##### Table of Contents









UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





Form 10-Q




|  |                                                                                                                                              
|- | ---------------------------------------------------------------------------------------------------------------------------------------------
|þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended
    March 31, 2005

or




|  |                                                                                                                                                         
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------
|o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) 
     OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period
    from                     to

Commission file number 1-8972


INDYMAC BANCORP, INC.


(Exact name of registrant as specified in its charter)


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

(Registrants telephone number, including area code)


(800) 669-2300


þ o


þ o














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##### Table of Contents










FORM 10-Q QUARTERLY REPORT


For the Period Ended March 31, 2005


TABLE OF CONTENTS


|                                                                                                      |                                                              |                                                                                 |    |    |    | 
|----------------------------------------------------------------------------------------------------- | ------------------------------------------------------------ | ------------------------------------------------------------------------------- | -- | -- | -- | 
|                                                                                                      |                                                              | Page                                                                            |   
|                                                                                                      |                                                              |                                                                                 |   
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|PART I. FINANCIAL INFORMATION                                                                        
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|Forward-Looking Statements                                                                            |                                                              |                                                                                 | 3  |   
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|Item 2. Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations |                                                              |                                                                                 | 3  |   
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|Highlights for the Quarter                                                                            |                                                              |                                                                                 | 3  |   
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|Overall Results                                                                                       |                                                              |                                                                                 | 5  |   
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|Our Business                                                                                          |                                                              |                                                                                 | 5  |   
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                      | Mortgage Banking                                             |                                                                                 |    | 23 |   
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                      |                                                              | Loan Production                                                                 |    |    | 23 | 
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                      |                                                              | Mortgage Production by Division                                                 |    |    | 25 | 
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                      |                                                              | Loan Sales                                                                      |    |    | 27 | 
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                      |                                                              | Mortgage Servicing and Mortgage Servicing
    Rights                            |    |    | 30 | 
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                      |                                                              | AAA-Rated Agency Interest-Only, Prepayment
    Penalty and Residuals Securities |    |    | 31 | 
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                      |                                                              | Other Investment Grade and Non-Investment
    Grade Securities                  |    |    | 31 | 
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                      |                                                              | Valuation of Servicing-Related Assets                                           |    |    | 33 | 
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                      |                                                              | Hedging Interest Rate Risk on
    Servicing-Related Assets                      |    |    | 34 | 
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                      | Mortgage-Backed Securities and Loans Held
    for Investment |                                                                                 |    | 35 |   
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                      |                                                              | SFR Mortgage Loans Held for Investment                                          |    |    | 36 | 
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                      |                                                              | Mortgage-Backed Securities                                                      |    |    | 37 | 
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                      |                                                              | Construction Lending                                                            |    |    | 38 | 
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                      |                                                              | HELOC Portfolio                                                                 |    |    | 40 | 
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                      | Net Interest Income                                          |                                                                                 |    | 41 |   
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                      | Overall Interest Rate Risk Management                        |                                                                                 |    | 43 |   
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                      | Credit Risk and Reserves                                     |                                                                                 |    | 44 |   
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                      | Secondary Market Reserve                                     |                                                                                 |    | 47 |   
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                      | Operating Expenses                                           |                                                                                 |    | 48 |   
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                      | Dividend                                                     |                                                                                 |    | 49 |   
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                      | Share Repurchase Activities                                  |                                                                                 |    | 49 |   
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                      | Future Outlook                                               |                                                                                 |    | 49 |   
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|Liquidity and Capital Resources                                                                       |                                                              |                                                                                 | 50 |   
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                      | Overview                                                     |                                                                                 |    | 50 |   
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                      | Principal Sources of Cash                                    |                                                                                 |    | 50 |   
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                      | Principal Uses of Cash                                       |                                                                                 |    | 53 |   
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                      | Accumulated Other Comprehensive Loss                         |                                                                                 |    | 53 |   
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                      | Regulatory Capital Requirements                              |                                                                                 |    | 53 |   
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|Off-Balance Sheet Arrangements                                                                        |                                                              |                                                                                 | 54 |   
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|Aggregate Contractual Obligations                                                                     |                                                              |                                                                                 | 55 |   
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|Key Operating Risks                                                                                   |                                                              |                                                                                 | 56 |   
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                      | Interest Rate Risk                                           |                                                                                 |    | 56 |   
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                      | Valuation Risk                                               |                                                                                 |    | 56 |   
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                     
|                                                                                                      | Credit Risk                                                  |                                                                                 |    | 56 |   

1



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##### Table of Contents



|                                                                        |                                                                              |      |    |    | 
|----------------------------------------------------------------------- | ---------------------------------------------------------------------------- | ---- | -- | -- | 
|                                                                        |                                                                              | Page |   
|                                                                        |                                                                              |      |   
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Liquidity Risk                                                               |      |    | 57 | 
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Cyclical Industry                                                            |      |    | 57 | 
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Competition                                                                  |      |    | 57 | 
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Laws and Regulations                                                         |      |    | 57 | 
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Geographic Concentration                                                     |      |    | 58 | 
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Business Execution and Technology Risk                                       |      |    | 58 | 
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Critical Accounting Policies and
    Judgments                          |                                                                              |      | 58 |   
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Item 3. Quantitative and
    Qualitative Disclosure About Market Risk   |                                                                              |      | 58 |   
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Item 1. Financial Statements
    (Unaudited)                            |                                                                              |      | 59 |   
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Consolidated Balance Sheets                                                  |      |    | 59 | 
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Consolidated Statements of Earnings                                          |      |    | 61 | 
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Consolidated Statements of
    Shareholders Equity and Comprehensive Income |      |    | 62 | 
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Consolidated Statements of Cash Flows                                        |      |    | 63 | 
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                        | Notes to Consolidated Financial
    Statements                               |      |    | 64 | 
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Item 4. Controls and
    Procedures                                     |                                                                              |      | 70 |   
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|PART II. OTHER
    INFORMATION                                         
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Item 1. Legal Proceedings                                               |                                                                              |      | 70 |   
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Item 2. Unregistered Sales of
    Equity Securities and Use of Proceeds |                                                                              |      | 70 |   
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Item 6. Exhibits                                                        |                                                                              |      | 70 |   
|EX-31.1                                                                
|EX-31.2                                                                
|EX-32.1                                                                
|EX-32.2                                                                



2



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##### Table of Contents






FORWARD-LOOKING STATEMENTS











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




HIGHLIGHTS FOR THE QUARTER




|                     |                                                     |                                              |   |       |           |  |   |              |        |  |   |       |        | 
|-------------------- | --------------------------------------------------- | -------------------------------------------- | - | ----- | --------- |  | - | ------------ | ------ |  | - | ----- | ------ | 
|                     |                                                     | Three Months Ended                           |  
|                     |                                                     |                                              |  
|                     |                                                     | March 31,                                    |   |       | March 31, |  |   | December 31, |       
|                     |                                                     | 2005                                         |   |       | 2004      |  |   | 2004(1)      |       
|                     |                                                     |                                              |   |       |           |  |   |              |       
|                     |                                                     | (Dollars in millions, except per share data) |  
|                    
|                    
|                    
|                    
|Income Statement     |                                                     |                                              |   |       |           |  |   |              |        |  |   |      
|                    
|                    
|                    
|                    
|                     | Net interest income after provision for loan losses |                                              | $ | 102   |           |  | $ | 92           |        |  | $ | 102   |       
|                    
|                    
|                    
|                    
|                     | Gain on sale of loans                               |                                              |   | 144   |           |  |   | 84           |        |  |   | 120   |       
|                    
|                    
|                    
|                    
|                     | Other income                                        |                                              |   | 22    |           |  |   | 9            |        |  |   | 25    |       
|                    
|                    
|                    
|                    
|                     | Net revenues                                        |                                              |   | 268   |           |  |   | 185          |        |  |   | 247   |       
|                    
|                    
|                    
|                    
|                     | Operating expenses                                  |                                              |   | 160   |           |  |   | 115          |        |  |   | 150   |       
|                    
|                    
|                    
|                    
|                     | Net earnings                                        |                                              |   | 65    |           |  |   | 42           |        |  |   | 58    |       
|                    
|                    
|                    
|                    
|                     | Basic earnings per share                            |                                              |   | 1.06  |           |  |   | 0.74         |        |  |   | 0.95  |       
|                    
|                    
|                    
|                    
|                     | Diluted earnings per share                          |                                              | $ | 1.01  |           |  | $ | 0.70         |        |  | $ | 0.91  |       
|                    
|                    
|                    
|                    
|Other Per Share Data |                                                     |                                              |   |       |           |  |   |              |        |  |   |      
|                    
|                    
|                    
|                    
|                     | Dividends declared per share                        |                                              | $ | 0.36  |           |  | $ | 0.25         |        |  | $ | 0.34  |       
|                    
|                    
|                    
|                    
|                     | Book value per share at end of quarter              |                                              |   | 21.28 |           |  |   | 18.26        |        |  |   | 20.39 |       
|                    
|                    
|                    
|                    
|                     | Closing price per share                             |                                              | $ | 34.00 |           |  | $ | 36.29        |        |  | $ | 34.45 |       
|                     | Average Common Shares (in thousands)                |                                              |   |       |           |  |   |              |        |  |   |       |       
|                    
|                    
|                    
|                    
|                     |                                                     | Basic                                        |   |       | 61,798    |  |   |              | 56,997 |  |   |       | 61,638 | 
|                    
|                    
|                    
|                    
|                     |                                                     | Diluted                                      |   |       | 64,763    |  |   |              | 59,791 |  |   |       | 64,344 | 

3



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##### Table of Contents



|                                       |                                                                                 |                                              |   |        |           |  |   |              |   |  |   |        |  
|-------------------------------------- | ------------------------------------------------------------------------------- | -------------------------------------------- | - | ------ | --------- |  | - | ------------ | - |  | - | ------ | -
|                                       |                                                                                 | Three Months Ended                           |  
|                                       |                                                                                 |                                              |  
|                                       |                                                                                 | March 31,                                    |   |        | March 31, |  |   | December 31, |  
|                                       |                                                                                 | 2005                                         |   |        | 2004      |  |   | 2004(1)      |  
|                                       |                                                                                 |                                              |   |        |           |  |   |              |  
|                                       |                                                                                 | (Dollars in millions, except per share data) |  
|                                      
|                                      
|                                      
|                                      
|Performance Ratios                     |                                                                                 |                                              |   |        |           |  |   |              |   |  |   |       
|                                      
|                                      
|                                      
|                                      
|                                       | Return on average equity (annualized)                                           |                                              |   | 21.18  | %         |  |   | 16.16        | % |  |   | 18.96  | %
|                                      
|                                      
|                                      
|                                      
|                                       | Return on average assets (annualized)                                           |                                              |   | 1.43   | %         |  |   | 1.16         | % |  |   | 1.25   | %
|                                      
|                                      
|                                      
|                                      
|                                       | Dividend payout ratio(2)                                                        |                                              |   | 35.64  | %         |  |   | 35.71        | % |  |   | 37.36  | %
|                                      
|                                      
|                                      
|                                      
|                                       | Net interest income to pretax income after minority interest                    |                                              |   | 96.32  | %         |  |   | 135.53       | % |  |   | 107.12 | %
|                                      
|                                      
|                                      
|                                      
|                                       | Average cost of funds                                                           |                                              |   | 2.98   | %         |  |   | 2.32         | % |  |   | 2.74   | %
|                                      
|                                      
|                                      
|                                      
|                                       | Net interest margin                                                             |                                              |   | 2.49   | %         |  |   | 2.82         | % |  |   | 2.40   | %
|                                      
|                                      
|                                      
|                                      
|                                       | Efficiency ratio(3)                                                             |                                              |   | 59     | %         |  |   | 62           | % |  |   | 60     | %
|                                      
|                                      
|                                      
|                                      
|                                       | Capital to net revenue ratio(4)                                                 |                                              |   | 115.82 | %         |  |   | 140.09       | % |  |   | 123.04 | %
|                                      
|                                      
|                                      
|                                      
|                                       | Capital adjusted efficiency ratio(5)                                            |                                              |   | 68     | %         |  |   | 87           | % |  |   | 74     | %
|                                      
|                                      
|                                      
|                                      
|                                       | Operating expenses to loan production                                           |                                              |   | 1.34   | %         |  |   | 1.61         | % |  |   | 1.30   | %
|                                      
|                                      
|                                      
|                                      
|Balance Sheet and Asset Quality Ratios |                                                                                 |                                              |   |        |           |  |   |              |   |  |   |       
|                                      
|                                      
|                                      
|                                      
|                                       | Average interest-earning assets                                                 |                                              | $ | 17,039 |           |  | $ | 13,387       |   |  | $ | 17,183 |  
|                                      
|                                      
|                                      
|                                      
|                                       | Average equity                                                                  |                                              | $ | 1,254  |           |  | $ | 1,043        |   |  | $ | 1,225  |  
|                                      
|                                      
|                                      
|                                      
|                                       | Debt to equity ratio(6)                                                         |                                              |   | 12.5:1 |           |  |   | 12.7:1       |   |  |   | 12.3:1 |  
|                                      
|                                      
|                                      
|                                      
|                                       | Core capital ratio(7)                                                           |                                              |   | 7.35   | %         |  |   | 7.50         | % |  |   | 7.66   | %
|                                      
|                                      
|                                      
|                                      
|                                       | Risk-based capital ratio(7)                                                     |                                              |   | 11.85  | %         |  |   | 12.61        | % |  |   | 12.02  | %
|                                      
|                                      
|                                      
|                                      
|                                       | Non-performing assets to total assets                                           |                                              |   | 0.54   | %         |  |   | 0.75         | % |  |   | 0.73   | %
|                                      
|                                      
|                                      
|                                      
|                                       | Allowance for loan losses to total loans held for investment                    |                                              |   | 0.72   | %         |  |   | 0.78         | % |  |   | 0.78   | %
|                                      
|                                      
|                                      
|                                      
|                                       | Allowance for loan losses and other credit reserves to
    non-performing loans |                                              |   | 80.73  | %         |  |   | 80.44        | % |  |   | 61.62  | %
|                                      
|                                      
|                                      
|                                      
|                                       | Allowance for loan losses to annualized net charge-offs                         |                                              |   | 708.33 | %         |  |   | 645.44       | % |  |   | 692.65 | %
|                                      
|                                      
|                                      
|                                      
|                                       | Provision for loan losses to net charge-offs                                    |                                              |   | 131.89 | %         |  |   | 74.29        | % |  |   | 103.30 | %
|                                      
|                                      
|                                      
|                                      
|Other Selected Items                   |                                                                                 |                                              |   |        |           |  |   |              |   |  |   |       
|                                      
|                                      
|                                      
|                                      
|                                       | Loans serviced for others(8)                                                    |                                              | $ | 55,995 |           |  | $ | 32,122       |   |  | $ | 50,219 |  
|                                      
|                                      
|                                      
|                                      
|                                       | Loan production(9)                                                              |                                              |   | 11,975 |           |  |   | 7,146        |   |  |   | 11,568 |  
|                                      
|                                      
|                                      
|                                      
|                                       | Pipeline of mortgage loans in process                                           |                                              |   | 7,489  |           |  |   | 5,949        |   |  |   | 6,307  |  
|                                      
|                                      
|                                      
|                                      
|                                       | Loans sold                                                                      |                                              | $ | 9,654  |           |  | $ | 4,907        |   |  | $ | 9,550  |  
|                                      
|                                      
|                                      
|                                      
|                                       | Net margin on sale of loans                                                     |                                              |   | 1.49   | %         |  |   | 1.71         | % |  |   | 1.26   | %






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | For the quarter ended December 31, 2004, the data is
    presented on a pro forma basis excluding the effect of change in
    accounting principle for rate lock commitments under
    SAB No. 105 and for the impact of the purchase
    accounting adjustments for Financial Freedom. The
    SAB No. 105 impact and purchase accounting adjustments
    for the quarter ended December 31, 2004, were
    $2.2 million and $1.9 million before-tax,
    respectively. A full reconciliation between the pro forma
    amounts and amounts calculated in accordance with generally
    accepted accounting principles, or GAAP, is as follows:

|                                      |  |                                              |       |   |             |   |              |           |  |   |       |  
|------------------------------------- |  | -------------------------------------------- | ----- | - | ----------- | - | ------------ | --------- |  | - | ----- | -
|                                      |  | Three Months Ended                           |      
|                                      |  |                                              |      
|                                      |  | December 31,                                 |       |   |             |   | December 31, |          
|                                      |  | 2004                                         |       |   |             |   | 2004         |          
|                                      |  | GAAP                                         |       |   | Adjustments |   |              | Pro Forma | 
|                                      |  |                                              |       |   |             |   |              |           | 
|                                      |  | (Dollars in millions, except per share data) |      
|                                     
|                                     
|                                     
|                                     
|Gain on sale of loans                 |  |                                              | 116   |   |             |   | 4            |           |  |   | 120   |  
|                                     
|                                     
|                                     
|                                     
|Net revenues                          |  |                                              | 243   |   |             |   | 4            |           |  |   | 247   |  
|                                     
|                                     
|                                     
|                                     
|Operating expenses                    |  |                                              | 150   |   |             |   |             |           |  |   | 150   |  
|                                     
|                                     
|                                     
|                                     
|Income taxes                          |  |                                              | 37    |   |             |   | 2            |           |  |   | 39    |  
|                                      |  |                                              |       |   |             |   |              |           | 
|Net earnings                          |  | $                                            | 56    |   |             | $ | 2            |           |  | $ | 58    |  
|                                      |  |                                              |       |   |             |   |              |           | 
|Diluted earnings per share            |  | $                                            | 0.87  |   |             | $ | 0.04         |           |  | $ | 0.91  |  
|                                     
|                                     
|                                     
|                                     
|Return on average equity (annualized) |  |                                              | 18.16 | % |             |   |              |           |  |   | 18.96 | %
|                                     
|                                     
|                                     
|                                     
|Return on average asset (annualized)  |  |                                              | 1.19  | % |             |   |              |           |  |   | 1.25  | %



|    |                                                                                       
|--- | --------------------------------------------------------------------------------------
|(2) | Dividends declared per common share as a percentage of diluted
    earnings per share.
|   
|(3) | Defined as operating expenses divided by net interest income and
    other income.    

4



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##### Table of Contents





|    |                                                                                                                                                                                                                                                                                         
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(4) | Average equity divided by net interest income and other income.                                                                                                                                                                                                                         
|   
|(5) | Efficiency ratio multiplied by the capital to net revenue ratio.                                                                                                                                                                                                                        
|   
|(6) | Debt includes deposits.                                                                                                                                                                                                                                                                 
|   
|(7) | IndyMac Bank, F.S.B. (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.
|   
|(8) | Represents the unpaid principal balance on loans sold with
    servicing retained by IndyMac.                                                                                                                                                                                           
|   
|(9) | Includes newly originated commitments on construction loans and
    warehouse lending.                                                                                                                                                                                                  




OVERALL RESULTS


(1)





OUR BUSINESS









|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Our market share is calculated based on our total loan
    production, both purchased (correspondent and conduit) and
    originated (retail and wholesale), in all of our channels (the
    numerator) divided by the MBAs estimate of the overall
    mortgage market (the denominator) per their April 14, 2005
    Mortgage Finance Forecast. As we review industry publications
    such as National Mortgage news, we have confirmed that our
    calculation is consistent with their 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
    in the absolute sense, 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.

5



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6



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##### Table of Contents







|                                       |                        |                        |                   |          |                |        |           |            |        |       |            |       |        |        |            |         |         |        |            |         |        |        |         |         |         |         |            |         |         |        | 
|-------------------------------------- | ---------------------- | ---------------------- | ----------------- | -------- | -------------- | ------ | --------- | ---------- | ------ | ----- | ---------- | ----- | ------ | ------ | ---------- | ------- | ------- | ------ | ---------- | ------- | ------ | ------ | ------- | ------- | ------- | ------- | ---------- | ------- | ------- | ------ | 
|                                       |                        | Mortgage Banking       |                   |          |                |        |           |            |       
|                                       |                        |                        |                   |          |                |        |           |            |       
|                                       |                        |                        |                   | MSRs and |                |        | Loan      |            |        |       |            |       |        |        |            |        
|                                       |                        | Production             |                   |          | Other Retained |        |           | Servicing  |        |       |            |       |        |        |            |         | Total   |       
|                                       |                        | Divisions              |                   |          | Assets         |        |           | Operations |        |       | Total      |       |        | Thrift |            |         | Other   |        |            | Company |       
|                                       |                        |                        |                   |          |                |        |           |            |        |       |            |       |        |        |            |         |         |        |            |         |       
|                                       |                        | (Dollars in thousands) |                  
|                                      
|                                      
|                                      
|                                      
|Operating Results                      |                        |                        |                   |          |                |        |           |            |        |       |            |       |        |        |            |         |         |        |            |         |        |        |         |         |         |         |            |        
|                                      
|                                      
|                                      
|                                      
|Net interest income                    |                        | $                      | 26,637            |          |                | $      | 14,674    |            |        | $     | (302       | )     |        | $      | 41,009     |         |         | $      | 60,051     |         |        | $      | 3,360   |         |         | $       | 104,420    |        
|                                      
|                                      
|                                      
|                                      
|Provision for loan losses              |                        |                        |                  |          |                |        |          |            |        |       |           |       |        |        |           |         |         |        | (2,490     | )       |        |        |        |         |         |         | (2,490     | )      
|                                      
|                                      
|                                      
|                                      
|Gain (loss) on sale of loans           |                        |                        | 160,601           |          |                |        | 742       |            |        |       | 13         |       |        |        | 161,356    |         |         |        | 8,429      |         |        |        | (25,463 | )       |         |         | 144,322    |        
|                                      
|                                      
|                                      
|                                      
|Gain (loss) on securities              |                        |                        |                  |          |                |        | (5,984    | )          |        |       |           |       |        |        | (5,984     | )       |         |        | 858        |         |        |        | 480     |         |         |         | (4,646     | )      
|                                      
|                                      
|                                      
|                                      
|Service fee income                     |                        |                        | 2,464             |          |                |        | 9,878     |            |        |       |           |       |        |        | 12,342     |         |         |        | 1,170      |         |        |        | (9,094  | )       |         |         | 4,418      |        
|                                      
|                                      
|                                      
|                                      
|Other income                           |                        |                        | 12,835            |          |                |        | 711       |            |        |       | 354        |       |        |        | 13,900     |         |         |        | 6,816      |         |        |        | 1,362   |         |         |         | 22,078     |        
|                                       |                        |                        |                   |          |                |        |           |            |        |       |            |       |        |        |            |         |         |        |            |         |       
|                                       | Net revenues (expense) |                        |                   | 202,537  |                |        |           | 20,021     |        |       |            | 65    |        |        |            | 222,623 |         |        |            | 74,834  |        |        |         | (29,355 | )       |         |            | 268,102 |        
|                                      
|                                      
|                                      
|                                      
|                                       | Operating expenses     |                        |                   | 85,429   |                |        |           | 5,789      |        |       |            | 5,773 |        |        |            | 96,991  |         |        |            | 17,491  |        |        |         | 45,216  |         |         |            | 159,698 |        
|                                       |                        |                        |                   |          |                |        |           |            |        |       |            |       |        |        |            |         |         |        |            |         |       
|                                       |                        | Pretax income (loss)   |                   |          | 117,108        |        |           |            | 14,232 |       |            |       | (5,708 | )      |            |         | 125,632 |        |            |         | 57,343 |        |         |         | (74,571 | )       |            |         | 108,404 |       
|                                       |                        |                        |                   |          |                |        |           |            |        |       |            |       |        |        |            |         |         |        |            |         |       
|                                       |                        |                        | Net income (loss) |          | $              | 70,850 |           |            | $      | 8,610 |            |       | $      | (3,453 | )          |         | $       | 76,007 |            |         | $      | 34,693 |         |         | $       | (45,224 | )          |         | $       | 65,476 | 
|                                       |                        |                        |                   |          |                |        |           |            |        |       |            |       |        |        |            |         |         |        |            |         |       
|Ratios                                 |                        |                        |                   |          |                |        |           |            |        |       |            |       |        |        |            |         |         |        |            |         |        |        |         |         |         |         |            |        
|                                      
|                                      
|                                      
|                                      
|Percentage of average total assets     |                        |                        | 27                | %        |                |        | 9         | %          |        |       |           |       |        |        | 36         | %       |         |        | 59         | %       |        |        | 5       | %       |         |         | 100        | %      
|                                      
|                                      
|                                      
|                                      
|Percentage of total revenue            |                        |                        | 75                | %        |                |        | 8         | %          |        |       |           |       |        |        | 83         | %       |         |        | 29         | %       |        |        | (12     | )%      |         |         | 100        | %      
|                                      
|                                      
|                                      
|                                      
|Percentage of pretax income            |                        |                        | 108               | %        |                |        | 13        | %          |        |       | (5         | )%    |        |        | 116        | %       |         |        | 53         | %       |        |        | (69     | )%      |         |         | 100        | %      
|                                      
|                                      
|                                      
|                                      
|Balance Sheet Data                     |                        |                        |                   |          |                |        |           |            |        |       |            |       |        |        |            |         |         |        |            |         |        |        |         |         |         |         |            |        
|                                      
|                                      
|                                      
|                                      
|Average interest-earning assets(1)     |                        | $                      | 4,783,880         |          |                | $      | 865,899   |            |        | $     |           |       |        | $      | 5,649,779  |         |         | $      | 10,982,898 |         |        | $      | 406,390 |         |         | $       | 17,039,067 |        
|                                      
|                                      
|                                      
|                                      
|Average total assets                   |                        | $                      | 4,991,172         |          |                | $      | 1,607,308 |            |        | $     | 55,630     |       |        | $      | 6,654,110  |         |         | $      | 11,009,879 |         |        | $      | 904,204 |         |         | $       | 18,568,193 |        
|                                      
|                                      
|                                      
|                                      
|Allocated capital                      |                        | $                      | 346,919           |          |                | $      | 252,155   |            |        | $     | 5,564      |       |        | $      | 604,638    |         |         | $      | 564,206    |         |        | $      | 84,704  |         |         | $       | 1,253,548  |        
|                                      
|                                      
|                                      
|                                      
|Allocated capital/average total assets |                        |                        | 6.95              | %        |                |        | 15.69     | %          |        |       | 10.00      | %     |        |        | 9.09       | %       |         |        | 5.12       | %       |        |        | 9.37    | %       |         |         | 6.75       | %      
|                                      
|                                      
|                                      
|                                      
|Operating Data                         |                        |                        |                   |          |                |        |           |            |        |       |            |       |        |        |            |         |         |        |            |         |        |        |         |         |         |         |            |        
|                                      
|                                      
|                                      
|                                      
|Loans produced                         |                        | $                      | 10,706,121        |          |                | $      | 221,769   |            |        | $     |           |       |        | $      | 10,927,890 |         |         | $      | 1,046,614  |         |        | $      |        |         |         | $       | 11,974,504 |        
|                                      
|                                      
|                                      
|                                      
|Operating expense to loans produced    |                        |                        | 0.80              | %        |                |        | 2.61      | %          |        |       | N/A        |       |        |        | 0.89       | %       |         |        | 1.67       | %       |        |        | N/A     |         |         |         | 1.33       | %      
|                                      
|                                      
|                                      
|                                      
|Loans sold                             |                        |                        | 8,895,470         |          |                |        | 198,442   |            |        |       | N/A        |       |        |        | 9,093,912  |         |         |        | 559,840    |         |        |        | N/A     |         |         |         | 9,653,752  |        
|                                      
|                                      
|                                      
|                                      
|Margin on loans sold                   |                        |                        | 1.81              | %        |                |        | 0.37      | %          |        |       | N/A        |       |        |        | 1.77       | %       |         |        | 1.51       | %       |        |        | N/A     |         |         |         | 1.49       | %      
|                                      
|                                      
|                                      
|                                      
|Loans serviced for others              |                        |                        | 5,300,382         |          |                |        |          |            |        |       | 49,374,742 |       |        |        | 54,675,124 |         |         |        | 1,319,515  |         |        |        | N/A     |         |         |         | 55,994,639 |        
|                                      
|                                      
|                                      
|                                      
|Performance Ratios                     |                        |                        |                   |          |                |        |           |            |        |       |            |       |        |        |            |         |         |        |            |         |        |        |         |         |         |         |            |        
|                                      
|                                      
|                                      
|                                      
|Return on equity (ROE)                 |                        |                        | 83                | %        |                |        | 14        | %          |        |       | N/A        |       |        |        | 51         | %       |         |        | 25         | %       |        |        | N/A     |         |         |         | 21         | %      
|                                      
|                                      
|                                      
|                                      
|Return on assets (ROA)                 |                        |                        | 5.76              | %        |                |        | 2.17      | %          |        |       | N/A        |       |        |        | 4.63       | %       |         |        | 1.28       | %       |        |        | N/A     |         |         |         | 1.43       | %      
|                                      
|                                      
|                                      
|                                      
|Net interest margin                    |                        |                        | 2.26              | %        |                |        | 6.87      | %          |        |       | N/A        |       |        |        | 2.94       | %       |         |        | 2.22       | %       |        |        | N/A     |         |         |         | 2.49       | %      
|                                      
|                                      
|                                      
|                                      
|Efficiency ratio                       |                        |                        | 42                | %        |                |        | 29        | %          |        |       | N/A        |       |        |        | 44         | %       |         |        | 23         | %       |        |        | N/A     |         |         |         | 59         | %      
|                                      
|                                      
|                                      
|                                      
|Capital adjusted efficiency ratio      |                        |                        | 18                | %        |                |        | 91        | %          |        |       | N/A        |       |        |        | 30         | %       |         |        | 41         | %       |        |        | N/A     |         |         |         | 68         | %      
|                                      
|                                      
|                                      
|                                      
|Average FTE                            |                        |                        | 3,454             |          |                |        | 85        |            |        |       | 391        |       |        |        | 3,930      |         |         |        | 491        |         |        |        | 1,024   |         |         |         | 5,445      |        






|    |                                                                                                                                          
|--- | -----------------------------------------------------------------------------------------------------------------------------------------
|(1) | The allowance for loan losses is excluded from average loan
    balances for purposes of calculating average interest-earning
    assets.

7



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|                                       |                        |                                       |                   |         |               |           |         |          |       |       |           |        |        |          |           |         |           |        |         |          |    |    |           |        |       |       |        |       |        |        |            |         |         |        | 
|-------------------------------------- | ---------------------- | ------------------------------------- | ----------------- | ------- | ------------- | --------- | ------- | -------- | ----- | ----- | --------- | ------ | ------ | -------- | --------- | ------- | --------- | ------ | ------- | -------- | -- | -- | --------- | ------ | ----- | ----- | ------ | ----- | ------ | ------ | ---------- | ------- | ------- | ------ | 
|                                       |                        | Mortgage Banking Production Divisions |                  
|                                       |                        |                                       |                  
|                                       |                        |                                       |                   |         |               | Financial |         |          |      
|                                       |                        | Mortgage Professionals                |                   |         | Consumer      |           |         | Freedom  |       |       |          
|                                       |                        |                                       |                   |         | Direct and    |           |         | (Reverse |       |       |          
|                                       |                        | Wholesale                             |                   |         | Correspondent |           |         | Conduit  |       |       | Total     |        |        | Indirect |           |         | Mortgage) |        |         | Overhead |    |    | Total     |       
|                                       |                        |                                       |                   |         |               |           |         |          |       |       |           |        |        |          |           |         |           |        |         |          |    |    |           |       
|                                       |                        | (Dollars in thousands)                |                  
|                                      
|                                      
|                                      
|                                      
|Operating Results                      |                        |                                       |                   |         |               |           |         |          |       |       |           |        |        |          |           |         |           |        |         |          |    |    |           |        |       |       |        |       |        |        |            |        
|                                      
|                                      
|                                      
|                                      
|Net interest income                    |                        | $                                     | 11,041            |         |               | $         | 1,437   |          |       | $     | 11,521    |        |        | $        | 23,999    |         |           | $      | 1,863   |          |    | $  | 463       |        |       | $     | 312    |       |        | $      | 26,637     |        
|                                      
|                                      
|                                      
|                                      
|Provision for loan losses              |                        |                                       |                  |         |               |           |        |          |       |       |          |        |        |          |          |         |           |        |        |          |    |    |          |        |       |       |       |       |        |        |           |        
|                                      
|                                      
|                                      
|                                      
|Gain (loss) on sale of loans           |                        |                                       | 115,678           |         |               |           | 9,436   |          |       |       | 2,888     |        |        |          | 128,002   |         |           |        | 16,681  |          |    |    | 15,918    |        |       |       |       |       |        |        | 160,601    |        
|                                      
|                                      
|                                      
|                                      
|Gain (loss) on sale of securities      |                        |                                       |                  |         |               |           |        |          |       |       |          |        |        |          |          |         |           |        |        |          |    |    |          |        |       |       |       |       |        |        |           |        
|                                      
|                                      
|                                      
|                                      
|Service fee income                     |                        |                                       |                  |         |               |           |        |          |       |       | (276      | )      |        |          | (276      | )       |           |        |        |          |    |    | 2,740     |        |       |       |       |       |        |        | 2,464      |        
|                                      
|                                      
|                                      
|                                      
|Other income                           |                        |                                       | 10,232            |         |               |           | 347     |          |       |       | 51        |        |        |          | 10,630    |         |           |        | 2,018   |          |    |    | 188       |        |       |       | (1     | )     |        |        | 12,835     |        
|                                       |                        |                                       |                   |         |               |           |         |          |       |       |           |        |        |          |           |         |           |        |         |          |    |    |           |       
|                                       | Net revenues (expense) |                                       |                   | 136,951 |               |           |         | 11,220   |       |       |           | 14,184 |        |          |           | 162,355 |           |        |         | 20,562   |    |    |           | 19,309 |       |       |        | 311   |        |        |            | 202,537 |        
|                                      
|                                      
|                                      
|                                      
|                                       | Operating expenses     |                                       |                   | 39,491  |               |           |         | 2,791    |       |       |           | 3,519  |        |          |           | 45,801  |           |        |         | 20,570   |    |    |           | 12,297 |       |       |        | 6,761 |        |        |            | 85,429  |        
|                                       |                        |                                       |                   |         |               |           |         |          |       |       |           |        |        |          |           |         |           |        |         |          |    |    |           |       
|                                       |                        | Pretax income (loss)                  |                   |         | 97,460        |           |         |          | 8,429 |       |           |        | 10,665 |          |           |         | 116,554   |        |         |          | (8 | )  |           |        | 7,012 |       |        |       | (6,450 | )      |            |         | 117,108 |       
|                                       |                        |                                       |                   |         |               |           |         |          |       |       |           |        |        |          |           |         |           |        |         |          |    |    |           |       
|                                       |                        |                                       | Net income (loss) |         | $             | 58,963    |         |          | $     | 5,100 |           |        | $      | 6,452    |           |         | $         | 70,515 |         |          | $  | (5 | )         |        | $     | 4,242 |        |       | $      | (3,902 | )          |         | $       | 70,850 | 
|                                       |                        |                                       |                   |         |               |           |         |          |       |       |           |        |        |          |           |         |           |        |         |          |    |    |           |       
|Ratios                                 |                        |                                       |                   |         |               |           |         |          |       |       |           |        |        |          |           |         |           |        |         |          |    |    |           |        |       |       |        |       |        |        |            |        
|                                      
|                                      
|                                      
|                                      
|Percentage of average total assets     |                        |                                       | 14                | %       |               |           | 2       | %        |       |       | 8         | %      |        |          | 24        | %       |           |        | 2       | %        |    |    | 1         | %      |       |       |       |       |        |        | 27         | %      
|                                      
|                                      
|                                      
|                                      
|Percentage of total revenue            |                        |                                       | 51                | %       |               |           | 4       | %        |       |       | 5         | %      |        |          | 60        | %       |           |        | 8       | %        |    |    | 7         | %      |       |       |       |       |        |        | 75         | %      
|                                      
|                                      
|                                      
|                                      
|Percentage of pretax income            |                        |                                       | 90                | %       |               |           | 8       | %        |       |       | 10        | %      |        |          | 108       | %       |           |        |        |          |    |    | 6         | %      |       |       | (6     | )%    |        |        | 108        | %      
|                                      
|                                      
|                                      
|                                      
|Balance Sheet Data                     |                        |                                       |                   |         |               |           |         |          |       |       |           |        |        |          |           |         |           |        |         |          |    |    |           |        |       |       |        |       |        |        |            |        
|                                      
|                                      
|                                      
|                                      
|Average interest-earning assets(1)     |                        | $                                     | 2,658,826         |         |               | $         | 299,467 |          |       | $     | 1,418,753 |        |        | $        | 4,377,046 |         |           | $      | 301,505 |          |    | $  | 105,329   |        |       | $     |       |       |        | $      | 4,783,880  |        
|                                      
|                                      
|                                      
|                                      
|Average total assets                   |                        | $                                     | 2,666,391         |         |               | $         | 300,226 |          |       | $     | 1,422,721 |        |        | $        | 4,389,338 |         |           | $      | 311,589 |          |    | $  | 215,471   |        |       | $     | 74,774 |       |        | $      | 4,991,172  |        
|                                      
|                                      
|                                      
|                                      
|Allocated capital                      |                        | $                                     | 151,916           |         |               | $         | 16,283  |          |       | $     | 81,185    |        |        | $        | 249,384   |         |           | $      | 18,351  |          |    | $  | 72,823    |        |       | $     | 6,361  |       |        | $      | 346,919    |        
|                                      
|                                      
|                                      
|                                      
|Allocated capital/average total assets |                        |                                       | 5.70              | %       |               |           | 5.42    | %        |       |       | 5.71      | %      |        |          | 5.68      | %       |           |        | 5.89    | %        |    |    | 33.80     | %      |       |       | 8.51   | %     |        |        | 6.95       | %      
|                                      
|                                      
|                                      
|                                      
|Operating Data                         |                        |                                       |                   |         |               |           |         |          |       |       |           |        |        |          |           |         |           |        |         |          |    |    |           |        |       |       |        |       |        |        |            |        
|                                      
|                                      
|                                      
|                                      
|Loans produced                         |                        | $                                     | 6,015,773         |         |               | $         | 892,815 |          |       | $     | 2,604,513 |        |        | $        | 9,513,101 |         |           | $      | 686,308 |          |    | $  | 506,712   |        |       | $     |       |       |        | $      | 10,706,121 |        
|                                      
|                                      
|                                      
|                                      
|Operating expenses to loans produced   |                        |                                       | 0.66              | %       |               |           | 0.31    | %        |       |       | 0.14      | %      |        |          | 0.48      | %       |           |        | 3.00    | %        |    |    | 2.43      | %      |       |       | N/A    |       |        |        | 0.80       | %      
|                                      
|                                      
|                                      
|                                      
|Loans sold                             |                        |                                       | 5,408,227         |         |               |           | 612,362 |          |       |       | 1,730,133 |        |        |          | 7,750,722 |         |           |        | 624,370 |          |    |    | 520,378   |        |       |       | N/A    |       |        |        | 8,895,470  |        
|                                      
|                                      
|                                      
|                                      
|Margin on loans sold                   |                        |                                       | 2.14              | %       |               |           | 1.54    | %        |       |       | 0.17      | %      |        |          | 1.65      | %       |           |        | 2.67    | %        |    |    | 3.06      | %      |       |       | N/A    |       |        |        | 1.81       | %      
|                                      
|                                      
|                                      
|                                      
|Loans serviced for others              |                        |                                       |                  |         |               |           |        |          |       |       |          |        |        |          |          |         |           |        |        |          |    |    | 5,300,382 |        |       |       |       |       |        |        | 5,300,382  |        
|                                      
|                                      
|                                      
|                                      
|Performance Ratios                     |                        |                                       |                   |         |               |           |         |          |       |       |           |        |        |          |           |         |           |        |         |          |    |    |           |        |       |       |        |       |        |        |            |        
|                                      
|                                      
|                                      
|                                      
|Return on equity (ROE)                 |                        |                                       | 157               | %       |               |           | 127     | %        |       |       | 32        | %      |        |          | 115       | %       |           |        | 0       | %        |    |    | 24        | %      |       |       | N/A    |       |        |        | 83         | %      
|                                      
|                                      
|                                      
|                                      
|Return on assets (ROA)                 |                        |                                       | 8.97              | %       |               |           | 6.89    | %        |       |       | 1.84      | %      |        |          | 6.52      | %       |           |        | (0.01   | )%       |    |    | 7.98      | %      |       |       | N/A    |       |        |        | 5.76       | %      
|                                      
|                                      
|                                      
|                                      
|Net interest margin                    |                        |                                       | 1.68              | %       |               |           | 1.95    | %        |       |       | 3.29      | %      |        |          | 2.22      | %       |           |        | 2.51    | %        |    |    | 1.78      | %      |       |       | N/A    |       |        |        | 2.26       | %      
|                                      
|                                      
|                                      
|                                      
|Efficiency ratio                       |                        |                                       | 29                | %       |               |           | 25      | %        |       |       | 25        | %      |        |          | 28        | %       |           |        | 100     | %        |    |    | 64        | %      |       |       | N/A    |       |        |        | 42         | %      
|                                      
|                                      
|                                      
|                                      
|Capital adjusted efficiency ratio      |                        |                                       | 8                 | %       |               |           | 9       | %        |       |       | 36        | %      |        |          | 11        | %       |           |        | 22      | %        |    |    | 60        | %      |       |       | N/A    |       |        |        | 18         | %      
|                                      
|                                      
|                                      
|                                      
|Average FTE                            |                        |                                       | 1,716             |         |               |           | 139     |          |       |       | 88        |        |        |          | 1,943     |         |           |        | 654     |          |    |    | 639       |        |       |       | 218    |       |        |        | 3,454      |        






|    |                                                                                                                                          
|--- | -----------------------------------------------------------------------------------------------------------------------------------------
|(1) | The allowance for loan losses is excluded from average loan
    balances for purposes of calculating average interest-earning
    assets.

