##### Table of Contents









UNITED STATES

SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549




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Form 10-Q

|   |  |                                                                                             
|-- |  | --------------------------------------------------------------------------------------------
|þ  |  | QUARTERLY REPORT PURSUANT TO SECTION 13
    OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
|  
|   |  | For the quarterly period ended
    September 30, 2004                                       
|  
|or
|  
|  
|o  |  | TRANSITION REPORT PURSUANT TO SECTION 13
    OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|  
|   |  | For the transition period
    from           to                                             

Commission file number 1-8972

IndyMac Bancorp, Inc.

(Exact name of registrant as specified in its
charter)


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

Registrants telephone number, including
area code:

(800) 669-2300


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

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

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

Common stock outstanding as of October 22,
2004: 61,965,568 shares



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FORM 10-Q QUARTERLY REPORT

For the Period Ended September 30,
2004


TABLE OF CONTENTS

|                                   |  |                                                                                           |  |      |    | 
|---------------------------------- |  | ----------------------------------------------------------------------------------------- |  | ---- | -- | 
|                                   |  |                                                                                           |  | Page
|                                   |  |                                                                                           |  |     
|PART I.  FINANCIAL
    INFORMATION
|                                   |  | Forward-Looking
    Statements                                                            |  |      | 2  | 
|Item 2.                            |  | Managements Discussion
    and Analysis of Financial Condition and Results of Operations |  |      | 2  | 
|                                   |  | Highlights for the Three and
    Nine Months Ended September 30, 2004                     |  |      | 2  | 
|                                   |  | Overall Results                                                                           |  |      | 5  | 
|                                   |  | Our Business                                                                              |  |      | 6  | 
|                                   |  | Mortgage Banking
    Activities                                                           |  |      | 23 | 
|                                   |  | Loan
    Production                                                                       |  |      | 23 | 
|                                   |  | Mortgage
    Production by Division and Channel                                           |  |      | 25 | 
|                                   |  | Loan
    Sales                                                                            |  |      | 27 | 
|                                   |  | Investing and
    HELOC Activities                                                        |  |      | 33 | 
|                                   |  | Investing
    Activities                                                                  |  |      | 34 | 
|                                   |  | Construction
    Lending                                                                  |  |      | 43 | 
|                                   |  | HELOC
    Portfolio                                                                       |  |      | 45 | 
|                                   |  | Net Interest Income                                                                       |  |      | 46 | 
|                                   |  | Overall Interest Rate Risk
    Management                                                 |  |      | 48 | 
|                                   |  | Credit Risk and Reserves                                                                  |  |      | 50 | 
|                                   |  | General                                                                                   |  |      | 50 | 
|                                   |  | Secondary Market
    Reserve                                                              |  |      | 53 | 
|                                   |  | Operating Expenses                                                                        |  |      | 54 | 
|                                   |  | Dividend Policy                                                                           |  |      | 55 | 
|                                   |  | Future Outlook                                                                            |  |      | 55 | 
|                                   |  | Liquidity and Capital
    Resources                                                       |  |      | 55 | 
|                                   |  | Overview                                                                                  |  |      | 55 | 
|                                   |  | Principal
    Sources of Cash                                                             |  |      | 56 | 
|                                   |  | Principal Uses
    of Cash                                                                |  |      | 58 | 
|                                   |  | Accumulated
    Other Comprehensive Loss                                                  |  |      | 58 | 
|                                   |  | Regulatory
    Capital Requirements                                                       |  |      | 58 | 
|                                   |  | Issuance of Common Stock                                                                  |  |      | 59 | 
|                                   |  | Share Repurchases                                                                         |  |      | 59 | 
|                                   |  | Off-Balance Sheet
    Arrangements                                                        |  |      | 60 | 
|                                   |  | Aggregate Contractual
    Obligations                                                     |  |      | 61 | 
|                                   |  | Key Operating Risks                                                                       |  |      | 62 | 
|                                   |  | Interest Rate
    Risk                                                                    |  |      | 62 | 
|                                   |  | Valuation
    Risk                                                                        |  |      | 62 | 
|                                   |  | Credit Risk                                                                               |  |      | 63 | 
|                                   |  | Liquidity Risk/
    Access to Capital Markets                                             |  |      | 63 | 
|                                   |  | Government
    Regulation and Monetary Policy                                             |  |      | 63 | 
|                                   |  | Competition                                                                               |  |      | 64 | 
|                                   |  | Other Risks                                                                               |  |      | 64 | 
|                                   |  | Critical Accounting
    Policies                                                          |  |      | 64 | 
|Item 3.                            |  | Quantitative and Qualitative
    Disclosure About Market Risk                             |  |      | 65 | 
|Item 1.                            |  | Financial Statements
    (Unaudited)                                                      |  |      | 66 | 
|                                   |  | Consolidated Balance
    Sheets                                                           |  |      | 66 | 
|                                   |  | Consolidated Statements of
    Earnings                                                   |  |      | 67 | 
|                                   |  | Consolidated Statements of
    Stockholders Equity and Comprehensive Income              |  |      | 68 | 
|                                   |  | Consolidated Statements of
    Cash Flows                                                 |  |      | 69 | 
|                                   |  | Notes to Consolidated
    Financial Statements                                            |  |      | 70 | 
|Item 4.                            |  | Controls and Procedures                                                                   |  |      | 76 | 
|PART II.  OTHER
    INFORMATION   
|Item 1.                            |  | Legal Proceedings                                                                         |  |      | 76 | 
|Item 2.                            |  | Changes in Securities, Use
    of Proceeds, and Issuer Purchases of Equity Securities     |  |      | 76 | 
|Item 6.                            |  | Exhibits                                                                                  |  |      | 77 | 
|EX-10.1                           
|EX-10.2                           
|EX-10.3                           
|EX-31.1                           
|EX-31.2                           
|EX-32.1                           
|EX-32.2                           



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FORWARD-LOOKING STATEMENTS

This Form 10-Q contains statements that may
be deemed to be forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934.
Forward-looking statements include statements regarding our
projected financial condition and results of operations, plans,
objectives, future performance and business. Forward-looking
statements typically include the words anticipate,
believe, estimate, expect,
project, plan, forecast,
intend, goal, target and
other similar expressions. These statements reflect our current
views with respect to future events and financial performance.
They are subject to risks and uncertainties that could cause
future results to differ materially from historical results or
from the results anticipated. Readers are cautioned not to place
undue reliance on these forward-looking statements, which speak
only as of their dates or as of the date hereof if no other date
is identified. We undertake no obligation to update or revise
any forward-looking statements, whether as a result of new
information, future events or otherwise. For further information
on our key operating risks, refer to Key Operating
Risks beginning on page 62 and to IndyMacs
annual report on Form 10-K for the year ended
December 31, 2003.

References to IndyMac Bancorp or the
Parent Company refer to the parent company alone
while references to IndyMac, the
Company, or we refer to IndyMac Bancorp,
Inc. and its consolidated subsidiaries. References to
IndyMac Bank or the Bank refer to
our subsidiary IndyMac Bank, F.S.B. and its
consolidated subsidiaries. The following discussion addresses
the Companys financial condition and results of operations
for the three and nine months ended September 30, 2004.






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




HIGHLIGHTS FOR THE THREE AND NINE MONTHS ENDED
SEPTEMBER 30, 2004

On March 9, 2004, the Securities and
Exchange Commission (SEC) issued Staff Accounting
Bulletin No. 105, Application of Accounting
Principles to Loan Commitments(SAB
No. 105). In SAB No. 105, the SEC determined
that an interest rate lock commitment should generally be valued
at zero at inception. Profits inherent in the rate lock will be
recognized at the time of the sale of the underlying loan. The
Company adopted this standard effective April 1, 2004,
which affected the second quarter 2004 gain on sale of loans
with a negative impact of $52.2 million before-tax, or
$31.6 million after-tax, and impacted the third quarter of
2004 by $5.1 million before-tax, or $3.1 million
after-tax. Once all loans that were rate locked prior to
April 1, 2004, are sold, SAB No. 105 will no longer
have a negative impact on earnings. We currently expect all
remaining loans to be sold in the fourth quarter of 2004 with
carryover SAB No. 105 impact of $2.2 million,
before-tax, on earnings.

Additionally, on July 16, 2004, the Company
completed the acquisition of 93.75% of the outstanding shares of
common stock of Financial Freedom Holdings Inc. (Financial
Freedom), the leading provider of reverse mortgages in the
United States of America, and the related assets from Lehman
Brothers Bank, F.S.B. and its affiliates for an aggregate cash
purchase price of approximately $83.8 million. The
remaining shares (6.25%) of the common stock of Financial
Freedom are held by its Chief Executive Officer. The acquisition
was accounted for using the purchase accounting method and
accordingly the results of operations for the period from
July 16, 2004, to September 30, 2004, which were
insignificant, have been included in the consolidated financial
statements for the three months and nine months ended
September 30, 2004. As part of the allocation of the
purchase price, we recorded loans held for sale and the loan
application pipeline at their fair values at the acquisition
date. By allocating a portion of the purchase price these
assets, we increased the cost basis of loans that are
subsequently sold. This increased cost basis decreases the gain
on sale when the related loans are sold. We allocated a total of
$8.1 million in purchase price to the loan portfolio and
loan application pipeline. Of this amount, $6.0 million was
recognized as the related loans were sold during the third
quarter of 2004. We expect the remaining $2.1 million will
be recognized during the fourth quarter of 2004 which will
reduce gain on sale of loans by the same amount. The Financial
Freedom acquisition has added $71.0 million in loans held
for sale and $41.8 million in mortgage servicing rights
(MSRs) related to the $4.0 billion portfolio of
loans serviced for others to our consolidated balance sheets.
The acquisition

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resulted in $46.9 million of goodwill. The
acquisition was consummated as Financial Freedoms focus on
the reverse mortgage industry aligns well with our strategy to
increase market share by offering niche mortgage products and
servicing a broad customer base. Financial Freedoms
results of operation are expected to be accretive to our
earnings after the third quarter of 2004.


In the table below, in addition to the financial
information presented in accordance with generally accepted
accounting principles (GAAP), we have presented
certain pro forma non-GAAP financial measures that are marked
with footnote (1). These pro forma non-GAAP financial
measures are calculated based on the GAAP gain on sale of loans
but adjusted to exclude the effect of the SAB No. 105
change in accounting principle related to rate lock commitments
as well as the impact of the purchase accounting adjustments for
the Financial Freedom acquisition described above. For the
quarter ended June 30, 2004, the pro forma financial
measures were calculated excluding the effect of the
SAB No. 105 only. We believe these pro forma non-GAAP
financial measures provide useful information to investors in
evaluating and comparing our financial condition and results of
operations on a consistent basis from period to period, and it
is on this basis that our management internally assesses our
performance.

Although we believe these pro forma non-GAAP
financial measures are useful to investors, they should not be
considered a substitute for, or superior to, GAAP results.

|                                                                                                                                                     |                                                         |                                              |   |                   |        |          |   |               |        |               |   |       |        |  |   |       |        |  |   |       |        | 
|---------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------- | -------------------------------------------- | - | ----------------- | ------ | -------- | - | ------------- | ------ | ------------- | - | ----- | ------ |  | - | ----- | ------ |  | - | ----- | ------ | 
|                                                                                                                                                     |                                                         |                                              |   |                  
|                                                                                                                                                     |                                                         | Three Months Ended                           |   | Nine Months Ended
|                                                                                                                                                     |                                                         |                                              |   |                  
|                                                                                                                                                     |                                                         | September 30,                                |   | September 30,     |        | June 30, |   | September 30, |        | September 30,
|                                                                                                                                                     |                                                         | 2004                                         |   | 2003              |        | 2004     |   | 2004          |        | 2003         
|                                                                                                                                                     |                                                         |                                              |   |                   |        |          |   |               |        |              
|                                                                                                                                                     |                                                         |                                             
|                                                                                                                                                     |                                                         | (Dollars in millions, except per share data)
|Income Statement                                                                                                                                     |                                                         |                                              |   |                   |        |          |   |               |        |               |   |       |        |  |   |       |        |  |   |      
|                                                                                                                                                     | Net interest income after provision for loan
    losses |                                              | $ | 99                |        |          | $ | 76            |        |               | $ | 104   |        |  | $ | 295   |        |  | $ | 197   |       
|                                                                                                                                                     | Gain on sale of loans                                   |                                              |   | 98                |        |          |   | 122           |        |               |   | 66    |        |  |   | 248   |        |  |   | 307   |       
|                                                                                                                                                     | Other income (loss)                                     |                                              |   | 21                |        |          |   | 2             |        |               |   | (11   | )      |  |   | 19    |        |  |   | 26    |       
|                                                                                                                                                     | Net revenues                                            |                                              |   | 218               |        |          |   | 200           |        |               |   | 159   |        |  |   | 562   |        |  |   | 530   |       
|                                                                                                                                                     | Operating expenses                                      |                                              |   | 135               |        |          |   | 118           |        |               |   | 121   |        |  |   | 372   |        |  |   | 318   |       
|                                                                                                                                                     | Net earnings                                            |                                              |   | 50                |        |          |   | 50            |        |               |   | 23    |        |  |   | 115   |        |  |   | 128   |       
|                                                                                                                                                     | Basic earnings per share                                |                                              |   | 0.81              |        |          |   | 0.90          |        |               |   | 0.39  |        |  |   | 1.95  |        |  |   | 2.33  |       
|                                                                                                                                                     | Diluted earnings per share                              |                                              | $ | 0.78              |        |          | $ | 0.87          |        |               | $ | 0.38  |        |  | $ | 1.87  |        |  | $ | 2.26  |       
|Pro Forma Income Statement Items Excluding the
    Effect of the Change in Accounting Principle and the Effect of
    Purchase Accounting Adjustment |                                                         |                                              |   |                   |        |          |   |               |        |               |   |       |        |  |   |       |        |  |   |      
|                                                                                                                                                     | Gain on sale of loans(1)                                |                                              | $ | 109               |        |          | $ | 122           |        |               | $ | 118   |        |  | $ | 311   |        |  | $ | 307   |       
|                                                                                                                                                     | Net revenues(1)                                         |                                              |   | 229               |        |          |   | 200           |        |               |   | 211   |        |  |   | 625   |        |  |   | 530   |       
|                                                                                                                                                     | Net earnings(1)                                         |                                              |   | 56                |        |          |   | 50            |        |               |   | 55    |        |  |   | 153   |        |  |   | 128   |       
|                                                                                                                                                     | Basic earnings per share(1)                             |                                              |   | 0.92              |        |          |   | 0.90          |        |               |   | 0.94  |        |  |   | 2.60  |        |  |   | 2.33  |       
|                                                                                                                                                     | Diluted earnings per share(1)                           |                                              | $ | 0.88              |        |          | $ | 0.87          |        |               | $ | 0.90  |        |  | $ | 2.49  |        |  | $ | 2.26  |       
|Other Per Share Data                                                                                                                                 |                                                         |                                              |   |                   |        |          |   |               |        |               |   |       |        |  |   |       |        |  |   |      
|                                                                                                                                                     | Dividends paid per share                                |                                              |   | 0.32              |        |          |   | 0.15          |        |               |   | 0.30  |        |  |   | 0.87  |        |  |   | 0.35  |       
|                                                                                                                                                     | Book value per share at end of quarter                  |                                              |   | 19.64             |        |          |   | 17.27         |        |               |   | 19.35 |        |  |   | 19.64 |        |  |   | 17.27 |       
|                                                                                                                                                     | Closing price per share                                 |                                              | $ | 36.20             |        |          | $ | 23.17         |        |               | $ | 31.60 |        |  | $ | 36.20 |        |  | $ | 23.17 |       
|                                                                                                                                                     | Average Common Shares (in thousands)                    |                                              |   |                   |        |          |   |               |        |               |   |       |        |  |   |       |        |  |   |       |       
|                                                                                                                                                     |                                                         | Basic                                        |   |                   | 61,254 |          |   |               | 55,255 |               |   |       | 58,137 |  |   |       | 58,800 |  |   |       | 55,034 | 
|                                                                                                                                                     |                                                         | Diluted                                      |   |                   | 63,904 |          |   |               | 56,991 |               |   |       | 60,588 |  |   |       | 61,421 |  |   |       | 56,561 | 

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|                                           |                                                                          |                                              |   |                   |   |          |   |               |   |               |   |        |   |  |   |        |   |  |   |        |  
|------------------------------------------ | ------------------------------------------------------------------------ | -------------------------------------------- | - | ----------------- | - | -------- | - | ------------- | - | ------------- | - | ------ | - |  | - | ------ | - |  | - | ------ | -
|                                           |                                                                          |                                              |   |                  
|                                           |                                                                          | Three Months Ended                           |   | Nine Months Ended
|                                           |                                                                          |                                              |   |                  
|                                           |                                                                          | September 30,                                |   | September 30,     |   | June 30, |   | September 30, |   | September 30,
|                                           |                                                                          | 2004                                         |   | 2003              |   | 2004     |   | 2004          |   | 2003         
|                                           |                                                                          |                                              |   |                   |   |          |   |               |   |              
|                                           |                                                                          |                                             
|                                           |                                                                          | (Dollars in millions, except per share data)
|Performance Ratios                         |                                                                          |                                              |   |                   |   |          |   |               |   |               |   |        |   |  |   |        |   |  |   |       
|                                           | Return on average equity (annualized)(1)                                 |                                              |   | 18.51             | % |          |   | 20.32         | % |               |   | 19.46  | % |  |   | 18.11  | % |  |   | 18.70  | %
|                                           | Return on average assets (annualized)(1)                                 |                                              |   | 1.30              | % |          |   | 1.63          | % |               |   | 1.29   | % |  |   | 1.25   | % |  |   | 1.55   | %
|                                           | Dividend payout ratio(1,2)                                               |                                              |   | 36.36             | % |          |   | 17.24         | % |               |   | 33.33  | % |  |   | 34.94  | % |  |   | 15.49  | %
|                                           | Net interest income to pretax income(1)                                  |                                              |   | 107.82            | % |          |   | 100.36        | % |               |   | 118.65 | % |  |   | 119.28 | % |  |   | 100.68 | %
|                                           | Average cost of funds                                                    |                                              |   | 2.49              | % |          |   | 2.61          | % |               |   | 2.29   | % |  |   | 2.37   | % |  |   | 2.90   | %
|                                           | Net interest margin                                                      |                                              |   | 2.52              | % |          |   | 2.97          | % |               |   | 2.75   | % |  |   | 2.69   | % |  |   | 2.84   | %
|                                           | Efficiency ratio(1,3)                                                    |                                              |   | 59                | % |          |   | 57            | % |               |   | 56     | % |  |   | 59     | % |  |   | 58     | %
|                                           | Capital to net revenue ratio(1,4)                                        |                                              |   | 131.81            | % |          |   | 117.85        | % |               |   | 131.18 | % |  |   | 133.79 | % |  |   | 125.67 | %
|                                           | Capital adjusted efficiency ratio(1,5)                                   |                                              |   | 77                | % |          |   | 67            | % |               |   | 74     | % |  |   | 79     | % |  |   | 73     | %
|                                           | Operating expenses to loan production                                    |                                              |   | 1.27              | % |          |   | 1.35          | % |               |   | 1.24   | % |  |   | 1.35   | % |  |   | 1.35   | %
|Balance Sheet and Asset Quality
    Ratios |                                                                          |                                              |   |                   |   |          |   |               |   |               |   |        |   |  |   |        |   |  |   |       
|                                           | Average interest-earning assets                                          |                                              | $ | 15,862            |   |          | $ | 11,019        |   |               | $ | 15,669 |   |  | $ | 14,967 |   |  | $ | 10,023 |  
|                                           | Average equity                                                           |                                              | $ | 1,213             |   |          | $ | 970           |   |               | $ | 1,127  |   |  | $ | 1,128  |   |  | $ | 915    |  
|                                           | Debt to equity ratio(6)                                                  |                                              |   | 12.3:1            |   |          |   | 11.6:1        |   |               |   | 12.1:1 |   |  |   | 12.3:1 |   |  |   | 11.6:1 |  
|                                           | Core capital ratio(7)                                                    |                                              |   | 7.53              | % |          |   | 7.92          | % |               |   | 7.65   | % |  |   | 7.53   | % |  |   | 7.92   | %
|                                           | Risk-based capital ratio(7)                                              |                                              |   | 11.83             | % |          |   | 12.49         | % |               |   | 12.47  | % |  |   | 11.83  | % |  |   | 12.49  | %
|                                           | Non-performing assets to total assets                                    |                                              |   | 0.76              | % |          |   | 0.81          | % |               |   | 0.73   | % |  |   | 0.76   | % |  |   | 0.81   | %
|                                           | Allowance for loan losses to total loans held for
    investment         |                                              |   | 0.78              | % |          |   | 0.92          | % |               |   | 0.76   | % |  |   | 0.78   | % |  |   | 0.92   | %
|                                           | Allowance for loan losses and other reserves to
    non-performing loans |                                              |   | 67.30             | % |          |   | 94.68         | % |               |   | 78.00  | % |  |   | 67.30  | % |  |   | 93.68  | %
|                                           | Allowance for loan losses to annualized net
    charge-offs              |                                              |   | 900.89            | % |          |   | 349.85        | % |               |   | 522.00 | % |  |   | 658.70 | % |  |   | 272.00 | %
|                                           | Provision for loan losses to net charge-offs                             |                                              |   | 102.18            | % |          |   | 164.85        | % |               |   | 126.48 | % |  |   | 103.04 | % |  |   | 111.88 | %
|                                           | Provision to net charge-offs (core loan
    portfolio)(8)                |                                              |   | 91.12             | % |          |   | 262.99        | % |               |   | 116.59 | % |  |   | 86.76  | % |  |   | 150.65 | %
|Other Selected Items                       |                                                                          |                                              |   |                   |   |          |   |               |   |               |   |        |   |  |   |        |   |  |   |       
|                                           | Loans serviced for others(9)                                             |                                              | $ | 44,501            |   |          | $ | 30,637        |   |               | $ | 34,618 |   |  | $ | 44,501 |   |  | $ | 30,637 |  
|                                           | Loan production(10)                                                      |                                              |   | 10,607            |   |          |   | 8,681         |   |               |   | 9,727  |   |  |   | 27,481 |   |  |   | 23,459 |  
|                                           | Pipeline of mortgage loans in process                                    |                                              |   | 6,433             |   |          |   | 4,688         |   |               |   | 5,179  |   |  |   | 6,433  |   |  |   | 4,688  |  
|                                           | Loans sold                                                               |                                              | $ | 8,941             |   |          | $ | 6,675         |   |               | $ | 7,638  |   |  | $ | 21,486 |   |  | $ | 18,535 |  
|                                           | Net margin on sale of loans(1)                                           |                                              |   | 1.22              | % |          |   | 1.82          | % |               |   | 1.55   | % |  |   | 1.45   | % |  |   | 1.66   | %



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| |     |                                                                                                                                                                                                         
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) | For the quarters ended September 30, 2004,
    and June 30, 2004, and for the nine months ended
    September 30, 2004, the data is presented on a pro forma
    basis excluding the effect of change in

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| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | accounting principle for rate lock commitments
    under SAB No. 105 effective April 1, 2004, and
    for the impact of the purchase accounting adjustments for
    Financial Freedom. The SAB No. 105 impact for the
    quarters ended September 30, 2004 and June 30, 2004,
    was $5.1 million and $52.2 million before-tax,
    respectively. For the nine months ended September 30, 2004,
    the SAB No. 105 impact amounted to $57.3 million.
    Additionally, the impact of the purchase accounting adjustment
    for Financial Freedom totaled $6.0 million before-tax. A
    full reconciliation between the pro forma and GAAP amounts, with
    the relevant performance ratios, is included at page 6.



| |     |                                                                                                                                                                                                                                                                                         
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (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) | 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 total loan portfolio excluding
    amounts of loans from discontinued product lines.                                                                                                                                                                                     
|
| | (9) | Represents the unpaid principal balance on loans
    sold with servicing retained by IndyMac.                                                                                                                                                                                           



|     |                                                                 
|---- | ----------------------------------------------------------------
|(10) | Includes newly originated commitments on
    construction loans.




OVERALL RESULTS

IndyMac Bancorp third quarter results reflect
continued strong operating fundamentals. The Company achieved
record mortgage production and pro forma earnings during the
quarter while the overall mortgage industry, according to the
October Mortgage Finance Forecast published by the Mortgage
Bankers Association (MBA) was 46% below its mid-year
2003 peak level. Based on the MBAs Mortgage Finance
Forecast dated October 19, 2004, IndyMacs mortgage
market share was up 123% over the third quarter of 2003.
IndyMacs third quarter 2004 pro forma earnings of
$56.4 million represents a new all-time record for the
Company while the $0.88 pro forma earnings per share is our
second highest quarter ever. On a GAAP basis, earnings per share
for the third quarter of 2004 declined 10% year over year, to
$0.78 per share on earnings of $49.7 million, in spite
of the 46% decrease in the mortgage industry. In addition, the
Company continued to deploy capital to facilitate balance sheet
growth and achieved record production total assets of
$16.1 billion as of September 30, 2004.

For the nine months ended September 30,
2004, IndyMac earned $152.9 million, or $2.49 per
share on a pro forma basis excluding the change in accounting
for rate locks referred to above pursuant to
SAB No. 105 and the purchase accounting adjustment for
the acquisition of Financial Freedom, compared to
$128.0 million, or $2.26 per share during the nine
months ended September 30, 2003. On a GAAP basis, the
Company earned $114.6 million, or $1.87 per share,
during the nine months ended September 30, 2004. The
following tables

5



---



##### Table of Contents



provide a reconciliation of IndyMacs GAAP
results including the SAB No. 105 accounting change
and the purchase accounting adjustment, and on a pro forma basis
excluding these two items:


|                                                        |  |                                              |      |             |  |               |      |               |  |          |      |             |  |           |      |  |  |   |      |   |  |   |      |  |  |   |      |  
|------------------------------------------------------- |  | -------------------------------------------- | ---- | ----------- |  | ------------- | ---- | ------------- |  | -------- | ---- | ----------- |  | --------- | ---- |  |  | - | ---- | - |  | - | ---- |  |  | - | ---- | -
|                                                        |  |                                             
|                                                        |  | Three Months Ended                          
|                                                        |  |                                             
|                                                        |  | September 30,                                |      |             |  | September 30, |      | September 30, |  | June 30, |      |             |  | June 30, 
|                                                        |  | 2004                                         |      |             |  | 2004          |      | 2003          |  | 2004     |      |             |  | 2004     
|                                                        |  | GAAP                                         |      | Adjustments |  | Pro Forma     |      | GAAP          |  | GAAP     |      | Adjustments |  | Pro Forma
|                                                        |  |                                              |      |             |  |               |      |               |  |          |      |             |  |          
|                                                        |  |                                             
|                                                        |  | (Dollars in millions, except per share data)
|Net interest income after provision for loan
    losses |  | $                                            | 99   |             |  | $             |     |               |  | $        | 99   |             |  | $         | 76   |  |  | $ | 104  |   |  | $ |     |  |  | $ | 104  |  
|Gain on sale of loans                                   |  |                                              | 98   |             |  |               | 11   |               |  |          | 109  |             |  |           | 122  |  |  |   | 66   |   |  |   | 52   |  |  |   | 118  |  
|Other income (loss)                                     |  |                                              | 21   |             |  |               |     |               |  |          | 21   |             |  |           | 2    |  |  |   | (11  | ) |  |   |     |  |  |   | (11  | )
|                                                        |  |                                              |      |             |  |               |      |               |  |          |      |             |  |           |      |  |  |   |      |   |  |   |      |  |  |   |      |  
|Net revenues                                            |  |                                              | 218  |             |  |               | 11   |               |  |          | 229  |             |  |           | 200  |  |  |   | 159  |   |  |   | 52   |  |  |   | 211  |  
|Operating expenses                                      |  |                                              | 135  |             |  |               |     |               |  |          | 135  |             |  |           | 118  |  |  |   | 121  |   |  |   |     |  |  |   | 121  |  
|Income taxes                                            |  |                                              | 33   |             |  |               | 5    |               |  |          | 38   |             |  |           | 32   |  |  |   | 15   |   |  |   | 20   |  |  |   | 35   |  
|                                                        |  |                                              |      |             |  |               |      |               |  |          |      |             |  |           |      |  |  |   |      |   |  |   |      |  |  |   |      |  
|Net earnings                                            |  | $                                            | 50   |             |  | $             | 6    |               |  | $        | 56   |             |  | $         | 50   |  |  | $ | 23   |   |  | $ | 32   |  |  | $ | 55   |  
|                                                        |  |                                              |      |             |  |               |      |               |  |          |      |             |  |           |      |  |  |   |      |   |  |   |      |  |  |   |      |  
|Diluted earnings per share                              |  | $                                            | 0.78 |             |  | $             | 0.10 |               |  | $        | 0.88 |             |  | $         | 0.87 |  |  | $ | 0.38 |   |  | $ | 0.52 |  |  | $ | 0.90 |  

|                                                        |  |                       |      |                |  |               |      |               |  |   |      |  |  |   |      | 
|------------------------------------------------------- |  | --------------------- | ---- | -------------- |  | ------------- | ---- | ------------- |  | - | ---- |  |  | - | ---- | 
|                                                        |  |                      
|                                                        |  | Nine Months Ended    
|                                                        |  |                      
|                                                        |  | September 30,         |      |                |  | September 30, |      | September 30,
|                                                        |  | 2004                  |      |                |  | 2004          |      | 2003         
|                                                        |  | GAAP                  |      | Adjustments(1) |  | Pro Forma     |      | GAAP         
|                                                        |  |                       |      |                |  |               |      |              
|                                                        |  |                      
|                                                        |  | (Dollars in millions)
|Net interest income after provision for loan
    losses |  | $                     | 295  |                |  | $             |     |               |  | $ | 295  |  |  | $ | 197  | 
|Gain on sale of loans                                   |  |                       | 248  |                |  |               | 63   |               |  |   | 311  |  |  |   | 307  | 
|Other income                                            |  |                       | 19   |                |  |               |     |               |  |   | 19   |  |  |   | 26   | 
|                                                        |  |                       |      |                |  |               |      |               |  |   |      |  |  |   |      | 
|Net revenues                                            |  |                       | 562  |                |  |               | 63   |               |  |   | 625  |  |  |   | 530  | 
|Operating expenses                                      |  |                       | 372  |                |  |               |     |               |  |   | 372  |  |  |   | 318  | 
|Income taxes                                            |  |                       | 75   |                |  |               | 25   |               |  |   | 100  |  |  |   | 84   | 
|                                                        |  |                       |      |                |  |               |      |               |  |   |      |  |  |   |      | 
|Net earnings                                            |  | $                     | 115  |                |  | $             | 38   |               |  | $ | 153  |  |  | $ | 128  | 
|                                                        |  |                       |      |                |  |               |      |               |  |   |      |  |  |   |      | 
|Diluted earnings per share                              |  | $                     | 1.87 |                |  | $             | 0.62 |               |  | $ | 2.49 |  |  | $ | 2.26 | 



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The pro forma results for the quarter ended
    June 30, 2004 were prepared by adding to GAAP earnings the
    amount of additional gain on sale revenue related to rate locks
    ($52.2 million) that the Company would have recognized had
    SAB No. 105 not been adopted as of April 1, 2004. The
    pro forma results for the quarter ended September 30, 2004
    were prepared by adding to GAAP earnings the amount of
    additional gain on sale revenue ($5.1 million) that the
    Company would have recognized had the provisions of SAB
    No. 105 been in effect during all previous periods. In
    addition, the pro forma results for the quarter ended
    September 30, 2004 also reflect the amount of gain on sale
    revenue ($6.0 million) that was reduced for GAAP purposes
    by the higher cost basis in certain loans that were sold by
    Financial Freedom during the third quarter. This higher cost
    basis was created by the allocation at the closing of a portion
    of the purchase price paid for Financial Freedom to the acquired
    loans held for sale and the loan application pipeline. The pro
    forma results for the nine months ended September 30, 2004
    reflect all of the above adjustments and are not necessarily
    indicative of the results that would have been reported had SAB
    No. 105 been applied to all previous periods.




OUR BUSINESS

IndyMac is the holding company for IndyMac
Bank®, the largest savings and loan or savings bank in Los
Angeles and the 9th largest thrift nationwide (based on assets).
Through its hybrid thrift/mortgage bank

6



---



##### Table of Contents



business model, IndyMac is in the business of
designing, manufacturing, and distributing cost-efficient
financing for the acquisition, development, and improvement of
single-family homes. IndyMac also provides financing secured by
single-family homes to facilitate consumers personal
financial goals and strategically invests in single-family
mortgage related assets. We facilitate the acquisition,
development, and improvement of single-family homes through our
award-winning e-MITS® (Electronic Mortgage Information and
Transaction System) platform that automates underwriting,
risk-based pricing and rate locking on a nationwide basis via
the Internet at the point of sale. IndyMac Bank offers highly
competitive mortgage products and services that are tailored to
meet the needs of both consumers and business professionals.


As a result of our strategic planning and the
acquisition of Financial Freedom, we have recently enhanced our
organizational structure to achieve better synergies, improve
marketing executions and support our core strategies. We are now
operating through four main segments, Mortgage Banking
Divisions, IndyMac Consumer Bank, Specialty Product Divisions
and Investing Divisions. The common denominator of the
Companys business is providing consumers with
single-family residential mortgages through relationships with
each segments core customers via the channel in which each
operates. Mortgage Banking Divisions provide consumers with
single-family permanent mortgage lending through relationships
with mortgage professionals  mortgage brokers,
mortgage bankers, as well as through community financial
institutions, real estate professionals, and consumers. IndyMac
Consumer Bank provides the platform for the mortgage and deposit
services that IndyMac offers directly to consumers through its
branch network. Specialty Product Divisions support the
production of niche products including construction lending,
home equity lines of credit (HELOCs), and reverse mortgages
through all of IndyMacs relationship and consumer direct
production channels. The Investing Divisions serve as the main
link to customers whose mortgages we service. Through its
investments in single-family residential (SFR)
mortgages, mortgage-backed securities (MBS) and
MSRs, the Investing Divisions generate core spread and fee
income and provides critical support to IndyMacs mortgage
lending operations.

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

The following tables summarize the Companys
financial results for the three months ended September 30,
2004, illustrating the revenues earned in its mortgage banking
activities, investing and HELOC activities by each of its
operating segments. The profitability of each operating segment
is measured on a fully-leveraged basis after allocating capital
based on regulatory capital rules. Operating segments that
originate mortgage loans are credited with gain on sale at
funding based on the estimated fair value. Any difference
between the actual gain on sale realized and the estimate is
credited or charged to the operating segment in the period the
loan is sold or transferred to the held for investment
portfolio. Differences between the gain on sale credited to the
operating segments and the consolidated gain on sale due to
timing of loan sales or

7



---



##### Table of Contents



transfers to the held for investment portfolio
are eliminated in consolidation. The Company uses a funds
transfer pricing (FTP) system to allocate interest
income and expense to the operating segments. Each operating
segment is allocated funding with maturities and interest rates
matched with the expected lives and repricing frequencies of the
segments assets. IndyMac Consumer Bank receives a funding
credit for deposits using a similar methodology. The difference
between these allocations and the Companys actual net
interest income and capital levels resulting from centralized
management of funding costs is reported in the Treasury unit.
Corporate overhead costs related to managing the Company as a
whole are not allocated to the operating segments.


