%


100
%Weighted Average CLTV
    ratio


44
%


65
%


78
%


85
%


93
%


76
%


74
%   Production
    by Documentation Type and FICO
  Documentation













ReverseType/FICO

<620


3620<660


3660£700


3700


Mortgage


Total1


2
%


3
%


4
%


11
%






20
%2


2
%


8
%


16
%


27
%






53
%3






2
%


3
%


6
%






11
%4






2
%


3
%


6
%






11
%5


















5
%


5
%Total


4
%


15
%


26
%


50
%


5
%


100
%  25




---



##### Table of Contents



Three Months EndedMarch 31, 2007


March 31, 2006


December 31, 2006Average





Average





AverageLifetime


Percent of


Lifetime


Percent of


Lifetime


Percent ofLoss Rate


Total


Loss Rate


Total


Loss Rate


Total(Dollars in millions)S&P Lifetime Loss
    Estimate(1) by Product Type:Agency conforming equivalent
    (<48 bps)


0.23
%


53
%


0.22
%


45
%


0.23
%


48
%Prime Alt-A equivalent
    (48-135 bps)


0.74
%


40
%


0.78
%


47
%


0.75
%


44
%Subprime equivalent
    (>135 bps)


6.05
%


7
%


3.34
%


8
%


5.12
%


8
%Total S&P lifetime loss
    estimate


0.85
%


100
%


0.74
%


100
%


0.84
%


100
%Total S&P evaluated production





$
21,803






$
16,282






$
21,864     (1)
    
    While our production is evaluated using the S&P Levels
    model, the data are not audited or endorsed by S&P. S&P
    evaluated production excludes second liens, HELOC, reverse
    mortgages, and construction loans. In the third quarter of 2006,
    we adopted version 5.7 of the S&P Levels model. The average
    lifetime loss for the first quarter of 2006 has been restated
    utilizing the new model.    Type 1


Type 2


Type 3


Type 4


Type 5


TotalAverage


Percent


Average


Percent


Average


Percent


Average


Percent


Average


Percent


Average


PercentLifetime


of


Lifetime


of


Lifetime


of


Lifetime


of


Lifetime


of


Lifetime


ofLoss Rate


Total


Loss Rate


Total


Loss Rate


Total


Loss Rate


Total


Loss Rate


Total


Loss Rate


TotalS&P Lifetime Loss Estimates
    by Documentation TypeAgency conforming equivalent
    (<48bps)


0.23
%


13
%


0.24
%


26
%


0.25
%


5
%


0.16
%


9
%










0.23
%


53
%Prime Alt-A Equivalent
    (48-135 bps)


0.71
%


6
%


0.75
%


24
%


0.25
%


6
%


0.71
%


4
%










0.74
%


40
%Subprime Equivalent (>135bps)


7.79
%


3
%


5.81
%


4
%


2.08
%






2.04
%














6.05
%


7
%Total


1.18
%


22
%


0.90
%


54
%


0.56
%


11
%


0.35
%


13
%










0.85
%


100
%     Three Months EndedMarch 31, 2007


March 31, 2006


December 31, 2006Production


FICO


CLTV(2)


Production


FICO


CLTV(2)


Production


FICO


CLTV(2)Total production

$
25,930



N/A



N/A


$
20,340



N/A



N/A


$
26,328



N/A



N/ALess:Home equity line of
    credit(1)/Seconds


1,703



706



91
%


1,643



708



87



1,856



709



90
%Reverse mortgages


1,221



N/A



54
%


1,118



N/A



55



1,441



N/A



54
%Consumer construction(1)


842



722



76
%


934



720



76



785



718



74
%Commercial Real Estate


1



N/A



45
%






N/A



N/A







N/A



N/ABuilder construction commitments(1)


360



N/A



75
%


363



N/A



74



382



N/A



77
%Total S&P evaluated production

$
21,803



704



80
%

$
16,282



697



80


$
21,864



703



81
%     (1)
    
    Amounts represent total commitments.(2)
    
    Combined
    loan-to-value
    ratio for loans in the second lien position is used to calculate
    weighted average original
    loan-to-value
    ratio for the portfolio. 26




---



##### Table of Contents



year-over-year year-over-year.
 LOAN
    SALES    Three Months EndedMarch 31,


March 31,


Percent


December 31,


Percent2007


2006


Change


2006


Change(Dollars in millions)Total loans sold

$
24,537


$
16,708



47
%

$
23,417



5
%Ratios:Gross MBR margin before hedging


0.76
%


0.86
%


(12
)%


0.88
%


(14
)%Net MBR margin after hedging


0.68
%


1.10
%


(38
)%


0.91
%


(25
)%       Three Months EndedMarch 31,


March 31,


December 31,2007


2006


2006MBR Margin by
    Channel:Consumer Direct


1.30
%


1.94
%


1.72
%Wholesale


0.66
%


1.27
%


1.02
%Correspondent


0.30
%


0.66
%


0.28
%Conduit


0.12
%


0.40
%


0.40
%Financial Freedom


4.51
%


2.83
%


4.49
%Other


0.55
%


1.26
%


1.18
%Total MBR margin


0.68
%


1.10
%


0.91
%MBR Margin by
    Product:Agency Conforming


(0.05
)%


0.40
%


0.26
%Alt-A


0.38
%


0.97
%


0.62
%Subprime


(0.14
)%


1.31
%


1.20
%HELOC/Seconds


0.86
%


0.46
%


0.84
%Reverse Mortgages


4.51
%


2.83
%


4.49
%CTP/Lot


1.38
%


1.87
%


1.94
%Other


0.64
%


1.56
%


1.68
%Total MBR margin


0.68
%


1.10
%


0.91
%  27




---



##### Table of Contents



Accounting for Derivative Instruments and Hedging
    Activities, Application of Accounting
    Principles to Loan Commitments.
    Three Months EndedMarch 31,


March 31,


December 31,2007


2006


2006(Dollars in millions)Distribution of Loan Sales
    by Channel:Sales of government-sponsored
    enterprises (GSEs) equivalent loans


29
%


21
%


23
%Private-label securitizations


30
%


38
%


32
%Whole loan sales, servicing
    retained


38
%


36
%


40
%Whole loan sales, servicing
    released


1
%


2
%


2
%Subtotal sales


98
%


97
%


97
%Investment portfolio acquisitions


2
%


3
%


3
%Total loan distribution percentage


100
%


100
%


100
%Total loan distribution

$
24,933


$
17,319


$
24,098    28




---



##### Table of Contents



MORTGAGE
    SERVICING RIGHTS    Three Months EndedMarch 31,


March 31,


December 31,2007


2006


2006(Dollars in millions)Servicing PortfolioUnpaid principal balance at
    beginning of period

$
139,817


$
84,495


$
124,395Additions


24,690



16,691



23,415Loan payments and prepayments


(8,363
)


(4,674
)


(7,993
)Unpaid principal balance at end of
    period

$
156,144


$
96,512


$
139,817     As ofMarch 31,


March 31,


December 31,2007


2006


2006By Product
    Type:Fixed rate mortgages


35
%


36
%


35
%Intermediate term fixed-rate loans


32
%


27
%


30
%Pay option ARMs


21
%


25
%


23
%Reverse mortgages (all ARMs)


9
%


9
%


9
%HELOCs


2
%


2
%


2
%Other


1
%


1
%


1
%Total


100
%


100
%


100
%Additional
    Information(1)Weighted average FICO


703



698



703Weighted average original LTV(2)


72
%


73
%


73
%Average original loan size (in
    thousands)


230



222



232Percent of portfolio with
    prepayment penalty


41
%


38
%


42
%Portfolio delinquency (% of unpaid
    principal balance)(3)