Mortgage Banking Production Divisions


|                             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|---------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Mortgage Professionals       |  | This group is responsible for the production of mortgage loans
    through relationships with mortgage brokers, mortgage bankers,
    financial institutions and homebuilders via three channels:
    wholesale, correspondent and conduit. Mortgage loans could be
    either funded by us (wholesale) or obtained as closed loans
    on a flow basis (correspondent) or in bulk purchases
    (conduit). While the wholesale and correspondent channels focus
    on producing loans via wholesale and correspondent delivery
    method, respectively, the production volume by wholesale and
    correspondent channels do not always correspond strictly with
    the table-funded (wholesale) and flow
    (correspondent) delivery method.
|Consumer Direct and Indirect |  | This channel offers consumers mortgage lending through our Web
    site, direct Internet leads developed through on line
    advertising, affinity relationships, company referral programs,
    relationships with Realtors and through our Southern California
    retail banking branches.                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Financial Freedom            |  | This group is responsible for the generation of predominantly
    reverse mortgage products with senior customers (age 62 or
    older) via a wholesale relationship sales force and a retail
    loan officer sales force.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Overhead                     |  | Items included in this column primarily represent the mortgage
    banking segments cost for productivity process improvement
    which do not directly relate to the production generated in the
    current period.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

8



---



##### Table of Contents





|                                       |                        |                        |                   |        |                |       |            |       |        |        |            |        |       |       | 
|-------------------------------------- | ---------------------- | ---------------------- | ----------------- | ------ | -------------- | ----- | ---------- | ----- | ------ | ------ | ---------- | ------ | ----- | ----- | 
|                                       |                        | Retained Assets and    |                  
|                                       |                        | Servicing Division     |                  
|                                       |                        |                        |                  
|                                       |                        | MSRs and Other         |                   |        | Loan Servicing |       |            |      
|                                       |                        | Retained Assets        |                   |        | Operations     |       |            | Total |       
|                                       |                        |                        |                   |        |                |       |            |       |       
|                                       |                        | (Dollars in thousands) |                  
|                                      
|                                      
|                                      
|                                      
|Operating Results                      |                        |                        |                   |        |                |       |            |       |        |        |            |       
|                                      
|                                      
|                                      
|                                      
|Net interest income                    |                        | $                      | 14,674            |        |                | $     | (302       | )     |        | $      | 14,372     |       
|                                      
|                                      
|                                      
|                                      
|Provision for loan losses              |                        |                        |                  |        |                |       |           |       |        |        |           |       
|                                      
|                                      
|                                      
|                                      
|Gain (loss) on sale of loans           |                        |                        | 742               |        |                |       | 13         |       |        |        | 755        |       
|                                      
|                                      
|                                      
|                                      
|Gain (loss) on sale of securities      |                        |                        | (5,984            | )      |                |       |           |       |        |        | (5,984     | )     
|                                      
|                                      
|                                      
|                                      
|Service fee income                     |                        |                        | 9,878             |        |                |       |           |       |        |        | 9,878      |       
|                                      
|                                      
|                                      
|                                      
|Other income                           |                        |                        | 711               |        |                |       | 354        |       |        |        | 1,065      |       
|                                       |                        |                        |                   |        |                |       |            |       |       
|                                       | Net revenues (expense) |                        |                   | 20,021 |                |       |            | 65    |        |        |            | 20,086 |      
|                                      
|                                      
|                                      
|                                      
|                                       | Operating expenses     |                        |                   | 5,789  |                |       |            | 5,773 |        |        |            | 11,562 |      
|                                       |                        |                        |                   |        |                |       |            |       |       
|                                       |                        | Pretax income (loss)   |                   |        | 14,232         |       |            |       | (5,708 | )      |            |        | 8,524 |      
|                                       |                        |                        |                   |        |                |       |            |       |       
|                                       |                        |                        | Net income (loss) |        | $              | 8,610 |            |       | $      | (3,453 | )          |        | $     | 5,157 | 
|                                       |                        |                        |                   |        |                |       |            |       |       
|Ratios                                 |                        |                        |                   |        |                |       |            |       |        |        |            |       
|                                      
|                                      
|                                      
|                                      
|Percentage of average total assets     |                        |                        | 9                 | %      |                |       |           |       |        |        | 9          | %     
|                                      
|                                      
|                                      
|                                      
|Percentage of total revenue            |                        |                        | 8                 | %      |                |       |           |       |        |        | 8          | %     
|                                      
|                                      
|                                      
|                                      
|Percentage of pretax income            |                        |                        | 13                | %      |                |       | (5         | )%    |        |        | 8          | %     
|                                      
|                                      
|                                      
|                                      
|Balance Sheet Data                     |                        |                        |                   |        |                |       |            |       |        |        |            |       
|                                      
|                                      
|                                      
|                                      
|Average interest-earning assets(1)     |                        | $                      | 865,899           |        |                | $     |           |       |        | $      | 865,899    |       
|                                      
|                                      
|                                      
|                                      
|Average total assets                   |                        | $                      | 1,607,308         |        |                | $     | 55,630     |       |        | $      | 1,662,938  |       
|                                      
|                                      
|                                      
|                                      
|Allocated capital                      |                        | $                      | 252,155           |        |                | $     | 5,564      |       |        | $      | 257,719    |       
|                                      
|                                      
|                                      
|                                      
|Allocated capital/average total assets |                        |                        | 15.69             | %      |                |       | 10.00      | %     |        |        | 15.50      | %     
|                                      
|                                      
|                                      
|                                      
|Operating Data                         |                        |                        |                   |        |                |       |            |       |        |        |            |       
|                                      
|                                      
|                                      
|                                      
|Loans produced via retention program   |                        | $                      | 221,769           |        |                | $     |           |       |        | $      | 221,769    |       
|                                      
|                                      
|                                      
|                                      
|Operating expenses to loans produced   |                        |                        | 2.61              | %      |                |       | N/A        |       |        |        | 5.21       | %     
|                                      
|                                      
|                                      
|                                      
|Loans sold                             |                        |                        | 198,442           |        |                |       | N/A        |       |        |        | 198,442    |       
|                                      
|                                      
|                                      
|                                      
|Margin on loans sold                   |                        |                        | 0.37              | %      |                |       | N/A        |       |        |        | 0.38       | %     
|                                      
|                                      
|                                      
|                                      
|Loans serviced for others              |                        |                        |                  |        |                |       | 49,374,742 |       |        |        | 49,374,742 |       
|                                      
|                                      
|                                      
|                                      
|Performance Ratios                     |                        |                        |                   |        |                |       |            |       |        |        |            |       
|                                      
|                                      
|                                      
|                                      
|Return on equity (ROE)                 |                        |                        | 14                | %      |                |       | N/A        |       |        |        | 8          | %     
|                                      
|                                      
|                                      
|                                      
|Return on assets (ROA)                 |                        |                        | 2.17              | %      |                |       | N/A        |       |        |        | 1.26       | %     
|                                      
|                                      
|                                      
|                                      
|Net interest margin                    |                        |                        | 6.87              | %      |                |       | N/A        |       |        |        | 6.73       | %     
|                                      
|                                      
|                                      
|                                      
|Efficiency ratio                       |                        |                        | 29                | %      |                |       | N/A        |       |        |        | 58         | %     
|                                      
|                                      
|                                      
|                                      
|Capital adjusted efficiency ratio      |                        |                        | 91                | %      |                |       | N/A        |       |        |        | 185        | %     
|                                      
|                                      
|                                      
|                                      
|Average FTE                            |                        |                        | 85                |        |                |       | 391        |       |        |        | 476        |       






|    |                                                                                                                                          
|--- | -----------------------------------------------------------------------------------------------------------------------------------------
|(1) | The allowance for loan losses is excluded from average loan
    balances for purposes of calculating average interest-earning
    assets.

|                              |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|----------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Retained Assets and Servicing |  | The retained assets and servicing division has been realigned
    with our mortgage banking segment, because we believe the
    ability to service mortgage loans is integral to obtaining the
    best execution on our mortgage loan sales. The ability to
    service mortgage loans provides the Company with additional loan
    sale channels in the secondary market such as sales to the
    government sponsored enterprises (GSEs) and
    private-label mortgage securitization transactions. The
    Companys objective is to maintain multiple outlets for
    loan sale distribution to optimize returns and reduce the risk
    of one or more channels being disrupted.
|                              |  | The retained assets and servicing division holds the following
    asset classes: (i) MSRs, interest-only strips and residual
    securities, (ii) securities held as hedges of such assets,
    including principal-only securities, agency debentures and
    U.S. Treasury bonds, (iii) loans acquired through
    clean-up calls or originated through the Companys customer
    retention programs and (iv) investment and non-investment
    grade securities.                                                                                                                                                                                                                     
|                              |  | The Company hedges the MSRs to protect the economic value of the
    MSRs. The economic value may vary from the GAAP value due to the
    lower of cost or market limitations of GAAP. The results in the
    table above reflect the economic fair value of the MSRs.
    Differences between the economic value and the GAAP value are
    eliminated in consolidation.                                                                                                                                                                                                                                                                                                                 

9



---



##### Table of Contents





|                                       |                        |                        |                   |          |           |       |           |         |        |        |              |        |       |              |           |        |           |       |         |              |       |       |         |     |      |      |        |     |      |     |            |        |        |        | 
|-------------------------------------- | ---------------------- | ---------------------- | ----------------- | -------- | --------- | ----- | --------- | ------- | ------ | ------ | ------------ | ------ | ----- | ------------ | --------- | ------ | --------- | ----- | ------- | ------------ | ----- | ----- | ------- | --- | ---- | ---- | ------ | --- | ---- | --- | ---------- | ------ | ------ | ------ | 
|                                       |                        | Thrift                 |                  
|                                       |                        |                        |                  
|                                       |                        |                        |                   | Consumer |           |       |          
|                                       |                        | Mortgage-              |                   |          | Prime SFR |       |           | Home    |        |        | Construction |        |       | Subdivision  |           |        |          
|                                       |                        | Backed                 |                   |          | Mortgage  |       |           | Equity  |        |        | and Lot      |        |       | Construction |           |        | Warehouse |       |         | Discontinued |       |       |        
|                                       |                        | Securities             |                   |          | Loans     |       |           | Lending |        |        | Loans        |        |       | Financing    |           |        | Lending   |       |         | Operations   |       |       | Total   |    
|                                       |                        |                        |                   |          |           |       |           |         |        |        |              |        |       |              |           |        |           |       |         |              |       |       |         |    
|                                       |                        | (Dollars in thousands) |                  
|                                      
|                                      
|                                      
|                                      
|Operating Results                      |                        |                        |                   |          |           |       |           |         |        |        |              |        |       |              |           |        |           |       |         |              |       |       |         |     |      |      |        |     |      |     |            |       
|                                      
|                                      
|                                      
|                                      
|Net interest income                    |                        | $                      | 9,367             |          |           | $     | 17,552    |         |        | $      | 8,772        |        |       | $            | 14,280    |        |           | $     | 9,192   |              |       | $     | 2       |     |      | $    | 886    |     |      | $   | 60,051     |       
|                                      
|                                      
|                                      
|                                      
|Provision for loan losses              |                        |                        |                  |          |           |       | (950      | )       |        |        |             |        |       |              | (475      | )      |           |       | (400    | )            |       |       |        |     |      |      | (665   | )   |      |     | (2,490     | )     
|                                      
|                                      
|                                      
|                                      
|Gain (loss) on sale of loans           |                        |                        |                  |          |           |       | 377       |         |        |        | 778          |        |       |              | 7,284     |        |           |       |        |              |       |       |        |     |      |      | (10    | )   |      |     | 8,429      |       
|                                      
|                                      
|                                      
|                                      
|Gain (loss) on sale of securities      |                        |                        | 52                |          |           |       |          |         |        |        | 612          |        |       |              | 194       |        |           |       |        |              |       |       |        |     |      |      |       |     |      |     | 858        |       
|                                      
|                                      
|                                      
|                                      
|Service fee income                     |                        |                        |                  |          |           |       |          |         |        |        | 1,170        |        |       |              |          |        |           |       |        |              |       |       |        |     |      |      |       |     |      |     | 1,170      |       
|                                      
|                                      
|                                      
|                                      
|Other income                           |                        |                        |                  |          |           |       | 753       |         |        |        | 1,425        |        |       |              | 3,924     |        |           |       | 704     |              |       |       | 6       |     |      |      | 4      |     |      |     | 6,816      |       
|                                       |                        |                        |                   |          |           |       |           |         |        |        |              |        |       |              |           |        |           |       |         |              |       |       |         |    
|                                       | Net revenues (expense) |                        |                   | 9,419    |           |       |           | 17,732  |        |        |              | 12,757 |       |              |           | 25,207 |           |       |         | 9,496        |       |       |         | 8   |      |      |        | 215 |      |     |            | 74,834 |       
|                                      
|                                      
|                                      
|                                      
|                                       | Operating expenses     |                        |                   | 201      |           |       |           | 531     |        |        |              | 2,771  |       |              |           | 10,469 |           |       |         | 2,608        |       |       |         | 564 |      |      |        | 347 |      |     |            | 17,491 |       
|                                       |                        |                        |                   |          |           |       |           |         |        |        |              |        |       |              |           |        |           |       |         |              |       |       |         |    
|                                       |                        | Pretax income (loss)   |                   |          | 9,218     |       |           |         | 17,201 |        |              |        | 9,986 |              |           |        | 14,738    |       |         |              | 6,888 |       |         |     | (556 | )    |        |     | (132 | )   |            |        | 57,343 |       
|                                       |                        |                        |                   |          |           |       |           |         |        |        |              |        |       |              |           |        |           |       |         |              |       |       |         |    
|                                       |                        |                        | Net income (loss) |          | $         | 5,577 |           |         | $      | 10,407 |              |        | $     | 6,042        |           |        | $         | 8,916 |         |              | $     | 4,167 |         |     | $    | (336 | )      |     | $    | (80 | )          |        | $      | 34,693 | 
|                                       |                        |                        |                   |          |           |       |           |         |        |        |              |        |       |              |           |        |           |       |         |              |       |       |         |    
|Ratios                                 |                        |                        |                   |          |           |       |           |         |        |        |              |        |       |              |           |        |           |       |         |              |       |       |         |     |      |      |        |     |      |     |            |       
|                                      
|                                      
|                                      
|                                      
|Percentage of average total assets     |                        |                        | 12                | %        |           |       | 25        | %       |        |        | 8            | %      |       |              | 10        | %      |           |       | 4       | %            |       |       |        |     |      |      |       |     |      |     | 59         | %     
|                                      
|                                      
|                                      
|                                      
|Percentage of total revenue            |                        |                        | 4                 | %        |           |       | 7         | %       |        |        | 5            | %      |       |              | 9         | %      |           |       | 4       | %            |       |       |        |     |      |      |       |     |      |     | 29         | %     
|                                      
|                                      
|                                      
|                                      
|Percentage of pretax income            |                        |                        | 9                 | %        |           |       | 16        | %       |        |        | 9            | %      |       |              | 14        | %      |           |       | 6       | %            |       |       | (1      | )%  |      |      |       |     |      |     | 53         | %     
|                                      
|                                      
|                                      
|                                      
|Balance Sheet Data                     |                        |                        |                   |          |           |       |           |         |        |        |              |        |       |              |           |        |           |       |         |              |       |       |         |     |      |      |        |     |      |     |            |       
|                                      
|                                      
|                                      
|                                      
|Average interest-earning assets(1)     |                        | $                      | 2,177,781         |          |           | $     | 4,649,775 |         |        | $      | 1,548,724    |        |       | $            | 1,882,041 |        |           | $     | 671,861 |              |       | $     | 147     |     |      | $    | 52,569 |     |      | $   | 10,982,898 |       
|                                      
|                                      
|                                      
|                                      
|Average total assets                   |                        | $                      | 2,192,673         |          |           | $     | 4,656,208 |         |        | $      | 1,562,400    |        |       | $            | 1,883,213 |        |           | $     | 669,272 |              |       | $     | 305     |     |      | $    | 45,808 |     |      | $   | 11,009,879 |       
|                                      
|                                      
|                                      
|                                      
|Allocated capital                      |                        | $                      | 46,973            |          |           | $     | 222,813   |         |        | $      | 111,647      |        |       | $            | 104,619   |        |           | $     | 73,457  |              |       | $     | 16      |     |      | $    | 4,681  |     |      | $   | 564,206    |       
|                                      
|                                      
|                                      
|                                      
|Allocated capital/average total assets |                        |                        | 2.14              | %        |           |       | 4.79      | %       |        |        | 7.15         | %      |       |              | 5.56      | %      |           |       | 10.98   | %            |       |       | 5.25    | %   |      |      | 10.22  | %   |      |     | 5.12       | %     
|                                      
|                                      
|                                      
|                                      
|Operating Data                         |                        |                        |                   |          |           |       |           |         |        |        |              |        |       |              |           |        |           |       |         |              |       |       |         |     |      |      |        |     |      |     |            |       
|                                      
|                                      
|                                      
|                                      
|Loans produced                         |                        | $                      |                  |          |           | $     |          |         |        | $      | 42,107       |        |       | $            | 631,018   |        |           | $     | 353,489 |              |       | $     | 20,000  |     |      | $    |       |     |      | $   | 1,046,614  |       
|                                      
|                                      
|                                      
|                                      
|Operating expenses to loans produced   |                        |                        | N/A               |          |           |       | N/A       |         |        |        | 6.58         | %      |       |              | 1.66      | %      |           |       | 0.74    | %            |       |       | 2.82    | %   |      |      | N/A    |     |      |     | 1.67       | %     
|                                      
|                                      
|                                      
|                                      
|Loans sold                             |                        |                        |                  |          |           |       | 59,088    |         |        |        | 161,726      |        |       |              | 339,026   |        |           |       |        |              |       |       |        |     |      |      |       |     |      |     | 559,840    |       
|                                      
|                                      
|                                      
|                                      
|Margins on loans sold                  |                        |                        | N/A               |          |           |       | 0.64      | %       |        |        | 0.48         | %      |       |              | 2.15      | %      |           |       | N/A     |              |       |       | N/A     |     |      |      | N/A    |     |      |     | 1.51       | %     
|                                      
|                                      
|                                      
|                                      
|Loans serviced for others              |                        |                        |                  |          |           |       |          |         |        |        | 1,319,515    |        |       |              |          |        |           |       |        |              |       |       |        |     |      |      |       |     |      |     | 1,319,515  |       
|                                      
|                                      
|                                      
|                                      
|Performance Ratios                     |                        |                        |                   |          |           |       |           |         |        |        |              |        |       |              |           |        |           |       |         |              |       |       |         |     |      |      |        |     |      |     |            |       
|                                      
|                                      
|                                      
|                                      
|Return on equity (ROE)                 |                        |                        | 48                | %        |           |       | 19        | %       |        |        | 22           | %      |       |              | 35        | %      |           |       | 23      | %            |       |       | (8,517  | )%  |      |      | (7     | )%  |      |     | 25         | %     
|                                      
|                                      
|                                      
|                                      
|Return on assets (ROA)                 |                        |                        | 1.03              | %        |           |       | 0.91      | %       |        |        | 1.57         | %      |       |              | 1.92      | %      |           |       | 2.53    | %            |       |       | (446.78 | )%  |      |      | (0.71  | )%  |      |     | 1.28       | %     
|                                      
|                                      
|                                      
|                                      
|Net interest margin                    |                        |                        | 1.74              | %        |           |       | 1.53      | %       |        |        | 2.30         | %      |       |              | 3.08      | %      |           |       | 5.55    | %            |       |       | 5.52    | %   |      |      | 6.84   | %   |      |     | 2.22       | %     
|                                      
|                                      
|                                      
|                                      
|Efficiency ratio                       |                        |                        | 2                 | %        |           |       | 3         | %       |        |        | 22           | %      |       |              | 41        | %      |           |       | 26      | %            |       |       | 7,050   | %   |      |      | 39     | %   |      |     | 23         | %     
|                                      
|                                      
|                                      
|                                      
|Capital adjusted efficiency ratio      |                        |                        | 3                 | %        |           |       | 8         | %       |        |        | 48           | %      |       |              | 42        | %      |           |       | 49      | %            |       |       | 3,525   | %   |      |      | 52     | %   |      |     | 41         | %     
|                                      
|                                      
|                                      
|                                      
|Average FTE                            |                        |                        | 5                 |          |           |       | 10        |         |        |        | 27           |        |       |              | 336       |        |           |       | 85      |              |       |       | 15      |     |      |      | 13     |     |      |     | 491        |       






|    |                                                                                                                                          
|--- | -----------------------------------------------------------------------------------------------------------------------------------------
|(1) | The allowance for loan losses is excluded from average loan
    balances for purposes of calculating average interest-earning
    assets.

|                                    |  |                                                                                                                                                                                                                                                                                                                                     
|----------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Mortgage-backed securities (MBS)  |  | Assets include AAA-rated agency and private label MBS.                                                                                                                                                                                                                                                                              
|Prime SFR Mortgage Loans            |  | Assets include all single-family residential mortgage loans held
    for investment other than discontinued products.                                                                                                                                                                                                               
|Home Equity Lending                 |  | This activity focuses on the production of home equity lines of
    credit (HELOCs) and closed-end seconds through marketing
    strategies focused on direct interaction with consumers.                                                                                                                                           
|Consumer Construction and Lot Loans |  | This activity provides construction-to-permanent and lot loan
    financing to individuals who are in the process of building
    their own homes. This channel leverages our relationship sales
    force in the mortgage professional channel to produce these
    products in addition to programs offered directly to consumers.
|Subdivision Construction Financing  |  | This division offers financing to subdivision developers.                                                                                                                                                                                                                                                                           
|Warehouse Lending                   |  | Through this division, we reentered the warehouse lending
    business in the first quarter of 2005, providing short-term
    revolving warehouse lending facilities to small-to-medium size
    mortgage bankers and brokers from the time the loan is closed
    till the loan is sold.                                           
|Discontinued Operations             |  | Home improvement and manufactured housing loans.                                                                                                                                                                                                                                                                                    

10



---



##### Table of Contents





|                                       |                        |                        |                   |           |         |         |            |          |         |        |           |       |        |          |         |     |         |    |         |        |         |         |            |         |         |        | 
|-------------------------------------- | ---------------------- | ---------------------- | ----------------- | --------- | ------- | ------- | ---------- | -------- | ------- | ------ | --------- | ----- | ------ | -------- | ------- | --- | ------- | -- | ------- | ------ | ------- | ------- | ---------- | ------- | ------- | ------ | 
|                                       |                        |                        |                   | Total     |         |         |            |          |         |        |           |       |       
|                                       |                        |                        |                   | Operating |         |         |            |          |         |        | Corporate |       |        | Total    |        
|                                       |                        | Eliminations           |                   |           | Results |         |            | Deposits |         |        | Treasury  |       |        | Overhead |         |     | Company |   
|                                       |                        |                        |                   |           |         |         |            |          |         |        |           |       |        |          |         |     |         |   
|                                       |                        | (Dollars in thousands) |                  
|                                      
|                                      
|                                      
|                                      
|Operating Results                      |                        |                        |                   |           |         |         |            |          |         |        |           |       |        |          |         |     |         |    |         |        |         |         |            |        
|                                      
|                                      
|                                      
|                                      
|Net interest income                    |                        | $                      | 5,656             |           |         | $       | 106,716    |          |         | $      |          |       |        | $        | 41      |     |         | $  | (2,337  | )      |         | $       | 104,420    |        
|                                      
|                                      
|                                      
|                                      
|Provision for loan losses              |                        |                        |                  |           |         |         | (2,490     | )        |         |        |          |       |        |          |        |     |         |    |        |        |         |         | (2,490     | )      
|                                      
|                                      
|                                      
|                                      
|Gain (loss) on sale of loans           |                        |                        | (25,463           | )         |         |         | 144,322    |          |         |        |          |       |        |          |        |     |         |    |        |        |         |         | 144,322    |        
|                                      
|                                      
|                                      
|                                      
|Gain (loss) on sale of securities      |                        |                        | 480               |           |         |         | (4,646     | )        |         |        |          |       |        |          |        |     |         |    |        |        |         |         | (4,646     | )      
|                                      
|                                      
|                                      
|                                      
|Service fee income                     |                        |                        | (9,094            | )         |         |         | 4,418      |          |         |        |          |       |        |          |        |     |         |    |        |        |         |         | 4,418      |        
|                                      
|                                      
|                                      
|                                      
|Other income                           |                        |                        | (3                | )         |         |         | 20,713     |          |         |        | 504       |       |        |          | 128     |     |         |    | 733     |        |         |         | 22,078     |        
|                                       |                        |                        |                   |           |         |         |            |          |         |        |           |       |        |          |         |     |         |   
|                                       | Net revenues (expense) |                        |                   | (28,424   | )       |         |            | 269,033  |         |        |           | 504   |        |          |         | 169 |         |    |         | (1,604 | )       |         |            | 268,102 |        
|                                      
|                                      
|                                      
|                                      
|                                       | Operating expenses     |                        |                   | 1,694     |         |         |            | 116,176  |         |        |           | 4,836 |        |          |         | 111 |         |    |         | 38,575 |         |         |            | 159,698 |        
|                                       |                        |                        |                   |           |         |         |            |          |         |        |           |       |        |          |         |     |         |   
|                                       |                        | Pretax income (loss)   |                   |           | (30,118 | )       |            |          | 152,857 |        |           |       | (4,332 | )        |         |     | 58      |    |         |        | (40,179 | )       |            |         | 108,404 |       
|                                       |                        |                        |                   |           |         |         |            |          |         |        |           |       |        |          |         |     |         |   
|                                       |                        |                        | Net income (loss) |           | $       | (18,221 | )          |          | $       | 92,479 |           |       | $      | (2,621   | )       |     | $       | 35 |         |        | $       | (24,417 | )          |         | $       | 65,476 | 
|                                       |                        |                        |                   |           |         |         |            |          |         |        |           |       |        |          |         |     |         |   
|Ratios                                 |                        |                        |                   |           |         |         |            |          |         |        |           |       |        |          |         |     |         |    |         |        |         |         |            |        
|                                      
|                                      
|                                      
|                                      
|Percentage of average total assets     |                        |                        |                  |           |         |         | 95         | %        |         |        |          |       |        |          | 4       | %   |         |    | 1       | %      |         |         | 100        | %      
|                                      
|                                      
|                                      
|                                      
|Percentage of total revenue            |                        |                        | (11               | )%        |         |         | 101        | %        |         |        |          |       |        |          |        |     |         |    | (1      | )%     |         |         | 100        | %      
|                                      
|                                      
|                                      
|                                      
|Percentage of pretax income            |                        |                        | (28               | )%        |         |         | 141        | %        |         |        | (4        | )%    |        |          |        |     |         |    | (37     | )%     |         |         | 100        | %      
|                                      
|                                      
|                                      
|                                      
|Balance Sheet Data                     |                        |                        |                   |           |         |         |            |          |         |        |           |       |        |          |         |     |         |    |         |        |         |         |            |        
|                                      
|                                      
|                                      
|                                      
|Average interest-earning assets(1)     |                        | $                      |                  |           |         | $       | 16,632,677 |          |         | $      | 180       |       |        | $        | 412,794 |     |         | $  | (6,584  | )      |         | $       | 17,039,067 |        
|                                      
|                                      
|                                      
|                                      
|Average total assets                   |                        | $                      |                  |           |         | $       | 17,663,989 |          |         | $      | 26,118    |       |        | $        | 678,541 |     |         | $  | 199,545 |        |         | $       | 18,568,193 |        
|                                      
|                                      
|                                      
|                                      
|Allocated capital                      |                        | $                      |                  |           |         | $       | 1,168,844  |          |         | $      | 1,306     |       |        | $        | 38,177  |     |         | $  | 45,221  |        |         | $       | 1,253,548  |        
|                                      
|                                      
|                                      
|                                      
|Allocated capital/average total assets |                        |                        | N/A               |           |         |         | 6.62       | %        |         |        | 5.00      | %     |        |          | 5.63    | %   |         |    | 22.66   | %      |         |         | 6.75       | %      
|                                      
|                                      
|                                      
|                                      
|Operating Data                         |                        |                        |                   |           |         |         |            |          |         |        |           |       |        |          |         |     |         |    |         |        |         |         |            |        
|                                      
|                                      
|                                      
|                                      
|Loans produced                         |                        | $                      |                  |           |         | $       | 11,974,504 |          |         | $      |          |       |        | $        |        |     |         | $  |        |        |         | $       | 11,974,504 |        
|                                      
|                                      
|                                      
|                                      
|Operating expense to loans produced    |                        |                        | N/A               |           |         |         | 0.97       | %        |         |        | N/A       |       |        |          | N/A     |     |         |    | N/A     |        |         |         | 1.33       | %      
|                                      
|                                      
|                                      
|                                      
|Loans sold                             |                        |                        | N/A               |           |         |         | 9,653,752  |          |         |        | N/A       |       |        |          | N/A     |     |         |    | N/A     |        |         |         | 9,653,752  |        
|                                      
|                                      
|                                      
|                                      
|Margin on loans sold                   |                        |                        | N/A               |           |         |         | 1.49       | %        |         |        | N/A       |       |        |          | N/A     |     |         |    | N/A     |        |         |         | 1.49       | %      
|                                      
|                                      
|                                      
|                                      
|Loans serviced for others              |                        |                        | N/A               |           |         |         | 55,994,639 |          |         |        | N/A       |       |        |          | N/A     |     |         |    | N/A     |        |         |         | 55,994,639 |        
|                                      
|                                      
|                                      
|                                      
|Performance Ratios                     |                        |                        |                   |           |         |         |            |          |         |        |           |       |        |          |         |     |         |    |         |        |         |         |            |        
|                                      
|                                      
|                                      
|                                      
|Return on equity (ROE)                 |                        |                        | N/A               |           |         |         | 32         | %        |         |        | N/A       |       |        |          | N/A     |     |         |    | N/A     |        |         |         | 21         | %      
|                                      
|                                      
|                                      
|                                      
|Return on assets (ROA)                 |                        |                        | N/A               |           |         |         | 2.12       | %        |         |        | N/A       |       |        |          | N/A     |     |         |    | N/A     |        |         |         | 1.43       | %      
|                                      
|                                      
|                                      
|                                      
|Net interest margin                    |                        |                        | N/A               |           |         |         | 2.60       | %        |         |        | N/A       |       |        |          | N/A     |     |         |    | N/A     |        |         |         | 2.49       | %      
|                                      
|                                      
|                                      
|                                      
|Efficiency ratio                       |                        |                        | N/A               |           |         |         | 43         | %        |         |        | N/A       |       |        |          | N/A     |     |         |    | N/A     |        |         |         | 59         | %      
|                                      
|                                      
|                                      
|                                      
|Capital adjusted efficiency ratio      |                        |                        | N/A               |           |         |         | 46         | %        |         |        | N/A       |       |        |          | N/A     |     |         |    | N/A     |        |         |         | 68         | %      
|                                      
|                                      
|                                      
|                                      
|Average FTE                            |                        |                        |                  |           |         |         | 4,421      |          |         |        | 183       |       |        |          | 28      |     |         |    | 813     |        |         |         | 5,445      |        






|    |                                                                                                                                          
|--- | -----------------------------------------------------------------------------------------------------------------------------------------
|(1) | The allowance for loan losses is excluded from average loan
    balances for purposes of calculating average interest-earning
    assets.

|                                  |                        |                        |         |         |              |   |         |         |   |   |         |         |  
|--------------------------------- | ---------------------- | ---------------------- | ------- | ------- | ------------ | - | ------- | ------- | - | - | ------- | ------- | -
|                                  |                        | Eliminations by Type   |        
|                                  |                        |                        |        
|                                  |                        | Intercompany           |         |         | MSR Economic |   |         |        
|                                  |                        | Loan Sales             |         |         | Value        |   |         | Total   |  
|                                  |                        |                        |         |         |              |   |         |         |  
|                                  |                        | (Dollars in thousands) |        
|                                 
|                                 
|                                 
|                                 
|Net interest income               |                        | $                      | 5,656   |         |              | $ |        |         |   | $ | 5,656   |        
|                                 
|                                 
|                                 
|                                 
|Gain (loss) on sale of loans      |                        |                        | (25,463 | )       |              |   |        |         |   |   | (25,463 | )      
|                                 
|                                 
|                                 
|                                 
|Gain (loss) on sale of securities |                        |                        | 480     |         |              |   |        |         |   |   | 480     |        
|                                 
|                                 
|                                 
|                                 
|Service fee income                |                        |                        | 1,008   |         |              |   | (10,102 | )       |   |   | (9,094  | )      
|                                 
|                                 
|                                 
|                                 
|Other income                      |                        |                        | (3      | )       |              |   |        |         |   |   | (3      | )      
|                                  |                        |                        |         |         |              |   |         |         |  
|                                  | Net revenues (expense) |                        |         | (18,322 | )            |   |         | (10,102 | ) |   |         | (28,424 | )
|                                  |                        |                        |         |         |              |   |         |         |  



11



---



##### Table of Contents





|                                  |  |                        |         |          |            |   |        |       |  |   |         |   |  |       |        |   |            |   |         |    |  |   |         |  
|--------------------------------- |  | ---------------------- | ------- | -------- | ---------- | - | ------ | ----- |  | - | ------- | - |  | ----- | ------ | - | ---------- | - | ------- | -- |  | - | ------- | -
|                                  |  | Mortgage Banking       |         |          |            |   |        |       | 
|                                  |  |                        |         |          |            |   |        |       | 
|                                  |  |                        |         | Retained |            |   |        |       |  |   |         |   | 
|                                  |  | Production             |         |          | Assets and |   |        |       |  |   |         |   |  | Total |       
|                                  |  | Divisions              |         |          | Servicing  |   |        | Total |  |   | Thrift  |   |  | Other |        |   | Company(1) |  
|                                  |  |                        |         |          |            |   |        |       |  |   |         |   |  |       |        |   |            |  
|                                  |  | (Dollars in thousands) |        
|                                 
|                                 
|                                 
|                                 
|Net Revenues                      |  |                        |         |          |            |   |        |       |  |   |         |   |  |       |        |   |            |   |         |    |  |   |         |  
|                                 
|                                 
|                                 
|                                 
|Q1 05                             |  | $                      | 202,537 |          |            | $ | 20,086 |       |  | $ | 222,623 |   |  | $     | 74,834 |   |            | $ | (29,355 | )  |  | $ | 268,102 |  
|                                 
|                                 
|                                 
|                                 
|Q4 04                             |  |                        | 156,721 |          |            |   | 17,088 |       |  |   | 173,809 |   |  |       | 72,851 |   |            |   | 221     |    |  |   | 246,881 |  
|                                 
|                                 
|                                 
|                                 
|Annualized Percent Change         |  |                        | 117     | %        |            |   | 70     | %     |  |   | 112     | % |  |       | 11     | % |            |   | (53,531 | )% |  |   | 34      | %
|                                 
|                                 
|                                 
|                                 
|Q1 04                             |  |                        | 117,343 |          |            |   | 12,924 |       |  |   | 130,267 |   |  |       | 61,759 |   |            |   | (7,334  | )  |  |   | 184,692 |  
|                                 
|                                 
|                                 
|                                 
|Percent Change                    |  |                        | 73      | %        |            |   | 55     | %     |  |   | 71      | % |  |       | 21     | % |            |   | (300    | )% |  |   | 45      | %
|                                 
|                                 
|                                 
|                                 
|Net Income                        |  |                        |         |          |            |   |        |       |  |   |         |   |  |       |        |   |            |   |         |    |  |   |         |  
|                                 
|                                 
|                                 
|                                 
|Q1 05                             |  |                        | 70,850  |          |            |   | 5,157  |       |  |   | 76,007  |   |  |       | 34,693 |   |            |   | (45,224 | )  |  |   | 65,476  |  
|                                 
|                                 
|                                 
|                                 
|Q4 04                             |  |                        | 41,850  |          |            |   | 3,316  |       |  |   | 45,166  |   |  |       | 33,275 |   |            |   | (20,057 | )  |  |   | 58,384  |  
|                                 
|                                 
|                                 
|                                 
|Annualized Percent Change         |  |                        | 277     | %        |            |   | 222    | %     |  |   | 273     | % |  |       | 17     | % |            |   | (502    | )% |  |   | 49      | %
|                                 
|                                 
|                                 
|                                 
|Q1 04                             |  |                        | 33,470  |          |            |   | 2,030  |       |  |   | 35,500  |   |  |       | 28,680 |   |            |   | (22,250 | )  |  |   | 41,930  |  
|                                 
|                                 
|                                 
|                                 
|Percent Change                    |  |                        | 112     | %        |            |   | 154    | %     |  |   | 114     | % |  |       | 21     | % |            |   | (103    | )% |  |   | 56      | %
|                                 
|                                 
|                                 
|                                 
|Performance Ratios                |  |                        |         |          |            |   |        |       |  |   |         |   |  |       |        |   |            |   |         |    |  |   |         |  
|Q1 05                             |  |                        |         |          |            |   |        |       |  |   |         |   |  |       |        |   |            |   |         |    |  |   |         |  
|                                 
|                                 
|                                 
|                                 
|Return on equity (ROE)            |  |                        | 83      | %        |            |   | 8      | %     |  |   | 51      | % |  |       | 25     | % |            |   | N/A     |    |  |   | 21      | %
|                                 
|                                 
|                                 
|                                 
|Return on assets (ROA)            |  |                        | 5.76    | %        |            |   | 1.26   | %     |  |   | 4.63    | % |  |       | 1.28   | % |            |   | N/A     |    |  |   | 1.43    | %
|                                 
|                                 
|                                 
|                                 
|Net interest margin               |  |                        | 2.26    | %        |            |   | 6.73   | %     |  |   | 2.94    | % |  |       | 2.22   | % |            |   | N/A     |    |  |   | 2.49    | %
|                                 
|                                 
|                                 
|                                 
|Efficiency ratio                  |  |                        | 42      | %        |            |   | 58     | %     |  |   | 44      | % |  |       | 23     | % |            |   | N/A     |    |  |   | 59      | %
|                                 
|                                 
|                                 
|                                 
|Capital adjusted efficiency ratio |  |                        | 18      | %        |            |   | 185    | %     |  |   | 30      | % |  |       | 41     | % |            |   | N/A     |    |  |   | 68      | %
|                                 
|                                 
|                                 
|                                 
|Average FTE                       |  |                        | 3,454   |          |            |   | 476    |       |  |   | 3,930   |   |  |       | 491    |   |            |   | 1,024   |    |  |   | 5,445   |  
|Q4 04                             |  |                        |         |          |            |   |        |       |  |   |         |   |  |       |        |   |            |   |         |    |  |   |         |  
|                                 
|                                 
|                                 
|                                 
|Return on equity (ROE)            |  |                        | 44      | %        |            |   | 5      | %     |  |   | 28      | % |  |       | 23     | % |            |   | N/A     |    |  |   | 19      | %
|                                 
|                                 
|                                 
|                                 
|Return on assets (ROA)            |  |                        | 3.45    | %        |            |   | 0.78   | %     |  |   | 2.76    | % |  |       | 1.18   | % |            |   | N/A     |    |  |   | 1.25    | %
|                                 
|                                 
|                                 
|                                 
|Net interest margin               |  |                        | 2.62    | %        |            |   | 7.19   | %     |  |   | 3.41    | % |  |       | 2.05   | % |            |   | N/A     |    |  |   | 2.40    | %
|                                 
|                                 
|                                 
|                                 
|Efficiency ratio                  |  |                        | 56      | %        |            |   | 68     | %     |  |   | 57      | % |  |       | 24     | % |            |   | N/A     |    |  |   | 60      | %
|                                 
|                                 
|                                 
|                                 
|Capital adjusted efficiency ratio |  |                        | 33      | %        |            |   | 264    | %     |  |   | 53      | % |  |       | 45     | % |            |   | N/A     |    |  |   | 74      | %
|                                 
|                                 
|                                 
|                                 
|Average FTE                       |  |                        | 3,419   |          |            |   | 471    |       |  |   | 3,890   |   |  |       | 434    |   |            |   | 1,011   |    |  |   | 5,335   |  
|Q1 04                             |  |                        |         |          |            |   |        |       |  |   |         |   |  |       |        |   |            |   |         |    |  |   |         |  
|                                 
|                                 
|                                 
|                                 
|Return on equity (ROE)            |  |                        | 78      | %        |            |   | 4      | %     |  |   | 38      | % |  |       | 24     | % |            |   | N/A     |    |  |   | 16      | %
|                                 
|                                 
|                                 
|                                 
|Return on assets (ROA)            |  |                        | 4.83    | %        |            |   | 0.50   | %     |  |   | 3.24    | % |  |       | 1.22   | % |            |   | N/A     |    |  |   | 1.16    | %
|                                 
|                                 
|                                 
|                                 
|Net interest margin               |  |                        | 4.53    | %        |            |   | 6.05   | %     |  |   | 4.94    | % |  |       | 2.29   | % |            |   | N/A     |    |  |   | 2.82    | %
|                                 
|                                 
|                                 
|                                 
|Efficiency ratio                  |  |                        | 53      | %        |            |   | 74     | %     |  |   | 55      | % |  |       | 23     | % |            |   | N/A     |    |  |   | 62      | %
|                                 
|                                 
|                                 
|                                 
|Capital adjusted efficiency ratio |  |                        | 20      | %        |            |   | 288    | %     |  |   | 39      | % |  |       | 43     | % |            |   | N/A     |    |  |   | 87      | %
|                                 
|                                 
|                                 
|                                 
|Average FTE                       |  |                        | 2,294   |          |            |   | 437    |       |  |   | 2,731   |   |  |       | 401    |   |            |   | 789     |    |  |   | 3,921   |  






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | For the fourth quarter of 2004, net revenues, net income and
    performance ratios of the total Company are presented on a pro
    forma basis. The pro forma results excluded the
    $2.2 million SAB No. 105 impact and the
    $1.9 million purchase accounting adjustment to the gain on
    sale of loans. Please refer to the Highlights for the
    Quarter section on page 3 for full reconciliation
    between pro forma and GAAP results for the quarter ended
    December 31, 2004.