The following table summarizes the segment
financial highlights for the three months ended
September 30, 2004:

|                                   |                        |                        |                            |                   |        |           |        |           |        |       |        |           |        |             |         |         |        |        |         |         |         |         |         |         |         |        |         |         |         |         |        |         |         |        |        | 
|---------------------------------- | ---------------------- | ---------------------- | -------------------------- | ----------------- | ------ | --------- | ------ | --------- | ------ | ----- | ------ | --------- | ------ | ----------- | ------- | ------- | ------ | ------ | ------- | ------- | ------- | ------- | ------- | ------- | ------- | ------ | ------- | ------- | ------- | ------- | ------ | ------- | ------- | ------ | ------ | 
|                                   |                        | Mortgage               |                            | IndyMac           |        | Specialty |        |           |        |       |        | Total     |        |             |         | Total  
|                                   |                        | Banking                |                            | Consumer          |        | Product   |        | Investing |        |       |        | Company   |        |             |         | Company
|                                   |                        | Divisions              |                            | Bank              |        | Divisions |        | Divisions |        | Other |        | Pro Forma |        | Adjustments |         | GAAP   
|                                   |                        |                        |                            |                   |        |           |        |           |        |       |        |           |        |             |         |        
|                                   |                        |                       
|                                   |                        | (Dollars in thousands)
|Operating Results                  |                        |                        |                            |                   |        |           |        |           |        |       |        |           |        |             |         |         |        |        |         |         |         |         |         |         |         |        |         |         |         |         |        |        
|Mortgage Banking Activities        |                        |                        |                            |                   |        |           |        |           |        |       |        |           |        |             |         |         |        |        |         |         |         |         |         |         |         |        |         |         |         |         |        |        
|Net interest income                |                        | $                      | 32,376                     |                   |        | $         | 510    |           |        | $     | 3,887  |           |        | $           | 3,771   |         |        | $      |        |         |         | $       | 40,544  |         |         | $      |        |         |         | $       | 40,544 |        
|Gain (loss) on sale of loans       |                        |                        | 74,934                     |                   |        |           | 115    |           |        |       | 17,677 |           |        |             | 9,512   |         |        |        | 6,918   |         |         |         | 109,156 |         |         |        | (11,104 | )       |         |         | 98,052 |        
|Other income                       |                        |                        | 11,550                     |                   |        |           | 258    |           |        |       | 4,178  |           |        |             |        |         |        |        | (1,686  | )       |         |         | 14,300  |         |         |        |        |         |         |         | 14,300 |        
|                                   |                        |                        |                            |                   |        |           |        |           |        |       |        |           |        |             |         |         |        |        |         |         |         |         |         |         |         |        |         |         |         |         |        |        
|                                   | Net revenues (expense) |                        |                            | 118,860           |        |           |        | 883       |        |       |        | 25,742    |        |             |         | 13,283  |        |        |         | 5,232   |         |         |         | 164,000 |         |        |         | (11,104 | )       |         |        | 152,896 |        
|                                   | Operating expenses     |                        |                            | 68,525            |        |           |        | 2,205     |        |       |        | 7,635     |        |             |         | 1,180   |        |        |         | (5      | )       |         |         | 79,540  |         |        |         |        |         |         |        | 79,540  |        
|                                   |                        |                        |                            |                   |        |           |        |           |        |       |        |           |        |             |         |         |        |        |         |         |         |         |         |         |         |        |         |         |         |         |        |        
|                                   |                        | Pretax income (loss)   |                            |                   | 50,335 |           |        |           | (1,322 | )     |        |           | 18,107 |             |         |         | 12,103 |        |         |         | 5,237   |         |         |         | 84,460  |        |         |         | (11,104 | )       |        |         | 73,356  |       
|                                   |                        |                        |                            |                   |        |           |        |           |        |       |        |           |        |             |         |         |        |        |         |         |         |         |         |         |         |        |         |         |         |         |        |        
|Investing Activities               |                        |                        |                            |                   |        |           |        |           |        |       |        |           |        |             |         |         |        |        |         |         |         |         |         |         |         |        |         |         |         |         |        |        
|Net interest income                |                        |                        |                           |                   |        |           |       |           |        |       | 19,105 |           |        |             | 34,498  |         |        |        | 2,315   |         |         |         | 55,918  |         |         |        |        |         |         |         | 55,918 |        
|Provision for loan losses          |                        |                        |                           |                   |        |           |       |           |        |       | (807   | )         |        |             | (1,200  | )       |        |        |        |         |         |         | (2,007  | )       |         |        |        |         |         |         | (2,007 | )      
|Service fee (expense) income       |                        |                        |                           |                   |        |           |       |           |        |       |       |           |        |             | 3,301   |         |        |        | 5,032   |         |         |         | 8,333   |         |         |        |        |         |         |         | 8,333  |        
|(Loss) gain on sale of securities  |                        |                        |                           |                   |        |           |       |           |        |       |       |           |        |             | (12,351 | )       |        |        | 2,913   |         |         |         | (9,438  | )       |         |        |        |         |         |         | (9,438 | )      
|Other income                       |                        |                        |                           |                   |        |           |       |           |        |       | 1,757  |           |        |             | 1,739   |         |        |        | 727     |         |         |         | 4,223   |         |         |        |        |         |         |         | 4,223  |        
|                                   |                        |                        |                            |                   |        |           |        |           |        |       |        |           |        |             |         |         |        |        |         |         |         |         |         |         |         |        |         |         |         |         |        |        
|                                   | Net revenues (expense) |                        |                            |                  |        |           |        |          |        |       |        | 20,055    |        |             |         | 25,987  |        |        |         | 10,987  |         |         |         | 57,029  |         |        |         |        |         |         |        | 57,029  |        
|                                   | Operating expenses     |                        |                            |                  |        |           |        |          |        |       |        | 10,981    |        |             |         | 10,872  |        |        |         |        |         |         |         | 21,853  |         |        |         |        |         |         |        | 21,853  |        
|                                   |                        |                        |                            |                   |        |           |        |           |        |       |        |           |        |             |         |         |        |        |         |         |         |         |         |         |         |        |         |         |         |         |        |        
|                                   |                        | Pretax income (loss)   |                            |                   |       |           |        |           |       |       |        |           | 9,074  |             |         |         | 15,115 |        |         |         | 10,987  |         |         |         | 35,176  |        |         |         |        |         |        |         | 35,176  |       
|                                   |                        |                        |                            |                   |        |           |        |           |        |       |        |           |        |             |         |         |        |        |         |         |         |         |         |         |         |        |         |         |         |         |        |        
|HELOC Activities                   |                        |                        |                            |                   |        |           |        |           |        |       |        |           |        |             |         |         |        |        |         |         |         |         |         |         |         |        |         |         |         |         |        |        
|Net interest income                |                        | $                      | 6,762                      |                   |        | $         | 325    |           |        | $     | 276    |           |        | $           | 5       |         |        | $      |        |         |         | $       | 7,368   |         |         | $      |        |         |         | $       | 7,368  |        
|Provision for loan losses          |                        |                        |                            |                   |        |           |       |           |        |       | 509    |           |        |             |        |         |        |        |        |         |         |         | 509     |         |         |        |        |         |         |         | 509    |        
|Service fee income                 |                        |                        |                           |                   |        |           |       |           |        |       | 409    |           |        |             |        |         |        |        |        |         |         |         | 409     |         |         |        |        |         |         |         | 409    |        
|Other income                       |                        |                        | 968                        |                   |        |           | 52     |           |        |       | 386    |           |        |             |        |         |        |        |        |         |         |         | 1,406   |         |         |        |        |         |         |         | 1,406  |        
|                                   |                        |                        |                            |                   |        |           |        |           |        |       |        |           |        |             |         |         |        |        |         |         |         |         |         |         |         |        |         |         |         |         |        |        
|                                   | Net revenues           |                        |                            | 7,730             |        |           |        | 377       |        |       |        | 1,580     |        |             |         | 5       |        |        |         |        |         |         |         | 9,692   |         |        |         |        |         |         |        | 9,692   |        
|                                   | Operating expenses     |                        |                            | 999               |        |           |        | 60        |        |       |        | 1,379     |        |             |         | 59      |        |        |         |        |         |         |         | 2,497   |         |        |         |        |         |         |        | 2,497   |        
|                                   |                        |                        |                            |                   |        |           |        |           |        |       |        |           |        |             |         |         |        |        |         |         |         |         |         |         |         |        |         |         |         |         |        |        
|                                   |                        | Pretax income          |                            |                   | 6,731  |           |        |           | 317    |       |        |           | 201    |             |         |         | (54    | )      |         |         |        |         |         |         | 7,195   |        |         |         |        |         |        |         | 7,195   |       
|                                   |                        |                        |                            |                   |        |           |        |           |        |       |        |           |        |             |         |         |        |        |         |         |         |         |         |         |         |        |         |         |         |         |        |        
|Financing and Other Activities     |                        |                        |                            |                   |        |           |        |           |        |       |        |           |        |             |         |         |        |        |         |         |         |         |         |         |         |        |         |         |         |         |        |        
|Net interest income (loss)         |                        |                        |                           |                   |        |           | 9,472  |           |        |       |       |           |        |             |        |         |        |        | (12,712 | )       |         |         | (3,240  | )       |         |        |        |         |         |         | (3,240 | )      
|Other income                       |                        |                        |                           |                   |        |           | 981    |           |        |       |       |           |        |             |        |         |        |        | 114     |         |         |         | 1,095   |         |         |        |        |         |         |         | 1,095  |        
|                                   |                        |                        |                            |                   |        |           |        |           |        |       |        |           |        |             |         |         |        |        |         |         |         |         |         |         |         |        |         |         |         |         |        |        
|                                   | Net revenues (expense) |                        |                            |                  |        |           |        | 10,453    |        |       |        |          |        |             |         |        |        |        |         | (12,598 | )       |         |         | (2,145  | )       |        |         |        |         |         |        | (2,145  | )      
|                                   | Operating expenses     |                        |                            |                  |        |           |        | 5,069     |        |       |        |          |        |             |         |        |        |        |         | 26,326  |         |         |         | 31,395  |         |        |         |        |         |         |        | 31,395  |        
|                                   |                        |                        |                            |                   |        |           |        |           |        |       |        |           |        |             |         |         |        |        |         |         |         |         |         |         |         |        |         |         |         |         |        |        
|                                   |                        | Pretax income (loss)   |                            |                   |       |           |        |           | 5,384  |       |        |           |       |             |         |         |       |        |         |         | (38,924 | )       |         |         | (33,540 | )      |         |         |        |         |        |         | (33,540 | )     
|                                   |                        |                        |                            |                   |        |           |        |           |        |       |        |           |        |             |         |         |        |        |         |         |         |         |         |         |         |        |         |         |         |         |        |        
|                                   |                        |                        | Total pretax income (loss) |                   |        | 57,066    |        |           |        | 4,379 |        |           |        | 27,382      |         |         |        | 27,164 |         |         |         | (22,700 | )       |         |         | 93,291 |         |         |         | (11,104 | )      |         |         | 82,187 |       
|                                   |                        |                        |                            |                   |        |           |        |           |        |       |        |           |        |             |         |         |        |        |         |         |         |         |         |         |         |        |         |         |         |         |        |        
|                                   |                        |                        |                            | Net income (loss) |        | $         | 34,526 |           |        | $     | 2,649  |           |        | $           | 16,566  |         |        | $      | 16,434  |         |         | $       | (13,734 | )       |         | $      | 56,441  |         |         | $       | (6,715 | )       |         | $      | 49,726 | 
|                                   |                        |                        |                            |                   |        |           |        |           |        |       |        |           |        |             |         |         |        |        |         |         |         |         |         |         |         |        |         |         |         |         |        |        
|Ratios                             |                        |                        |                            |                   |        |           |        |           |        |       |        |           |        |             |         |         |        |        |         |         |         |         |         |         |         |        |         |         |         |         |        |        
|Percentage of average total assets |                        |                        | 30                         | %                 |        |           | 1      | %         |        |       | 16     | %         |        |             | 48      | %       |        |        | 5       | %       |         |         | 100     | %       |         |        |         |         |         |         |        |        
|Percentage of total revenue        |                        |                        | 55                         | %                 |        |           | 5      | %         |        |       | 21     | %         |        |             | 17      | %       |        |        | 2       | %       |         |         | 100     | %       |         |        |         |         |         |         |        |        
|Percentage of pretax income        |                        |                        | 61                         | %                 |        |           | 5      | %         |        |       | 29     | %         |        |             | 29      | %       |        |        | (24     | )%      |         |         | 100     | %       |         |        |         |         |         |         |        |        

8



---



##### Table of Contents



|                                                        |  |                        |           |          |  |           |         |           |  |       |           |           |  |             |           |         |  |   |         |   |  |   |            |    |  |   |   |  |  |   |            |   
|------------------------------------------------------- |  | ---------------------- | --------- | -------- |  | --------- | ------- | --------- |  | ----- | --------- | --------- |  | ----------- | --------- | ------- |  | - | ------- | - |  | - | ---------- | -- |  | - | - |  |  | - | ---------- | --
|                                                        |  | Mortgage               |           | IndyMac  |  | Specialty |         |           |  |       |           | Total     |  |             |           | Total  
|                                                        |  | Banking                |           | Consumer |  | Product   |         | Investing |  |       |           | Company   |  |             |           | Company
|                                                        |  | Divisions              |           | Bank     |  | Divisions |         | Divisions |  | Other |           | Pro Forma |  | Adjustments |           | GAAP   
|                                                        |  |                        |           |          |  |           |         |           |  |       |           |           |  |             |           |        
|                                                        |  |                       
|                                                        |  | (Dollars in thousands)
|Balance Sheet Data                                      |  |                        |           |          |  |           |         |           |  |       |           |           |  |             |           |         |  |   |         |   |  |   |            |    |  |   |   |  |  |   |            |   
|Average interest-earning assets(1)                      |  | $                      | 5,115,839 |          |  | $         | 110,746 |           |  | $     | 2,614,239 |           |  | $           | 7,674,139 |         |  | $ | 347,295 |   |  | $ | 15,862,258 |    |  | $ |  |  |  | $ | 15,862,258 |   
|Average total assets                                    |  | $                      | 5,213,741 |          |  | $         | 132,768 |           |  | $     | 2,702,466 |           |  | $           | 8,341,261 |         |  | $ | 909,695 |   |  | $ | 17,299,931 |    |  | $ |  |  |  | $ | 17,299,931 |   
|Allocated capital                                       |  | $                      | 339,671   |          |  | $         | 8,055   |           |  | $     | 217,103   |           |  | $           | 507,747   |         |  | $ | 140,486 |   |  | $ | 1,213,062  |    |  | $ |  |  |  | $ | 1,213,062  |   
|Capital allocated to mortgage banking activities        |  | $                      | 270,402   |          |  | $         | 2,198   |           |  | $     | 55,385    |           |  | $           | 20,881    |         |  | $ |        |   |  | $ | 348,866    |    |  | $ |  |  |  | $ | 348,866    |   
|Capital allocated to investing activities               |  | $                      |          |          |  | $         |        |           |  | $     | 148,539   |           |  | $           | 486,805   |         |  | $ |        |   |  | $ | 635,344    |    |  | $ |  |  |  | $ | 635,344    |   
|Capital allocated to HELOC activities                   |  | $                      | 69,269    |          |  | $         | 4,646   |           |  | $     | 13,179    |           |  | $           | 61        |         |  | $ |        |   |  | $ | 87,155     |    |  | $ |  |  |  | $ | 87,155     |   
|Capital allocated to financing and other
    activities |  | $                      |          |          |  | $         | 1,211   |           |  | $     |          |           |  | $           |          |         |  | $ | 140,486 |   |  | $ | 141,697    |    |  | $ |  |  |  | $ | 141,697    |   
|Allocated capital/average total assets                  |  |                        | 6.51      | %        |  |           | 6.07    | %         |  |       | 8.03      | %         |  |             | 6.09      | %       |  |   | 15.44   | % |  |   | 7.01       | %  |  |   |   |  |  |   | 7.01       | % 
|Loans Produced                                          |  | $                      | 8,314,156 |          |  | $         | 104,704 |           |  | $     | 1,772,499 |           |  | $           | 416,035   |         |  | $ |        |   |  | $ | 10,607,394 |    |  | $ |  |  |  | $ | 10,607,394 |   
|Purchase mortgages                                      |  |                        | 43        | %        |  |           | 28      | %         |  |       | 59        | %         |  |             | 23        | %       |  |   |        |   |  |   | 45         | %  |  |   |  |  |  |   | 45         | % 
|Cash-out refinance mortgages                            |  |                        | 45        | %        |  |           | 63      | %         |  |       | 26        | %         |  |             | 38        | %       |  |   |        |   |  |   | 42         | %  |  |   |  |  |  |   | 42         | % 
|Rate and term refinance mortgages                       |  |                        | 12        | %        |  |           | 9       | %         |  |       | 15        | %         |  |             | 39        | %       |  |   |        |   |  |   | 13         | %  |  |   |  |  |  |   | 13         | % 
|Performance Ratios                                      |  |                        |           |          |  |           |         |           |  |       |           |           |  |             |           |         |  |   |         |   |  |   |            |    |  |   |   |  |  |   |            |   
|Return on equity (ROE)                                  |  |                        | 40        | %        |  |           | 131     | %         |  |       | 30        | %         |  |             | 13        | %       |  |   |         |   |  |   | 19         | %  |  |   |   |  |  |   | 16         | % 
|ROE  mortgage banking activities                       |  |                        | 45        | %        |  |           | (145    | )%        |  |       | 79        | %         |  |             | 140       | %       |  |   |         |   |  |   | 58         | %  |  |   |   |  |  |   | 51         | % 
|ROE  investing activities                              |  |                        |          |          |  |           |        |           |  |       | 15        | %         |  |             | 7         | %       |  |   |         |   |  |   | 13         | %  |  |   |   |  |  |   | 13         | % 
|ROE  HELOC activities                                  |  |                        | 23        | %        |  |           | 16      | %         |  |       | 4         | %         |  |             | (213      | )%      |  |   |         |   |  |   | 20         | %  |  |   |   |  |  |   | 20         | % 
|ROE  financing and other activities                    |  |                        |          |          |  |           | 1,070   | %         |  |       |          |           |  |             |          |         |  |   |         |   |  |   | (57        | )% |  |   |   |  |  |   | (57        | )%
|Return on assets (ROA)                                  |  |                        | 2.63      | %        |  |           |        |           |  |       | 2.44      | %         |  |             | 0.78      | %       |  |   |         |   |  |   | 1.30       | %  |  |   |   |  |  |   | 1.14       | % 
|Net interest margin                                     |  |                        | 3.04      | %        |  |           |        |           |  |       | 3.54      | %         |  |             | 1.98      | %       |  |   |         |   |  |   | 2.52       | %  |  |   |   |  |  |   | 2.52       | % 
|Efficiency ratio                                        |  |                        | 55        | %        |  |           | 63      | %         |  |       | 42        | %         |  |             | 30        | %       |  |   |         |   |  |   | 59         | %  |  |   |   |  |  |   | 62         | % 
|Capital adjusted efficiency ratio                       |  |                        | 37        | %        |  |           | 11      | %         |  |       | 48        | %         |  |             | 94        | %       |  |   |         |   |  |   | 78         | %  |  |   |   |  |  |   | 86         | % 
|Average Full-Time Equivalent Employees
    (FTE)      |  |                        | 2,586     |          |  |           | 278     |           |  |       | 804       |           |  |             | 490       |         |  |   | 752     |   |  |   | 4,910      |    |  |   |   |  |  |   | 4,910      |   



---



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

9



---



##### Table of Contents



The following table provides additional detail on
the segment results for the Mortgage Banking Divisions for the
three months ended September 30, 2004:

|                                  |                    |                            |                            |                   |       |               |        |              |        |        |        |       |     |     |        |        |       |       |        |         |        |        |        | 
|--------------------------------- | ------------------ | -------------------------- | -------------------------- | ----------------- | ----- | ------------- | ------ | ------------ | ------ | ------ | ------ | ----- | --- | --- | ------ | ------ | ----- | ----- | ------ | ------- | ------ | ------ | ------ | 
|                                  |                    |                           
|                                  |                    | Mortgage Banking Divisions
|                                  |                    |                           
|                                  |                    | IndyMac                    |                            | Mortgage          |       | Real Estate   |        | Web & Direct |        |       
|                                  |                    | Conduit                    |                            | Professionals     |       | Professionals |        | Mail         |        | Total 
|                                  |                    |                            |                            |                   |       |               |        |              |        |       
|                                  |                    |                           
|                                  |                    | (Dollars in thousands)    
|Operating Results                 |                    |                            |                            |                   |       |               |        |              |        |        |        |       |     |     |        |        |       |       |        |        
|Mortgage Banking Activities       |                    |                            |                            |                   |       |               |        |              |        |        |        |       |     |     |        |        |       |       |        |        
|Net interest income               |                    | $                          | 7,461                      |                   |       | $             | 19,002 |              |        | $      | 2,117  |       |     | $   | 3,796  |        |       | $     | 32,376 |        
|Gain on sale of loans             |                    |                            | 3,573                      |                   |       |               | 54,925 |              |        |        | 2,858  |       |     |     | 13,578 |        |       |       | 74,934 |        
|Other income                      |                    |                            | (118                       | )                 |       |               | 8,713  |              |        |        | 628    |       |     |     | 2,327  |        |       |       | 11,550 |        
|                                  |                    |                            |                            |                   |       |               |        |              |        |        |        |       |     |     |        |        |       |       |        |        
|                                  | Net revenues       |                            |                            | 10,916            |       |               |        | 82,640       |        |        |        | 5,603 |     |     |        | 19,701 |       |       |        | 118,860 |       
|                                  | Operating expenses |                            |                            | 4,180             |       |               |        | 38,766       |        |        |        | 5,213 |     |     |        | 20,366 |       |       |        | 68,525  |       
|                                  |                    |                            |                            |                   |       |               |        |              |        |        |        |       |     |     |        |        |       |       |        |        
|                                  |                    | Pretax income (loss)       |                            |                   | 6,736 |               |        |              | 43,874 |        |        |       | 390 |     |        |        | (665  | )     |        |         | 50,335 |       
|                                  |                    |                            |                            |                   |       |               |        |              |        |        |        |       |     |     |        |        |       |       |        |        
|Investing Activities              |                    |                            |                            |                   |       |               |        |              |        |        |        |       |     |     |        |        |       |       |        |        
|Net interest income               |                    |                            |                           |                   |       |               |       |              |        |        |       |       |     |     |       |        |       |       |       |        
|Provision for loan losses         |                    |                            |                           |                   |       |               |       |              |        |        |       |       |     |     |       |        |       |       |       |        
|Service fee income                |                    |                            |                           |                   |       |               |       |              |        |        |       |       |     |     |       |        |       |       |       |        
|Gain (loss) on sale of securities |                    |                            |                           |                   |       |               |       |              |        |        |       |       |     |     |       |        |       |       |       |        
|Other income                      |                    |                            |                           |                   |       |               |       |              |        |        |       |       |     |     |       |        |       |       |       |        
|                                  |                    |                            |                            |                   |       |               |        |              |        |        |        |       |     |     |        |        |       |       |        |        
|                                  | Net revenues       |                            |                            |                  |       |               |        |             |        |        |        |      |     |     |        |       |       |       |        |        |       
|                                  | Operating expenses |                            |                            |                  |       |               |        |             |        |        |        |      |     |     |        |       |       |       |        |        |       
|                                  |                    |                            |                            |                   |       |               |        |              |        |        |        |       |     |     |        |        |       |       |        |        
|                                  |                    | Pretax income              |                            |                   |      |               |        |              |       |        |        |       |    |     |        |        |      |       |        |         |       |       
|                                  |                    |                            |                            |                   |       |               |        |              |        |        |        |       |     |     |        |        |       |       |        |        
|HELOC Activities                  |                    |                            |                            |                   |       |               |        |              |        |        |        |       |     |     |        |        |       |       |        |        
|Net interest income               |                    |                            | 982                        |                   |       |               | 3,821  |              |        |        | 325    |       |     |     | 1,634  |        |       |       | 6,762  |        
|Provision for loan losses         |                    |                            |                           |                   |       |               |       |              |        |        |       |       |     |     |       |        |       |       |       |        
|Service fee income                |                    |                            |                           |                   |       |               |       |              |        |        |       |       |     |     |       |        |       |       |       |        
|Other income                      |                    |                            | 1                          |                   |       |               | 550    |              |        |        | 57     |       |     |     | 360    |        |       |       | 968    |        
|                                  |                    |                            |                            |                   |       |               |        |              |        |        |        |       |     |     |        |        |       |       |        |        
|                                  | Net revenues       |                            |                            | 983               |       |               |        | 4,371        |        |        |        | 382   |     |     |        | 1,994  |       |       |        | 7,730   |       
|                                  | Operating expenses |                            |                            | 250               |       |               |        | 449          |        |        |        | 41    |     |     |        | 259    |       |       |        | 999     |       
|                                  |                    |                            |                            |                   |       |               |        |              |        |        |        |       |     |     |        |        |       |       |        |        
|                                  |                    | Pretax income              |                            |                   | 733   |               |        |              | 3,922  |        |        |       | 341 |     |        |        | 1,735 |       |        |         | 6,731  |       
|                                  |                    |                            |                            |                   |       |               |        |              |        |        |        |       |     |     |        |        |       |       |        |        
|Financing and Other Activities    |                    |                            |                            |                   |       |               |        |              |        |        |        |       |     |     |        |        |       |       |        |        
|Net interest income               |                    |                            |                           |                   |       |               |       |              |        |        |       |       |     |     |       |        |       |       |       |        
|Other income                      |                    |                            |                           |                   |       |               |       |              |        |        |       |       |     |     |       |        |       |       |       |        
|                                  |                    |                            |                            |                   |       |               |        |              |        |        |        |       |     |     |        |        |       |       |        |        
|                                  | Net revenues       |                            |                            |                  |       |               |        |             |        |        |        |      |     |     |        |       |       |       |        |        |       
|                                  | Operating expenses |                            |                            |                  |       |               |        |             |        |        |        |      |     |     |        |       |       |       |        |        |       
|                                  |                    |                            |                            |                   |       |               |        |              |        |        |        |       |     |     |        |        |       |       |        |        
|                                  |                    | Pretax income              |                            |                   |      |               |        |              |       |        |        |       |    |     |        |        |      |       |        |         |       |       
|                                  |                    |                            |                            |                   |       |               |        |              |        |        |        |       |     |     |        |        |       |       |        |        
|                                  |                    |                            | Total pretax income (loss) |                   |       | 7,469         |        |              |        | 47,796 |        |       |     | 731 |        |        |       | 1,070 |        |         |        | 57,066 |       
|                                  |                    |                            |                            |                   |       |               |        |              |        |        |        |       |     |     |        |        |       |       |        |        
|                                  |                    |                            |                            | Net income (loss) |       | $             | 4,519  |              |        | $      | 28,917 |       |     | $   | 442    |        |       | $     | 648    |         |        | $      | 34,526 | 
|                                  |                    |                            |                            |                   |       |               |        |              |        |        |        |       |     |     |        |        |       |       |        |        
|Ratios                            |                    |                            |                            |                   |       |               |        |              |        |        |        |       |     |     |        |        |       |       |        |        
|Percentage of assets              |                    |                            | 5                          | %                 |       |               | 20     | %            |        |        | 1      | %     |     |     | 4      | %      |       |       | 30     | %      
|Percentage of total revenue       |                    |                            | 5                          | %                 |       |               | 38     | %            |        |        | 3      | %     |     |     | 9      | %      |       |       | 55     | %      
|Percentage of pretax income       |                    |                            | 8                          | %                 |       |               | 51     | %            |        |        | 1      | %     |     |     | 1      | %      |       |       | 61     | %      

10



---



##### Table of Contents



|                                                        |  |                            |           |               |  |               |           |              |  |       |         |   |  |   |         |    |  |   |           |  
|------------------------------------------------------- |  | -------------------------- | --------- | ------------- |  | ------------- | --------- | ------------ |  | ----- | ------- | - |  | - | ------- | -- |  | - | --------- | -
|                                                        |  |                           
|                                                        |  | Mortgage Banking Divisions
|                                                        |  |                           
|                                                        |  | IndyMac                    |           | Mortgage      |  | Real Estate   |           | Web & Direct |  |      
|                                                        |  | Conduit                    |           | Professionals |  | Professionals |           | Mail         |  | Total
|                                                        |  |                            |           |               |  |               |           |              |  |      
|                                                        |  |                           
|                                                        |  | (Dollars in thousands)    
|Balance Sheet Data                                      |  |                            |           |               |  |               |           |              |  |       |         |   |  |   |         |    |  |   |           |  
|Average interest-earning assets                         |  | $                          | 781,083   |               |  | $             | 3,425,073 |              |  | $     | 275,396 |   |  | $ | 634,287 |    |  | $ | 5,115,839 |  
|Average total assets                                    |  | $                          | 799,603   |               |  | $             | 3,484,481 |              |  | $     | 280,621 |   |  | $ | 649,036 |    |  | $ | 5,213,741 |  
|Allocated capital                                       |  | $                          | 54,428    |               |  | $             | 220,305   |              |  | $     | 16,419  |   |  | $ | 48,519  |    |  | $ | 339,671   |  
|Capital allocated to mortgage banking activities        |  | $                          | 43,563    |               |  | $             | 185,440   |              |  | $     | 12,995  |   |  | $ | 28,404  |    |  | $ | 270,402   |  
|Capital allocated to investing activities               |  | $                          |          |               |  | $             |          |              |  | $     |        |   |  | $ |        |    |  | $ |          |  
|Capital allocated to HELOC activities                   |  | $                          | 10,865    |               |  | $             | 34,865    |              |  | $     | 3,424   |   |  | $ | 20,115  |    |  | $ | 69,269    |  
|Capital allocated to financing and other
    activities |  | $                          |          |               |  | $             |          |              |  | $     |        |   |  | $ |        |    |  | $ |          |  
|Allocated capital/total average assets                  |  |                            | 6.81      | %             |  |               | 6.32      | %            |  |       | 5.85    | % |  |   | 7.48    | %  |  |   | 6.51      | %
|Loans Produced                                          |  | $                          | 2,155,478 |               |  | $             | 5,075,046 |              |  | $     | 442,501 |   |  | $ | 641,131 |    |  | $ | 8,314,156 |  
|Purchase mortgages                                      |  |                            | 47        | %             |  |               | 44        | %            |  |       | 82      | % |  |   | 13      | %  |  |   | 43        | %
|Cash out refinance mortgages                            |  |                            | 41        | %             |  |               | 44        | %            |  |       | 15      | % |  |   | 73      | %  |  |   | 45        | %
|Rate and term refinance mortgages                       |  |                            | 12        | %             |  |               | 12        | %            |  |       | 3       | % |  |   | 14      | %  |  |   | 12        | %
|Performance Ratios                                      |  |                            |           |               |  |               |           |              |  |       |         |   |  |   |         |    |  |   |           |  
|Return on equity (ROE)                                  |  |                            | 33        | %             |  |               | 52        | %            |  |       | 11      | % |  |   | 5       | %  |  |   | 40        | %
|ROE  mortgage banking activities                       |  |                            | 37        | %             |  |               | 57        | %            |  |       | 7       | % |  |   | (6      | )% |  |   | 45        | %
|ROE  investing activities                              |  |                            |          |               |  |               |          |              |  |       |        |   |  |   |        |    |  |   |          |  
|ROE  HELOC activities                                  |  |                            | 16        | %             |  |               | 27        | %            |  |       | 24      | % |  |   | 21      | %  |  |   | 23        | %
|ROE  financing and other activities                    |  |                            |          |               |  |               |          |              |  |       |        |   |  |   |        |    |  |   |          |  
|Return on assets (ROA)                                  |  |                            | 2.25      | %             |  |               | 3.30      | %            |  |       | 0.63    | % |  |   | 0.40    | %  |  |   | 2.63      | %
|Net interest margin                                     |  |                            | 4.30      | %             |  |               | 2.65      | %            |  |       | 3.53    | % |  |   | 3.41    | %  |  |   | 3.04      | %
|Efficiency ratio                                        |  |                            | 37        | %             |  |               | 45        | %            |  |       | 88      | % |  |   | 95      | %  |  |   | 55        | %
|Capital adjusted efficiency ratio                       |  |                            | 43        | %             |  |               | 29        | %            |  |       | 60      | % |  |   | 53      | %  |  |   | 37        | %
|Average FTE                                             |  |                            | 63        |               |  |               | 1,696     |              |  |       | 237     |   |  |   | 590     |    |  |   | 2,586     |  

Mortgage Banking Divisions






|                          |  |                                                                                                                                                                                                       
|------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|IndyMac Conduit           |  | The division is responsible for the production of
    bulk mortgage loans from the top mortgage bankers and financial
    institutions and other capital market participants.                         
|                         
|Mortgage Professionals    |  | This group is responsible for the production of
    mortgage loans through relationships with mortgage
    professionals, including mortgage brokers, mortgage bankers and
    financial institutions.
|                         
|Real Estate Professionals |  | This group provides mortgage loan services
    through relationships with Realtors and homebuilders.                                                                                                  
|                         
|Web & Direct Mail         |  | This channel offers consumers mortgage lending
    through the Internet, direct mail, and affinity relationships.                                                                                     

11



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##### Table of Contents



The following table provides additional details
on the segment results for the IndyMac Consumer Bank and
Specialty Product Divisions for the three months ended
September 30, 2004:

|                                  |                    |                        |                     |                             |        |              |        |        |        |           |        |       |       |       |       |       |     |     |        |        |       |       |        |        |        |        |        | 
|--------------------------------- | ------------------ | ---------------------- | ------------------- | --------------------------- | ------ | ------------ | ------ | ------ | ------ | --------- | ------ | ----- | ----- | ----- | ----- | ----- | --- | --- | ------ | ------ | ----- | ----- | ------ | ------ | ------ | ------ | ------ | 
|                                  |                    |                        |                     |                            
|                                  |                    |                        |                     | Specialty Product Divisions
|                                  |                    | IndyMac                |                     |                            
|                                  |                    | Consumer               |                     | Consumer                    |        | Subdivision  |        |        |        | Financial |        |      
|                                  |                    | Bank                   |                     | Construction                |        | Construction |        | HELOC  |        | Freedom   |        | Total
|                                  |                    |                        |                     |                             |        |              |        |        |        |           |        |      
|                                  |                    |                       
|                                  |                    | (Dollars in thousands)
|Operating Results                 |                    |                        |                     |                             |        |              |        |        |        |           |        |       |       |       |       |       |     |     |        |        |       |       |        |       
|Mortgage Banking Activities       |                    |                        |                     |                             |        |              |        |        |        |           |        |       |       |       |       |       |     |     |        |        |       |       |        |       
|Net interest income               |                    | $                      | 510                 |                             |        | $            | 3,561  |        |        | $         |       |       |       | $     |      |       |     | $   | 326    |        |       | $     | 3,887  |       
|Gain on sale of loans             |                    |                        | 115                 |                             |        |              | 7,465  |        |        |           |       |       |       |       |      |       |     |     | 10,212 |        |       |       | 17,677 |       
|Other income                      |                    |                        | 258                 |                             |        |              | 2,194  |        |        |           |       |       |       |       |      |       |     |     | 1,984  |        |       |       | 4,178  |       
|                                  |                    |                        |                     |                             |        |              |        |        |        |           |        |       |       |       |       |       |     |     |        |        |       |       |        |       
|                                  | Net revenues       |                        |                     | 883                         |        |              |        | 13,220 |        |           |        |      |       |       |       |      |     |     |        | 12,522 |       |       |        | 25,742 |       
|                                  | Operating expenses |                        |                     | 2,205                       |        |              |        | 928    |        |           |        |      |       |       |       |      |     |     |        | 6,707  |       |       |        | 7,635  |       
|                                  |                    |                        |                     |                             |        |              |        |        |        |           |        |       |       |       |       |       |     |     |        |        |       |       |        |       
|                                  |                    | Pretax income (loss)   |                     |                             | (1,322 | )            |        |        | 12,292 |           |        |       |      |       |       |       |    |     |        |        | 5,815 |       |        |        | 18,107 |       
|                                  |                    |                        |                     |                             |        |              |        |        |        |           |        |       |       |       |       |       |     |     |        |        |       |       |        |       
|Investing Activities              |                    |                        |                     |                             |        |              |        |        |        |           |        |       |       |       |       |       |     |     |        |        |       |       |        |       
|Net interest income               |                    |                        |                    |                             |        |              | 12,214 |        |        |           | 6,891  |       |       |       |      |       |     |     |       |        |       |       | 19,105 |       
|Provision for loan losses         |                    |                        |                    |                             |        |              | (537   | )      |        |           | (270   | )     |       |       |      |       |     |     |       |        |       |       | (807   | )     
|Service fee income                |                    |                        |                    |                             |        |              |       |        |        |           |       |       |       |       |      |       |     |     |       |        |       |       |       |       
|Gain (loss) on sale of securities |                    |                        |                    |                             |        |              |       |        |        |           |       |       |       |       |      |       |     |     |       |        |       |       |       |       
|Other income                      |                    |                        |                    |                             |        |              | 1,665  |        |        |           | 92     |       |       |       |      |       |     |     |       |        |       |       | 1,757  |       
|                                  |                    |                        |                     |                             |        |              |        |        |        |           |        |       |       |       |       |       |     |     |        |        |       |       |        |       
|                                  | Net revenues       |                        |                     |                            |        |              |        | 13,342 |        |           |        | 6,713 |       |       |       |      |     |     |        |       |       |       |        | 20,055 |       
|                                  | Operating expenses |                        |                     |                            |        |              |        | 8,819  |        |           |        | 2,162 |       |       |       |      |     |     |        |       |       |       |        | 10,981 |       
|                                  |                    |                        |                     |                             |        |              |        |        |        |           |        |       |       |       |       |       |     |     |        |        |       |       |        |       
|                                  |                    | Pretax income          |                     |                             |       |              |        |        | 4,523  |           |        |       | 4,551 |       |       |       |    |     |        |        |      |       |        |        | 9,074  |       
|                                  |                    |                        |                     |                             |        |              |        |        |        |           |        |       |       |       |       |       |     |     |        |        |       |       |        |       
|HELOC Activities                  |                    |                        |                     |                             |        |              |        |        |        |           |        |       |       |       |       |       |     |     |        |        |       |       |        |       
|Net interest income               |                    |                        | 325                 |                             |        |              | 33     |        |        |           |       |       |       |       | 243   |       |     |     |       |        |       |       | 276    |       
|Provision for loan losses         |                    |                        |                    |                             |        |              |       |        |        |           |       |       |       |       | 509   |       |     |     |       |        |       |       | 509    |       
|Service fee income                |                    |                        |                    |                             |        |              |       |        |        |           |       |       |       |       | 409   |       |     |     |       |        |       |       | 409    |       
|Other income                      |                    |                        | 52                  |                             |        |              | 8      |        |        |           |       |       |       |       | 378   |       |     |     |       |        |       |       | 386    |       
|                                  |                    |                        |                     |                             |        |              |        |        |        |           |        |       |       |       |       |       |     |     |        |        |       |       |        |       
|                                  | Net revenues       |                        |                     | 377                         |        |              |        | 41     |        |           |        |      |       |       |       | 1,539 |     |     |        |       |       |       |        | 1,580  |       
|                                  | Operating expenses |                        |                     | 60                          |        |              |        | 4      |        |           |        |      |       |       |       | 1,375 |     |     |        |       |       |       |        | 1,379  |       
|                                  |                    |                        |                     |                             |        |              |        |        |        |           |        |       |       |       |       |       |     |     |        |        |       |       |        |       
|                                  |                    | Pretax income          |                     |                             | 317    |              |        |        | 37     |           |        |       |      |       |       |       | 164 |     |        |        |      |       |        |        | 201    |       
|                                  |                    |                        |                     |                             |        |              |        |        |        |           |        |       |       |       |       |       |     |     |        |        |       |       |        |       
|Financing and Other Activities    |                    |                        |                     |                             |        |              |        |        |        |           |        |       |       |       |       |       |     |     |        |        |       |       |        |       
|Net interest income               |                    |                        | 9,472               |                             |        |              |       |        |        |           |       |       |       |       |      |       |     |     |       |        |       |       |       |       
|Other income                      |                    |                        | 981                 |                             |        |              |       |        |        |           |       |       |       |       |      |       |     |     |       |        |       |       |       |       
|                                  |                    |                        |                     |                             |        |              |        |        |        |           |        |       |       |       |       |       |     |     |        |        |       |       |        |       
|                                  | Net revenues       |                        |                     | 10,453                      |        |              |        |       |        |           |        |      |       |       |       |      |     |     |        |       |       |       |        |       |       
|                                  | Operating expenses |                        |                     | 5,069                       |        |              |        |       |        |           |        |      |       |       |       |      |     |     |        |       |       |       |        |       |       
|                                  |                    |                        |                     |                             |        |              |        |        |        |           |        |       |       |       |       |       |     |     |        |        |       |       |        |       
|                                  |                    | Pretax income          |                     |                             | 5,384  |              |        |        |       |           |        |       |      |       |       |       |    |     |        |        |      |       |        |        |       |       
|                                  |                    |                        |                     |                             |        |              |        |        |        |           |        |       |       |       |       |       |     |     |        |        |       |       |        |       
|                                  |                    |                        | Total pretax income |                             |        | 4,379        |        |        |        | 16,852    |        |       |       | 4,551 |       |       |     | 164 |        |        |       | 5,815 |        |        |        | 27,382 |       
|                                  |                    |                        |                     |                             |        |              |        |        |        |           |        |       |       |       |       |       |     |     |        |        |       |       |        |       
|                                  |                    |                        |                     | Net income                  |        | $            | 2,649  |        |        | $         | 10,195 |       |       | $     | 2,754 |       |     | $   | 99     |        |       | $     | 3,518  |        |        | $      | 16,566 | 
|                                  |                    |                        |                     |                             |        |              |        |        |        |           |        |       |       |       |       |       |     |     |        |        |       |       |        |       
|Ratios                            |                    |                        |                     |                             |        |              |        |        |        |           |        |       |       |       |       |       |     |     |        |        |       |       |        |       
|Percentage of assets              |                    |                        | 1                   | %                           |        |              | 10     | %      |        |           | 4      | %     |       |       | 1     | %     |     |     | 1      | %      |       |       | 16     | %     
|Percentage of total revenue       |                    |                        | 5                   | %                           |        |              | 12     | %      |        |           | 3      | %     |       |       | 1     | %     |     |     | 5      | %      |       |       | 21     | %     
|Percentage of pretax income       |                    |                        | 5                   | %                           |        |              | 18     | %      |        |           | 5      | %     |       |       | 0     | %     |     |     | 6      | %      |       |       | 29     | %     