5.41
%


3.17
%


5.02
%By Geographic Distribution:California


43
%


42
%


43
%Florida


8
%


8
%


8
%New York


8
%


9
%


8
%New Jersey


4
%


5
%


4
%Virginia


4
%


4
%


4
%Other


33
%


32
%


33
%Total


100
%


100
%


100
%     (1)
    
    Portfolio delinquency is calculated for the entire servicing
    portfolio. All other information presented excludes reverse
    mortgages.(2)
    
    Combined
    loan-to-value
    ratio for loans in the second lien position is used to calculate
    weighted average original
    loan-to-value
    ratio for the portfolio.(3)
    
    Delinquency is defined as 30 days or more past the due date. 29




---



##### Table of Contents



Three Months EndedMarch 31,


March 31,


December 31,2007


2006


2006(Dollars in thousands)Balance at beginning of period

$
1,822,455


$
1,094,490


$
1,631,316Cumulative-effect adjustment due
    to change in accounting for MSRs






17,561



Net additions from loan sale or
    securitization


319,663



230,057



318,919Transfers due to clean-up calls
    and other


(2,355
)






(2,122
)Change in fair value due to run-off


(117,781
)


(68,158
)


(122,585
)Change in fair value due to market
    changes


30,840



84,054



(3,073
)Change in fair value due to
    application of external benchmarking policies






(3,571
)


Balance at end of period

$
2,052,822


$
1,354,433


$
1,822,455MSRs as basis points of unpaid
    principal balance


131



140



130       Three Months EndedMarch 31,


BPS


March 31,


BPS


December 31,


BPS2007


UPB


2006


UPB


2006


UPB(Dollars in thousands)Service fee (expense)
    income:Gross service fee income

$
164,875



45


$
98,193



44


$
151,106



46Change in value due to portfolio
    run-off


(117,781
)


(32
)


(68,158
)


(31
)


(120,822
)


(37
)Service fee income (expense), net
    of change in value due to portfolio run-off


47,094



13



30,035



13



30,284



9Change in value due to application
    of external benchmarking policies










(3,571
)


(2
)






Valuation adjustment due to market
    changes


30,840



8



84,054



38



(3,073
)


(1
)Hedge loss on MSRs


(28,747
)


(8
)


(79,629
)


(36
)


(5,088
)


(2
)Total service fee (expense)
    income

$
49,187



13


$
30,889



13


$
22,123



6  30




---



##### Table of Contents



Three Months EndedMarch 31,


March 31,


December 31,2007


2006


2006(Dollars in thousands)Valuation adjustment due to market
    changes and external benchmarking

$
30,840


$
80,483


$
(3,073
)Hedge loss on MSRs


(28,747
)


(79,629
)


(5,088
)Hedge (loss) gain on AAA-rated and
    agency interest-only securities


(435
)


(9,373
)


287Unrealized gain (loss) on
    AAA-rated and agency interest-only securities


1,481



6,495



(1,002
)Unrealized gain (loss) on
    principal-only securities


301



(894
)


689Unrealized (loss) gain on
    prepayment penalty securities


(2,204
)


(6,252
)


5,718Net gain (loss) on MSRs, AAA-rated
    and agency interest-only securities, and hedges

$
1,236


$
(9,170
)

$
(2,469
)     HEDGING
    INTEREST RATE RISK ON SERVICING-RELATED ASSETS
      value-at-risk one-day
     31




---



##### Table of Contents



MORTGAGE-BACKED
    SECURITIES      Three Months EndedMarch 31, 2007


March 31, 2006


December 31, 2006Trading


AFS


Total


Trading


AFS


Total


Trading


AFS


Total(Dollars in thousands)Mortgage-backed
    securities:AAA-rated non-agency securities

$
24,258


$
4,265,012


$
4,289,270


$
24,244


$
3,917,482


$
3,941,726


$
43,957


$
4,604,489


$
4,648,446AAA-rated agency securities






57,947



57,947







40,675



40,675







65,175



65,175AAA-rated and agency interest-only
    securities


74,720







74,720



84,816







84,816



73,570







73,570AAA-rated principal-only securities


55,977







55,977



12,820







12,820



38,478







38,478Prepayment penalty securities


93,106







93,106



66,949







66,949



97,576







97,576Other investment grade securities


67,155



233,559



300,714



13,603



131,896



145,499



29,015



160,238



189,253Other non-investment grade
    securities


70,809



39,395



110,204



13,258



53,081



66,339



41,390



38,784



80,174Non-investment grade residual
    securities


244,579



26,252



270,831



157,264



47,864



205,128



218,745



31,828



250,573Total mortgage-backed securities

$
630,604


$
4,622,165


$
5,252,769


$
372,954


$
4,190,998


$
4,563,952


$
542,731


$
4,900,514


$
5,443,245    32




---



##### Table of Contents



OTHER
    RETAINED ASSETS
    Three Months EndedMarch 31,


March 31,


December 31,2007


2006


2006(Dollars in thousands)AAA-rated and agency
    interest-only securities:Beginning balance

$
73,570


$
78,731


$
68,440Retained investments from
    securitizations


3,532



5,196



9,323Cash received, net of accretion


(3,863
)


(5,606
)


(3,191
)Valuation gains (losses) before
    hedges


1,481



6,495



(1,002
)Ending balance

$
74,720


$
84,816


$
73,750Principal-only
    securities:Beginning balance

$
38,478


$
9,483


$
35,158Retained investments from
    securitizations


2,637



4,224



2,955Purchases


14,925







Cash received, net of accretion


(364
)


7



(324
)Valuation gains (losses) before
    hedges


301



(894
)


689Ending balance

$
55,977


$
12,820


$
38,478Prepayment penalty
    securities:Beginning balance

$
97,576


$
75,741


$
98,422Retained investments from
    securitizations


8,105



8,591



7,236Transfer from MSRs/residual
    securities


163







881Sales










(2,078
)Cash received, net of accretion


(10,534
)


(11,131
)


(12,603
)Valuation (losses) gains before
    hedges


(2,204
)


(6,252
)


5,718Ending balance

$
93,106


$
66,949


$
97,576Investment-grade
    securities:Beginning balance

$
189,253


$
92,120


$
193,195Retained investments from
    securitizations


55,658



14,801



Purchases


58,799



41,023



Transfer to non-investment-grade
    securities


(1,439
)






Impairments


(182
)


(183
)


Sales










(2,757
)Cash received, net of accretion


(3,209
)


(1,424
)


(1,342
)Valuation gains (losses) before
    hedges


1,834



(838
)


157Ending balance

$
300,714


$
145,499


$
189,253 33




---



##### Table of Contents



Three Months EndedMarch 31,


March 31,


December 31,2007


2006


2006(Dollars in thousands)Non-Investment-grade
    securities:Beginning balance

$
80,173


$
57,712


$
78,278Retained investments from
    securitizations


25,911



8,649



Purchases


1,827







3,697Transfer from investment-grade
    securities


1,439







Impairments


(103
)


(252
)


(236
)Sales










(1,141
)Cash received, net of accretion


843



207



(23
)Valuation gain (losses) before
    hedges


114



23



(401
)Ending balance

$
110,204


$
66,339


$
80,174Residual
    securities(1):Beginning balance

$
250,573


$
167,771


$
261,658Retained investments from
    securitizations, net(2)


23,707



41,876



67,586Transfer due to clean-up calls and
    other


(5,615
)






1,241Impairments


(1,770
)






(4,283
)Sales










(60,349
)Cash received, net of accretion


6,864



(6,049
)


(6,627
)Valuation (losses) gains before
    hedges


(2,928
)


1,530



(8,653
)Ending balance

$
270,831


$
205,128


$
250,573     (1)
    
    Included in the residual securities balance at March 31,
    2007 were $26.3 million of HELOC residuals retained from
    two separate guaranteed mortgage securitization transactions.
    There was no gain on sale of loans recognized in connection with
    these transactions.(2)
    