12



---



##### Table of Contents





|                                  |  |                                       |         |           |            |   |         |           |  |   |          |    |  |       |        |   |  |   |         |  
|--------------------------------- |  | ------------------------------------- | ------- | --------- | ---------- | - | ------- | --------- |  | - | -------- | -- |  | ----- | ------ | - |  | - | ------- | -
|                                  |  | Mortgage Banking Production Divisions |         |           |           
|                                  |  |                                       |         |           |           
|                                  |  |                                       |         | Financial |            |   |         |           | 
|                                  |  |                                       |         | Consumer  |            |   | Freedom |           |  |   |          |   
|                                  |  | Mortgage                              |         |           | Direct and |   |         | (Reverse  |  |   |          |    | 
|                                  |  | Professionals                         |         |           | Indirect   |   |         | Mortgage) |  |   | Overhead |    |  | Total |       
|                                  |  |                                       |         |           |            |   |         |           |  |   |          |    |  |       |       
|                                  |  | (Dollars in thousands)                |        
|                                 
|                                 
|                                 
|                                 
|Net Revenues                      |  |                                       |         |           |            |   |         |           |  |   |          |    |  |       |        |   |  |   |         |  
|                                 
|                                 
|                                 
|                                 
|Q1 05                             |  | $                                     | 162,355 |           |            | $ | 20,562  |           |  | $ | 19,309   |    |  | $     | 311    |   |  | $ | 202,537 |  
|                                 
|                                 
|                                 
|                                 
|Q4 04                             |  |                                       | 114,204 |           |            |   | 20,927  |           |  |   | 21,590   |    |  |       |       |   |  |   | 156,721 |  
|                                 
|                                 
|                                 
|                                 
|Annualized Percent Change         |  |                                       | 169     | %         |            |   | (7      | )%        |  |   | (42      | )% |  |       | NA     |   |  |   | 117     | %
|                                 
|                                 
|                                 
|                                 
|Q1 04                             |  |                                       | 85,704  |           |            |   | 31,639  |           |  |   |         |    |  |       |       |   |  |   | 117,343 |  
|                                 
|                                 
|                                 
|                                 
|Percent Change                    |  |                                       | 89      | %         |            |   | (35     | )%        |  |   | NA       |    |  |       | NA     |   |  |   | 73      | %
|                                 
|                                 
|                                 
|                                 
|Net Income                        |  |                                       |         |           |            |   |         |           |  |   |          |    |  |       |        |   |  |   |         |  
|                                 
|                                 
|                                 
|                                 
|Q1 05                             |  |                                       | 70,515  |           |            |   | (5      | )         |  |   | 4,242    |    |  |       | (3,902 | ) |  |   | 70,850  |  
|                                 
|                                 
|                                 
|                                 
|Q4 04                             |  |                                       | 41,851  |           |            |   | (309    | )         |  |   | 5,418    |    |  |       | (5,110 | ) |  |   | 41,850  |  
|                                 
|                                 
|                                 
|                                 
|Annualized Percent Change         |  |                                       | 274     | %         |            |   | 394     | %         |  |   | (87      | )% |  |       | 95     | % |  |   | 277     | %
|                                 
|                                 
|                                 
|                                 
|Q1 04                             |  |                                       | 32,457  |           |            |   | 5,452   |           |  |   |         |    |  |       | (4,439 | ) |  |   | 33,470  |  
|                                 
|                                 
|                                 
|                                 
|Percent Change                    |  |                                       | 117     | %         |            |   | (100    | )%        |  |   | NA       |    |  |       | 12     | % |  |   | 112     | %
|                                 
|                                 
|                                 
|                                 
|Performance Ratios                |  |                                       |         |           |            |   |         |           |  |   |          |    |  |       |        |   |  |   |         |  
|Q1 05                             |  |                                       |         |           |            |   |         |           |  |   |          |    |  |       |        |   |  |   |         |  
|                                 
|                                 
|                                 
|                                 
|Return on equity (ROE)            |  |                                       | 115     | %         |            |   |        |           |  |   | 24       | %  |  |       | N/A    |   |  |   | 83      | %
|                                 
|                                 
|                                 
|                                 
|Return on assets (ROA)            |  |                                       | 6.52    | %         |            |   | (0.01   | )%        |  |   | 7.98     | %  |  |       | N/A    |   |  |   | 5.76    | %
|                                 
|                                 
|                                 
|                                 
|Net interest margin               |  |                                       | 2.22    | %         |            |   | 2.51    | %         |  |   | 1.78     | %  |  |       | N/A    |   |  |   | 2.26    | %
|                                 
|                                 
|                                 
|                                 
|Efficiency ratio                  |  |                                       | 28      | %         |            |   | 100     | %         |  |   | 64       | %  |  |       | N/A    |   |  |   | 42      | %
|                                 
|                                 
|                                 
|                                 
|Capital adjusted efficiency ratio |  |                                       | 11      | %         |            |   | 22      | %         |  |   | 60       | %  |  |       | N/A    |   |  |   | 18      | %
|                                 
|                                 
|                                 
|                                 
|Average FTE                       |  |                                       | 1,943   |           |            |   | 654     |           |  |   | 639      |    |  |       | 218    |   |  |   | 3,454   |  
|Q4 04                             |  |                                       |         |           |            |   |         |           |  |   |          |    |  |       |        |   |  |   |         |  
|                                 
|                                 
|                                 
|                                 
|Return on equity (ROE)            |  |                                       | 60      | %         |            |   | (4      | )%        |  |   | 32       | %  |  |       | N/A    |   |  |   | 44      | %
|                                 
|                                 
|                                 
|                                 
|Return on assets (ROA)            |  |                                       | 3.96    | %         |            |   | (0.32   | )%        |  |   | 9.26     | %  |  |       | N/A    |   |  |   | 3.45    | %
|                                 
|                                 
|                                 
|                                 
|Net interest margin               |  |                                       | 2.60    | %         |            |   | 3.28    | %         |  |   | 1.23     | %  |  |       | N/A    |   |  |   | 2.62    | %
|                                 
|                                 
|                                 
|                                 
|Efficiency ratio                  |  |                                       | 39      | %         |            |   | 102     | %         |  |   | 59       | %  |  |       | N/A    |   |  |   | 56      | %
|                                 
|                                 
|                                 
|                                 
|Capital adjusted efficiency ratio |  |                                       | 24      | %         |            |   | 36      | %         |  |   | 46       | %  |  |       | N/A    |   |  |   | 33      | %
|                                 
|                                 
|                                 
|                                 
|Average FTE                       |  |                                       | 1,910   |           |            |   | 721     |           |  |   | 578      |    |  |       | 210    |   |  |   | 3,419   |  
|Q1 04                             |  |                                       |         |           |            |   |         |           |  |   |          |    |  |       |        |   |  |   |         |  
|                                 
|                                 
|                                 
|                                 
|Return on equity (ROE)            |  |                                       | 91      | %         |            |   | 72      | %         |  |   | N/A      |    |  |       | N/A    |   |  |   | 78      | %
|                                 
|                                 
|                                 
|                                 
|Return on assets (ROA)            |  |                                       | 5.67    | %         |            |   | 4.51    | %         |  |   | N/A      |    |  |       | N/A    |   |  |   | 4.83    | %
|                                 
|                                 
|                                 
|                                 
|Net interest margin               |  |                                       | 4.55    | %         |            |   | 4.41    | %         |  |   | N/A      |    |  |       | N/A    |   |  |   | 4.53    | %
|                                 
|                                 
|                                 
|                                 
|Efficiency ratio                  |  |                                       | 37      | %         |            |   | 72      | %         |  |   | N/A      |    |  |       | N/A    |   |  |   | 53      | %
|                                 
|                                 
|                                 
|                                 
|Capital adjusted efficiency ratio |  |                                       | 16      | %         |            |   | 17      | %         |  |   | N/A      |    |  |       | N/A    |   |  |   | 20      | %
|                                 
|                                 
|                                 
|                                 
|Average FTE                       |  |                                       | 1,324   |           |            |   | 785     |           |  |   |         |    |  |       | 185    |   |  |   | 2,294   |  






13



---



##### Table of Contents





|                                  |  |                                        |        |   |                |   |        |       |  |   |        |  
|--------------------------------- |  | -------------------------------------- | ------ | - | -------------- | - | ------ | ----- |  | - | ------ | -
|                                  |  | Retained Assets and Servicing Division |       
|                                  |  |                                        |       
|                                  |  | MSRs and                               |        |   |               
|                                  |  | Other Retained                         |        |   | Loan Servicing |   |        |      
|                                  |  | Assets                                 |        |   | Operations     |   |        | Total | 
|                                  |  |                                        |        |   |                |   |        |       | 
|                                  |  | (Dollars in thousands)                 |       
|                                 
|                                 
|                                 
|                                 
|Net Revenues                      |  |                                        |        |   |                |   |        |       |  |   |        |  
|                                 
|                                 
|                                 
|                                 
|Q1 05                             |  | $                                      | 20,021 |   |                | $ | 65     |       |  | $ | 20,086 |  
|                                 
|                                 
|                                 
|                                 
|Q4 04                             |  |                                        | 16,463 |   |                |   | 625    |       |  |   | 17,088 |  
|                                 
|                                 
|                                 
|                                 
|Annualized Percent Change         |  |                                        | 86     | % |                |   | (358   | )%    |  |   | 70     | %
|                                 
|                                 
|                                 
|                                 
|Q1 04                             |  |                                        | 12,440 |   |                |   | 484    |       |  |   | 12,924 |  
|                                 
|                                 
|                                 
|                                 
|Percent Change                    |  |                                        | 61     | % |                |   | (87    | )%    |  |   | 55     | %
|                                 
|                                 
|                                 
|                                 
|Net Income                        |  |                                        |        |   |                |   |        |       |  |   |        |  
|                                 
|                                 
|                                 
|                                 
|Q1 05                             |  |                                        | 8,610  |   |                |   | (3,453 | )     |  |   | 5,157  |  
|                                 
|                                 
|                                 
|                                 
|Q4 04                             |  |                                        | 6,219  |   |                |   | (2,903 | )     |  |   | 3,316  |  
|                                 
|                                 
|                                 
|                                 
|Annualized Percent Change         |  |                                        | 154    | % |                |   | (76    | )%    |  |   | 222    | %
|                                 
|                                 
|                                 
|                                 
|Q1 04                             |  |                                        | 4,258  |   |                |   | (2,228 | )     |  |   | 2,030  |  
|                                 
|                                 
|                                 
|                                 
|Percent Change                    |  |                                        | 102    | % |                |   | (55    | )%    |  |   | 154    | %
|                                 
|                                 
|                                 
|                                 
|Performance Ratios                |  |                                        |        |   |                |   |        |       |  |   |        |  
|Q1 05                             |  |                                        |        |   |                |   |        |       |  |   |        |  
|                                 
|                                 
|                                 
|                                 
|Return on equity (ROE)            |  |                                        | 14     | % |                |   | N/A    |       |  |   | 8      | %
|                                 
|                                 
|                                 
|                                 
|Return on assets (ROA)            |  |                                        | 2.17   | % |                |   | N/A    |       |  |   | 1.26   | %
|                                 
|                                 
|                                 
|                                 
|Net interest margin               |  |                                        | 6.87   | % |                |   | N/A    |       |  |   | 6.73   | %
|                                 
|                                 
|                                 
|                                 
|Efficiency ratio                  |  |                                        | 29     | % |                |   | N/A    |       |  |   | 58     | %
|                                 
|                                 
|                                 
|                                 
|Capital adjusted efficiency ratio |  |                                        | 91     | % |                |   | N/A    |       |  |   | 185    | %
|                                 
|                                 
|                                 
|                                 
|Average FTE                       |  |                                        | 85     |   |                |   | 391    |       |  |   | 476    |  
|Q4 04                             |  |                                        |        |   |                |   |        |       |  |   |        |  
|                                 
|                                 
|                                 
|                                 
|Return on equity (ROE)            |  |                                        | 9      | % |                |   | N/A    |       |  |   | 5      | %
|                                 
|                                 
|                                 
|                                 
|Return on assets (ROA)            |  |                                        | 1.47   | % |                |   | N/A    |       |  |   | 0.78   | %
|                                 
|                                 
|                                 
|                                 
|Net interest margin               |  |                                        | 7.19   | % |                |   | N/A    |       |  |   | 7.19   | %
|                                 
|                                 
|                                 
|                                 
|Efficiency ratio                  |  |                                        | 38     | % |                |   | N/A    |       |  |   | 68     | %
|                                 
|                                 
|                                 
|                                 
|Capital adjusted efficiency ratio |  |                                        | 152    | % |                |   | N/A    |       |  |   | 264    | %
|                                 
|                                 
|                                 
|                                 
|Average FTE                       |  |                                        | 100    |   |                |   | 371    |       |  |   | 471    |  
|Q1 04                             |  |                                        |        |   |                |   |        |       |  |   |        |  
|                                 
|                                 
|                                 
|                                 
|Return on equity (ROE)            |  |                                        | 9      | % |                |   | N/A    |       |  |   | 4      | %
|                                 
|                                 
|                                 
|                                 
|Return on assets (ROA)            |  |                                        | 1.06   | % |                |   | N/A    |       |  |   | 0.50   | %
|                                 
|                                 
|                                 
|                                 
|Net interest margin               |  |                                        | 6.05   | % |                |   | N/A    |       |  |   | 6.05   | %
|                                 
|                                 
|                                 
|                                 
|Efficiency ratio                  |  |                                        | 43     | % |                |   | N/A    |       |  |   | 74     | %
|                                 
|                                 
|                                 
|                                 
|Capital adjusted efficiency ratio |  |                                        | 175    | % |                |   | N/A    |       |  |   | 288    | %
|                                 
|                                 
|                                 
|                                 
|Average FTE                       |  |                                        | 43     |   |                |   | 394    |       |  |   | 437    |  






14



---



##### Table of Contents





|                                  |  |                        |       |   |           |   |          |             |  |             |              |   |  |              |        |    |           |   |       |              |  |   |         |    |  |   |       |    |  |   |        |  
|--------------------------------- |  | ---------------------- | ----- | - | --------- | - | -------- | ----------- |  | ----------- | ------------ | - |  | ------------ | ------ | -- | --------- | - | ----- | ------------ |  | - | ------- | -- |  | - | ----- | -- |  | - | ------ | -
|                                  |  | Thrift                 |      
|                                  |  |                        |      
|                                  |  | Mortgage-              |       |   |           |   | Consumer |             |  | Subdivision |              |   | 
|                                  |  | Backed                 |       |   | Prime SFR |   |          | Home Equity |  |             | Construction |   |  | Construction |        |    | Warehouse |   |       | Discontinued |  |   |        
|                                  |  | Securities             |       |   | Mortgage  |   |          | Lending     |  |             | and Lot      |   |  | Financing    |        |    | Lending   |   |       | Operations   |  |   | Total   |   
|                                  |  |                        |       |   |           |   |          |             |  |             |              |   |  |              |        |    |           |   |       |              |  |   |         |   
|                                  |  | (Dollars in thousands) |      
|                                 
|                                 
|                                 
|                                 
|Net Revenues                      |  |                        |       |   |           |   |          |             |  |             |              |   |  |              |        |    |           |   |       |              |  |   |         |    |  |   |       |    |  |   |        |  
|                                 
|                                 
|                                 
|                                 
|Q1 05                             |  | $                      | 9,419 |   |           | $ | 17,732   |             |  | $           | 12,757       |   |  | $            | 25,207 |    |           | $ | 9,496 |              |  | $ | 8       |    |  | $ | 215   |    |  | $ | 74,834 |  
|                                 
|                                 
|                                 
|                                 
|Q4 04                             |  |                        | 5,951 |   |           |   | 17,805   |             |  |             | 11,634       |   |  |              | 29,098 |    |           |   | 8,202 |              |  |   |        |    |  |   | 161   |    |  |   | 72,851 |  
|                                 
|                                 
|                                 
|                                 
|Annualized Percent Change         |  |                        | 233   | % |           |   | (2       | )%          |  |             | 39           | % |  |              | (53    | )% |           |   | 63    | %            |  |   | N/A     |    |  |   | 134   | %  |  |   | 11     | %
|                                 
|                                 
|                                 
|                                 
|Q1 04                             |  |                        | 8,944 |   |           |   | 19,475   |             |  |             | 5,785        |   |  |              | 20,292 |    |           |   | 7,214 |              |  |   |        |    |  |   | 49    |    |  |   | 61,759 |  
|                                 
|                                 
|                                 
|                                 
|Percent Change                    |  |                        | 5     | % |           |   | (9       | )%          |  |             | 121          | % |  |              | 24     | %  |           |   | 32    | %            |  |   | N/A     |    |  |   | 339   | %  |  |   | 21     | %
|                                 
|                                 
|                                 
|                                 
|Net Income                        |  |                        |       |   |           |   |          |             |  |             |              |   |  |              |        |    |           |   |       |              |  |   |         |    |  |   |       |    |  |   |        |  
|                                 
|                                 
|                                 
|                                 
|Q1 05                             |  |                        | 5,577 |   |           |   | 10,407   |             |  |             | 6,042        |   |  |              | 8,916  |    |           |   | 4,167 |              |  |   | (336    | )  |  |   | (80   | )  |  |   | 34,693 |  
|                                 
|                                 
|                                 
|                                 
|Q4 04                             |  |                        | 3,469 |   |           |   | 10,378   |             |  |             | 4,960        |   |  |              | 11,303 |    |           |   | 3,393 |              |  |   |        |    |  |   | (228  | )  |  |   | 33,275 |  
|                                 
|                                 
|                                 
|                                 
|Annualized Percent Change         |  |                        | 243   | % |           |   | 1        | %           |  |             | 87           | % |  |              | (84    | )% |           |   | 91    | %            |  |   | N/A     |    |  |   | 260   | %  |  |   | 17     | %
|                                 
|                                 
|                                 
|                                 
|Q1 04                             |  |                        | 5,227 |   |           |   | 11,227   |             |  |             | 2,526        |   |  |              | 7,169  |    |           |   | 3,138 |              |  |   |        |    |  |   | (607  | )  |  |   | 28,680 |  
|                                 
|                                 
|                                 
|                                 
|Percent Change                    |  |                        | 7     | % |           |   | (7       | )%          |  |             | 139          | % |  |              | 24     | %  |           |   | 33    | %            |  |   | N/A     |    |  |   | 87    | %  |  |   | 21     | %
|                                 
|                                 
|                                 
|                                 
|Performance Ratios                |  |                        |       |   |           |   |          |             |  |             |              |   |  |              |        |    |           |   |       |              |  |   |         |    |  |   |       |    |  |   |        |  
|Q1 05                             |  |                        |       |   |           |   |          |             |  |             |              |   |  |              |        |    |           |   |       |              |  |   |         |    |  |   |       |    |  |   |        |  
|                                 
|                                 
|                                 
|                                 
|Return on equity (ROE)            |  |                        | 48    | % |           |   | 19       | %           |  |             | 22           | % |  |              | 35     | %  |           |   | 23    | %            |  |   | (8,517  | )% |  |   | (7    | )% |  |   | 25     | %
|                                 
|                                 
|                                 
|                                 
|Return on assets (ROA)            |  |                        | 1.03  | % |           |   | 0.91     | %           |  |             | 1.57         | % |  |              | 1.92   | %  |           |   | 2.53  | %            |  |   | (446.78 | )% |  |   | (0.71 | )% |  |   | 1.28   | %
|                                 
|                                 
|                                 
|                                 
|Net interest margin               |  |                        | 1.74  | % |           |   | 1.53     | %           |  |             | 2.30         | % |  |              | 3.08   | %  |           |   | 5.55  | %            |  |   | 5.52    | %  |  |   | 6.84  | %  |  |   | 2.22   | %
|                                 
|                                 
|                                 
|                                 
|Efficiency ratio                  |  |                        | 2     | % |           |   | 3        | %           |  |             | 22           | % |  |              | 41     | %  |           |   | 26    | %            |  |   | 7,050   | %  |  |   | 39    | %  |  |   | 23     | %
|                                 
|                                 
|                                 
|                                 
|Capital adjusted efficiency ratio |  |                        | 3     | % |           |   | 8        | %           |  |             | 48           | % |  |              | 42     | %  |           |   | 49    | %            |  |   | 3,525   | %  |  |   | 52    | %  |  |   | 41     | %
|                                 
|                                 
|                                 
|                                 
|Average FTE                       |  |                        | 5     |   |           |   | 10       |             |  |             | 27           |   |  |              | 336    |    |           |   | 85    |              |  |   | 15      |    |  |   | 13    |    |  |   | 491    |  
|Q4 04                             |  |                        |       |   |           |   |          |             |  |             |              |   |  |              |        |    |           |   |       |              |  |   |         |    |  |   |       |    |  |   |        |  
|                                 
|                                 
|                                 
|                                 
|Return on equity (ROE)            |  |                        | 31    | % |           |   | 18       | %           |  |             | 17           | % |  |              | 44     | %  |           |   | 19    | %            |  |   | N/A     |    |  |   | (18   | )% |  |   | 23     | %
|                                 
|                                 
|                                 
|                                 
|Return on assets (ROA)            |  |                        | 0.64  | % |           |   | 0.86     | %           |  |             | 1.17         | % |  |              | 2.39   | %  |           |   | 2.06  | %            |  |   | N/A     |    |  |   | (1.84 | )% |  |   | 1.18   | %
|                                 
|                                 
|                                 
|                                 
|Net interest margin               |  |                        | 1.10  | % |           |   | 1.48     | %           |  |             | 2.24         | % |  |              | 3.23   | %  |           |   | 5.08  | %            |  |   | N/A     |    |  |   | 6.13  | %  |  |   | 2.05   | %
|                                 
|                                 
|                                 
|                                 
|Efficiency ratio                  |  |                        | 4     | % |           |   | 4        | %           |  |             | 30           | % |  |              | 35     | %  |           |   | 31    | %            |  |   | N/A     |    |  |   | 62    | %  |  |   | 24     | %
|                                 
|                                 
|                                 
|                                 
|Capital adjusted efficiency ratio |  |                        | 7     | % |           |   | 11       | %           |  |             | 74           | % |  |              | 31     | %  |           |   | 63    | %            |  |   | N/A     |    |  |   | 90    | %  |  |   | 45     | %
|                                 
|                                 
|                                 
|                                 
|Average FTE                       |  |                        | 4     |   |           |   | 8        |             |  |             | 20           |   |  |              | 310    |    |           |   | 78    |              |  |   |        |    |  |   | 14    |    |  |   | 434    |  
|Q1 04                             |  |                        |       |   |           |   |          |             |  |             |              |   |  |              |        |    |           |   |       |              |  |   |         |    |  |   |       |    |  |   |        |  
|                                 
|                                 
|                                 
|                                 
|Return on equity (ROE)            |  |                        | 57    | % |           |   | 19       | %           |  |             | 15           | % |  |              | 36     | %  |           |   | 21    | %            |  |   | N/A     |    |  |   | (41   | )% |  |   | 24     | %
|                                 
|                                 
|                                 
|                                 
|Return on assets (ROA)            |  |                        | 1.30  | % |           |   | 0.93     | %           |  |             | 1.30         | % |  |              | 1.90   | %  |           |   | 2.09  | %            |  |   | N/A     |    |  |   | (4.03 | )% |  |   | 1.22   | %
|                                 
|                                 
|                                 
|                                 
|Net interest margin               |  |                        | 2.03  | % |           |   | 1.54     | %           |  |             | 2.58         | % |  |              | 3.59   | %  |           |   | 4.82  | %            |  |   | N/A     |    |  |   | 6.84  | %  |  |   | 2.29   | %
|                                 
|                                 
|                                 
|                                 
|Efficiency ratio                  |  |                        | 3     | % |           |   | 5        | %           |  |             | 27           | % |  |              | 41     | %  |           |   | 28    | %            |  |   | N/A     |    |  |   | 92    | %  |  |   | 23     | %
|                                 
|                                 
|                                 
|                                 
|Capital adjusted efficiency ratio |  |                        | 4     | % |           |   | 14       | %           |  |             | 77           | % |  |              | 40     | %  |           |   | 56    | %            |  |   | N/A     |    |  |   | 118   | %  |  |   | 43     | %
|                                 
|                                 
|                                 
|                                 
|Average FTE                       |  |                        | 4     |   |           |   | 11       |             |  |             | 15           |   |  |              | 278    |    |           |   | 64    |              |  |   |        |    |  |   | 29    |    |  |   | 401    |  






15



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##### Table of Contents





|                                  |  |              |         |           |         |                        |         |          |  |   |           |    |  |          |        |   |         |   |         |    |  |   |         |  
|--------------------------------- |  | ------------ | ------- | --------- | ------- | ---------------------- | ------- | -------- |  | - | --------- | -- |  | -------- | ------ | - | ------- | - | ------- | -- |  | - | ------- | -
|                                  |  |              |         | Total     |         |                        |         |          |  |   |           |    | 
|                                  |  |              |         | Operating |         |                        |         |          |  |   | Corporate |    |  | Total    |       
|                                  |  | Eliminations |         |           | Results |                        |         | Deposits |  |   | Treasury  |    |  | Overhead |        |   | Company |  
|                                  |  |              |         |           |         |                        |         |          |  |   |           |    |  |          |        |   |         |  
|                                  |  |              |         |           |         | (Dollars in thousands) |         |          |  |   |          
|                                 
|                                 
|                                 
|                                 
|Net Revenues                      |  |              |         |           |         |                        |         |          |  |   |           |    |  |          |        |   |         |   |         |    |  |   |         |  
|                                 
|                                 
|                                 
|                                 
|Q1 05                             |  | $            | (28,424 | )         |         | $                      | 269,033 |          |  | $ | 504       |    |  | $        | 169    |   |         | $ | (1,604  | )  |  | $ | 268,102 |  
|                                 
|                                 
|                                 
|                                 
|Q4 04                             |  |              | 7,721   |           |         |                        | 254,381 |          |  |   | 551       |    |  |          | (6,438 | ) |         |   | (1,613  | )  |  |   | 246,881 |  
|                                 
|                                 
|                                 
|                                 
|Annualized Percent Change         |  |              | (1,873  | )%        |         |                        | 23      | %        |  |   | (34       | )% |  |          | 411    | % |         |   | 2       | %  |  |   | 34      | %
|                                 
|                                 
|                                 
|                                 
|Q1 04                             |  |              | 1,511   |           |         |                        | 193,537 |          |  |   | 494       |    |  |          | (9,379 | ) |         |   | 40      |    |  |   | 184,692 |  
|                                 
|                                 
|                                 
|                                 
|Percent Change                    |  |              | (1,981  | )%        |         |                        | 39      | %        |  |   | 2         | %  |  |          | 102    | % |         |   | (4,110  | )% |  |   | 45      | %
|                                 
|                                 
|                                 
|                                 
|Net Income                        |  |              |         |           |         |                        |         |          |  |   |           |    |  |          |        |   |         |   |         |    |  |   |         |  
|                                 
|                                 
|                                 
|                                 
|Q1 05                             |  |              | (18,221 | )         |         |                        | 92,479  |          |  |   | (2,621    | )  |  |          | 35     |   |         |   | (24,417 | )  |  |   | 65,476  |  
|                                 
|                                 
|                                 
|                                 
|Q4 04                             |  |              | 4,266   |           |         |                        | 82,707  |          |  |   | (1,943    | )  |  |          | (3,797 | ) |         |   | (18,583 | )  |  |   | 58,384  |  
|                                 
|                                 
|                                 
|                                 
|Annualized Percent Change         |  |              | (2,108  | )%        |         |                        | 47      | %        |  |   | (140      | )% |  |          | 404    | % |         |   | (126    | )% |  |   | 49      | %
|                                 
|                                 
|                                 
|                                 
|Q1 04                             |  |              | 337     |           |         |                        | 64,517  |          |  |   | (2,105    | )  |  |          | (6,202 | ) |         |   | (14,280 | )  |  |   | 41,930  |  
|                                 
|                                 
|                                 
|                                 
|Percent Change                    |  |              | (5,507  | )%        |         |                        | 43      | %        |  |   | (25       | )% |  |          | 101    | % |         |   | (71     | )% |  |   | 56      | %
|                                 
|                                 
|                                 
|                                 
|Performance Ratios                |  |              |         |           |         |                        |         |          |  |   |           |    |  |          |        |   |         |   |         |    |  |   |         |  
|Q1 05                             |  |              |         |           |         |                        |         |          |  |   |           |    |  |          |        |   |         |   |         |    |  |   |         |  
|                                 
|                                 
|                                 
|                                 
|Return on equity (ROE)            |  |              | N/A     |           |         |                        | 32      | %        |  |   | N/A       |    |  |          | N/A    |   |         |   | N/A     |    |  |   | 21      | %
|                                 
|                                 
|                                 
|                                 
|Return on assets (ROA)            |  |              | N/A     |           |         |                        | 2.12    | %        |  |   | N/A       |    |  |          | N/A    |   |         |   | N/A     |    |  |   | 1.43    | %
|                                 
|                                 
|                                 
|                                 
|Net interest margin               |  |              | N/A     |           |         |                        | 2.60    | %        |  |   | N/A       |    |  |          | N/A    |   |         |   | N/A     |    |  |   | 2.49    | %
|                                 
|                                 
|                                 
|                                 
|Efficiency ratio                  |  |              | N/A     |           |         |                        | 43      | %        |  |   | N/A       |    |  |          | N/A    |   |         |   | N/A     |    |  |   | 59      | %
|                                 
|                                 
|                                 
|                                 
|Capital adjusted efficiency ratio |  |              | N/A     |           |         |                        | 46      | %        |  |   | N/A       |    |  |          | N/A    |   |         |   | N/A     |    |  |   | 68      | %
|                                 
|                                 
|                                 
|                                 
|Average FTE                       |  |              |        |           |         |                        | 4,421   |          |  |   | 183       |    |  |          | 28     |   |         |   | 813     |    |  |   | 5,445   |  
|Q4 04                             |  |              |         |           |         |                        |         |          |  |   |           |    |  |          |        |   |         |   |         |    |  |   |         |  
|                                 
|                                 
|                                 
|                                 
|Return on equity (ROE)            |  |              | N/A     |           |         |                        | 27      | %        |  |   | N/A       |    |  |          | N/A    |   |         |   | N/A     |    |  |   | 19      | %
|                                 
|                                 
|                                 
|                                 
|Return on assets (ROA)            |  |              | N/A     |           |         |                        | 1.86    | %        |  |   | N/A       |    |  |          | N/A    |   |         |   | N/A     |    |  |   | 1.25    | %
|                                 
|                                 
|                                 
|                                 
|Net interest margin               |  |              | N/A     |           |         |                        | 2.66    | %        |  |   | N/A       |    |  |          | N/A    |   |         |   | N/A     |    |  |   | 2.40    | %
|                                 
|                                 
|                                 
|                                 
|Efficiency ratio                  |  |              | N/A     |           |         |                        | 46      | %        |  |   | N/A       |    |  |          | N/A    |   |         |   | N/A     |    |  |   | 60      | %
|                                 
|                                 
|                                 
|                                 
|Capital adjusted efficiency ratio |  |              | N/A     |           |         |                        | 54      | %        |  |   | N/A       |    |  |          | N/A    |   |         |   | N/A     |    |  |   | 74      | %
|                                 
|                                 
|                                 
|                                 
|Average FTE                       |  |              |        |           |         |                        | 4,324   |          |  |   | 166       |    |  |          | 29     |   |         |   | 816     |    |  |   | 5,335   |  
|Q1 04                             |  |              |         |           |         |                        |         |          |  |   |           |    |  |          |        |   |         |   |         |    |  |   |         |  
|                                 
|                                 
|                                 
|                                 
|Return on equity (ROE)            |  |              | N/A     |           |         |                        | 30      | %        |  |   | N/A       |    |  |          | N/A    |   |         |   | N/A     |    |  |   | 16      | %
|                                 
|                                 
|                                 
|                                 
|Return on assets (ROA)            |  |              | N/A     |           |         |                        | 1.88    | %        |  |   | N/A       |    |  |          | N/A    |   |         |   | N/A     |    |  |   | 1.16    | %
|                                 
|                                 
|                                 
|                                 
|Net interest margin               |  |              | N/A     |           |         |                        | 3.21    | %        |  |   | N/A       |    |  |          | N/A    |   |         |   | N/A     |    |  |   | 2.82    | %
|                                 
|                                 
|                                 
|                                 
|Efficiency ratio                  |  |              | N/A     |           |         |                        | 45      | %        |  |   | N/A       |    |  |          | N/A    |   |         |   | N/A     |    |  |   | 62      | %
|                                 
|                                 
|                                 
|                                 
|Capital adjusted efficiency ratio |  |              | N/A     |           |         |                        | 49      | %        |  |   | N/A       |    |  |          | N/A    |   |         |   | N/A     |    |  |   | 87      | %
|                                 
|                                 
|                                 
|                                 
|Average FTE                       |  |              |        |           |         |                        | 3,132   |          |  |   | 168       |    |  |          | 25     |   |         |   | 596     |    |  |   | 3,921   |  






16



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17



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##### Table of Contents





|                                   |                        |                                            |                   |       |       |       |           |          |         |        |         |        |       |       |        |        |         |         |           |         |        |        | 
|---------------------------------- | ---------------------- | ------------------------------------------ | ----------------- | ----- | ----- | ----- | --------- | -------- | ------- | ------ | ------- | ------ | ----- | ----- | ------ | ------ | ------- | ------- | --------- | ------- | ------ | ------ | 
|                                   |                        | Standard Consumer Home Loans Held for Sale |                  
|                                   |                        |                                            |                  
|                                   |                        | Agency                                     |                   |       |       |       | Fixed     |          |         |       
|                                   |                        | Conforming/                                |                   |       |       |       | Operating |          |         |       
|                                   |                        | Jumbo                                      |                   |       | Alt-A |       |           | Subprime |         |        | Expense |        |       | Total |       
|                                   |                        |                                            |                   |       |       |       |           |          |         |        |         |        |       |       |       
|                                   |                        | (Dollars in thousands)                     |                  
|                                  
|                                  
|                                  
|                                  
|Operating Results                  |                        |                                            |                   |       |       |       |           |          |         |        |         |        |       |       |        |        |         |         |           |        
|                                  
|                                  
|                                  
|                                  
|Net interest income                |                        | $                                          | 1,616             |       |       | $     | 17,496    |          |         | $      | 5,758   |        |       | $     | 312    |        |         | $       | 25,182    |        
|                                  
|                                  
|                                  
|                                  
|Provision for loan losses          |                        |                                            |                  |       |       |       |          |          |         |        |        |        |       |       |       |        |         |         |          |        
|                                  
|                                  
|                                  
|                                  
|Gain (loss) on sale of loans       |                        |                                            | 3,766             |       |       |       | 105,547   |          |         |        | 6,417   |        |       |       |       |        |         |         | 115,730   |        
|                                  
|                                  
|                                  
|                                  
|Service fee income                 |                        |                                            |                  |       |       |       |          |          |         |        |        |        |       |       |       |        |         |         |          |        
|                                  
|                                  
|                                  
|                                  
|Gain (loss) on sale of securities  |                        |                                            |                  |       |       |       |          |          |         |        |        |        |       |       |       |        |         |         |          |        
|                                  
|                                  
|                                  
|                                  
|Other income                       |                        |                                            | 1,107             |       |       |       | 8,454     |          |         |        | 2,549   |        |       |       |       |        |         |         | 12,110    |        
|                                   |                        |                                            |                   |       |       |       |           |          |         |        |         |        |       |       |       
|                                   | Net revenues (expense) |                                            |                   | 6,489 |       |       |           | 131,497  |         |        |         | 14,724 |       |       |        | 312    |         |         |           | 153,022 |       
|                                  
|                                  
|                                  
|                                  
|                                   | Operating expenses     |                                            |                   | 4,033 |       |       |           | 29,105   |         |        |         | 5,485  |       |       |        | 29,540 |         |         |           | 68,163  |       
|                                   |                        |                                            |                   |       |       |       |           |          |         |        |         |        |       |       |       
|                                   |                        | Pretax income (loss)                       |                   |       | 2,456 |       |           |          | 102,392 |        |         |        | 9,239 |       |        |        | (29,228 | )       |           |         | 84,859 |       
|                                   |                        |                                            |                   |       |       |       |           |          |         |        |         |        |       |       |       
|                                   |                        |                                            | Net income (loss) |       | $     | 1,486 |           |          | $       | 61,947 |         |        | $     | 5,589 |        |        | $       | (17,683 | )         |         | $      | 51,339 | 
|                                   |                        |                                            |                   |       |       |       |           |          |         |        |         |        |       |       |       
|Balance Sheet Data                 |                        |                                            |                   |       |       |       |           |          |         |        |         |        |       |       |        |        |         |         |           |        
|                                  
|                                  
|                                  
|                                  
|Average interest-earning assets(1) |                        | $                                          | 296,785           |       |       | $     | 3,480,904 |          |         | $      | 791,626 |        |       | $     |       |        |         | $       | 4,569,315 |        
|                                  
|                                  
|                                  
|                                  
|Average total assets               |                        | $                                          | 298,203           |       |       | $     | 3,497,561 |          |         | $      | 795,405 |        |       | $     | 74,774 |        |         | $       | 4,665,943 |        
|                                  
|                                  
|                                  
|                                  
|Allocated capital                  |                        | $                                          | 15,782            |       |       | $     | 185,327   |          |         | $      | 60,816  |        |       | $     | 6,361  |        |         | $       | 268,286   |        
|                                  
|                                  
|                                  
|                                  
|Performance Ratios                 |                        |                                            |                   |       |       |       |           |          |         |        |         |        |       |       |        |        |         |         |           |        
|                                  
|                                  
|                                  
|                                  
|Return on equity (ROE)             |                        |                                            | 38                | %     |       |       | 136       | %        |         |        | 37      | %      |       |       | N/A    |        |         |         | 78        | %      
|                                  
|                                  
|                                  
|                                  
|Net interest margin                |                        |                                            | 2.21              | %     |       |       | 2.04      | %        |         |        | 2.95    | %      |       |       | N/A    |        |         |         | 2.24      | %      
|                                  
|                                  
|                                  
|                                  
|Gain on sale margin                |                        |                                            | 0.66              | %     |       |       | 1.47      | %        |         |        | 1.35    | %      |       |       | N/A    |        |         |         | 1.41      | %      
|                                  
|                                  
|                                  
|                                  
|Efficiency ratio                   |                        |                                            | 62                | %     |       |       | 22        | %        |         |        | 37      | %      |       |       | N/A    |        |         |         | 45        | %      
|                                  
|                                  
|                                  
|                                  
|Capital adjusted efficiency ratio  |                        |                                            | 38                | %     |       |       | 8         | %        |         |        | 38      | %      |       |       | N/A    |        |         |         | 20        | %      
|                                  
|                                  
|                                  
|                                  
|Operating Data                     |                        |                                            |                   |       |       |       |           |          |         |        |         |        |       |       |        |        |         |         |           |        
|                                  
|                                  
|                                  
|                                  
|Loan production                    |                        | $                                          | 668,780           |       |       | $     | 8,187,548 |          |         | $      | 553,530 |        |       | $     |       |        |         | $       | 9,409,858 |        
|                                  
|                                  
|                                  
|                                  
|Loans sold                         |                        | $                                          | 567,780           |       |       | $     | 7,179,297 |          |         | $      | 476,985 |        |       | $     |       |        |         | $       | 8,224,062 |        






|    |                                                                                                                                          
|--- | -----------------------------------------------------------------------------------------------------------------------------------------
|(1) | The allowance for loan losses is excluded from average loan
    balances for purposes of calculating average interest-earning
    assets.



|                         |  |                                                                                                                                                                                                                                                                                                           
|------------------------ |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Agency Conforming/ Jumbo |  | First mortgage loans for sale that meet the underwriting
    guidelines of Fannie Mae and Freddie Mac. Also includes loans
    that meet all these guidelines, but exceed the loan size
    acceptable to these agencies.                                                                                 
|                        
|Alt-A                    |  | First mortgage loans for sale that have prime credit
    characteristics, but do not meet the GSE underwriting guidelines.                                                                                                                                                                                
|                        
|Subprime                 |  | Includes marginal product performance of first mortgage loans
    that are extended to borrowers with impaired credit with one or
    more of the following characteristics: 1) FICO score of
    less than 620; 2) late mortgage payment in the last
    12 months; and 3) bankruptcy in the last 2 years