12



---



##### Table of Contents



|                                                        |  |                        |         |                             |  |              |           |       |  |           |         |       |  |   |         |   |  |   |         |   |  |   |           |  
|------------------------------------------------------- |  | ---------------------- | ------- | --------------------------- |  | ------------ | --------- | ----- |  | --------- | ------- | ----- |  | - | ------- | - |  | - | ------- | - |  | - | --------- | -
|                                                        |  |                        |         |                            
|                                                        |  |                        |         | Specialty Product Divisions
|                                                        |  | IndyMac                |         |                            
|                                                        |  | Consumer               |         | Consumer                    |  | Subdivision  |           |       |  | Financial |         |      
|                                                        |  | Bank                   |         | Construction                |  | Construction |           | HELOC |  | Freedom   |         | Total
|                                                        |  |                        |         |                             |  |              |           |       |  |           |         |      
|                                                        |  |                       
|                                                        |  | (Dollars in thousands)
|Balance Sheet Data                                      |  |                        |         |                             |  |              |           |       |  |           |         |       |  |   |         |   |  |   |         |   |  |   |           |  
|Average interest-earning assets                         |  | $                      | 110,746 |                             |  | $            | 1,720,717 |       |  | $         | 642,013 |       |  | $ | 162,850 |   |  | $ | 88,659  |   |  | $ | 2,614,239 |  
|Average total assets                                    |  | $                      | 132,768 |                             |  | $            | 1,724,748 |       |  | $         | 640,091 |       |  | $ | 178,692 |   |  | $ | 158,935 |   |  | $ | 2,702,466 |  
|Allocated capital                                       |  | $                      | 8,055   |                             |  | $            | 92,868    |       |  | $         | 68,458  |       |  | $ | 12,937  |   |  | $ | 42,840  |   |  | $ | 217,103   |  
|Capital allocated to mortgage banking activities        |  | $                      | 2,198   |                             |  | $            | 12,545    |       |  | $         |        |       |  | $ |        |   |  | $ | 42,840  |   |  | $ | 55,385    |  
|Capital allocated to investing activities               |  | $                      |        |                             |  | $            | 80,081    |       |  | $         | 68,458  |       |  | $ |        |   |  | $ |        |   |  | $ | 148,539   |  
|Capital allocated to HELOC activities                   |  | $                      | 4,646   |                             |  | $            | 242       |       |  | $         |        |       |  | $ | 12,937  |   |  | $ |        |   |  | $ | 13,179    |  
|Capital allocated to financing and other
    activities |  | $                      | 1,211   |                             |  | $            |          |       |  | $         |        |       |  | $ |        |   |  | $ |        |   |  | $ |          |  
|Allocated capital/total average assets                  |  |                        | 6.07    | %                           |  |              | 5.38      | %     |  |           | 10.70   | %     |  |   | 7.24    | % |  |   | 26.95   | % |  |   | 8.03      | %
|Loans Produced                                          |  | $                      | 104,704 |                             |  | $            | 1,056,807 |       |  | $         | 265,882 |       |  | $ | 71,076  |   |  | $ | 378,734 |   |  | $ | 1,772,499 |  
|Purchase mortgages                                      |  |                        | 28      | %                           |  |              | 76        | %     |  |           | 94      | %     |  |   | 0       | % |  |   | 0       | % |  |   | 59        | %
|Cash out refinance mortgages                            |  |                        | 63      | %                           |  |              | 0         | %     |  |           | 5       | %     |  |   | 100     | % |  |   | 100     | % |  |   | 26        | %
|Rate and term refinance mortgages                       |  |                        | 9       | %                           |  |              | 24        | %     |  |           | 1       | %     |  |   | 0       | % |  |   | 0       | % |  |   | 15        | %
|Performance Ratios                                      |  |                        |         |                             |  |              |           |       |  |           |         |       |  |   |         |   |  |   |         |   |  |   |           |  
|Return on equity (ROE)                                  |  |                        | 131     | %                           |  |              | 44        | %     |  |           | 16      | %     |  |   | 3       | % |  |   | 33      | % |  |   | 30        | %
|ROE  mortgage banking activities                       |  |                        | (145    | )%                          |  |              | 236       | %     |  |           |        |       |  |   |        |   |  |   | 33      | % |  |   | 79        | %
|ROE  investing activities                              |  |                        |        |                             |  |              | 14        | %     |  |           | 16      | %     |  |   |        |   |  |   |        |   |  |   | 15        | %
|ROE  HELOC activities                                  |  |                        | 16      | %                           |  |              | 37        | %     |  |           |        |       |  |   | 3       | % |  |   |        |   |  |   | 4         | %
|ROE  financing and other activities                    |  |                        | 1,070   | %                           |  |              |          |       |  |           |        |       |  |   |        |   |  |   |        |   |  |   |          |  
|Return on assets (ROA)                                  |  |                        |         |                             |  |              | 2.35      | %     |  |           | 1.71    | %     |  |   | 0.22    | % |  |   | 8.81    | % |  |   | 2.44      | %
|Net interest margin                                     |  |                        |         |                             |  |              | 3.65      | %     |  |           | 4.27    | %     |  |   | 0.59    | % |  |   | 1.46    | % |  |   | 3.54      | %
|Efficiency ratio                                        |  |                        | 63      | %                           |  |              | 36        | %     |  |           | 31      | %     |  |   | 133     | % |  |   | 54      | % |  |   | 42        | %
|Capital adjusted efficiency ratio                       |  |                        | 11      | %                           |  |              | 31        | %     |  |           | 76      | %     |  |   | 419     | % |  |   | 46      | % |  |   | 48        | %
|Average FTE                                             |  |                        | 278     |                             |  |              | 303       |       |  |           | 69      |       |  |   | 20      |   |  |   | 412     |   |  |   | 804       |  

IndyMac Consumer Bank and Specialty Product
Divisions






|                         |  |                                                                                                                                                                                                                                  
|------------------------ |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Consumer Bank            |  | The Consumer Bank offers direct lending and
    deposit products to our depositors through our retail branch
    network, on-line contact center and institutional money desk.                                                   
|                        
|Consumer Construction    |  | This division is responsible for the production
    of construction-to-permanent and lot loans to individuals who
    are in the process of building their own homes, through mortgage
    professionals and direct to consumers.
|                        
|Subdivision Construction |  | This division provides financing to subdivision
    developers.                                                                                                                                                                  
|                        
|HELOC                    |  | This group is primarily responsible for the
    production of home equity lines of credit (HELOCs) and
    closed-end seconds through marketing strategies focused on
    direct interaction with consumers.                     
|                        
|Financial Freedom        |  | This group is responsible for the generation of
    predominantly reverse mortgage products with senior customers
    (age 62 or older) via a relationship sales force and a loan
    officer sales force.                       

13



---



##### Table of Contents



The following table provides additional details
on the segment results for Investing Divisions for the three
months ended September 30, 2004:

|                                  |                        |                        |                            |                   |        |     |        |              |        |        |        |       |       |       |       |     |      |      |         |        |        |        |        | 
|--------------------------------- | ---------------------- | ---------------------- | -------------------------- | ----------------- | ------ | --- | ------ | ------------ | ------ | ------ | ------ | ----- | ----- | ----- | ----- | --- | ---- | ---- | ------- | ------ | ------ | ------ | ------ | 
|                                  |                        |                       
|                                  |                        | Investing Divisions   
|                                  |                        |                       
|                                  |                        | Loan Servicing &       |                            | SFR Mortgage      |        |     |        | Discontinued |        |       
|                                  |                        | Retained Assets        |                            | Loans             |        | MBS |        | Products     |        | Total 
|                                  |                        |                        |                            |                   |        |     |        |              |        |       
|                                  |                        |                       
|                                  |                        | (Dollars in thousands)
|Operating Results                 |                        |                        |                            |                   |        |     |        |              |        |        |        |       |       |       |       |     |      |      |         |       
|Mortgage Banking Activities       |                        |                        |                            |                   |        |     |        |              |        |        |        |       |       |       |       |     |      |      |         |       
|Net interest income               |                        | $                      | 3,771                      |                   |        | $   |       |              |        | $      |       |       |       | $     |      |     |      | $    | 3,771   |       
|Gain on sale of loans             |                        |                        | 6,351                      |                   |        |     | 3,161  |              |        |        |       |       |       |       |      |     |      |      | 9,512   |       
|Other income                      |                        |                        |                           |                   |        |     |       |              |        |        |       |       |       |       |      |     |      |      |        |       
|                                  |                        |                        |                            |                   |        |     |        |              |        |        |        |       |       |       |       |     |      |      |         |       
|                                  | Net revenues           |                        |                            | 10,122            |        |     |        | 3,161        |        |        |        |      |       |       |       |    |      |      |         | 13,283 |       
|                                  | Operating expenses     |                        |                            | 1,180             |        |     |        |             |        |        |        |      |       |       |       |    |      |      |         | 1,180  |       
|                                  |                        |                        |                            |                   |        |     |        |              |        |        |        |       |       |       |       |     |      |      |         |       
|                                  |                        | Pretax income          |                            |                   | 8,942  |     |        |              | 3,161  |        |        |       |      |       |       |     |     |      |         |        | 12,103 |       
|                                  |                        |                        |                            |                   |        |     |        |              |        |        |        |       |       |       |       |     |      |      |         |       
|Investing Activities              |                        |                        |                            |                   |        |     |        |              |        |        |        |       |       |       |       |     |      |      |         |       
|Net interest income               |                        |                        | 8,981                      |                   |        |     | 17,199 |              |        |        | 7,264  |       |       |       | 1,054 |     |      |      | 34,498  |       
|Provision for loan losses         |                        |                        |                           |                   |        |     | (400   | )            |        |        |       |       |       |       | (800  | )   |      |      | (1,200  | )     
|Service fee income                |                        |                        | 3,301                      |                   |        |     |       |              |        |        |       |       |       |       |      |     |      |      | 3,301   |       
|Gain (loss) on sale of securities |                        |                        | (12,550                    | )                 |        |     |       |              |        |        | 199    |       |       |       |      |     |      |      | (12,351 | )     
|Other income                      |                        |                        | 844                        |                   |        |     | 895    |              |        |        |       |       |       |       |      |     |      |      | 1,739   |       
|                                  |                        |                        |                            |                   |        |     |        |              |        |        |        |       |       |       |       |     |      |      |         |       
|                                  | Net (expense) revenues |                        |                            | 576               |        |     |        | 17,694       |        |        |        | 7,463 |       |       |       | 254 |      |      |         | 25,987 |       
|                                  | Operating expenses     |                        |                            | 9,486             |        |     |        | 797          |        |        |        | 113   |       |       |       | 476 |      |      |         | 10,872 |       
|                                  |                        |                        |                            |                   |        |     |        |              |        |        |        |       |       |       |       |     |      |      |         |       
|                                  |                        | Pretax (loss) income   |                            |                   | (8,910 | )   |        |              | 16,897 |        |        |       | 7,350 |       |       |     | (222 | )    |         |        | 15,115 |       
|                                  |                        |                        |                            |                   |        |     |        |              |        |        |        |       |       |       |       |     |      |      |         |       
|HELOC Activities                  |                        |                        |                            |                   |        |     |        |              |        |        |        |       |       |       |       |     |      |      |         |       
|Net interest income               |                        |                        | 5                          |                   |        |     |       |              |        |        |       |       |       |       |      |     |      |      | 5       |       
|Provision for loan losses         |                        |                        |                           |                   |        |     |       |              |        |        |       |       |       |       |      |     |      |      |        |       
|Service fee income                |                        |                        |                           |                   |        |     |       |              |        |        |       |       |       |       |      |     |      |      |        |       
|Other income                      |                        |                        |                           |                   |        |     |       |              |        |        |       |       |       |       |      |     |      |      |        |       
|                                  |                        |                        |                            |                   |        |     |        |              |        |        |        |       |       |       |       |     |      |      |         |       
|                                  | Net revenues           |                        |                            | 5                 |        |     |        |             |        |        |        |      |       |       |       |    |      |      |         | 5      |       
|                                  | Operating expenses     |                        |                            | 59                |        |     |        |             |        |        |        |      |       |       |       |    |      |      |         | 59     |       
|                                  |                        |                        |                            |                   |        |     |        |              |        |        |        |       |       |       |       |     |      |      |         |       
|                                  |                        | Pretax income          |                            |                   | (54    | )   |        |              |       |        |        |       |      |       |       |     |     |      |         |        | (54    | )     
|                                  |                        |                        |                            |                   |        |     |        |              |        |        |        |       |       |       |       |     |      |      |         |       
|Financing and Other Activities    |                        |                        |                            |                   |        |     |        |              |        |        |        |       |       |       |       |     |      |      |         |       
|Net interest income               |                        |                        |                           |                   |        |     |       |              |        |        |       |       |       |       |      |     |      |      |        |       
|Other income                      |                        |                        |                           |                   |        |     |       |              |        |        |       |       |       |       |      |     |      |      |        |       
|                                  |                        |                        |                            |                   |        |     |        |              |        |        |        |       |       |       |       |     |      |      |         |       
|                                  | Net revenues           |                        |                            |                  |        |     |        |             |        |        |        |      |       |       |       |    |      |      |         |       |       
|                                  | Operating expenses     |                        |                            |                  |        |     |        |             |        |        |        |      |       |       |       |    |      |      |         |       |       
|                                  |                        |                        |                            |                   |        |     |        |              |        |        |        |       |       |       |       |     |      |      |         |       
|                                  |                        | Pretax income          |                            |                   |       |     |        |              |       |        |        |       |      |       |       |     |     |      |         |        |       |       
|                                  |                        |                        |                            |                   |        |     |        |              |        |        |        |       |       |       |       |     |      |      |         |       
|                                  |                        |                        | Total pretax (loss) income |                   |        | (22 | )      |              |        | 20,058 |        |       |       | 7,350 |       |     |      | (222 | )       |        |        | 27,164 |       
|                                  |                        |                        |                            |                   |        |     |        |              |        |        |        |       |       |       |       |     |      |      |         |       
|                                  |                        |                        |                            | Net (loss) income |        | $   | (13    | )            |        | $      | 12,136 |       |       | $     | 4,446 |     |      | $    | (135    | )      |        | $      | 16,434 | 
|                                  |                        |                        |                            |                   |        |     |        |              |        |        |        |       |       |       |       |     |      |      |         |       
|Ratios                            |                        |                        |                            |                   |        |     |        |              |        |        |        |       |       |       |       |     |      |      |         |       
|Percentage of assets              |                        |                        | 9                          | %                 |        |     | 27     | %            |        |        | 12     | %     |       |       | 0     | %   |      |      | 48      | %     
|Percentage of total revenue       |                        |                        | 5                          | %                 |        |     | 9      | %            |        |        | 3      | %     |       |       | 0     | %   |      |      | 17      | %     
|Percentage of pretax income       |                        |                        | 0                          | %                 |        |     | 21     | %            |        |        | 8      | %     |       |       | 0     | %   |      |      | 29      | %     

14



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##### Table of Contents



|                                                        |  |                        |           |              |  |     |           |              |  |       |           |   |  |   |        |    |  |   |           |   
|------------------------------------------------------- |  | ---------------------- | --------- | ------------ |  | --- | --------- | ------------ |  | ----- | --------- | - |  | - | ------ | -- |  | - | --------- | --
|                                                        |  |                       
|                                                        |  | Investing Divisions   
|                                                        |  |                       
|                                                        |  | Loan Servicing &       |           | SFR Mortgage |  |     |           | Discontinued |  |      
|                                                        |  | Retained Assets        |           | Loans        |  | MBS |           | Products     |  | Total
|                                                        |  |                        |           |              |  |     |           |              |  |      
|                                                        |  |                       
|                                                        |  | (Dollars in thousands)
|Balance Sheet Data                                      |  |                        |           |              |  |     |           |              |  |       |           |   |  |   |        |    |  |   |           |   
|Average interest-earning assets                         |  | $                      | 914,369   |              |  | $   | 4,709,068 |              |  | $     | 1,991,141 |   |  | $ | 59,561 |    |  | $ | 7,674,139 |   
|Average total assets                                    |  | $                      | 1,550,268 |              |  | $   | 4,720,632 |              |  | $     | 2,018,386 |   |  | $ | 51,975 |    |  | $ | 8,341,261 |   
|Allocated capital                                       |  | $                      | 226,674   |              |  | $   | 232,653   |              |  | $     | 43,208    |   |  | $ | 5,212  |    |  | $ | 507,747   |   
|Capital allocated to mortgage banking activities        |  | $                      | 20,881    |              |  | $   |          |              |  | $     |          |   |  | $ |       |    |  | $ | 20,881    |   
|Capital allocated to investing activities               |  | $                      | 205,732   |              |  | $   | 232,653   |              |  | $     | 43,208    |   |  | $ | 5,212  |    |  | $ | 486,805   |   
|Capital allocated to HELOC activities                   |  | $                      | 61        |              |  | $   |          |              |  | $     |          |   |  | $ |       |    |  | $ | 61        |   
|Capital allocated to financing and other
    activities |  | $                      |          |              |  | $   |          |              |  | $     |          |   |  | $ |       |    |  | $ |          |   
|Allocated capital/ total average assets                 |  |                        | 14.62     | %            |  |     | 4.93      | %            |  |       | 2.14      | % |  |   | 10.03  | %  |  |   | 6.09      | % 
|Loans Produced                                          |  | $                      | 416,035   |              |  | $   |          |              |  | $     |          |   |  | $ |       |    |  | $ | 416,035   |   
|Performance Ratios                                      |  |                        |           |              |  |     |           |              |  |       |           |   |  |   |        |    |  |   |           |   
|Return on equity (ROE)                                  |  |                        | 0         | %            |  |     | 21        | %            |  |       | 41        | % |  |   | (10    | )% |  |   | 13        | % 
|ROE  mortgage banking activities                       |  |                        | 103       | %            |  |     |          |              |  |       |          |   |  |   |       |    |  |   | 140       | % 
|ROE  investing activities                              |  |                        | (10       | )%           |  |     | 17        | %            |  |       | 41        | % |  |   | (10    | )% |  |   | 7         | % 
|ROE  HELOC activities                                  |  |                        | (213      | )%           |  |     |          |              |  |       |          |   |  |   |       |    |  |   | (213      | )%
|ROE  financing and other activities                    |  |                        |          |              |  |     |          |              |  |       |          |   |  |   |       |    |  |   |          |   
|Return on assets (ROA)                                  |  |                        | 0         | %            |  |     | 1.02      | %            |  |       | 0.88      | % |  |   | (1.03  | )% |  |   | 0.78      | % 
|Net interest margin                                     |  |                        | 5.55      | %            |  |     | 1.45      | %            |  |       | 1.45      | % |  |   | 7.04   | %  |  |   | 1.98      | % 
|Efficiency ratio                                        |  |                        | 100       | %            |  |     | 4         | %            |  |       | 2         | % |  |   | 45     | %  |  |   | 30        | % 
|Capital adjusted efficiency ratio                       |  |                        | 531       | %            |  |     | 10        | %            |  |       | 2         | % |  |   | 56     | %  |  |   | 94        | % 
|Average FTE                                             |  |                        | 461       |              |  |     | 11        |              |  |       | 4         |   |  |   | 14     |    |  |   | 490       |   

Investing Divisions






|                                     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                       
|------------------------------------ |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Loan Servicing & Retained
    Assets |  | Loan servicing and retained assets include the
    following: (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 through the Companys customer retention
    programs and (iv) investment and non-investment grade
    securities.
|                                    
|SFR Mortgage Loans                   |  | Assets include all single-family residential
    loans held for investment other than discontinued products.                                                                                                                                                                                                                                                                                                                          
|                                    
|MBS                                  |  | Assets include AAA-rated agency and private label
    MBS.                                                                                                                                                                                                                                                                                                                                                                            
|                                    
|Discontinued Products                |  | Discontinued products are home improvement and
    manufactured housing loans.                                                                                                                                                                                                                                                                                                                                                        

15



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##### Table of Contents



The following table provides additional details
on the segment results for all others for the three months ended
September 30, 2004:

|                                  |                        |                        |                            |                   |         |           |         |                 |        |           |        |             |         |         |         |        |        |        |         |         |         |        |         |         |         |         |        |         |         |        |        | 
|--------------------------------- | ---------------------- | ---------------------- | -------------------------- | ----------------- | ------- | --------- | ------- | --------------- | ------ | --------- | ------ | ----------- | ------- | ------- | ------- | ------ | ------ | ------ | ------- | ------- | ------- | ------ | ------- | ------- | ------- | ------- | ------ | ------- | ------- | ------ | ------ | 
|                                  |                        |                        |                            | Total             |         |           |         |                 |        |           |        |             |         |        
|                                  |                        |                        |                            | Company           |         |           |         |                 |        |           |        |             |         |        
|                                  |                        |                        |                            | Before Corp.      |         |           |         |                 |        | Total     |        |             |         | Total  
|                                  |                        | Treasury               |                            | Overhead and      |         | Corporate |         |                 |        | Company   |        |             |         | Company
|                                  |                        | Group(1)               |                            | Eliminations      |         | Overhead  |         | Eliminations(2) |        | Pro Forma |        | Adjustments |         | GAAP   
|                                  |                        |                        |                            |                   |         |           |         |                 |        |           |        |             |         |        
|                                  |                        |                       
|                                  |                        | (Dollars in thousands)
|Operating Results                 |                        |                        |                            |                   |         |           |         |                 |        |           |        |             |         |         |         |        |        |        |         |         |         |        |         |         |         |         |        |        
|Mortgage Banking Activities       |                        |                        |                            |                   |         |           |         |                 |        |           |        |             |         |         |         |        |        |        |         |         |         |        |         |         |         |         |        |        
|Net interest income               |                        | $                      |                           |                   |         | $         | 40,544  |                 |        | $         |       |             |         | $       |        |        |        | $      | 40,544  |         |         | $      |        |         |         | $       | 40,544 |        
|Gain (loss) on sale of loans      |                        |                        |                           |                   |         |           | 102,238 |                 |        |           |       |             |         |         | 6,918   |        |        |        | 109,156 |         |         |        | (11,104 | )       |         |         | 98,052 |        
|Other income                      |                        |                        |                           |                   |         |           | 15,986  |                 |        |           |       |             |         |         | (1,686  | )      |        |        | 14,300  |         |         |        |        |         |         |         | 14,300 |        
|                                  |                        |                        |                            |                   |         |           |         |                 |        |           |        |             |         |         |         |        |        |        |         |         |         |        |         |         |         |         |        |        
|                                  | Net revenues (expense) |                        |                            |                  |         |           |         | 158,768         |        |           |        |            |         |         |         | 5,232  |        |        |         | 164,000 |         |        |         | (11,104 | )       |         |        | 152,896 |        
|                                  | Operating expenses     |                        |                            |                  |         |           |         | 79,545          |        |           |        |            |         |         |         | (5     | )      |        |         | 79,540  |         |        |         |        |         |         |        | 79,540  |        
|                                  |                        |                        |                            |                   |         |           |         |                 |        |           |        |             |         |         |         |        |        |        |         |         |         |        |         |         |         |         |        |        
|                                  |                        | Pretax income (loss)   |                            |                   |        |           |         |                 | 79,223 |           |        |             |        |         |         |        | 5,237  |        |         |         | 84,460  |        |         |         | (11,104 | )       |        |         | 73,356  |       
|                                  |                        |                        |                            |                   |         |           |         |                 |        |           |        |             |         |         |         |        |        |        |         |         |         |        |         |         |         |         |        |        
|Investing Activities              |                        |                        |                            |                   |         |           |         |                 |        |           |        |             |         |         |         |        |        |        |         |         |         |        |         |         |         |         |        |        
|Net interest income               |                        |                        |                           |                   |         |           | 53,603  |                 |        |           |       |             |         |         | 2,315   |        |        |        | 55,918  |         |         |        |        |         |         |         | 55,918 |        
|Provision for loan losses         |                        |                        |                           |                   |         |           | (2,007  | )               |        |           |       |             |         |         |        |        |        |        | (2,007  | )       |         |        |        |         |         |         | (2,007 | )      
|Service fee (expense) income      |                        |                        |                           |                   |         |           | 3,301   |                 |        |           |       |             |         |         | 5,032   |        |        |        | 8,333   |         |         |        |        |         |         |         | 8,333  |        
|Gain (loss) on sale of securities |                        |                        |                           |                   |         |           | (12,351 | )               |        |           |       |             |         |         | 2,913   |        |        |        | (9,438  | )       |         |        |        |         |         |         | (9,438 | )      
|Other income                      |                        |                        |                           |                   |         |           | 3,496   |                 |        |           | 727    |             |         |         |        |        |        |        | 4,223   |         |         |        |        |         |         |         | 4,223  |        
|                                  |                        |                        |                            |                   |         |           |         |                 |        |           |        |             |         |         |         |        |        |        |         |         |         |        |         |         |         |         |        |        
|                                  | Net revenues           |                        |                            |                  |         |           |         | 46,042          |        |           |        | 727         |         |         |         | 10,260 |        |        |         | 57,029  |         |        |         |        |         |         |        | 57,029  |        
|                                  | Operating expenses     |                        |                            |                  |         |           |         | 21,853          |        |           |        |            |         |         |         |       |        |        |         | 21,853  |         |        |         |        |         |         |        | 21,853  |        
|                                  |                        |                        |                            |                   |         |           |         |                 |        |           |        |             |         |         |         |        |        |        |         |         |         |        |         |         |         |         |        |        
|                                  |                        | Pretax (loss) income   |                            |                   |        |           |         |                 | 24,189 |           |        |             | 727     |         |         |        | 10,260 |        |         |         | 35,176  |        |         |         |        |         |        |         | 35,176  |       
|                                  |                        |                        |                            |                   |         |           |         |                 |        |           |        |             |         |         |         |        |        |        |         |         |         |        |         |         |         |         |        |        
|HELOC Activities                  |                        |                        |                            |                   |         |           |         |                 |        |           |        |             |         |         |         |        |        |        |         |         |         |        |         |         |         |         |        |        
|Net interest income               |                        |                        |                           |                   |         |           | 7,368   |                 |        |           |       |             |         |         |        |        |        |        | 7,368   |         |         |        |        |         |         |         | 7,368  |        
|Provision for loan losses         |                        |                        |                           |                   |         |           | 509     |                 |        |           |       |             |         |         |        |        |        |        | 509     |         |         |        |        |         |         |         | 509    |        
|Service fee income                |                        |                        |                           |                   |         |           | 409     |                 |        |           |       |             |         |         |        |        |        |        | 409     |         |         |        |        |         |         |         | 409    |        
|Other income                      |                        |                        |                           |                   |         |           | 1,406   |                 |        |           |       |             |         |         |        |        |        |        | 1,406   |         |         |        |        |         |         |         | 1,406  |        
|                                  |                        |                        |                            |                   |         |           |         |                 |        |           |        |             |         |         |         |        |        |        |         |         |         |        |         |         |         |         |        |        
|                                  | Net revenues           |                        |                            |                  |         |           |         | 9,692           |        |           |        |            |         |         |         |       |        |        |         | 9,692   |         |        |         |        |         |         |        | 9,692   |        
|                                  | Operating expenses     |                        |                            |                  |         |           |         | 2,497           |        |           |        |            |         |         |         |       |        |        |         | 2,497   |         |        |         |        |         |         |        | 2,497   |        
|                                  |                        |                        |                            |                   |         |           |         |                 |        |           |        |             |         |         |         |        |        |        |         |         |         |        |         |         |         |         |        |        
|                                  |                        | Pretax income          |                            |                   |        |           |         |                 | 7,195  |           |        |             |        |         |         |        |       |        |         |         | 7,195   |        |         |         |        |         |        |         | 7,195   |       
|                                  |                        |                        |                            |                   |         |           |         |                 |        |           |        |             |         |         |         |        |        |        |         |         |         |        |         |         |         |         |        |        
|Financing and Other Activities    |                        |                        |                            |                   |         |           |         |                 |        |           |        |             |         |         |         |        |        |        |         |         |         |        |         |         |         |         |        |        
|Net interest loss                 |                        |                        | (9,910                     | )                 |         |           | (438    | )               |        |           | (2,802 | )           |         |         |        |        |        |        | (3,240  | )       |         |        |        |         |         |         | (3,240 | )      
|Other income                      |                        |                        | 114                        |                   |         |           | 1,095   |                 |        |           |       |             |         |         |        |        |        |        | 1,095   |         |         |        |        |         |         |         | 1,095  |        
|                                  |                        |                        |                            |                   |         |           |         |                 |        |           |        |             |         |         |         |        |        |        |         |         |         |        |         |         |         |         |        |        
|                                  | Net expense            |                        |                            | (9,796            | )       |           |         | 657             |        |           |        | (2,802      | )       |         |         |       |        |        |         | (2,145  | )       |        |         |        |         |         |        | (2,145  | )      
|                                  | Operating expenses     |                        |                            | 391               |         |           |         | 5,460           |        |           |        | 25,935      |         |         |         |       |        |        |         | 31,395  |         |        |         |        |         |         |        | 31,395  |        
|                                  |                        |                        |                            |                   |         |           |         |                 |        |           |        |             |         |         |         |        |        |        |         |         |         |        |         |         |         |         |        |        
|                                  |                        | Pretax loss            |                            |                   | (10,187 | )         |         |                 | (4,803 | )         |        |             | (28,737 | )       |         |        |       |        |         |         | (33,540 | )      |         |         |        |         |        |         | (33,540 | )     
|                                  |                        |                        |                            |                   |         |           |         |                 |        |           |        |             |         |         |         |        |        |        |         |         |         |        |         |         |         |         |        |        
|                                  |                        |                        | Total pretax (loss) income |                   |         | (10,187   | )       |                 |        | 105,804   |        |             |         | (28,010 | )       |        |        | 15,497 |         |         |         | 93,291 |         |         |         | (11,104 | )      |         |         | 82,187 |       
|                                  |                        |                        |                            |                   |         |           |         |                 |        |           |        |             |         |         |         |        |        |        |         |         |         |        |         |         |         |         |        |        
|                                  |                        |                        |                            | Net (loss) income |         | $         | (6,164  | )               |        | $         | 64,011 |             |         | $       | (16,946 | )      |        | $      | 9,376   |         |         | $      | 56,441  |         |         | $       | (6,715 | )       |         | $      | 49,726 | 
|                                  |                        |                        |                            |                   |         |           |         |                 |        |           |        |             |         |         |         |        |        |        |         |         |         |        |         |         |         |         |        |        
|Ratios                            |                        |                        |                            |                   |         |           |         |                 |        |           |        |             |         |         |         |        |        |        |         |         |         |        |         |         |         |         |        |        
|Percentage of assets              |                        |                        | 4                          | %                 |         |           | 99      | %               |        |           | 1      | %           |         |         | 0       | %      |        |        | 100     | %       |         |        |         |         |         |         |        |        
|Percentage of total revenue       |                        |                        | (4                         | )%                |         |           | 94      | %               |        |           | (1     | )%          |         |         | 7       | %      |        |        | 100     | %       |         |        |         |         |         |         |        |        
|Percentage of pretax income       |                        |                        | (11                        | )%                |         |           | 113     | %               |        |           | (30    | )%          |         |         | 17      | %      |        |        | 100     | %       |         |        |         |         |         |         |        |        

16



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##### Table of Contents



|                                                        |  |                        |         |              |  |           |            |                 |  |           |         |             |  |         |   |  |  |   |            |    |  |   |   |  |  |   |            |   
|------------------------------------------------------- |  | ---------------------- | ------- | ------------ |  | --------- | ---------- | --------------- |  | --------- | ------- | ----------- |  | ------- | - |  |  | - | ---------- | -- |  | - | - |  |  | - | ---------- | --
|                                                        |  |                        |         | Total        |  |           |            |                 |  |           |         |             |  |        
|                                                        |  |                        |         | Company      |  |           |            |                 |  |           |         |             |  |        
|                                                        |  |                        |         | Before Corp. |  |           |            |                 |  | Total     |         |             |  | Total  
|                                                        |  | Treasury               |         | Overhead and |  | Corporate |            |                 |  | Company   |         |             |  | Company
|                                                        |  | Group(1)               |         | Eliminations |  | Overhead  |            | Eliminations(2) |  | Pro Forma |         | Adjustments |  | GAAP   
|                                                        |  |                        |         |              |  |           |            |                 |  |           |         |             |  |        
|                                                        |  |                       
|                                                        |  | (Dollars in thousands)
|Balance Sheet Data                                      |  |                        |         |              |  |           |            |                 |  |           |         |             |  |         |   |  |  |   |            |    |  |   |   |  |  |   |            |   
|Average interest-earning assets                         |  | $                      | 354,577 |              |  | $         | 15,869,540 |                 |  | $         | (7,282  | )           |  | $       |  |  |  | $ | 15,862,258 |    |  | $ |  |  |  | $ | 15,862,258 |   
|Average total assets                                    |  | $                      | 663,566 |              |  | $         | 17,053,802 |                 |  | $         | 246,129 |             |  | $       |  |  |  | $ | 17,299,931 |    |  | $ |  |  |  | $ | 17,299,931 |   
|Allocated capital                                       |  | $                      | 33,178  |              |  | $         | 1,105,754  |                 |  | $         | 107,308 |             |  | $       |  |  |  | $ | 1,213,062  |    |  | $ |  |  |  | $ | 1,213,062  |   
|Capital allocated to mortgage banking activities        |  | $                      |        |              |  | $         | 348,866    |                 |  | $         |        |             |  | $       |  |  |  | $ | 348,866    |    |  | $ |  |  |  | $ | 348,866    |   
|Capital allocated to investing activities               |  | $                      |        |              |  | $         | 635,344    |                 |  | $         |        |             |  | $       |  |  |  | $ | 635,344    |    |  | $ |  |  |  | $ | 635,344    |   
|Capital allocated to HELOC activities                   |  | $                      |        |              |  | $         | 87,155     |                 |  | $         |        |             |  | $       |  |  |  | $ | 87,155     |    |  | $ |  |  |  | $ | 87,155     |   
|Capital allocated to financing and other
    activities |  | $                      | 33,178  |              |  | $         | 34,389     |                 |  | $         | 107,308 |             |  | $       |  |  |  | $ | 141,697    |    |  | $ |  |  |  | $ | 141,697    |   
|Allocated capital/total average assets                  |  |                        | 5.00    | %            |  |           | 6.48       | %               |  |           | 43.60   | %           |  |         |  |  |  |   | 7.01       | %  |  |   |  |  |  |   | 7.01       | % 
|Loans Produced                                          |  | $                      |        |              |  | $         | 10,607,394 |                 |  | $         |        |             |  | $       |  |  |  | $ | 10,607,394 |    |  | $ |  |  |  | $ | 10,607,394 |   
|Purchase mortgages                                      |  |                        |         |              |  |           | 45         | %               |  |           |         |             |  |         |   |  |  |   | 45         | %  |  |   |   |  |  |   | 45         | % 
|Cash out refinance mortgages                            |  |                        |         |              |  |           | 42         | %               |  |           |         |             |  |         |   |  |  |   | 42         | %  |  |   |   |  |  |   | 42         | % 
|Rate and term refinance mortgages                       |  |                        |         |              |  |           | 13         | %               |  |           |         |             |  |         |   |  |  |   | 13         | %  |  |   |   |  |  |   | 13         | % 
|Performance Ratios                                      |  |                        |         |              |  |           |            |                 |  |           |         |             |  |         |   |  |  |   |            |    |  |   |   |  |  |   |            |   
|Return on equity (ROE)                                  |  |                        |         |              |  |           | 23         | %               |  |           |         |             |  |         |   |  |  |   | 19         | %  |  |   |   |  |  |   | 16         | % 
|ROE  mortgage banking                                  |  |                        |         |              |  |           | 55         | %               |  |           |         |             |  |         |   |  |  |   | 58         | %  |  |   |   |  |  |   | 51         | % 
|ROE  investing activities                              |  |                        |         |              |  |           | 9          | %               |  |           |         |             |  |         |   |  |  |   | 13         | %  |  |   |   |  |  |   | 13         | % 
|ROE  HELOC activities                                  |  |                        |         |              |  |           | 20         | %               |  |           |         |             |  |         |   |  |  |   | 20         | %  |  |   |   |  |  |   | 20         | % 
|ROE  financing and other activities                    |  |                        |         |              |  |           | (34        | )%              |  |           |         |             |  |         |   |  |  |   | (57        | )% |  |   |   |  |  |   | (57        | )%
|Return on assets (ROA)                                  |  |                        |         |              |  |           | 1.49       | %               |  |           |         |             |  |         |   |  |  |   | 1.30       | %  |  |   |   |  |  |   | 1.14       | % 
|Net interest margin                                     |  |                        |         |              |  |           | 2.53       | %               |  |           |         |             |  |         |   |  |  |   | 2.52       | %  |  |   |   |  |  |   | 2.52       | % 
|Efficiency ratio                                        |  |                        |         |              |  |           | 50         | %               |  |           |         |             |  |         |   |  |  |   | 59         | %  |  |   |   |  |  |   | 62         | % 
|Capital adjusted efficiency ratio                       |  |                        |         |              |  |           | 64         | %               |  |           |         |             |  |         |   |  |  |   | 78         | %  |  |   |   |  |  |   | 86         | % 
|Average FTE                                             |  |                        | 28      |              |  |           | 4,186      |                 |  |           | 724     |             |  |         |   |  |  |   | 4,910      |    |  |   |   |  |  |   | 4,910      |   



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | During the three months ended September 30,
    2004, the Treasury Group reported net interest expense of
    $9.9 million. This amount includes interest expense related
    to the debentures underlying trust preferred securities issued
    by the Company in 2003 and 2001 which is not allocated to the
    business units. Additionally, the net expense in Treasury
    reflects the cost of maintaining adequate corporate liquidity,
    as well as certain fixed rate deposits with longer maturities
    raised in prior years, the higher cost of which is not allocated
    to the business units.
|   
|(2) | The amounts in this column include primarily the
    differences between the actual gain on sale credited to the
    operating segments and the consolidated gain on sale due to
    timing of loan sales or transfers, and the elimination of
    premiums on inter-company transactions.                                                                                                                                                                                                                                                                                                                       