    Amounts retained consist of 15% in prime-lot loans, 26% in
    subprime loans and 59% in HELOCs for the three months ended
    March 31, 2007. 34




---



##### Table of Contents



March 31, 2007


December 31, 2006Current


Net DiscountFace


to Face


AmortizedValue


Value


Cost


Fair Value


Fair Value(Dollars in thousands)Other investment grade
    mortgage-backed securities:AA+

$
7,445


$
(67
)

$
7,378


$
7,551


$
7,513AA


125,260



(1,057
)


124,203



124,999



86,311AA−


14,005



(342
)


13,663



13,988



14,138A+


4,000







4,000



4,000



A


17,248



(572
)


16,676



16,656



2,160A−


13,650







13,650



13,651



BBB+


13,550



(484
)


13,066



13,066



BBB


33,731



(2,721
)


31,010



31,137



20,734BBB−


82,474



(7,164
)


75,310



75,666



58,397Total other investment grade
    mortgage-backed securities

$
311,363


$
(12,407
)

$
298,956


$
300,714


$
189,253Non-investment grade
    mortgage-backed securities:BB+

$
31,519


$
(7,138
)

$
24,381


$
24,381


$
7,299BB


75,369



(13,704
)


61,665



62,034



49,856BB−


23,039



(1,140
)


21,899



21,924



21,170B


6,549



(5,549
)


1,000



1,468



1,442Other


4,856



(4,653
)


203



397



407Total other non-investment grade
    mortgage-backed securities

$
141,332


$
(32,184
)

$
109,148


$
110,204


$
80,174       Three Months EndedMarch 31,


March 31,


December 31,2007


2006


2006(Dollars in thousands)Net loss on
    securities:Realized (loss) gain on available
    for sale securities

$
(486
)

$



$
195Impairments on available for sale
    securities


(2,057
)


(435
)


(4,520
)Unrealized (loss) gain on
    prepayment penalty securities


(2,204
)


(6,252
)


5,718Unrealized (loss) gain on
    AAA-rated and agency interest-only and residual securities


(1,145
)


6,284



(9,654
)Net gain (loss) on trading
    securities and other instruments used to hedge AAA-rated and
    agency interest-only and residual securities


545



(2,212
)


4,132Total loss on securities, net

$
(5,347
)

$
(2,615
)

$
(4,129
)  35




---



##### Table of Contents



VALUATION
    OF MSRS, INTEREST-ONLY, PREPAYMENT PENALTY, AND RESIDUAL
    SECURITIES    Actual


Valuation AssumptionsServicingGross Wtd.


Fee/


3-Month


Weighted


Lifetime


3-Month





RemainingCollateral


Average


Interest


Prepayment


Average


Prepayment


Prepayment


Discount


CumulativeBook Value


Balance


Coupon


Strip


Speeds


Multiple


Speeds


Speeds


Yield


Loss Rate(1)(Dollars in thousands)March 31,
    2007MSRs

$
2,052,822


$
156,144,082



7.09
%


0.36
%


18.4
%


3.63



26.3
%


25.2
%


8.1
%


N/AAAA-rated interest-only securities

$
74,720


$
6,152,269



6.63
%


0.50
%


21.1
%


2.43



21.6
%


21.2
%


12.5
%


N/APrepayment penalty securities

$
93,106


$
20,887,449



7.54
%


N/A



16.3
%


N/A



27.7
%


21.1
%


23.1
%


N/ALot loan residual securities


65,186


$
2,201,884



9.34
%


3.74
%


30.8
%


0.79



40.3
%


37.8
%


23.4
%


0.66
%HELOC residual securities


107,985


$
3,377,932



9.41
%


3.28
%


38.5
%


0.97



47.3
%


45.7
%


20.3
%


1.54
%Closed-end seconds residual
    securities


21,001


$
2,358,518



10.51
%


4.43
%


15.3
%


0.20



37.7
%


26.0
%


23.7
%


8.13
%Subprime residual securities


76,659


$
5,707,589



7.96
%


1.41
%


29.1
%


0.95



32.1
%


25.9
%


22.2
%


6.25
%Total non-investment grade residual
    securities

$
270,831March 31,
    2006MSRs

$
1,354,433


$
96,511,574



6.43
%


0.37
%


17.6
%


3.82



21.0
%


17.5
%


10.3
%


N/AAAA-rated and agency interest-only
    securities

$
84,816


$
7,708,837



6.62
%


0.39
%


15.6
%


2.86



20.7
%


18.2
%


10.2
%


N/APrepayment penalty securities

$
66,949


$
14,528,867



6.61
%


N/A



17.4
%


N/A



20.9
%


22.1
%


10.5
%


N/APrime residual securities

$
3,954


$
1,117,251



6.19
%


N/M



72.1
%


N/M



45.4
%


51.6
%


15.0
%


1.92
%Lot loan residual securities


50,649


$
1,103,266



8.02
%


2.79
%


29.3
%


1.64



42.7
%


41.4
%


22.1
%


0.50
%HELOC residual securities


80,819


$
1,929,000



8.64
%


2.70
%


48.1
%


1.55



50.2
%


48.2
%


19.2
%


0.70
%Subprime residual securities


69,706


$
5,726,600



7.53
%


1.72
%


24.7
%


0.71



37.5
%


30.4
%


24.9
%


4.92
%Total non-investment grade residual
    securities

$
205,128December 31,
    2006MSRs

$
1,822,455


$
139,816,763



7.05
%


0.37
%


20.2
%


3.57



25.8
%


19.8
%


8.8
%


N/AAAA-rated and agency interest-only
    securities

$
73,570


$
5,957,550



6.93
%


0.51
%


19.5
%


2.41



16.4
%


19.7
%


15.4
%


N/APrepayment penalty securities

$
97,576


$
20,282,718



7.40
%


N/A



18.1
%


N/A



28.2
%


20.6
%


26.3
%


N/ALot loan residual securities


57,640


$
2,246,833



9.24
%


3.54
%


35.6
%


0.73



39.8
%


37.9
%


23.5
%


0.61
%HELOC residual securities


98,697


$
3,039,555



9.59
%


2.71
%


43.7
%


1.20



50.3
%


47.6
%


20.7
%


1.11
%Closed-end seconds residual
    securities


14,572


$
1,737,859



10.44
%


3.69
%


17.5
%


0.23



37.1
%


24.8
%


24.1
%


8.08
%Subprime residual securities


79,664


$
4,848,859



7.74
%


1.68
%


33.0
%


0.98



39.5
%


38.1
%


23.4
%


5.85
%Total non-investment grade residual
    securities

$
250,573  36




---



##### Table of Contents



(1)
    
    As a percentage of the original pool balance, the actual
    cumulative loss rate to date totaled 0.50%, 0.15% and 0.49% for
    HELOC, closed-end seconds and subprime loans, respectively, at
    March 31, 2007. No loss has been incurred on lot loans as
    of March 31, 2007.         LOANS
    HELD FOR INVESTMENT  SFR
    MORTGAGE LOANS HELD FOR INVESTMENT
   37




---



##### Table of Contents



March 31,


March 31,


December 31,2007


2006


2006(Dollars in thousands)SFR mortgage loans held for
    investment (book value)

$
5,214,423


$
5,663,142


$
6,519,340Average loan size


338



292



310Non-performing loans


2.12
%


0.69
%


1.09
%Estimated average life in years(1)


2.8



2.3



2.6Estimated average net duration in
    month(2)


(2.7
)


0.8



(3.5
)Annualized yield


6.21
%


5.61
%


6.01
%Percent of loans with active
    prepayment penalty


38
%


40
%


34
%Fixed-rate mortgages


7
%


6
%


5
%Intermediate term fixed-rate loans


14
%


16
%


15
%Interest-only loans


55
%


51
%


60
%Pay option ARMs


22
%


24
%


18
%Other ARMs


2
%


3
%


2
%Additional
    Information:Average FICO score(3)