18



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##### Table of Contents





|                                   |                        |                                                               |                   |        |           |       |         |         |        |           |              |        |        |         |        |     |       |     |     |        |         |        |           |        |        |        | 
|---------------------------------- | ---------------------- | ------------------------------------------------------------- | ----------------- | ------ | --------- | ----- | ------- | ------- | ------ | --------- | ------------ | ------ | ------ | ------- | ------ | --- | ----- | --- | --- | ------ | ------- | ------ | --------- | ------ | ------ | ------ | 
|                                   |                        | Specialty Consumer Home Loans Held for Sale and/or Investment |                  
|                                   |                        |                                                               |                  
|                                   |                        |                                                               |                   | Fixed  |           |       |        
|                                   |                        | HELOC/                                                        |                   |        | Reverse   |       |         |         |        | Operating |              |        |       
|                                   |                        | Seconds                                                       |                   |        | Mortgages |       |         | CTP/Lot |        |           | Discontinued |        |        | Expense |        |     | Total |    
|                                   |                        |                                                               |                   |        |           |       |         |         |        |           |              |        |        |         |        |     |       |    
|                                   |                        | (Dollars in thousands)                                        |                  
|                                  
|                                  
|                                  
|                                  
|Operating Results                  |                        |                                                               |                   |        |           |       |         |         |        |           |              |        |        |         |        |     |       |     |     |        |         |        |           |       
|                                  
|                                  
|                                  
|                                  
|Net interest income                |                        | $                                                             | 11,091            |        |           | $     | 463     |         |        | $         | 13,732       |        |        | $       | 886    |     |       | $   |    |        |         | $      | 26,172    |       
|                                  
|                                  
|                                  
|                                  
|Provision for loan losses          |                        |                                                               |                  |        |           |       |        |         |        |           | (356         | )      |        |         | (665   | )   |       |     |    |        |         |        | (1,021    | )     
|                                  
|                                  
|                                  
|                                  
|Gain (loss) on sale of loans       |                        |                                                               | 4,510             |        |           |       | 15,918  |         |        |           | 5,492        |        |        |         | (10    | )   |       |     |    |        |         |        | 25,910    |       
|                                  
|                                  
|                                  
|                                  
|Service fee income                 |                        |                                                               | 1,170             |        |           |       | 2,740   |         |        |           |             |        |        |         |       |     |       |     |    |        |         |        | 3,910     |       
|                                  
|                                  
|                                  
|                                  
|Gain (loss) on sale of securities  |                        |                                                               | 612               |        |           |       |        |         |        |           | 194          |        |        |         |       |     |       |     |    |        |         |        | 806       |       
|                                  
|                                  
|                                  
|                                  
|Other income                       |                        |                                                               | 1,960             |        |           |       | 188     |         |        |           | 3,718        |        |        |         | 4      |     |       |     |    |        |         |        | 5,870     |       
|                                   |                        |                                                               |                   |        |           |       |         |         |        |           |              |        |        |         |        |     |       |    
|                                   | Net revenues (expense) |                                                               |                   | 19,343 |           |       |         | 19,309  |        |           |              | 22,780 |        |         |        | 215 |       |     |     |       |         |        |           | 61,647 |       
|                                  
|                                  
|                                  
|                                  
|                                   | Operating expenses     |                                                               |                   | 5,183  |           |       |         | 8,784   |        |           |              | 5,067  |        |         |        | 347 |       |     |     | 10,245 |         |        |           | 29,626 |       
|                                   |                        |                                                               |                   |        |           |       |         |         |        |           |              |        |        |         |        |     |       |    
|                                   |                        | Pretax income (loss)                                          |                   |        | 14,160    |       |         |         | 10,525 |           |              |        | 17,713 |         |        |     | (132  | )   |     |        | (10,245 | )      |           |        | 32,021 |       
|                                   |                        |                                                               |                   |        |           |       |         |         |        |           |              |        |        |         |        |     |       |    
|                                   |                        |                                                               | Net income (loss) |        | $         | 8,567 |         |         | $      | 6,368     |              |        | $      | 10,716  |        |     | $     | (80 | )   |        | $       | (6,198 | )         |        | $      | 19,373 | 
|                                   |                        |                                                               |                   |        |           |       |         |         |        |           |              |        |        |         |        |     |       |    
|Balance Sheet Data                 |                        |                                                               |                   |        |           |       |         |         |        |           |              |        |        |         |        |     |       |     |     |        |         |        |           |       
|                                  
|                                  
|                                  
|                                  
|Average interest-earning assets(1) |                        | $                                                             | 1,657,960         |        |           | $     | 105,329 |         |        | $         | 1,737,736    |        |        | $       | 52,569 |     |       | $   |    |        |         | $      | 3,553,594 |       
|                                  
|                                  
|                                  
|                                  
|Average total assets               |                        | $                                                             | 1,672,158         |        |           | $     | 215,471 |         |        | $         | 1,739,819    |        |        | $       | 45,808 |     |       | $   |    |        |         | $      | 3,673,256 |       
|                                  
|                                  
|                                  
|                                  
|Allocated capital                  |                        | $                                                             | 117,457           |        |           | $     | 72,823  |         |        | $         | 91,099       |        |        | $       | 4,681  |     |       | $   |    |        |         | $      | 286,060   |       
|                                  
|                                  
|                                  
|                                  
|Performance Ratios                 |                        |                                                               |                   |        |           |       |         |         |        |           |              |        |        |         |        |     |       |     |     |        |         |        |           |       
|                                  
|                                  
|                                  
|                                  
|Return on equity (ROE)             |                        |                                                               | 30                | %      |           |       | 35      | %       |        |           | 48           | %      |        |         | (7     | )%  |       |     | N/A |        |         |        | 27        | %     
|                                  
|                                  
|                                  
|                                  
|Net interest margin                |                        |                                                               | 2.71              | %      |           |       | 1.78    | %       |        |           | 3.20         | %      |        |         | 6.84   | %   |       |     | N/A |        |         |        | 2.99      | %     
|                                  
|                                  
|                                  
|                                  
|Gain on sale margin                |                        |                                                               | 1.44              | %      |           |       | 3.06    | %       |        |           | 1.62         | %      |        |         | N/A    |     |       |     | N/A |        |         |        | 2.21      | %     
|                                  
|                                  
|                                  
|                                  
|Efficiency ratio                   |                        |                                                               | 27                | %      |           |       | 45      | %       |        |           | 22           | %      |        |         | 39     | %   |       |     | N/A |        |         |        | 47        | %     
|                                  
|                                  
|                                  
|                                  
|Capital adjusted efficiency ratio  |                        |                                                               | 41                | %      |           |       | 43      | %       |        |           | 22           | %      |        |         | 52     | %   |       |     | N/A |        |         |        | 54        | %     
|                                  
|                                  
|                                  
|                                  
|Operating Data                     |                        |                                                               |                   |        |           |       |         |         |        |           |              |        |        |         |        |     |       |     |     |        |         |        |           |       
|                                  
|                                  
|                                  
|                                  
|Loan production                    |                        |                                                               | 406,940           |        |           |       | 506,712 |         |        |           | 987,777      |        |        |         |       |     |       |     |    |        |         |        | 1,901,429 |       
|                                  
|                                  
|                                  
|                                  
|Loans sold                         |                        |                                                               | 312,756           |        |           |       | 520,378 |         |        |           | 339,026      |        |        |         |       |     |       |     |    |        |         |        | 1,172,160 |       






|    |                                                                                                                                          
|--- | -----------------------------------------------------------------------------------------------------------------------------------------
|(1) | The allowance for loan losses is excluded from average loan
    balances for purposes of calculating average interest-earning
    assets.



|                  |  |                                                                                                                
|----------------- |  | ---------------------------------------------------------------------------------------------------------------
|HELOCs/ Seconds   |  | Home equity lines of credit and closed-end second mortgages.                                                   
|                 
|Reverse Mortgages |  | Reverse mortgage loans extended to borrowers age 62 and
    older secured by equity in a primary residence.    
|                 
|CTP/ Lot          |  | Consumer construction and lot loans, as well as loans converted
    to permanent status that are held for sale.
|                 
|Discontinued      |  | Manufactured housing and home improvement loans.                                                               

19



---



##### Table of Contents





|                                   |                        |                                    |                   |        |       |       |           |            |       |       |           |                |        |         |           |        |        |        |        |       |        |        |  
|---------------------------------- | ---------------------- | ---------------------------------- | ----------------- | ------ | ----- | ----- | --------- | ---------- | ----- | ----- | --------- | -------------- | ------ | ------- | --------- | ------ | ------ | ------ | ------ | ----- | ------ | ------ | -
|                                   |                        | Home Loans and Related Investments |                   |        |      
|                                   |                        |                                    |                   |        |      
|                                   |                        | Retained Assets                    |                   |        |       |       | SFR Loans |            |       |       |           | Loan Servicing |       
|                                   |                        | and Retention                      |                   |        |       |       | Held for  |            |       |       |           | Operations     |       
|                                   |                        | Activities                         |                   |        | MBS   |       |           | Investment |       |       | Total     |                |        | Expense |          
|                                   |                        |                                    |                   |        |       |       |           |            |       |       |           |                |        |         |          
|                                   |                        | (Dollars in thousands)             |                  
|                                  
|                                  
|                                  
|                                  
|Operating Results                  |                        |                                    |                   |        |       |       |           |            |       |       |           |                |        |         |           |        |        |        |        |      
|                                  
|                                  
|                                  
|                                  
|Net interest income                |                        | $                                  | 14,674            |        |       | $     | 9,812     |            |       | $     | 18,419    |                |        | $       | 42,905    |        |        | $      | (302   | )    
|                                  
|                                  
|                                  
|                                  
|Provision for loan losses          |                        |                                    |                  |        |       |       |          |            |       |       | (950      | )              |        |         | (950      | )      |        |        |       |      
|                                  
|                                  
|                                  
|                                  
|Gain (loss) on sale of loans       |                        |                                    | 2,305             |        |       |       |          |            |       |       | 377       |                |        |         | 2,682     |        |        |        |       |      
|                                  
|                                  
|                                  
|                                  
|Service fee income                 |                        |                                    | 508               |        |       |       |          |            |       |       |          |                |        |         | 508       |        |        |        |       |      
|                                  
|                                  
|                                  
|                                  
|Gain (loss) on sale of securities  |                        |                                    | (5,504            | )      |       |       | 52        |            |       |       |          |                |        |         | (5,452    | )      |        |        |       |      
|                                  
|                                  
|                                  
|                                  
|Other income                       |                        |                                    | 711               |        |       |       |          |            |       |       | 753       |                |        |         | 1,464     |        |        |        | 354    |      
|                                   |                        |                                    |                   |        |       |       |           |            |       |       |           |                |        |         |          
|                                   | Net revenues (expense) |                                    |                   | 12,694 |       |       |           | 9,864      |       |       |           | 18,599         |        |         |           | 41,157 |        |        |        | 52    |       
|                                  
|                                  
|                                  
|                                  
|                                   | Operating expenses     |                                    |                   | 5,288  |       |       |           | 201        |       |       |           | 531            |        |         |           | 6,020  |        |        |        | 6,549 |       
|                                   |                        |                                    |                   |        |       |       |           |            |       |       |           |                |        |         |          
|                                   |                        | Pretax income (loss)               |                   |        | 7,406 |       |           |            | 9,663 |       |           |                | 18,068 |         |           |        | 35,137 |        |        |       | (6,497 | )     
|                                   |                        |                                    |                   |        |       |       |           |            |       |       |           |                |        |         |          
|                                   |                        |                                    | Net income (loss) |        | $     | 4,481 |           |            | $     | 5,846 |           |                | $      | 10,931  |           |        | $      | 21,258 |        |       | $      | (3,931 | )
|                                   |                        |                                    |                   |        |       |       |           |            |       |       |           |                |        |         |          
|Balance Sheet Data                 |                        |                                    |                   |        |       |       |           |            |       |       |           |                |        |         |           |        |        |        |        |      
|                                  
|                                  
|                                  
|                                  
|Average interest-earning assets(1) |                        | $                                  | 865,899           |        |       | $     | 2,177,781 |            |       | $     | 4,649,775 |                |        | $       | 7,693,455 |        |        | $      |       |      
|                                  
|                                  
|                                  
|                                  
|Average total assets               |                        | $                                  | 1,607,308         |        |       | $     | 2,192,673 |            |       | $     | 4,656,208 |                |        | $       | 8,456,189 |        |        | $      | 55,630 |      
|                                  
|                                  
|                                  
|                                  
|Allocated capital                  |                        | $                                  | 252,155           |        |       | $     | 46,973    |            |       | $     | 222,813   |                |        | $       | 521,941   |        |        | $      | 5,564  |      
|                                  
|                                  
|                                  
|                                  
|Performance Ratios                 |                        |                                    |                   |        |       |       |           |            |       |       |           |                |        |         |           |        |        |        |        |      
|                                  
|                                  
|                                  
|                                  
|Return on equity (ROE)             |                        |                                    | 7                 | %      |       |       | 50        | %          |       |       | 20        | %              |        |         | 17        | %      |        |        | N/A    |      
|                                  
|                                  
|                                  
|                                  
|Net interest margin                |                        |                                    | 6.87              | %      |       |       | 1.83      | %          |       |       | 1.61      | %              |        |         | 2.26      | %      |        |        | N/A    |      
|                                  
|                                  
|                                  
|                                  
|Gain on sale margin                |                        |                                    | 1.16              | %      |       |       | N/A       |            |       |       | N/A       |                |        |         | N/A       |        |        |        | N/A    |      
|                                  
|                                  
|                                  
|                                  
|Efficiency ratio                   |                        |                                    | 42                | %      |       |       | 2         | %          |       |       | 3         | %              |        |         | 14        | %      |        |        | N/A    |      
|                                  
|                                  
|                                  
|                                  
|Capital adjusted efficiency ratio  |                        |                                    | 207               | %      |       |       | 2         | %          |       |       | 8         | %              |        |         | 44        | %      |        |        | N/A    |      
|                                  
|                                  
|                                  
|                                  
|Operating Data                     |                        |                                    |                   |        |       |       |           |            |       |       |           |                |        |         |           |        |        |        |        |      
|                                  
|                                  
|                                  
|                                  
|Loan production                    |                        | $                                  | 215,330           |        |       | $     |          |            |       | $     |          |                |        | $       | 215,330   |        |        | $      |       |      
|                                  
|                                  
|                                  
|                                  
|Loans sold                         |                        | $                                  | 198,442           |        |       | $     |          |            |       | $     | 59,088    |                |        | $       | 257,530   |        |        | $      |       |      






|    |                                                                                                                                          
|--- | -----------------------------------------------------------------------------------------------------------------------------------------
|(1) | The allowance for loan losses is excluded from average loan
    balances for purposes of calculating average interest-earning
    assets.



|                                         |  |                                                                                                                                                                                                                                           
|---------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Retained Assets and Retention Activities |  | Mortgage banking and trading activity associated with the
    purchase, management and sale of mortgage banking assets and
    variable cash flow instruments. Activity also includes loans
    originated through the servicing function.
|                                        
|MBS                                      |  | Trading and investment activity related to the purchase,
    management and sale of investment grade mortgage-backed
    securities.                                                                                                      
|                                        
|SFR Loans Held for Investment            |  | Company-wide loan investment activity related to the purchase,
    management and sale of single family residential mortgage loans
    held for investment.                                                                               
|                                        
|Loan Servicing Operations Expense        |  | Includes all fixed operating costs associated with servicing
    loans held for sale, held for investment and loans serviced for
    others that are not allocated to the respective products for
    which these services are provided.  

20



---



##### Table of Contents





|                                   |                        |                                                |                   |       |             |     |           |         |       |           |         |     |      |       |     |       |        |      |         |        |       |       | 
|---------------------------------- | ---------------------- | ---------------------------------------------- | ----------------- | ----- | ----------- | --- | --------- | ------- | ----- | --------- | ------- | --- | ---- | ----- | --- | ----- | ------ | ---- | ------- | ------ | ----- | ----- | 
|                                   |                        | Specialty Commercial Loans Held for Investment |                  
|                                   |                        |                                                |                  
|                                   |                        |                                                |                   | Fixed |             |     |          
|                                   |                        | Single                                         |                   |       |             |     | Warehouse |         |       | Operating |         |     |     
|                                   |                        | Spec                                           |                   |       | Subdivision |     |           | Lending |       |           | Expense |     |      | Total |    
|                                   |                        |                                                |                   |       |             |     |           |         |       |           |         |     |      |       |    
|                                   |                        | (Dollars in thousands)                         |                  
|                                  
|                                  
|                                  
|                                  
|Operating Results                  |                        |                                                |                   |       |             |     |           |         |       |           |         |     |      |       |     |       |        |      |         |       
|                                  
|                                  
|                                  
|                                  
|Net interest income                |                        | $                                              | 2,348             |       |             | $   | 9,192     |         |       | $         | 2       |     |      | $     |    |       |        | $    | 11,542  |       
|                                  
|                                  
|                                  
|                                  
|Provision for loan losses          |                        |                                                | (119              | )     |             |     | (400      | )       |       |           |        |     |      |       |    |       |        |      | (519    | )     
|                                  
|                                  
|                                  
|                                  
|Gain (loss) on sale of loans       |                        |                                                |                  |       |             |     |          |         |       |           |        |     |      |       |    |       |        |      |        |       
|                                  
|                                  
|                                  
|                                  
|Service fee income                 |                        |                                                |                  |       |             |     |          |         |       |           |        |     |      |       |    |       |        |      |        |       
|                                  
|                                  
|                                  
|                                  
|Gain (loss) on sale of securities  |                        |                                                |                  |       |             |     |          |         |       |           |        |     |      |       |    |       |        |      |        |       
|                                  
|                                  
|                                  
|                                  
|Other income                       |                        |                                                | 205               |       |             |     | 704       |         |       |           | 6       |     |      |       |    |       |        |      | 915     |       
|                                   |                        |                                                |                   |       |             |     |           |         |       |           |         |     |      |       |    
|                                   | Net revenues (expense) |                                                |                   | 2,434 |             |     |           | 9,496   |       |           |         | 8   |      |       |     |      |        |      |         | 11,938 |      
|                                  
|                                  
|                                  
|                                  
|                                   | Operating expenses     |                                                |                   | 891   |             |     |           | 1,613   |       |           |         | 564 |      |       |     | 1,534 |        |      |         | 4,602  |      
|                                   |                        |                                                |                   |       |             |     |           |         |       |           |         |     |      |       |    
|                                   |                        | Pretax income (loss)                           |                   |       | 1,543       |     |           |         | 7,883 |           |         |     | (556 | )     |     |       | (1,534 | )    |         |        | 7,336 |      
|                                   |                        |                                                |                   |       |             |     |           |         |       |           |         |     |      |       |    
|                                   |                        |                                                | Net income (loss) |       | $           | 934 |           |         | $     | 4,769     |         |     | $    | (336  | )   |       | $      | (928 | )       |        | $     | 4,439 | 
|                                   |                        |                                                |                   |       |             |     |           |         |       |           |         |     |      |       |    
|Balance Sheet Data                 |                        |                                                |                   |       |             |     |           |         |       |           |         |     |      |       |     |       |        |      |         |       
|                                  
|                                  
|                                  
|                                  
|Average interest-earning assets(1) |                        | $                                              | 144,305           |       |             | $   | 671,861   |         |       | $         | 147     |     |      | $     |    |       |        | $    | 816,313 |       
|                                  
|                                  
|                                  
|                                  
|Average total assets               |                        | $                                              | 143,394           |       |             | $   | 669,272   |         |       | $         | 305     |     |      | $     |    |       |        | $    | 812,971 |       
|                                  
|                                  
|                                  
|                                  
|Allocated capital                  |                        | $                                              | 13,520            |       |             | $   | 73,457    |         |       | $         | 16      |     |      | $     |    |       |        | $    | 86,993  |       
|                                  
|                                  
|                                  
|                                  
|Performance Ratios                 |                        |                                                |                   |       |             |     |           |         |       |           |         |     |      |       |     |       |        |      |         |       
|                                  
|                                  
|                                  
|                                  
|Return on equity (ROE)             |                        |                                                | 28                | %     |             |     | 26        | %       |       |           | N/A     |     |      |       | N/A |       |        |      | 21%     |       
|                                  
|                                  
|                                  
|                                  
|Net interest margin                |                        |                                                | 6.60              | %     |             |     | 5.55      | %       |       |           | N/A     |     |      |       | N/A |       |        |      | 5.73%   |       
|                                  
|                                  
|                                  
|                                  
|Gain on sale margin                |                        |                                                | N/A               |       |             |     | N/A       |         |       |           | N/A     |     |      |       | N/A |       |        |      | N/A     |       
|                                  
|                                  
|                                  
|                                  
|Efficiency ratio                   |                        |                                                | 35                | %     |             |     | 16        | %       |       |           | N/A     |     |      |       | N/A |       |        |      | 37%     |       
|                                  
|                                  
|                                  
|                                  
|Capital adjusted efficiency ratio  |                        |                                                | 46                | %     |             |     | 30        | %       |       |           | N/A     |     |      |       | N/A |       |        |      | 64%     |       
|                                  
|                                  
|                                  
|                                  
|Operating Data                     |                        |                                                |                   |       |             |     |           |         |       |           |         |     |      |       |     |       |        |      |         |       
|                                  
|                                  
|                                  
|                                  
|Loan production                    |                        |                                                | 74,398            |       |             |     | 353,489   |         |       |           | 20,000  |     |      |       |    |       |        |      | 447,887 |       
|                                  
|                                  
|                                  
|                                  
|Loans sold                         |                        |                                                |                  |       |             |     |          |         |       |           |        |     |      |       |    |       |        |      |        |       






|    |                                                                                                                                          
|--- | -----------------------------------------------------------------------------------------------------------------------------------------
|(1) | The allowance for loan losses is excluded from average loan
    balances for purposes of calculating average interest-earning
    assets.



|                         |  |                                                                                                               
|------------------------ |  | --------------------------------------------------------------------------------------------------------------
|Single Spec              |  | Loans that are made to homebuilders to build 1-4 custom homes
    for resale to consumers.                    
|                        
|Subdivision Construction |  | Subdivision lending for commercial acquisition, development and
    construction loans to commercial builders.
|                        
|Warehouse Lending        |  | Warehouse lines of credit to mortgage brokers to finance their
    inventory of loans prior to sale.          

21



---



##### Table of Contents





|                                   |                        |                        |                   |       |          |        |         |              |    |    |               |        |         |         |            |         |         |        | 
|---------------------------------- | ---------------------- | ---------------------- | ----------------- | ----- | -------- | ------ | ------- | ------------ | -- | -- | ------------- | ------ | ------- | ------- | ---------- | ------- | ------- | ------ | 
|                                   |                        | Deposits               |                   |       | Treasury |        |         | Corporate OH |    |    | Total Company |       
|                                   |                        |                        |                   |       |          |        |         |              |    |    |               |       
|                                   |                        | (Dollars in thousands) |                  
|                                  
|                                  
|                                  
|                                  
|Operating Results                  |                        |                        |                   |       |          |        |         |              |    |    |               |        |         |         |            |        
|                                  
|                                  
|                                  
|                                  
|Net interest income                |                        | $                      | 1,217             |       |          | $      | 41      |              |    | $  | (2,337        | )      |         | $       | 104,420    |        
|                                  
|                                  
|                                  
|                                  
|Provision for loan losses          |                        |                        |                  |       |          |        |        |              |    |    |              |        |         |         | (2,490     | )      
|                                  
|                                  
|                                  
|                                  
|Gain (loss) on sale of loans       |                        |                        |                  |       |          |        |        |              |    |    |              |        |         |         | 144,322    |        
|                                  
|                                  
|                                  
|                                  
|Service fee income                 |                        |                        |                  |       |          |        |        |              |    |    |              |        |         |         | 4,418      |        
|                                  
|                                  
|                                  
|                                  
|Gain (loss) on sale of securities  |                        |                        |                  |       |          |        |        |              |    |    |              |        |         |         | (4,646     | )      
|                                  
|                                  
|                                  
|                                  
|Other income                       |                        |                        | 504               |       |          |        | 128     |              |    |    | 733           |        |         |         | 22,078     |        
|                                   |                        |                        |                   |       |          |        |         |              |    |    |               |       
|                                   | Net revenues (expense) |                        |                   | 1,721 |          |        |         | 169          |    |    |               | (1,604 | )       |         |            | 268,102 |        
|                                  
|                                  
|                                  
|                                  
|                                   | Operating expenses     |                        |                   | 6,052 |          |        |         | 111          |    |    |               | 38,575 |         |         |            | 159,698 |        
|                                   |                        |                        |                   |       |          |        |         |              |    |    |               |       
|                                   |                        | Pretax income (loss)   |                   |       | (4,331   | )      |         |              | 58 |    |               |        | (40,179 | )       |            |         | 108,404 |       
|                                   |                        |                        |                   |       |          |        |         |              |    |    |               |       
|                                   |                        |                        | Net income (loss) |       | $        | (2,620 | )       |              | $  | 35 |               |        | $       | (24,417 | )          |         | $       | 65,476 | 
|                                   |                        |                        |                   |       |          |        |         |              |    |    |               |       
|Balance Sheet Data                 |                        |                        |                   |       |          |        |         |              |    |    |               |        |         |         |            |        
|                                  
|                                  
|                                  
|                                  
|Average interest-earning assets(1) |                        | $                      | 180               |       |          | $      | 412,794 |              |    | $  | (6,584        | )      |         | $       | 17,039,067 |        
|                                  
|                                  
|                                  
|                                  
|Average total assets               |                        | $                      | 26,118            |       |          | $      | 678,541 |              |    | $  | 199,545       |        |         | $       | 18,568,193 |        
|                                  
|                                  
|                                  
|                                  
|Allocated capital                  |                        | $                      | 1,306             |       |          | $      | 38,177  |              |    | $  | 45,221        |        |         | $       | 1,253,548  |        
|                                  
|                                  
|                                  
|                                  
|Performance Ratios                 |                        |                        |                   |       |          |        |         |              |    |    |               |        |         |         |            |        
|                                  
|                                  
|                                  
|                                  
|Return on equity (ROE)             |                        |                        | N/A               |       |          |        | N/A     |              |    |    | N/A           |        |         |         | 21         | %      
|                                  
|                                  
|                                  
|                                  
|Net interest margin                |                        |                        | N/A               |       |          |        | N/A     |              |    |    | N/A           |        |         |         | 2.49       | %      
|                                  
|                                  
|                                  
|                                  
|Gain on sale margin                |                        |                        | N/A               |       |          |        | N/A     |              |    |    | N/A           |        |         |         | 1.49       | %      
|                                  
|                                  
|                                  
|                                  
|Efficiency ratio                   |                        |                        | N/A               |       |          |        | N/A     |              |    |    | N/A           |        |         |         | 59         | %      
|                                  
|                                  
|                                  
|                                  
|Capital adjusted efficiency ratio  |                        |                        | N/A               |       |          |        | N/A     |              |    |    | N/A           |        |         |         | 68         | %      
|                                  
|                                  
|                                  
|                                  
|Operating Data                     |                        |                        |                   |       |          |        |         |              |    |    |               |        |         |         |            |        
|                                  
|                                  
|                                  
|                                  
|Loan production                    |                        | $                      |                  |       |          | $      |        |              |    | $  |              |        |         | $       | 11,974,504 |        
|                                  
|                                  
|                                  
|                                  
|Loans sold                         |                        | $                      |                  |       |          | $      |        |              |    | $  |              |        |         | $       | 9,653,752  |        






|    |                                                                                                                                          
|--- | -----------------------------------------------------------------------------------------------------------------------------------------
|(1) | The allowance for loan losses is excluded from average loan
    balances for purposes of calculating average interest-earning
    assets.



|                   |  |                                                                                                                                                                                                                                                                                                                                                                                                                
|------------------ |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Deposits           |  | Includes all deposit generating activities to raise deposits
    from retail bank branch customers to be used in certain lending
    activities. The Deposits group is organized as a cost center
    whereby its interest expense from deposits is offset by
    allocations from Treasury.                                                                                                                   
|                  
|Treasury           |  | Includes all financing activity related to providing funds (FHLB
    and private borrowings, debt and other securities issuances and
    deposits generation) to IndyMac businesses to fund loans and
    investments. The use of funds is charged to each business unit
    according to IndyMacs capital allocation and funds
    transfer pricing methodology with the difference residing in
    Treasury.
|                  
|Corporate Overhead |  | Includes all corporate fixed costs that do not vary in the short
    term with changes in business activity. Fixed costs include
    corporate administration, financial management, enterprise risk
    management, centralized information technology and other
    unallocated fixed costs.                                                                                                                 

22



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##### Table of Contents






MORTGAGE BANKING







Loan
Production








|                                        |                   |                              |       |       |           |   |       |         |       |  |              |     |    |         |       |       |        |  |     |     |    |  
|--------------------------------------- | ----------------- | ---------------------------- | ----- | ----- | --------- | - | ----- | ------- | ----- |  | ------------ | --- | -- | ------- | ----- | ----- | ------ |  | --- | --- | -- | -
|                                        |                   | Three Months Ended           |      
|                                        |                   |                              |      
|                                        |                   | March 31,                    |       |       | March 31, |   |       | Percent |       |  | December 31, |     |    | Percent |      
|                                        |                   | 2005                         |       |       | 2004      |   |       | Change  |       |  | 2004         |     |    | Change  |      
|                                        |                   |                              |       |       |           |   |       |         |       |  |              |     |    |         |      
|                                        |                   | (Dollars in millions)        |      
|                                       
|                                       
|                                       
|                                       
|Volume by product:                      |                   |                              |       |       |           |   |       |         |       |  |              |     |    |         |       |       |        |  |     |    
|Prime(1)                                |                   |                              |       |       |           |   |       |         |       |  |              |     |    |         |       |       |        |  |     |    
|                                       
|                                       
|                                       
|                                       
|                                        | Alt-A             |                              | $     | 8,693 |           |   | $     | 4,338   |       |  |              | 100 | %  |         | $     | 8,013 |        |  |     | 8   | % 
|                                       
|                                       
|                                       
|                                       
|                                        | Agency conforming |                              |       | 287   |           |   |       | 587     |       |  |              | (51 | )% |         |       | 365   |        |  |     | (21 | )%
|                                       
|                                       
|                                       
|                                       
|                                        | Jumbo             |                              |       | 518   |           |   |       | 636     |       |  |              | (19 | )% |         |       | 487   |        |  |     | 6   | % 
|                                       
|                                       
|                                       
|                                       
|                                        | Reverse mortgages |                              |       | 507   |           |   |       |        |       |  |              | N/A |    |         |       | 514   |        |  |     | (1  | )%
|                                       
|                                       
|                                       
|                                       
|Subprime(1)                             |                   |                              | 555   |       |           |   | 496   |         |       |  | 12           | %   |    |         | 725   |       |        |  | (23 | )% 
|                                       
|                                       
|                                       
|                                       
|Home equity line of credit(2)           |                   |                              | 343   |       |           |   | 244   |         |       |  | 41           | %   |    |         | 448   |       |        |  | (23 | )% 
|                                       
|                                       
|                                       
|                                       
|Consumer construction(2)                |                   |                              | 699   |       |           |   | 603   |         |       |  | 16           | %   |    |         | 682   |       |        |  | 2   | %  
|                                        |                   |                              |       |       |           |   |       |         |       |  |              |     |    |         |      
|                                        |                   | Subtotal mortgage production |       |       | 11,602    |   |       |         | 6,904 |  |              |     | 68 | %       |       |       | 11,234 |  |     |     | 3  | %
|                                       
|                                       
|                                       
|                                       
|Subdivision construction commitments(2) |                   |                              | 353   |       |           |   | 242   |         |       |  | 46           | %   |    |         | 334   |       |        |  | 6   | %  
|                                       
|                                       
|                                       
|                                       
|Warehouse lending(2)                    |                   |                              | 20    |       |           |   |      |         |       |  | N/A          |     |    |         |      |       |        |  | N/A |    
|                                        |                   |                              |       |       |           |   |       |         |       |  |              |     |    |         |      
|                                        |                   | Total production             |       | $     | 11,975    |   |       | $       | 7,146 |  |              |     | 68 | %       |       | $     | 11,568 |  |     |     | 4  | %
|                                        |                   |                              |       |       |           |   |       |         |       |  |              |     |    |         |      
|Mortgage  Web-based production         |                   | $                            | 7,482 |       |           | $ | 4,319 |         |       |  | 73           | %   |    | $       | 7,250 |       |        |  | 3   | %  
|                                       
|                                       
|                                       
|                                       
|Mortgage pipeline at period end(3)      |                   | $                            | 7,489 |       |           | $ | 5,949 |         |       |  | 26           | %   |    | $       | 6,307 |       |        |  | 19  | %  






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

23



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|                               |                                     |                           |   |       |           |  |   |         |       |  |              |     |    |         |   |       |        |  |  |     |    |  
|------------------------------ | ----------------------------------- | ------------------------- | - | ----- | --------- |  | - | ------- | ----- |  | ------------ | --- | -- | ------- | - | ----- | ------ |  |  | --- | -- | -
|                               |                                     | Three Months Ended        |  
|                               |                                     |                           |  
|                               |                                     | March 31,                 |   |       | March 31, |  |   | Percent |       |  | December 31, |     |    | Percent |  
|                               |                                     | 2005                      |   |       | 2004      |  |   | Change  |       |  | 2004         |     |    | Change  |  
|                               |                                     |                           |   |       |           |  |   |         |       |  |              |     |    |         |  
|                               |                                     | (Dollars in millions)     |  
|                              
|                              
|                              
|                              
|Production by Delivery Method: |                                     |                           |   |       |           |  |   |         |       |  |              |     |    |         |   |       |        |  |  |    
|                              
|                              
|                              
|                              
|                               | Wholesale(1)                        |                           | $ | 5,664 |           |  | $ | 3,397   |       |  |              | 67  | %  |         | $ | 5,510 |        |  |  | 3   | % 
|                              
|                              
|                              
|                              
|                               | Correspondent(2)                    |                           |   | 4,942 |           |  |   | 2,090   |       |  |              | 136 | %  |         |   | 4,506 |        |  |  | 10  | % 
|                              
|                              
|                              
|                              
|                               | Retail(3)                           |                           |   | 996   |           |  |   | 1,417   |       |  |              | (30 | )% |         |   | 1,218 |        |  |  | (18 | )%
|                               |                                     |                           |   |       |           |  |   |         |       |  |              |     |    |         |  
|                               |                                     | Total mortgage production |   |       | 11,602    |  |   |         | 6,904 |  |              |     | 68 | %       |   |       | 11,234 |  |  |     | 3  | %
|                              
|                              
|                              
|                              
|                               | Subdivision construction commitment |                           |   | 353   |           |  |   | 242     |       |  |              | 46  | %  |         |   | 334   |        |  |  | 6   | % 
|                              
|                              
|                              
|                              
|                               | Warehouse lending commitments       |                           |   | 20    |           |  |   |        |       |  |              | N/A |    |         |   |      |        |  |  | N/A |   
|                               |                                     |                           |   |       |           |  |   |         |       |  |              |     |    |         |  
|                               |                                     | Total Production          |   | $     | 11,975    |  |   | $       | 7,146 |  |              |     | 68 | %       |   | $     | 11,568 |  |  |     | 4  | %
|                               |                                     |                           |   |       |           |  |   |         |       |  |              |     |    |         |  






|    |                                                                                                                                                                                                                                 
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Loans obtained through relationships with mortgage brokers and
    funded by IndyMac Bank                                                                                                                                       
|   
|(2) | Closed loans acquired by IndyMac through relationships with
    mortgage bankers and financial institutions on a flow basis, as
    well as loans obtained through bulk purchases by our mortgage
    professional conduit group
|   
|(3) | Direct to consumer channels                                                                                                                                                                                                     

|                                               |                      |                    |      |     |           |  |      |              |  |  |      |     | 
|---------------------------------------------- | -------------------- | ------------------ | ---- | --- | --------- |  | ---- | ------------ |  |  | ---- | --- | 
|                                               |                      | Three Months Ended |     
|                                               |                      |                    |     
|                                               |                      | March 31,          |      |     | March 31, |  |      | December 31, | 
|                                               |                      | 2005               |      |     | 2004      |  |      | 2004         | 
|                                               |                      |                    |      |     |           |  |      |              | 
|Production by Interest Rate Amortization Type: |                      |                    |      |     |           |  |      |              |  |  |      |    
|                                              
|                                              
|                                              
|                                              
|                                               | Fixed Rate Mortgages |                    |      | 35% |           |  |      | 44%          |  |  |      | 27% | 
|                                              
|                                              
|                                              
|                                              
|                                               | Hybrid ARMs          |                    |      | 25% |           |  |      | 26%          |  |  |      | 38% | 
|                                              
|                                              
|                                              
|                                              
|                                               | ARMs                 |                    |      | 40% |           |  |      | 30%          |  |  |      | 35% | 
|                                               |                      |                    |      |     |           |  |      |              | 
|                                               |                      |                    | 100% |     |           |  | 100% |              |  |  | 100% |    
|                                               |                      |                    |      |     |           |  |      |              | 

24



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|                                               |  |                                      |        |   |           |   |       |         |  |  |              |    |  |         |        |   |  |  |    |   
|---------------------------------------------- |  | ------------------------------------ | ------ | - | --------- | - | ----- | ------- |  |  | ------------ | -- |  | ------- | ------ | - |  |  | -- | --
|                                               |  | As of and For the Three Months Ended |       
|                                               |  |                                      |       
|                                               |  | March 31,                            |        |   | March 31, |   |       | Percent |  |  | December 31, |    |  | Percent |       
|                                               |  | 2005                                 |        |   | 2004      |   |       | Change  |  |  | 2004         |    |  | Change  |       
|                                               |  |                                      |        |   |           |   |       |         |  |  |              |    |  |         |       
|                                               |  | (Dollars in millions)                |       
|                                              
|                                              
|                                              
|                                              
|Mortgage loan production:                      |  |                                      |        |   |           |   |       |         |  |  |              |    |  |         |        |   |  |  |    |   
|                                              
|                                              
|                                              
|                                              
|Purchase transactions                          |  | $                                    | 4,895  |   |           | $ | 2,669 |         |  |  | 83           | %  |  | $       | 4,952  |   |  |  | (1 | )%
|                                              
|                                              
|                                              
|                                              
|Cash-out refinance transactions                |  |                                      | 5,342  |   |           |   | 2,562 |         |  |  | 109          | %  |  |         | 4,927  |   |  |  | 8  | % 
|                                              
|                                              
|                                              
|                                              
|Rate/term refinance transactions               |  |                                      | 1,365  |   |           |   | 1,673 |         |  |  | (18          | )% |  |         | 1,355  |   |  |  | 1  | % 
|                                               |  |                                      |        |   |           |   |       |         |  |  |              |    |  |         |       
|Total mortgage loan production                 |  | $                                    | 11,602 |   |           | $ | 6,904 |         |  |  | 68           | %  |  | $       | 11,234 |   |  |  | 3  | % 
|                                               |  |                                      |        |   |           |   |       |         |  |  |              |    |  |         |       
|% purchase and cash-out refinance transactions |  |                                      | 88     | % |           |   | 76    | %       |  |  |              |    |  |         | 88     | % |  |  |    |   
|                                              
|                                              
|                                              
|                                              
|Mortgage pipeline:                             |  |                                      |        |   |           |   |       |         |  |  |              |    |  |         |        |   |  |  |    |   
|                                              
|                                              
|                                              
|                                              
|Purchase transactions                          |  | $                                    | 3,296  |   |           | $ | 2,249 |         |  |  | 47           | %  |  | $       | 2,606  |   |  |  | 26 | % 
|                                              
|                                              
|                                              
|                                              
|Cash-out refinance transactions                |  |                                      | 3,036  |   |           |   | 1,900 |         |  |  | 60           | %  |  |         | 2,727  |   |  |  | 11 | % 
|                                              
|                                              
|                                              
|                                              
|Rate/term refinance transactions               |  |                                      | 1,157  |   |           |   | 1,800 |         |  |  | (36          | )% |  |         | 974    |   |  |  | 19 | % 
|                                               |  |                                      |        |   |           |   |       |         |  |  |              |    |  |         |       
|Mortgage pipeline at period end                |  | $                                    | 7,489  |   |           | $ | 5,949 |         |  |  | 26           | %  |  | $       | 6,307  |   |  |  | 19 | % 
|                                               |  |                                      |        |   |           |   |       |         |  |  |              |    |  |         |       
|% purchase and cash-out refinance transactions |  |                                      | 85     | % |           |   | 70    | %       |  |  |              |    |  |         | 85     | % |  |  |    |   




Mortgage
Production by Division




|                         |            |           |  |    |           |   |  |    |     |  
|------------------------ | ---------- | --------- |  | -- | --------- | - |  | -- | --- | -
|                         |            | March 31, |  |    | March 31, |  
|                         |            | 2005      |  |    | 2004      |  
|                         |            |           |  |    |           |  
|Geographic distribution: |            |           |  |    |           |   |  |   
|                        
|                        
|                        
|                        
|                         | California |           |  | 46 | %         |   |  | 49 | %  
|                        
|                        
|                        
|                        
|                         | Florida    |           |  | 8  | %         |   |  | 5  | %  
|                        
|                        
|                        
|                        
|                         | New York   |           |  | 6  | %         |   |  | 10 | %  
|                        
|                        
|                        
|                        
|                         | New Jersey |           |  | 4  | %         |   |  | 4  | %  
|                        
|                        
|                        
|                        
|                         | Virginia   |           |  | 3  | %         |   |  | 3  | %  
|                        
|                        
|                        
|                        
|                         | Other      |           |  | 33 | %         |   |  | 29 | %  
|                         |            |           |  |    |           |  
|                         |            | Total     |  |    | 100       | % |  |    | 100 | %
|                         |            |           |  |    |           |  