17



---



##### Table of Contents



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

|                                  |  |                            |        |               |  |               |        |              |  |       |       |    |  |   |        |    |  |   |         |   
|--------------------------------- |  | -------------------------- | ------ | ------------- |  | ------------- | ------ | ------------ |  | ----- | ----- | -- |  | - | ------ | -- |  | - | ------- | --
|                                  |  |                           
|                                  |  | Mortgage Banking Divisions
|                                  |  |                           
|                                  |  | IndyMac                    |        | Mortgage      |  | Real Estate   |        | Web & Direct |  |      
|                                  |  | Conduit                    |        | Professionals |  | Professionals |        | Mail         |  | Total
|                                  |  |                            |        |               |  |               |        |              |  |      
|                                  |  |                           
|                                  |  | (Dollars in thousands)    
|Mortgage Banking Activities       |  |                            |        |               |  |               |        |              |  |       |       |    |  |   |        |    |  |   |         |   
|Q3 04  Pretax income (loss)      |  | $                          | 6,736  |               |  | $             | 43,874 |              |  | $     | 390   |    |  | $ | (665   | )  |  | $ | 50,335  |   
|Q2 04  Pretax income (loss)      |  |                            | 14,418 |               |  |               | 55,886 |              |  |       | 509   |    |  |   | 5,945  |    |  |   | 76,758  |   
|Annualized Percent Change         |  |                            | (213   | )%            |  |               | (86    | )%           |  |       | (94   | )% |  |   | (445   | )% |  |   | (138    | )%
|Q3 03  Pretax income             |  |                            | 10,101 |               |  |               | 74,358 |              |  |       | 3,551 |    |  |   | 25,548 |    |  |   | 113,558 |   
|Percent Change                    |  |                            | (33    | )%            |  |               | (41    | )%           |  |       | (89   | )% |  |   | (103   | )% |  |   | (56     | )%
|Investing Activities              |  |                            |        |               |  |               |        |              |  |       |       |    |  |   |        |    |  |   |         |   
|Q3 04  Pretax income (loss)      |  |                            |       |               |  |               |       |              |  |       |      |    |  |   |       |    |  |   |        |   
|Q2 04  Pretax income (loss)      |  |                            |       |               |  |               |       |              |  |       |      |    |  |   |       |    |  |   |        |   
|Annualized Percent Change         |  |                            |       |               |  |               |       |              |  |       |      |    |  |   |       |    |  |   |        |   
|Q3 03  Pretax income             |  |                            |       |               |  |               |       |              |  |       |      |    |  |   |       |    |  |   |        |   
|Percent Change                    |  |                            |       |               |  |               |       |              |  |       |      |    |  |   |       |    |  |   |        |   
|HELOC Activities                  |  |                            |        |               |  |               |        |              |  |       |       |    |  |   |        |    |  |   |         |   
|Q3 04  Pretax income (loss)      |  |                            | 733    |               |  |               | 3,922  |              |  |       | 341   |    |  |   | 1,735  |    |  |   | 6,731   |   
|Q2 04  Pretax income (loss)      |  |                            | 12     |               |  |               | 3,358  |              |  |       | 381   |    |  |   | 1,355  |    |  |   | 5,106   |   
|Annualized Percent Change         |  |                            | 24,033 | %             |  |               | 67     | %            |  |       | (42   | )% |  |   | 112    | %  |  |   | 127     | % 
|Q3 03  Pretax income             |  |                            |       |               |  |               | 993    |              |  |       | 54    |    |  |   | 247    |    |  |   | 1,294   |   
|Percent Change                    |  |                            |       |               |  |               | 295    | %            |  |       | 531   | %  |  |   | 602    | %  |  |   | 420     | % 
|Financing and Other Activities    |  |                            |        |               |  |               |        |              |  |       |       |    |  |   |        |    |  |   |         |   
|Q3 04  Pretax income             |  |                            |       |               |  |               |       |              |  |       |      |    |  |   |       |    |  |   |        |   
|Q2 04  Pretax income             |  |                            |       |               |  |               |       |              |  |       |      |    |  |   |       |    |  |   |        |   
|Q3 03  Pretax income             |  |                            |       |               |  |               |       |              |  |       |      |    |  |   |       |    |  |   |        |   
|Net Income                        |  |                            |        |               |  |               |        |              |  |       |       |    |  |   |        |    |  |   |         |   
|Q3 04  Net income (loss)         |  |                            | 4,519  |               |  |               | 28,917 |              |  |       | 442   |    |  |   | 648    |    |  |   | 34,526  |   
|Q2 04  Net income (loss)         |  |                            | 8,730  |               |  |               | 35,843 |              |  |       | 539   |    |  |   | 4,417  |    |  |   | 49,529  |   
|Annualized Percent Change         |  |                            | (193   | )%            |  |               | (77    | )%           |  |       | (72   | )% |  |   | (341   | )% |  |   | (121    | )%
|Q3 03  Net income                |  |                            | 6,111  |               |  |               | 45,587 |              |  |       | 2,181 |    |  |   | 15,606 |    |  |   | 69,485  |   
|Percent Change                    |  |                            | (26    | )%            |  |               | (37    | )%           |  |       | (80   | )% |  |   | (96    | )% |  |   | (50     | )%
|Performance Ratios                |  |                            |        |               |  |               |        |              |  |       |       |    |  |   |        |    |  |   |         |   
|Q3 04                             |  |                            |        |               |  |               |        |              |  |       |       |    |  |   |        |    |  |   |         |   
|ROE                               |  |                            | 33     | %             |  |               | 52     | %            |  |       | 11    | %  |  |   | 5      | %  |  |   | 40      | % 
|ROA                               |  |                            | 2.25   | %             |  |               | 3.30   | %            |  |       | 0.63  | %  |  |   | 0.40   | %  |  |   | 2.63    | % 
|NIM                               |  |                            | 4.30   | %             |  |               | 2.65   | %            |  |       | 3.53  | %  |  |   | 3.41   | %  |  |   | 3.04    | % 
|Efficiency ratio                  |  |                            | 37     | %             |  |               | 45     | %            |  |       | 88    | %  |  |   | 95     | %  |  |   | 55      | % 
|Capital adjusted efficiency ratio |  |                            | 43     | %             |  |               | 29     | %            |  |       | 60    | %  |  |   | 53     | %  |  |   | 37      | % 
|Average FTE                       |  |                            | 63     |               |  |               | 1,696  |              |  |       | 237   |    |  |   | 590    |    |  |   | 2,586   |   
|Q2 04                             |  |                            |        |               |  |               |        |              |  |       |       |    |  |   |        |    |  |   |         |   
|ROE                               |  |                            | 47     | %             |  |               | 80     | %            |  |       | 16    | %  |  |   | 37     | %  |  |   | 63      | % 
|ROA                               |  |                            | 2.88   | %             |  |               | 5.03   | %            |  |       | 0.91  | %  |  |   | 2.41   | %  |  |   | 3.93    | % 
|NIM                               |  |                            | 4.32   | %             |  |               | 3.07   | %            |  |       | 3.71  | %  |  |   | 3.23   | %  |  |   | 3.43    | % 
|Efficiency ratio                  |  |                            | 20     | %             |  |               | 38     | %            |  |       | 88    | %  |  |   | 71     | %  |  |   | 44      | % 
|Capital adjusted efficiency ratio |  |                            | 20     | %             |  |               | 18     | %            |  |       | 45    | %  |  |   | 34     | %  |  |   | 24      | % 
|Average FTE                       |  |                            | 54     |               |  |               | 1,448  |              |  |       | 238   |    |  |   | 606    |    |  |   | 2,346   |   
|Q3 03                             |  |                            |        |               |  |               |        |              |  |       |       |    |  |   |        |    |  |   |         |   
|ROE                               |  |                            | 85     | %             |  |               | 124    | %            |  |       | 66    | %  |  |   | 115    | %  |  |   | 114     | % 
|ROA                               |  |                            | 6.16   | %             |  |               | 7.54   | %            |  |       | 3.98  | %  |  |   | 7.42   | %  |  |   | 7.17    | % 
|NIM                               |  |                            | 5.08   | %             |  |               | 4.45   | %            |  |       | 4.09  | %  |  |   | 3.63   | %  |  |   | 4.32    | % 
|Efficiency ratio                  |  |                            | 10     | %             |  |               | 33     | %            |  |       | 62    | %  |  |   | 41     | %  |  |   | 35      | % 
|Capital adjusted efficiency ratio |  |                            | 6      | %             |  |               | 10     | %            |  |       | 21    | %  |  |   | 12     | %  |  |   | 12      | % 
|Average FTE                       |  |                            | 8      |               |  |               | 1,347  |              |  |       | 230   |    |  |   | 650    |    |  |   | 2,235   |   

The Mortgage Banking Divisions net income
decreased by 30%, or $15.0 million compared to the second
quarter of 2004, and 50% or $35.0 million from the third
quarter of 2003. The decreases were primarily due to decreases
in gain on sale of loans and net interest income from the
mortgage pipeline as a result of margin compression caused by a
change in channel mix to more correspondent and conduit
business, a change in product mix to more adjustable rate
mortgages and competitive pricing pressures. In addition, our
pipeline hedge underperformed in the third quarter of 2004 after
outperforming in the second quarter of 2004 and the third
quarter of 2003. Our operating expenses also increased as we
expanded our sales force to support continued growth in mortgage
production and our pursuit of increased market share.

18



---



##### Table of Contents



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

|                                  |  |                        |        |                             |  |              |        |       |  |           |       |       |  |   |       |    |  |   |       |   |  |   |        |   
|--------------------------------- |  | ---------------------- | ------ | --------------------------- |  | ------------ | ------ | ----- |  | --------- | ----- | ----- |  | - | ----- | -- |  | - | ----- | - |  | - | ------ | --
|                                  |  |                        |        |                            
|                                  |  |                        |        | Specialty Product Divisions
|                                  |  |                        |        |                            
|                                  |  | IndyMac                |        | Consumer                    |  | Subdivision  |        |       |  | Financial |       |      
|                                  |  | Consumer Bank          |        | Construction                |  | Construction |        | HELOC |  | Freedom   |       | Total
|                                  |  |                        |        |                             |  |              |        |       |  |           |       |      
|                                  |  |                       
|                                  |  | (Dollars in thousands)
|Mortgage Banking Activities       |  |                        |        |                             |  |              |        |       |  |           |       |       |  |   |       |    |  |   |       |   |  |   |        |   
|Q3 04  Pretax income (loss)      |  | $                      | (1,322 | )                           |  | $            | 12,292 |       |  | $         |      |       |  | $ |      |    |  | $ | 5,815 |   |  | $ | 18,107 |   
|Q2 04  Pretax income             |  |                        | (529   | )                           |  |              | 20,419 |       |  |           |      |       |  |   |      |    |  |   |      |   |  |   | 20,419 |   
|Annualized Percent Change         |  |                        | (600   | )%                          |  |              | (159   | )%    |  |           |      |       |  |   |      |    |  |   |      |   |  |   | (45    | )%
|Q3 03  Pretax income             |  |                        | 1,799  |                             |  |              | 9,525  |       |  |           |      |       |  |   |      |    |  |   |      |   |  |   | 9,525  |   
|Percent Change                    |  |                        | (173   | )%                          |  |              | 29     | %     |  |           |      |       |  |   |      |    |  |   |      |   |  |   | 90     | % 
|Investing Activities              |  |                        |        |                             |  |              |        |       |  |           |       |       |  |   |       |    |  |   |       |   |  |   |        |   
|Q3 04  Pretax income (loss)      |  |                        |       |                             |  |              | 4,523  |       |  |           | 4,551 |       |  |   |      |    |  |   |      |   |  |   | 9,074  |   
|Q2 04  Pretax income             |  |                        |       |                             |  |              | 3,187  |       |  |           | 5,230 |       |  |   |      |    |  |   |      |   |  |   | 8,417  |   
|Annualized Percent Change         |  |                        |       |                             |  |              | 168    | %     |  |           | (52   | )%    |  |   |      |    |  |   |      |   |  |   | 31     | % 
|Q3 03  Pretax income             |  |                        |       |                             |  |              | 2,650  |       |  |           | 5,307 |       |  |   |      |    |  |   |      |   |  |   | 7,957  |   
|Percent Change                    |  |                        |       |                             |  |              | 71     | %     |  |           | (14   | )%    |  |   |      |    |  |   |      |   |  |   | 14     | % 
|HELOC Activities                  |  |                        |        |                             |  |              |        |       |  |           |       |       |  |   |       |    |  |   |       |   |  |   |        |   
|Q3 04  Pretax income (loss)      |  |                        | 317    |                             |  |              | 37     |       |  |           |      |       |  |   | 164   |    |  |   |      |   |  |   | 201    |   
|Q2 04  Pretax income             |  |                        | 174    |                             |  |              | 37     |       |  |           |      |       |  |   | 316   |    |  |   |      |   |  |   | 353    |   
|Annualized Percent Change         |  |                        | 329    | %                           |  |              |       |       |  |           |      |       |  |   | (192  | )% |  |   |      |   |  |   | (172   | )%
|Q3 03  Pretax income             |  |                        | 15     |                             |  |              | (3     | )     |  |           |      |       |  |   | (369  | )  |  |   |      |   |  |   | (372   | ) 
|Percent Change                    |  |                        | 2,013  | %                           |  |              | 1,333  | %     |  |           |      |       |  |   | 144   | %  |  |   |      |   |  |   | 154    | % 
|Financing and Other Activities    |  |                        |        |                             |  |              |        |       |  |           |       |       |  |   |       |    |  |   |       |   |  |   |        |   
|Q3 04  Pretax income             |  |                        | 5,384  |                             |  |              |       |       |  |           |      |       |  |   |      |    |  |   |      |   |  |   |       |   
|Q2 04  Pretax income             |  |                        | 3,182  |                             |  |              |       |       |  |           |      |       |  |   |      |    |  |   |      |   |  |   |       |   
|Q3 03  Pretax loss               |  |                        | (2,048 | )                           |  |              |       |       |  |           |      |       |  |   |      |    |  |   |      |   |  |   |       |   
|Net Income                        |  |                        |        |                             |  |              |        |       |  |           |       |       |  |   |       |    |  |   |       |   |  |   |        |   
|Q3 04  Net income                |  |                        | 2,649  |                             |  |              | 10,195 |       |  |           | 2,754 |       |  |   | 99    |    |  |   | 3,518 |   |  |   | 16,566 |   
|Q2 04  Net income                |  |                        | 1,710  |                             |  |              | 14,304 |       |  |           | 3,164 |       |  |   | 191   |    |  |   |      |   |  |   | 17,659 |   
|Annualized Percent Change         |  |                        | 220    | %                           |  |              | (115   | )%    |  |           | (52   | )%    |  |   | (193  | )% |  |   |      |   |  |   | (25    | )%
|Q3 03  Net income (loss)         |  |                        | (142   | )                           |  |              | 7,364  |       |  |           | 3,211 |       |  |   | (223  | )  |  |   |      |   |  |   | 10,352 |   
|Percent Change                    |  |                        | 1,965  | %                           |  |              | 38     | %     |  |           | (14   | )%    |  |   | 144   | %  |  |   |      |   |  |   | 60     | % 
|Performance Ratios                |  |                        |        |                             |  |              |        |       |  |           |       |       |  |   |       |    |  |   |       |   |  |   |        |   
|Q3 04                             |  |                        |        |                             |  |              |        |       |  |           |       |       |  |   |       |    |  |   |       |   |  |   |        |   
|ROE                               |  |                        | 131    | %                           |  |              | 44     | %     |  |           | 16    | %     |  |   | 3     | %  |  |   | 33    | % |  |   | 30     | % 
|ROA                               |  |                        | N/M    |                             |  |              | 2.35   | %     |  |           | 1.71  | %     |  |   | 0.22  | %  |  |   | 8.81  | % |  |   | 2.44   | % 
|NIM                               |  |                        | N/M    |                             |  |              | 3.65   | %     |  |           | 4.27  | %     |  |   | 0.59  | %  |  |   | 1.46  | % |  |   | 3.54   | % 
|Efficiency ratio                  |  |                        | 63     | %                           |  |              | 36     | %     |  |           | 31    | %     |  |   | 133   | %  |  |   | 54    | % |  |   | 42     | % 
|Capital adjusted efficiency ratio |  |                        | 11     | %                           |  |              | 31     | %     |  |           | 76    | %     |  |   | 419   | %  |  |   | 46    | % |  |   | 48     | % 
|Average FTE                       |  |                        | 278    |                             |  |              | 303    |       |  |           | 69    |       |  |   | 20    |    |  |   | 412   |   |  |   | 804    |   
|Q2 04                             |  |                        |        |                             |  |              |        |       |  |           |       |       |  |   |       |    |  |   |       |   |  |   |        |   
|ROE                               |  |                        | 88     | %                           |  |              | 61     | %     |  |           | 18    | %     |  |   | 8     | %  |  |   |      |   |  |   | 41     | % 
|ROA                               |  |                        | N/M    |                             |  |              | 3.43   | %     |  |           | 1.99  | %     |  |   | 0.52  | %  |  |   |      |   |  |   | 2.88   | % 
|NIM                               |  |                        | N/M    |                             |  |              | 3.81   | %     |  |           | 4.62  | %     |  |   | 3.02  | %  |  |   |      |   |  |   | 3.98   | % 
|Efficiency ratio                  |  |                        | 73     | %                           |  |              | 28     | %     |  |           | 26    | %     |  |   | 81    | %  |  |   |      |   |  |   | 29     | % 
|Capital adjusted efficiency ratio |  |                        | 14     | %                           |  |              | 19     | %     |  |           | 61    | %     |  |   | 121   | %  |  |   |      |   |  |   | 29     | % 
|Average FTE                       |  |                        | 270    |                             |  |              | 285    |       |  |           | 65    |       |  |   | 16    |    |  |   |      |   |  |   | 366    |   
|Q3 03                             |  |                        |        |                             |  |              |        |       |  |           |       |       |  |   |       |    |  |   |       |   |  |   |        |   
|ROE                               |  |                        | (9     | )%                          |  |              | 41     | %     |  |           | 20    | %     |  |   | (17   | )% |  |   | N/A   |   |  |   | 30     | % 
|ROA                               |  |                        | N/M    |                             |  |              | 2.22   | %     |  |           | 2.13  | %     |  |   | (1.60 | )% |  |   | N/A   |   |  |   | 2.09   | % 
|NIM                               |  |                        | N/M    |                             |  |              | 4.21   | %     |  |           | 4.79  | %     |  |   | 2.92  | %  |  |   | N/A   |   |  |   | 4.35   | % 
|Efficiency ratio                  |  |                        | 103    | %                           |  |              | 41     | %     |  |           | 24    | %     |  |   | 158   | %  |  |   | N/A   |   |  |   | 39     | % 
|Capital adjusted efficiency ratio |  |                        | 23     | %                           |  |              | 34     | %     |  |           | 50    | %     |  |   | 445   | %  |  |   | N/A   |   |  |   | 46     | % 
|Average FTE                       |  |                        | 235    |                             |  |              | 228    |       |  |           | 62    |       |  |   | 12    |    |  |   | N/A   |   |  |   | 302    |   

IndyMac Consumer Banks net income increased
$0.9 million from the second quarter of 2004, and increased
from the $0.1 million loss in the third quarter of 2003 to
$2.6 million in the third quarter of 2004. The growth in
net income during 2004 was generated by an increase in their
allocated net interest income through the FTP credit from the
Treasury Group.

The Specialty Product Divisions generated net
income of $16.6 million during the third quarter of 2004
compared to $17.7 million in the second quarter of 2004,
and $10.4 million in the third quarter of 2003. The
decrease in net income compared to the second quarter of 2004
was primarily due to gain on sale of loans

19



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##### Table of Contents



revenue earned during the second quarter for the
securitization of lot loans, which was not repeated in the third
quarter. This decrease was offset in large part by the
$3.5 million earned by Financial Freedom in the third
quarter. The increase in net income year over year was driven by
the income earned in 2004 by the acquisition of Financial
Freedom, as well as higher gain on sale of loans.


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

|                                  |  |                        |         |          |  |     |        |              |  |       |       |    |  |   |        |    |  |   |         |   
|--------------------------------- |  | ---------------------- | ------- | -------- |  | --- | ------ | ------------ |  | ----- | ----- | -- |  | - | ------ | -- |  | - | ------- | --
|                                  |  |                       
|                                  |  | Investing Divisions   
|                                  |  |                       
|                                  |  | Loan                   |         |         
|                                  |  | Servicing &            |         | SFR      |  |    
|                                  |  | Retained               |         | Mortgage |  |     |        | Discontinued |  |      
|                                  |  | Assets                 |         | Loans    |  | MBS |        | Products     |  | Total
|                                  |  |                        |         |          |  |     |        |              |  |      
|                                  |  |                       
|                                  |  | (Dollars in thousands)
|Mortgage Banking Activities       |  |                        |         |          |  |     |        |              |  |       |       |    |  |   |        |    |  |   |         |   
|Q3 04  Pretax income             |  | $                      | 8,942   |          |  | $   | 3,161  |              |  | $     |      |    |  | $ |       |    |  | $ | 12,103  |   
|Q2 04  Pretax income             |  |                        | 16,044  |          |  |     | 11,463 |              |  |       |      |    |  |   |       |    |  |   | 27,507  |   
|Annualized Percent Change         |  |                        | (177    | )%       |  |     | (290   | )%           |  |       |      |    |  |   |       |    |  |   | (224    | )%
|Q3 03  Pretax income             |  |                        | 24,788  |          |  |     |       |              |  |       |      |    |  |   |       |    |  |   | 24,788  |   
|Percent Change                    |  |                        | (64     | )%       |  |     |       |              |  |       |      |    |  |   |       |    |  |   | (51     | )%
|Investing Activities              |  |                        |         |          |  |     |        |              |  |       |       |    |  |   |        |    |  |   |         |   
|Q3 04  Pretax income             |  |                        | (8,910  | )        |  |     | 16,897 |              |  |       | 7,350 |    |  |   | (222   | )  |  |   | 15,115  |   
|Q2 04  Pretax income             |  |                        | (37,191 | )        |  |     | 15,487 |              |  |       | 8,809 |    |  |   | (1,142 | )  |  |   | (14,037 | ) 
|Annualized Percent Change         |  |                        | 304     | %        |  |     | 36     | %            |  |       | (66   | )% |  |   | 322    | %  |  |   | 831     | % 
|Q3 03  Pretax income             |  |                        | (23,150 | )        |  |     | 2,334  |              |  |       | 1,033 |    |  |   | (1,589 | )  |  |   | (21,372 | ) 
|Percent Change                    |  |                        | 62      | %        |  |     | 624    | %            |  |       | 612   | %  |  |   | 86     | %  |  |   | 171     | % 
|HELOC Activities                  |  |                        |         |          |  |     |        |              |  |       |       |    |  |   |        |    |  |   |         |   
|Q3 04  Pretax income             |  |                        | (54     | )        |  |     |       |              |  |       |      |    |  |   |       |    |  |   | (54     | ) 
|Q2 04  Pretax income             |  |                        |        |          |  |     |       |              |  |       |      |    |  |   |       |    |  |   |        |   
|Annualized Percent Change         |  |                        |        |          |  |     |       |              |  |       |      |    |  |   |       |    |  |   |        |   
|Q3 03  Pretax income             |  |                        |        |          |  |     |       |              |  |       |      |    |  |   |       |    |  |   |        |   
|Percent Change                    |  |                        |        |          |  |     |       |              |  |       |      |    |  |   |       |    |  |   |        |   
|Financing and Other Activities    |  |                        |         |          |  |     |        |              |  |       |       |    |  |   |        |    |  |   |         |   
|Q3 04  Pretax income             |  |                        |        |          |  |     |       |              |  |       |      |    |  |   |       |    |  |   |        |   
|Q2 04  Pretax income             |  |                        |        |          |  |     |       |              |  |       |      |    |  |   |       |    |  |   |        |   
|Q3 03  Pretax income             |  |                        |        |          |  |     |       |              |  |       |      |    |  |   |       |    |  |   |        |   
|Net Income                        |  |                        |         |          |  |     |        |              |  |       |       |    |  |   |        |    |  |   |         |   
|Q3 04  Net (loss) income         |  |                        | (13     | )        |  |     | 12,136 |              |  |       | 4,446 |    |  |   | (135   | )  |  |   | 16,434  |   
|Q2 04  Net income (loss)         |  |                        | (12,794 | )        |  |     | 16,305 |              |  |       | 5,329 |    |  |   | (691   | )  |  |   | 8,149   |   
|Annualized Percent Change         |  |                        | 400     | %        |  |     | (102   | )%           |  |       | (66   | )% |  |   | 322    | %  |  |   | 407     | % 
|Q3 03  Net income (loss)         |  |                        | 991     |          |  |     | 1,412  |              |  |       | 625   |    |  |   | (961   | )  |  |   | 2,067   |   
|Percent Change                    |  |                        | (101    | )%       |  |     | 759    | %            |  |       | 611   | %  |  |   | 86     | %  |  |   | 695     | % 
|Performance Ratios                |  |                        |         |          |  |     |        |              |  |       |       |    |  |   |        |    |  |   |         |   
|Q3 04                             |  |                        |         |          |  |     |        |              |  |       |       |    |  |   |        |    |  |   |         |   
|ROE                               |  |                        | 0       | %        |  |     | 21     | %            |  |       | 41    | %  |  |   | (10    | )% |  |   | 13      | % 
|ROA                               |  |                        | 0       | %        |  |     | 1.02   | %            |  |       | 0.88  | %  |  |   | (1.03  | )% |  |   | 0.78    | % 
|NIM                               |  |                        | 5.55    | %        |  |     | 1.45   | %            |  |       | 1.45  | %  |  |   | 7.04   | %  |  |   | 1.98    | % 
|Efficiency ratio                  |  |                        | 100     | %        |  |     | 4      | %            |  |       | 2     | %  |  |   | 45     | %  |  |   | 30      | % 
|Capital adjusted efficiency ratio |  |                        | 531     | %        |  |     | 10     | %            |  |       | 2     | %  |  |   | 56     | %  |  |   | 94      | % 
|Average FTE                       |  |                        | 461     |          |  |     | 11     |              |  |       | 4     |    |  |   | 14     |    |  |   | 490     |   
|Q2 04                             |  |                        |         |          |  |     |        |              |  |       |       |    |  |   |        |    |  |   |         |   
|ROE                               |  |                        | (25     | )%       |  |     | 28     | %            |  |       | 50    | %  |  |   | (50    | )% |  |   | 7       | % 
|ROA                               |  |                        | (3.18   | )%       |  |     | 1.36   | %            |  |       | 1.07  | %  |  |   | (4.93  | )% |  |   | 0.39    | % 
|NIM                               |  |                        | 6.69    | %        |  |     | 1.29   | %            |  |       | 1.78  | %  |  |   | 6.99   | %  |  |   | 2.16    | % 
|Efficiency ratio                  |  |                        | (114    | )%       |  |     | 2      | %            |  |       | 3     | %  |  |   | 68     | %  |  |   | 46      | % 
|Capital adjusted efficiency ratio |  |                        | 594     | %        |  |     | 5      | %            |  |       | 4     | %  |  |   | 85     | %  |  |   | 199     | % 
|Average FTE                       |  |                        | 407     |          |  |     | 9      |              |  |       | 4     |    |  |   | 25     |    |  |   | 445     |   
|Q3 03                             |  |                        |         |          |  |     |        |              |  |       |       |    |  |   |        |    |  |   |         |   
|ROE                               |  |                        | 2       | %        |  |     | 5      | %            |  |       | 7     | %  |  |   | (54    | )% |  |   | 2       | % 
|ROA                               |  |                        | 0.21    | %        |  |     | 0.22   | %            |  |       | 0.20  | %  |  |   | (5.26  | )% |  |   | 0.14    | % 
|NIM                               |  |                        | 6.09    | %        |  |     | 0.61   | %            |  |       | 0.42  | %  |  |   | 6.64   | %  |  |   | 2.06    | % 
|Efficiency ratio                  |  |                        | 86      | %        |  |     | 14     | %            |  |       | 11    | %  |  |   | 62     | %  |  |   | 62      | % 
|Capital adjusted efficiency ratio |  |                        | 365     | %        |  |     | 85     | %            |  |       | 86    | %  |  |   | 81     | %  |  |   | 294     | % 
|Average FTE                       |  |                        | 387     |          |  |     | 6      |              |  |       | 7     |    |  |   | 33     |    |  |   | 433     |   

20



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##### Table of Contents



The Investing Divisions segments net income
increased by 102%, or $8.3 million compared to the second
quarter of 2004, and increased $14.4 million compared to
the third quarter of 2003. Revenues generated by mortgage
banking activities decreased compared to both periods due to a
lower amount of called loans sold during the third quarter of
2004. These decreases were more than offset by the improved
performance of the servicing portfolio during the third quarter
of 2004 over the prior periods.

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

|                                  |  |                        |         |              |  |           |         |              |  |           |         |             |  |         |         |   |  |   |         |    |  |   |         |   |  |   |         |   
|--------------------------------- |  | ---------------------- | ------- | ------------ |  | --------- | ------- | ------------ |  | --------- | ------- | ----------- |  | ------- | ------- | - |  | - | ------- | -- |  | - | ------- | - |  | - | ------- | --
|                                  |  |                        |         | Total        |  |           |         |              |  |           |         |             |  |        
|                                  |  |                        |         | Company      |  |           |         |              |  |           |         |             |  |        
|                                  |  |                        |         | before Corp. |  |           |         |              |  | Total     |         |             |  | Total  
|                                  |  | Treasury               |         | Overhead and |  | Corporate |         |              |  | Company   |         |             |  | Company
|                                  |  | Group                  |         | Eliminations |  | Overhead  |         | Eliminations |  | Pro Forma |         | Adjustments |  | GAAP   
|                                  |  |                        |         |              |  |           |         |              |  |           |         |             |  |        
|                                  |  |                       
|                                  |  | (Dollars in thousands)
|Mortgage Banking Activities       |  |                        |         |              |  |           |         |              |  |           |         |             |  |         |         |   |  |   |         |    |  |   |         |   |  |   |         |   
|Q3 04  Pretax income (loss)      |  | $                      |        |              |  | $         | 79,223  |              |  | $         |        |             |  | $       | 5,237   |   |  | $ | 84,460  |    |  | $ | (11,104 | ) |  | $ | 73,356  |   
|Q2 04  Pretax income (loss)      |  |                        |        |              |  |           | 124,155 |              |  |           |        |             |  |         | (9,102  | ) |  |   | 115,053 |    |  |   | (52,223 | ) |  |   | 62,830  |   
|Annualized Percent Change         |  |                        |        |              |  |           | (145    | )%           |  |           |        |             |  |         | 630     | % |  |   | (106    | )% |  |   | 315     | % |  |   | 67      | % 
|Q3 03  Pretax income (loss)      |  |                        |        |              |  |           | 149,670 |              |  |           |        |             |  |         | (24,498 | ) |  |   | 125,172 |    |  |   |        |   |  |   | 125,172 |   
|Percent Change                    |  |                        |        |              |  |           | (47     | )%           |  |           |        |             |  |         | 121     | % |  |   | (33     | )% |  |   |        |   |  |   | (41     | )%
|Investing Activities              |  |                        |         |              |  |           |         |              |  |           |         |             |  |         |         |   |  |   |         |    |  |   |         |   |  |   |         |   
|Q3 04  Pretax (loss) income      |  |                        |        |              |  |           | 24,189  |              |  |           | 727     |             |  |         | 10,260  |   |  |   | 35,176  |    |  |   |        |   |  |   | 35,176  |   
|Q2 04  Pretax income             |  |                        |        |              |  |           | (5,620  | )            |  |           | 847     |             |  |         | 7,177   |   |  |   | 2,404   |    |  |   |        |   |  |   | 2,404   |   
|Annualized Percent Change         |  |                        |        |              |  |           | 2,122   | %            |  |           | (57     | )%          |  |         | 172     | % |  |   | 5,453   | %  |  |   |        |   |  |   | 5,453   | % 
|Q3 03  Pretax (loss) income      |  |                        |        |              |  |           | (13,415 | )            |  |           | 5       |             |  |         | 6,185   |   |  |   | (7,225  | )  |  |   |        |   |  |   | (7,225  | ) 
|Percent Change                    |  |                        |        |              |  |           | 280     | %            |  |           | 14,440  | %           |  |         | 66      | % |  |   | 587     | %  |  |   |        |   |  |   | 587     | % 
|HELOC Activities                  |  |                        |         |              |  |           |         |              |  |           |         |             |  |         |         |   |  |   |         |    |  |   |         |   |  |   |         |   
|Q3 04  Pretax income             |  |                        |        |              |  |           | 7,195   |              |  |           |        |             |  |         |        |   |  |   | 7,195   |    |  |   |        |   |  |   | 7,195   |   
|Q2 04  Pretax income             |  |                        |        |              |  |           | 5,633   |              |  |           |        |             |  |         |        |   |  |   | 5,633   |    |  |   |        |   |  |   | 5,633   |   
|Annualized Percent Change         |  |                        |        |              |  |           | 111     | %            |  |           |        |             |  |         |        |   |  |   | 111     | %  |  |   |        |   |  |   | 111     | % 
|Q3 03  Pretax income             |  |                        |        |              |  |           | 937     |              |  |           |        |             |  |         |        |   |  |   | 937     |    |  |   |        |   |  |   | 937     |   
|Percent Change                    |  |                        |        |              |  |           | 668     | %            |  |           |        |             |  |         |        |   |  |   | 668     | %  |  |   |        |   |  |   | 668     | % 
|Financing and Other Activities    |  |                        |         |              |  |           |         |              |  |           |         |             |  |         |         |   |  |   |         |    |  |   |         |   |  |   |         |   
|Q3 04  Pretax loss               |  |                        | (10,187 | )            |  |           | (4,803  | )            |  |           | (28,737 | )           |  |         |        |   |  |   | (33,540 | )  |  |   |        |   |  |   | (33,540 | ) 
|Q2 04  Pretax (loss) income      |  |                        | (11,881 | )            |  |           | (8,699  | )            |  |           | (24,226 | )           |  |         |        |   |  |   | (32,925 | )  |  |   |        |   |  |   | (32,925 | ) 
|Q3 03  Pretax (loss) income      |  |                        | (10,638 | )            |  |           | (12,686 | )            |  |           | (24,045 | )           |  |         | 3       |   |  |   | (36,728 | )  |  |   |        |   |  |   | (36,728 | ) 
|Net Income                        |  |                        |         |              |  |           |         |              |  |           |         |             |  |         |         |   |  |   |         |    |  |   |         |   |  |   |         |   
|Q3 04  Net (loss) income         |  |                        | (6,164  | )            |  |           | 64,011  |              |  |           | (16,946 | )           |  |         | 9,376   |   |  |   | 56,441  |    |  |   | (6,715  | ) |  |   | 49,726  |   
|Q2 04  Net (loss) income         |  |                        | (7,188  | )            |  |           | 69,859  |              |  |           | (14,144 | )           |  |         | (1,165  | ) |  |   | 54,550  |    |  |   | (31,595 | ) |  |   | 22,955  |   
|Annualized Percent Change         |  |                        | 57      | %            |  |           | (33     | )%           |  |           | (79     | )%          |  |         | 3,619   | % |  |   | 14      | %  |  |   | 315     | % |  |   | 466     | % 
|Q3 03  Net (loss) income         |  |                        | (6,436  | )            |  |           | 75,326  |              |  |           | (14,544 | )           |  |         | (11,078 | ) |  |   | 49,704  |    |  |   |        |   |  |   | 49,704  |   
|Percent Change                    |  |                        | 4       | %            |  |           | (15     | )%           |  |           | (17     | )%          |  |         | 185     | % |  |   | 14      | %  |  |   |        |   |  |   | 0       | % 
|Performance Ratios                |  |                        |         |              |  |           |         |              |  |           |         |             |  |         |         |   |  |   |         |    |  |   |         |   |  |   |         |   
|Q3 04                             |  |                        |         |              |  |           |         |              |  |           |         |             |  |         |         |   |  |   |         |    |  |   |         |   |  |   |         |   
|ROE                               |  |                        |        |              |  |           | 23      | %            |  |           |        |             |  |         |        |   |  |   | 19      | %  |  |   |         |   |  |   | 16      | % 
|ROA                               |  |                        |        |              |  |           | 1.49    | %            |  |           |        |             |  |         |        |   |  |   | 1.30    | %  |  |   |         |   |  |   | 1.14    | % 
|NIM                               |  |                        |        |              |  |           | 2.53    | %            |  |           |        |             |  |         |        |   |  |   | 2.52    | %  |  |   |         |   |  |   | 2.52    | % 
|Efficiency ratio                  |  |                        |        |              |  |           | 50      | %            |  |           |        |             |  |         |        |   |  |   | 59      | %  |  |   |         |   |  |   | 62      | % 
|Capital adjusted efficiency ratio |  |                        |        |              |  |           | 64      | %            |  |           |        |             |  |         |        |   |  |   | 78      | %  |  |   |         |   |  |   | 86      | % 
|Average FTE                       |  |                        | 28      |              |  |           | 4,186   |              |  |           | 724     |             |  |         |        |   |  |   | 4,910   |    |  |   |         |   |  |   | 4,910   |   
|Q2 04                             |  |                        |         |              |  |           |         |              |  |           |         |             |  |         |         |   |  |   |         |    |  |   |         |   |  |   |         |   
|ROE                               |  |                        |        |              |  |           | 28      | %            |  |           |        |             |  |         |        |   |  |   | 19      | %  |  |   |        |   |  |   | 8       | % 
|ROA                               |  |                        |        |              |  |           | 1.68    | %            |  |           |        |             |  |         |        |   |  |   | 1.29    | %  |  |   |        |   |  |   | 0.54    | % 
|NIM                               |  |                        |        |              |  |           | 2.71    | %            |  |           |        |             |  |         |        |   |  |   | 2.75    | %  |  |   |        |   |  |   | 2.75    | % 
|Efficiency ratio                  |  |                        |        |              |  |           | 45      | %            |  |           |        |             |  |         |        |   |  |   | 56      | %  |  |   |        |   |  |   | 75      | % 
|Capital adjusted efficiency ratio |  |                        |        |              |  |           | 53      | %            |  |           |        |             |  |         |        |   |  |   | 74      | %  |  |   |        |   |  |   | 129     | % 
|Average FTE                       |  |                        | 24      |              |  |           | 3,451   |              |  |           | 610     |             |  |         |        |   |  |   | 4,061   |    |  |   |        |   |  |   | 4,061   |   

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|                                  |  |                        |    |              |  |           |       |              |  |           |     |             |  |         |   |  |  |  |       |   |  |  |   |  |  |  |       |  
|--------------------------------- |  | ---------------------- | -- | ------------ |  | --------- | ----- | ------------ |  | --------- | --- | ----------- |  | ------- | - |  |  |  | ----- | - |  |  | - |  |  |  | ----- | -
|                                  |  |                        |    | Total        |  |           |       |              |  |           |     |             |  |        
|                                  |  |                        |    | Company      |  |           |       |              |  |           |     |             |  |        
|                                  |  |                        |    | before Corp. |  |           |       |              |  | Total     |     |             |  | Total  
|                                  |  | Treasury               |    | Overhead and |  | Corporate |       |              |  | Company   |     |             |  | Company
|                                  |  | Group                  |    | Eliminations |  | Overhead  |       | Eliminations |  | Pro Forma |     | Adjustments |  | GAAP   
|                                  |  |                        |    |              |  |           |       |              |  |           |     |             |  |        
|                                  |  |                       
|                                  |  | (Dollars in thousands)
|Q3 03 ROE                         |  |                        |   |              |  |           | 40    | %            |  |           |    |             |  |         |  |  |  |  | 20    | % |  |  |  |  |  |  | 20    | %
|ROA                               |  |                        |   |              |  |           | 2.49  | %            |  |           |    |             |  |         |  |  |  |  | 1.63  | % |  |  |  |  |  |  | 1.63  | %
|NIM                               |  |                        |   |              |  |           | 2.94  | %            |  |           |    |             |  |         |  |  |  |  | 2.97  | % |  |  |  |  |  |  | 2.97  | %
|Efficiency ratio                  |  |                        |   |              |  |           | 42    | %            |  |           |    |             |  |         |  |  |  |  | 57    | % |  |  |  |  |  |  | 57    | %
|Capital adjusted efficiency ratio |  |                        |   |              |  |           | 35    | %            |  |           |    |             |  |         |  |  |  |  | 67    | % |  |  |  |  |  |  | 67    | %
|Average FTE                       |  |                        | 23 |              |  |           | 3,228 |              |  |           | 498 |             |  |         |  |  |  |  | 3,726 |   |  |  |  |  |  |  | 3,726 |  

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##### Table of Contents






MORTGAGE BANKING ACTIVITIES




Loan Production

During the third quarter of 2004, the
Companys loan production reached a record level at
$10.6 billion, a 9% increase over the $9.7 billion of
loans produced during the second quarter of 2004 and a 22%
increase over the $8.7 billion of loans produced in the
third quarter of 2003. The third quarter of 2004 production
includes $379 million in reverse mortgages originated by
Financial Freedom, which we acquired on July 16, 2004. The
vast majority of these reverse mortgages are insured by the FHA
and are sold to FNMA within 30 days of origination.