714



713



716Original average loan to value
    ratio


73
%


73
%


73
%Current average loan to value
    ratio(4)


58
%


59
%


61
%Geographic distribution of top
    five states:Southern California


34
%


31
%


32
%Northern California


21
%


21
%


20
%Total California


55
%


52
%


52
%Florida


6
%


6
%


6
%New York


4
%


4
%


4
%Virginia


3
%


3
%


3
%Michigan


3
%


4
%


3
%Other


29
%


31
%


32
%Total


100
%


100
%


100
%     (1)
    
    Represents the estimated length of time, on average, the SFR
    loan portfolio will remain outstanding based on our estimates
    for prepayments.(2)
    
    Average net duration measures the expected change in the value
    of a financial instrument in response to changes in interest
    rates, taking into consideration the impact of the related
    hedges. The negative net duration implies an increase in value
    as rates rise while the positive net duration implies a decrease
    in value.(3)
    
    FICO scores are the result of 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.(4)
    
    Current average
    loan-to-value
    ratio is estimated based on the Office of the Federal Housing
    Enterprise Oversight House Price Index Metropolitan Statistical
    Area data for the fourth quarter of 2006 on a loan level basis.   38




---



##### Table of Contents



loan-to-value loan-to-value
  CONSUMER
    CONSTRUCTION DIVISION
  construction-to-permanent
   39




---



##### Table of Contents



As ofMarch 31,


March 31,


December 31,2007


2006


2006(Dollars in thousands)Construction loans (book value)

$
2,275,210


$
1,976,278


$
2,225,979Lot, land and other mortgage loans
    (book value)


48,341



92,687



50,154Total commitments


3,625,265



3,413,092



3,600,454Average loan commitment


496



446



474Non-performing loans


1.23
%


0.71
%


1.14
%Fixed-rate loans


61
%


84
%


71
%Adjustable-rate loans


39
%


16
%


29
%Additional
    Information:Average
    loan-to-value
    ratio(1)


73
%


71
%


73
%Average FICO score


712



712



712Geographic distribution of top
    five states:Southern California


29
%


29
%


28
%Northern California


14
%


17
%


15
%Total California


43
%


46
%


43
%Florida


8
%


9
%


9
%New York


4
%


4
%


4
%Washington


4
%


3
%


4
%Colorado


3
%


3
%


4
%Other


38
%


35
%


36
%Total Consumer Construction


100
%


100
%


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 the date indicated.  HOME
    EQUITY DIVISION
     40




---



##### Table of Contents



March 31,


March 31,


December 31,2007


2006


2006(Dollars in thousands)Outstanding balance (book value)

$
557,492


$
666,848


$
656,714Total commitments(1)


2,347,329



1,534,414


$
2,211,298Average spread over prime


1.42
%


1.23
%


1.39
%Average FICO score


738



728



737Average CLTV ratio(2)


76
%


77
%


77
%   Additional
    Information
  March 31, 2007Average Loan








30+ DaysOutstanding


Commitment


Average Spread


Average


DelinquencyCLTV

Balance


Balance


Over Prime


FICO


Percentage(Dollars in thousands)96% to 100%

$
61,869


$
172



2.48
%


718



7.57
%91% to 95%


98,131



150



2.21
%


715



1.89
%81% to 90%


207,899



141



1.70
%


719



2.15
%71% to 80%


106,391



240



0.41
%


747



1.04
%70% or less


83,202



243



0.26
%


754



0.38
%Total

$
557,492



193



1.42
%


738



2.23
% March 31, 200696% to 100%

$
79,234


$
103



2.37
%


722



1.10
%91% to 95%


64,606



89



2.20
%


712



0.15
%81% to 90%


244,867



84



1.55
%


711



0.38
%71% to 80%


144,590



128



0.50
%


732



0.54
%70% or less


133,551



131



0.26
%


746



0.22
%Total

$
666,848



107



1.23
%


728



0.45
%     (1)
    
    On funded loans.(2)
    
    The CLTV combines the
    loan-to-value
    on both the first mortgage loan and the HELOC.  HOMEBUILDER
    DIVISION
     41




---



##### Table of Contents



loan-to-value
    As ofMarch 31,


March 31,


December 31,2007


2006


2006(Dollars in thousands)Construction loans (book value)

$
781,425


$
722,189


$
786,279Land and other mortgage loans
    (book value)


391,676



303,745



358,556Total commitments


1,967,262



1,884,760



2,010,727Average loan commitments


9,836



10,832



10,810Percentage of homes under
    construction or completed that are sold(1)


37
%


51
%


37
%Median sales price of homes


432



402



420Non-performing loans


0.77
%


0.00
%


0.78
%Additional
    Information:Average
    loan-to-value
    ratio(2)


73
%


71
%


73
%Geographic distribution of top
    five states:Southern California


42
%


39
%


41
%Northern California


22
%


17
%


19
%Total California


64
%


56
%


60
%Florida


10
%


10
%


11
%Illinois


8
%


15
%


9
%Oregon


5
%


5
%


6
%Massachusetts


2
%


2
%


2
%Other


11
%


12
%


12
%Total Builder Construction


100
%


100
%


100
%     (1)
    
    The methodology of data collection was refined in the first
    quarter of 2007, which resulted in a more conservative approach
    of monitoring the absorption rate of the underlying projects.
    All prior periods have been restated to reflect the change in
    methodology.(2)
    
    The average
    loan-to-value
    ratio is based on the estimated appraised value of the completed
    project compared to the commitment amount at the date indicated. 42




---



##### Table of Contents



WAREHOUSE
    LENDING DIVISION
    As ofMarch 31,


March 31,


December 31,2007


2006


2006(Dollars in thousands)Total Customers


117



55



107Outstanding balance (book value)