25



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|                            |                                           |                                  |                  |       |           |        |   |         |       |       |              |     |    |         |   |       |        |        |  |     |    |   |  
|--------------------------- | ----------------------------------------- | -------------------------------- | ---------------- | ----- | --------- | ------ | - | ------- | ----- | ----- | ------------ | --- | -- | ------- | - | ----- | ------ | ------ |  | --- | -- | - | -
|                            |                                           | Three Months Ended               |                 
|                            |                                           |                                  |                 
|                            |                                           | March 31,                        |                  |       | March 31, |        |   | Percent |       |       | December 31, |     |    | Percent |  
|                            |                                           | 2005                             |                  |       | 2004      |        |   | Change  |       |       | 2004         |     |    | Change  |  
|                            |                                           |                                  |                  |       |           |        |   |         |       |       |              |     |    |         |  
|                            |                                           | (Dollars in millions)            |                 
|                           
|                           
|                           
|                           
|Mortgage Loan Production:   |                                           |                                  |                  |       |           |        |   |         |       |       |              |     |    |         |   |       |        |        |  |    
|                           
|                           
|                           
|                           
|                            | Mortgage Professionals, excluding Conduit |                                  | $                | 6,909 |           |        | $ | 3,874   |       |       |              | 78  | %  |         | $ | 6,409 |        |        |  | 8   | % 
|                           
|                           
|                           
|                           
|                            | Mortgage Professionals, Conduit           |                                  |                  | 2,605 |           |        |   | 1,170   |       |       |              | 123 | %  |         |   | 2,535 |        |        |  | 3   | % 
|                           
|                           
|                           
|                           
|                            | Consumer Direct and Indirect              |                                  |                  | 686   |           |        |   | 1,076   |       |       |              | (36 | )% |         |   | 873   |        |        |  | (21 | )%
|                           
|                           
|                           
|                           
|                            | Financial Freedom                         |                                  |                  | 507   |           |        |   |        |       |       |              | N/A |    |         |   | 514   |        |        |  | (1  | )%
|                           
|                           
|                           
|                           
|                            | Servicing Retention                       |                                  |                  | 222   |           |        |   | 282     |       |       |              | (21 | )% |         |   | 244   |        |        |  | (9  | )%
|                           
|                           
|                           
|                           
|                            | HELOC                                     |                                  |                  | 42    |           |        |   | 35      |       |       |              | 20  | %  |         |   | 56    |        |        |  | (25 | )%
|                           
|                           
|                           
|                           
|                            | Consumer Construction and Lot             |                                  | $                | 631   |           |        | $ | 467     |       |       |              | 35  | %  |         | $ | 603   |        |        |  | 5   | % 
|                            |                                           |                                  |                  |       |           |        |   |         |       |       |              |     |    |         |  
|                            |                                           | Total Mortgage Loan Production   |                  | $     | 11,602    |        |   | $       | 6,904 |       |              |     | 68 | %       |   | $     | 11,234 |        |  |     | 3  | %
|                           
|                           
|                           
|                           
|Commercial Loan Production: |                                           |                                  |                  |       |           |        |   |         |       |       |              |     |    |         |   |       |        |        |  |    
|                           
|                           
|                           
|                           
|                            | Subdivision Construction                  |                                  | $                | 353   |           |        | $ | 242     |       |       |              | 46  | %  |         | $ | 334   |        |        |  | 6   | % 
|                           
|                           
|                           
|                           
|                            | Warehouse Lending                         |                                  |                  | 20    |           |        |   |        |       |       |              | N/A |    |         |   |      |        |        |  | N/A |   
|                            |                                           |                                  |                  |       |           |        |   |         |       |       |              |     |    |         |  
|                            |                                           | Total Commercial Loan Production |                  | $     | 373       |        |   | $       | 242   |       |              |     | 54 | %       |   | $     | 334    |        |  |     | 12 | %
|                            |                                           |                                  |                  |       |           |        |   |         |       |       |              |     |    |         |  
|                            |                                           |                                  | Total Production |       | $         | 11,975 |   |         | $     | 7,146 |              |     |    | 68      | % |       | $      | 11,568 |  |     |    | 4 | %
|                            |                                           |                                  |                  |       |           |        |   |         |       |       |              |     |    |         |  







26



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|                                        |                                     |                       |       |       |           |  |     |         |  |  |              |    |   |         |       |       |  |  |    |    |  
|--------------------------------------- | ----------------------------------- | --------------------- | ----- | ----- | --------- |  | --- | ------- |  |  | ------------ | -- | - | ------- | ----- | ----- |  |  | -- | -- | -
|                                        |                                     | Three Months Ended    |      
|                                        |                                     |                       |      
|                                        |                                     | March 31,             |       |       | March 31, |  |     | Percent |  |  | December 31, |    |   | Percent |      
|                                        |                                     | 2005                  |       |       | 2004      |  |     | Change  |  |  | 2004         |    |   | Change  |      
|                                        |                                     |                       |       |       |           |  |     |         |  |  |              |    |   |         |      
|                                        |                                     | (Dollars in millions) |      
|                                       
|                                       
|                                       
|                                       
|Key Performance Indicators:             |                                     |                       |       |       |           |  |     |         |  |  |              |    |   |         |       |       |  |  |    |   
|Active Customers:(1)                    |                                     |                       |       |       |           |  |     |         |  |  |              |    |   |         |       |       |  |  |    |   
|                                       
|                                       
|                                       
|                                       
|                                        | Average monthly active customers    |                       |       | 3,059 |           |  |     | 2,060   |  |  |              | 48 | % |         |       | 2,939 |  |  |    | 4  | %
|                                       
|                                       
|                                       
|                                       
|                                        | Active customers during the quarter |                       |       | 5,394 |           |  |     | 3,609   |  |  |              | 49 | % |         |       | 5,047 |  |  |    | 7  | %
|                                       
|                                       
|                                       
|                                       
|Net new customers during the quarter(2) |                                     |                       | 1,286 |       |           |  | 731 |         |  |  | 76           | %  |   |         | 1,407 |       |  |  | (9 | )%
|                                       
|                                       
|                                       
|                                       
|Sales personnel                         |                                     |                       | 640   |       |           |  | 417 |         |  |  | 53           | %  |   |         | 573   |       |  |  | 12 | % 






|    |                                                                                                        
|--- | -------------------------------------------------------------------------------------------------------
|(1) | Active customers are defined as customers who funded at least
    one loan during the period           
|   
|(2) | Net new customers are the number of new customers signed up
    during the period less those terminated




Loan
Sales








27



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##### Table of Contents





|                                  |  |                       |      |   |           |   |      |         |  |  |              |    |  |         |      |   |  |  |     |   
|--------------------------------- |  | --------------------- | ---- | - | --------- | - | ---- | ------- |  |  | ------------ | -- |  | ------- | ---- | - |  |  | --- | --
|                                  |  | Three Months Ended    |     
|                                  |  |                       |     
|                                  |  | March 31,             |      |   | March 31, |   |      | Percent |  |  | December 31, |    |  | Percent |     
|                                  |  | 2005                  |      |   | 2004      |   |      | Change  |  |  | 2004(1)      |    |  | Change  |     
|                                  |  |                       |      |   |           |   |      |         |  |  |              |    |  |         |     
|                                  |  | (Dollars in millions) |     
|                                 
|                                 
|                                 
|                                 
|Gross gain on mortgage loan sales |  | $                     | 117  |   |           | $ | 126  |         |  |  | (7           | )% |  | $       | 135  |   |  |  | (13 | )%
|                                 
|                                 
|                                 
|                                 
|Gross margin before hedging       |  |                       | 1.22 | % |           |   | 2.58 | %       |  |  | (53          | )% |  |         | 1.42 | % |  |  | (14 | )%
|                                 
|                                 
|                                 
|                                 
|Gross hedging gains (losses)      |  | $                     | 27   |   |           | $ | (42  | )       |  |  | 164          | %  |  | $       | (15  | ) |  |  | 279 | % 
|                                 
|                                 
|                                 
|                                 
|Net gains on sale                 |  | $                     | 144  |   |           | $ | 84   |         |  |  | 72           | %  |  | $       | 120  |   |  |  | 20  | % 
|                                 
|                                 
|                                 
|                                 
|Net margin after hedging          |  |                       | 1.49 | % |           |   | 1.71 | %       |  |  | (13          | )% |  |         | 1.26 | % |  |  | 19  | % 






|    |                                                                                                                                                                                                                                                                                                                                                                                         
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The gain on sale of loans for the three months ended
    December 31, 2004 excluded the $2.2 million
    SAB No. 105 and the $1.9 million purchase
    accounting adjustments related to the Financial Freedom
    acquisition. The GAAP gain on sale of loans was
    $116.0 million for the three months ended December 31,
    2004 representing a net margin after hedging of 1.21%.



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




|                      |                              |                    |           |         |            |                        |       |           |  |   |            |         |  |              |       |       |            |   |           |         |  |  |       |       | 
|--------------------- | ---------------------------- | ------------------ | --------- | ------- | ---------- | ---------------------- | ----- | --------- |  | - | ---------- | ------- |  | ------------ | ----- | ----- | ---------- | - | --------- | ------- |  |  | ----- | ----- | 
|                      |                              | Three Months Ended |          
|                      |                              |                    |          
|                      |                              | March 31,          |           |         | % of Loans |                        |       | March 31, |  |   | % of Loans |         |  | December 31, |       |       | % of Loans |  
|                      |                              | 2005               |           |         | Sold       |                        |       | 2004      |  |   | Sold       |         |  | 2004(1)      |       |       | Sold       |  
|                      |                              |                    |           |         |            |                        |       |           |  |   |            |         |  |              |       |       |            |  
|                      |                              |                    |           |         |            | (Dollars in thousands) |       |           |  |   |           
|                     
|                     
|                     
|                     
|Gain on sale of loans |                              | $                  | 144,322   |         |            |                        | 1.49% |           |  | $ | 83,668     |         |  |              | 1.71% |       |            | $ | 120,095   |         |  |  | 1.26% |      
|                     
|                     
|                     
|                     
|Net interest income   |                              |                    | 32,522    |         |            |                        | 0.34% |           |  |   | 41,336     |         |  |              | 0.84% |       |            |   | 40,016    |         |  |  | 0.42% |      
|                     
|                     
|                     
|                     
|Fee income            |                              |                    | 14,337    |         |            |                        | 0.15% |           |  |   | 10,967     |         |  |              | 0.22% |       |            |   | 13,496    |         |  |  | 0.14% |      
|                      |                              |                    |           |         |            |                        |       |           |  |   |            |         |  |              |       |       |            |  
|                      | Total revenues on loans sold |                    | $         | 191,181 |            |                        |       | 1.98%     |  |   | $          | 135,971 |  |              |       | 2.77% |            |   | $         | 173,607 |  |  |       | 1.82% | 
|                      |                              |                    |           |         |            |                        |       |           |  |   |            |         |  |              |       |       |            |  
|Loans sold            |                              | $                  | 9,653,752 |         |            |                        |       |           |  | $ | 4,906,724  |         |  |              |       |       |            | $ | 9,550,060 |         |  |  |       |      






|    |                                                                                                                                                                                                                                                                                                                                                                                     
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The gain on sale of loans for the three months ended
    December 31, 2004 excluded the $2.2 million
    SAB No. 105 and $1.9 million purchase accounting
    adjustments related to the Financial Freedom acquisition. The
    GAAP gain on sale of loans was $116.0 million for the three
    months ended December 31, 2004 representing a net margin
    after hedging of 1.21%.

28



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##### Table of Contents







|                                     |                         |                       |       |        |              |  |    |           |   |   |              |       |  |              |    |     |              |   |       |        |  |  |    |     |  
|------------------------------------ | ----------------------- | --------------------- | ----- | ------ | ------------ |  | -- | --------- | - | - | ------------ | ----- |  | ------------ | -- | --- | ------------ | - | ----- | ------ |  |  | -- | --- | -
|                                     |                         | Three Months Ended    |      
|                                     |                         |                       |      
|                                     |                         | March 31,             |       |        | Distribution |  |    | March 31, |   |   | Distribution |       |  | December 31, |    |     | Distribution |  
|                                     |                         | 2005                  |       |        | Percentages  |  |    | 2004      |   |   | Percentages  |       |  | 2004         |    |     | Percentages  |  
|                                     |                         |                       |       |        |              |  |    |           |   |   |              |       |  |              |    |     |              |  
|                                     |                         | (Dollars in millions) |      
|                                    
|                                    
|                                    
|                                    
|Sales to the GSEs(1)                 |                         | $                     | 1,313 |        |              |  | 12 | %         |   | $ | 2,304        |       |  |              | 45 | %   |              | $ | 2,551 |        |  |  | 24 | %  
|                                    
|                                    
|                                    
|                                    
|Private-label securitizations        |                         |                       | 5,356 |        |              |  | 51 | %         |   |   | 1,085        |       |  |              | 21 | %   |              |   | 4,656 |        |  |  | 45 | %  
|                                    
|                                    
|                                    
|                                    
|Whole loan sales                     |                         |                       | 2,985 |        |              |  | 28 | %         |   |   | 1,518        |       |  |              | 30 | %   |              |   | 2,343 |        |  |  | 22 | %  
|                                     |                         |                       |       |        |              |  |    |           |   |   |              |       |  |              |    |     |              |  
|                                     | Subtotal sales          |                       |       | 9,654  |              |  |    | 91        | % |   |              | 4,907 |  |              |    | 96  | %            |   |       | 9,550  |  |  |    | 91  | %
|                                    
|                                    
|                                    
|                                    
|Investment portfolio acquisitions(2) |                         |                       | 925   |        |              |  | 9  | %         |   |   | 195          |       |  |              | 4  | %   |              |   | 1,001 |        |  |  | 9  | %  
|                                     |                         |                       |       |        |              |  |    |           |   |   |              |       |  |              |    |     |              |  
|                                     | Total loan distribution |                       | $     | 10,579 |              |  |    | 100       | % |   | $            | 5,102 |  |              |    | 100 | %            |   | $     | 10,551 |  |  |    | 100 | %
|                                     |                         |                       |       |        |              |  |    |           |   |   |              |       |  |              |    |     |              |  






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





29



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##### Table of Contents






Mortgage Servicing and Mortgage Servicing Rights




|                                                |                                            |                       |        |        |                   |   |        |        | 
|----------------------------------------------- | ------------------------------------------ | --------------------- | ------ | ------ | ----------------- | - | ------ | ------ | 
|                                                |                                            | Servicing Portfolio   |       
|                                                |                                            |                       |       
|                                                |                                            | Three Months Ended    |       
|                                                |                                            |                       |       
|                                                |                                            | March 31, 2005        |        |        | December 31, 2004 |  
|                                                |                                            |                       |        |        |                   |  
|                                                |                                            | (Dollars in millions) |       
|                                               
|                                               
|                                               
|                                               
|Unpaid principal balance at beginning of period |                                            | $                     | 50,219 |        |                   | $ | 44,501 |       
|                                               
|                                               
|                                               
|                                               
|Additions                                       |                                            |                       | 8,187  |        |                   |   | 9,496  |       
|                                               
|                                               
|                                               
|                                               
|Clean-up calls exercised                        |                                            |                       | (269   | )      |                   |   | (489   | )     
|                                               
|                                               
|                                               
|                                               
|Loan payments and prepayments                   |                                            |                       | (2,142 | )      |                   |   | (3,289 | )     
|                                                |                                            |                       |        |        |                   |  
|                                                | Unpaid principal balance at March 31, 2005 |                       | $      | 55,995 |                   |   | $      | 50,219 | 
|                                                |                                            |                       |        |        |                   |  



|                                                                                            |                          |                        |         |         |           |   |         |              |  |   |         |         | 
|------------------------------------------------------------------------------------------- | ------------------------ | ---------------------- | ------- | ------- | --------- | - | ------- | ------------ |  | - | ------- | ------- | 
|                                                                                            |                          | Three Months Ended     |        
|                                                                                            |                          |                        |        
|                                                                                            |                          | March 31,              |         |         | March 31, |   |         | December 31, | 
|                                                                                            |                          | 2005                   |         |         | 2004      |   |         | 2004         | 
|                                                                                            |                          |                        |         |         |           |   |         |              | 
|                                                                                            |                          | (Dollars in thousands) |        
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|Balance at beginning of period                                                              |                          | $                      | 640,794 |         |           | $ | 443,688 |              |  | $ | 551,811 |        
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|Additions                                                                                   |                          |                        | 132,900 |         |           |   | 50,753  |              |  |   | 122,049 |        
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|Transfers from (to) prepayment penalty and/or AAA-rated
    agency interest-only securities |                          |                        | (5,127  | )       |           |   |        |              |  |   | 8,536   |        
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|Clean-up calls exercised                                                                    |                          |                        | (1,396  | )       |           |   | (3,790  | )            |  |   | (4,313  | )      
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|Amortization                                                                                |                          |                        | (45,792 | )       |           |   | (22,860 | )            |  |   | (46,036 | )      
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|Valuation/impairment                                                                        |                          |                        | 12,859  |         |           |   | (53,433 | )            |  |   | 8,747   |        
|                                                                                            |                          |                        |         |         |           |   |         |              | 
|                                                                                            | Balance at end of period |                        | $       | 734,238 |           |   | $       | 414,358      |  |   | $       | 640,794 | 
|                                                                                            |                          |                        |         |         |           |   |         |              | 



Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of
Liabilities.


30



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##### Table of Contents






AAA-Rated Agency Interest-Only, Prepayment Penalty and
Residual Securities






|                                               |                   |                                                |   |         |           |   |   |              |         |   |   |         |         |  
|---------------------------------------------- | ----------------- | ---------------------------------------------- | - | ------- | --------- | - | - | ------------ | ------- | - | - | ------- | ------- | -
|                                               |                   | Three Months Ended                             |  
|                                               |                   |                                                |  
|                                               |                   | March 31,                                      |   |         | March 31, |   |   | December 31, |        
|                                               |                   | 2005                                           |   |         | 2004      |   |   | 2004         |        
|                                               |                   |                                                |   |         |           |   |   |              |        
|                                               |                   | (Dollars in thousands)                         |  
|                                              
|                                              
|                                              
|                                              
|AAA-rated and agency interest-only securities: |                   |                                                |   |         |           |   |   |              |         |   |   |        
|                                              
|                                              
|                                              
|                                              
|                                               | Beginning balance |                                                | $ | 90,658  |           |   | $ | 146,179      |         |   | $ | 117,257 |        
|                                              
|                                              
|                                              
|                                              
|                                               |                   | Retained investments from securitizations      |   |         |          |   |   |              | 33,578  |   |   |         | 735     |  
|                                              
|                                              
|                                              
|                                              
|                                               |                   | Transfer from (to) MSRs                        |   |         |          |   |   |              |        |   |   |         | (8,536  | )
|                                              
|                                              
|                                              
|                                              
|                                               |                   | Clean-up calls exercised                       |   |         |          |   |   |              | (1,151  | ) |   |         | (31     | )
|                                              
|                                              
|                                              
|                                              
|                                               |                   | Cash received, net of accretion                |   |         | (6,214    | ) |   |              | (11,770 | ) |   |         | (7,422  | )
|                                              
|                                              
|                                              
|                                              
|                                               |                   | Valuation gains (losses) before hedges         |   |         | (1,364    | ) |   |              | (17,684 | ) |   |         | (11,345 | )
|                                               |                   |                                                |   |         |           |   |   |              |        
|                                               | Ending balance    |                                                | $ | 83,080  |           |   | $ | 149,152      |         |   | $ | 90,658  |        
|                                               |                   |                                                |   |         |           |   |   |              |        
|Prepayment penalty securities:                 |                   |                                                |   |         |           |   |   |              |         |   |   |        
|                                              
|                                              
|                                              
|                                              
|                                               | Beginning balance |                                                | $ | 33,451  |           |   | $ | 2,096        |         |   | $ | 28,299  |        
|                                              
|                                              
|                                              
|                                              
|                                               |                   | Retained investments from securitizations      |   |         | 8,393     |   |   |              | 2,199   |   |   |         | 4,467   |  
|                                              
|                                              
|                                              
|                                              
|                                               |                   | Transfer from MSRs                             |   |         | 5,127     |   |   |              |        |   |   |         |        |  
|                                              
|                                              
|                                              
|                                              
|                                               |                   | Cash received, net of accretion                |   |         | (2,812    | ) |   |              | (429    | ) |   |         | (544    | )
|                                              
|                                              
|                                              
|                                              
|                                               |                   | Valuation gains                                |   |         | 1,490     |   |   |              | 443     |   |   |         | 1,229   |  
|                                               |                   |                                                |   |         |           |   |   |              |        
|                                               | Ending balance    |                                                | $ | 45,649  |           |   | $ | 4,309        |         |   | $ | 33,451  |        
|                                               |                   |                                                |   |         |           |   |   |              |        
|Residual securities:                           |                   |                                                |   |         |           |   |   |              |         |   |   |        
|                                              
|                                              
|                                              
|                                              
|                                               | Beginning balance |                                                | $ | 135,386 |           |   | $ | 56,156       |         |   | $ | 113,121 |        
|                                              
|                                              
|                                              
|                                              
|                                               |                   | Retained investments from securitizations, net |   |         | 30        |   |   |              | 16,507  |   |   |         | 27,414  |  
|                                              
|                                              
|                                              
|                                              
|                                               |                   | Cash received, net of accretion                |   |         | (2,960    | ) |   |              | (11,090 | ) |   |         | (5,062  | )
|                                              
|                                              
|                                              
|                                              
|                                               |                   | Valuation losses before hedges                 |   |         | (1,082    | ) |   |              | (251    | ) |   |         | (87     | )
|                                               |                   |                                                |   |         |           |   |   |              |        
|                                               | Ending balance    |                                                | $ | 131,374 |           |   | $ | 61,322       |         |   | $ | 135,386 |        
|                                               |                   |                                                |   |         |           |   |   |              |        




Other Investment Grade and Non-Investment Grade
Securities




31



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##### Table of Contents





|                                                    |       |                                                             |   |                        |            |  |   |           |         |   |            |        |         |            |   |        |         |  |   |        |         | 
|--------------------------------------------------- | ----- | ----------------------------------------------------------- | - | ---------------------- | ---------- |  | - | --------- | ------- | - | ---------- | ------ | ------- | ---------- | - | ------ | ------- |  | - | ------ | ------- | 
|                                                    |       |                                                             |   | December 31,           |           
|                                                    |       | March 31, 2005                                              |   |                        | 2004       | 
|                                                    |       |                                                             |   |                        |            | 
|                                                    |       |                                                             |   | Premium                |            |  |   |           |        
|                                                    |       | Current                                                     |   |                        | (Discount) |  |   |           |         |  
|                                                    |       | Face                                                        |   |                        | to Face    |  |   | Amortized |         |   |            |        |        
|                                                    |       | Value                                                       |   |                        | Value      |  |   | Cost      |         |   | Fair Value |        |         | Fair Value |  
|                                                    |       |                                                             |   |                        |            |  |   |           |         |   |            |        |         |            |  
|                                                    |       |                                                             |   | (Dollars in thousands) |            |  |  
|                                                   
|                                                   
|                                                   
|                                                   
|Other investment grade mortgage- backed securities: |       |                                                             |   |                        |            |  |   |           |         |   |            |        |         |            |   |        |         |  |   |       
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | AA    |                                                             | $ | 71,008                 |            |  | $ | 167       |         |   | $          | 71,175 |         |            | $ | 71,169 |         |  | $ | 76,941 |        
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | A     |                                                             |   | 269                    |            |  |   | (20       | )       |   |            | 249    |         |            |   | 251    |         |  |   | 5,087  |        
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | BBB   |                                                             |   | 33,605                 |            |  |   | (1,743    | )       |   |            | 31,862 |         |            |   | 32,447 |         |  |   | 33,764 |        
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | BBB-  |                                                             |   | 42,761                 |            |  |   | (3,824    | )       |   |            | 38,937 |         |            |   | 40,165 |         |  |   | 31,030 |        
|                                                    |       |                                                             |   |                        |            |  |   |           |         |   |            |        |         |            |  
|                                                    |       | Total other investment grade mortgage-backed securities     |   | $                      | 147,643    |  |   | $         | (5,420  | ) |            | $      | 142,223 |            |   | $      | 144,032 |  |   | $      | 146,822 | 
|                                                    |       |                                                             |   |                        |            |  |   |           |         |   |            |        |         |            |  
|Non-investment grade mortgage-backed securities:    |       |                                                             |   |                        |            |  |   |           |         |   |            |        |         |            |   |        |         |  |   |       
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | BB    |                                                             | $ | 57,389                 |            |  | $ | (7,191    | )       |   | $          | 50,198 |         |            | $ | 51,102 |         |  | $ | 53,065 |        
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | BB-   |                                                             |   | 13,524                 |            |  |   | (220      | )       |   |            | 13,304 |         |            |   | 13,524 |         |  |   | 13,516 |        
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | B+    |                                                             |   | 468                    |            |  |   | (383      | )       |   |            | 85     |         |            |   | 85     |         |  |   | 101    |        
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | B     |                                                             |   | 26,159                 |            |  |   | (12,872   | )       |   |            | 13,287 |         |            |   | 13,669 |         |  |   | 14,449 |        
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    | Other |                                                             |   | 18,418                 |            |  |   | (17,292   | )       |   |            | 1,126  |         |            |   | 1,388  |         |  |   | 1,921  |        
|                                                    |       |                                                             |   |                        |            |  |   |           |         |   |            |        |         |            |  
|                                                    |       | Total other non-investment grade mortgage-backed securities |   | $                      | 115,958    |  |   | $         | (37,958 | ) |            | $      | 78,000  |            |   | $      | 79,768  |  |   | $      | 83,052  | 
|                                                    |       |                                                             |   |                        |            |  |   |           |         |   |            |        |         |            |  



32



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##### Table of Contents






Valuation of Servicing-Related Assets




|                                               |  |                        |         |            |                       |   |            |         |  |         |              |   |          |            |      |          |          |  |         |            |  |  |            |           |  |          |      |   |              |  |      |   |  |  |      |   |  |  |      |  
|---------------------------------------------- |  | ---------------------- | ------- | ---------- | --------------------- | - | ---------- | ------- |  | ------- | ------------ | - | -------- | ---------- | ---- | -------- | -------- |  | ------- | ---------- |  |  | ---------- | --------- |  | -------- | ---- | - | ------------ |  | ---- | - |  |  | ---- | - |  |  | ---- | -
|                                               |  | Actual                 |         |            | Valuation Assumptions |  
|                                               |  |                        |         |            |                       |  
|                                               |  |                        |         | Gross Wtd. |                       |   | Servicing  |         |  | 3-Month |              |   | Weighted |            |      | Lifetime |          |  | 3-Month |            |  |  |            | Remaining | 
|                                               |  | Book                   |         |            | Collateral            |   |            | Average |  |         | Fee/Interest |   |          | Prepayment |      |          | Average  |  |         | Prepayment |  |  | Prepayment |           |  | Discount |      |   | Cumulative   | 
|                                               |  | Value                  |         |            | Balance               |   |            | Coupon  |  |         | Strip        |   |          | Speeds     |      |          | Multiple |  |         | Speeds     |  |  | Speeds     |           |  | Yield    |      |   | Loss Rate(1) | 
|                                               |  |                        |         |            |                       |   |            |         |  |         |              |   |          |            |      |          |          |  |         |            |  |  |            |           |  |          |      |   |              | 
|                                               |  | (Dollars in thousands) |        
|                                              
|                                              
|                                              
|                                              
|March 31, 2005                                 |  |                        |         |            |                       |   |            |         |  |         |              |   |          |            |      |          |          |  |         |            |  |  |            |           |  |          |      |   |              |  |      |   |  |  |      |   |  |  |      |  
|                                              
|                                              
|                                              
|                                              
|MSRs                                           |  | $                      | 734,238 |            |                       | $ | 55,994,639 |         |  |         | 5.79         | % |          |            | 0.36 | %        |          |  | 21.4    | %          |  |  | 3.64       |           |  |          | 20.5 | % |              |  | 20.6 | % |  |  | 11.0 | % |  |  | N/A  |  
|                                               |  |                        |         |            |                       |   |            |         |  |         |              |   |          |            |      |          |          |  |         |            |  |  |            |           |  |          |      |   |              | 
|AAA-rated agency interest-only securities      |  | $                      | 83,080  |            |                       | $ | 7,623,711  |         |  |         | 6.30         | % |          |            | 0.37 | %        |          |  | 29.7    | %          |  |  | 2.95       |           |  |          | 14.4 | % |              |  | 25.4 | % |  |  | 11.0 | % |  |  | N/A  |  
|                                               |  |                        |         |            |                       |   |            |         |  |         |              |   |          |            |      |          |          |  |         |            |  |  |            |           |  |          |      |   |              | 
|Prime residual securities                      |  | $                      | 4,813   |            |                       | $ | 1,510,690  |         |  |         | 6.40         | % |          |            | 1.01 | %        |          |  | 36.8    | %          |  |  | 0.31       |           |  |          | 29.9 | % |              |  | 37.2 | % |  |  | 15.0 | % |  |  | 0.20 | %
|                                              
|                                              
|                                              
|                                              
|Lot loan residual securities                   |  |                        | 18,594  |            |                       | $ | 394,413    |         |  |         | 7.09         | % |          |            | 3.65 | %        |          |  | 35.1    | %          |  |  | 1.29       |           |  |          | 42.2 | % |              |  | 42.8 | % |  |  | 19.6 | % |  |  | 0.39 | %
|                                              
|                                              
|                                              
|                                              
|HELOC residual securities                      |  |                        | 59,800  |            |                       | $ | 1,372,162  |         |  |         | 6.05         | % |          |            | 3.28 | %        |          |  | 47.5    | %          |  |  | 1.33       |           |  |          | 49.1 | % |              |  | 50.0 | % |  |  | 19.0 | % |  |  | 0.72 | %
|                                              
|                                              
|                                              
|                                              
|Subprime residual securities                   |  |                        | 48,167  |            |                       | $ | 3,451,302  |         |  |         | 7.29         | % |          |            | 2.56 | %        |          |  | 26.9    | %          |  |  | 0.54       |           |  |          | 34.1 | % |              |  | 22.1 | % |  |  | 24.9 | % |  |  | 2.88 | %
|                                               |  |                        |         |            |                       |   |            |         |  |         |              |   |          |            |      |          |          |  |         |            |  |  |            |           |  |          |      |   |              | 
|Total non-investment grade residual securities |  | $                      | 131,374 |            |                       |   |            |         |  |         |              |   |          |            |      |          |          |  |         |            |  |  |            |           |  |          |      |   |              |  |      |   |  |  |      |   |  |  |      |  
|                                               |  |                        |         |            |                       |   |            |         |  |         |              |   |          |            |      |          |          |  |         |            |  |  |            |           |  |          |      |   |              | 
|December 31, 2004                              |  |                        |         |            |                       |   |            |         |  |         |              |   |          |            |      |          |          |  |         |            |  |  |            |           |  |          |      |   |              |  |      |   |  |  |      |   |  |  |      |  
|                                              
|                                              
|                                              
|                                              
|MSRs                                           |  | $                      | 640,794 |            |                       | $ | 50,218,965 |         |  |         | 5.73         | % |          |            | 0.36 | %        |          |  | 24.0    | %          |  |  | 3.54       |           |  |          | 20.8 | % |              |  | 21.9 | % |  |  | 10.3 | % |  |  | N/A  |  
|                                               |  |                        |         |            |                       |   |            |         |  |         |              |   |          |            |      |          |          |  |         |            |  |  |            |           |  |          |      |   |              | 
|AAA-rated agency interest-only securities      |  | $                      | 90,658  |            |                       | $ | 8,472,502  |         |  |         | 6.65         | % |          |            | 0.38 | %        |          |  | 34.3    | %          |  |  | 2.82       |           |  |          | 14.9 | % |              |  | 26.9 | % |  |  | 11.3 | % |  |  | N/A  |  
|                                               |  |                        |         |            |                       |   |            |         |  |         |              |   |          |            |      |          |          |  |         |            |  |  |            |           |  |          |      |   |              | 
|Prime residual securities                      |  | $                      | 6,495   |            |                       | $ | 1,668,429  |         |  |         | 6.55         | % |          |            | 1.00 | %        |          |  | 40.9    | %          |  |  | 0.39       |           |  |          | 36.9 | % |              |  | 37.3 | % |  |  | 15.0 | % |  |  | 0.21 | %
|                                              
|                                              
|                                              
|                                              
|Lot loan residual securities                   |  |                        | 17,675  |            |                       | $ | 441,884    |         |  |         | 7.02         | % |          |            | 4.13 | %        |          |  | 36.5    | %          |  |  | 0.97       |           |  |          | 41.0 | % |              |  | 41.6 | % |  |  | 19.3 | % |  |  | 0.42 | %
|                                              
|                                              
|                                              
|                                              
|HELOC residual securities                      |  |                        | 66,077  |            |                       | $ | 1,352,181  |         |  |         | 6.48         | % |          |            | 3.41 | %        |          |  | 32.1    | %          |  |  | 1.43       |           |  |          | 36.7 | % |              |  | 43.4 | % |  |  | 19.0 | % |  |  | 0.91 | %
|                                              
|                                              
|                                              
|                                              
|Subprime residual securities                   |  |                        | 45,139  |            |                       | $ | 2,757,236  |         |  |         | 7.44         | % |          |            | 3.29 | %        |          |  | 24.1    | %          |  |  | 0.50       |           |  |          | 33.6 | % |              |  | 22.8 | % |  |  | 24.7 | % |  |  | 2.55 | %
|                                               |  |                        |         |            |                       |   |            |         |  |         |              |   |          |            |      |          |          |  |         |            |  |  |            |           |  |          |      |   |              | 
|Total non-investment grade residual securities |  | $                      | 135,386 |            |                       |   |            |         |  |         |              |   |          |            |      |          |          |  |         |            |  |  |            |           |  |          |      |   |              |  |      |   |  |  |      |   |  |  |      |  
|                                               |  |                        |         |            |                       |   |            |         |  |         |              |   |          |            |      |          |          |  |         |            |  |  |            |           |  |          |      |   |              | 
|March 31, 2004                                 |  |                        |         |            |                       |   |            |         |  |         |              |   |          |            |      |          |          |  |         |            |  |  |            |           |  |          |      |   |              |  |      |   |  |  |      |   |  |  |      |  
|                                              
|                                              
|                                              
|                                              
|MSRs                                           |  | $                      | 414,358 |            |                       | $ | 32,121,562 |         |  |         | 6.36         | % |          |            | 0.32 | %        |          |  | 29.2    | %          |  |  | 3.97       |           |  |          | 18.9 | % |              |  | 32.1 | % |  |  | 9.0  | % |  |  | N/A  |  
|                                               |  |                        |         |            |                       |   |            |         |  |         |              |   |          |            |      |          |          |  |         |            |  |  |            |           |  |          |      |   |              | 
|AAA-rated agency interest-only securities      |  | $                      | 149,152 |            |                       | $ | 13,559,779 |         |  |         | 6.51         | % |          |            | 0.37 | %        |          |  | 34.5    | %          |  |  | 2.68       |           |  |          | 18.6 | % |              |  | 27.6 | % |  |  | 10.3 | % |  |  | N/A  |  
|                                               |  |                        |         |            |                       |   |            |         |  |         |              |   |          |            |      |          |          |  |         |            |  |  |            |           |  |          |      |   |              | 
|Prime residual securities                      |  | $                      | 11,019  |            |                       | $ | 2,044,144  |         |  |         | 7.07         | % |          |            | 1.36 | %        |          |  | 59.0    | %          |  |  | 0.40       |           |  |          | 26.9 | % |              |  | 36.8 | % |  |  | 15.0 | % |  |  | 0.52 | %
|                                              
|                                              
|                                              
|                                              
|Lot loan residual securities                   |  |                        | 7,855   |            |                       | $ | 166,032    |         |  |         | 6.39         | % |          |            | 4.28 | %        |          |  | 40.4    | %          |  |  | 1.11       |           |  |          | 43.6 | % |              |  | 41.0 | % |  |  | 20.0 | % |  |  | 0.29 | %
|                                              
|                                              
|                                              
|                                              
|HELOC residual securities                      |  |                        | 17,684  |            |                       | $ | 501,551    |         |  |         | 5.89         | % |          |            | 3.94 | %        |          |  | 0.0     | %          |  |  | 0.89       |           |  |          | 50.6 | % |              |  | 50.6 | % |  |  | 19.0 | % |  |  | 1.22 | %
|                                              
|                                              
|                                              
|                                              
|Subprime residual securities                   |  |                        | 24,764  |            |                       | $ | 1,043,495  |         |  |         | 8.55         | % |          |            | 4.31 | %        |          |  | 35.4    | %          |  |  | 0.55       |           |  |          | 32.2 | % |              |  | 33.0 | % |  |  | 23.9 | % |  |  | 2.88 | %
|                                               |  |                        |         |            |                       |   |            |         |  |         |              |   |          |            |      |          |          |  |         |            |  |  |            |           |  |          |      |   |              | 
|Total non-investment grade residual securities |  | $                      | 61,322  |            |                       |   |            |         |  |         |              |   |          |            |      |          |          |  |         |            |  |  |            |           |  |          |      |   |              |  |      |   |  |  |      |   |  |  |      |  
|                                               |  |                        |         |            |                       |   |            |         |  |         |              |   |          |            |      |          |          |  |         |            |  |  |            |           |  |          |      |   |              | 






|    |                                                                                                                                                                                                                                                                
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | As a percentage of the original pool balance, the actual
    cumulative loss rate to date totaled 0.03%, 0.06% and 0.70% for
    prime, HELOC and subprime, respectively, at March 31, 2005.
    No loss has incurred to date for lot loan residual securities.