Our focus on less cyclical products, such as
Alt-A, subprime, HELOCs, reverse mortgages and consumer
construction loans, resulted in continued growth in each of
these products in the third quarter of 2004 compared to the
second quarter of 2004 and third quarter of 2003. This increase
more than offset the decrease in our agency conforming and jumbo
products which are more cyclical in nature, closely tracking
changes in the overall mortgage market. Additionally, we
continued to further penetrate the purchase market, increasing
our purchase transactions 57% year over year and successfully
adapting our production mix to the demand for adjustable rate
mortgages (ARMs) with 74% of our mortgage production now
consisting of ARMs compared with only 38% a year ago and 61% for
the second quarter of 2004.

Total production by loan type was as follows:

|                                        |                   |                              |       |               |        |         |       |          |       |         |     |     |    |   |       |       |       |  |     |     |    |  
|--------------------------------------- | ----------------- | ---------------------------- | ----- | ------------- | ------ | ------- | ----- | -------- | ----- | ------- | --- | --- | -- | - | ----- | ----- | ----- |  | --- | --- | -- | -
|                                        |                   |                             
|                                        |                   | Three Months Ended          
|                                        |                   |                             
|                                        |                   | September 30,                |       | September 30, |        | Percent |       | June 30, |       | Percent
|                                        |                   | 2004                         |       | 2003          |        | Change  |       | 2004     |       | Change 
|                                        |                   |                              |       |               |        |         |       |          |       |        
|                                        |                   |                             
|                                        |                   | (Dollars in millions)       
|Volume by product:                      |                   |                              |       |               |        |         |       |          |       |         |     |     |    |   |       |       |       |  |     |    
|Prime(1)                                |                   |                              |       |               |        |         |       |          |       |         |     |     |    |   |       |       |       |  |     |    
|                                        | Alt-A             |                              | $     | 6,880         |        |         | $     | 4,505    |       |         |     | 53  | %  |   | $     | 6,447 |       |  |     | 7   | % 
|                                        | Agency conforming |                              |       | 274           |        |         |       | 1,503    |       |         |     | (82 | )% |   |       | 511   |       |  |     | (46 | )%
|                                        | Jumbo             |                              |       | 371           |        |         |       | 1,154    |       |         |     | (68 | )% |   |       | 730   |       |  |     | (49 | )%
|                                        | Reverse mortgages |                              |       | 379           |        |         |       |         |       |         |     | N/A |    |   |       |      |       |  |     | N/A |   
|Subprime(1)                             |                   |                              | 934   |               |        |         | 520   |          |       |         | 80  | %   |    |   | 567   |       |       |  | 65  | %  
|Home equity line of credit(2)           |                   |                              | 755   |               |        |         | 264   |          |       |         | 186 | %   |    |   | 408   |       |       |  | 85  | %  
|Consumer construction(2)                |                   |                              | 748   |               |        |         | 586   |          |       |         | 28  | %   |    |   | 760   |       |       |  | (2  | )% 
|                                        |                   |                              |       |               |        |         |       |          |       |         |     |     |    |   |       |       |       |  |     |    
|                                        |                   | Subtotal mortgage production |       |               | 10,341 |         |       |          | 8,532 |         |     |     | 21 | % |       |       | 9,423 |  |     |     | 10 | %
|Subdivision construction commitments(2) |                   |                              | 266   |               |        |         | 149   |          |       |         | 79  | %   |    |   | 304   |       |       |  | (13 | )% 
|                                        |                   |                              |       |               |        |         |       |          |       |         |     |     |    |   |       |       |       |  |     |    
|                                        |                   | Total production             |       | $             | 10,607 |         |       | $        | 8,681 |         |     |     | 22 | % |       | $     | 9,727 |  |     |     | 9  | %
|                                        |                   |                              |       |               |        |         |       |          |       |         |     |     |    |   |       |       |       |  |     |    
|Mortgage  Web-based
    production     |                   | $                            | 6,584 |               |        | $       | 5,983 |          |       |         | 10  | %   |    | $ | 5,973 |       |       |  | 10  | %  
|Mortgage pipeline at period end(3)      |                   | $                            | 6,433 |               |        | $       | 4,688 |          |       |         | 37  | %   |    | $ | 5,179 |       |       |  | 24  | %  



---



|    |                                                                                                                                         
|--- | ----------------------------------------------------------------------------------------------------------------------------------------
|(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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##### Table of Contents



The tables below provide the production by
delivery method and interest rate amortization type for the
quarters ended September 30, 2004 and 2003, and
June 30, 2004:

|                               |                                  |                           |   |               |        |         |   |          |       |         |  |     |    |   |   |       |       |  |  |     |    |  
|------------------------------ | -------------------------------- | ------------------------- | - | ------------- | ------ | ------- | - | -------- | ----- | ------- |  | --- | -- | - | - | ----- | ----- |  |  | --- | -- | -
|                               |                                  |                          
|                               |                                  | Three Months Ended       
|                               |                                  |                          
|                               |                                  | September 30,             |   | September 30, |        | Percent |   | June 30, |       | Percent
|                               |                                  | 2004                      |   | 2003          |        | Change  |   | 2004     |       | Change 
|                               |                                  |                           |   |               |        |         |   |          |       |        
|                               |                                  |                          
|                               |                                  | (Dollars in millions)    
|Production by delivery method: |                                  |                           |   |               |        |         |   |          |       |         |  |     |    |   |   |       |       |  |  |    
|                               | Wholesale(1)                     |                           | $ | 4,922         |        |         | $ | 4,990    |       |         |  | (1  | )% |   | $ | 4,717 |       |  |  | 4   | % 
|                               | Correspondent(2)                 |                           |   | 4,066         |        |         |   | 1,713    |       |         |  | 137 | %  |   |   | 3,020 |       |  |  | 35  | % 
|                               | Retail(3)                        |                           |   | 1,353         |        |         |   | 1,829    |       |         |  | (26 | )% |   |   | 1,686 |       |  |  | (20 | )%
|                               |                                  |                           |   |               |        |         |   |          |       |         |  |     |    |   |   |       |       |  |  |    
|                               |                                  | Total mortgage production |   |               | 10,341 |         |   |          | 8,532 |         |  |     | 21 | % |   |       | 9,423 |  |  |     | 10 | %
|                               | Subdivision construction lending |                           | $ | 266           |        |         | $ | 149      |       |         |  | 79  | %  |   | $ | 304   |       |  |  | (13 | )%
|                               |                                  |                           |   |               |        |         |   |          |       |         |  |     |    |   |   |       |       |  |  |    
|                               |                                  | Total Production          |   | $             | 10,607 |         |   | $        | 8,681 |         |  |     | 22 | % |   | $     | 9,727 |  |  |     | 9  | %
|                               |                                  |                           |   |               |        |         |   |          |       |         |  |     |    |   |   |       |       |  |  |    



---



|    |                                                                                                                                                                                                            
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Loans obtained through relationships with
    mortgage brokers and funded by IndyMac.                                                                                                                      
|   
|(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 conduit group.
|   
|(3) | Direct to consumer channels.                                                                                                                                                                               

|                     |  |                    |    |               |  |          |    |   |  |  |    |  
|-------------------- |  | ------------------ | -- | ------------- |  | -------- | -- | - |  |  | -- | -
|                     |  |                   
|                     |  | Three Months Ended
|                     |  |                   
|                     |  | September 30,      |    | September 30, |  | June 30,
|                     |  | 2004               |    | 2003          |  | 2004    
|                     |  |                    |    |               |  |         
|Fixed Rate Mortgages |  |                    | 26 | %             |  |          | 62 | % |  |  | 39 | %
|Hybrid ARMs          |  |                    | 36 | %             |  |          | 29 | % |  |  | 36 | %
|ARMs                 |  |                    | 38 | %             |  |          | 9  | % |  |  | 25 | %

The following table details the mix of our
production and pipeline between purchase, cash-out refinance and
rate/term refinance transactions as of and for the quarters
ended September 30, 2004, September 30, 2003, and
June 30, 2004. As refinance volumes industry-wide have
declined, IndyMac has increased its penetration of the market
with respect to purchase transactions, mitigating the decline in
refinance related mortgage transactions.

|                                 |  |                                  |        |               |  |         |       |          |  |         |     |    |  |   |       |   |  |  |     |   
|-------------------------------- |  | -------------------------------- | ------ | ------------- |  | ------- | ----- | -------- |  | ------- | --- | -- |  | - | ----- | - |  |  | --- | --
|                                 |  |                                 
|                                 |  | As of and for the Quarters Ended
|                                 |  |                                 
|                                 |  | September 30,                    |        | September 30, |  | Percent |       | June 30, |  | Percent
|                                 |  | 2004                             |        | 2003          |  | Change  |       | 2004     |  | Change 
|                                 |  |                                  |        |               |  |         |       |          |  |        
|                                 |  |                                 
|                                 |  | (Dollars in millions)           
|Mortgage loan production:        |  |                                  |        |               |  |         |       |          |  |         |     |    |  |   |       |   |  |  |     |   
|Purchase transactions            |  | $                                | 4,568  |               |  | $       | 3,072 |          |  |         | 49  | %  |  | $ | 3,882 |   |  |  | 18  | % 
|Cash-out refinance transactions  |  |                                  | 4,366  |               |  |         | 2,986 |          |  |         | 46  | %  |  |   | 3,301 |   |  |  | 32  | % 
|Rate/term refinance transactions |  |                                  | 1,407  |               |  |         | 2,474 |          |  |         | (43 | )% |  |   | 2,240 |   |  |  | (37 | )%
|                                 |  |                                  |        |               |  |         |       |          |  |         |     |    |  |   |       |   |  |  |     |   
|Total mortgage loan production   |  | $                                | 10,341 |               |  | $       | 8,532 |          |  |         | 21  | %  |  | $ | 9,423 |   |  |  | 10  | % 
|                                 |  |                                  |        |               |  |         |       |          |  |         |     |    |  |   |       |   |  |  |     |   
|% purchase transactions          |  |                                  | 44     | %             |  |         | 36    | %        |  |         |     |    |  |   | 41    | % |  |  |     |   
|Mortgage pipeline:               |  |                                  |        |               |  |         |       |          |  |         |     |    |  |   |       |   |  |  |     |   
|Purchase transactions            |  | $                                | 2,808  |               |  | $       | 1,839 |          |  |         | 53  | %  |  | $ | 2,542 |   |  |  | 10  | % 
|Cash-out refinance transactions  |  |                                  | 2,446  |               |  |         | 1,698 |          |  |         | 44  | %  |  |   | 1,737 |   |  |  | 41  | % 
|Rate/term refinance transactions |  |                                  | 1,179  |               |  |         | 1,151 |          |  |         | 2   | %  |  |   | 900   |   |  |  | 31  | % 
|                                 |  |                                  |        |               |  |         |       |          |  |         |     |    |  |   |       |   |  |  |     |   
|Mortgage pipeline at period end  |  | $                                | 6,433  |               |  | $       | 4,688 |          |  |         | 37  | %  |  | $ | 5,179 |   |  |  | 24  | % 
|                                 |  |                                  |        |               |  |         |       |          |  |         |     |    |  |   |       |   |  |  |     |   
|% purchase transactions          |  |                                  | 44     | %             |  |         | 39    | %        |  |         |     |    |  |   | 49    | % |  |  |     |   

24



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##### Table of Contents



During the nine months ended September 30,
2004, the Company produced $27.5 billion of loans, a 17%
increase over the $23.5 billion of loans produced during
the nine months ended September 30, 2003. Total production
by loan type was as follows:

|                                        |                   |                              |        |               |        |         |        |        |        |  |     |     |    |  
|--------------------------------------- | ----------------- | ---------------------------- | ------ | ------------- | ------ | ------- | ------ | ------ | ------ |  | --- | --- | -- | -
|                                        |                   |                             
|                                        |                   | Nine Months Ended           
|                                        |                   |                             
|                                        |                   | September 30,                |        | September 30, |        | Percent
|                                        |                   | 2004                         |        | 2003          |        | Change 
|                                        |                   |                              |        |               |        |        
|                                        |                   |                             
|                                        |                   | (Dollars in millions)       
|Volume by product:                      |                   |                              |        |               |        |         |        |        |        |  |     |    
|Prime(1)                                |                   |                              |        |               |        |         |        |        |        |  |     |    
|                                        | Alt-A             |                              | $      | 17,912        |        |         | $      | 11,603 |        |  |     | 54  | % 
|                                        | Agency conforming |                              |        | 1,393         |        |         |        | 4,395  |        |  |     | (68 | )%
|                                        | Jumbo             |                              |        | 1,508         |        |         |        | 3,359  |        |  |     | (55 | )%
|                                        | Reverse mortgages |                              |        | 379           |        |         |        |       |        |  |     | N/A |   
|Subprime(1)                             |                   |                              | 1,959  |               |        |         | 1,369  |        |        |  | 43  | %  
|Home equity line of credit(2)           |                   |                              | 1,407  |               |        |         | 673    |        |        |  | 109 | %  
|Consumer construction(2)                |                   |                              | 2,111  |               |        |         | 1,544  |        |        |  | 37  | %  
|                                        |                   |                              |        |               |        |         |        |        |        |  |     |    
|                                        |                   | Subtotal mortgage production |        |               | 26,669 |         |        |        | 22,943 |  |     |     | 16 | %
|Subdivision construction commitments(2) |                   |                              | 812    |               |        |         | 516    |        |        |  | 57  | %  
|                                        |                   |                              |        |               |        |         |        |        |        |  |     |    
|                                        |                   | Total production volume      |        | $             | 27,481 |         |        | $      | 23,459 |  |     |     | 17 | %
|                                        |                   |                              |        |               |        |         |        |        |        |  |     |    
|Mortgage  Web-based
    production     |                   | $                            | 16,876 |               |        | $       | 16,897 |        |        |  | 0   | %  



---



|    |                 
|--- | ----------------
|(1) | Fundings.       
|   
|(2) | New commitments.




Mortgage Production by
Division

IndyMac generates its mortgage production through
multiple channels on a nationwide basis with a concentration in
those regions of the country in which IndyMac has regional
offices or in which there are higher home prices, including
California, Florida, New Jersey and New York. Our highest
concentration of mortgage loans relates to properties in
California. Mortgages secured by California properties accounted
for 46% of the mortgage loans we produced in the third quarter
of 2004 based on dollar value, and 40% based on number of loans.
We expect this level of concentration will trend down in the
future as we execute on our plan to double the number of
regional offices outside of California over the next five years.

IndyMac produces mortgages through its Mortgage
Banking Divisions, IndyMac Consumer Bank, Specialty Product
Divisions, and Investing Divisions.

25



---



##### Table of Contents



The following tables show total production by
divisions for the three months ended September 30, 2004 and
2003, and June 30, 2004.

|                            |                           |                                   |                  |               |       |         |     |          |       |         |     |     |    |    |     |       |       |       |     |     |    |   |  
|--------------------------- | ------------------------- | --------------------------------- | ---------------- | ------------- | ----- | ------- | --- | -------- | ----- | ------- | --- | --- | -- | -- | --- | ----- | ----- | ----- | --- | --- | -- | - | -
|                            |                           |                                  
|                            |                           | Three Months Ended               
|                            |                           |                                  
|                            |                           | September 30,                     |                  | September 30, |       | Percent |     | June 30, |       | Percent
|                            |                           | 2004                              |                  | 2003          |       | Change  |     | 2004     |       | Change 
|                            |                           |                                   |                  |               |       |         |     |          |       |        
|                            |                           |                                  
|                            |                           | (Dollars in millions)            
|PRODUCTION BY DIVISIONS:    |                           |                                   |                  |               |       |         |     |          |       |         |     |     |    |    |     |       |       |       |     |    
|Mortgage Banking Divisions  |                           |                                   |                  |               |       |         |     |          |       |         |     |     |    |    |     |       |       |       |     |    
|                            | IndyMac Conduit           |                                   | $                | 2,155         |       |         | $   | 625      |       |         |     | 245 | %  |    | $   | 1,792 |       |       |     | 20  | % 
|                            | Mortgage Professionals    |                                   |                  | 5,075         |       |         |     | 4,367    |       |         |     | 16  | %  |    |     | 4,588 |       |       |     | 11  | % 
|                            | Real Estate Professionals |                                   |                  | 442           |       |         |     | 479      |       |         |     | (8  | )% |    |     | 435   |       |       |     | 2   | % 
|                            | Web & Direct Mail         |                                   |                  | 641           |       |         |     | 1,622    |       |         |     | (60 | )% |    |     | 936   |       |       |     | (32 | )%
|                            |                           |                                   |                  |               |       |         |     |          |       |         |     |     |    |    |     |       |       |       |     |    
|                            |                           | Total Mortgage Banking Divisions  |                  | $             | 8,313 |         |     | $        | 7,093 |         |     |     | 17 | %  |     | $     | 7,751 |       |     |     | 7  | %
|IndyMac Consumer Bank       |                           | $                                 | 105              |               |       | $       | 152 |          |       |         | (31 | )%  |    |    | 140 |       |       |       | (25 | )% 
|Specialty Product Divisions |                           |                                   |                  |               |       |         |     |          |       |         |     |     |    |    |     |       |       |       |     |    
|                            | Consumer Construction     |                                   | $                | 1,057         |       |         | $   | 821      |       |         |     | 29  | %  |    | $   | 1,070 |       |       |     | (1  | )%
|                            | Subdivision Construction  |                                   |                  | 266           |       |         |     | 149      |       |         |     | 79  | %  |    |     | 304   |       |       |     | (13 | )%
|                            | HELOC                     |                                   |                  | 71            |       |         |     | 55       |       |         |     | 29  | %  |    |     | 44    |       |       |     | 61  | % 
|                            | Financial Freedom         |                                   |                  | 379           |       |         |     |         |       |         |     | N/A |    |    |     |      |       |       |     | N/A |   
|                            |                           |                                   |                  |               |       |         |     |          |       |         |     |     |    |    |     |       |       |       |     |    
|                            |                           | Total Specialty Product Divisions |                  | $             | 1,773 |         |     | $        | 1,025 |         |     |     | 73 | %  |     | $     | 1,418 |       |     |     | 25 | %
|Investing Divisions         |                           |                                   |                  |               |       |         |     |          |       |         |     |     |    |    |     |       |       |       |     |    
|                            | Servicing                 |                                   | $                | 416           |       |         | $   | 411      |       |         |     | 1   | %  |    | $   | 418   |       |       |     | 0   | % 
|                            |                           |                                   |                  |               |       |         |     |          |       |         |     |     |    |    |     |       |       |       |     |    
|                            |                           | Total Investing Divisions         |                  | $             | 416   |         |     | $        | 411   |         |     |     | 1  | %  |     | $     | 418   |       |     |     | 0  | %
|                            |                           |                                   | Total Production |               | $     | 10,607  |     |          | $     | 8,681   |     |     |    | 22 | %   |       | $     | 9,727 |     |     |    | 9 | %
|                            |                           |                                   |                  |               |       |         |     |          |       |         |     |     |    |    |     |       |       |       |     |    

Our largest segment, the Mortgage Banking
Divisions, increased production by 17% year over year and by 7%
from the second quarter of 2004, due to strong execution on
IndyMacs strategies to increase market share in the
mortgage industry by continuing its focus on less interest
rate-sensitive products such as Alt-A and subprime, by
increasing the size of its sales force, by investing in
geographic expansion, and by growing its purchase business.
Active wholesale customers during the quarter grew 35% from the
third quarter of prior year and 11% from the second quarter of
2004. This growth is the direct result of IndyMacs focus
on increasing the size of its sales force nationwide and the
newer sales people demonstrating increasing effectiveness as
they gain experience with IndyMacs products and
technology. We have been successful in attracting experienced,
quality salespeople because of our less interest-rate sensitive
products combined with our technology advantage. Our
Web & Direct Mail Division is a refinance-oriented
channel. Consistent with the market contraction, particularly in
the refinance-oriented originations, the production volume from
this channel has decreased 60% compared to the third quarter
2003 and 32% over the second quarter of 2004.

The production for Specialty Product Divisions
increased 73% from the third quarter 2003 and 25% from the
second quarter of 2004. The growth from the second quarter of
2004 is largely because of reverse mortgage production from
Financial Freedom. The increase compared to the third quarter of
2003 was driven by the acquisition of Financial Freedom, as well
as the continued penetration in customers and loan commitments
by both construction lending units.

26



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##### Table of Contents



The table below provides the key performance
indicators for our Mortgage Banking Divisions for the quarters
ended September 30, 2004 and 2003, and June 30, 2004:

|                            |                                         |                           |  |               |       |         |  |          |       |         |  |  |     |    |  |  |       |  |  |  |     |   
|--------------------------- | --------------------------------------- | ------------------------- |  | ------------- | ----- | ------- |  | -------- | ----- | ------- |  |  | --- | -- |  |  | ----- |  |  |  | --- | --
|                            |                                         |                          
|                            |                                         | Three Months Ended       
|                            |                                         |                          
|                            |                                         | September 30,             |  | September 30, |       | Percent |  | June 30, |       | Percent
|                            |                                         | 2004                      |  | 2003          |       | Change  |  | 2004     |       | Change 
|                            |                                         |                           |  |               |       |         |  |          |       |        
|Key Performance Indicators: |                                         |                           |  |               |       |         |  |          |       |         |  |  |     |    |  |  |       |  |  | 
|Active Customers:(1)        |                                         |                           |  |               |       |         |  |          |       |         |  |  |     |    |  |  |       |  |  | 
|                            | Average Monthly Active Customers        |                           |  |               |       |         |  |          |       |         |  |  |     |    |  |  |       |  |  |  |    
|                            |                                         | Mortgage professionals    |  |               | 2,765 |         |  |          | 2,244 |         |  |  | 23  | %  |  |  | 2,527 |  |  |  | 9   | % 
|                            |                                         | Real estate professionals |  |               | 162   |         |  |          | 306   |         |  |  | (47 | )% |  |  | 187   |  |  |  | (13 | )%
|                            | Active customers during the quarter     |                           |  |               |       |         |  |          |       |         |  |  |     |    |  |  |       |  |  |  |    
|                            |                                         | Mortgage professionals    |  |               | 4,760 |         |  |          | 3,540 |         |  |  | 34  | %  |  |  | 4,273 |  |  |  | 11  | % 
|                            |                                         | Real estate professionals |  |               | 320   |         |  |          | 591   |         |  |  | (46 | )% |  |  | 330   |  |  |  | (3  | )%
|                            | Net new customers during the quarter(2) |                           |  |               |       |         |  |          |       |         |  |  |     |    |  |  |       |  |  |  |    
|                            |                                         | Mortgage professionals    |  |               | 975   |         |  |          | 658   |         |  |  | 48  | %  |  |  | 874   |  |  |  | 12  | % 
|                            |                                         | Real estate professionals |  |               | 139   |         |  |          | 347   |         |  |  | (60 | )% |  |  | 181   |  |  |  | (23 | )%
|Sales personnel             |                                         |                           |  |               |       |         |  |          |       |         |  |  |     |    |  |  |       |  |  | 
|                            |                                         | Mortgage professionals    |  |               | 386   |         |  |          | 224   |         |  |  | 72  | %  |  |  | 326   |  |  |  | 18  | % 
|                            |                                         | Real estate professionals |  |               | 93    |         |  |          | 89    |         |  |  | 4   | %  |  |  | 99    |  |  |  | (6  | )%
|                            |                                         | Consumers                 |  |               | 244   |         |  |          | 213   |         |  |  | 15  | %  |  |  | 242   |  |  |  | 1   | % 



---



|    |                                                                                                         
|--- | --------------------------------------------------------------------------------------------------------
|(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

The Company sold $8.9 billion and
$6.7 billion of loans during the three months ended
September 30, 2004 and 2003, respectively, and
$21.5 billion and $18.5 billion for the nine months
ended September 30, 2004 and 2003, respectively. The
Companys gain on sale of loans of $98.1 million and
$247.8 million for the three and the nine months ended
September 30, 2004, respectively, are reflected net of the
SAB No. 105 impact of $5.1 million and
$57.3 million, respectively, as well as the effect of the
allocation of a portion of the purchase price of Financial
Freedom to loans held for sale and the loan application pipeline
totaling $6.0 million during the third quarter of 2004,
which effectively decreases gain on sale of loans when the
related loans are sold. Excluding these two items, the gain on
sale of loans would have been $109.2 million for the three
months ended September 30, 2004, compared to
$121.5 million for the same period in 2003, reflecting a
10% decrease, and $311.1 million for the nine months ended
September 30, 2004 compared to $307.4 million for the
nine months ended 2003. The decrease in gain on sale of loans
for the three months ended September 30, 2004, is primarily
due to 33% decline in profit margin, partially offset by the
increase in the volume of loans sold. Our profit margin has been
negatively impacted by the change in our product mix to more
hybrid and ARM loans, the shift in our channel mix to lower
margin conduit and correspondent channels, a reversal of
pipeline hedge results from an outperformance in the second
quarter of 2004 to an underperformance in the third quarter of
2004, as well as the impacts of competition and volatile
interest rates.

The Company hedges the interest rate risk
inherent in its pipeline of mortgage loans held for sale to
protect its margin on sale of loans. Hedging practices can vary
significantly from company to company ranging across a broad
spectrum. At one extreme, a mortgage banker may choose not to
hedge its pipeline at all. Mortgage bankers who choose not to
hedge their pipeline will typically report higher earnings and
profit margins in a falling interest rate environment, and lower
earnings and profit margins in a rising interest rate
environment. This would be the most profitable strategy over an
indefinite period of time as more production is done in the
declining rate environment, assuming that rates rise as often as
and as much as they fall. However,

27



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##### Table of Contents



such a strategy results in highly volatile
earnings and could result in losses for an extended period of
time potentially risking the depletion of capital reserves.
Conversely at the other extreme, a mortgage banker can choose to
hedge 100% of its pipeline with option-based instruments to
closely offset the free option enjoyed by the
mortgage loan applicant to not close on his or her loan (i.e.
fallout). This hedging strategy will generally
produce stable and consistent results, but profitability is
significantly reduced as the cost of the options can be
prohibitive.


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

The following tables illustrate the impact of the
Companys pipeline hedging activities:

|                                     |  |                       |      |               |  |         |      |          |  |         |      |    |  |   |      |   |  |  |      |   
|------------------------------------ |  | --------------------- | ---- | ------------- |  | ------- | ---- | -------- |  | ------- | ---- | -- |  | - | ---- | - |  |  | ---- | --
|                                     |  |                      
|                                     |  | Three Months Ended   
|                                     |  |                      
|                                     |  | September 30,         |      | September 30, |  | Percent |      | June 30, |  | Percent
|                                     |  | 2004                  |      | 2003          |  | Change  |      | 2004     |  | Change 
|                                     |  |                       |      |               |  |         |      |          |  |        
|                                     |  |                      
|                                     |  | (Dollars in millions)
|Gross gain on mortgage loan sales(1) |  | $                     | 168  |               |  | $       | 40   |          |  |         | 320  | %  |  | $ | 54   |   |  |  | 211  | % 
|Gross margin before hedging          |  |                       | 1.88 | %             |  |         | 0.60 | %        |  |         | 213  | %  |  |   | 0.71 | % |  |  | 165  | % 
|Hedging (losses) gains               |  | $                     | (59  | )             |  | $       | 81   |          |  |         | (173 | )% |  | $ | 64   |   |  |  | (192 | )%
|Net gains on sale(1)                 |  | $                     | 109  |               |  | $       | 121  |          |  |         | (10  | )% |  | $ | 118  |   |  |  | (8   | )%
|Net margin after hedging(1)          |  |                       | 1.22 | %             |  |         | 1.82 | %        |  |         | (33  | )% |  |   | 1.55 | % |  |  | (21  | )%



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The gain on mortgage loan sales for the three
    months ended September 30, 2004 excludes the
    $5.1 million before-tax SAB No. 105 and
    $6.0 million before-tax purchase accounting adjustments
    related to the Financial Freedom acquisition. The GAAP gain on
    mortgage loan sales was $98.1 million for the three months
    ended September 30, 2004 representing a net margin after
    hedging of 1.10%. The gain on mortgage loan sales for the three
    months ended June 30, 2004 excludes the $52.2 million
    SAB No. 105 adjustment. The GAAP gain on mortgage loan
    sales for the second quarter of 2004 was $66.1 million,
    representing a net margin of 1.20%.

|                                     |  |                       |      |               |  |         |      |   |  |  |     |   
|------------------------------------ |  | --------------------- | ---- | ------------- |  | ------- | ---- | - |  |  | --- | --
|                                     |  |                      
|                                     |  | Nine Months Ended    
|                                     |  |                      
|                                     |  | September 30,         |      | September 30, |  | Percent
|                                     |  | 2004                  |      | 2003          |  | Change 
|                                     |  |                       |      |               |  |        
|                                     |  |                      
|                                     |  | (Dollars in millions)
|Gross gain on mortgage loan sales(1) |  | $                     | 349  |               |  | $       | 322  |   |  |  | 8   | % 
|Gross margin before hedging          |  |                       | 1.63 | %             |  |         | 1.74 | % |  |  | (6  | )%
|Hedging losses                       |  | $                     | (38  | )             |  | $       | (14  | ) |  |  | 171 | % 
|Net gains on sale(1)                 |  | $                     | 311  |               |  | $       | 307  |   |  |  | 1   | % 
|Net margin after hedging(1)          |  |                       | 1.45 | %             |  |         | 1.66 | % |  |  | (13 | )%



---



|    |                                                                                                                                                                                                                                                                                                                       
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The gain on mortgage loan sales for the nine
    months ended September 30, 2004 excludes the
    $57.3 million before-tax SAB No. 105 and
    $6.0 million purchase accounting adjustments related to the
    Financial Freedom acquisition. The GAAP gain on mortgage loan
    sales reported was $247.8 million for

28



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##### Table of Contents



| |                                                                                                                                            
| | -------------------------------------------------------------------------------------------------------------------------------------------
| | the nine months ended September 30, 2004.
    The GAAP net margin after hedging was 1.16% for the nine months
    ended September 30, 2004.

During the quarter ended September 30, 2004,
the Companys pipeline hedging activities resulted in
hedging losses of $58.7 million compared to hedging gains
of $81.4 million for the quarter ended September 30,
2003. The hedging losses in the third quarter of 2004 were
primarily the result of a decline in interest rates. However,
losses were slightly higher than anticipated due to increased
rate lock fall-out in selected channels and mismatches in basis,
which occurred in hedging hybrid ARM and subprime loans.

In addition to mortgage loans held for sale, the
pipeline also includes rate lock commitments. Rate lock
commitments on mortgage loans that are intended to be sold are
considered to be derivatives pursuant to SFAS No. 133,
Accounting for Derivative Instruments and Hedging
Activities,(SFAS 133) and,
therefore, were recorded at fair value prior to April 1,
2004. On April 1, 2004, the Company adopted SAB
No. 105, and in accordance with this standard, for rate
lock commitments entered into after April 1, 2004, only the
change in the fair value is recorded by the Company.

The Company hedges the risk of changes in fair
value of rate lock commitments by selling forward contracts on
securities of Fannie Mae or Freddie Mac, Euro Dollar futures and
other hedge instruments as the Company deems appropriate to
prudently manage this risk. These forward contracts are also
accounted for as derivatives and recorded at fair value.

The following two tables present the gain on sale
margins by product type (including hedges) for the quarters
ended September 30, 2004 and 2003, and June 30, 2004,
and for the nine months ended September 30, 2004 and 2003:

|                                      |  |                       |       |                    |  |               |       |        |  |         |      |        |  |        |       |         |  |        |       |  |  |  |      |   |  |   |       |  |  |   |       |  |  |  |      |  
|------------------------------------- |  | --------------------- | ----- | ------------------ |  | ------------- | ----- | ------ |  | ------- | ---- | ------ |  | ------ | ----- | ------- |  | ------ | ----- |  |  |  | ---- | - |  | - | ----- |  |  | - | ----- |  |  |  | ---- | -
|                                      |  |                      
|                                      |  | Three Months Ended   
|                                      |  |                      
|                                      |  |                       |       |                    |  |              
|                                      |  | September 30, 2004    |       | September 30, 2003 |  | June 30, 2004
|                                      |  |                       |       |                    |  |              
|Gain on Sale Margins by               |  | Amount                |       | Gain on            |  |               |       | Amount |  | Gain on |      |        |  | Amount |       | Gain on |  |       
|Product Type(1)                       |  | Sold                  |       | Sale               |  | Margin        |       | Sold   |  | Sale    |      | Margin |  | Sold   |       | Sale    |  | Margin
|                                      |  |                       |       |                    |  |               |       |        |  |         |      |        |  |        |       |         |  |       
|                                      |  |                      
|                                      |  | (Dollars in millions)
|Alt-A and Jumbo                       |  | $                     | 7,266 |                    |  | $             | 74.2  |        |  |         | 1.03 | %      |  | $      | 4,155 |         |  | $      | 79.2  |  |  |  | 1.90 | % |  | $ | 5,938 |  |  | $ | 88.0  |  |  |  | 1.48 | %
|Agency conforming                     |  |                       | 380   |                    |  |               | 2.3   |        |  |         | 0.62 | %      |  |        | 1,864 |         |  |        | 22.8  |  |  |  | 1.22 | % |  |   | 924   |  |  |   | 6.4   |  |  |  | 0.69 | %
|Reverse mortgages                     |  |                       | 371   |                    |  |               | 10.2  |        |  |         | 2.75 | %      |  |        |      |         |  |        |      |  |  |  |     |   |  |   |      |  |  |   |      |  |  |  |     |  
|Subprime                              |  |                       | 908   |                    |  |               | 21.7  |        |  |         | 2.39 | %      |  |        | 444   |         |  |        | 12.5  |  |  |  | 2.81 | % |  |   | 476   |  |  |   | 13.2  |  |  |  | 2.77 | %
|Consumer lot loans                    |  |                       |      |                    |  |               |      |        |  |         |     |        |  |        |      |         |  |        |      |  |  |  |     |   |  |   | 192   |  |  |   | 8.2   |  |  |  | 4.27 | %
|Loans acquired through clean-up calls |  |                       | 15    |                    |  |               | 0.7   |        |  |         | 4.61 | %      |  |        | 212   |         |  |        | 7.0   |  |  |  | 3.30 | % |  |   | 108   |  |  |   | 2.5   |  |  |  | 2.31 | %
|                                      |  |                       |       |                    |  |               |       |        |  |         |      |        |  |        |       |         |  |        |       |  |  |  |      |   |  |   |       |  |  |   |       |  |  |  |      |  
|Total gain on sale of loans(1)        |  | $                     | 8,940 |                    |  | $             | 109.1 |        |  |         | 1.22 | %      |  | $      | 6,675 |         |  | $      | 121.5 |  |  |  | 1.82 | % |  | $ | 7,638 |  |  | $ | 118.3 |  |  |  | 1.55 | %
|                                      |  |                       |       |                    |  |               |       |        |  |         |      |        |  |        |       |         |  |        |       |  |  |  |      |   |  |   |       |  |  |   |       |  |  |  |      |  



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The gain on mortgage loan sales for the three
    months ended September 30, 2004 excludes the
    $5.1 million before-tax SAB No. 105 and
    $6.0 million before-tax purchase accounting adjustments
    related to the Financial Freedom acquisition. The GAAP gain on
    mortgage loan sales was $98.1 million for the three months
    ended September 30, 2004 representing a net margin after
    hedging of 1.10%. The gain on mortgage loan sales for the three
    months ended June 30, 2004 excludes the $52.2 million
    SAB No. 105 adjustment. The GAAP gain on mortgage loan
    sales was $66.1 million, representing a net margin of 1.20%.