$
276,686


$
78,331


$
246,778Total commitments


826,500



342,000



712,000      43




---



##### Table of Contents



NET
    INTEREST MARGIN    Three Months EndedMarch 31, 2007


March 31, 2006


December 31, 2006Average





Yield/


Average





Yield/


Average





Yield/Balance


Interest


Rate


Balance


Interest


Rate


Balance


Interest


Rate(Dollars in thousands)AssetsSecurities

$
5,377,680


$
92,279



6.96
%

$
4,130,581


$
66,483



6.53
%

$
5,005,888


$
86,153



6.83
%Loans held for sale


14,442,890



252,157



7.08
%


10,626,563



173,561



6.62
%


13,975,255



245,896



6.98
%Mortgage loans held for investment


7,117,335



108,994



6.21
%


5,945,154



82,179



5.61
%


6,922,638



104,882



6.01
%Builder construction


789,266



19,753



10.15
%


661,746



15,363



9.42
%


764,370



20,231



10.50
%Consumer construction


2,158,355



43,646



8.20
%


1,855,329



30,364



6.64
%


2,153,544



41,780



7.70
%Investment in Federal Home Loan
    Bank stock and other


1,144,072



15,848



5.62
%


814,800



9,896



4.93
%


1,046,419



15,266



5.79
%Total interest-earning assets


31,029,598



532,677



6.96
%


24,034,173



377,846



6.38
%


29,868,114



514,208



6.83
%Mortgage servicing assets


1,867,582











1,140,750











1,612,215Other


2,443,740











1,342,240











2,285,160Total assets

$
35,340,920










$
26,517,163










$
33,765,489Liabilities and
    Shareholders EquityInterest-bearing deposits

$
10,333,760



132,067



5.18
%

$
7,322,611



74,243



4.11
%

$
9,876,612



127,367



5.12
%Advances from Federal Home Loan Bank


13,651,211



174,529



5.18
%


9,975,973



103,609



4.21
%


12,700,996



161,454



5.04
%Other borrowings


6,428,718



91,011



5.74
%


5,951,582



72,784



4.96
%


6,403,620



92,741



5.75
%Total interest-bearing liabilities


30,413,689



397,607



5.30
%


23,250,166



250,636



4.37
%


28,981,228



381,562



5.22
%Other


2,894,332











1,668,691











2,815,678Total liabilities


33,308,021











24,918,857











31,796,906Shareholders equity


2,032,899











1,598,306











1,968,583Total liabilities and
    shareholders equity

$
35,340,920










$
26,517,163










$
33,765,489Net interest income





$
135,070










$
127,210










$
132,646Net interest spread










1.66
%










2.01
%










1.61
%Net interest margin










1.77
%










2.15
%










1.76
%    44




---



##### Table of Contents



Three Months EndedMarch 31, 2007


March 31, 2006


December 31, 2006Average


Net


Net


Average


Net


Net


Average


Net


NetEarning


Interest


Interest


Earning


Interest


Interest


Earning


Interest


InterestAssets


Income


Margin


Assets


Income


Margin


Assets


Income


Margin(Dollars in millions)By Segment:Thrift segment and other

$
17,367


$
90



2.11
%

$
14,666


$
87



2.42
%

$
16,734


$
88



2.09
%Mortgage banking segment


13,663



45



1.33
%


9,368



40



1.72
%


13,134



45



1.34
%Total Company

$
31,030


$
135



1.77
%

$
24,034


$
127



2.15
%

$
29,868


$
133



1.76
%         Increase/(Decrease) Due toVolume(1)


Rate(2)


Mix(3)


Total Change(Dollars in thousands)Three Months Ended
    March 31, 2007 vs. 2006Interest income:Mortgage-backed securities

$
20,072


$
4,396


$
1,328


$
25,796Loans held for sale


62,331



11,967



4,298



78,596Mortgage loans held for investment


16,203



8,864



1,748



26,815Builder construction


2,960



1,199



231



4,390Consumer construction


4,959



7,154



1,169



13,282Investment in Federal Home
    Loan Bank stock and other


3,999



1,391



562



5,952Total interest income


110,524



34,971



9,336



154,831Interest expense:Interest-bearing deposits


30,530



19,341



7,953



57,824Advances from Federal Home
    Loan Bank


38,170



23,933



8,817



70,920Other borrowings


5,835



11,472



920



18,227Total interest expense


74,535



54,746



17,690



146,971Net interest income

$
35,989


$
(19,775
)

$
(8,354
)

$
7,860  45




---



##### Table of Contents



(1)
    
    Changes in volume are calculated by taking changes in average
    outstanding balances multiplied by the prior periods rate.(2)
    
    Changes in the rate are calculated by taking changes in the
    average interest rate multiplied by the prior periods
    volume.(3)
    
    Changes in rate/volume (mix) are calculated by
    taking changes in rates times the changes in volume. INTEREST
    RATE SENSITIVITY      March 31, 2007


December 31, 2006Effect of Change in





Effect of Change inInterest Rates





Interest RatesDecrease


Increase





Decrease


IncreaseFair Value


100 bps


100 bps


Fair Value


100 bps


100 bps(Dollars in thousands)Cash and cash equivalents

$
576,891


$
576,891


$
576,891


$
541,545


$
541,545


$
541,545Trading securities


629,192



661,000



608,528



541,175



573,028



522,503Available for sale securities


4,032,737



4,091,196



3,915,944



4,183,629



4,272,980



4,064,097Loans held for sale


10,583,978



10,693,753



10,409,081



9,566,224



9,645,767



9,440,968Loans held for investment


9,013,607



9,074,412



8,925,395



10,191,350



10,266,772



10,081,430MSRs


2,052,822



1,537,663



2,424,294



1,822,455



1,393,979



2,142,276Other assets


2,207,385



2,686,582



1,929,615



1,882,732



2,219,807



1,692,256Total assets

$
29,096,612


$
29,321,497


$
28,789,748


$
28,729,110


$
28,913,878


$
28,485,075Deposits

$
11,427,496


$
11,474,110


$
11,381,767


$
10,936,012


$
10,978,982


$
10,894,553Advances from Federal Home
    Loan Bank


10,362,179



10,525,315



10,201,208



10,409,767



10,565,054



10,256,128Other borrowings


3,290,767



3,292,200



3,289,337



3,464,290



3,466,577



3,462,006Other liabilities


682,063



682,063



682,063



775,455



775,455



775,455Total liabilities


25,762,505



25,973,688



25,554,375



25,585,524



25,786,068



25,388,142Shareholders equity (NPV)

$
3,334,107


$
3,347,809


$
3,235,373


$
3,143,586


$
3,127,810


$
3,096,933% Change from base case






0.41
%


(2.96
)%






(0.50
)%


(1.48
)%      46




---



##### Table of Contents



CREDIT
    RISK AND RESERVES       47




---



##### Table of Contents



TotalAllowance





Reserves as aFor Loan


Credit


Percentage ofType of Loan

Book Value


Losses


Discounts(1)


Book ValueHeld for sale
    portfolio(2)

$
10,576,381






$
65,276



0.62
%Held for investment
    portfolioSFR mortgage loans and HELOCs(3)


5,242,454


$
34,937







0.67
%Land and other mortgage loans


412,044



6,291







1.53
%Builder construction


781,425



14,545







1.86
%Consumer construction loans


2,275,210



11,401







0.50
%Revolving warehouse lines of credit


276,686



413







0.15
%Total held for investment portfolio


8,987,819


$
67,587







0.75
%Total loans

$
19,564,200     (1)
    
    The amount represents the lower of cost or market adjustments in
    the held for sale portfolio.(2)
    
    Book value of held for sale portfolio is before credit discounts.(3)
    
    Includes discontinued product lines, which consist of
    manufactured home loans and home improvement loans that were
    discontinued in 1999.   48




---



##### Table of Contents



March 31,


March 31,


December 31,2007


2006


2006(Dollars in thousands)Non-performing loans held for sale
    before market valuation reserves

$
174,275


$
51,988


$
78,238Market valuation reserves


(37,172
)


(11,439
)


(23,891
)Net non-performing loans held for
    sale

$
137,103


$
40,549


$
54,347Loans held for investment:Portfolio loansSFR mortgage loans

$
114,270


$
39,686


$
73,545Land and other mortgage loans


6,082



121



5,959Builder construction


8,981







8,981Consumer construction loans


22,587



14,210



19,998Revolving warehouse lines of credit


1,311







Total non-performing loans held
    for investment

$
153,231


$
54,017


$
108,483Total non-performing loans


290,334



94,566



162,830Foreclosed assets


33,307



8,519



21,638Total non-performing assets

$
323,641


$
103,085


$
184,468Allowance for loan losses to
    non-performing loans held for investment


44
%


106
%


58
%Total non-performing assets to
    total assets


1.09
%


0.43
%


0.63
%    49




---



##### Table of Contents



Three Months EndedMarch 31,


March 31,


December 31,2007


2006


2006(Dollars in thousands)Balance, beginning of period

$
62,386


$
55,168


$
61,035Allowance transferred to loans
    held for sale


(1,661
)






Provision for loan losses


10,687



3,822



8,953Charge-offs net of recoveries:SFR mortgage loans


(2,434
)


(1,285
)


(6,058
)Consumer construction


(1,391
)


(384
)


(1,544
)Charge-offs net of recoveries


(3,825
)


(1,669
)


(7,602
)Balance, end of period

$
67,587


$
57,321


$
62,386Annualized charge-offs to average
    loans held for investment


0.15
%


0.08
%


0.31
%     SECONDARY
    MARKET RESERVE
      Three Months EndedMarch 31,


March 31,2007


2006(Dollars in millions)Loans sold:GSEs and whole loans

$
17,146


$
10,161Securitization trusts


7,391



6,547Total

$
24,537


$
16,708Total repurchases(1)