33



---



##### Table of Contents










Hedging Interest Rate Risk on Servicing-Related
Assets






34



---



##### Table of Contents





|                                                 |                                                                                                                                                 |                                                      |       |         |           |   |        |              |        |   |       |         |        |  
|------------------------------------------------ | ----------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------- | ----- | ------- | --------- | - | ------ | ------------ | ------ | - | ----- | ------- | ------ | -
|                                                 |                                                                                                                                                 | Three Months Ended                                   |      
|                                                 |                                                                                                                                                 |                                                      |      
|                                                 |                                                                                                                                                 | March 31,                                            |       |         | March 31, |   |        | December 31, |       
|                                                 |                                                                                                                                                 | 2005                                                 |       |         | 2004      |   |        | 2004         |       
|                                                 |                                                                                                                                                 |                                                      |       |         |           |   |        |              |       
|                                                 |                                                                                                                                                 | (Dollars in thousands)                               |      
|                                                
|                                                
|                                                
|                                                
|Service fee (expense) income:                    |                                                                                                                                                 |                                                      |       |         |           |   |        |              |        |   |       |        
|                                                
|                                                
|                                                
|                                                
|                                                 | Gross service fee income                                                                                                                        |                                                      | $     | 54,989  |           |   | $      | 28,080       |        |   | $     | 46,621  |       
|                                                
|                                                
|                                                
|                                                
|                                                 | Amortization                                                                                                                                    |                                                      |       | (45,792 | )         |   |        | (22,860      | )      |   |       | (46,036 | )     
|                                                 |                                                                                                                                                 |                                                      |       |         |           |   |        |              |       
|                                                 | Service fee (expense) income, net of amortization                                                                                               |                                                      |       | 9,197   |           |   |        | 5,220        |        |   |       | 585     |       
|                                                
|                                                
|                                                
|                                                
|                                                 | Valuation adjustments on MSRs                                                                                                                   |                                                      |       | 12,859  |           |   |        | (53,433      | )      |   |       | 8,747   |       
|                                                
|                                                
|                                                
|                                                
|                                                 | Hedge gain (loss) on MSRs                                                                                                                       |                                                      |       | (17,638 | )         |   |        | 45,069       |        |   |       | 424     |       
|                                                 |                                                                                                                                                 |                                                      |       |         |           |   |        |              |       
|                                                 |                                                                                                                                                 | Total service fee (expense) income                   |       | $       | 4,418     |   |        | $            | (3,144 | ) |       | $       | 9,756  |  
|                                                 |                                                                                                                                                 |                                                      |       |         |           |   |        |              |       
|Net (loss) gain on securities:                   |                                                                                                                                                 |                                                      |       |         |           |   |        |              |        |   |       |        
|                                                
|                                                
|                                                
|                                                
|                                                 | Realized gain (loss) on available for sale securities                                                                                           |                                                      | $     | (350    | )         |   | $      | 900          |        |   | $     | 29      |       
|                                                
|                                                
|                                                
|                                                
|                                                 | Impairment on available for sale securities                                                                                                     |                                                      |       | (337    | )         |   |        | (101         | )      |   |       | (269    | )     
|                                                
|                                                
|                                                
|                                                
|                                                 | Unrealized gain (loss) on prepayment penalty securities                                                                                         |                                                      |       | 1,491   |           |   |        | (1,025       | )      |   |       | 1,229   |       
|                                                
|                                                
|                                                
|                                                
|                                                 | Unrealized gain (loss) on AAA-rated and agency interest-only
    securities and residual securities                                             |                                                      |       | (4,268  | )         |   |        | (16,467      | )      |   |       | (11,432 | )     
|                                                
|                                                
|                                                
|                                                
|                                                 | Net (loss) gain on securities and other instruments used to
    hedge AAA-rated and agency interest-only securities and residual
    securities |                                                      |       | (1,182  | )         |   |        | 11,706       |        |   |       | 4,478   |       
|                                                 |                                                                                                                                                 |                                                      |       |         |           |   |        |              |       
|                                                 |                                                                                                                                                 | Total (loss) gain on mortgage-backed securities, net |       | $       | (4,646    | ) |        | $            | (4,987 | ) |       | $       | (5,965 | )
|                                                 |                                                                                                                                                 |                                                      |       |         |           |   |        |              |       
|Total clean-up call and retention program income |                                                                                                                                                 | $                                                    | 7,434 |         |           | $ | 21,192 |              |        | $ | 8,542 |        








MORTGAGE-BACKED SECURITIES AND LOANS HELD FOR INVESTMENT




35



---



##### Table of Contents





|                                                          |                                |                                                |                                     |                                    |              |           |            |           |           |           |            | 
|--------------------------------------------------------- | ------------------------------ | ---------------------------------------------- | ----------------------------------- | ---------------------------------- | ------------ | --------- | ---------- | --------- | --------- | --------- | ---------- | 
|                                                          |                                | March 31,                                      |                                     |                                    | December 31, |          
|                                                          |                                | 2005                                           |                                     |                                    | 2004         |          
|                                                          |                                |                                                |                                     |                                    |              |          
|                                                          |                                | (Dollars in thousands)                         |                                    
|                                                         
|                                                         
|                                                         
|                                                         
|Loans held for investment:                                |                                |                                                |                                     |                                    |              |           |            |          
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | SFR mortgage                   |                                                | $                                   | 5,059,627                          |              |           | $          | 4,458,784 |          
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Consumer construction          |                                                |                                     | 1,451,370                          |              |           |            | 1,443,450 |          
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Builder construction           |                                                |                                     | 670,977                            |              |           |            | 643,116   |          
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | HELOC                          |                                                |                                     | 46,474                             |              |           |            | 45,932    |          
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Land and other mortgage        |                                                |                                     | 170,759                            |              |           |            | 158,471   |          
|                                                          |                                |                                                |                                     |                                    |              |          
|                                                          |                                |                                                |                                     | Total  loans held for investment  |              |           | 7,399,207  |           |           |           | 6,749,753  | 
|                                                          |                                |                                                |                                     |                                    |              |          
|Mortgage-backed securities:                               |                                |                                                |                                     |                                    |              |           |            |          
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Trading securities:            |                                                |                                     |                                    |              |           |            |           |          
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          |                                | AAA-rated and agency interest-only securities  |                                     |                                    | 83,080       |           |            |           | 90,658    |          
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          |                                | AAA-rated principal-only securities            |                                     |                                    | 1,113        |           |            |           | 18,599    |          
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          |                                | Prepayment penalty securities                  |                                     |                                    | 45,649       |           |            |           | 33,451    |          
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          |                                | Other investment grade securities              |                                     |                                    | 9,263        |           |            |           | 9,219     |          
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          |                                | Other non-investment grade securities          |                                     |                                    | 100          |           |            |           | 4,198     |          
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          |                                | Non-investment grade residual securities       |                                     |                                    | 84,123       |           |            |           | 78,911    |          
|                                                          |                                |                                                |                                     |                                    |              |          
|                                                          |                                |                                                |                                     | Total trading securities           |              |           | 223,328    |           |           |           | 235,036    | 
|                                                          |                                |                                                |                                     |                                    |              |          
|                                                          | Available for sale securities: |                                                |                                     |                                    |              |           |            |           |          
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          |                                | AAA-rated non-agency securities                |                                     |                                    | 3,101,050    |           |            |           | 3,166,600 |          
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          |                                | AAA-rated agency securities                    |                                     |                                    | 13,091       |           |            |           | 14,903    |          
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          |                                | Other investment grade securities              |                                     |                                    | 134,769      |           |            |           | 137,603   |          
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          |                                | Other non-investment grade securities          |                                     |                                    | 79,668       |           |            |           | 78,854    |          
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          |                                | Non-investment grade HELOC residual securities |                                     |                                    | 47,251       |           |            |           | 56,475    |          
|                                                          |                                |                                                |                                     |                                    |              |          
|                                                          |                                |                                                | Total available for sale securities |                                    |              | 3,375,829 |            |           |           | 3,454,435 |           
|                                                          |                                |                                                |                                     |                                    |              |          
|                                                          |                                |                                                |                                     | Total  mortgage-backed securities |              |           | 3,599,157  |           |           |           | 3,689,471  | 
|                                                          |                                |                                                |                                     |                                    |              |          
|                                                          |                                |                                                |                                     | Total                              |              | $         | 10,998,364 |           |           | $         | 10,439,224 | 
|                                                          |                                |                                                |                                     |                                    |              |          
|Percentage of securities portfolio rated investment grade |                                |                                                | 93                                  | %                                  |              |           | 93         | %        
|                                                         
|                                                         
|                                                         
|                                                         
|Percentage of securities portfolio rated AAA              |                                |                                                | 89                                  | %                                  |              |           | 89         | %        






SFR Mortgage Loans Held for Investment




36



---



##### Table of Contents







|                                                  |  |                        |           |   |              |   |           |  
|------------------------------------------------- |  | ---------------------- | --------- | - | ------------ | - | --------- | -
|                                                  |  | March 31,              |           |   | December 31, |  
|                                                  |  | 2005                   |           |   | 2004         |  
|                                                  |  |                        |           |   |              |  
|                                                  |  | (Dollars in thousands) |          
|                                                 
|                                                 
|                                                 
|                                                 
|SFR mortgage loans held for investment            |  | $                      | 5,059,627 |   |              | $ | 4,458,784 |  
|                                                 
|                                                 
|                                                 
|                                                 
|Average loan size                                 |  | $                      | 302       |   |              | $ | 305       |  
|                                                 
|                                                 
|                                                 
|                                                 
|Non-performing loans as a percentage of SFR loans |  |                        | 0.54      | % |              |   | 0.60      | %
|                                                 
|                                                 
|                                                 
|                                                 
|Estimated average life in years(1)                |  |                        | 2.4       |   |              |   | 2.4       |  
|                                                 
|                                                 
|                                                 
|                                                 
|Estimated average duration in years(2)            |  |                        | 1.5       |   |              |   | 1.5       |  
|                                                 
|                                                 
|                                                 
|                                                 
|Yield                                             |  |                        | 4.66      | % |              |   | 4.27      | %
|                                                 
|                                                 
|                                                 
|                                                 
|Fixed-rate mortgages                              |  |                        | 8         | % |              |   | 9         | %
|                                                 
|                                                 
|                                                 
|                                                 
|Adjustable-rate mortgages                         |  |                        | 26        | % |              |   | 18        | %
|                                                 
|                                                 
|                                                 
|                                                 
|Hybrid adjustable-rate mortgages                  |  |                        | 66        | % |              |   | 73        | %

|                            |                                        |           |     |    |              |   |     |    |     |  
|--------------------------- | -------------------------------------- | --------- | --- | -- | ------------ | - | --- | -- | --- | -
|                            |                                        | March 31, |     |    | December 31, |  
|Additional Information      |                                        | 2005      |     |    | 2004         |  
|                            |                                        |           |     |    |              |  
|Average FICO score(3)       |                                        |           | 717 |    |              |   | 720 |   
|                           
|                           
|                           
|                           
|Average loan to value ratio |                                        |           | 72  | %  |              |   | 71  | % 
|                           
|                           
|                           
|                           
|Geographic distribution:    |                                        |           |     |    |              |   |     |   
|                           
|                           
|                           
|                           
|                            | Southern California                    |           |     | 30 | %            |   |     | 31 | %  
|                           
|                           
|                           
|                           
|                            | Northern California                    |           |     | 21 | %            |   |     | 21 | %  
|                           
|                           
|                           
|                           
|                            | Michigan                               |           |     | 5  | %            |   |     | 6  | %  
|                           
|                           
|                           
|                           
|                            | Florida                                |           |     | 5  | %            |   |     | 4  | %  
|                           
|                           
|                           
|                           
|                            | New York                               |           |     | 4  | %            |   |     | 4  | %  
|                           
|                           
|                           
|                           
|                            | Georgia                                |           |     | 3  | %            |   |     | 3  | %  
|                           
|                           
|                           
|                           
|                            | Virginia                               |           |     | 3  | %            |   |     | 3  | %  
|                           
|                           
|                           
|                           
|                            | Massachusetts                          |           |     | 3  | %            |   |     | 3  | %  
|                           
|                           
|                           
|                           
|                            | New Jersey                             |           |     | 3  | %            |   |     | 2  | %  
|                           
|                           
|                           
|                           
|                            | Arizona                                |           |     | 2  | %            |   |     | 2  | %  
|                           
|                           
|                           
|                           
|                            | Other (each individually less than 2%) |           |     | 21 | %            |   |     | 21 | %  
|                            |                                        |           |     |    |              |  
|                            |                                        | Total     |     |    | 100          | % |     |    | 100 | %
|                            |                                        |           |     |    |              |  






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Represents the estimated length of time, on average, the SFR
    loan portfolio will remain outstanding based on the
    Companys estimates for prepayments.                                                                                                                                                                                                                                                                    
|   
|(2) | Average duration measures the expected change in the value of a
    financial instrument in response to changes in interest rates.                                                                                                                                                                                                                                                                                               
|   
|(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.




Mortgage-Backed Securities




37



---



##### Table of Contents










Construction Lending






38



---



##### Table of Contents





|                                       |  |                |           |                        |                   |   |           |              |  |   |              |   |  |   |           |  
|-------------------------------------- |  | -------------- | --------- | ---------------------- | ----------------- | - | --------- | ------------ |  | - | ------------ | - |  | - | --------- | -
|                                       |  | As of          |          
|                                       |  |                |          
|                                       |  | March 31, 2005 |           |                        | December 31, 2004 |  
|                                       |  |                |           |                        |                   |  
|                                       |  | Consumer       |           |                        | Builder           |   |           | Consumer     |  |   | Builder      |  
|                                       |  | Construction   |           |                        | Construction      |   |           | Construction |  |   | Construction |  
|                                       |  | Loans          |           |                        | Loans             |   |           | Loans        |  |   | Loans        |  
|                                       |  |                |           |                        |                   |   |           |              |  |   |              |  
|                                       |  |                |           | (Dollars in thousands) |                   |   |          
|                                      
|                                      
|                                      
|                                      
|Construction loans                     |  | $              | 1,451,370 |                        |                   | $ | 670,977   |              |  | $ | 1,443,450    |   |  | $ | 643,116   |  
|                                      
|                                      
|                                      
|                                      
|Lot, land and other mortgage loans     |  | $              | 154,762   |                        |                   | $ | 167,039   |              |  | $ | 37,172       |   |  | $ | 154,123   |  
|                                      
|                                      
|                                      
|                                      
|Outstanding commitments                |  | $              | 2,662,193 |                        |                   | $ | 1,624,376 |              |  | $ | 2,528,054    |   |  | $ | 1,461,296 |  
|                                      
|                                      
|                                      
|                                      
|Average loan commitment                |  | $              | 393       |                        |                   | $ | 1,909     |              |  | $ | 410          |   |  | $ | 1,941     |  
|                                      
|                                      
|                                      
|                                      
|Non-performing loans                   |  |                | 0.51      | %                      |                   |   | 0.87      | %            |  |   | 0.65         | % |  |   | 1.45      | %
|                                      
|                                      
|                                      
|                                      
|Annualized yield on construction loans |  |                | 5.70      | %                      |                   |   | 8.04      | %            |  |   | 5.56         | % |  |   | 7.35      | %
|                                      
|                                      
|                                      
|                                      
|Fixed-rate loans                       |  |                | 91        | %                      |                   |   |          |              |  |   | 98           | % |  |   |          |  
|                                      
|                                      
|                                      
|                                      
|Adjustable-rate loans                  |  |                | 9         | %                      |                   |   | 99        | %            |  |   | 2            | % |  |   | 98        | %
|                                      
|                                      
|                                      
|                                      
|Hybrid adjustable-rate loans           |  |                |          |                        |                   |   | 1         | %            |  |   |             |   |  |   | 2         | %

Additional Information as of March 31, 2005


|                               |                                        |              |     |     |   |  |                                        |  |     |     |  
|------------------------------ | -------------------------------------- | ------------ | --- | --- | - |  | -------------------------------------- |  | --- | --- | -
|                               |                                        | Consumer     |     |     |   |  | Builder                                | 
|                               |                                        | Construction |     |     |   |  | Construction                           | 
|                               |                                        | Loans        |     |     |   |  | Loans                                  | 
|                               |                                        |              |     |     |   |  |                                        | 
|Average loan-to-value ratio(1) |                                        |              | 74  | %   |   |  |                                        |  | 70  | %  
|                              
|                              
|                              
|                              
|Average FICO score(2)          |                                        |              | 710 |     |   |  |                                        |  | N/A |    
|Geographic distribution        |                                        |              |     |     |   |  |                                        |  |     |    
|                              
|                              
|                              
|                              
|                               | Southern California                    |              |     | 30  | % |  | Southern California                    |  |     | 42  | %
|                              
|                              
|                              
|                              
|                               | Northern California                    |              |     | 17  | % |  | Northern California                    |  |     | 19  | %
|                              
|                              
|                              
|                              
|                               | Hawaii                                 |              |     | 6   | % |  | Illinois                               |  |     | 11  | %
|                              
|                              
|                              
|                              
|                               | Florida                                |              |     | 5   | % |  | Florida                                |  |     | 4   | %
|                              
|                              
|                              
|                              
|                               | New York                               |              |     | 5   | % |  | Massachusetts                          |  |     | 4   | %
|                              
|                              
|                              
|                              
|                               | Washington                             |              |     | 3   | % |  | Nevada                                 |  |     | 3   | %
|                              
|                              
|                              
|                              
|                               | Colorado                               |              |     | 3   | % |  | New York                               |  |     | 3   | %
|                              
|                              
|                              
|                              
|                               | Nevada                                 |              |     | 2   | % |  | Arizona                                |  |     | 2   | %
|                              
|                              
|                              
|                              
|                               | Arizona                                |              |     | 2   | % |  | Other (each individually less than 2%) |  |     | 12  | %
|                               |                                        |              |     |     |   |  |                                        | 
|                               | Georgia                                |              |     | 2   | % |  | Total Builder Construction             |  |     | 100 | %
|                               |                                        |              |     |     |   |  |                                        | 
|                               | Other (each individually less than 2%) |              |     | 25  | % |  |                                        |  |     |     |  
|                               |                                        |              |     |     |   |  |                                        | 
|                               | Total Consumer Construction            |              |     | 100 | % |  |                                        |  |     |     |  
|                               |                                        |              |     |     |   |  |                                        | 






|    |                                                                                                                                                                
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The average loan-to-value ratio is based on the estimated
    appraised value of the completed project compared to the
    commitment amount at March 31, 2005.
|   
|(2) | FICO scores are not calculated for corporate entities and,
    therefore, are not applicable to the builder construction
    portfolio.                        



39



---



##### Table of Contents






HELOC Portfolio






|                           |  |                        |         |   |           |   |         |              |  |   |         |  
|-------------------------- |  | ---------------------- | ------- | - | --------- | - | ------- | ------------ |  | - | ------- | -
|                           |  | March 31,              |         |   | March 31, |   |         | December 31, | 
|                           |  | 2005                   |         |   | 2004      |   |         | 2004         | 
|                           |  |                        |         |   |           |   |         |              | 
|                           |  | (Dollars in thousands) |        
|                          
|                          
|                          
|                          
|Outstanding balance        |  | $                      | 409,948 |   |           | $ | 322,351 |              |  | $ | 404,342 |  
|                          
|                          
|                          
|                          
|Outstanding commitments(1) |  | $                      | 821,991 |   |           | $ | 638,210 |              |  | $ | 838,534 |  
|                          
|                          
|                          
|                          
|Average spread over prime  |  |                        | 1.31    | % |           |   | 2.07    | %            |  |   | 1.41    | %
|                          
|                          
|                          
|                          
|Average FICO score         |  |                        | 729     |   |           |   | 711     |              |  |   | 726     |  
|                          
|                          
|                          
|                          
|Average CLTV ratio(2)      |  |                        | 76      | % |           |   | 76      | %            |  |   | 76      | %

Additional Information as of March 31, 2005


|            |       |                        |         |              |            |   |    |                |  |  |          |      |   |             |     |     |  |  |      |      |  
|----------- | ----- | ---------------------- | ------- | ------------ | ---------- | - | -- | -------------- |  |  | -------- | ---- | - | ----------- | --- | --- |  |  | ---- | ---- | -
|            |       |                        |         | Average Loan |            |   |    |                |  |  | 30+ Days |     
|            |       | Outstanding            |         |              | Commitment |   |    | Average Spread |  |  | Average  |      |   | Delinquency |    
|CLTV        |       | Balance                |         |              | Balance    |   |    | Over Prime     |  |  | FICO     |      |   | Percentage  |    
|            |       |                        |         |              |            |   |    |                |  |  |          |      |   |             |    
|            |       | (Dollars in thousands) |        
|           
|           
|           
|           
|96% to 100% |       | $                      | 75,312  |              |            | $ | 68 |                |  |  | 2.27     | %    |   |             | 733 |     |  |  | 0.41 | %   
|           
|           
|           
|           
|91% to 95%  |       |                        | 39,059  |              |            |   | 64 |                |  |  | 2.03     | %    |   |             | 723 |     |  |  | 0.94 | %   
|           
|           
|           
|           
|81% to 90%  |       |                        | 101,100 |              |            |   | 64 |                |  |  | 1.77     | %    |   |             | 713 |     |  |  | 0.89 | %   
|           
|           
|           
|           
|71% to 80%  |       |                        | 100,033 |              |            |   | 89 |                |  |  | 0.69     | %    |   |             | 728 |     |  |  | 0.42 | %   
|           
|           
|           
|           
|70% or less |       |                        | 94,444  |              |            |   | 88 |                |  |  | 0.40     | %    |   |             | 744 |     |  |  | 0.05 | %   
|            |       |                        |         |              |            |   |    |                |  |  |          |      |   |             |    
|            | Total |                        | $       | 409,948      |            |   | $  | 77             |  |  |          | 1.31 | % |             |     | 729 |  |  |      | 0.50 | %
|            |       |                        |         |              |            |   |    |                |  |  |          |      |   |             |    






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

40



---



##### Table of Contents






NET INTEREST INCOME




|                                                     |                                            |                        |           |            |                |   |         |                   |  |         |         |      |   |          |           |            |      |         |        |         |  |  |          |      |   |      |           |            |  |   |         |         |  |  |       |      |  
|---------------------------------------------------- | ------------------------------------------ | ---------------------- | --------- | ---------- | -------------- | - | ------- | ----------------- |  | ------- | ------- | ---- | - | -------- | --------- | ---------- | ---- | ------- | ------ | ------- |  |  | -------- | ---- | - | ---- | --------- | ---------- |  | - | ------- | ------- |  |  | ----- | ---- | -
|                                                     |                                            | Three Months Ended     |          
|                                                     |                                            |                        |          
|                                                     |                                            | March 31, 2005         |           |            | March 31, 2004 |   |         | December 31, 2004 | 
|                                                     |                                            |                        |           |            |                |   |         |                   | 
|                                                     |                                            | Average                |           |            |                |   | Yield/  |                   |  | Average |         |      |   |          | Yield/    |            |      | Average |        |         |  |  | Yield/   |     
|                                                     |                                            | Balance                |           |            | Interest       |   |         | Rate              |  |         | Balance |      |   | Interest |           |            | Rate |         |        | Balance |  |  | Interest |      |   | Rate |          
|                                                     |                                            |                        |           |            |                |   |         |                   |  |         |         |      |   |          |           |            |      |         |        |         |  |  |          |      |   |      |          
|                                                     |                                            | (Dollars in thousands) |          
|                                                    
|                                                    
|                                                    
|                                                    
|Securities                                           |                                            | $                      | 3,657,831 |            |                | $ | 51,324  |                   |  |         | 5.69    | %    |   | $        | 2,105,468 |            |      | $       | 26,855 |         |  |  | 5.13     | %    |   | $    | 3,601,428 |            |  | $ | 46,002  |         |  |  | 5.08  | %   
|                                                    
|                                                    
|                                                    
|                                                    
|Loans held for sale                                  |                                            |                        | 6,047,608 |            |                |   | 79,383  |                   |  |         | 5.32    | %    |   |          | 3,688,650 |            |      |         | 54,746 |         |  |  | 5.97     | %    |   |      | 6,175,698 |            |  |   | 80,426  |         |  |  | 5.18  | %   
|                                                    
|                                                    
|                                                    
|                                                    
|Mortgage loans held for investment                   |                                            |                        | 4,890,267 |            |                |   | 56,220  |                   |  |         | 4.66    | %    |   |          | 5,608,258 |            |      |         | 58,042 |         |  |  | 4.16     | %    |   |      | 5,040,393 |            |  |   | 55,557  |         |  |  | 4.38  | %   
|                                                    
|                                                    
|                                                    
|                                                    
|Builder construction and income property             |                                            |                        | 656,007   |            |                |   | 13,007  |                   |  |         | 8.04    | %    |   |          | 506,668   |            |      |         | 8,039  |         |  |  | 6.38     | %    |   |      | 614,330   |            |  |   | 11,342  |         |  |  | 7.34  | %   
|                                                    
|                                                    
|                                                    
|                                                    
|Consumer construction                                |                                            |                        | 1,371,321 |            |                |   | 19,271  |                   |  |         | 5.70    | %    |   |          | 1,140,371 |            |      |         | 15,995 |         |  |  | 5.64     | %    |   |      | 1,366,365 |            |  |   | 19,087  |         |  |  | 5.56  | %   
|                                                    
|                                                    
|                                                    
|                                                    
|Investment in Federal Home Loan Bank stock and other |                                            |                        | 416,033   |            |                |   | 4,393   |                   |  |         | 4.28    | %    |   |          | 337,478   |            |      |         | 2,882  |         |  |  | 3.43     | %    |   |      | 384,358   |            |  |   | 3,324   |         |  |  | 3.44  | %   
|                                                     |                                            |                        |           |            |                |   |         |                   |  |         |         |      |   |          |           |            |      |         |        |         |  |  |          |      |   |      |          
|                                                     | Total interest-earning assets              |                        |           | 17,039,067 |                |   |         | 223,598           |  |         |         | 5.32 | % |          |           | 13,386,893 |      |         |        | 166,559 |  |  |          | 5.00 | % |      |           | 17,182,572 |  |   |         | 215,738 |  |  |       | 4.99 | %
|                                                     |                                            |                        |           |            |                |   |         |                   |  |         |         |      |   |          |           |            |      |         |        |         |  |  |          |      |   |      |          
|Other                                                |                                            |                        | 1,529,126 |            |                |   |         |                   |  |         |         |      |   |          | 1,161,479 |            |      |         |        |         |  |  |          |      |   |      | 1,465,184 |            |  |   |         |         |  |  |       |     
|                                                     |                                            |                        |           |            |                |   |         |                   |  |         |         |      |   |          |           |            |      |         |        |         |  |  |          |      |   |      |          
|                                                     | Total assets                               |                        | $         | 18,568,193 |                |   |         |                   |  |         |         |      |   |          | $         | 14,548,372 |      |         |        |         |  |  |          |      |   |      | $         | 18,647,756 |  |   |         |         |  |  |       |      |  
|                                                     |                                            |                        |           |            |                |   |         |                   |  |         |         |      |   |          |           |            |      |         |        |         |  |  |          |      |   |      |          
|Interest-bearing deposits                            |                                            | $                      | 5,258,418 |            |                |   | 35,892  |                   |  |         | 2.77    | %    |   | $        | 3,838,511 |            |      |         | 22,482 |         |  |  | 2.36     | %    |   | $    | 4,806,998 |            |  |   | 30,906  |         |  |  | 2.56  | %   
|                                                    
|                                                    
|                                                    
|                                                    
|Advances from Federal Home Loan Bank                 |                                            |                        | 7,300,102 |            |                |   | 52,713  |                   |  |         | 2.93    | %    |   |          | 5,207,135 |            |      |         | 30,920 |         |  |  | 2.39     | %    |   |      | 6,334,385 |            |  |   | 43,426  |         |  |  | 2.73  | %   
|                                                    
|                                                    
|                                                    
|                                                    
|Other borrowings                                     |                                            |                        | 3,635,020 |            |                |   | 30,573  |                   |  |         | 3.41    | %    |   |          | 3,532,004 |            |      |         | 19,224 |         |  |  | 2.19     | %    |   |      | 5,139,378 |            |  |   | 37,845  |         |  |  | 2.93  | %   
|                                                     |                                            |                        |           |            |                |   |         |                   |  |         |         |      |   |          |           |            |      |         |        |         |  |  |          |      |   |      |          
|                                                     | Total interest-bearing liabilities         |                        |           | 16,193,540 |                |   |         | 119,178           |  |         |         | 2.98 | % |          |           | 12,577,650 |      |         |        | 72,626  |  |  |          | 2.32 | % |      |           | 16,280,761 |  |   |         | 112,177 |  |  |       | 2.74 | %
|                                                     |                                            |                        |           |            |                |   |         |                   |  |         |         |      |   |          |           |            |      |         |        |         |  |  |          |      |   |      |          
|Other                                                |                                            |                        | 1,121,105 |            |                |   |         |                   |  |         |         |      |   |          | 927,400   |            |      |         |        |         |  |  |          |      |   |      | 1,142,205 |            |  |   |         |         |  |  |       |     
|                                                     |                                            |                        |           |            |                |   |         |                   |  |         |         |      |   |          |           |            |      |         |        |         |  |  |          |      |   |      |          
|                                                     | Total liabilities                          |                        |           | 17,314,645 |                |   |         |                   |  |         |         |      |   |          |           | 13,505,050 |      |         |        |         |  |  |          |      |   |      |           | 17,422,966 |  |   |         |         |  |  |       |      |  
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Shareholders equity                       |                        |           | 1,253,548  |                |   |         |                   |  |         |         |      |   |          |           | 1,043,322  |      |         |        |         |  |  |          |      |   |      |           | 1,224,790  |  |   |         |         |  |  |       |      |  
|                                                     |                                            |                        |           |            |                |   |         |                   |  |         |         |      |   |          |           |            |      |         |        |         |  |  |          |      |   |      |          
|                                                     | Total liabilities and shareholders equity |                        | $         | 18,568,193 |                |   |         |                   |  |         |         |      |   |          | $         | 14,548,372 |      |         |        |         |  |  |          |      |   |      | $         | 18,647,756 |  |   |         |         |  |  |       |      |  
|                                                     |                                            |                        |           |            |                |   |         |                   |  |         |         |      |   |          |           |            |      |         |        |         |  |  |          |      |   |      |          
|Net interest income                                  |                                            |                        |           |            |                | $ | 104,420 |                   |  |         |         |      |   |          |           |            |      | $       | 93,933 |         |  |  |          |      |   |      |           |            |  | $ | 103,561 |         |  |  |       |     
|                                                     |                                            |                        |           |            |                |   |         |                   |  |         |         |      |   |          |           |            |      |         |        |         |  |  |          |      |   |      |          
|Net interest spread                                  |                                            |                        |           |            |                |   |         |                   |  |         | 2.34    | %    |   |          |           |            |      |         |        |         |  |  | 2.68     | %    |   |      |           |            |  |   |         |         |  |  | 2.25  | %   
|                                                     |                                            |                        |           |            |                |   |         |                   |  |         |         |      |   |          |           |            |      |         |        |         |  |  |          |      |   |      |          
|Net interest margin                                  |                                            |                        |           |            |                |   |         |                   |  |         | 2.49    | %    |   |          |           |            |      |         |        |         |  |  | 2.82     | %    |   |      |           |            |  |   |         |         |  |  | 2.40  | %   
|                                                     |                                            |                        |           |            |                |   |         |                   |  |         |         |      |   |          |           |            |      |         |        |         |  |  |          |      |   |      |          
|Return on average equity                             |                                            |                        |           |            |                |   |         |                   |  |         | 21.18   | %    |   |          |           |            |      |         |        |         |  |  | 16.16    | %    |   |      |           |            |  |   |         |         |  |  | 18.96 | %   
|                                                     |                                            |                        |           |            |                |   |         |                   |  |         |         |      |   |          |           |            |      |         |        |         |  |  |          |      |   |      |          
|Return on average assets                             |                                            |                        |           |            |                |   |         |                   |  |         | 1.43    | %    |   |          |           |            |      |         |        |         |  |  | 1.16     | %    |   |      |           |            |  |   |         |         |  |  | 1.25  | %   
|                                                     |                                            |                        |           |            |                |   |         |                   |  |         |         |      |   |          |           |            |      |         |        |         |  |  |          |      |   |      |          



41



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##### Table of Contents





|                         |               |                       |        |        |                |   |    |                   |  |  |         |      |   |          |       |        |          |   |    |         |  |  |          |      |   |          |        |        |  |   |    |     |  |  |      |      |  
|------------------------ | ------------- | --------------------- | ------ | ------ | -------------- | - | -- | ----------------- |  |  | ------- | ---- | - | -------- | ----- | ------ | -------- | - | -- | ------- |  |  | -------- | ---- | - | -------- | ------ | ------ |  | - | -- | --- |  |  | ---- | ---- | -
|                         |               | Three Months Ended    |       
|                         |               |                       |       
|                         |               | March 31, 2005        |        |        | March 31, 2004 |   |    | December 31, 2004 | 
|                         |               |                       |        |        |                |   |    |                   | 
|                         |               | Average               |        |        | Net            |   |    | Net               |  |  | Average |      |   | Net      |       |        | Net      |   |    | Average |  |  | Net      |      |   | Net      |       
|                         |               | Earning               |        |        | Interest       |   |    | Interest          |  |  | Earning |      |   | Interest |       |        | Interest |   |    | Earning |  |  | Interest |      |   | Interest |       
|                         |               | Assets                |        |        | Income         |   |    | Margin            |  |  | Assets  |      |   | Income   |       |        | Margin   |   |    | Assets  |  |  | Income   |      |   | Margin   |       
|                         |               |                       |        |        |                |   |    |                   |  |  |         |      |   |          |       |        |          |   |    |         |  |  |          |      |   |          |       
|                         |               | (Dollars in millions) |       
|                        
|                        
|                        
|                        
|By Segment:              |               |                       |        |        |                |   |    |                   |  |  |         |      |   |          |       |        |          |   |    |         |  |  |          |      |   |          |        |        |  |   |    |     |  |  |      |     
|                        
|                        
|                        
|                        
|Thrift segment           |               | $                     | 11,389 |        |                | $ | 63 |                   |  |  | 2.26    | %    |   | $        | 9,710 |        |          | $ | 49 |         |  |  | 2.02     | %    |   | $        | 11,572 |        |  | $ | 56 |     |  |  | 1.91 | %   
|                        
|                        
|                        
|                        
|Mortgage banking segment |               |                       | 5,650  |        |                |   | 41 |                   |  |  | 2.94    | %    |   |          | 3,677 |        |          |   | 45 |         |  |  | 4.94     | %    |   |          | 5,611  |        |  |   | 48 |     |  |  | 3.41 | %   
|                         |               |                       |        |        |                |   |    |                   |  |  |         |      |   |          |       |        |          |   |    |         |  |  |          |      |   |          |       
|                         | Total Company |                       |        | 17,039 |                |   |    | 104               |  |  |         | 2.49 | % |          |       | 13,387 |          |   |    | 94      |  |  |          | 2.82 | % |          |        | 17,183 |  |   |    | 104 |  |  |      | 2.40 | %
|                         |               |                       |        |        |                |   |    |                   |  |  |         |      |   |          |       |        |          |   |    |         |  |  |          |      |   |          |       





| |   |                                                                                                            
| | - | -----------------------------------------------------------------------------------------------------------
| |  | changes in volume (changes in average outstanding balances
    multiplied by the prior periods rate),     
|
| |  | changes in the rate (changes in the average interest rate
    multiplied by the prior periods volume), and
|
| |  | changes in rate/volume (mix) (changes in rates times
    the changes in volume).                         

|                  |                                                      |                              |                     |                        |        |        |   |        |        |         |              |        |        |        |   |        |        |        | 
|----------------- | ---------------------------------------------------- | ---------------------------- | ------------------- | ---------------------- | ------ | ------ | - | ------ | ------ | ------- | ------------ | ------ | ------ | ------ | - | ------ | ------ | ------ | 
|                  |                                                      | Three Months Ended March 31, |                    
|                  |                                                      | 2005 vs. 2004                |                    
|                  |                                                      |                              |                    
|                  |                                                      | Increase/(Decrease) Due to   |                    
|                  |                                                      |                              |                    
|                  |                                                      | Volume                       |                     |                        | Rate   |        |   | Mix    |        |         | Total Change |       
|                  |                                                      |                              |                     |                        |        |        |   |        |        |         |              |       
|                  |                                                      |                              |                     | (Dollars in thousands) |        |        |  
|                 
|                 
|                 
|                 
|Interest income:  |                                                      |                              |                     |                        |        |        |   |        |        |         |              |        |        |        |   |       
|                 
|                 
|                 
|                 
|                  | Securities                                           |                              | $                   | 19,414                 |        |        | $ | 2,934  |        |         | $            | 2,121  |        |        | $ | 24,469 |       
|                 
|                 
|                 
|                 
|                  | Loans held for sale                                  |                              |                     | 34,268                 |        |        |   | (5,923 | )      |         |              | (3,708 | )      |        |   | 24,637 |       
|                 
|                 
|                 
|                 
|                  | Mortgage loans held for investment                   |                              |                     | (7,850                 | )      |        |   | 6,971  |        |         |              | (943   | )      |        |   | (1,822 | )     
|                 
|                 
|                 
|                 
|                  | Builder construction and income property             |                              |                     | 2,283                  |        |        |   | 2,091  |        |         |              | 594    |        |        |   | 4,968  |       
|                 
|                 
|                 
|                 
|                  | Consumer construction                                |                              |                     | 3,081                  |        |        |   | 164    |        |         |              | 31     |        |        |   | 3,276  |       
|                 
|                 
|                 
|                 
|                  | Investment in Federal Home Loan Bank stock and other |                              |                     | 641                    |        |        |   | 711    |        |         |              | 159    |        |        |   | 1,511  |       
|                  |                                                      |                              |                     |                        |        |        |   |        |        |         |              |       
|                  |                                                      | Total interest income        |                     |                        | 51,837 |        |   |        | 6,948  |         |              |        | (1,746 | )      |   |        | 57,039 |       
|                 
|                 
|                 
|                 
|Interest expense: |                                                      |                              |                     |                        |        |        |   |        |        |         |              |        |        |        |   |       
|                 
|                 
|                 
|                 
|                  | Interest-bearing deposits                            |                              |                     | 8,061                  |        |        |   | 3,937  |        |         |              | 1,412  |        |        |   | 13,410 |       
|                 
|                 
|                 
|                 
|                  | Advances from Federal Home Loan Bank                 |                              |                     | 12,069                 |        |        |   | 6,994  |        |         |              | 2,730  |        |        |   | 21,793 |       
|                 
|                 
|                 
|                 
|                  | Other borrowings                                     |                              |                     | 396                    |        |        |   | 10,731 |        |         |              | 222    |        |        |   | 11,349 |       
|                  |                                                      |                              |                     |                        |        |        |   |        |        |         |              |       
|                  |                                                      | Total interest expense       |                     |                        | 20,526 |        |   |        | 21,662 |         |              |        | 4,364  |        |   |        | 46,552 |       
|                  |                                                      |                              |                     |                        |        |        |   |        |        |         |              |       
|                  |                                                      |                              | Net interest income |                        | $      | 31,311 |   |        | $      | (14,714 | )            |        | $      | (6,110 | ) |        | $      | 10,487 | 
|                  |                                                      |                              |                     |                        |        |        |   |        |        |         |              |       

42



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##### Table of Contents






OVERALL INTEREST RATE RISK MANAGEMENT






|                                     |                   |                |           |                     |                   |                        |           |            |                     |   |            |            |  |         |           |            |         |   |           |            |  |   |           |            | 
|------------------------------------ | ----------------- | -------------- | --------- | ------------------- | ----------------- | ---------------------- | --------- | ---------- | ------------------- | - | ---------- | ---------- |  | ------- | --------- | ---------- | ------- | - | --------- | ---------- |  | - | --------- | ---------- | 
|                                     |                   | March 31, 2005 |           |                     | December 31, 2004 |                       
|                                     |                   |                |           |                     |                   |                       
|                                     |                   |                |           | Effect of Change in |                   |                        |           |            | Effect of Change in |  
|                                     |                   |                |           | Interest Rates      |                   |                        |           |            | Interest Rates      |  
|                                     |                   |                |           |                     |                   |                        |           |            |                     |  
|                                     |                   |                |           | Decrease            |                   |                        | Increase  |            |                     |   |            | Decrease   |  |         | Increase  |           
|                                     |                   | Fair Value     |           |                     | 100 bps           |                        |           | 100 bps    |                     |   | Fair Value |            |  | 100 bps |           |            | 100 bps |  
|                                     |                   |                |           |                     |                   |                        |           |            |                     |   |            |            |  |         |           |            |         |  
|                                     |                   |                |           |                     |                   | (Dollars in thousands) |           |            |                     |   |           
|                                    
|                                    
|                                    
|                                    
|Cash and cash equivalents            |                   | $              | 404,078   |                     |                   | $                      | 404,078   |            |                     | $ | 404,078    |            |  | $       | 352,664   |            |         | $ | 352,664   |            |  | $ | 352,664   |           
|                                    
|                                    
|                                    
|                                    
|Trading securities                   |                   |                | 207,532   |                     |                   |                        | 202,921   |            |                     |   | 218,517    |            |  |         | 215,480   |            |         |   | 202,801   |            |  |   | 224,716   |           
|                                    
|                                    
|                                    
|                                    
|Available for sale securities        |                   |                | 2,272,660 |                     |                   |                        | 2,303,228 |            |                     |   | 2,260,866  |            |  |         | 2,362,108 |            |         |   | 2,398,485 |            |  |   | 2,303,858 |           
|                                    
|                                    
|                                    
|                                    
|Loans held for sale                  |                   |                | 4,696,436 |                     |                   |                        | 4,765,339 |            |                     |   | 4,598,918  |            |  |         | 4,474,459 |            |         |   | 4,530,902 |            |  |   | 4,385,744 |           
|                                    
|                                    
|                                    
|                                    
|Loans held for investment            |                   |                | 7,347,820 |                     |                   |                        | 7,432,090 |            |                     |   | 7,224,529  |            |  |         | 6,725,541 |            |         |   | 6,792,345 |            |  |   | 6,616,173 |           
|                                    
|                                    
|                                    
|                                    
|MSRs                                 |                   |                | 734,238   |                     |                   |                        | 613,752   |            |                     |   | 808,402    |            |  |         | 640,794   |            |         |   | 509,099   |            |  |   | 728,703   |           
|                                    
|                                    
|                                    
|                                    
|Other assets                         |                   |                | 1,137,111 |                     |                   |                        | 1,150,175 |            |                     |   | 1,199,168  |            |  |         | 898,496   |            |         |   | 959,259   |            |  |   | 926,602   |           
|                                     |                   |                |           |                     |                   |                        |           |            |                     |   |            |            |  |         |           |            |         |  
|                                     | Total assets      |                | $         | 16,799,875          |                   |                        | $         | 16,871,583 |                     |   | $          | 16,714,478 |  |         | $         | 15,669,542 |         |   | $         | 15,745,555 |  |   | $         | 15,538,460 | 
|                                     |                   |                |           |                     |                   |                        |           |            |                     |   |            |            |  |         |           |            |         |  
|Deposits                             |                   | $              | 6,051,357 |                     |                   | $                      | 6,100,218 |            |                     | $ | 6,005,680  |            |  | $       | 5,688,988 |            |         | $ | 5,741,396 |            |  | $ | 5,640,149 |           
|                                    
|                                    
|                                    
|                                    
|Advances from Federal Home Loan Bank |                   |                | 6,699,368 |                     |                   |                        | 6,726,777 |            |                     |   | 6,672,467  |            |  |         | 6,160,151 |            |         |   | 6,189,573 |            |  |   | 6,131,386 |           
|                                    
|                                    
|                                    
|                                    
|Other borrowings                     |                   |                | 1,953,345 |                     |                   |                        | 1,954,804 |            |                     |   | 1,951,889  |            |  |         | 1,865,801 |            |         |   | 1,867,124 |            |  |   | 1,864,481 |           
|                                    
|                                    
|                                    
|                                    
|Other liabilities                    |                   |                | 320,734   |                     |                   |                        | 320,989   |            |                     |   | 320,481    |            |  |         | 299,876   |            |         |   | 300,119   |            |  |   | 299,631   |           
|                                     |                   |                |           |                     |                   |                        |           |            |                     |   |            |            |  |         |           |            |         |  
|                                     | Total liabilities |                |           | 15,024,804          |                   |                        |           | 15,102,788 |                     |   |            | 14,950,517 |  |         |           | 14,014,816 |         |   |           | 14,098,212 |  |   |           | 13,935,647 | 
|                                    
|                                    
|                                    
|                                    
|Shareholders equity (NPV)           |                   | $              | 1,775,071 |                     |                   | $                      | 1,768,795 |            |                     | $ | 1,763,961  |            |  | $       | 1,654,726 |            |         | $ | 1,647,343 |            |  | $ | 1,602,813 |           
|                                     |                   |                |           |                     |                   |                        |           |            |                     |   |            |            |  |         |           |            |         |  
|% Change from base case              |                   |                |           |                     |                   |                        | (0.35     | )%         |                     |   | (0.63      | )%         |  |         |           |            |         |   | (0.45     | )%         |  |   | (3.14     | )%        
|                                     |                   |                |           |                     |                   |                        |           |            |                     |   |            |            |  |         |           |            |         |  