29



---



##### Table of Contents



|                                      |  |                       |        |                    |  |        |       |        |  |         |      |        |  |   |        |  |  |   |       |  |  |  |      |  
|------------------------------------- |  | --------------------- | ------ | ------------------ |  | ------ | ----- | ------ |  | ------- | ---- | ------ |  | - | ------ |  |  | - | ----- |  |  |  | ---- | -
|                                      |  |                      
|                                      |  | Nine Months Ended    
|                                      |  |                      
|                                      |  |                       |        |                   
|                                      |  | September 30, 2004    |        | September 30, 2003
|                                      |  |                       |        |                   
|Gain on Sale Margins by               |  | Amount                |        | Gain on            |  |        |       | Amount |  | Gain on |      |       
|Product Type(1)                       |  | Sold                  |        | Sale               |  | Margin |       | Sold   |  | Sale    |      | Margin
|                                      |  |                       |        |                    |  |        |       |        |  |         |      |       
|                                      |  |                      
|                                      |  | (Dollars in millions)
|Alt-A and Jumbo                       |  | $                     | 16,668 |                    |  | $      | 216.1 |        |  |         | 1.30 | %      |  | $ | 12,283 |  |  | $ | 208.3 |  |  |  | 1.70 | %
|Agency conforming                     |  |                       | 2,029  |                    |  |        | 15.2  |        |  |         | 0.75 | %      |  |   | 4,995  |  |  |   | 58.1  |  |  |  | 1.16 | %
|Reverse mortgages                     |  |                       | 371    |                    |  |        | 10.2  |        |  |         | 2.75 | %      |  |   |       |  |  |   |      |  |  |  |     |  
|Subprime                              |  |                       | 1,810  |                    |  |        | 49.8  |        |  |         | 2.75 | %      |  |   | 708    |  |  |   | 19.1  |  |  |  | 2.70 | %
|Consumer Lot Loans                    |  |                       | 192    |                    |  |        | 8.2   |        |  |         | 4.29 | %      |  |   |       |  |  |   |      |  |  |  |     |  
|Loans acquired through clean-up calls |  |                       | 416    |                    |  |        | 11.6  |        |  |         | 2.79 | %      |  |   | 549    |  |  |   | 21.9  |  |  |  | 3.99 | %
|                                      |  |                       |        |                    |  |        |       |        |  |         |      |        |  |   |        |  |  |   |       |  |  |  |      |  
|Total gain on sale of loans(1)        |  | $                     | 21,486 |                    |  | $      | 311.1 |        |  |         | 1.45 | %      |  | $ | 18,535 |  |  | $ | 307.4 |  |  |  | 1.66 | %
|                                      |  |                       |        |                    |  |        |       |        |  |         |      |        |  |   |        |  |  |   |       |  |  |  |      |  



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The gain on mortgage loan sales for the nine
    months ended September 30, 2004 excludes the
    $57.3 million before-tax SAB No. 105 and
    $6.0 million purchase accounting adjustments related to the
    Financial Freedom acquisition. The GAAP gain on mortgage loan
    sales reported was $247.8 million for the nine months ended
    September 30, 2004. The GAAP net margin after hedging was
    1.16% for the nine months ended September 30, 2004.

The gain on sale margins declined on the Alt-A
and agency conforming products during the third quarter 2004.
The decline in Alt-A and Jumbo margins was caused by a shift in
origination channel mix, including an increase in loans funded
through the conduit and correspondent channels, a shift to
adjustable rate products and competitive pricing pressure. In
addition, our pipeline hedge underperformed in the third quarter
after outperforming in the second quarter 2004. In the third
quarter of 2004, 74% of loans originated were adjustable rate
compared to 61% in the second quarter of 2004, and 76% of the
loans sold in the third quarter were ARM loans, compared to 60%
in the quarter ended June 30, 2004. The demand for the ARM
market is somewhat less than the demand for the fixed rate
agency and non-agency markets.

In addition to the gain on sale, IndyMac earns
spread and fee income on its mortgage loans held for sale. It is
important to look at the entire mortgage banking revenue stream
in evaluating performance, as these components may vary in
differing interest rate environments, and due to product/channel
mixes, and loan sale strategies. The following table depicts the
total revenue margin on mortgage loans sold, which is calculated
by dividing the sum of gain on sale of loans, net interest
income, and fee income by the amount of loans sold:

|                               |  |                        |           |            |  |               |      |            |  |          |           |            |  |  |      |   |  |   |           |  |  |  |      |  
|------------------------------ |  | ---------------------- | --------- | ---------- |  | ------------- | ---- | ---------- |  | -------- | --------- | ---------- |  |  | ---- | - |  | - | --------- |  |  |  | ---- | -
|                               |  |                       
|                               |  | Three Months Ended    
|                               |  |                       
|                               |  | September 30,          |           | % of loans |  | September 30, |      | % of loans |  | June 30, |           | % of loans
|                               |  | 2004                   |           | sold       |  | 2003          |      | sold       |  | 2004     |           | sold      
|                               |  |                        |           |            |  |               |      |            |  |          |           |           
|                               |  |                       
|                               |  | (Dollars in thousands)
|Gain on sale of loans(1)       |  | $                      | 109,156   |            |  |               | 1.22 | %          |  | $        | 121,498   |            |  |  | 1.82 | % |  | $ | 118,307   |  |  |  | 1.55 | %
|Net interest income            |  |                        | 40,544    |            |  |               | 0.45 | %          |  |          | 50,815    |            |  |  | 0.76 | % |  |   | 50,809    |  |  |  | 0.67 | %
|Fee income                     |  |                        | 14,300    |            |  |               | 0.16 | %          |  |          | 18,009    |            |  |  | 0.27 | % |  |   | 14,786    |  |  |  | 0.19 | %
|                               |  |                        |           |            |  |               |      |            |  |          |           |            |  |  |      |   |  |   |           |  |  |  |      |  
|Total mortgage banking revenue |  | $                      | 164,000   |            |  |               | 1.83 | %          |  | $        | 190,322   |            |  |  | 2.85 | % |  | $ | 183,902   |  |  |  | 2.41 | %
|                               |  |                        |           |            |  |               |      |            |  |          |           |            |  |  |      |   |  |   |           |  |  |  |      |  
|Loans sold                     |  | $                      | 8,940,648 |            |  |               |      |            |  | $        | 6,674,915 |            |  |  |      |   |  | $ | 7,638,446 |  |  |  |      |  



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The gain on mortgage loan sales for the three
    months ended September 30, 2004 excludes the
    $5.1 million SAB No. 105 and $6.0 million
    purchase accounting adjustments related to the Financial Freedom
    acquisition. The GAAP gain on mortgage loan sales was
    $98.1 million for the three months ended September 30,
    2004 representing a net margin after hedging of 1.10%. The gain
    on mortgage loan

30



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##### Table of Contents



| |                                                                                                                                                                                                          
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | sales for the three months ended June 30,
    2004 excludes the $52.2 million SAB No. 105
    adjustment. The GAAP gain on mortgage loan sales was
    $66.1 million, representing a net margin of 1.20%.

|                               |  |                        |            |            |  |               |      |            |  |   |            |  |  |  |      |  
|------------------------------ |  | ---------------------- | ---------- | ---------- |  | ------------- | ---- | ---------- |  | - | ---------- |  |  |  | ---- | -
|                               |  |                       
|                               |  | Nine Months Ended     
|                               |  |                       
|                               |  | September 30,          |            | % of loans |  | September 30, |      | % of loans
|                               |  | 2004                   |            | sold       |  | 2003          |      | sold      
|                               |  |                        |            |            |  |               |      |           
|                               |  |                       
|                               |  | (Dollars in thousands)
|Gain on sale of loans(1)       |  | $                      | 311,131    |            |  |               | 1.45 | %          |  | $ | 307,428    |  |  |  | 1.66 | %
|Net interest income            |  |                        | 133,153    |            |  |               | 0.62 | %          |  |   | 127,848    |  |  |  | 0.69 | %
|Fee income                     |  |                        | 41,193     |            |  |               | 0.19 | %          |  |   | 50,807     |  |  |  | 0.27 | %
|                               |  |                        |            |            |  |               |      |            |  |   |            |  |  |  |      |  
|Total mortgage banking revenue |  | $                      | 485,477    |            |  |               | 2.26 | %          |  | $ | 486,083    |  |  |  | 2.62 | %
|                               |  |                        |            |            |  |               |      |            |  |   |            |  |  |  |      |  
|Loans sold                     |  | $                      | 21,485,818 |            |  |               |      |            |  | $ | 18,534,523 |  |  |  |      |  



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The gain on mortgage loan sales for the nine
    months ended September 30, 2004 excludes the
    $57.3 million before-tax SAB No. 105 and
    $6.0 million purchase accounting adjustments related to the
    Financial Freedom acquisition. The GAAP gain on mortgage loan
    sales reported was $247.8 million for the nine months ended
    September 30, 2004. The GAAP net margin after hedging was
    1.16% for the nine months ended September 30, 2004.

Total mortgage banking revenue decreased by
$26.3 million compared to the quarter ended
September 30, 2003 primarily due to decreases in gain on
sale of loans, net interest income and fee income. The decline
in gain on sale margins during the third quarter of 2004 was
caused by a shift in origination channel mix, including an
increase in loans funded through the conduit and correspondent
channels, a shift to adjustable rate products and competitive
pricing pressure. In addition, our pipeline hedge underperformed
in the third quarter after outperforming in the second quarter
2004. Our net interest income was also negatively impacted by
the shift to ARMs from the third quarter of 2003, which reduced
spread. The fee income decreased due to change in channel mix
from retail to more correspondent/conduit volume.

Total mortgage banking revenue of
$485.5 million for the nine months ended September 30,
2004, was comparable to $486.1 million for the nine months
ended September 30, 2003.

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

|                                     |                         |                       |       |              |  |               |    |              |   |          |       |              |  |  |    |     |   |   |       |       |  |  |    |     |  
|------------------------------------ | ----------------------- | --------------------- | ----- | ------------ |  | ------------- | -- | ------------ | - | -------- | ----- | ------------ |  |  | -- | --- | - | - | ----- | ----- |  |  | -- | --- | -
|                                     |                         |                      
|                                     |                         | Three Months Ended   
|                                     |                         |                      
|                                     |                         | September 30,         |       | Distribution |  | September 30, |    | Distribution |   | June 30, |       | Distribution
|                                     |                         | 2004                  |       | Percentages  |  | 2003          |    | Percentages  |   | 2004     |       | Percentages 
|                                     |                         |                       |       |              |  |               |    |              |   |          |       |             
|                                     |                         |                      
|                                     |                         | (Dollars in millions)
|Sales to the GSEs(1)                 |                         | $                     | 1,495 |              |  |               | 15 | %            |   | $        | 4,170 |              |  |  | 53 | %   |   | $ | 2,249 |       |  |  | 25 | %  
|Private-label securitizations        |                         |                       | 6,445 |              |  |               | 67 | %            |   |          | 1,672 |              |  |  | 21 | %   |   |   | 3,845 |       |  |  | 43 | %  
|Whole loan sales                     |                         |                       | 1,001 |              |  |               | 10 | %            |   |          | 833   |              |  |  | 11 | %   |   |   | 1,544 |       |  |  | 17 | %  
|                                     |                         |                       |       |              |  |               |    |              |   |          |       |              |  |  |    |     |   |   |       |       |  |  |    |    
|                                     | Subtotal sales          |                       |       | 8,941        |  |               |    | 92           | % |          |       | 6,675        |  |  |    | 85  | % |   |       | 7,638 |  |  |    | 86  | %
|Investment portfolio acquisitions(2) |                         |                       | 807   |              |  |               | 8  | %            |   |          | 1,223 |              |  |  | 15 | %   |   |   | 1,236 |       |  |  | 14 | %  
|                                     |                         |                       |       |              |  |               |    |              |   |          |       |              |  |  |    |     |   |   |       |       |  |  |    |    
|                                     | Total loan distribution |                       | $     | 9,748        |  |               |    | 100          | % |          | $     | 7,898        |  |  |    | 100 | % |   | $     | 8,874 |  |  |    | 100 | %
|                                     |                         |                       |       |              |  |               |    |              |   |          |       |              |  |  |    |     |   |   |       |       |  |  |    |    

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|                                     |                         |                       |        |              |  |               |    |              |   |   |        |        |  |  |    |     |  
|------------------------------------ | ----------------------- | --------------------- | ------ | ------------ |  | ------------- | -- | ------------ | - | - | ------ | ------ |  |  | -- | --- | -
|                                     |                         |                      
|                                     |                         | Nine Months Ended    
|                                     |                         |                      
|                                     |                         | September 30,         |        | Distribution |  | September 30, |    | Distribution
|                                     |                         | 2004                  |        | Percentages  |  | 2003          |    | Percentages 
|                                     |                         |                       |        |              |  |               |    |             
|                                     |                         |                      
|                                     |                         | (Dollars in millions)
|Sales to the GSEs(1)                 |                         | $                     | 6,048  |              |  |               | 25 | %            |   | $ | 11,093 |        |  |  | 53 | %  
|Private-label securitizations        |                         |                       | 11,376 |              |  |               | 48 | %            |   |   | 4,760  |        |  |  | 22 | %  
|Whole loan sales                     |                         |                       | 4,062  |              |  |               | 17 | %            |   |   | 2,682  |        |  |  | 13 | %  
|                                     |                         |                       |        |              |  |               |    |              |   |   |        |        |  |  |    |    
|                                     | Subtotal sales          |                       |        | 21,486       |  |               |    | 91           | % |   |        | 18,535 |  |  |    | 88  | %
|Investment portfolio acquisitions(2) |                         |                       | 2,238  |              |  |               | 9  | %            |   |   | 2,423  |        |  |  | 12 | %  
|                                     |                         |                       |        |              |  |               |    |              |   |   |        |        |  |  |    |    
|                                     | Total loan distribution |                       | $      | 23,724       |  |               |    | 100          | % |   | $      | 20,958 |  |  |    | 100 | %
|                                     |                         |                       |        |              |  |               |    |              |   |   |        |        |  |  |    |    



---



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

Loan sales to government-sponsored enterprises
(GSEs) dropped to 19% of total sales for the quarter
ended September 30, 2004 compared to 53% for the same
period a year ago and 25% for the previous quarter ended
June 30, 2004. The increase in the amount of adjustable
rate mortgages sold resulted in a higher percentage of loans
being sold in private-label securitizations.

In conjunction with the sale of mortgage loans in
private-label securitizations and GSEs transactions, the Company
generally retains certain assets. The primary assets retained
include MSRs and, to a lesser degree, AAA-rated and agency
interest-only strips, investment-grade securities,
non-investment grade securities and residual securities. The
allocated cost of the retained assets at the time of sale is
recorded as an asset with an offsetting increase to the gain on
sale of loans (or a reduction in the cost basis of the loans
sold). The calculation of the $109.2 million in gain on
sale of loans earned during the three months ended
September 30, 2004 included the retention of
$182.7 million of servicing-related assets,
$2.3 million of other investment-grade securities and
$35.6 million of non-investment grade securities. The Bank
also sold $28.6 million in assets retained from previous
securitizations at a net gain of $2.2 million. During the
three months ended September 30, 2004, assets previously
retained generated cash flows of $64.2 million. More
information on the valuation assumptions related to
IndyMacs retained assets can be found under the heading,
Investing Activities Valuation of Servicing-Related
Assets, below.

32



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##### Table of Contents






INVESTING AND HELOC ACTIVITIES

The following table details the assets associated
with our investing and HELOC activities as of September 30,
2004, and December 31, 2003:

|                                                                           |                                |                                                |                                          |                                                                                 |           |           |            |           |           |           |           | 
|-------------------------------------------------------------------------- | ------------------------------ | ---------------------------------------------- | ---------------------------------------- | ------------------------------------------------------------------------------- | --------- | --------- | ---------- | --------- | --------- | --------- | --------- | 
|                                                                           |                                | September 30,                                  |                                          | December 31,                                                                   
|                                                                           |                                | 2004                                           |                                          | 2003                                                                           
|                                                                           |                                |                                                |                                          |                                                                                
|                                                                           |                                |                                               
|                                                                           |                                | (Dollars in thousands)                        
|Loans held for investment:                                                 |                                |                                                |                                          |                                                                                 |           |           |            |          
|                                                                           | SFR mortgage                   |                                                | $                                        | 4,550,156                                                                       |           |           | $          | 4,945,439 |          
|                                                                           | Consumer construction          |                                                |                                          | 1,383,147                                                                       |           |           |            | 1,145,526 |          
|                                                                           | Builder construction           |                                                |                                          | 565,381                                                                         |           |           |            | 484,397   |          
|                                                                           | HELOC                          |                                                |                                          | 48,299                                                                          |           |           |            | 711,494   |          
|                                                                           | Land and other mortgage        |                                                |                                          | 191,606                                                                         |           |           |            | 126,044   |          
|                                                                           | Income property                |                                                |                                          | 7,201                                                                           |           |           |            | 36,285    |          
|                                                                           |                                |                                                |                                          |                                                                                 |           |           |            |          
|                                                                           |                                |                                                |                                          | Total  loans held for investment                                               |           |           | 6,745,790  |           |           |           | 7,449,185 | 
|                                                                           |                                |                                                |                                          |                                                                                 |           |           |            |          
|Mortgage-backed securities, U.S. Treasury
    securities and agency notes: |                                |                                                |                                          |                                                                                 |           |           |            |          
|                                                                           | Trading securities:            |                                                |                                          |                                                                                 |           |           |            |           |          
|                                                                           |                                | AAA-rated and agency interest-only strips      |                                          |                                                                                 | 145,556   |           |            |           | 148,275   |          
|                                                                           |                                | AAA-rated principal-only securities            |                                          |                                                                                 | 18,564    |           |            |           | 8,518     |          
|                                                                           |                                | Other investment grade securities              |                                          |                                                                                 | 9,155     |           |            |           | 8,922     |          
|                                                                           |                                | Other non-investment grade securities          |                                          |                                                                                 | 367       |           |            |           | 1,760     |          
|                                                                           |                                | Non-investment grade residual securities       |                                          |                                                                                 | 62,065    |           |            |           | 56,157    |          
|                                                                           |                                |                                                |                                          |                                                                                 |           |           |            |          
|                                                                           |                                |                                                | Subtotal  trading securities            |                                                                                 |           | 235,707   |            |           |           | 223,632   |          
|                                                                           |                                |                                                |                                          |                                                                                 |           |           |            |          
|                                                                           | Available for sale securities: |                                                |                                          |                                                                                 |           |           |            |           |          
|                                                                           |                                | U.S. Treasury securities and agency notes      |                                          |                                                                                 |          |           |            |           | 143,689   |          
|                                                                           |                                | AAA-rated non-agency securities                |                                          |                                                                                 | 3,146,437 |           |            |           | 1,407,984 |          
|                                                                           |                                | AAA-rated agency securities                    |                                          |                                                                                 | 16,405    |           |            |           | 25,193    |          
|                                                                           |                                | Other investment grade securities              |                                          |                                                                                 | 72,735    |           |            |           | 26,926    |          
|                                                                           |                                | Other non-investment grade securities          |                                          |                                                                                 | 56,191    |           |            |           | 10,182    |          
|                                                                           |                                | Non-investment grade HELOC residual securities |                                          |                                                                                 | 51,056    |           |            |           |          |          
|                                                                           |                                |                                                |                                          |                                                                                 |           |           |            |          
|                                                                           |                                |                                                | Subtotal  available for sale securities |                                                                                 |           | 3,342,824 |            |           |           | 1,613,974 |          
|                                                                           |                                |                                                |                                          |                                                                                 |           |           |            |          
|                                                                           |                                |                                                |                                          | Total mortgage-backed securities,
    U.S. Treasury securities and agency notes |           |           | 3,578,531  |           |           |           | 1,837,606 | 
|                                                                           |                                |                                                |                                          |                                                                                 |           |           |            |          
|Mortgage servicing rights                                                  |                                |                                                | 551,811                                  |                                                                                 |           |           | 443,688    |          
|                                                                           |                                |                                                |                                          |                                                                                 |           |           |            |          
|                                                                           |                                |                                                |                                          | Total                                                                           |           | $         | 10,876,132 |           |           | $         | 9,730,479 | 
|                                                                           |                                |                                                |                                          |                                                                                 |           |           |            |          
|Percentage of securities portfolio rated
    investment grade              |                                |                                                | 95                                       | %                                                                               |           |           | 96         | %        
|Percentage of securities portfolio rated AAA                               |                                |                                                | 93                                       | %                                                                               |           |           | 94         | %        

Our HELOC loans held for investment decreased by
$663.2 million from December 31, 2003, to
September 30, 2004, primarily due to the recharacterization
of nearly $1 billion of HELOCs into mortgage-backed
securities via two separate on-balance sheet securitizations
during 2004. Similarly, our AAA-rated non-agency securities
increased from $1.4 billion at December 31, 2003, to
$3.1 billion at September 30, 2004, resulting from the
recharacterization of the $1 billion of HELOCs from loans
to securities as previously noted and the reclassification of
$516.5 million of SFR mortgage loans that were securitized
with retention of $353.0 million as mortgage-backed
securities available for sale during the first quarter of 2004.
Refer to the

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##### Table of Contents



Investing Activities and the
HELOC Portfolio sections below for further
discussions on SFR mortgage and HELOC securitizations.


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

The following table shows average annualized net
returns for all of our investing and HELOC activities, which are
calculated by dividing the sum of net interest income after
allocated interest expense (see Note 5 
Segment Reporting in the accompanying notes to the
consolidated financial statements for further information on our
method of allocating interest expense to the operating segments)
and provision for loan losses, service fee income and related
net gains or losses by the average balance of investment assets.
Service fee income includes gross service fee income,
amortization of MSRs, valuation adjustments and net hedging
gains and losses. Gross service fee income includes reinvestment
income, prepayment and late fee income net of compensating
interest paid to borrowers and investors in addition to the
contractual servicing fees.

|                                                                                  |  |                        |            |               |  |               |           |   |  |   |            |  
|--------------------------------------------------------------------------------- |  | ---------------------- | ---------- | ------------- |  | ------------- | --------- | - |  | - | ---------- | -
|                                                                                  |  |                       
|                                                                                  |  | Three Months Ended    
|                                                                                  |  |                       
|                                                                                  |  | September 30,          |            | September 30, |  |              
|                                                                                  |  | 2004                   |            | 2003          |  | June 30, 2004
|                                                                                  |  |                        |            |               |  |              
|                                                                                  |  |                       
|                                                                                  |  | (Dollars in thousands)
|Net interest income after provision for loan
    losses                           |  | $                      | 61,788     |               |  | $             | 32,575    |   |  | $ | 57,992     |  
|Service fee gain (loss)                                                           |  |                        | 8,742      |               |  |               | (11,113   | ) |  |   | (27,807    | )
|Loss on mortgage-backed securities, net                                           |  |                        | (9,438     | )             |  |               | (8,647    | ) |  |   | (3,414     | )
|Other income                                                                      |  |                        | 5,629      |               |  |               | 3,007     |   |  |   | 5,338      |  
|Average balance of interest-earning assets and
    MSRs                           |  | $                      | 10,999,786 |               |  | $             | 7,102,768 |   |  | $ | 10,493,236 |  
|Investing activities return on
    interest-earning assets and MSRs (annualized) |  |                        | 2.41       | %             |  |               | 0.88      | % |  |   | 1.23       | %
|                                                                                  |  |                        |            |               |  |               |           |   |  |   |            |  

|                                                                                  |  |                        |            |               |  |   |           |  
|--------------------------------------------------------------------------------- |  | ---------------------- | ---------- | ------------- |  | - | --------- | -
|                                                                                  |  |                       
|                                                                                  |  | Nine Months Ended     
|                                                                                  |  |                       
|                                                                                  |  | September 30,          |            | September 30,
|                                                                                  |  | 2004                   |            | 2003         
|                                                                                  |  |                        |            |              
|                                                                                  |  |                       
|                                                                                  |  | (Dollars in thousands)
|Net interest income after provision for loan
    losses                           |  | $                      | 177,058    |               |  | $ | 90,641    |  
|Service fee (loss)                                                                |  |                        | (22,209    | )             |  |   | (10,130   | )
|Loss on mortgage-backed securities, net                                           |  |                        | (17,839    | )             |  |   | (24,816   | )
|Other income                                                                      |  |                        | 14,971     |               |  |   | 8,219     |  
|Average balance of interest-earning assets and
    MSRs                           |  | $                      | 10,429,662 |               |  | $ | 6,673,305 |  
|Investing activities return on
    interest-earning assets and MSRs (annualized) |  |                        | 1.95       | %             |  |   | 1.28      | %
|                                                                                  |  |                        |            |               |  |   |           |  




INVESTING ACTIVITIES

IndyMacs investing activities complement
the mortgage banking activities and serve to diversify
IndyMacs revenue stream through its investments in SFR
mortgage loans, mortgage-backed securities and servicing-related
assets.

Our investments in prime SFR loans,
mortgage-backed securities and mortgage loan servicing-related
assets help to provide stable earnings in periods when mortgage
banking revenues decline. Should loan production and or margins
decline due to factors such as increasing interest rates, the
value and fee income of the MSRs generally rises, as there is
less incentive for borrowers to refinance at a higher interest
rate. Similarly, when loan production increases, the value of
the MSRs and the associated income streams generally

34



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##### Table of Contents



decrease. We believe this serves to stabilize the
Companys revenue stream through increased interest and
servicing fee income when production slows.


In addition to the investments in SFR mortgage
loans, mortgage-backed securities and servicing-related assets,
certain investing activities through investments in construction
loans and HELOCs also take place in Specialty Products Divisions.

SFR Mortgage Loans Held for
Investment

The Companys portfolio of mortgage loans
held for investment is comprised primarily of SFR mortgage
loans, with a concentration in adjustable-rate and hybrid
adjustable-rate mortgage loans to mitigate interest rate risk.
The Company plans on increasing its portfolio of mortgage loans
held for investment to achieve better balance in its investing
activities relative to its mortgage banking activities, which
tend to be more cyclical. The Company added $2.2 billion of
mortgage loans in accordance with this strategy during the nine
months ended September 30, 2004; however, the portfolio
actually declined relative to December 31, 2003. The
decline was the result of the Companys decision to sell
approximately $1.5 billion of loans and to recharacterize
approximately $516.5 million of loans as securities in line
with overall balance sheet management objectives during the nine
months ended September 30, 2004. The Company plans to
continue to securitize portions of its SFR mortgage loans held
for investment periodically, with the intent to retain most of
the securities, to optimize return on equity, reduce hedging
costs and enhance the liquidity of the loan portfolio. The
following table shows the composition of the portfolio as of
September 30, 2004, and December 31, 2003, and
relevant credit quality characteristics at September 30,
2004, and December 31, 2003.

|                                                  |  |                        |           |              |  |   |           |  
|------------------------------------------------- |  | ---------------------- | --------- | ------------ |  | - | --------- | -
|                                                  |  | September 30,          |           | December 31,
|                                                  |  | 2004                   |           | 2003        
|                                                  |  |                        |           |             
|                                                  |  |                       
|                                                  |  | (Dollars in thousands)
|SFR mortgage loans held for investment            |  | $                      | 4,550,156 |              |  | $ | 4,945,439 |  
|Average loan size                                 |  | $                      | 306       |              |  | $ | 286       |  
|Non-performing loans as a percentage of SFR loans |  |                        | 0.36      | %            |  |   | 0.38      | %
|Estimated average life in years(1)                |  |                        | 2.5       |              |  |   | 3.1       |  
|Estimated average duration in years(2)            |  |                        | 1.6       |              |  |   | 1.4       |  
|Yield                                             |  |                        | 4.33      | %            |  |   | 4.63      | %
|Fixed-rate mortgages                              |  |                        | 8         | %            |  |   | 6         | %
|Adjustable-rate mortgages                         |  |                        | 16        | %            |  |   | 39        | %
|Hybrid adjustable-rate mortgages                  |  |                        | 76        | %            |  |   | 55        | %

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##### Table of Contents



|                                                                      |                                        |               |     |              |     |   |     |    |     |  
|--------------------------------------------------------------------- | -------------------------------------- | ------------- | --- | ------------ | --- | - | --- | -- | --- | -
|                                                                      |                                        | September 30, |     | December 31,
|                                                                      |                                        | 2004          |     | 2003        
|Additional Information as of September 30, 2004 and December 31, 2003 |                                        |               |     |             
|Average FICO score(3)                                                 |                                        |               | 717 |              |     |   | 707 |   
|Average loan to value ratio                                           |                                        |               | 72  | %            |     |   | 73  | % 
|Geographic distribution:                                              |                                        |               |     |              |     |   |     |   
|                                                                      | Southern California                    |               |     | 32           | %   |   |     | 39 | %  
|                                                                      | Northern California                    |               |     | 20           | %   |   |     | 22 | %  
|                                                                      | Michigan                               |               |     | 6            | %   |   |     | 3  | %  
|                                                                      | New York                               |               |     | 4            | %   |   |     | 4  | %  
|                                                                      | Florida                                |               |     | 4            | %   |   |     | 3  | %  
|                                                                      | Georgia                                |               |     | 3            | %   |   |     | 2  | %  
|                                                                      | New Jersey                             |               |     | 2            | %   |   |     | 2  | %  
|                                                                      | Colorado                               |               |     | 2            | %   |   |     | 2  | %  
|                                                                      | Washington                             |               |     | 2            | %   |   |     | 2  | %  
|                                                                      | Other (each individually less than 2%) |               |     | 25           | %   |   |     | 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,
U.S. Treasury Securities and Agency Notes

The Companys portfolio of mortgage-backed
securities, U.S. Treasury securities and agency notes
totaled $3.6 billion and $1.8 billion at
September 30, 2004, and December 31, 2003,
respectively. These securities are recorded at fair value. The
Company invests in high quality mortgage-backed securities to
provide net interest income. At September 30, 2004, 93% of
the portfolio was rated AAA with an expected weighted-average
life of 3.1 years. U.S. Treasury securities are
purchased to hedge the interest rate risk associated with
servicing-related assets, among other types of investments.
AAA-rated principal-only securities are retained from
securitizations or purchased in the secondary market to hedge
servicing-related assets.

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The fair value of other investment grade and
non-investment grade securities by credit rating as of
September 30, 2004, and December 31, 2003, follows:

|                                                     |       |                                                                 |   |                   |        |           |   |         |         |            |   |        |        |  |   |        |        |  |   |        |        | 
|---------------------------------------------------- | ----- | --------------------------------------------------------------- | - | ----------------- | ------ | --------- | - | ------- | ------- | ---------- | - | ------ | ------ |  | - | ------ | ------ |  | - | ------ | ------ | 
|                                                     |       |                                                                 |   |                  
|                                                     |       | September 30, 2004                                              |   | December 31, 2003
|                                                     |       |                                                                 |   |                  
|                                                     |       |                                                                 |   | Premium           |        |           |   |        
|                                                     |       | Current                                                         |   | (Discount)        |        |           |   |        
|                                                     |       | Face                                                            |   | To Face           |        | Amortized |   | Fair    |         |           
|                                                     |       | Value                                                           |   | Value             |        | Cost      |   | Value   |         | Fair Value
|                                                     |       |                                                                 |   |                   |        |           |   |         |         |           
|                                                     |       |                                                                
|                                                     |       | (In thousands)                                                 
|Investment grade mortgage-backed
    securities:     |       |                                                                 |   |                   |        |           |   |         |         |            |   |        |        |  |   |        |        |  |   |       
|                                                     | AAA   |                                                                 | $ |                  |        |           | $ |        |         |            | $ |       |        |  | $ |       |        |  | $ | 8,001  |       
|                                                     | AA    |                                                                 |   | 31,158            |        |           |   | 12      |         |            |   | 31,170 |        |  |   | 31,013 |        |  |   |       |       
|                                                     | A     |                                                                 |   | 280               |        |           |   | (21     | )       |            |   | 259    |        |  |   | 262    |        |  |   |       |       
|                                                     | BBB   |                                                                 |   | 32,945            |        |           |   | (2,098  | )       |            |   | 30,847 |        |  |   | 32,073 |        |  |   | 24,198 |       
|                                                     | BBB-  |                                                                 |   | 19,550            |        |           |   | (1,670  | )       |            |   | 17,880 |        |  |   | 18,543 |        |  |   | 3,649  |       
|                                                     |       |                                                                 |   |                   |        |           |   |         |         |            |   |        |        |  |   |        |        |  |   |       
|                                                     |       | Total other investment grade mortgage-backed
    securities     |   | $                 | 83,933 |           |   | $       | (3,777  | )          |   | $      | 80,156 |  |   | $      | 81,891 |  |   | $      | 35,848 | 
|                                                     |       |                                                                 |   |                   |        |           |   |         |         |            |   |        |        |  |   |        |        |  |   |       
|Non-investment grade mortgage-backed
    securities: |       |                                                                 |   |                   |        |           |   |         |         |            |   |        |        |  |   |        |        |  |   |       
|                                                     | BB    |                                                                 | $ | 43,366            |        |           | $ | (7,367  | )       |            | $ | 35,999 |        |  | $ | 36,885 |        |  | $ | 7,896  |       
|                                                     | B     |                                                                 |   | 26,317            |        |           |   | (17,288 | )       |            |   | 9,029  |        |  |   | 9,220  |        |  |   | 186    |       
|                                                     | Other |                                                                 |   | 21,438            |        |           |   | (19,762 | )       |            |   | 1,676  |        |  |   | 1,805  |        |  |   | 3,860  |       
|                                                     |       |                                                                 |   |                   |        |           |   |         |         |            |   |        |        |  |   |        |        |  |   |       
|                                                     |       | Total other non-investment grade mortgage-backed
    securities |   | $                 | 91,121 |           |   | $       | (44,417 | )          |   | $      | 46,704 |  |   | $      | 47,910 |  |   | $      | 11,942 | 
|                                                     |       |                                                                 |   |                   |        |           |   |         |         |            |   |        |        |  |   |        |        |  |   |       

At September 30, 2004, of the total other
investment grade and non-investment grade mortgage-backed
securities, $96.8 million was collateralized by prime
loans, $32.6 million by subprime loans and
$0.4 million by manufactured housing loans.

Mortgage Servicing and Mortgage Servicing
Rights

In addition to its own loans, IndyMac serviced
$44.5 billion of mortgage loans owned by others at
September 30, 2004, with a weighted average coupon of
5.74%. In comparison, IndyMac serviced $30.8 billion of
mortgage loans owned by others at December 31, 2003, with a
weighted average coupon of 6.53%. The table below shows the
activity in the servicing portfolios during the quarter and nine
months ended September 30, 2004.

|                                                   |  |                       |        |                    |  |   |        |  
|-------------------------------------------------- |  | --------------------- | ------ | ------------------ |  | - | ------ | -
|                                                   |  |                      
|                                                   |  | Servicing Portfolio  
|                                                   |  |                      
|                                                   |  | Three Months          |        | Nine months       
|                                                   |  | Ended                 |        | Ended             
|                                                   |  | September 30, 2004    |        | September 30, 2004
|                                                   |  |                       |        |                   
|                                                   |  |                      
|                                                   |  | (Dollars in millions)
|Unpaid principal balance at beginning of period    |  | $                     | 34,618 |                    |  | $ | 30,774 |  
|Additions from Financial Freedom                   |  |                       | 4,280  |                    |  |   | 4,280  |  
|Additions from normal operations                   |  |                       | 8,768  |                    |  |   | 20,530 |  
|Clean-up calls exercised                           |  |                       | (298   | )                  |  |   | (1,289 | )
|Loan payments and prepayments                      |  |                       | (2,867 | )                  |  |   | (9,794 | )
|                                                   |  |                       |        |                    |  |   |        |  
|Unpaid principal balance at September 30,
    2004 |  | $                     | 44,501 |                    |  | $ | 44,501 |  
|                                                   |  |                       |        |                    |  |   |        |  

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The capitalized value of MSRs totaled
$551.8 million as of September 30, 2004, and
$443.7 million as of December 31, 2003, reflecting an
increase of $108.1 million. The table below shows the
activity in MSRs.

|                                                           |  |                        |         |                   |  |          |         |               |  |               |         |   |  |   |          |   |  |   |         |  
|---------------------------------------------------------- |  | ---------------------- | ------- | ----------------- |  | -------- | ------- | ------------- |  | ------------- | ------- | - |  | - | -------- | - |  | - | ------- | -
|                                                           |  |                        |         |                  
|                                                           |  | Three Months Ended     |         | Nine Months Ended
|                                                           |  |                        |         |                  
|                                                           |  | September 30,          |         | September 30,     |  | June 30, |         | September 30, |  | September 30,
|                                                           |  | 2004                   |         | 2003              |  | 2004     |         | 2004          |  | 2003         
|                                                           |  |                        |         |                   |  |          |         |               |  |              
|                                                           |  |                       
|                                                           |  | (Dollars in thousands)
|Balance at beginning of period                             |  | $                      | 493,876 |                   |  | $        | 335,727 |               |  | $             | 414,358 |   |  | $ | 443,688  |   |  | $ | 300,539 |  
|Additions from Financial Freedom                           |  |                        | 45,254  |                   |  |          |        |               |  |               |        |   |  |   | 45,254   |   |  |   |        |  
|Additions from normal operations                           |  |                        | 108,155 |                   |  |          | 98,928  |               |  |               | 92,190  |   |  |   | 250,703  |   |  |   | 240,402 |  
|Transfers to AAA-rated agency interest-only
    securities |  |                        |        |                   |  |          | (29,499 | )             |  |               | (14,293 | ) |  |   | (13,898  | ) |  |   | (47,311 | )
|Clean-up calls exercised                                   |  |                        | (2,425  | )                 |  |          | (2,546  | )             |  |               | (8,226  | ) |  |   | (14,441  | ) |  |   | (6,502  | )
|Amortization                                               |  |                        | (38,848 | )                 |  |          | (22,559 | )             |  |               | (38,747 | ) |  |   | (100,455 | ) |  |   | (65,541 | )
|Valuation/impairment                                       |  |                        | (54,201 | )                 |  |          | 26,866  |               |  |               | 48,594  |   |  |   | (59,040  | ) |  |   | (14,670 | )
|                                                           |  |                        |         |                   |  |          |         |               |  |               |         |   |  |   |          |   |  |   |         |  
|Balance at end of period                                   |  | $                      | 551,811 |                   |  | $        | 406,917 |               |  | $             | 493,876 |   |  | $ | 551,811  |   |  | $ | 406,917 |  
|                                                           |  |                        |         |                   |  |          |         |               |  |               |         |   |  |   |          |   |  |   |         |  

Although we have been hedging our MSRs on an
economic basis, we elected not to designate fair value hedge
accounting on MSRs prior to January 1, 2004, and they were
carried at the lower of the initial carrying value, adjusted for
amortization, or fair value. On January 1, 2004, we started
to designate fair value hedges on certain selected tranches of
MSRs. The changes in the fair value of the designated MSRs, and
the fair value of the designated hedges, are recorded through
income, if the hedging relationships are proven to be effective
under the provisions of SFAS No. 133.

Each quarter, we evaluate the MSRs for impairment
in accordance with SFAS No. 140, Accounting
for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities. We stratify our MSRs
based on predominant risk characteristics, underlying loan type,
interest rate type, and interest rate band. Then, for each
stratum, we determine the fair value of MSRs using our valuation
models, which are validated quarterly by third party opinions of
value. If the carrying value exceeds the fair value by
individual stratum, a valuation allowance is recorded as a
charge to service fee income in current earnings; however, if
such impairment is determined to be other-than-temporary and the
recoverability of the value is remote, we recognize a direct
write-down. Unlike a valuation allowance, a direct write-down
permanently reduces the carrying value of the MSR asset and the
related valuation allowance. During the quarter ended
September 30, 2004, we recorded a negative valuation
adjustment of $54.2 million due primarily to an increase in
expected prepayments on our servicing portfolio as the 10-year
Treasury rate declined during the quarter. As of
September 30, 2004, the valuation allowance on MSRs totaled
$93.8 million.