$
224


$
15Repurchases as a percentage of
    total loans sold during the period


0.91
%


0.09
%     (1)
    
    Amounts exclude repurchases that are administrative in nature
    and generally are re-sold immediately at little or no loss. 50




---



##### Table of Contents



Three Months EndedMarch 31,


March 31,


December 31,2007


2006


2006(Dollars in thousands)Balance, beginning of period

$
33,932


$
27,638


$
30,190Additions/provisions


31,670



4,527



13,186Actual
    losses/mark-to-market


(15,085
)


(2,526
)


(10,394
)Recoveries on previous claims


75



774



950Balance, end of period

$
50,592


$
30,413


$
33,932    EXPENSES    Three Months EndedMarch 31,


March 31,


December 31,2007


2006


2006(Dollars in thousands)Salaries and related

$
182,474


$
152,558


$
180,340Premises and equipment


24,297



16,972



22,063Loan purchase and servicing costs


15,026



12,906



14,754Professional services


9,864



8,108



11,309Data processing


19,756



14,275



17,962Office and related


16,127



15,095



18,610Advertising and promotion


9,635



11,217



10,001Operations and sale of foreclosed
    assets


2,180



542



2,474Other


5,038



3,319



3,946Deferral of expenses under
    SFAS 91


(68,647
)


(63,226
)


(70,647
)Total operating expenses


215,750



171,766



210,812Amortization of other intangible
    assets


430



134



429Total expenses

$
216,180


$
171,900


$
211,241    51




---



##### Table of Contents



SHARE
    REPURCHASE ACTIVITIES    Total Number of


Maximum ApproximateTotal





Shares Purchased


Dollar Value (In Million) ofNumber of


Weighted


as Part of Publicly


Shares that May Yet beShares


Average Price


Announced Plans or


Purchased  Under thePurchased(1)


Paid per Share


Programs


Plans or Programs(2)Calendar Month:January 2007


19,763


$
45.27






$
300February 2007


450



39.33







300March 2007


17,064



29.96







300Total


37,277


$
38.19







300     (1)
    
    All shares purchased during the periods indicated represent
    withholding of a portion of shares to cover taxes in connection
    with vesting of restricted stocks or exercise of stock options.(2)
    
    Our Board of Directors previously approved a $500 million
    share repurchase program. Since its inception in 1999, we have
    repurchased a total of 28.0 million shares through this
    program. In January 2007, we have obtained an authorization from
    the Board of Directors to repurchase an additional
    $236.4 million of common stock for a total current
    authorization of up to $300 million. FUTURE
    OUTLOOK        52




---



##### Table of Contents



This Future Outlook section contains certain
    forward-looking statements. See the section of this
    Form 10-Q
    entitled Forward-Looking Statements for a
    description of factors which may cause our actual results to
    differ from those anticipated.
 LIQUIDITY
    AND CAPITAL RESOURCES  OVERVIEW
    PRINCIPAL
    SOURCES OF CASH
  Loan
    Sales and Securitizations
      Advances
    from Federal Home Loan Bank
   53




---



##### Table of Contents



Deposits/Retail
    Bank
  www.indymacbank.com accounts 24-hours
    March 31, 2007


March 31, 2006


December 31, 2006% of





% of





% ofTotal





Total





TotalAmount


Deposits


Amount


Deposits


Amount


Deposits(Dollars in thousands)Deposit ChannelBranch

$
5,697,039



50
%

$
3,627,684



44
%

$
5,211,365



48
%Internet


1,198,872



10
%


822,608



10
%


1,185,423



11
%Telebanking


1,347,431



12
%


981,756



12
%


1,290,595



12
%Money desk


2492,241



22
%


2,271,282



27
%


2,593,719



24
%Custodial


716,599



6
%


563,046



7
%


616,904



5
%Total deposits

$
11,452,182



100
%

$
8,266,376



100
%

$
10,898,006



100
%     March 31, 2007


March 31, 2006


December 31, 2006Amount


Rate


Amount


Rate


Amount


Rate(Dollars in thousands)Deposit CategoryNon-interest-bearing checking

$
79,002



0.0
%

$
66,076



0.0
%

$
72,081



0.0
%Interest-bearing checking


55,702



1.2
%


57,143



1.3
%


54,844



1.2
%Savings


2,255,677



5.0
%


1,257,956



4.2
%


1,915,333



5.0
%Custodial accounts


716,599



0.0
%


563,046



0.0
%


616,904



0.0
%Total core deposits


3,106,980



3.7
%


1,944,221



2.7
%


2,659,162



3.6
%Certificates of deposit


8,345,202



5.2
%


6,322,155



4.3
%


8,238,844



5.2
%Total deposits

$
11,452,182



4.8
%

$
8,266,376



3.9
%

$
10,898,006



4.8
%  54




---



##### Table of Contents



Trust Preferred
    Securities and Warrants
    3-month
  Consolidation of Variable Interest Entities, an
    Interpretation of Accounting Research Bulletin (ARB)
    No. 51,
  Other
    Borrowings, Excluding Subordinated Debentures Underlying
    Trust Preferred Securities
    and/or
  P-1 A-1+
 55




---



##### Table of Contents



364-day
  Direct
    Stock Purchase Plan
    Capital
    Raising and Deployment Strategies
    PRINCIPAL
    USES OF CASH
    REGULATORY
    CAPITAL REQUIREMENTS
       56




---



##### Table of Contents



Capital RatiosTangible


Tier 1 Core


Tier 1 Risk-Based


Total Risk-Based(Dollars in thousands)March 31, 2007:As reported pre-subprime
    risk-weighting


7.41
%


7.41
%


10.98
%


11.37
%Adjusted for additional subprime
    risk weighting


7.41
%


7.41
%


10.90
%


11.28
%Well-capitalized minimum


2.00
%


5.00
%


6.00
%


10.00
%Excess over well-capitalized
    minimum requirement

$
1,558,939


$
695,133


$
838,513


$
219,645      OFF-BALANCE
    SHEET ARRANGEMENTS       57




---



##### Table of Contents



AGGREGATE
    CONTRACTUAL OBLIGATIONS  10-K. 10-K
 CRITICAL
    ACCOUNTING POLICIES AND JUDGMENTS  and/or 10-K
   REGULATORY
    UPDATE    ITEM 3.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK   58




---



##### Table of Contents



ITEM 1.
    FINANCIAL
    STATEMENTS  INDYMAC
    BANCORP, INC. AND SUBSIDIARIES
 CONSOLIDATED BALANCE SHEETS  March 31,


December 31,2007


2006(Unaudited)(Dollars in thousands)ASSETSCash and cash equivalents

$
577,471


$
541,725Securities classified as trading
    ($158.8 million and $152.9 million pledged as
    collateral for borrowings at March 31, 2007 and
    December 31, 2006, respectively)


630,604



542,731Securities classified as available
    for sale, amortized cost of $4.6 billion and
    $4.9 billion at March 31, 2007 and December 31,
    2006, respectively ($4.0 billion and $4.1 billion
    pledged as collateral for borrowings at March 31, 2007 and
    December 31, 2006, respectively)


4,622,165



4,900,514Loans receivable:Loans held for saleSFR mortgage


9,952,670



8,801,252HELOC


529,461



633,096Consumer lot loans and other
    mortgage


28,974



33,495Total loans held for sale


10,511,105



9,467,843Loans held for investmentSFR mortgage


5,214,423



6,519,340Consumer construction


2,275,210



2,225,979Builder construction


781,425



786,279HELOC


28,031



23,618Land and other mortgage


412,044



375,215Revolving warehouse lines of credit


276,686



246,778Allowance for loan losses


(67,587
)