43



---



##### Table of Contents








CREDIT RISK AND RESERVES




|                                                            |                                                |                                      |                                     |           |           |                        |        |                |        |               |            |      |            |        |        |          |             |      |        |        |        |        |   |     |       |       | 
|----------------------------------------------------------- | ---------------------------------------------- | ------------------------------------ | ----------------------------------- | --------- | --------- | ---------------------- | ------ | -------------- | ------ | ------------- | ---------- | ---- | ---------- | ------ | ------ | -------- | ----------- | ---- | ------ | ------ | ------ | ------ | - | --- | ----- | ----- | 
|                                                            |                                                |                                      |                                     |           |           |                        |        | Total Reserves |        |               |            |      | QTD Net    |       
|                                                            |                                                |                                      |                                     | Allowance |           |                        |        |                | as a   |               |            | Non- |            |        | Charge |         
|                                                            |                                                |                                      |                                     | For Loan  |           |                        | Credit |                |        | Percentage of |            |      | Performing |        |        | Offs/Net |            
|Type of Loan                                                |                                                | Book Value                           |                                     |           | Losses    |                        |        | Discounts(2)   |        |               | Book Value |      |            | Assets |        |          | REO (Gains) |     
|                                                            |                                                |                                      |                                     |           |           |                        |        |                |        |               |            |      |            |        |        |          |             |     
|                                                            |                                                |                                      |                                     |           |           | (Dollars in thousands) |        |                |        |               |           
|                                                           
|                                                           
|                                                           
|                                                           
|Held for investment portfolio                               |                                                |                                      |                                     |           |           |                        |        |                |        |               |            |      |            |        |        |          |             |      |        |        |        |        |   |    
|                                                           
|                                                           
|                                                           
|                                                           
|                                                            | SFR mortgage loans and HELOCs                  |                                      | $                                   | 5,055,012 |           |                        | $      | 18,098         |        |               | $          |     |            |        |        | 0.36     | %           |      | $      | 22,409 |        |        | $ | 821 |      
|                                                           
|                                                           
|                                                           
|                                                           
|                                                            | Land and other mortgage loans                  |                                      |                                     | 170,759   |           |                        |        | 4,420          |        |               |            |     |            |        |        | 2.59     | %           |      |        |       |        |        |   |    |      
|                                                           
|                                                           
|                                                           
|                                                           
|                                                            | Builder construction and income property loans |                                      |                                     | 670,977   |           |                        |        | 12,966         |        |               |            |     |            |        |        | 1.93     | %           |      |        | 7,308  |        |        |   |    |      
|                                                           
|                                                           
|                                                           
|                                                           
|                                                            | Consumer construction loans                    |                                      |                                     | 1,451,370 |           |                        |        | 10,216         |        |               |            |     |            |        |        | 0.70     | %           |      |        | 8,119  |        |        |   | 495 |      
|                                                            |                                                |                                      |                                     |           |           |                        |        |                |        |               |            |      |            |        |        |          |             |     
|                                                            |                                                | Total core held for investment loans |                                     |           | 7,348,118 |                        |        |                | 45,700 |               |            |      |           |        |        |          | 0.62        | %    |        |        | 37,836 |        |   |     | 1,316 |      
|                                                           
|                                                           
|                                                           
|                                                           
|                                                            | Discontinued product lines(1)                  |                                      |                                     | 51,089    |           |                        |        | 7,793          |        |               |            |     |            |        |        | 15.25    | %           |      |        | 5,654  |        |        |   | 572 |      
|                                                            |                                                |                                      |                                     |           |           |                        |        |                |        |               |            |      |            |        |        |          |             |     
|                                                            |                                                |                                      | Total held for investment portfolio |           |           | 7,399,207              |        |                | $      | 53,493        |            |      |            |       |        |          |             | 0.72 | %      |        |        | 43,490 |   |     |       | 1,888 | 
|                                                            |                                                |                                      |                                     |           |           |                        |        |                |        |               |            |      |            |        |        |          |             |     
|Held for sale portfolio                                     |                                                |                                      | 4,693,854                           |           |           |                        |        |                |        | $             | 10,833     |      |            |        | 0.23   | %        |             |      | 36,186 |        |        |        |  |    
|                                                            |                                                |                                      |                                     |           |           |                        |        |                |        |               |            |      |            |        |        |          |             |     
|                                                            |                                                |                                      | Total loans                         |           | $         | 12,093,061             |        |                |        |               |            |      |            |        |        |          |             |      |        |        |        | 79,676 |   |     | $     | 1,888 | 
|                                                            |                                                |                                      |                                     |           |           |                        |        |                |        |               |            |      |            |        |        |          |             |     
|Foreclosed assets                                           |                                                |                                      |                                     |           |           |                        |        |                |        |               |            |      |            |        |        |          |             |      |        |        |        |        |   |    
|                                                           
|                                                           
|                                                           
|                                                           
|Core portfolios                                             |                                                |                                      | 15,816                              |           |           | $                      | (458   | )             
|                                                           
|                                                           
|                                                           
|                                                           
|Discontinued product lines                                  |                                                |                                      | 648                                 |           |           |                        | (48    | )             
|                                                            |                                                |                                      |                                     |           |           |                       
|                                                           
|                                                           
|                                                           
|                                                           
|Total foreclosed assets                                     |                                                |                                      | 16,464                              |           |           | $                      | (506   | )             
|                                                            |                                                |                                      |                                     |           |           |                       
|                                                           
|                                                           
|                                                           
|                                                           
|Total non-performing assets                                 |                                                | $                                    | 96,140                              |           |           |                        |        |               
|                                                            |                                                |                                      |                                     |           |           |                       
|                                                           
|                                                           
|                                                           
|                                                           
|Total non-performing assets as a percentage of total assets |                                                |                                      | 0.54                                | %         |           |                        |        |               
|                                                            |                                                |                                      |                                     |           |           |                       






|    |                                                                                                                          
|--- | -------------------------------------------------------------------------------------------------------------------------
|(1) | Discontinued product lines include manufactured home loans and
    home improvement, which were discontinued during 1999.
|   
|(2) | The amount represents the lower of cost or market adjustments on
    non-performing loans in the held for sale portfolio.

44



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##### Table of Contents





|                                                                          |                 |                                                |                                      |                                                |           |        |        |              |        |        |         |   |        |        |         | 
|------------------------------------------------------------------------- | --------------- | ---------------------------------------------- | ------------------------------------ | ---------------------------------------------- | --------- | ------ | ------ | ------------ | ------ | ------ | ------- | - | ------ | ------ | ------- | 
|                                                                          |                 | March 31,                                      |                                      |                                                | March 31, |        |        | December 31, |       
|                                                                          |                 | 2005                                           |                                      |                                                | 2004      |        |        | 2004         |       
|                                                                          |                 |                                                |                                      |                                                |           |        |        |              |       
|                                                                          |                 | (Dollars in thousands)                         |                                     
|Loans held for investment                                                 |                 |                                                |                                      |                                                |           |        |        |              |        |        |         |  
|                                                                          | Portfolio loans |                                                |                                      |                                                |           |        |        |              |        |        |         |   |       
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|                                                                          |                 | SFR mortgage loans                             |                                      | $                                              | 22,409    |        |        | $            | 14,402 |        |         | $ | 22,155 |       
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|                                                                          |                 | Builder construction and income property loans |                                      |                                                | 7,308     |        |        |              | 12,057 |        |         |   | 11,546 |       
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|                                                                          |                 | Consumer construction loans                    |                                      |                                                | 8,119     |        |        |              | 9,428  |        |         |   | 9,553  |       
|                                                                          |                 |                                                |                                      |                                                |           |        |        |              |       
|                                                                          |                 |                                                | Total portfolio non-performing loans |                                                |           | 37,836 |        |              |        | 35,887 |         |   |        | 43,254 |        
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|                                                                          |                 |                                                | Discontinued product lines           |                                                |           | 5,654  |        |              |        | 6,431  |         |   |        | 5,868  |        
|                                                                          |                 |                                                |                                      |                                                |           |        |        |              |       
|                                                                          |                 |                                                |                                      | Total non-performing loans held for investment |           |        | 43,490 |              |        |        | 42,318  |   |        |        | 49,122  | 
|                                                                          |                 |                                                |                                      |                                                |           |        |        |              |       
|Allowance for loan losses to non-performing loans held for
    investment |                 |                                                | 123                                  | %                                              |           |        | 123    | %            |        |        | 108     | %
|                                                                          |                 |                                                |                                      |                                                |           |        |        |              |       
|Non-performing loans held for sale                                        |                 |                                                | 36,186                               |                                                |           |        | 39,794 |              |        |        | 54,611  |  
|                                                                          |                 |                                                |                                      |                                                |           |        |        |              |       
|                                                                          |                 |                                                |                                      | Total non-performing loans                     |           |        | 79,676 |              |        |        | 82,112  |   |        |        | 103,733 | 
|                                                                         
|                                                                         
|                                                                         
|                                                                         
|Foreclosed assets                                                         |                 |                                                | 16,464                               |                                                |           |        | 26,535 |              |        |        | 19,161  |  
|                                                                          |                 |                                                |                                      |                                                |           |        |        |              |       
|                                                                          |                 |                                                |                                      | Total non-performing assets                    |           | $      | 96,140 |              |        | $      | 108,647 |   |        | $      | 122,894 | 
|                                                                          |                 |                                                |                                      |                                                |           |        |        |              |       
|Total non-performing assets to total assets                               |                 |                                                | 0.54                                 | %                                              |           |        | 0.75   | %            |        |        | 0.73    | %
|                                                                          |                 |                                                |                                      |                                                |           |        |        |              |       

45



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##### Table of Contents





|                                                            |                               |                                 |        |        |           |   |        |              |        |   |        |        |        |  
|----------------------------------------------------------- | ----------------------------- | ------------------------------- | ------ | ------ | --------- | - | ------ | ------------ | ------ | - | ------ | ------ | ------ | -
|                                                            |                               | Three Months Ended              |       
|                                                            |                               |                                 |       
|                                                            |                               | March 31,                       |        |        | March 31, |   |        | December 31, |       
|                                                            |                               | 2005                            |        |        | 2004      |   |        | 2004         |       
|                                                            |                               |                                 |        |        |           |   |        |              |       
|                                                            |                               | (Dollars in thousands)          |       
|                                                           
|                                                           
|                                                           
|                                                           
|Core portfolio loans                                        |                               |                                 |        |        |           |   |        |              |        |   |        |       
|                                                           
|                                                           
|                                                           
|                                                           
|Balance, beginning of period                                |                               | $                               | 45,191 |        |           | $ | 45,644 |              |        | $ | 45,217 |       
|                                                           
|                                                           
|                                                           
|                                                           
|Provision for loan losses                                   |                               |                                 | 1,825  |        |           |   | 400    |              |        |   | 1,272  |       
|Charge-offs net of recoveries                               |                               |                                 |        |        |           |   |        |              |        |   |        |       
|                                                           
|                                                           
|                                                           
|                                                           
|                                                            |                               | SFR mortgage loans              |        |        | (821      | ) |        |              | (925   | ) |        |        | (530   | )
|                                                           
|                                                           
|                                                           
|                                                           
|                                                            |                               | Builder construction            |        |        |          |   |        |              | (76    | ) |        |        | (59    | )
|                                                           
|                                                           
|                                                           
|                                                           
|                                                            |                               | Consumer construction           |        |        | (495      | ) |        |              |       |   |        |        | (709   | )
|                                                            |                               |                                 |        |        |           |   |        |              |       
|                                                            | Charge-offs net of recoveries |                                 |        | (1,316 | )         |   |        | (1,001       | )      |   |        | (1,298 | )     
|                                                            |                               |                                 |        |        |           |   |        |              |       
|Balance, end of period                                      |                               |                                 | 45,700 |        |           |   | 45,043 |              |        |   | 45,191 |       
|                                                            |                               |                                 |        |        |           |   |        |              |       
|Discontinued product lines                                  |                               |                                 |        |        |           |   |        |              |        |   |        |       
|                                                           
|                                                           
|                                                           
|                                                           
|Balance, beginning of period                                |                               |                                 | 7,700  |        |           |   | 7,001  |              |        |   | 7,611  |       
|                                                           
|                                                           
|                                                           
|                                                           
|Provision for loan losses                                   |                               |                                 | 665    |        |           |   | 1,100  |              |        |   | 700    |       
|                                                           
|                                                           
|                                                           
|                                                           
|                                                            | Charge-offs net of recoveries |                                 |        | (572   | )         |   |        | (1,018       | )      |   |        | (611   | )     
|                                                            |                               |                                 |        |        |           |   |        |              |       
|Balance, end of period                                      |                               |                                 | 7,793  |        |           |   | 7,083  |              |        |   | 7,700  |       
|                                                            |                               |                                 |        |        |           |   |        |              |       
|                                                            |                               | Total allowance for loan losses |        | $      | 53,493    |   |        | $            | 52,126 |   |        | $      | 52,891 |  
|                                                            |                               |                                 |        |        |           |   |        |              |       
|Annualized charge-offs to average loans held for investment |                               |                                 | 0.11   | %      |           |   | 0.11   | %            |        |   | 0.11   | %     
|                                                           
|                                                           
|                                                           
|                                                           
|Charge-offs to quarterly production                         |                               |                                 | 0.02   | %      |           |   | 0.03   | %            |        |   | 0.02   | %     
|                                                           
|                                                           
|                                                           
|                                                           
|Core portfolio loans only                                   |                               |                                 |        |        |           |   |        |              |        |   |        |       
|                                                           
|                                                           
|                                                           
|                                                           
|Annualized charge-offs to average loans held for investment |                               |                                 | 0.08   | %      |           |   | 0.06   | %            |        |   | 0.07   | %     
|                                                           
|                                                           
|                                                           
|                                                           
|Charge-offs to quarterly production                         |                               |                                 | 0.01   | %      |           |   | 0.01   | %            |        |   | 0.01   | %     







46



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##### Table of Contents














SECONDARY MARKET RESERVE




|                      |       |                       |       |       |            |   |            |             |  |  |      |      |  
|--------------------- | ----- | --------------------- | ----- | ----- | ---------- | - | ---------- | ----------- |  |  | ---- | ---- | -
|                      |       | Amount                |       |       |            |   | Percentage |            
|                      |       | Repurchased           |       |       | Total Sold |   |            | Repurchased | 
|                      |       |                       |       |       |            |   |            |             | 
|                      |       | (Dollars in millions) |      
|                     
|                     
|                     
|                     
|Loans sold:           |       |                       |       |       |            |   |            |             |  |  |      |     
|                     
|                     
|                     
|                     
|GSEs and whole loans  |       | $                     | 146.3 |       |            | $ | 60,731     |             |  |  | 0.24 | %   
|                     
|                     
|                     
|                     
|Securitization trusts |       |                       | 13.2  |       |            |   | 77,982     |             |  |  | 0.02 | %   
|                      |       |                       |       |       |            |   |            |             | 
|                      | Total |                       | $     | 159.5 |            |   | $          | 138,713     |  |  |      | 0.11 | %
|                      |       |                       |       |       |            |   |            |             | 

47



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|                                                                                    |  |             |        |  
|----------------------------------------------------------------------------------- |  | ----------- | ------ | -
|                                                                                    |  | Total       |       
|                                                                                    |  |             |       
|                                                                                    |  | (Dollars in |       
|                                                                                    |  | thousands)  |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|Balance, December 31, 2004                                                          |  | $           | 35,610 |  
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|Additions/provisions                                                                |  |             | 5,000  |  
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|Claims reimbursement and estimated discounts on loans held for
    sale/charge-offs |  |             | (4,527 | )
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|Recoveries on previous claims                                                       |  |             | 274    |  
|                                                                                    |  |             |       
|Balance, March 31, 2005                                                             |  | $           | 36,357 |  
|                                                                                    |  |             |       






OPERATING EXPENSES




|                                         |  |                        |         |  |           |   |         |              |  |   |         | 
|---------------------------------------- |  | ---------------------- | ------- |  | --------- | - | ------- | ------------ |  | - | ------- | 
|                                         |  | Three Months Ended     |        
|                                         |  |                        |        
|                                         |  | March 31,              |         |  | March 31, |   |         | December 31, | 
|                                         |  | 2005                   |         |  | 2004      |   |         | 2004         | 
|                                         |  |                        |         |  |           |   |         |              | 
|                                         |  | (Dollars in thousands) |        
|                                        
|                                        
|                                        
|                                        
|Salaries and related                     |  | $                      | 89,593  |  |           | $ | 63,038  |              |  | $ | 84,237  | 
|                                        
|                                        
|                                        
|                                        
|Premises and equipment                   |  |                        | 12,613  |  |           |   | 9,593   |              |  |   | 12,640  | 
|                                        
|                                        
|                                        
|                                        
|Loan purchase costs                      |  |                        | 8,720   |  |           |   | 7,307   |              |  |   | 9,131   | 
|                                        
|                                        
|                                        
|                                        
|Professional services                    |  |                        | 6,956   |  |           |   | 5,073   |              |  |   | 9,339   | 
|                                        
|                                        
|                                        
|                                        
|Data processing                          |  |                        | 9,913   |  |           |   | 8,591   |              |  |   | 9,574   | 
|                                        
|                                        
|                                        
|                                        
|Office                                   |  |                        | 6,623   |  |           |   | 5,979   |              |  |   | 5,475   | 
|                                        
|                                        
|                                        
|                                        
|Advertising and promotion                |  |                        | 11,150  |  |           |   | 8,856   |              |  |   | 11,539  | 
|                                        
|                                        
|                                        
|                                        
|Operations and sale of foreclosed assets |  |                        | 1,601   |  |           |   | 2,135   |              |  |   | 1,292   | 
|                                        
|                                        
|                                        
|                                        
|Litigation settlement                    |  |                        | 6,000   |  |           |   |        |              |  |   |        | 
|                                        
|                                        
|                                        
|                                        
|Other                                    |  |                        | 6,097   |  |           |   | 4,626   |              |  |   | 6,538   | 
|                                         |  |                        |         |  |           |   |         |              | 
|                                         |  | $                      | 159,266 |  |           | $ | 115,198 |              |  | $ | 149,765 | 
|                                         |  |                        |         |  |           |   |         |              | 



48



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##### Table of Contents








DIVIDEND







SHARE REPURCHASE ACTIVITIES






|                                     |                     |           |        |        |                  |                     |       |                     |                         |  |                     |   |  |   |      |      | 
|------------------------------------ | ------------------- | --------- | ------ | ------ | ---------------- | ------------------- | ----- | ------------------- | ----------------------- |  | ------------------- | - |  | - | ---- | ---- | 
|                                     |                     |           |        |        |                  |                     |       | Maximum Approximate |                        
|                                     |                     |           |        |        |                  | Total Number of     |       |                     | Dollar Value            | 
|                                     |                     |           |        |        |                  | Shares Purchased    |       |                     | (in millions) of Shares | 
|                                     |                     |           |        |        |                  | as Past of Publicly |       |                     | that May Yet Be         | 
|                                     |                     | Number of |        |        | Weighted-Average |                     |       | Announced Plans or  |                         |  | Purchased Under the |  
|Period                               |                     | Shares(1) |        |        | Price Per Share  |                     |       | Programs            |                         |  | Plans orPrograms(2) |  
|                                     |                     |           |        |        |                  |                     |       |                     |                         |  |                     |  
|January 1, 2005  January 31, 2005   |                     |           | 13,385 |        |                  | $                   | 34.67 |                     |                         |  |                    |   |  | $ | 63.6 |     
|                                    
|                                    
|                                    
|                                    
|February 1, 2005  February 28, 2005 |                     |           | 224    |        |                  |                     | 38.69 |                     |                         |  |                    |   |  |   | 63.6 |     
|                                    
|                                    
|                                    
|                                    
|March 1, 2005  March 31, 2005       |                     |           |       |        |                  |                     |      |                     |                         |  |                    |   |  |   | 63.6 |     
|                                     |                     |           |        |        |                  |                     |       |                     |                         |  |                     |  
|                                     | First Quarter Total |           |        | 13,609 |                  |                     | $     | 34.73               |                         |  |                     |  |  |   | $    | 63.6 | 
|                                     |                     |           |        |        |                  |                     |       |                     |                         |  |                     |  






|    |                                                                                                                                                                                                                                                                                                                                  
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | All shares purchased during the periods indicated were purchased
    pursuant to the Companys stock incentive plans at the
    then-current market prices.                                                                                                                                                                      
|   
|(2) | Our Board of Directors approved a $100 million share
    repurchase program in June of 1999, which was subsequently
    increased by the Board to $500 million. The Board of
    Directors also approved a special repurchase of
    3,640,860 shares from Countrywide, which was not a part of
    our share repurchase program.




FUTURE OUTLOOK




49



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Share-Based
Payment


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




50



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Advances from Federal Home Loan Bank




Deposits/ Retail Bank


www.indymacbank.com






|                              |                     |                |           |           |                |                        |    |                   |       |   |           |           |  |        |    |     |          |   |           |           |  |  |    |     |  
|----------------------------- | ------------------- | -------------- | --------- | --------- | -------------- | ---------------------- | -- | ----------------- | ----- | - | --------- | --------- |  | ------ | -- | --- | -------- | - | --------- | --------- |  |  | -- | --- | -
|                              |                     | March 31, 2005 |           |           | March 31, 2004 |                        |    | December 31, 2004 |      
|                              |                     |                |           |           |                |                        |    |                   |      
|                              |                     |                |           | % of      |                |                        |    |                   | % of  |   |           |           |  | % of   |   
|                              |                     |                |           | Total     |                |                        |    |                   | Total |   |           |           |  | Total  |   
|                              |                     | Amount         |           |           | Deposits       |                        |    | Amount            |       |   | Deposits  |           |  | Amount |    |     | Deposits |  
|                              |                     |                |           |           |                |                        |    |                   |       |   |           |           |  |        |    |     |          |  
|                              |                     |                |           |           |                | (Dollars in thousands) |    |                   |       |   |          
|                             
|                             
|                             
|                             
|Non-interest-bearing checking |                     | $              | 57,358    |           |                |                        | 1  | %                 |       | $ | 48,231    |           |  |        | 1  | %   |          | $ | 55,359    |           |  |  | 1  | %  
|                             
|                             
|                             
|                             
|Interest-bearing checking     |                     |                | 51,134    |           |                |                        | 1  | %                 |       |   | 42,727    |           |  |        | 1  | %   |          |   | 42,306    |           |  |  | 1  | %  
|                             
|                             
|                             
|                             
|Savings                       |                     |                | 1,323,267 |           |                |                        | 22 | %                 |       |   | 1,637,665 |           |  |        | 34 | %   |          |   | 1,527,466 |           |  |  | 27 | %  
|                             
|                             
|                             
|                             
|Custodial accounts            |                     |                | 646,370   |           |                |                        | 11 | %                 |       |   | 658,387   |           |  |        | 14 | %   |          |   | 622,589   |           |  |  | 11 | %  
|                              |                     |                |           |           |                |                        |    |                   |       |   |           |           |  |        |    |     |          |  
|                              | Total core deposits |                |           | 2,078,129 |                |                        |    | 35                | %     |   |           | 2,387,010 |  |        |    | 50  | %        |   |           | 2,247,720 |  |  |    | 40  | %
|                             
|                             
|                             
|                             
|Certificates of deposit       |                     |                | 4,027,760 |           |                |                        | 65 | %                 |       |   | 2,362,759 |           |  |        | 50 | %   |          |   | 3,495,759 |           |  |  | 60 | %  
|                              |                     |                |           |           |                |                        |    |                   |       |   |           |           |  |        |    |     |          |  
|                              | Total deposits      |                | $         | 6,105,889 |                |                        |    | 100               | %     |   | $         | 4,749,769 |  |        |    | 100 | %        |   | $         | 5,743,479 |  |  |    | 100 | %
|                              |                     |                |           |           |                |                        |    |                   |       |   |           |           |  |        |    |     |          |  

51



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|            |                |                |           |           |                |                        |    |                   |       |   |           |           |  |        |    |     |          |   |           |           |  |  |    |     |  
|----------- | -------------- | -------------- | --------- | --------- | -------------- | ---------------------- | -- | ----------------- | ----- | - | --------- | --------- |  | ------ | -- | --- | -------- | - | --------- | --------- |  |  | -- | --- | -
|            |                | March 31, 2005 |           |           | March 31, 2004 |                        |    | December 31, 2004 |      
|            |                |                |           |           |                |                        |    |                   |      
|            |                |                |           | % of      |                |                        |    |                   | % of  |   |           |           |  | % of   |   
|            |                |                |           | Total     |                |                        |    |                   | Total |   |           |           |  | Total  |   
|            |                | Amount         |           |           | Deposits       |                        |    | Amount            |       |   | Deposits  |           |  | Amount |    |     | Deposits |  
|            |                |                |           |           |                |                        |    |                   |       |   |           |           |  |        |    |     |          |  
|            |                |                |           |           |                | (Dollars in thousands) |    |                   |       |   |          
|           
|           
|           
|           
|Branch      |                | $              | 2,543,879 |           |                |                        | 42 | %                 |       | $ | 1,780,396 |           |  |        | 37 | %   |          | $ | 2,271,605 |           |  |  | 40 | %  
|           
|           
|           
|           
|Internet    |                |                | 608,432   |           |                |                        | 10 | %                 |       |   | 523,622   |           |  |        | 11 | %   |          |   | 579,503   |           |  |  | 10 | %  
|           
|           
|           
|           
|Telebanking |                |                | 703,017   |           |                |                        | 12 | %                 |       |   | 462,997   |           |  |        | 10 | %   |          |   | 639,584   |           |  |  | 11 | %  
|           
|           
|           
|           
|Money desk  |                |                | 1,604,191 |           |                |                        | 26 | %                 |       |   | 1,324,367 |           |  |        | 28 | %   |          |   | 1,630,199 |           |  |  | 28 | %  
|           
|           
|           
|           
|Custodial   |                |                | 646,370   |           |                |                        | 10 | %                 |       |   | 658,387   |           |  |        | 14 | %   |          |   | 622,588   |           |  |  | 11 | %  
|            |                |                |           |           |                |                        |    |                   |       |   |           |           |  |        |    |     |          |  
|            | Total deposits |                | $         | 6,105,889 |                |                        |    | 100               | %     |   | $         | 4,749,769 |  |        |    | 100 | %        |   | $         | 5,743,479 |  |  |    | 100 | %
|            |                |                |           |           |                |                        |    |                   |       |   |           |           |  |        |    |     |          |  



Trust Preferred Securities and Warrants






Consolidation of Variable Interest Entities, an
Interpretation of Accounting Research Bulletin (ARB)
No. 51


Other Borrowings, Excluding Subordinated Debentures
underlying Trust Preferred securities


.




52



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##### Table of Contents








PRINCIPAL USES OF CASH







ACCUMULATED OTHER COMPREHENSIVE LOSSES







REGULATORY CAPITAL REQUIREMENTS






53



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##### Table of Contents





|                  |  |                |       |   |                     |  |       |                  |  |  |       |  
|----------------- |  | -------------- | ----- | - | ------------------- |  | ----- | ---------------- |  |  | ----- | -
|                  |  | As Reported    |       |   | Adjusted for        |  |       |                 
|                  |  | Pre-Subprime   |       |   | Additional Subprime |  |       | Well-Capitalized | 
|                  |  | Risk-Weighting |       |   | Risk-Weighting      |  |       | Minimum          | 
|                  |  |                |       |   |                     |  |       |                  | 
|                 
|                 
|                 
|                 
|Capital Ratios:   |  |                |       |   |                     |  |       |                  |  |  |       |  
|                 
|                 
|                 
|                 
|Tier 1 core       |  |                | 7.35  | % |                     |  | 7.35  | %                |  |  | 5.00  | %
|                 
|                 
|                 
|                 
|Tier 1 risk-based |  |                | 11.62 | % |                     |  | 11.38 | %                |  |  | 6.00  | %
|                 
|                 
|                 
|                 
|Total risk-based  |  |                | 12.10 | % |                     |  | 11.85 | %                |  |  | 10.00 | %






OFF-BALANCE SHEET ARRANGEMENTS












54



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##### Table of Contents






AGGREGATE CONTRACTUAL OBLIGATIONS




|                                                |  |                        |            |  |                   |   |           |                   |  |   |                   |  |  |       |           |  |  |   |            | 
|----------------------------------------------- |  | ---------------------- | ---------- |  | ----------------- | - | --------- | ----------------- |  | - | ----------------- |  |  | ----- | --------- |  |  | - | ---------- | 
|                                                |  | Payment Due            |           
|                                                |  |                        |           
|                                                |  | April 1, 2005          |            |  | January 1, 2006   |   |           | January 1, 2008   |  |   |                  
|                                                |  | through                |            |  | through           |   |           | through           |  |   | After             |  |  |      
|                                                |  | December 31, 2005      |            |  | December 31, 2007 |   |           | December 31, 2009 |  |   | December 31, 2009 |  |  | Total |          
|                                                |  |                        |            |  |                   |   |           |                   |  |   |                   |  |  |       |          
|                                                |  | (Dollars in thousands) |           
|                                               
|                                               
|                                               
|                                               
|Deposits Without a Stated Maturity              |  | $                      | 1,431,759  |  |                   | $ |          |                   |  | $ |                  |  |  | $     |          |  |  | $ | 1,431,759  | 
|                                               
|                                               
|                                               
|                                               
|Custodial Accounts and Certificates of Deposits |  |                        | 3,617,621  |  |                   |   | 1,055,152 |                   |  |   | 1,357             |  |  |       |          |  |  |   | 4,674,130  | 
|                                               
|                                               
|                                               
|                                               
|FHLB Advances                                   |  |                        | 4,836,000  |  |                   |   | 1,822,000 |                   |  |   | 50,000            |  |  |       |          |  |  |   | 6,708,000  | 
|                                               
|                                               
|                                               
|                                               
|Repurchase Agreements                           |  |                        | 2,045,977  |  |                   |   |          |                   |  |   |                  |  |  |       |          |  |  |   | 2,045,977  | 
|                                               
|                                               
|                                               
|                                               
|HELOC Notes(1)                                  |  |                        |           |  |                   |   |          |                   |  |   |                  |  |  |       | 997,287   |  |  |   | 997,287    | 
|                                               
|                                               
|                                               
|                                               
|CMOs                                            |  |                        |           |  |                   |   |          |                   |  |   |                  |  |  |       | 184       |  |  |   | 184        | 
|                                               
|                                               
|                                               
|                                               
|Trust Preferred Debentures                      |  |                        |           |  |                   |   |          |                   |  |   |                  |  |  |       | 215,369   |  |  |   | 215,369    | 
|                                               
|                                               
|                                               
|                                               
|Accrued Interest Payable                        |  |                        | 63,254     |  |                   |   |          |                   |  |   |                  |  |  |       |          |  |  |   | 63,254     | 
|                                               
|                                               
|                                               
|                                               
|Deferred Compensation                           |  |                        |           |  |                   |   |          |                   |  |   |                  |  |  |       | 30,662    |  |  |   | 30,662     | 
|                                               
|                                               
|                                               
|                                               
|Operating Leases(2)                             |  |                        | 14,845     |  |                   |   | 41,174    |                   |  |   | 34,243            |  |  |       | 32,831    |  |  |   | 123,093    | 
|                                               
|                                               
|                                               
|                                               
|Employment Agreements(3)                        |  |                        | 7,119      |  |                   |   | 11,150    |                   |  |   |                  |  |  |       |          |  |  |   | 18,269     | 
|                                               
|                                               
|                                               
|                                               
|Purchase Obligations                            |  |                        |           |  |                   |   | 3,579     |                   |  |   |                  |  |  |       |          |  |  |   | 3,579      | 
|                                                |  |                        |            |  |                   |   |           |                   |  |   |                   |  |  |       |          
|Total                                           |  | $                      | 12,016,575 |  |                   | $ | 2,933,055 |                   |  | $ | 85,600            |  |  | $     | 1,276,333 |  |  | $ | 16,311,563 | 
|                                                |  |                        |            |  |                   |   |           |                   |  |   |                   |  |  |       |          






|    |                                                                                                                                                                                                               
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | HELOC notes are non-recourse and secured by AAA-rated HELOC
    certificates.                                                                                                                                 
|   
|(2) | Total lease commitments are net of sublease rental income.                                                                                                                                                    
|   
|(3) | Represents compensation for nine senior executives and includes
    both base salary and estimated bonuses. Amount is calculated
    based on the terms in their respective written employment
    agreements.



|                              |                             |                        |       |           | 
|----------------------------- | --------------------------- | ---------------------- | ----- | --------- | 
|                              |                             | Payment Due            |      
|                              |                             |                        |      
|                              |                             | (Dollars in thousands) |      
|                             
|                             
|                             
|                             
|Undisbursed loan commitments: |                             |                        |       |          
|                             
|                             
|                             
|                             
|                              | Builder construction        |                        | $     | 780,137   | 
|                             
|                             
|                             
|                             
|                              | Consumer construction       |                        |       | 1,058,719 | 
|                             
|                             
|                             
|                             
|                              | HELOCs                      |                        |       | 412,044   | 
|                             
|                             
|                             
|                             
|                              | Revolving warehouse lending |                        |       | 19,875    | 
|                             
|                             
|                             
|                             
|Letters of credit             |                             | $                      | 9,420 |          



55



---



##### Table of Contents






KEY OPERATING RISKS







INTEREST RATE RISK







VALUATION RISK







CREDIT RISK






56



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##### Table of Contents






LIQUIDITY RISK









CYCLICAL INDUSTRY







COMPETITION









LAWS AND REGULATIONS




57



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##### Table of Contents












GEOGRAPHIC CONCENTRATION







BUSINESS EXECUTION AND TECHNOLOGY RISK









CRITICAL ACCOUNTING POLICIES AND JUDGMENTS









ITEM 3.     QUANTITATIVE AND
QUALITATIVE DISCLOSURES ABOUT MARKET RISK




58



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##### Table of Contents








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

INDYMAC BANCORP, INC. AND SUBSIDIARIES





CONSOLIDATED BALANCE SHEETS


|                                                                                                                                                                                                                                                                                              |                           |                                                                                                                        |                                 |         |              |           |           |         |            |           | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------- | ---------------------------------------------------------------------------------------------------------------------- | ------------------------------- | ------- | ------------ | --------- | --------- | ------- | ---------- | --------- | 
|                                                                                                                                                                                                                                                                                              |                           | March 31,                                                                                                              |                                 |         | December 31, |          
|                                                                                                                                                                                                                                                                                              |                           | 2005                                                                                                                   |                                 |         | 2004         |          
|                                                                                                                                                                                                                                                                                              |                           |                                                                                                                        |                                 |         |              |          
|                                                                                                                                                                                                                                                                                              |                           | Unaudited                                                                                                              |                                 |         |             
|                                                                                                                                                                                                                                                                                              |                           | (Dollars in thousands)                                                                                                 |                                
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|Assets                                                                                                                                                                                                                                                                                        |                           |                                                                                                                        |                                 |         |              |           |           |        
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|Cash and cash equivalents                                                                                                                                                                                                                                                                     |                           | $                                                                                                                      | 413,536                         |         |              | $         | 356,157   |        
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|Securities classified as trading ($48.8 million and
    $54.4 million pledged as collateral for borrowings at
    March 31, 2005 and December 31, 2004, respectively)                                                                                                                         |                           |                                                                                                                        | 223,328                         |         |              |           | 235,036   |        
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|Securities classified as available for sale, amortized cost of
    $3.4 billion and $3.5 billion at March 31, 2005
    and December 31, 2004, respectively ($2.2 billion and
    $2.3 billion pledged as collateral for borrowings at
    March 31, 2005 and December 31, 2004, respectively) |                           |                                                                                                                        | 3,375,829                       |         |              |           | 3,454,435 |        
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|Loans receivable:                                                                                                                                                                                                                                                                             |                           |                                                                                                                        |                                 |         |              |           |           |        
|                                                                                                                                                                                                                                                                                              | Loans held for sale       |                                                                                                                        |                                 |         |              |           |           |         |           
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                              |                           | Prime                                                                                                                  |                                 |         | 3,617,995    |           |           |         | 3,491,064  |          
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                              |                           | Subprime                                                                                                               |                                 |         | 550,381      |           |           |         | 563,274    |          
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                              |                           | HELOC                                                                                                                  |                                 |         | 363,474      |           |           |         | 358,410    |          
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                              |                           | Consumer lot loans                                                                                                     |                                 |         | 151,171      |           |           |         | 32,824     |          
|                                                                                                                                                                                                                                                                                              |                           |                                                                                                                        |                                 |         |              |          
|                                                                                                                                                                                                                                                                                              |                           |                                                                                                                        | Total loans held for sale       |         |              | 4,683,021 |           |         |            | 4,445,572 | 
|                                                                                                                                                                                                                                                                                              |                           |                                                                                                                        |                                 |         |              |          
|                                                                                                                                                                                                                                                                                              | Loans held for investment |                                                                                                                        |                                 |         |              |           |           |         |           
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                              |                           | SFR mortgage                                                                                                           |                                 |         | 5,059,627    |           |           |         | 4,458,784  |          
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                              |                           | Consumer construction                                                                                                  |                                 |         | 1,451,370    |           |           |         | 1,443,450  |          
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                              |                           | Builder construction                                                                                                   |                                 |         | 670,977      |           |           |         | 643,116    |          
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                              |                           | HELOC                                                                                                                  |                                 |         | 46,474       |           |           |         | 45,932     |          
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                              |                           | Land and other mortgage                                                                                                |                                 |         | 170,759      |           |           |         | 158,471    |          
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                              | Allowance for loan losses |                                                                                                                        |                                 | (53,493 | )            |           |           | (52,891 | )         
|                                                                                                                                                                                                                                                                                              |                           |                                                                                                                        |                                 |         |              |          
|                                                                                                                                                                                                                                                                                              |                           |                                                                                                                        | Total loans held for investment |         |              | 7,345,714 |           |         |            | 6,696,862 | 
|                                                                                                                                                                                                                                                                                              |                           |                                                                                                                        |                                 |         |              |          
|                                                                                                                                                                                                                                                                                              |                           | Total loans receivable ($8.1 billion pledged as collateral
    for borrowings at March 31, 2005 and December 31, 2004) |                                 |         | 12,028,735   |           |           |         | 11,142,434 |          
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|Mortgage servicing rights                                                                                                                                                                                                                                                                     |                           |                                                                                                                        | 734,238                         |         |              |           | 640,794   |        
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|Investment in Federal Home Loan Bank stock                                                                                                                                                                                                                                                    |                           |                                                                                                                        | 427,148                         |         |              |           | 390,716   |        
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|Interest receivable                                                                                                                                                                                                                                                                           |                           |                                                                                                                        | 83,095                          |         |              |           | 78,827    |        
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|Goodwill and other intangible assets                                                                                                                                                                                                                                                          |                           |                                                                                                                        | 81,281                          |         |              |           | 81,445    |        
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|Foreclosed assets                                                                                                                                                                                                                                                                             |                           |                                                                                                                        | 16,464                          |         |              |           | 19,161    |        
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                             
|Other assets                                                                                                                                                                                                                                                                                  |                           |                                                                                                                        | 582,673                         |         |              |           | 426,639   |        
|                                                                                                                                                                                                                                                                                              |                           |                                                                                                                        |                                 |         |              |          
|                                                                                                                                                                                                                                                                                              |                           | Total assets                                                                                                           |                                 | $       | 17,966,327   |           |           | $       | 16,825,644 |          
|                                                                                                                                                                                                                                                                                              |                           |                                                                                                                        |                                 |         |              |          