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

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

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A summary of the activity in the AAA-rated and
agency interest-only strips and residual securities portfolios
for the three and nine months ended September 30, 2004 and
2003, and for the three months ended June 30, 2004, follows:

|                                              |                                           |                        |   |                   |         |          |   |               |         |               |   |         |         |  |   |         |         |  |   |         |         | 
|--------------------------------------------- | ----------------------------------------- | ---------------------- | - | ----------------- | ------- | -------- | - | ------------- | ------- | ------------- | - | ------- | ------- |  | - | ------- | ------- |  | - | ------- | ------- | 
|                                              |                                           |                        |   |                  
|                                              |                                           | Three Months Ended     |   | Nine Months Ended
|                                              |                                           |                        |   |                  
|                                              |                                           | September 30,          |   | September 30,     |         | June 30, |   | September 30, |         | September 30,
|                                              |                                           | 2004                   |   | 2003              |         | 2004     |   | 2004          |         | 2003         
|                                              |                                           |                        |   |                   |         |          |   |               |         |              
|                                              |                                           |                        |   |                  
|                                              |                                           | (Dollars in thousands) |   |                  
|AAA-rated and agency interest-only
    strips |                                           |                        |   |                   |         |          |   |               |         |               |   |         |         |  |   |         |         |  |   |        
|                                              | Beginning balance                         |                        | $ | 166,799           |         |          | $ | 135,264       |         |               | $ | 153,460 |         |  | $ | 148,275 |         |  | $ | 187,060 |        
|                                              | Retained investments from securitizations |                        |   | 16,170            |         |          |   | 11,065        |         |               |   | 13,180  |         |  |   | 65,522  |         |  |   | 36,498  |        
|                                              | Transfer from MSRs                        |                        |   |                  |         |          |   | 29,499        |         |               |   | 14,293  |         |  |   | 13,898  |         |  |   | 47,311  |        
|                                              | Sales(1)                                  |                        |   |                  |         |          |   |              |         |               |   | (15,171 | )       |  |   | (15,171 | )       |  |   |        |        
|                                              | Clean-up calls exercised                  |                        |   | (710              | )       |          |   | (7,272        | )       |               |   | (1,655  | )       |  |   | (3,516  | )       |  |   | (26,397 | )      
|                                              | Cash received, net of accretion           |                        |   | (10,249           | )       |          |   | (12,496       | )       |               |   | (12,240 | )       |  |   | (34,689 | )       |  |   | (40,196 | )      
|                                              | Valuation gains (losses) before hedges    |                        |   | (26,454           | )       |          |   | (802          | )       |               |   | 14,932  |         |  |   | (28,763 | )       |  |   | (49,018 | )      
|                                              |                                           |                        |   |                   |         |          |   |               |         |               |   |         |         |  |   |         |         |  |   |        
|                                              |                                           | Ending balance         |   | $                 | 145,556 |          |   | $             | 155,258 |               |   | $       | 166,799 |  |   | $       | 145,556 |  |   | $       | 155,258 | 
|                                              |                                           |                        |   |                   |         |          |   |               |         |               |   |         |         |  |   |         |         |  |   |        
|Residual securities                           |                                           |                        |   |                   |         |          |   |               |         |               |   |         |         |  |   |         |         |  |   |        
|                                              | Beginning balance                         |                        | $ | 72,632            |         |          | $ | 66,031        |         |               | $ | 61,324  |         |  | $ | 56,157  |         |  | $ | 78,740  |        
|                                              | Retained investments from securitizations |                        |   | 37,634            |         |          |   | 3,935         |         |               |   | 11,827  |         |  |   | 65,968  |         |  |   | 18,673  |        
|                                              | Sales                                     |                        |   |                  |         |          |   |              |         |               |   |        |         |  |   |        |         |  |   | (10,525 | )      
|                                              | Clean-up calls exercised                  |                        |   |                  |         |          |   |              |         |               |   |        |         |  |   | 159     |         |  |   |        |        
|                                              | Cash received, net of accretion           |                        |   | 154               |         |          |   | (8,185        | )       |               |   | (3,706  | )       |  |   | (14,801 | )       |  |   | (21,239 | )      
|                                              | Valuation gains (losses) before hedges    |                        |   | 2,701             |         |          |   | (7,038        | )       |               |   | 3,187   |         |  |   | 5,638   |         |  |   | (10,906 | )      
|                                              |                                           |                        |   |                   |         |          |   |               |         |               |   |         |         |  |   |         |         |  |   |        
|                                              |                                           | Ending balance         |   | $                 | 113,121 |          |   | $             | 54,743  |               |   | $       | 72,632  |  |   | $       | 113,121 |  |   | $       | 54,743  | 
|                                              |                                           |                        |   |                   |         |          |   |               |         |               |   |         |         |  |   |         |         |  |   |        



---



|    |                                                                                                                                                                                                                 
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Represents the AAA-rated interest-only security
    that was created during the second quarter in connection with a
    private-label securitization transaction and subsequently sold
    in the third quarter.

Valuation of Servicing-Related
Assets

MSRs, AAA-rated and agency interest-only strips
and residual securities are recorded at fair market value. MSRs,
except for certain tranches for which we have applied hedge
accounting, are further subject to the lower of cost or market
limitations. Relevant information and assumptions used to value
the Companys

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##### Table of Contents



servicing related assets and residual securities
at September 30, 2004, June 30, 2004, and
December 31, 2003 are shown below.


|                                               |  |                        |         |                       |  |           |            |              |  |            |      |          |  |            |      |            |  |           |      |              |  |  |      |  |  |  |      |   |  |  |      |   |  |  |      |   |  |  |     |  
|---------------------------------------------- |  | ---------------------- | ------- | --------------------- |  | --------- | ---------- | ------------ |  | ---------- | ---- | -------- |  | ---------- | ---- | ---------- |  | --------- | ---- | ------------ |  |  | ---- |  |  |  | ---- | - |  |  | ---- | - |  |  | ---- | - |  |  | --- | -
|                                               |  |                        |         |                      
|                                               |  | Actual                 |         | Valuation Assumptions
|                                               |  |                        |         |                      
|                                               |  |                        |         | Gross Wtd.            |  | Servicing |            | 3-Month      |  | Weighted   |      | Lifetime |  | 3-Month    |      |            |  | Remaining
|                                               |  | Book                   |         | Collateral            |  | Average   |            | Fee/Interest |  | Prepayment |      | Average  |  | Prepayment |      | Prepayment |  | Discount  |      | Cumulative  
|                                               |  | Value                  |         | Balance               |  | Coupon    |            | Strip        |  | Speeds     |      | Multiple |  | Speeds     |      | Speeds     |  | Yield     |      | Loss Rate(2)
|                                               |  |                        |         |                       |  |           |            |              |  |            |      |          |  |            |      |            |  |           |      |             
|                                               |  |                       
|                                               |  | (Dollars in thousands)
|September 30, 2004                             |  |                        |         |                       |  |           |            |              |  |            |      |          |  |            |      |            |  |           |      |              |  |  |      |  |  |  |      |   |  |  |      |   |  |  |      |   |  |  |     |  
|MSRs(1)                                        |  | $                      | 551,811 |                       |  | $         | 44,501,086 |              |  |            | 5.74 | %        |  |            | 0.35 | %          |  |           | 24.3 | %            |  |  | 3.57 |  |  |  | 20.0 | % |  |  | 19.5 | % |  |  | 11.0 | % |  |  | N/A |  
|                                               |  |                        |         |                       |  |           |            |              |  |            |      |          |  |            |      |            |  |           |      |              |  |  |      |  |  |  |      |   |  |  |      |   |  |  |      |   |  |  |     |  
|AAA-rated/agency interest- only strips         |  | $                      | 145,556 |                       |  | $         | 18,128,933 |              |  |            | 6.51 | %        |  |            | 0.37 | %          |  |           | 34.5 | %            |  |  | 2.17 |  |  |  | 18.6 | % |  |  | 27.6 | % |  |  | 10.3 | % |  |  | N/A |  
|                                               |  |                        |         |                       |  |           |            |              |  |            |      |          |  |            |      |            |  |           |      |              |  |  |      |  |  |  |      |   |  |  |      |   |  |  |      |   |  |  |     |  
|Prime residual securities                      |  | $                      | 20,275  |                       |  | $         | 2,143,806  |              |  |            | 6.84 | %        |  |            | 2.22 | %          |  |           | 49.9 | %            |  |  | 0.43 |  |  |  | 38.7 | % |  |  | 38.6 | % |  |  | 16.8 | % |  |  | 0.3 | %
|Subprime residual securities                   |  |                        | 41,790  |                       |  | $         | 2,181,505  |              |  |            | 7.66 | %        |  |            | 4.25 | %          |  |           | 34.0 | %            |  |  | 0.45 |  |  |  | 32.4 | % |  |  | 21.3 | % |  |  | 24.3 | % |  |  | 2.5 | %
|HELOC residual securities                      |  |                        | 51,056  |                       |  | $         | 1,019,759  |              |  |            | 5.95 | %        |  |            | 3.35 | %          |  |           | 40.8 | %            |  |  | 1.49 |  |  |  | 41.0 | % |  |  | 41.0 | % |  |  | 19.0 | % |  |  | 1.2 | %
|                                               |  |                        |         |                       |  |           |            |              |  |            |      |          |  |            |      |            |  |           |      |              |  |  |      |  |  |  |      |   |  |  |      |   |  |  |      |   |  |  |     |  
|Total non-investment grade residual securities |  | $                      | 113,121 |                       |  |           |            |              |  |            |      |          |  |            |      |            |  |           |      |              |  |  |      |  |  |  |      |   |  |  |      |   |  |  |      |   |  |  |     |  
|                                               |  |                        |         |                       |  |           |            |              |  |            |      |          |  |            |      |            |  |           |      |              |  |  |      |  |  |  |      |   |  |  |      |   |  |  |      |   |  |  |     |  
|June 30, 2004                                  |  |                        |         |                       |  |           |            |              |  |            |      |          |  |            |      |            |  |           |      |              |  |  |      |  |  |  |      |   |  |  |      |   |  |  |      |   |  |  |     |  
|MSRs                                           |  | $                      | 493,876 |                       |  | $         | 34,618,427 |              |  |            | 6.15 | %        |  |            | 0.32 | %          |  |           | 35.6 | %            |  |  | 4.46 |  |  |  | 16.2 | % |  |  | 15.9 | % |  |  | 11.4 | % |  |  | N/A |  
|                                               |  |                        |         |                       |  |           |            |              |  |            |      |          |  |            |      |            |  |           |      |              |  |  |      |  |  |  |      |   |  |  |      |   |  |  |      |   |  |  |     |  
|AAA-rated/agency interest- only strips         |  | $                      | 166,799 |                       |  | $         | 16,280,985 |              |  |            | 6.55 | %        |  |            | 0.38 | %          |  |           | 43.0 | %            |  |  | 2.70 |  |  |  | 16.7 | % |  |  | 23.3 | % |  |  | 10.8 | % |  |  | N/A |  
|                                               |  |                        |         |                       |  |           |            |              |  |            |      |          |  |            |      |            |  |           |      |              |  |  |      |  |  |  |      |   |  |  |      |   |  |  |      |   |  |  |     |  
|Prime residual securities                      |  | $                      | 20,059  |                       |  | $         | 2,320,207  |              |  |            | 6.88 | %        |  |            | 2.31 | %          |  |           | 63.5 | %            |  |  | 0.37 |  |  |  | 32.2 | % |  |  | 37.3 | % |  |  | 16.9 | % |  |  | 0.5 | %
|Subprime residual securities                   |  |                        | 29,476  |                       |  | $         | 1,337,460  |              |  |            | 8.06 | %        |  |            | 4.56 | %          |  |           | 42.8 | %            |  |  | 0.48 |  |  |  | 32.4 | % |  |  | 27.3 | % |  |  | 23.8 | % |  |  | 2.3 | %
|HELOC residual securities                      |  |                        | 23,098  |                       |  | $         | 506,419    |              |  |            | 5.76 | %        |  |            | 3.80 | %          |  |           | 34.8 | %            |  |  | 1.20 |  |  |  | 45.0 | % |  |  | 45.0 | % |  |  | 19.0 | % |  |  | 1.3 | %
|Total non-investment grade residual securities |  | $                      | 72,633  |                       |  |           |            |              |  |            |      |          |  |            |      |            |  |           |      |              |  |  |      |  |  |  |      |   |  |  |      |   |  |  |      |   |  |  |     |  
|                                               |  |                        |         |                       |  |           |            |              |  |            |      |          |  |            |      |            |  |           |      |              |  |  |      |  |  |  |      |   |  |  |      |   |  |  |      |   |  |  |     |  
|December 31, 2003                              |  |                        |         |                       |  |           |            |              |  |            |      |          |  |            |      |            |  |           |      |              |  |  |      |  |  |  |      |   |  |  |      |   |  |  |      |   |  |  |     |  
|MSRs                                           |  | $                      | 443,688 |                       |  | $         | 30,773,545 |              |  |            | 6.53 | %        |  |            | 0.32 | %          |  |           | 31.0 | %            |  |  | 4.51 |  |  |  | 16.8 | % |  |  | 31.5 | % |  |  | 10.0 | % |  |  | N/A |  
|                                               |  |                        |         |                       |  |           |            |              |  |            |      |          |  |            |      |            |  |           |      |              |  |  |      |  |  |  |      |   |  |  |      |   |  |  |      |   |  |  |     |  
|AAA-rated/agency interest- only strips         |  | $                      | 148,275 |                       |  | $         | 14,740,915 |              |  |            | 6.90 | %        |  |            | 0.38 | %          |  |           | 34.0 | %            |  |  | 2.65 |  |  |  | 17.2 | % |  |  | 35.5 | % |  |  | 9.8  | % |  |  | N/A |  
|                                               |  |                        |         |                       |  |           |            |              |  |            |      |          |  |            |      |            |  |           |      |              |  |  |      |  |  |  |      |   |  |  |      |   |  |  |      |   |  |  |     |  
|Prime residual securities                      |  | $                      | 23,518  |                       |  | $         | 2,406,030  |              |  |            | 7.00 | %        |  |            | 1.48 | %          |  |           | 60.0 | %            |  |  | 0.66 |  |  |  | 26.3 | % |  |  | 36.0 | % |  |  | 15.8 | % |  |  | 0.5 | %
|Subprime residual securities                   |  |                        | 32,639  |                       |  | $         | 1,286,694  |              |  |            | 8.65 | %        |  |            | 4.34 | %          |  |           | 38.4 | %            |  |  | 0.58 |  |  |  | 33.4 | % |  |  | 32.9 | % |  |  | 23.6 | % |  |  | 2.3 | %
|Total non-investment grade residual securities |  | $                      | 56,157  |                       |  |           |            |              |  |            |      |          |  |            |      |            |  |           |      |              |  |  |      |  |  |  |      |   |  |  |      |   |  |  |      |   |  |  |     |  
|                                               |  |                        |         |                       |  |           |            |              |  |            |      |          |  |            |      |            |  |           |      |              |  |  |      |  |  |  |      |   |  |  |      |   |  |  |      |   |  |  |     |  



---



|    |                                                                                                                                                                                                               
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Financial Freedom added a total of
    $4.2 billion to our MSR servicing portfolio with related
    servicing assets of $43.4 million at September 30,
    2004.                                              
|   
|(2) | As a percentage of the original pool balance, the
    actual cumulative loss rate to date totaled 0.11%, 1.21% and
    0.00% for prime, subprime and HELOC residuals, respectively, at
    September 30, 2004.

The lifetime prepayment speeds represent the
annual constant prepayment rate (CPR) we estimate
for the remaining life of the collateral supporting the asset.
For MSRs and AAA-rated and agency interest-only strips, we
project prepayment rates using an industry standard prepayment
model. The model considers key factors such as refinance
incentive, housing turnover, seasonality and aging of the pool
of loans. Prepayment

40



---



##### Table of Contents



speeds incorporate expectations of future rates
implied by the market forward LIBOR/ swap curve as well as
collateral specific current coupon information.


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

The lifetime prepayment speed assumptions
incorporate expectations of future rates implied by the market
forward LIBOR/ swap curve. In contrast, the refinance incentive
reflected in short term prepayment speeds incorporates recent
actual mortgage current coupon information and generally will be
higher than lifetime speeds due to aging and burnout effects of
the portfolio. In response to the decline in 10-year Treasury
rates, the short-term prepayment speeds as well as the lifetime
prepayment speeds assumptions have generally increased from that
of the second quarter of 2004, except for the subprime and HELOC
residuals which are not as interest rate sensitive. The decrease
in the short term prepayment speed assumptions for the subprime
portfolio was due to a substantial amount of new subprime
residuals. As the underlying pool of loans become seasoned, the
prepayment speeds are expected to ramp up which results in
higher lifetime prepayment speed assumptions.

Hedging Interest Rate Risk on
Servicing-Related Assets

With respect to the investment in
servicing-related assets (AAA-rated and agency interest-only
strips, non-investment grade residual securities and MSRs), the
Company is exposed to interest rate risk as a result of other
than predicted prepayment of loans. Our Investing Divisions are
responsible for the management of interest rate and prepayment
risks in the servicing-related assets, subject to policies and
procedures established by, and oversight from, our
management-level Asset and Liability Committee
(ALCO), management level Enterprise Risk Management
group (ERM), and our Board of Directors-level ALCO.

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

We recorded a negative $54.2 million
valuation adjustment to decrease our mortgage servicing asset
during the third quarter of 2004 as a result of decreasing
long-term interest rates; however, this decrease was more than
offset by gains of $64.1 million on our related hedging
instruments. Prepayment speeds experienced in the portfolio
during the third quarter were faster than projected by our
industry-standard prepayment model, as rates decreased during
the quarter resulting in significantly higher levels of
prepayments than anticipated. However, our hedges effectively
mitigated the losses on hedged assets.

Our portfolio retention activities contributed to
the increased prepayments during the quarter. The positive
benefits of these activities are reflected in our segment
results and in the table on page 43, as these benefits are
realized in higher net interest income and gain on sale results.
In line with our expectations, we have observed a slowing of
prepayment speeds more recently, and as a result, we currently
expect continued improved performance in our servicing segment
in the fourth quarter of 2004.

41



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##### Table of Contents



The following table breaks out the components of
service fee income/ expense and the net loss on mortgage-backed
securities.

|                                                 |                                                                                                                                              |                                                   |        |                   |        |          |        |               |         |               |        |         |         |   |        |          |         |   |        |         |         |  
|------------------------------------------------ | -------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------- | ------ | ----------------- | ------ | -------- | ------ | ------------- | ------- | ------------- | ------ | ------- | ------- | - | ------ | -------- | ------- | - | ------ | ------- | ------- | -
|                                                 |                                                                                                                                              |                                                   |        |                  
|                                                 |                                                                                                                                              | Three Months Ended                                |        | Nine Months Ended
|                                                 |                                                                                                                                              |                                                   |        |                  
|                                                 |                                                                                                                                              | September 30,                                     |        | September 30,     |        | June 30, |        | September 30, |         | September 30,
|                                                 |                                                                                                                                              | 2004                                              |        | 2003              |        | 2004     |        | 2004          |         | 2003         
|                                                 |                                                                                                                                              |                                                   |        |                   |        |          |        |               |         |              
|                                                 |                                                                                                                                              |                                                  
|                                                 |                                                                                                                                              | (Dollars in thousands)                           
|Service fee (expense) income:                    |                                                                                                                                              |                                                   |        |                   |        |          |        |               |         |               |        |         |         |   |        |          |         |   |        |        
|                                                 | Gross service fee income                                                                                                                     |                                                   | $      | 37,686            |        |          | $      | 28,007        |         |               | $      | 29,879  |         |   | $      | 95,645   |         |   | $      | 77,574  |        
|                                                 | Amortization                                                                                                                                 |                                                   |        | (38,848           | )      |          |        | (22,559       | )       |               |        | (38,747 | )       |   |        | (100,455 | )       |   |        | (65,541 | )      
|                                                 |                                                                                                                                              |                                                   |        |                   |        |          |        |               |         |               |        |         |         |   |        |          |         |   |        |        
|                                                 | Service fee (expense) income, net of
    amortization                                                                                        |                                                   |        | (1,162            | )      |          |        | 5,448         |         |               |        | (8,868  | )       |   |        | (4,810   | )       |   |        | 12,033  |        
|                                                 | Valuation adjustments on MSRs                                                                                                                |                                                   |        | (54,201           | )      |          |        | 26,866        |         |               |        | 48,594  |         |   |        | (59,040  | )       |   |        | (14,670 | )      
|                                                 | Hedge (loss) gain on MSRs                                                                                                                    |                                                   |        | 64,105            |        |          |        | (43,427       | )       |               |        | (67,533 | )       |   |        | 41,641   |         |   |        | (7,493  | )      
|                                                 |                                                                                                                                              |                                                   |        |                   |        |          |        |               |         |               |        |         |         |   |        |          |         |   |        |        
|                                                 |                                                                                                                                              | Total service fee (expense) income                |        | $                 | 8,742  |          |        | $             | (11,113 | )             |        | $       | (27,807 | ) |        | $        | (22,209 | ) |        | $       | (10,130 | )
|                                                 |                                                                                                                                              |                                                   |        |                   |        |          |        |               |         |               |        |         |         |   |        |          |         |   |        |        
|Net loss on securities:                          |                                                                                                                                              |                                                   |        |                   |        |          |        |               |         |               |        |         |         |   |        |          |         |   |        |        
|                                                 | Realized gain on available for sale securities                                                                                               |                                                   | $      | 2,412             |        |          | $      |              |         |               | $      | 631     |         |   | $      | 3,943    |         |   | $      | 2,022   |        
|                                                 | Impairment on available for sale securities                                                                                                  |                                                   |        | (647              | )      |          |        | (745          | )       |               |        | (565    | )       |   |        | (1,313   | )       |   |        | (2,135  | )      
|                                                 | Unrealized gain (loss) on AAA-rated and agency
    interest-only and residual securities                                                     |                                                   |        | (23,753           | )      |          |        | (7,840        | )       |               |        | 18,119  |         |   |        | (23,126  | )       |   |        | (59,924 | )      
|                                                 | Net (loss) gain on trading securities and other
    instruments used to hedge AAA-rated and agency interest-only and
    residual securities |                                                   |        | 12,550            |        |          |        | (62           | )       |               |        | (21,599 | )       |   |        | 2,657    |         |   |        | 35,221  |        
|                                                 |                                                                                                                                              |                                                   |        |                   |        |          |        |               |         |               |        |         |         |   |        |          |         |   |        |        
|                                                 |                                                                                                                                              | Total loss on mortgage-backed securities,
    net |        | $                 | (9,438 | )        |        | $             | (8,647  | )             |        | $       | (3,414  | ) |        | $        | (17,839 | ) |        | $       | (24,816 | )
|                                                 |                                                                                                                                              |                                                   |        |                   |        |          |        |               |         |               |        |         |         |   |        |          |         |   |        |        
|Total Clean-Up Call and Retention Program Income |                                                                                                                                              | $                                                 | 10,122 |                   |        | $        | 25,196 |               |         | $             | 17,199 |         |         | $ | 48,513 |          |         | $ | 52,183 |        

The income from the clean-up call and retention
programs is recognized as a component of gain on sale and net
interest income in the Investing Divisions mortgage
banking activities. As shown in our segment results on
page 43, the effect of the clean-up call and retention
program activities allowed the mortgage servicing business to
generate positive returns during the historical refinance boom
periods, with the exception of the past two quarters.

The income from the clean-up call and retention
programs totaled $10.1 million during the third quarter of
2004, a decrease of $7.1 million compared to the quarter
ended June 30, 2004. The reduction is primarily due to the
decrease in net interest income as the remaining clean-up call
loans and loans acquired through retention programs had lower
weighted average coupon rates.

As master servicer for our various
securitizations, we maintain the right to call selected
transactions when the outstanding loan balances in the
securitization trust decline to a specified level, typically 10%
of the original collateral balance. During the quarter ended
September 30, 2004, we sold approximately
$22.7 million of called loans with a pretax gain of
$0.7 million. We expect to exercise our option to call
additional loans of approximately $161.2 million during the
remainder of 2004, the exact timing and amount of which is
dependent upon the future interest rate environment and borrower
prepayment behavior.

Mortgage loan servicing provides a key advantage
to mortgage originators in a declining interest rate
environment, as there is an existing base of customers that
could potentially be in the market for a refinance mortgage. The
gains from providing a new mortgage to an existing customer
serve to mitigate the decline in

42



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##### Table of Contents



value of the mortgage servicing asset for the
early prepayment of the original loan. Prior to the third
quarter of 2003, servicing referrals and direct marketing to
IndyMacs servicing customers was performed by the
Web & Direct Mail segment. IndyMac began to
transition this customer retention activity to the mortgage
servicing segment beginning in the third quarter of last year
and expects to complete the transition by the end of year 2004.
In order to evaluate the overall profitability of the servicing
segment, we believe it is important to view the profitability
including all of the retention activities performed at the
Company, both by the consumer direct segment and the mortgage
servicing segment.


When looked at as a whole, the retention
activities significantly enhance the servicing returns. The
second quarter of 2004 was the only quarter in which IndyMac
suffered a loss in its servicing activities net of the retention
profits. The table below shows the total return on servicing and
retained assets including an estimate of the consumer direct
retention profits.

|                           |                                                |                          |       |               |         |         |        |          |         |         |     |     |     |    |         |         |         |  |     |     |      |   
|-------------------------- | ---------------------------------------------- | ------------------------ | ----- | ------------- | ------- | ------- | ------ | -------- | ------- | ------- | --- | --- | --- | -- | ------- | ------- | ------- |  | --- | --- | ---- | --
|                           |                                                |                         
|                           |                                                | Three Months Ended      
|                           |                                                |                         
|                           |                                                | September 30,            |       | September 30, |         | Percent |        | June 30, |         | Percent
|                           |                                                | 2004                     |       | 2003          |         | Change  |        | 2004     |         | Change 
|                           |                                                |                          |       |               |         |         |        |          |         |        
|                           |                                                |                         
|                           |                                                | (Dollars in thousands)  
|Net revenues:              |                                                |                          |       |               |         |         |        |          |         |         |     |     |     |    |         |         |         |  |     |    
|                           | Servicing-related assets segment               |                          | $     | 10,703        |         |         | $      | 11,572   |         |         |     | (8  | )%  |    | $       | (9,869  | )       |  |     | 208 | %   
|                           | Web & Direct Mail servicing retention revenue  |                          |       | 3,353         |         |         |        | 23,791   |         |         |     | (86 | )%  |    |         | 10,018  |         |  |     | (67 | )%  
|                           |                                                |                          |       |               |         |         |        |          |         |         |     |     |     |    |         |         |         |  |     |    
|                           |                                                | Total net revenues       |       |               | 14,056  |         |        |          | 35,363  |         |     |     | (60 | )% |         |         | 149     |  |     |     | 9334 | % 
|Operating expenses:        |                                                |                          |       |               |         |         |        |          |         |         |     |     |     |    |         |         |         |  |     |    
|                           | Servicing-related assets segment               |                          |       | 10,725        |         |         |        | 9,934    |         |         |     | 8   | %   |    |         | 11,278  |         |  |     | (5  | )%  
|                           | Web & Direct Mail servicing retention expenses |                          |       | 1,634         |         |         |        | 11,023   |         |         |     | (85 | )%  |    |         | 4,838   |         |  |     | (66 | )%  
|                           |                                                |                          |       |               |         |         |        |          |         |         |     |     |     |    |         |         |         |  |     |    
|                           |                                                | Total operating expenses |       |               | 12,359  |         |        |          | 20,957  |         |     |     | (41 | )% |         |         | 16,116  |  |     |     | (23  | )%
|Earnings before tax        |                                                |                          | 1,697 |               |         |         | 14,406 |          |         |         | (88 | )%  |     |    | (15,967 | )       |         |  | 111 | %  
|                           |                                                |                          |       |               |         |         |        |          |         |         |     |     |     |    |         |         |         |  |     |    
|Net earnings               |                                                | $                        | 1,027 |               |         | $       | 8,716  |          |         |         | (88 | )%  |     | $  | (9,660  | )       |         |  | 111 | %  
|                           |                                                |                          |       |               |         |         |        |          |         |         |     |     |     |    |         |         |         |  |     |    
|Average capital allocated: |                                                |                          |       |               |         |         |        |          |         |         |     |     |     |    |         |         |         |  |     |    
|                           | Servicing-related assets segment               |                          | $     | 226,674       |         |         | $      | 196,584  |         |         |     | 15  | %   |    | $       | 205,192 |         |  |     | 10  | %   
|                           | Web & Direct Mail servicing retention revenue  |                          |       | 6,809         |         |         |        | 15,310   |         |         |     | (56 | )%  |    |         | 6,719   |         |  |     | 1   | %   
|                           |                                                |                          |       |               |         |         |        |          |         |         |     |     |     |    |         |         |         |  |     |    
|                           |                                                | Total average capital    |       | $             | 233,483 |         |        | $        | 211,894 |         |     |     | 10  | %  |         | $       | 211,911 |  |     |     | 10   | % 
|                           |                                                |                          |       |               |         |         |        |          |         |         |     |     |     |    |         |         |         |  |     |    
|ROE                        |                                                |                          | 2     | %             |         |         | 16     | %        |         |         | (88 | )%  |     |    | (18     | )%      |         |  | 111 | %  




Construction Lending

IndyMac provides construction financing for
individual consumers who are in the process of building their
own home (consumer construction) and for residential subdivision
developers (builder construction). With respect to consumer
construction, the primary product is a construction-to-permanent
residential mortgage loan. This product provides financing for
the 9 to 12 month term of construction and automatically
converts to a permanent mortgage loan at the end of
construction. As a result, this product represents a hybrid
activity between our portfolio lending activities and mortgage
banking activities. The Company earns net interest income during
the construction phase. These loans are typically fixed-rate
loans. When the loan converts to permanent status the loan is
transferred into the Companys pipeline of mortgage loans
held for sale. Consumer construction loan originations grew 6%
from the second quarter of 2004 and 28% over the same quarter of
2003, as we continue to take advantage of the strong new
home purchase market. Overall, the Consumer Construction
group is one of the largest custom residential construction
lenders in the nation.

43



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##### Table of Contents



Consumer construction loans outstanding at
September 30, 2004, were $1.4 billion, up 21% compared
to the amount at December 31, 2003.


Builder construction loans are typically based on
the prime rate. During the third quarter of 2004, we entered
into new tract construction commitments of $265.9 million,
up 78%, or $116.6 million, from the third quarter of 2003.
Builder loans outstanding at September 30, 2004, including
construction and land and other mortgage loans, totaled
$752.8 million, a $147.7 million, or 24% increase
compared to December 31, 2003. A substantial portion of our
builder construction loans is secured by corporate or personal
guarantees of the builders as well as the underlying real estate.

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

|                                     |  |                        |           |                   |  |              |           |              |  |   |           |   |  |   |           |  
|------------------------------------ |  | ---------------------- | --------- | ----------------- |  | ------------ | --------- | ------------ |  | - | --------- | - |  | - | --------- | -
|                                     |  |                       
|                                     |  | As of                 
|                                     |  |                       
|                                     |  |                        |           |                  
|                                     |  | September 30, 2004     |           | December 31, 2003
|                                     |  |                        |           |                  
|                                     |  | Consumer               |           | Builder           |  | Consumer     |           | Builder     
|                                     |  | Construction           |           | Construction      |  | Construction |           | Construction
|                                     |  | Loans                  |           | Loans             |  | Loans        |           | Loans       
|                                     |  |                        |           |                   |  |              |           |             
|                                     |  |                       
|                                     |  | (Dollars in thousands)
|Construction loans                   |  | $                      | 1,383,147 |                   |  | $            | 565,381   |              |  | $ | 1,145,526 |   |  | $ | 484,397   |  
|Land and other mortgage loans        |  | $                      | 157,161   |                   |  | $            | 187,422   |              |  | $ | 87,045    |   |  | $ | 120,751   |  
|Outstanding commitments              |  | $                      | 2,574,651 |                   |  | $            | 1,483,282 |              |  | $ | 2,091,853 |   |  | $ | 1,120,893 |  
|Average construction loan commitment |  | $                      | 373       |                   |  | $            | 2,296     |              |  | $ | 391       |   |  | $ | 3,046     |  
|Non-performing loans                 |  |                        | 0.65      | %                 |  |              | 2.04      | %            |  |   | 0.78      | % |  |   | 1.60      | %
|Yield                                |  |                        | 5.64      | %                 |  |              | 6.62      | %            |  |   | 5.81      | % |  |   | 6.63      | %
|Fixed-rate loans                     |  |                        | 91        | %                 |  |              | 0         | %            |  |   | 94        | % |  |   | 1         | %
|Adjustable-rate loans                |  |                        | 9         | %                 |  |              | 98        | %            |  |   | 6         | % |  |   | 97        | %
|Hybrid adjustable-rate loans         |  |                        | 0         | %                 |  |              | 2         | %            |  |   | 0         | % |  |   | 2         | %

Additional Information as of
September 30, 2004

|                               |                                            |              |     |     |   |              |                                              |  |     |     |  
|------------------------------ | ------------------------------------------ | ------------ | --- | --- | - | ------------ | -------------------------------------------- |  | --- | --- | -
|                               |                                            | Consumer     |     |     |   | Builder     
|                               |                                            | Construction |     |     |   | Construction
|                               |                                            | Loans        |     |     |   | Loans       
|                               |                                            |              |     |     |   |             
|Average loan-to-value ratio(1) |                                            |              | 74  | %   |   |              |                                              |  | 69  | %  
|Average FICO score(2)          |                                            |              | 707 |     |   |              |                                              |  | N/A |    
|Geographic distribution        |                                            |              |     |     |   |              |                                              |  |     |    
|                               | Southern California                        |              |     | 29  | % |              | Southern California                          |  |     | 43  | %
|                               | Northern California                        |              |     | 18  | % |              | Northern California                          |  |     | 21  | %
|                               | Hawaii                                     |              |     | 6   | % |              | Illinois                                     |  |     | 13  | %
|                               | New York                                   |              |     | 5   | % |              | Florida                                      |  |     | 5   | %
|                               | Florida                                    |              |     | 5   | % |              | Massachusetts                                |  |     | 4   | %
|                               | Washington                                 |              |     | 3   | % |              | Nevada                                       |  |     | 2   | %
|                               | Colorado                                   |              |     | 3   | % |              |                                              |  |     |     |  
|                               | Georgia                                    |              |     | 2   | % |              |                                              |  |     |     |  
|                               | Connecticut                                |              |     | 2   | % |              |                                              |  |     |     |  
|                               | Illinois                                   |              |     | 2   | % |              |                                              |  |     |     |  
|                               | Michigan                                   |              |     | 2   | % |              |                                              |  |     |     |  
|                               | Nevada                                     |              |     | 2   | % |              |                                              |  |     |     |  
|                               | New Jersey                                 |              |     | 2   | % |              |                                              |  |     |     |  
|                               | North Carolina                             |              |     | 2   | % |              |                                              |  |     |     |  
|                               | Other (each individually
    less than 2%) |              |     | 17  | % |              | Other (each
    individually   less than 2%) |  |     | 12  | %
|                               |                                            |              |     |     |   |              |                                              |  |     |    
|                               | Total Consumer Construction                |              |     | 100 | % |              | Total Builder Construction                   |  |     | 100 | %
|                               |                                            |              |     |     |   |              |                                              |  |     |    



---



|    |                                                                                                                                                                    
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The average loan-to-value ratio is based on the
    estimated appraised value of the completed project compared to
    the commitment amount at September 30, 2004.

44



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##### Table of Contents





|    |                                                                                                                                        
|--- | ---------------------------------------------------------------------------------------------------------------------------------------
|(2) | FICO scores are not calculated for corporate
    entities and, therefore, are not applicable to the builder
    construction portfolio.

For information related to the Companys
balance of non-performing assets and related credit reserves,
see discussion in the Credit Risk and Reserves
section at page 50.




HELOC Portfolio

The HELOC portfolio grew 111% during the nine
months ended September 30, 2004, from $711.5 million
at December 31, 2003, to $1.5 billion at
September 30, 2004, including the HELOC securitized
servicing portfolio. The HELOC production was largely from our
internal and conduit channels. HELOC loans that we currently
plan to sell or securitize are classified as held for sale.

During 2004, the Company financed $1 billion
in HELOC loans through two separate securitization transactions.
The trusts issued AAA-rated asset-backed certificates that are
guaranteed by a third party insurer. The Company pledged the
certificates to secure $1 billion of nonrecourse debt. As a
result of these transactions, the Company recharacterized the
net book value of the HELOCs as securities available for sale
and servicing rights. The nonrecourse notes are reflected in
other borrowings. The Company recognized no gain or loss on
these secured financing transactions. The primary objectives of
these transactions were to (1) lower our cost of funds,
(2) improve our liquidity profile, and (3) improve our
risk profile through the use of bond insurance.