(62,386
)Total loans held for investment


8,920,232



10,114,823Total loans receivable
    ($14.6 billion and $14.9 billion pledged as collateral
    for borrowings at March 31, 2007 and December 31,
    2006, respectively)


19,431,337



19,582,666Mortgage servicing rights


2,052,822



1,822,455Investment in Federal Home
    Loan Bank stock


805,632



762,054Interest receivable


283,604



217,667Goodwill and other intangible assets


112,178



112,608Foreclosed assets


33,307



21,638Other assets held for sale


54,785



Other assets


1,090,434



991,258Total assets

$
29,694,339


$
29,495,316LIABILITIES AND
    SHAREHOLDERS EQUITYDeposits

$
11,452,182


$
10,898,006Advances from Federal Home
    Loan Bank


10,349,800



10,412,800Other borrowings


4,312,965



4,637,000Other liabilities


1,524,604



1,519,242Total liabilities


27,639,551



27,467,048Shareholders EquityPreferred 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 102,624,002 shares (73,578,966 outstanding) at
    March 31, 2007, and issued 102,258,939 shares
    (73,017,356 outstanding) at December 31, 2006


1,026



1,023Additional
    paid-in-capital


1,606,051



1,597,814Accumulated other comprehensive loss


(28,751
)


(31,439
)Retained earnings


999,166



983,348Treasury stock,
    29,045,036 shares and 29,241,583 shares at
    March 31, 2007 and December 31, 2006, respectively


(522,704
)


(522,478
)Total shareholders equity


2,054,788



2,028,268Total liabilities and
    shareholders equity

$
29,694,339


$
29,495,316    59




---



##### Table of Contents



INDYMAC
    BANCORP, INC. AND SUBSIDIARIES
  CONSOLIDATED STATEMENTS OF EARNINGS
  For the Three MonthsEnded March 31,2007


2006(Unaudited)(Dollars in thousands, except per share data)Interest incomeMortgage-backed and other securities

$
92,279


$
66,483Loans held for saleSFR mortgage


231,748



153,397HELOC


19,666



17,745Consumer lot loans and other
    mortgage


743



2,419Total loans held for sale


252,157



173,561Loans held for investmentSFR mortgage


94,453



73,795Consumer construction


43,646



30,364Builder construction


19,753



15,363Land and other mortgage


9,715



6,848HELOC


600



614Revolving warehouse lines of credit


4,226



922Total loans held for investment


172,393



127,906Other


15,848



9,896Total interest income


532,677



377,846Interest expenseDeposits


132,067



74,243Advances from Federal Home
    Loan Bank


174,529



103,609Other borrowings


91,011



72,784Total interest expense


397,607



250,636Net interest income


135,070



127,210Provision for loan
    losses


10,687



3,822Net interest income after provision
    for loan losses


124,383



123,388Other incomeGain on sale of loans


117,543



141,199Service fee income


49,187



30,889Loss on mortgage-backed securities,
    net


(5,347
)


(2,615
)Fee and other income


16,316



11,674Total other income


177,699



181,147Net revenues


302,082



304,535Other expenseOperating expenses


215,750



171,766Amortization of other intangible
    assets


430



134Total other expense


216,180



171,900Earnings before provision for
    income taxes and minority interests


85,902



132,635Provision for income taxes


33,520



52,319Net earnings before minority
    interests


52,382



80,316Minority interests






467Net earnings

$
52,382


$
79,849Earnings per share:Basic

$
0.72


$
1.24Diluted

$
0.70


$
1.18Weighted-average shares
    outstanding:Basic


72,297



64,310Diluted


74,305



67,528Dividends declared per
    share

$
0.50


$
0.44    60




---



##### Table of Contents



INDYMAC
    BANCORP, INC. AND SUBSIDIARIES
 CONSOLIDATED
    STATEMENTS OF SHAREHOLDERS EQUITY AND
    COMPREHENSIVE INCOME  AccumulatedAdditional


Other





Total





TotalShares


Common


Paid-In-


Comprehensive


Retained


Comprehensive


Treasury


ShareholdersOutstanding


Stock


Capital


Loss


Earnings


Income


Stock


Equity(Unaudited)(Dollars in thousands)Balance at December 31,
    2005


64,246,767


$
934


$
1,318,751


$
(15,157
)

$
759,330


$



$
(520,417
)

$
1,543,441Cumulative-effect adjustment due to
    change in accounting for MSRs


















10,624











10,624Issuance of common stock


617,414



6



23,919



















23,925Exercises of common stock options


162,029



2



4,203



















4,205Exercises of warrants


407,286



4



8,924



















8,928Compensation expenses for common
    stock options










2,515



















2,515Net officers notes receivable
    payments










18



















18Deferred compensation and
    restricted stock amortization, net of forfeitures


363,976



4



2,166



















2,170Net unrealized loss on
    mortgage-backed securities available for sale














(11,287
)






(11,287
)






(11,287
)Net unrealized gain on derivatives
    used in cash flow hedges














9,975







9,975







9,975Purchases of common stock


(49,689
)






















(1,977
)


(1,977
)Cash dividends


















(28,844
)










(28,844
)Net earnings


















79,849



79,849







79,849Total comprehensive income





















$
78,537







Balance at March 31,
    2006


65,747,783


$
950


$
1,360,496


$
(16,469
)

$
820,959






$
(522,394
)

$
1,643,542Balance at December 31,
    2006


73,017,356


$
1,023


$
1,597,814


$
(31,439
)

$
983,348


$



$
(522,478
)

$
2,028,268Exercises of common stock options


100,230























2,693



2,693Exercises of warrants


63,888



1



1,405



















1,406Compensation expenses for common
    stock options










2,594



















2,594Net officers notes receivable
    payments










59



















59Deferred compensation and
    restricted stock amortization, net of forfeitures


434,769



2



4,179















(1,495
)


2,686Net unrealized gain on
    mortgage-backed securities available for sale














5,331







5,331







5,331Net unrealized loss on derivatives
    used in cash flow hedges














(2,643
)






(2,643
)






(2,643
)Purchases of common stock


(37,277
)






















(1,424
)


(1,424
)Cash dividends


















(36,564
)










(36,564
)Net earnings


















52,382



52,382







52,382Total comprehensive income





















$
55,070







Balance at March 31,
    2007


73,578,966


$
1,026


$
1,606,051


$
(28,751
)

$
999,166






$
(522,704
)

$
2,054,788    61




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##### Table of Contents



INDYMAC
    BANCORP, INC. AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF CASH FLOWS  For the Three MonthsEnded March 31,2007


2006(Unaudited)(Dollars in thousands)Cash flows from operating
    activities:Net earnings

$
52,382


$
79,849Adjustments to reconcile net
    earnings to net cash used in operating activities:Gain on sale of loans


(117,543
)


(141,199
)Compensation expenses related to
    stock options and restricted stocks


5,280



4,685Other amortization and depreciation


33,833



14,586Change in valuation of mortgage
    servicing rights, including amortization


86,941



(12,325
)Loss on mortgage-backed securities,
    net


5,347



2,615Provision for loan losses


10,687



3,822Net decrease in deferred tax
    liability


33,409



82,222Net (increase) decrease in other
    assets and liabilities


(239,758
)


47,804Net cash (used in) provided by
    operating activities before activity for trading securities and
    loans held for sale


(129,422
)


82,059Net sales of trading securities


24,867



99,286Net purchases and originations of
    loans held for sale


(956,618
)


(2,661,562
)Net cash used in operating
    activities


(1,061,173
)


(2,480,217
)Cash flows from investing
    activities:Net sales of and payments from
    loans held for investment


762,813



102,095Purchases of mortgage-backed
    securities available for sale


(282,226
)


(192,630
)Proceeds from sales of and
    principal payments from mortgage-backed securities available for
    sale


578,850



158,193Net increase in investment in
    Federal Home Loan Bank stock, at cost


(43,578
)