59



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|                                     |                                                                                                                                                                                                                                   |                                            |           |           |              |   |           |           |            | 
|------------------------------------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | --------- | --------- | ------------ | - | --------- | --------- | ---------- | 
|                                     |                                                                                                                                                                                                                                   | March 31,                                  |           |           | December 31, |  
|                                     |                                                                                                                                                                                                                                   | 2005                                       |           |           | 2004         |  
|                                     |                                                                                                                                                                                                                                   |                                            |           |           |              |  
|                                     |                                                                                                                                                                                                                                   | Unaudited                                  |           |           |             
|                                     |                                                                                                                                                                                                                                   | (Dollars in thousands)                     |          
|                                    
|                                    
|                                    
|                                    
|Liabilities and Shareholders Equity |                                                                                                                                                                                                                                   |                                            |           |           |              |   |           |          
|                                    
|                                    
|                                    
|                                    
|Deposits                             |                                                                                                                                                                                                                                   | $                                          | 6,105,889 |           |              | $ | 5,743,479 |          
|                                    
|                                    
|                                    
|                                    
|Advances from Federal Home Loan Bank |                                                                                                                                                                                                                                   |                                            | 6,708,000 |           |              |   | 6,162,000 |          
|                                    
|                                    
|                                    
|                                    
|Other borrowings                     |                                                                                                                                                                                                                                   |                                            | 3,258,818 |           |              |   | 3,162,241 |          
|                                    
|                                    
|                                    
|                                    
|Other liabilities                    |                                                                                                                                                                                                                                   |                                            | 564,659   |           |              |   | 493,953   |          
|                                     |                                                                                                                                                                                                                                   |                                            |           |           |              |  
|                                     |                                                                                                                                                                                                                                   | Total liabilities                          |           |           | 16,637,366   |   |           |           | 15,561,673 | 
|                                     |                                                                                                                                                                                                                                   |                                            |           |           |              |  
|Shareholders Equity                 |                                                                                                                                                                                                                                   |                                            |           |           |              |   |           |          
|                                    
|                                    
|                                    
|                                    
|                                     | Preferred stock  authorized, 10,000,000 shares
    of $0.01 par value; none issued                                                                                                                                               |                                            |           |          |              |   |           |          |           
|                                    
|                                    
|                                    
|                                    
|                                     | Common stock  authorized, 200,000,000 shares of
    $0.01 par value; issued 91,644,666 shares (62,457,622
    outstanding) at March 31, 2005, and issued
    91,168,915 shares (61,995,480 outstanding) at
    December 31, 2004 |                                            |           | 916       |              |   |           | 912       |           
|                                    
|                                    
|                                    
|                                    
|                                     | Additional paid-in-capital                                                                                                                                                                                                        |                                            |           | 1,193,127 |              |   |           | 1,186,682 |           
|                                    
|                                    
|                                    
|                                    
|                                     | Accumulated other comprehensive loss                                                                                                                                                                                              |                                            |           | (4,377    | )            |   |           | (20,304   | )         
|                                    
|                                    
|                                    
|                                    
|                                     | Retained earnings                                                                                                                                                                                                                 |                                            |           | 659,602   |              |   |           | 616,516   |           
|                                    
|                                    
|                                    
|                                    
|                                     | Treasury stock, 29,187,044 shares and
    29,173,435 shares at March 31, 2005 and
    December 31, 2004, respectively                                                                                                             |                                            |           | (520,307  | )            |   |           | (519,835  | )         
|                                     |                                                                                                                                                                                                                                   |                                            |           |           |              |  
|                                     |                                                                                                                                                                                                                                   | Total shareholders equity                 |           |           | 1,328,961    |   |           |           | 1,263,971  | 
|                                     |                                                                                                                                                                                                                                   |                                            |           |           |              |  
|                                     |                                                                                                                                                                                                                                   | Total liabilities and shareholders equity |           | $         | 17,966,327   |   |           | $         | 16,825,644 | 
|                                     |                                                                                                                                                                                                                                   |                                            |           |           |              |  



60



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INDYMAC BANCORP, INC. AND SUBSIDIARIES





CONSOLIDATED STATEMENTS OF EARNINGS


|                                     |                                                                   |                                 |                                                     |              |         |         |        |         |         |         |        | 
|------------------------------------ | ----------------------------------------------------------------- | ------------------------------- | --------------------------------------------------- | ------------ | ------- | ------- | ------ | ------- | ------- | ------- | ------ | 
|                                     |                                                                   | For the Three Months            |                                                    
|                                     |                                                                   | Ended March 31,                 |                                                    
|                                     |                                                                   |                                 |                                                    
|                                     |                                                                   | 2005                            |                                                     |              | 2004    |        
|                                     |                                                                   |                                 |                                                     |              |         |        
|                                     |                                                                   | (Unaudited)                     |                                                    
|                                     |                                                                   | (Dollars in thousands,          |                                                    
|                                     |                                                                   | except per share data)          |                                                    
|                                    
|                                    
|                                    
|                                    
|Interest income                      |                                                                   |                                 |                                                     |              |         |         |        |        
|                                    
|                                    
|                                    
|                                    
|Mortgage-backed and other securities |                                                                   | $                               | 51,324                                              |              |         | $       | 26,855 |        
|Loans held for sale                  |                                                                   |                                 |                                                     |              |         |         |        |        
|                                    
|                                    
|                                    
|                                    
|                                     | Prime                                                             |                                 |                                                     | 57,297       |         |         |        | 44,331  |        
|                                    
|                                    
|                                    
|                                    
|                                     | Subprime                                                          |                                 |                                                     | 14,497       |         |         |        | 8,508   |        
|                                    
|                                    
|                                    
|                                    
|                                     | HELOC                                                             |                                 |                                                     | 6,352        |         |         |        |        |        
|                                    
|                                    
|                                    
|                                    
|                                     | Consumer lot loans                                                |                                 |                                                     | 1,237        |         |         |        | 1,907   |        
|                                     |                                                                   |                                 |                                                     |              |         |        
|                                     |                                                                   | Total loans held for sale       |                                                     |              | 79,383  |         |        |         | 54,746  |        
|Loans held for investment            |                                                                   |                                 |                                                     |              |         |         |        |        
|                                    
|                                    
|                                    
|                                    
|                                     | SFR mortgage                                                      |                                 |                                                     | 52,000       |         |         |        | 49,218  |        
|                                    
|                                    
|                                    
|                                    
|                                     | Consumer construction                                             |                                 |                                                     | 19,271       |         |         |        | 15,995  |        
|                                    
|                                    
|                                    
|                                    
|                                     | Builder construction                                              |                                 |                                                     | 13,007       |         |         |        | 7,526   |        
|                                    
|                                    
|                                    
|                                    
|                                     | HELOC                                                             |                                 |                                                     | 583          |         |         |        | 6,359   |        
|                                    
|                                    
|                                    
|                                    
|                                     | Land and other mortgage                                           |                                 |                                                     | 3,637        |         |         |        | 2,978   |        
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                   | Total loans held for investment |                                                     |              | 88,498  |         |        |         | 82,076  |        
|                                    
|                                    
|                                    
|                                    
|Other                                |                                                                   |                                 | 4,393                                               |              |         |         | 2,882  |        
|                                     |                                                                   |                                 |                                                     |              |         |        
|                                     |                                                                   | Total interest income           |                                                     |              | 223,598 |         |        |         | 166,559 |        
|                                    
|                                    
|                                    
|                                    
|Interest expense                     |                                                                   |                                 |                                                     |              |         |         |        |        
|                                    
|                                    
|                                    
|                                    
|                                     | Deposits                                                          |                                 |                                                     | 35,892       |         |         |        | 22,482  |        
|                                    
|                                    
|                                    
|                                    
|                                     | Advances from Federal Home Loan Bank                              |                                 |                                                     | 52,713       |         |         |        | 30,920  |        
|                                    
|                                    
|                                    
|                                    
|                                     | Other borrowings                                                  |                                 |                                                     | 30,573       |         |         |        | 19,224  |        
|                                     |                                                                   |                                 |                                                     |              |         |        
|                                     |                                                                   | Total interest expense          |                                                     |              | 119,178 |         |        |         | 72,626  |        
|                                     |                                                                   |                                 |                                                     |              |         |        
|                                     |                                                                   |                                 | Net interest income                                 |              |         | 104,420 |        |         |         | 93,933  |       
|                                    
|                                    
|                                    
|                                    
|Provision for loan losses            |                                                                   |                                 | 2,490                                               |              |         |         | 1,500  |        
|                                     |                                                                   |                                 |                                                     |              |         |        
|                                     |                                                                   |                                 | Net interest income after provision for loan losses |              |         | 101,930 |        |         |         | 92,433  |       
|                                    
|                                    
|                                    
|                                    
|Other income                         |                                                                   |                                 |                                                     |              |         |         |        |        
|                                    
|                                    
|                                    
|                                    
|                                     | Gain on sale of loans                                             |                                 |                                                     | 144,322      |         |         |        | 83,668  |        
|                                    
|                                    
|                                    
|                                    
|                                     | Service fee (loss) income                                         |                                 |                                                     | 4,418        |         |         |        | (3,144  | )      
|                                    
|                                    
|                                    
|                                    
|                                     | (Loss) gain on mortgage-backed securities, net                    |                                 |                                                     | (4,646       | )       |         |        | (4,987  | )      
|                                    
|                                    
|                                    
|                                    
|                                     | Fee and other income                                              |                                 |                                                     | 22,078       |         |         |        | 16,722  |        
|                                     |                                                                   |                                 |                                                     |              |         |        
|                                     |                                                                   | Total other income              |                                                     |              | 166,172 |         |        |         | 92,259  |        
|                                     |                                                                   |                                 |                                                     |              |         |        
|                                     |                                                                   |                                 | Net revenues                                        |              |         | 268,102 |        |         |         | 184,692 |       
|                                    
|                                    
|                                    
|                                    
|Other expense                        |                                                                   |                                 |                                                     |              |         |         |        |        
|                                    
|                                    
|                                    
|                                    
|                                     | Operating expenses                                                |                                 |                                                     | 159,266      |         |         |        | 115,198 |        
|                                    
|                                    
|                                    
|                                    
|                                     | Amortization of other intangible assets                           |                                 |                                                     | 157          |         |         |        | 188     |        
|                                     |                                                                   |                                 |                                                     |              |         |        
|                                     |                                                                   | Total other expense             |                                                     |              | 159,423 |         |        |         | 115,386 |        
|                                     |                                                                   |                                 |                                                     |              |         |        
|                                     | Earnings before provision for income taxes and minority interests |                                 |                                                     | 108,679      |         |         |        | 69,306  |        
|                                    
|                                    
|                                    
|                                    
|                                     |                                                                   | Provision for income taxes      |                                                     |              | 42,928  |         |        |         | 27,376  |        
|                                     |                                                                   |                                 |                                                     |              |         |        
|                                     |                                                                   |                                 | Net earnings before minority interests              |              |         | 65,751  |        |         |         | 41,930  |       
|                                    
|                                    
|                                    
|                                    
|                                     | Minority interests                                                |                                 |                                                     | 275          |         |         |        |        |        
|                                     |                                                                   |                                 |                                                     |              |         |        
|                                     |                                                                   |                                 |                                                     | Net earnings |         | $       | 65,476 |         |         | $       | 41,930 | 
|                                     |                                                                   |                                 |                                                     |              |         |        
|Earnings per share:                  |                                                                   |                                 |                                                     |              |         |         |        |        
|                                    
|                                    
|                                    
|                                    
|                                     | Basic                                                             |                                 | $                                                   | 1.06         |         |         | $      | 0.74    |        
|                                    
|                                    
|                                    
|                                    
|                                     | Diluted                                                           |                                 | $                                                   | 1.01         |         |         | $      | 0.70    |        
|                                    
|                                    
|                                    
|                                    
|Weighted-average shares outstanding: |                                                                   |                                 |                                                     |              |         |         |        |        
|                                    
|                                    
|                                    
|                                    
|                                     | Basic                                                             |                                 |                                                     | 61,798       |         |         |        | 56,997  |        
|                                    
|                                    
|                                    
|                                    
|                                     | Diluted                                                           |                                 |                                                     | 64,763       |         |         |        | 59,791  |        
|                                    
|                                    
|                                    
|                                    
|Dividends declared per share         |                                                                   | $                               | 0.36                                                |              |         | $       | 0.25   |        



61



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##### Table of Contents



INDYMAC BANCORP, INC. AND SUBSIDIARIES





CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY AND
COMPREHENSIVE INCOME


|                                                                         |  |                        |            |   |        |            |     |             |       |   |               |  |  |          |         |   |               |   |         |          |  |   |               |   |  |   |          |   |  |   |           |  
|------------------------------------------------------------------------ |  | ---------------------- | ---------- | - | ------ | ---------- | --- | ----------- | ----- | - | ------------- |  |  | -------- | ------- | - | ------------- | - | ------- | -------- |  | - | ------------- | - |  | - | -------- | - |  | - | --------- | -
|                                                                         |  |                        |            |   |        |            |     | Accumulated |       |   |               |  |  |          |         |   |              
|                                                                         |  |                        |            |   |        | Additional |     |             | Other |   |               |  |  | Total    |         |   |               |   | Total   |         
|                                                                         |  | Shares                 |            |   | Common |            |     | Paid-In-    |       |   | Comprehensive |  |  | Retained |         |   | Comprehensive |   |         | Treasury |  |   | Shareholders |  
|                                                                         |  | Outstanding            |            |   | Stock  |            |     | Capital     |       |   | Loss          |  |  | Earnings |         |   | Income        |   |         | Stock    |  |   | Equity        |  
|                                                                         |  |                        |            |   |        |            |     |             |       |   |               |  |  |          |         |   |               |   |         |          |  |   |               |  
|                                                                         |  | (Unaudited)            |           
|                                                                         |  | (Dollars in thousands) |           
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Balance at December 31, 2003                                             |  |                        | 56,760,313 |   |        | $          | 859 |             |       | $ | 1,043,856     |  |  | $        | (26,454 | ) |               | $ | 518,408 |          |  |   |               |   |  | $ | (519,238 | ) |  | $ | 1,017,431 |  
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Common stock options exercised                                           |  |                        | 944,774    |   |        |            | 10  |             |       |   | 20,507        |  |  |          |        |   |               |   |        |          |  | $ |              |   |  |   |         |   |  |   | 20,517    |  
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Net directors and officers notes receivable payments                   |  |                        |           |   |        |            |    |             |       |   | 33            |  |  |          |        |   |               |   |        |          |  |   |              |   |  |   |         |   |  |   | 33        |  
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Deferred compensation, restricted stock                                  |  |                        | 93,952     |   |        |            |    |             |       |   | 504           |  |  |          |        |   |               |   |        |          |  |   |              |   |  |   |         |   |  |   | 504       |  
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Net unrealized gain on mortgage-backed securities available for
    sale |  |                        |           |   |        |            |    |             |       |   |              |  |  |          | 11,849  |   |               |   |        |          |  |   | 11,849        |   |  |   |         |   |  |   | 11,849    |  
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Net unrealized loss on derivatives used in cash flow hedges              |  |                        |           |   |        |            |    |             |       |   |              |  |  |          | (22,119 | ) |               |   |        |          |  |   | (22,119       | ) |  |   |         |   |  |   | (22,119   | )
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Purchases of common stock                                                |  |                        | (17,452    | ) |        |            |    |             |       |   |              |  |  |          |        |   |               |   |        |          |  |   |              |   |  |   | (533     | ) |  |   | (533      | )
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Cash dividends                                                           |  |                        |           |   |        |            |    |             |       |   |              |  |  |          |        |   |               |   | (14,308 | )        |  |   |              |   |  |   |         |   |  |   | (14,308   | )
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Net earnings                                                             |  |                        |           |   |        |            |    |             |       |   |              |  |  |          |        |   |               |   | 41,930  |          |  |   | 41,930        |   |  |   |         |   |  |   | 41,930    |  
|                                                                         |  |                        |            |   |        |            |     |             |       |   |               |  |  |          |         |   |               |   |         |          |  |   |               |  
|Total comprehensive income                                               |  |                        |           |   |        |            |    |             |       |   |              |  |  |          |        |   |               |   |        |          |  | $ | 31,660        |   |  |   |         |   |  |   |          |  
|                                                                         |  |                        |            |   |        |            |     |             |       |   |               |  |  |          |         |   |               |   |         |          |  |   |               |  
|Balance at March 31, 2004                                                |  |                        | 57,781,587 |   |        | $          | 869 |             |       | $ | 1,064,900     |  |  | $        | (36,724 | ) |               | $ | 546,030 |          |  |   |               |   |  | $ | (519,771 | ) |  | $ | 1,055,304 |  
|                                                                         |  |                        |            |   |        |            |     |             |       |   |               |  |  |          |         |   |               |   |         |          |  |   |               |  
|Balance at December 31, 2004                                             |  |                        | 61,995,480 |   |        | $          | 912 |             |       | $ | 1,186,682     |  |  | $        | (20,304 | ) |               | $ | 616,516 |          |  |   |               |   |  | $ | (519,835 | ) |  | $ | 1,263,971 |  
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Common stock options exercised                                           |  |                        | 214,317    |   |        |            | 2   |             |       |   | 5,387         |  |  |          |        |   |               |   |        |          |  | $ |              |   |  |   |         |   |  |   | 5,389     |  
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Deferred compensation, restricted stock                                  |  |                        | 261,434    |   |        |            | 2   |             |       |   | 1,058         |  |  |          |        |   |               |   |        |          |  |   |              |   |  |   |         |   |  |   | 1,060     |  
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Net unrealized loss on mortgage-backed securities available for
    sale |  |                        |           |   |        |            |    |             |       |   |              |  |  |          | (10,027 | ) |               |   |        |          |  |   | (10,027       | ) |  |   |         |   |  |   | (10,027   | )
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Net unrealized gain on derivatives used in cash flow hedges              |  |                        |           |   |        |            |    |             |       |   |              |  |  |          | 25,954  |   |               |   |        |          |  |   | 25,954        |   |  |   |         |   |  |   | 25,954    |  
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Purchases of common stock                                                |  |                        | (13,609    | ) |        |            |    |             |       |   |              |  |  |          |        |   |               |   |        |          |  |   |              |   |  |   | (472     | ) |  |   | (472      | )
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Cash dividends                                                           |  |                        |           |   |        |            |    |             |       |   |              |  |  |          |        |   |               |   | (22,390 | )        |  |   |              |   |  |   |         |   |  |   | (22,390   | )
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Net earnings                                                             |  |                        |           |   |        |            |    |             |       |   |              |  |  |          |        |   |               |   | 65,476  |          |  |   | 65,476        |   |  |   |         |   |  |   | 65,476    |  
|                                                                         |  |                        |            |   |        |            |     |             |       |   |               |  |  |          |         |   |               |   |         |          |  |   |               |  
|Total comprehensive income                                               |  |                        |           |   |        |            |    |             |       |   |              |  |  |          |        |   |               |   |        |          |  | $ | 81,403        |   |  |   |         |   |  |   |          |  
|                                                                         |  |                        |            |   |        |            |     |             |       |   |               |  |  |          |         |   |               |   |         |          |  |   |               |  
|Balance at March 31, 2005                                                |  |                        | 62,457,622 |   |        | $          | 916 |             |       | $ | 1,193,127     |  |  | $        | (4,377  | ) |               | $ | 659,602 |          |  |   |               |   |  | $ | (520,307 | ) |  | $ | 1,328,961 |  
|                                                                         |  |                        |            |   |        |            |     |             |       |   |               |  |  |          |         |   |               |   |         |          |  |   |               |  



62



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##### Table of Contents



INDYMAC BANCORP, INC. AND SUBSIDIARIES





CONSOLIDATED STATEMENTS OF CASH FLOWS


|                                                                            |                                                                                                                        |                                                                 |                                                     |            |          |            |         |            |         |           |  
|--------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------- | --------------------------------------------------- | ---------- | -------- | ---------- | ------- | ---------- | ------- | --------- | -
|                                                                            |                                                                                                                        | For the Three Months Ended                                      |                                                    
|                                                                            |                                                                                                                        | March 31,                                                       |                                                    
|                                                                            |                                                                                                                        |                                                                 |                                                    
|                                                                            |                                                                                                                        | 2005                                                            |                                                     |            | 2004     |           
|                                                                            |                                                                                                                        |                                                                 |                                                     |            |          |           
|                                                                            |                                                                                                                        | (Unaudited)                                                     |                                                    
|                                                                            |                                                                                                                        | (Dollars in thousands)                                          |                                                    
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|Cash flows from operating activities:                                       |                                                                                                                        |                                                                 |                                                     |            |          |            |         |           
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            | Net earnings                                                                                                           |                                                                 | $                                                   | 65,476     |          |            | $       | 41,930     |        
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            | Adjustments to reconcile net earnings to net cash used in
    operating activities:                                    |                                                                 |                                                     |            |          |            |         |            |        
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            |                                                                                                                        | Total amortization and depreciation                             |                                                     |            | 54,201   |            |         |            | 43,313  |          
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            |                                                                                                                        | Provision for valuation adjustment of mortgage servicing rights |                                                     |            | (12,859  | )          |         |            | 53,433  |          
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            |                                                                                                                        | Gain on sale of loans                                           |                                                     |            | (144,322 | )          |         |            | (83,668 | )        
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            |                                                                                                                        | Loss on mortgage-backed securities, net                         |                                                     |            | 4,646    |            |         |            | 4,987   |          
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            |                                                                                                                        | Provision for loan losses                                       |                                                     |            | 2,490    |            |         |            | 1,500   |          
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            |                                                                                                                        | Net increase in deferred tax liability                          |                                                     |            | 25,100   |            |         |            | 8,243   |          
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            |                                                                                                                        | Net (increase) decrease in other assets and liabilities         |                                                     |            | (13,276  | )          |         |            | 42,446  |          
|                                                                            |                                                                                                                        |                                                                 |                                                     |            |          |           
|                                                                            | Net cash (used in) provided by operating activities before
    activity for trading securities and loans held for sale |                                                                 |                                                     | (18,544    | )        |            |         | 112,184    |        
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            | Net sales (purchases) of trading securities                                                                            |                                                                 |                                                     | 14,559     |          |            |         | (5,199     | )      
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            | Net purchases of loans held for sale                                                                                   |                                                                 |                                                     | (1,209,338 | )        |            |         | (1,025,454 | )      
|                                                                            |                                                                                                                        |                                                                 |                                                     |            |          |           
|                                                                            |                                                                                                                        |                                                                 | Net cash used in operating activities               |            |          | (1,213,323 | )       |            |         | (918,469  | )
|                                                                            |                                                                                                                        |                                                                 |                                                     |            |          |           
|Cash flows from investing activities:                                       |                                                                                                                        |                                                                 |                                                     |            |          |            |         |           
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            | Net sales (purchases) of and payments from loans held for
    investment                                               |                                                                 |                                                     | 262,350    |          |            |         | (44,928    | )      
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            | Net sales (purchases) of mortgage-backed securities
    available for sale                                             |                                                                 |                                                     | 75,047     |          |            |         | (151,562   | )      
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            | Net (increase) decrease in investment in Federal Home
    Loan Bank stock, at cost                                     |                                                                 |                                                     | (36,432    | )        |            |         | 25,548     |        
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            | Net increase in warehouse lending                                                                                      |                                                                 |                                                     | (125       | )        |            |         |           |        
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            | Net purchases of property, plant and equipment                                                                         |                                                                 |                                                     | (17,482    | )        |            |         | (9,192     | )      
|                                                                            |                                                                                                                        |                                                                 |                                                     |            |          |           
|                                                                            |                                                                                                                        |                                                                 | Net cash provided by (used in) investing activities |            |          | 283,358    |         |            |         | (180,134  | )
|                                                                            |                                                                                                                        |                                                                 |                                                     |            |          |           
|Cash flows from financing activities:                                       |                                                                                                                        |                                                                 |                                                     |            |          |            |         |           
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            | Net increase in deposits                                                                                               |                                                                 |                                                     | 362,410    |          |            |         | 398,996    |        
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            | Net increase (decrease)in advances from Federal Home
    Loan Bank                                                     |                                                                 |                                                     | 546,000    |          |            |         | (175,000   | )      
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            | Net increase in borrowings                                                                                             |                                                                 |                                                     | 96,407     |          |            |         | 954,276    |        
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            | Net proceeds from stock options and notes receivable                                                                   |                                                                 |                                                     | 5,389      |          |            |         | 20,550     |        
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            | Cash dividends paid                                                                                                    |                                                                 |                                                     | (22,390    | )        |            |         | (14,308    | )      
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            | Purchases of common stock                                                                                              |                                                                 |                                                     | (472       | )        |            |         | (533       | )      
|                                                                            |                                                                                                                        |                                                                 |                                                     |            |          |           
|                                                                            |                                                                                                                        |                                                                 | Net cash provided by financing activities           |            |          | 987,344    |         |            |         | 1,183,981 |  
|                                                                            |                                                                                                                        |                                                                 |                                                     |            |          |           
|Net increase in cash and cash equivalents                                   |                                                                                                                        |                                                                 | 57,379                                              |            |          |            | 85,378  |           
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|Cash and cash equivalents at beginning of period                            |                                                                                                                        |                                                                 | 356,157                                             |            |          |            | 115,485 |           
|                                                                            |                                                                                                                        |                                                                 |                                                     |            |          |           
|Cash and cash equivalents at end of period                                  |                                                                                                                        | $                                                               | 413,536                                             |            |          | $          | 200,863 |           
|                                                                            |                                                                                                                        |                                                                 |                                                     |            |          |           
|Supplemental cash flow information:                                         |                                                                                                                        |                                                                 |                                                     |            |          |            |         |           
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            | Cash paid for interest                                                                                                 |                                                                 | $                                                   | 108,338    |          |            | $       | 63,121     |        
|                                                                            |                                                                                                                        |                                                                 |                                                     |            |          |           
|                                                                            | Cash paid for income taxes                                                                                             |                                                                 | $                                                   | 10,404     |          |            | $       | 4,443      |        
|                                                                            |                                                                                                                        |                                                                 |                                                     |            |          |           
|Supplemental disclosure of non-cash investing and financing
    activities: |                                                                                                                        |                                                                 |                                                     |            |          |            |         |           
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|                                                                            | Net transfer of loans held for sale to loans held for investment                                                       |                                                                 | $                                                   | 924,889    |          |            | $       | 195,037    |        
|                                                                            |                                                                                                                        |                                                                 |                                                     |            |          |           
|                                                                            | Recharacterization of loans to mortgage-backed securities
    available for sale                                       |                                                                 | $                                                   |           |          |            | $       | 500,012    |        
|                                                                            |                                                                                                                        |                                                                 |                                                     |            |          |           
|                                                                            | Net transfer of mortgage servicing rights to trading securities                                                        |                                                                 | $                                                   | 5,127      |          |            | $       |           |        
|                                                                            |                                                                                                                        |                                                                 |                                                     |            |          |           



63



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##### Table of Contents



INDYMAC BANCORP, INC. AND SUBSIDIARIES





NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


March 31, 2005


(Unaudited)




|         |                      
|-------- | ---------------------
|NOTE 1  | BASIS OF PRESENTATION







|         |                              
|-------- | -----------------------------
|NOTE 2  | NEW ACCOUNTING PRONOUNCEMENTS

Share-Based Payment Accounting for Stock-Based
Compensation Accounting for Stock Issued to Employees,


Share-Based Payment


Implicit Variable Interests under FASB
Interpretation No. 46 (FIN 46R  Revised
December 2003), Consolidation of Variable Interest Entities
(VIE


Accounting
for Transfers and


64



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##### Table of Contents



INDYMAC BANCORP, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Servicing of Financial Assets and Extinguishments of
Liabilities


Accounting for Certain Loans or Debt Securities
Acquired in a Transfer




|         |                                            
|-------- | -------------------------------------------
|NOTE 3  | MORTGAGE-BACKED SECURITIES AND AGENCY NOTES



|                                                                     |                                                |                                                                            |   |           |              |  |   |           |           | 
|-------------------------------------------------------------------- | ---------------------------------------------- | -------------------------------------------------------------------------- | - | --------- | ------------ |  | - | --------- | --------- | 
|                                                                     |                                                | March 31,                                                                  |   |           | December 31, | 
|                                                                     |                                                | 2005                                                                       |   |           | 2004         | 
|                                                                     |                                                |                                                                            |   |           |              | 
|                                                                     |                                                | (Dollars in thousands)                                                     |  
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|Mortgage-backed securities  Trading                                 |                                                |                                                                            |   |           |              |  |   |          
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     | AAA-rated and agency interest-only securities  |                                                                            | $ | 83,080    |              |  | $ | 90,658    |          
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     | AAA-rated principal-only securities            |                                                                            |   | 1,113     |              |  |   | 18,598    |          
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     | Prepayment penalty securities                  |                                                                            |   | 45,649    |              |  |   | 33,451    |          
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     | Other investment grade securities              |                                                                            |   | 9,263     |              |  |   | 9,219     |          
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     | Other non-investment grade securities          |                                                                            |   | 100       |              |  |   | 4,198     |          
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     | Non-investment grade residual securities       |                                                                            |   | 84,123    |              |  |   | 78,912    |          
|                                                                     |                                                |                                                                            |   |           |              | 
|                                                                     |                                                | Total mortgage-backed securities  Trading                                 |   | $         | 223,328      |  |   | $         | 235,036   | 
|                                                                     |                                                |                                                                            |   |           |              | 
|Mortgage-backed securities and agency notes 
    Available for sale |                                                |                                                                            |   |           |              |  |   |          
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     | AAA-rated non-agency securities                |                                                                            | $ | 3,101,050 |              |  | $ | 3,166,600 |          
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     | AAA-rated agency securities                    |                                                                            |   | 13,091    |              |  |   | 14,903    |          
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     | Other investment grade securities              |                                                                            |   | 134,769   |              |  |   | 137,603   |          
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     | Other non-investment grade securities          |                                                                            |   | 79,668    |              |  |   | 78,854    |          
|                                                                    
|                                                                    
|                                                                    
|                                                                    
|                                                                     | Non-investment grade HELOC residual securities |                                                                            |   | 47,251    |              |  |   | 56,475    |          
|                                                                     |                                                |                                                                            |   |           |              | 
|                                                                     |                                                | Total mortgage-backed securities and agency notes 
    Available for sale |   | $         | 3,375,829    |  |   | $         | 3,454,435 | 
|                                                                     |                                                |                                                                            |   |           |              | 

65



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##### Table of Contents



INDYMAC BANCORP, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                 |                                       |                                       |   |         |                      |                        |            |           |           |  |            |            |         |        |   |         |            |  |   |         |         |   |   |           |           | 
|-------------------------------- | ------------------------------------- | ------------------------------------- | - | ------- | -------------------- | ---------------------- | ---------- | --------- | --------- |  | ---------- | ---------- | ------- | ------ | - | ------- | ---------- |  | - | ------- | ------- | - | - | --------- | --------- | 
|                                 |                                       | As of March 31, 2005                  |  
|                                 |                                       |                                       |  
|                                 |                                       | Less Than 12 Months                   |   |         | 12 Months or Greater |                        |            | Total     |          
|                                 |                                       |                                       |   |         |                      |                        |            |           |          
|                                 |                                       | Unrealized                            |   |         |                      |                        | Unrealized |           |           |  |            | Unrealized |         |        |  
|                                 |                                       | Losses                                |   |         | Fair Value           |                        |            | Losses    |           |  | Fair Value |            |         | Losses |   |         | Fair Value | 
|                                 |                                       |                                       |   |         |                      |                        |            |           |           |  |            |            |         |        |   |         |            | 
|                                 |                                       |                                       |   |         |                      | (Dollars in thousands) |            |           |           |  |           
|                                
|                                
|                                
|                                
|Securities  Available for Sale: |                                       |                                       |   |         |                      |                        |            |           |           |  |            |            |         |        |   |         |            |  |   |         |         |   |   |          
|                                
|                                
|                                
|                                
|                                 | AAA-rated agency securities           |                                       | $ |        |                      |                        | $          |          |           |  | $          | (200       | )       |        | $ | 7,481   |            |  | $ | (200    | )       |   | $ | 7,481     |          
|                                
|                                
|                                
|                                
|                                 | AAA-rated non-agency securities       |                                       |   | (13,127 | )                    |                        |            | 1,125,155 |           |  |            | (25,167    | )       |        |   | 917,930 |            |  |   | (38,294 | )       |   |   | 2,043,086 |          
|                                
|                                
|                                
|                                
|                                 | Other investment grade securities     |                                       |   | (319    | )                    |                        |            | 45,728    |           |  |            |           |         |        |   |        |            |  |   | (319    | )       |   |   | 45,728    |          
|                                
|                                
|                                
|                                
|                                 | Other non-investment grade securities |                                       |   | (19     | )                    |                        |            | 635       |           |  |            |           |         |        |   |        |            |  |   | (19     | )       |   |   | 635       |          
|                                 |                                       |                                       |   |         |                      |                        |            |           |           |  |            |            |         |        |   |         |            | 
|                                 |                                       | Total Securities  Available for Sale |   | $       | (13,465              | )                      |            | $         | 1,171,518 |  |            | $          | (25,367 | )      |   | $       | 925,411    |  |   | $       | (38,832 | ) |   | $         | 2,096,930 | 
|                                 |                                       |                                       |   |         |                      |                        |            |           |           |  |            |            |         |        |   |         |            | 





|         |                  
|-------- | -----------------
|NOTE 4  | SEGMENT REPORTING





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INDYMAC BANCORP, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                  |                               |                        |           |         |                 |   |           |            |  |   |         |        |   |   |            |        |  |   |           |         |   |   |            |         | 
|--------------------------------- | ----------------------------- | ---------------------- | --------- | ------- | --------------- | - | --------- | ---------- |  | - | ------- | ------ | - | - | ---------- | ------ |  | - | --------- | ------- | - | - | ---------- | ------- | 
|                                  |                               |                        |           |         |                 |   |           | Total      | 
|                                  |                               | Mortgage Banking       |           |         | Thrift          |   |           | Other      |  |   | Company |       
|                                  |                               |                        |           |         |                 |   |           |            |  |   |         |       
|                                  |                               |                        |           | MSRs    |                 |   | Loan      |            |  |   |         |        |   |  
|                                  |                               | Production             |           |         | and             |   |           | Servicing  |  |   |         |        |   |   |           
|                                  |                               | Divisions              |           |         | Retained Assets |   |           | Operations |  |   |         |        |   |   |           
|                                  |                               |                        |           |         |                 |   |           |            |  |   |         |        |   |   |           
|                                  |                               | (Dollars in thousands) |          
|                                 
|                                 
|                                 
|                                 
|Three months ended March 31, 2005 |                               |                        |           |         |                 |   |           |            |  |   |         |        |   |   |            |        |  |   |           |         |   |   |            |        
|                                 
|                                 
|                                 
|                                 
|                                  | Net interest income (expense) |                        | $         | 26,637  |                 |   | $         | 14,674     |  |   | $       | (302   | ) |   | $          | 60,051 |  |   | $         | 3,360   |   |   | $          | 104,420 | 
|                                 
|                                 
|                                 
|                                 
|                                  | Net revenues (expense)        |                        |           | 202,537 |                 |   |           | 20,021     |  |   |         | 65     |   |   |            | 74,834 |  |   |           | (29,355 | ) |   |            | 268,102 | 
|                                 
|                                 
|                                 
|                                 
|                                  | Net earnings (loss)           |                        |           | 70,850  |                 |   |           | 8,610      |  |   |         | (3,453 | ) |   |            | 34,693 |  |   |           | (45,224 | ) |   |            | 65,476  | 
|                                 
|                                 
|                                 
|                                 
|Allocated capital                 |                               |                        | 346,919   |         |                 |   | 252,155   |            |  |   | 5,564   |        |   |   | 564,206    |        |  |   | 84,704    |         |   |   | 1,253,548  |        
|                                 
|                                 
|                                 
|                                 
|Assets as of March 31, 2005       |                               | $                      | 3,950,736 |         |                 | $ | 1,456,979 |            |  | $ | 69,907  |        |   | $ | 11,469,063 |        |  | $ | 1,019,642 |         |   | $ | 17,966,327 |        
|                                 
|                                 
|                                 
|                                 
|Return on equity                  |                               |                        | 83        | %       |                 |   | 14        | %          |  |   | NA      |        |   |   | 25         | %      |  |   | NA        |         |   |   | 21         | %      
|                                 
|                                 
|                                 
|                                 
|Three months ended March 31, 2004 |                               |                        |           |         |                 |   |           |            |  |   |         |        |   |   |            |        |  |   |           |         |   |   |            |        
|                                 
|                                 
|                                 
|                                 
|                                  | Net interest income (expense) |                        | $         | 30,228  |                 |   | $         | 14,914     |  |   | $       |       |   |   | $          | 53,384 |  |   | $         | (4,593  | ) |   | $          | 93,933  | 
|                                 
|                                 
|                                 
|                                 
|                                  | Net revenues (expense)        |                        |           | 117,343 |                 |   |           | 12,440     |  |   |         | 484    |   |   |            | 61,759 |  |   |           | (7,334  | ) |   |            | 184,692 | 
|                                 
|                                 
|                                 
|                                 
|                                  | Net earnings (loss)           |                        |           | 33,470  |                 |   |           | 4,258      |  |   |         | (2,228 | ) |   |            | 28,680 |  |   |           | (22,250 | ) |   |            | 41,930  | 
|                                 
|                                 
|                                 
|                                 
|Allocated capital                 |                               |                        | 173,245   |         |                 |   | 200,874   |            |  |   |        |        |   |   | 483,189    |        |  |   | 186,014   |         |   |   | 1,043,322  |        
|                                 
|                                 
|                                 
|                                 
|Assets as of March 31, 2004       |                               | $                      | 4,507,087 |         |                 | $ | 1,572,009 |            |  | $ | 54,894  |        |   | $ | 9,751,579  |        |  | $ | 940,075   |         |   | $ | 16,825,644 |        
|                                 
|                                 
|                                 
|                                 
|Return on equity                  |                               |                        | 78        | %       |                 |   | 9         | %          |  |   | NA      |        |   |   | 24         | %      |  |   | NA        |         |   |   | 16         | %      



|         |                         
|-------- | ------------------------
|NOTE 5  | STOCK-BASED COMPENSATION





Accounting for Stock Issued to Employees, Accounting for Stock-Based
Compensation  Transition and Disclosure.


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INDYMAC BANCORP, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                           |             |                                  |   |        |        |   |   |        |        |  
|-------------------------- | ----------- | -------------------------------- | - | ------ | ------ | - | - | ------ | ------ | -
|                           |             | Three Months                     |  
|                           |             | Ended March 31,                  |  
|                           |             |                                  |  
|                           |             | 2005                             |   |        | 2004   |  
|                           |             |                                  |   |        |        |  
|                           |             | (Dollars in thousands,           |  
|                           |             | except per share data)           |  
|                          
|                          
|                          
|                          
|Net Earnings               |             |                                  |   |        |        |   |   |       
|                          
|                          
|                          
|                          
|                           | As reported |                                  | $ | 65,476 |        |   | $ | 41,930 |       
|                          
|                          
|                          
|                          
|                           |             | Stock-based compensation expense |   |        | (2,725 | ) |   |        | (2,885 | )
|                          
|                          
|                          
|                          
|                           |             | Tax effect                       |   |        | 779    |   |   |        | 1,140  |  
|                           |             |                                  |   |        |        |  
|                           | Pro forma   |                                  | $ | 63,530 |        |   | $ | 40,185 |       
|                           |             |                                  |   |        |        |  
|Basic Earnings Per Share   |             |                                  |   |        |        |   |   |       
|                          
|                          
|                          
|                          
|                           | As reported |                                  | $ | 1.06   |        |   | $ | 0.74   |       
|                          
|                          
|                          
|                          
|                           | Pro forma   |                                  | $ | 1.03   |        |   | $ | 0.71   |       
|                          
|                          
|                          
|                          
|Diluted Earnings Per Share |             |                                  |   |        |        |   |   |       
|                          
|                          
|                          
|                          
|                           | As reported |                                  | $ | 1.01   |        |   | $ | 0.70   |       
|                          
|                          
|                          
|                          
|                           | Pro forma   |                                  | $ | 0.98   |        |   | $ | 0.67   |       





|         |                                               
|-------- | ----------------------------------------------
|NOTE 6  | DEFINED BENEFIT PENSION PLAN NET PERIODIC COST



|                                   |  |                        |       |   |      |   |       |  
|---------------------------------- |  | ---------------------- | ----- | - | ---- | - | ----- | -
|                                   |  | Three Months           |      
|                                   |  | Ended March 31,        |      
|                                   |  |                        |      
|                                   |  | 2005                   |       |   | 2004 |  
|                                   |  |                        |       |   |      |  
|                                   |  | (Dollars in thousands) |      
|                                  
|                                  
|                                  
|                                  
|Service cost                       |  | $                      | 1,812 |   |      | $ | 1,480 |  
|                                  
|                                  
|                                  
|                                  
|Interest cost                      |  |                        | 507   |   |      |   | 358   |  
|                                  
|                                  
|                                  
|                                  
|Expected return on assets          |  |                        | (453  | ) |      |   | (294  | )
|                                  
|                                  
|                                  
|                                  
|Recognized actuarial loss          |  |                        | 139   |   |      |   | 103   |  
|                                  
|                                  
|                                  
|                                  
|Amortization of prior service cost |  |                        | 14    |   |      |   | 14    |  
|                                   |  |                        |       |   |      |  
|Net periodic expense               |  | $                      | 2,019 |   |      | $ | 1,661 |  
|                                   |  |                        |       |   |      |  

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##### Table of Contents



INDYMAC BANCORP, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                     |  |                 |       |  |      |  |       | 
|------------------------------------ |  | --------------- | ----- |  | ---- |  | ----- | 
|                                     |  | Three Months    |      
|                                     |  | Ended March 31, |      
|                                     |  |                 |      
|                                     |  | 2005            |       |  | 2004 | 
|                                     |  |                 |       |  |      | 
|                                    
|                                    
|                                    
|                                    
|Discount rate for net periodic costs |  |                 | 6.00% |  |      |  | 6.00% | 
|                                    
|                                    
|                                    
|                                    
|Rate of compensation increase        |  |                 | 4.00% |  |      |  | 4.00% | 
|                                    
|                                    
|                                    
|                                    
|Expected return on assets            |  |                 | 7.50% |  |      |  | 7.50% | 





|         |              
|-------- | -------------
|NOTE 7  | LEGAL MATTERS

Accounting for Contingencies




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##### Table of Contents








|        |                        
|------- | -----------------------
|ITEM 4. | CONTROLS AND PROCEDURES








PART II. OTHER INFORMATION







|        |                  
|------- | -----------------
|ITEM 1. | LEGAL PROCEEDINGS

Accounting for Contingencies









|        |                                                                
|------- | ---------------------------------------------------------------
|ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
    PROCEEDS








|        |         
|------- | --------
|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.

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SIGNATURE






| |                      
| | ---------------------
| | INDYMAC BANCORP, INC.
| | (Registrant)         



| |     |                     
| | --- | --------------------
| | By: | /s/ Michael W. Perry

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



| |     |               
| | --- | --------------
| | By: | /s/ Scott Keys

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

71