(33,654
)Net (increase) decrease in real
    estate investment


(554
)


3,324Net purchases of property, plant
    and equipment


(21,110
)


(25,198
)Net cash provided by investing
    activities


994,195



12,130Cash flows from financing
    activities:Net increase in deposits


553,182



593,476Net (decrease) increase in advances
    from Federal Home Loan Bank


(63,000
)


1,042,000Net (decrease) increase in
    borrowings


(325,488
)


825,917Net proceeds from issuance of
    common stock






23,925Redemption of trust preferred
    securities


(28,140
)


Net proceeds from stock options,
    warrants and notes receivable


4,158



13,151Cash dividends paid


(36,564
)


(28,844
)Purchases of common stock


(1,424
)


(1,977
)Net cash provided by financing
    activities


102,724



2,467,648Net increase (decrease) in cash and
    cash equivalents


35,746



(439
)Cash and cash equivalents at
    beginning of period


541,725



442,525Cash and cash equivalents at end of
    period

$
577,471


$
442,086Supplemental cash flow
    information:Cash paid for interest

$
357,977


$
239,390Cash paid (received) for income
    taxes

$
111


$
(49,425
)Supplemental disclosure of
    non-cash investing and financing activities:Net transfer of loans held for sale
    to loans held for investment

$
403,648


$
621,116Net transfer of mortgage servicing
    rights to trading securities

$
163


$
    62




---



##### Table of Contents



INDYMAC
    BANCORP, INC. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS
 March 31, 2007
 (Unaudited)
  NOTE 1 
    BASIS OF PRESENTATION
    10-K.
  NOTE 2 
    NEWLY ADOPTED AND NEW ACCOUNTING PRONOUNCEMENTS
  Accounting for Certain Hybrid Financial
    Instruments Application of Paragraph 13(b) to Securitized
    Interests in Prepayable Financial Assets
  06-2, Accounting for Sabbatical Leave and Other Similar
    Benefits, 06-2) Accounting for
    Compensated Absences 06-2 Accounting Changes and Error
    Corrections,
  Accounting for Uncertainty in Income Taxes Accounting for Income
    Taxes.
 63




---



##### Table of Contents



INDYMAC
    BANCORP, INC. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Fair Value Measurements
  The Fair Value Option for Financial Assets and
    Financial Liabilities
 64




---



##### Table of Contents



INDYMAC
    BANCORP, INC. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   NOTE 3 
    SEGMENT REPORTING
      Mortgage BankingProduction


Mortgage








TotalDivisions


Servicing


Thrift


Other


Company(Dollars in thousands)Three months ended
    March 31, 2007Net interest income (expense)

$
49,762


$
(5,052
)

$
69,820


$
20,540


$
135,070Net revenues (expense)


168,012



59,670



74,949



(549
)


302,082Net earnings (loss)


44,035



24,905



29,945



(46,503
)


52,382Allocated average capital


679,808



332,085



851,976



169,030



2,032,899Assets as of March 31, 2007

$
9,164,307


$
3,119,507


$
16,374,788


$
1,035,737


$
29,694,339Return on equity


26
%


30
%


14
%


N/A



10
%Three months ended
    March 31, 2006Net interest income (expense)

$
43,251


$
(3,296
)

$
75,662


$
11,593


$
127,210Net revenues (expense)


182,510



29,279



98,599



(5,853
)


304,535Net earnings (loss)


64,555



11,661



45,436



(41,803
)


79,849Allocated average capital


510,832



197,253



727,465



162,756



1,598,306Assets as of March 31, 2006

$
6,528,233


$
1,880,361


$
14,315,533


$
1,479,120


$
24,203,247Return on equity


51
%


24
%


25
%


N/A



20
%  65




---



##### Table of Contents



INDYMAC
    BANCORP, INC. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  NOTE 4 
    MORTGAGE-BACKED SECURITIES
    March 31,


December 31,2007


2006(Dollars in thousands)Mortgage-backed
    securities  tradingAAA-rated non-agency securities

$
24,258


$
43,957AAA-rated and agency interest-only
    securities


74,720



73,570AAA-rated principal-only securities


55,977



38,478Prepayment penalty securities


93,106



97,576Other investment grade securities


67,155



29,015Other non-investment grade
    securities


70,809



41,390Non-investment grade residual
    securities


244,579



218,745Total mortgage-backed
    securities  trading

$
630,604


$
542,731Mortgage-backed
    securities  available for saleAAA-rated non-agency securities

$
4,265,012


$
4,604,489AAA-rated agency securities


57,947



65,175Other investment grade securities


233,559



160,238Other non-investment grade
    securities


39,395



38,784Non-investment grade residual
    securities


26,252



31,828Total mortgage-backed
    securities  available for sale

$
4,622,165


$
4,900,514     As of March 31, 2007Less Than 12 Months


12 Months or Greater


TotalUnrealized





Unrealized





UnrealizedLosses


Fair Value


Losses


Fair Value


Losses


Fair Value(Dollars in thousands)Securities  available
    for sale:AAA-rated non-agency securities

$
(1,376
)

$
271,886


$
(36,055
)

$
1,515,412


$
(37,431
)

$
1,787,298AAA-rated agency securities


(644
)


13,228



(146
)


15,154



(790
)


28,382Other investment grade securities


(322
)


35,376



(1,037
)


26,049



(1,359
)


61,425Non-investment grade residual
    securities


(303
)


26,252











(303
)


26,252Total securities 
    available for sale

$
(2,645
)

$
346,742


$
(37,238
)

$
1,556,615


$
(39,883
)

$
1,903,357    66




---



##### Table of Contents



INDYMAC
    BANCORP, INC. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  other-than-temporarily
  NOTE 5 
    STOCK-BASED COMPENSATION
      For the Three Months Ended March 31,2007


2006(Dollars in thousands except per share data)Stock option compensation cost,
    before tax

$
2,594


$
2,515Stock option compensation cost,
    after tax


1,638



1,655Effect on basic earnings per share


0.02



0.03Effect on dilutive earnings per
    share


0.02



0.02        67




---



##### Table of Contents



INDYMAC
    BANCORP, INC. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Weighted-AverageGrant-DateShares


Fair ValueRestricted Stock:Nonvested, at beginning of period


889,117


$
39.14Granted


455,132



30.68Vested


(133,594
)


37.37Canceled and forfeited


(16,302
)


39.15Nonvested, at end of period


1,194,353



36.11     NOTE 6 
    DEFINED BENEFIT PENSION PLAN NET PERIODIC EXPENSE
      NOTE 7 
    LEGAL MATTERS
  Accounting for
    Contingencies
  CV-07-01635,
 68




---



##### Table of Contents



INDYMAC
    BANCORP, INC. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Rule 10b-5,
  NOTE 8 
    OTHER ASSETS HELD FOR SALE
  Accounting
    for the Impairment or Disposal of Long-Lived Assets
  NOTE 9 
    SUBSEQUENT EVENT
   69




---



##### Table of Contents



ITEM 4.
    CONTROLS
    AND PROCEDURES  Rules 13a-15 15d-15 Form 10-Q
   PART II.
    OTHER INFORMATION  ITEM 1.
    LEGAL
    PROCEEDINGS    ITEM 1A.
    RISK
    FACTORS  10-K.
  ITEM 2.
    UNREGISTERED
    SALES OF EQUITY SECURITIES AND USE OF PROCEEDS    ITEM 5.
    OTHER
    INFORMATION    ITEM 6.
    EXHIBITS  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.  70




---



##### Table of Contents



SIGNATURE
       By:
    /s/  MICHAEL
    W. PERRY   Chairman of the Board of Directors
 and Chief Executive Officer
  By:
    /s/  A.
    SCOTT KEYS   Executive Vice President
 and Chief Financial Officer
 71