The following table presents information on the
combined HELOCs held for sale and held for investment as of and
for the three months ended September 30, 2004,
June 30, 2004, and December 31, 2003. All HELOC loans
are adjustable rate loans and indexed to the prime rate.

|                           |  |                        |           |          |  |              |           |   |  |   |           |  
|-------------------------- |  | ---------------------- | --------- | -------- |  | ------------ | --------- | - |  | - | --------- | -
|                           |  | September 30,          |           | June 30, |  | December 31,
|                           |  | 2004                   |           | 2004     |  | 2003        
|                           |  |                        |           |          |  |             
|                           |  |                       
|                           |  | (Dollars in thousands)
|Outstanding balance        |  | $                      | 519,788   |          |  | $            | 559,406   |   |  | $ | 711,494   |  
|Outstanding commitments(1) |  | $                      | 1,205,617 |          |  | $            | 1,095,532 |   |  | $ | 1,189,213 |  
|Average spread over prime  |  |                        | 1.71      | %        |  |              | 1.99      | % |  |   | 1.92      | %
|Average FICO score         |  |                        | 725       |          |  |              | 716       |   |  |   | 710       |  
|Average CLTV ratio(2)      |  |                        | 75        | %        |  |              | 75        | % |  |   | 77        | %

|                 |       |                        |         |              |  |                |     |         |  |             |      |      |   |  |     |     |  |  |      |      |  
|---------------- | ----- | ---------------------- | ------- | ------------ |  | -------------- | --- | ------- |  | ----------- | ---- | ---- | - |  | --- | --- |  |  | ---- | ---- | -
|                 |       |                        |         | Average Loan |  |                |     |         |  | 30+ Days   
|                 |       | Outstanding            |         | Commitment   |  | Average Spread |     | Average |  | Delinquency
|CLTV             |       | Balance                |         | Balance      |  | Over Prime     |     | FICO    |  | Percentage 
|                 |       |                        |         |              |  |                |     |         |  |            
|                 |       |                       
|                 |       | (Dollars in thousands)
|>= 96% &< = 100% |       | $                      | 74,811  |              |  | $              | 97  |         |  |             | 2.07 | %    |   |  | 730 |     |  |  | 0.36 | %   
|>= 91% &< = 95%  |       |                        | 50,002  |              |  |                | 88  |         |  |             | 2.14 | %    |   |  | 722 |     |  |  | 0.61 | %   
|>= 81% &< = 90%  |       |                        | 145,196 |              |  |                | 88  |         |  |             | 1.81 | %    |   |  | 712 |     |  |  | 1.41 | %   
|>= 71% &< = 80%  |       |                        | 129,667 |              |  |                | 125 |         |  |             | 1.30 | %    |   |  | 722 |     |  |  | 0.79 | %   
|<= 70%           |       |                        | 120,112 |              |  |                | 127 |         |  |             | 1.63 | %    |   |  | 738 |     |  |  | 0.07 | %   
|                 |       |                        |         |              |  |                |     |         |  |             |      |      |   |  |     |     |  |  |      |     
|                 | Total |                        | $       | 519,788      |  |                | $   | 108     |  |             |      | 1.71 | % |  |     | 725 |  |  |      | 0.72 | %
|                 |       |                        |         |              |  |                |     |         |  |             |      |      |   |  |     |     |  |  |      |     



---



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

45



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##### Table of Contents






NET INTEREST INCOME

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

|                                                         |                                    |                                                |           |                    |            |               |         |         |  |          |      |       |   |         |           |            |            |       |        |         |  |  |      |      |   |   |           |            |            |   |         |         |  |  |      |      |   | 
|-------------------------------------------------------- | ---------------------------------- | ---------------------------------------------- | --------- | ------------------ | ---------- | ------------- | ------- | ------- |  | -------- | ---- | ----- | - | ------- | --------- | ---------- | ---------- | ----- | ------ | ------- |  |  | ---- | ---- | - | - | --------- | ---------- | ---------- | - | ------- | ------- |  |  | ---- | ---- | - | 
|                                                         |                                    |                                               
|                                                         |                                    | Three Months Ended                            
|                                                         |                                    |                                               
|                                                         |                                    |                                                |           |                    |            |              
|                                                         |                                    | September 30, 2004                             |           | September 30, 2003 |            | June 30, 2004
|                                                         |                                    |                                                |           |                    |            |              
|                                                         |                                    | Average                                        |           |                    |            | Yield         |         | Average |  |          |      | Yield |   | Average |           |            |            | Yield
|                                                         |                                    | Balance                                        |           | Interest           |            | Rate          |         | Balance |  | Interest |      | Rate  |   | Balance |           | Interest   |            | Rate 
|                                                         |                                    |                                                |           |                    |            |               |         |         |  |          |      |       |   |         |           |            |            |      
|                                                         |                                    |                                               
|                                                         |                                    | (Dollars in thousands)                        
|Securities                                               |                                    | $                                              | 3,042,119 |                    |            | $             | 36,129  |         |  |          | 4.72 | %     |   | $       | 1,665,884 |            |            | $     | 20,437 |         |  |  | 4.87 | %    |   | $ | 2,877,174 |            |            | $ | 34,365  |         |  |  | 4.80 | %   
|Loans held for sale                                      |                                    |                                                | 5,608,086 |                    |            |               | 72,927  |         |  |          | 5.17 | %     |   |         | 4,043,670 |            |            |       | 61,933 |         |  |  | 6.08 | %    |   |   | 5,282,806 |            |            |   | 69,395  |         |  |  | 5.28 | %   
|Mortgage loans held for investment                       |                                    |                                                | 5,014,168 |                    |            |               | 54,537  |         |  |          | 4.33 | %     |   |         | 3,473,840 |            |            |       | 37,767 |         |  |  | 4.31 | %    |   |   | 5,424,545 |            |            |   | 56,827  |         |  |  | 4.21 | %   
|Builder construction and income property                 |                                    |                                                | 555,422   |                    |            |               | 9,226   |         |  |          | 6.61 | %     |   |         | 549,544   |            |            |       | 8,977  |         |  |  | 6.48 | %    |   |   | 546,597   |            |            |   | 8,820   |         |  |  | 6.49 | %   
|Consumer construction                                    |                                    |                                                | 1,284,467 |                    |            |               | 18,203  |         |  |          | 5.64 | %     |   |         | 1,009,016 |            |            |       | 15,592 |         |  |  | 6.13 | %    |   |   | 1,208,522 |            |            |   | 17,003  |         |  |  | 5.66 | %   
|Investment in Federal Home Loan Bank stock
    and other |                                    |                                                | 357,996   |                    |            |               | 3,981   |         |  |          | 4.42 | %     |   |         | 277,246   |            |            |       | 2,633  |         |  |  | 3.77 | %    |   |   | 329,231   |            |            |   | 3,898   |         |  |  | 4.76 | %   
|                                                         |                                    |                                                |           |                    |            |               |         |         |  |          |      |       |   |         |           |            |            |       |        |         |  |  |      |      |   |   |           |            |            |   |         |         |  |  |      |     
|                                                         | Total interest-earning assets      |                                                |           | 15,862,258         |            |               |         | 195,003 |  |          |      | 4.89  | % |         |           | 11,019,200 |            |       |        | 147,339 |  |  |      | 5.30 | % |   |           | 15,668,875 |            |   |         | 190,308 |  |  |      | 4.88 | %
|                                                         |                                    |                                                |           |                    |            |               |         |         |  |          |      |       |   |         |           |            |            |       |        |         |  |  |      |      |   |   |           |            |            |   |         |         |  |  |      |     
|Other                                                    |                                    |                                                | 1,437,673 |                    |            |               |         |         |  |          |      |       |   |         | 1,105,794 |            |            |       |        |         |  |  |      |      |   |   | 1,317,607 |            |            |   |         |         |  |  |      |     
|                                                         |                                    |                                                |           |                    |            |               |         |         |  |          |      |       |   |         |           |            |            |       |        |         |  |  |      |      |   |   |           |            |            |   |         |         |  |  |      |     
|                                                         | Total assets                       |                                                | $         | 17,299,931         |            |               |         |         |  |          |      |       |   |         | $         | 12,124,994 |            |       |        |         |  |  |      |      |   |   | $         | 16,986,482 |            |   |         |         |  |  |      |      |  
|                                                         |                                    |                                                |           |                    |            |               |         |         |  |          |      |       |   |         |           |            |            |       |        |         |  |  |      |      |   |   |           |            |            |   |         |         |  |  |      |     
|Interest-bearing deposits                                |                                    | $                                              | 4,388,651 |                    |            |               | 26,527  |         |  |          | 2.40 | %     |   | $       | 3,336,257 |            |            |       | 22,261 |         |  |  | 2.65 | %    |   | $ | 4,076,509 |            |            |   | 23,697  |         |  |  | 2.34 | %   
|Advances from Federal Home Loan Bank                     |                                    |                                                | 5,922,663 |                    |            |               | 37,660  |         |  |          | 2.53 | %     |   |         | 4,094,698 |            |            |       | 28,959 |         |  |  | 2.81 | %    |   |   | 5,775,468 |            |            |   | 33,919  |         |  |  | 2.36 | %   
|Other borrowings                                         |                                    |                                                | 4,769,125 |                    |            |               | 30,226  |         |  |          | 2.52 | %     |   |         | 2,434,027 |            |            |       | 13,666 |         |  |  | 2.23 | %    |   |   | 4,800,920 |            |            |   | 25,714  |         |  |  | 2.15 | %   
|                                                         |                                    |                                                |           |                    |            |               |         |         |  |          |      |       |   |         |           |            |            |       |        |         |  |  |      |      |   |   |           |            |            |   |         |         |  |  |      |     
|                                                         | Total interest-bearing liabilities |                                                |           | 15,080,439         |            |               |         | 94,413  |  |          |      | 2.49  | % |         |           | 9,864,982  |            |       |        | 64,886  |  |  |      | 2.61 | % |   |           | 14,652,897 |            |   |         | 83,330  |  |  |      | 2.29 | %
|                                                         |                                    |                                                |           |                    |            |               |         |         |  |          |      |       |   |         |           |            |            |       |        |         |  |  |      |      |   |   |           |            |            |   |         |         |  |  |      |     
|Other                                                    |                                    |                                                | 1,006,430 |                    |            |               |         |         |  |          |      |       |   |         | 1,289,642 |            |            |       |        |         |  |  |      |      |   |   | 1,206,297 |            |            |   |         |         |  |  |      |     
|                                                         |                                    |                                                |           |                    |            |               |         |         |  |          |      |       |   |         |           |            |            |       |        |         |  |  |      |      |   |   |           |            |            |   |         |         |  |  |      |     
|                                                         |                                    | Total liabilities                              |           |                    | 16,086,869 |               |         |         |  |          |      |       |   |         |           |            | 11,154,624 |       |        |         |  |  |      |      |   |   |           |            | 15,859,194 |   |         |         |  |  |      |      |   | 
|                                                         |                                    | Stockholders equity                           |           |                    | 1,213,062  |               |         |         |  |          |      |       |   |         |           |            | 970,370    |       |        |         |  |  |      |      |   |   |           |            | 1,127,288  |   |         |         |  |  |      |      |   | 
|                                                         |                                    |                                                |           |                    |            |               |         |         |  |          |      |       |   |         |           |            |            |       |        |         |  |  |      |      |   |   |           |            |            |   |         |         |  |  |      |     
|                                                         |                                    | Total liabilities and
    stockholders equity |           | $                  | 17,299,931 |               |         |         |  |          |      |       |   |         |           | $          | 12,124,994 |       |        |         |  |  |      |      |   |   |           | $          | 16,986,482 |   |         |         |  |  |      |      |   | 
|                                                         |                                    |                                                |           |                    |            |               |         |         |  |          |      |       |   |         |           |            |            |       |        |         |  |  |      |      |   |   |           |            |            |   |         |         |  |  |      |     
|Net interest income                                      |                                    |                                                |           |                    |            | $             | 100,590 |         |  |          |      |       |   |         |           |            |            | $     | 82,453 |         |  |  |      |      |   |   |           |            |            | $ | 106,978 |         |  |  |      |     
|                                                         |                                    |                                                |           |                    |            |               |         |         |  |          |      |       |   |         |           |            |            |       |        |         |  |  |      |      |   |   |           |            |            |   |         |         |  |  |      |     
|Net interest spread                                      |                                    |                                                |           |                    |            |               |         |         |  |          | 2.40 | %     |   |         |           |            |            |       |        |         |  |  | 2.70 | %    |   |   |           |            |            |   |         |         |  |  | 2.59 | %   
|                                                         |                                    |                                                |           |                    |            |               |         |         |  |          |      |       |   |         |           |            |            |       |        |         |  |  |      |      |   |   |           |            |            |   |         |         |  |  |      |     
|Net interest margin                                      |                                    |                                                |           |                    |            |               |         |         |  |          | 2.52 | %     |   |         |           |            |            |       |        |         |  |  | 2.97 | %    |   |   |           |            |            |   |         |         |  |  | 2.75 | %   
|                                                         |                                    |                                                |           |                    |            |               |         |         |  |          |      |       |   |         |           |            |            |       |        |         |  |  |      |      |   |   |           |            |            |   |         |         |  |  |      |     

46



---



##### Table of Contents



|                                                         |                                            |                        |           |            |  |                    |         |         |  |          |      |       |   |   |           |            |  |   |         |         |  |  |      |      |  
|-------------------------------------------------------- | ------------------------------------------ | ---------------------- | --------- | ---------- |  | ------------------ | ------- | ------- |  | -------- | ---- | ----- | - | - | --------- | ---------- |  | - | ------- | ------- |  |  | ---- | ---- | -
|                                                         |                                            |                       
|                                                         |                                            | Nine Months Ended     
|                                                         |                                            |                       
|                                                         |                                            |                        |           |            |  |                    |         |        
|                                                         |                                            | September 30, 2004     |           |            |  | September 30, 2003 |         |        
|                                                         |                                            |                        |           |            |  |                    |         |        
|                                                         |                                            | Average                |           |            |  | Yield              |         | Average |  |          |      | Yield
|                                                         |                                            | Balance                |           | Interest   |  | Rate               |         | Balance |  | Interest |      | Rate 
|                                                         |                                            |                        |           |            |  |                    |         |         |  |          |      |      
|                                                         |                                            |                       
|                                                         |                                            | (Dollars in thousands)
|Securities                                               |                                            | $                      | 2,674,920 |            |  | $                  | 97,349  |         |  |          | 4.86 | %     |   | $ | 1,713,395 |            |  | $ | 57,508  |         |  |  | 4.49 | %   
|Loans held for sale                                      |                                            |                        | 4,859,847 |            |  |                    | 197,068 |         |  |          | 5.42 | %     |   |   | 3,459,452 |            |  |   | 159,595 |         |  |  | 6.17 | %   
|Mortgage loans held for investment                       |                                            |                        | 5,348,991 |            |  |                    | 169,405 |         |  |          | 4.23 | %     |   |   | 3,135,760 |            |  |   | 110,930 |         |  |  | 4.73 | %   
|Builder construction and income property                 |                                            |                        | 536,229   |            |  |                    | 26,086  |         |  |          | 6.50 | %     |   |   | 563,791   |            |  |   | 28,465  |         |  |  | 6.75 | %   
|Consumer construction                                    |                                            |                        | 1,211,120 |            |  |                    | 51,200  |         |  |          | 5.65 | %     |   |   | 915,998   |            |  |   | 44,627  |         |  |  | 6.51 | %   
|Investment in Federal Home Loan Bank stock
    and other |                                            |                        | 335,849   |            |  |                    | 10,762  |         |  |          | 4.28 | %     |   |   | 234,355   |            |  |   | 6,887   |         |  |  | 3.93 | %   
|                                                         |                                            |                        |           |            |  |                    |         |         |  |          |      |       |   |   |           |            |  |   |         |         |  |  |      |     
|                                                         | Total interest-earning assets              |                        |           | 14,966,956 |  |                    |         | 551,870 |  |          |      | 4.93  | % |   |           | 10,022,751 |  |   |         | 408,012 |  |  |      | 5.44 | %
|                                                         |                                            |                        |           |            |  |                    |         |         |  |          |      |       |   |   |           |            |  |   |         |         |  |  |      |     
|Other                                                    |                                            |                        | 1,311,306 |            |  |                    |         |         |  |          |      |       |   |   | 991,042   |            |  |   |         |         |  |  |      |     
|                                                         |                                            |                        |           |            |  |                    |         |         |  |          |      |       |   |   |           |            |  |   |         |         |  |  |      |     
|                                                         | Total assets                               |                        | $         | 16,278,262 |  |                    |         |         |  |          |      |       |   |   | $         | 11,013,793 |  |   |         |         |  |  |      |      |  
|                                                         |                                            |                        |           |            |  |                    |         |         |  |          |      |       |   |   |           |            |  |   |         |         |  |  |      |     
|Interest-bearing deposits                                |                                            | $                      | 4,101,224 |            |  |                    | 72,706  |         |  |          | 2.37 | %     |   | $ | 3,023,169 |            |  |   | 65,899  |         |  |  | 2.91 | %   
|Advances from Federal Home Loan Bank                     |                                            |                        | 5,635,089 |            |  |                    | 102,499 |         |  |          | 2.43 | %     |   |   | 3,463,913 |            |  |   | 82,824  |         |  |  | 3.20 | %   
|Other borrowings                                         |                                            |                        | 4,367,349 |            |  |                    | 75,164  |         |  |          | 2.30 | %     |   |   | 2,507,798 |            |  |   | 46,297  |         |  |  | 2.47 | %   
|                                                         |                                            |                        |           |            |  |                    |         |         |  |          |      |       |   |   |           |            |  |   |         |         |  |  |      |     
|                                                         | Total interest-bearing liabilities         |                        |           | 14,103,662 |  |                    |         | 250,369 |  |          |      | 2.37  | % |   |           | 8,994,880  |  |   |         | 195,020 |  |  |      | 2.90 | %
|                                                         |                                            |                        |           |            |  |                    |         |         |  |          |      |       |   |   |           |            |  |   |         |         |  |  |      |     
|Other                                                    |                                            |                        | 1,046,709 |            |  |                    |         |         |  |          |      |       |   |   | 1,103,865 |            |  |   |         |         |  |  |      |     
|                                                         |                                            |                        |           |            |  |                    |         |         |  |          |      |       |   |   |           |            |  |   |         |         |  |  |      |     
|                                                         | Total liabilities                          |                        |           | 15,150,371 |  |                    |         |         |  |          |      |       |   |   |           | 10,098,745 |  |   |         |         |  |  |      |      |  
|                                                         | Stockholders equity                       |                        |           | 1,127,891  |  |                    |         |         |  |          |      |       |   |   |           | 915,048    |  |   |         |         |  |  |      |      |  
|                                                         |                                            |                        |           |            |  |                    |         |         |  |          |      |       |   |   |           |            |  |   |         |         |  |  |      |     
|                                                         | Total liabilities and stockholders equity |                        | $         | 16,278,262 |  |                    |         |         |  |          |      |       |   |   | $         | 11,013,793 |  |   |         |         |  |  |      |      |  
|                                                         |                                            |                        |           |            |  |                    |         |         |  |          |      |       |   |   |           |            |  |   |         |         |  |  |      |     
|Net interest income                                      |                                            |                        |           |            |  | $                  | 301,501 |         |  |          |      |       |   |   |           |            |  | $ | 212,992 |         |  |  |      |     
|                                                         |                                            |                        |           |            |  |                    |         |         |  |          |      |       |   |   |           |            |  |   |         |         |  |  |      |     
|Net interest spread                                      |                                            |                        |           |            |  |                    |         |         |  |          | 2.56 | %     |   |   |           |            |  |   |         |         |  |  | 2.54 | %   
|                                                         |                                            |                        |           |            |  |                    |         |         |  |          |      |       |   |   |           |            |  |   |         |         |  |  |      |     
|Net interest margin                                      |                                            |                        |           |            |  |                    |         |         |  |          | 2.69 | %     |   |   |           |            |  |   |         |         |  |  | 2.84 | %   
|                                                         |                                            |                        |           |            |  |                    |         |         |  |          |      |       |   |   |           |            |  |   |         |         |  |  |      |     

The net interest margin during the third quarter
of 2004 was 2.52%, a decline from 2.75% for the second quarter
2004 and 2.97% for the third quarter of 2003. The margin decline
quarter over quarter was primarily due to the 42 basis
points increase in short term LIBOR rate which affected our cost
of borrowings. Compared to the third quarter of 2003, the
45 basis points drop in net interest margin was primarily
due to the change in the mix of our interest-earning assets to
more adjustable rate mortgages, including 12-MAT loans that
carry a lower yield in the initial period. Similarly, our net
interest margin decreased 15 basis points to 2.69% for the
nine months ended September 30, 2004 from 2.84% for the
same period in 2003.

The dollar amounts of interest income and
interest expense fluctuate depending upon changes in the average
balances and interest rates of interest-earning assets and
interest-bearing liabilities. The following table details
changes attributable to (i) changes in volume (changes in
average outstanding balances multiplied by the prior
periods rate), (ii) changes in the rate (changes in
the average interest rate multiplied

47



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by the prior periods volume), and
(iii) changes in rate/volume (mix) (changes in
rates times the changes in volume).


|                                           |                                                          |                                                |       |        |        |     |        |              |         |   |      |        |        |   |       |        |        | 
|------------------------------------------ | -------------------------------------------------------- | ---------------------------------------------- | ----- | ------ | ------ | --- | ------ | ------------ | ------- | - | ---- | ------ | ------ | - | ----- | ------ | ------ | 
|                                           |                                                          |                                               
|                                           |                                                          | Three Months Ended September 30, 2004 vs. 2003
|                                           |                                                          |                                               
|                                           |                                                          |                                               
|                                           |                                                          | Increase/(Decrease) Due to                    
|                                           |                                                          |                                               
|                                           |                                                          | Volume                                         |       | Rate   |        | Mix |        | Total Change
|                                           |                                                          |                                                |       |        |        |     |        |             
|                                           |                                                          |                                               
|                                           |                                                          | (Dollars in thousands)                        
|Interest income                            |                                                          |                                                |       |        |        |     |        |              |         |   |      |        |        |   |       |       
|                                           | Mortgage-backed securities                               |                                                | $     | 16,781 |        |     | $      | (598         | )       |   | $    | (490   | )      |   | $     | 15,693 |       
|                                           | Loans held for sale                                      |                                                |       | 23,726 |        |     |        | (9,206       | )       |   |      | (3,525 | )      |   |       | 10,995 |       
|                                           | Mortgage loans held for investment                       |                                                |       | 16,597 |        |     |        | 120          |         |   |      | 53     |        |   |       | 16,770 |       
|                                           | Builder construction and income property                 |                                                |       | 71     |        |     |        | 176          |         |   |      | 2      |        |   |       | 249    |       
|                                           | Consumer construction                                    |                                                |       | 4,202  |        |     |        | (1,255       | )       |   |      | (338   | )      |   |       | 2,609  |       
|                                           | Investment in Federal Home Loan Bank stock
    and other |                                                |       | 759    |        |     |        | 460          |         |   |      | 129    |        |   |       | 1,348  |       
|                                           |                                                          |                                                |       |        |        |     |        |              |         |   |      |        |        |   |       |       
|                                           |                                                          | Total interest income                          |       |        | 62,136 |     |        |              | (10,303 | ) |      |        | (4,169 | ) |       |        | 47,664 | 
|Interest expense Interest-bearing deposits |                                                          |                                                | 6,942 |        |        |     | (2,040 | )            |         |   | (635 | )      |        |   | 4,267 |       
|                                           | Advances from Federal Home Loan Bank                     |                                                |       | 12,813 |        |     |        | (2,851       | )       |   |      | (1,261 | )      |   |       | 8,701  |       
|                                           | Other borrowings                                         |                                                |       | 11,148 |        |     |        | 2,646        |         |   |      | 2,765  |        |   |       | 16,559 |       
|                                           |                                                          |                                                |       |        |        |     |        |              |         |   |      |        |        |   |       |       
|                                           |                                                          | Total interest expense                         |       |        | 30,903 |     |        |              | (2,245  | ) |      |        | 869    |   |       |        | 29,527 | 
|                                           |                                                          |                                                |       |        |        |     |        |              |         |   |      |        |        |   |       |       
|                                           |                                                          | Net interest income                            |       | $      | 31,233 |     |        | $            | (8,058  | ) |      | $      | (5,038 | ) |       | $      | 18,137 | 
|                                           |                                                          |                                                |       |        |        |     |        |              |         |   |      |        |        |   |       |       

|                 |                                                          |                                               |   |        |         |     |   |              |         |   |   |         |         |   |   |        |         | 
|---------------- | -------------------------------------------------------- | --------------------------------------------- | - | ------ | ------- | --- | - | ------------ | ------- | - | - | ------- | ------- | - | - | ------ | ------- | 
|                 |                                                          |                                              
|                 |                                                          | Nine Months Ended September 30, 2004 vs. 2003
|                 |                                                          |                                              
|                 |                                                          |                                              
|                 |                                                          | Increase/(Decrease) Due to                   
|                 |                                                          |                                              
|                 |                                                          | Volume                                        |   | Rate   |         | Mix |   | Total Change
|                 |                                                          |                                               |   |        |         |     |   |             
|                 |                                                          |                                              
|                 |                                                          | (Dollars in thousands)                       
|Interest income  |                                                          |                                               |   |        |         |     |   |              |         |   |   |         |         |   |   |       
|                 | Mortgage-backed securities                               |                                               | $ | 32,355 |         |     | $ | 4,791        |         |   | $ | 2,695   |         |   | $ | 39,841 |        
|                 | Loans held for sale                                      |                                               |   | 64,811 |         |     |   | (19,442      | )       |   |   | (7,896  | )       |   |   | 37,473 |        
|                 | Mortgage loans held for investment                       |                                               |   | 78,470 |         |     |   | (11,712      | )       |   |   | (8,283  | )       |   |   | 58,475 |        
|                 | Builder construction and income property                 |                                               |   | (1,367 | )       |     |   | (1,063       | )       |   |   | 51      |         |   |   | (2,379 | )      
|                 | Consumer construction                                    |                                               |   | 14,433 |         |     |   | (5,939       | )       |   |   | (1,921  | )       |   |   | 6,573  |        
|                 | Investment in Federal Home Loan Bank stock
    and other |                                               |   | 2,991  |         |     |   | 616          |         |   |   | 268     |         |   |   | 3,875  |        
|                 |                                                          |                                               |   |        |         |     |   |              |         |   |   |         |         |   |   |       
|                 |                                                          | Total interest income                         |   |        | 191,693 |     |   |              | (32,749 | ) |   |         | (15,086 | ) |   |        | 143,858 | 
|Interest expense |                                                          |                                               |   |        |         |     |   |              |         |   |   |         |         |   |   |       
|                 | Interest-bearing deposits                                |                                               |   | 23,582 |         |     |   | (12,354      | )       |   |   | (4,421  | )       |   |   | 6,807  |        
|                 | Advances from Federal Home Loan Bank                     |                                               |   | 52,039 |         |     |   | (19,876      | )       |   |   | (12,488 | )       |   |   | 19,675 |        
|                 | Other borrowings                                         |                                               |   | 32,339 |         |     |   | (2,125       | )       |   |   | (1,347  | )       |   |   | 28,867 |        
|                 |                                                          |                                               |   |        |         |     |   |              |         |   |   |         |         |   |   |       
|                 |                                                          | Total interest expense                        |   |        | 107,960 |     |   |              | (34,355 | ) |   |         | (18,256 | ) |   |        | 55,349  | 
|                 |                                                          |                                               |   |        |         |     |   |              |         |   |   |         |         |   |   |       
|                 |                                                          | Net interest income                           |   | $      | 83,733  |     |   | $            | 1,606   |   |   | $       | 3,170   |   |   | $      | 88,509  | 
|                 |                                                          |                                               |   |        |         |     |   |              |         |   |   |         |         |   |   |       




OVERALL INTEREST RATE RISK
MANAGEMENT

In addition to our hedging activities to mitigate
the interest rate risk in our pipeline of mortgage loans held
for sale and our investment in servicing-related assets, we
perform extensive overall interest rate risk analyses. The
primary measurement tool used to evaluate interest rate risk
over the comprehensive balance

48



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sheet is a net portfolio value (NPV)
analysis that simulates the effects changes in interest rates
have on the fair value of stockholders equity.


The following table sets forth the NPV and change
in NPV that we estimate might result from a 100 basis point
change in interest rates as of September 30, 2004, and
December 31, 2003. Our NPV model has been built to focus on
the Bank alone as the $1.1 billion of assets at the holding
company and its non-bank subsidiaries have very little interest
rate risk exposure.

|                                     |                   |                        |           |                     |  |          |           |                     |  |          |           |            |  |   |           |            |  |   |           |            |  |   |           |            | 
|------------------------------------ | ----------------- | ---------------------- | --------- | ------------------- |  | -------- | --------- | ------------------- |  | -------- | --------- | ---------- |  | - | --------- | ---------- |  | - | --------- | ---------- |  | - | --------- | ---------- | 
|                                     |                   |                        |           |                    
|                                     |                   | September 30, 2004     |           | December 31, 2003  
|                                     |                   |                        |           |                    
|                                     |                   |                        |           |                     |  |          |           |                    
|                                     |                   |                        |           | 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            |                   | $                      | 467,570   |                     |  | $        | 467,570   |                     |  | $        | 467,570   |            |  | $ | 111,203   |            |  | $ | 111,203   |            |  | $ | 111,203   |           
|Trading securities                   |                   |                        | 228,589   |                     |  |          | 211,723   |                     |  |          | 239,107   |            |  |   | 206,484   |            |  |   | 180,197   |            |  |   | 228,880   |           
|Available for sale securities        |                   |                        | 2,252,297 |                     |  |          | 2,290,652 |                     |  |          | 2,194,276 |            |  |   | 1,611,958 |            |  |   | 1,662,715 |            |  |   | 1,553,103 |           
|Loans held for sale                  |                   |                        | 3,737,276 |                     |  |          | 3,783,114 |                     |  |          | 3,669,442 |            |  |   | 2,573,248 |            |  |   | 2,606,028 |            |  |   | 2,519,059 |           
|Loans held for investment            |                   |                        | 6,883,075 |                     |  |          | 6,941,400 |                     |  |          | 6,783,044 |            |  |   | 7,396,475 |            |  |   | 7,448,389 |            |  |   | 7,304,464 |           
|MSRs                                 |                   |                        | 551,811   |                     |  |          | 432,089   |                     |  |          | 632,919   |            |  |   | 443,688   |            |  |   | 311,777   |            |  |   | 534,672   |           
|Other assets                         |                   |                        | 711,411   |                     |  |          | 733,100   |                     |  |          | 695,058   |            |  |   | 683,213   |            |  |   | 697,356   |            |  |   | 669,062   |           
|Derivatives                          |                   |                        | 111,434   |                     |  |          | 115,650   |                     |  |          | 137,638   |            |  |   | 106,119   |            |  |   | 91,598    |            |  |   | 169,246   |           
|                                     |                   |                        |           |                     |  |          |           |                     |  |          |           |            |  |   |           |            |  |   |           |            |  |   |           |           
|                                     | Total assets      |                        | $         | 14,943,463          |  |          | $         | 14,975,298          |  |          | $         | 14,819,054 |  |   | $         | 13,132,388 |  |   | $         | 13,109,263 |  |   | $         | 13,089,689 | 
|                                     |                   |                        |           |                     |  |          |           |                     |  |          |           |            |  |   |           |            |  |   |           |            |  |   |           |           
|Deposits                             |                   | $                      | 5,231,144 |                     |  | $        | 5,286,068 |                     |  | $        | 5,179,297 |            |  | $ | 4,367,400 |            |  | $ | 4,404,900 |            |  | $ | 4,335,433 |           
|Advances from Federal Home Loan Bank |                   |                        | 4,789,165 |                     |  |          | 4,819,254 |                     |  |          | 4,759,788 |            |  |   | 4,949,477 |            |  |   | 4,979,962 |            |  |   | 4,919,147 |           
|Other borrowings                     |                   |                        | 3,002,923 |                     |  |          | 3,004,908 |                     |  |          | 3,000,941 |            |  |   | 2,438,695 |            |  |   | 2,440,538 |            |  |   | 2,436,665 |           
|Other liabilities                    |                   |                        | 400,581   |                     |  |          | 400,940   |                     |  |          | 400,232   |            |  |   | 156,711   |            |  |   | 156,800   |            |  |   | 156,599   |           
|                                     |                   |                        |           |                     |  |          |           |                     |  |          |           |            |  |   |           |            |  |   |           |            |  |   |           |           
|                                     | Total liabilities |                        |           | 13,423,813          |  |          |           | 13,511,170          |  |          |           | 13,340,258 |  |   |           | 11,912,283 |  |   |           | 11,982,200 |  |   |           | 11,847,844 | 
|                                     |                   |                        |           |                     |  |          |           |                     |  |          |           |            |  |   |           |            |  |   |           |            |  |   |           |           
|Stockholders equity (NPV)           |                   | $                      | 1,519,650 |                     |  | $        | 1,464,128 |                     |  | $        | 1,478,796 |            |  | $ | 1,220,105 |            |  | $ | 1,127,063 |            |  | $ | 1,241,845 |           
|                                     |                   |                        |           |                     |  |          |           |                     |  |          |           |            |  |   |           |            |  |   |           |            |  |   |           |           
|% Change from base case              |                   |                        |           |                     |  |          | (3.65     | )%                  |  |          | (2.69     | )%         |  |   |           |            |  |   | (7.63     | )%         |  |   | 1.78      | %         
|                                     |                   |                        |           |                     |  |          |           |                     |  |          |           |            |  |   |           |            |  |   |           |            |  |   |           |           

The increase in the net present value of equity
from December 31, 2003, to September 30, 2004, is
primarily due to (i) the increase in retained earnings of
the Bank of approximately $108.1 million (ii) a
capital contribution of $80.0 million from IndyMac Bancorp
to IndyMac Bank, and (iii) the impact of SAB No. 105
on the mortgage pipeline. The September 30, 2004, results
indicate that the Bank has a neutral bias for either rising or
falling rates in an up and down 100 basis point scenario.
It should be noted that this analysis does not reflect changes
in volumes and profits from our mortgage banking operations that
would be expected to result from the interest rate environment.

The assumptions inherent in our interest rate
shock models include expected valuation changes in an
instantaneous and parallel interest rate shock and assumptions
as to the degree of correlation between the hedges and hedged
assets and liabilities. These assumptions may not adequately
reflect factors such as the spread-widening or spread-tightening
risk among the changes in rates on Treasury, LIBOR/swap curve
and mortgages. In addition, the sensitivity analysis described
in the prior paragraph is limited by the fact that it is
performed at a particular point in time and does not incorporate
other factors that would impact our financial performance in
these scenarios, such as increases in income associated with the
increase in production volume that could result from a decrease
in interest rates. Consequently, the preceding estimates should
not be viewed as a forecast, and it is reasonable to expect that
actual results could vary significantly from the analyses
discussed above.

49



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




CREDIT RISK AND RESERVES



GENERAL

The following table summarizes the Companys
allowance for loan losses/credit discounts and non-performing
assets as of September 30, 2004.

|                                                                |                                      |                               |                                     |             |        |           |            |               |       |            |        |             |   |             |      |      |       |      |        |        |       |        |        |     |     |       |       |       |       |       |       | 
|--------------------------------------------------------------- | ------------------------------------ | ----------------------------- | ----------------------------------- | ----------- | ------ | --------- | ---------- | ------------- | ----- | ---------- | ------ | ----------- | - | ----------- | ---- | ---- | ----- | ---- | ------ | ------ | ----- | ------ | ------ | --- | --- | ----- | ----- | ----- | ----- | ----- | ----- | 
|                                                                |                                      |                               |                                     |             |        |           |            | Total         |       |            |        |             |   |            
|                                                                |                                      |                               |                                     |             |        |           |            | Reserves as a |       |            |        | QTD Net     |   | YTD Net    
|                                                                |                                      |                               |                                     | Allowance   |        | Credit    |            | Percentage    |       | Non-       |        | Charge      |   | Charge     
|                                                                |                                      |                               |                                     | For Loan    |        | Discounts |            | of Book       |       | Performing |        | Offs/Net    |   | Offs/Net   
|Type of Loan                                                    |                                      | Book Value                    |                                     | Losses      |        | (2)       |            | Value         |       | Assets     |        | REO (Gains) |   | REO (Gains)
|                                                                |                                      |                               |                                     |             |        |           |            |               |       |            |        |             |   |            
|                                                                |                                      |                              
|                                                                |                                      | (Dollars in thousands)       
|Held for investment portfolio                                   |                                      |                               |                                     |             |        |           |            |               |       |            |        |             |   |             |      |      |       |      |        |        |       |        |        |     |     |       |       |      
|SFR mortgage loans and HELOCs                                   |                                      | $                             | 4,540,970                           |             |        | $         | 18,001     |               |       | $          |       |             |   |             | 0.40 | %    |       | $    | 10,882 |        |       | $      | 488    |     |     | $     | 2,534 |      
|Land and other mortgage                                         |                                      |                               | 191,606                             |             |        |           | 4,420      |               |       |            |       |             |   |             | 2.31 | %    |       |      |       |        |       |        |       |     |     |       |      |      
|Builder construction and income property                        |                                      |                               | 572,582                             |             |        |           | 12,185     |               |       |            |       |             |   |             | 2.13 | %    |       |      | 15,369 |        |       |        | 7      |     |     |       | 17    |      
|Consumer construction                                           |                                      |                               | 1,383,147                           |             |        |           | 10,614     |               |       |            |       |             |   |             | 0.77 | %    |       |      | 9,966  |        |       |        | 271    |     |     |       | 675   |      
|                                                                |                                      |                               |                                     |             |        |           |            |               |       |            |        |             |   |             |      |      |       |      |        |        |       |        |        |     |     |       |       |      
|                                                                | Total core held for investment loans |                               |                                     | 6,688,305   |        |           |            | 45,220        |       |            |        |            |   |             |      | 0.68 | %     |      |        | 36,217 |       |        |        | 766 |     |       |       | 3,226 |      
|                                                                |                                      | Discontinued product lines(1) |                                     |             | 57,485 |           |            |               | 7,608 |            |        |             |  |             |      |      | 13.23 | %    |        |        | 5,414 |        |        |     | 700 |       |       |       | 2,789 |      
|                                                                |                                      |                               |                                     |             |        |           |            |               |       |            |        |             |   |             |      |      |       |      |        |        |       |        |        |     |     |       |       |      
|                                                                |                                      |                               | Total held for investment portfolio |             |        | 6,745,790 |            |               | $     | 52,828     |        |             |   |            |      |      |       | 0.78 | %      |        |       | 41,631 |        |     |     | 1,466 |       |       |       | 6,015 |      
|                                                                |                                      |                               |                                     |             |        |           |            |               |       |            |        |             |   |             |      |      |       |      |        |        |       |        |        |     |     |       |       |      
|Held for sale portfolio                                         |                                      |                               | 3,911,928                           |             |        |           |            |               |       | $          | 13,102 |             |   |             | 0.33 | %    |       |      | 56,327 |        |       |        |       |     |     |       |      |      
|                                                                |                                      |                               |                                     |             |        |           |            |               |       |            |        |             |   |             |      |      |       |      |        |        |       |        |        |     |     |       |       |      
|                                                                |                                      |                               |                                     | Total loans |        | $         | 10,657,718 |               |       |            |        |             |   |             |      |      |       |      |        |        |       |        | 97,958 |     |     | $     | 1,466 |       |       | $     | 6,015 | 
|                                                                |                                      |                               |                                     |             |        |           |            |               |       |            |        |             |   |             |      |      |       |      |        |        |       |        |        |     |     |       |       |      
|Foreclosed assets                                               |                                      |                               |                                     |             |        |           |            |               |       |            |        |             |   |             |      |      |       |      |        |        |       |        |        |     |     |       |       |      
|Core portfolios                                                 |                                      |                               | 23,870                              |             |        | $         | (315       | )             |       | $          | (914   | )          
|Discontinued product lines                                      |                                      |                               | 885                                 |             |        |           | (195       | )             |       |            | (35    | )          
|                                                                |                                      |                               |                                     |             |        |           |            |               |       |            |        |            
|Total foreclosed assets                                         |                                      |                               | 24,755                              |             |        | $         | (510       | )             |       | $          | (949   | )          
|                                                                |                                      |                               |                                     |             |        |           |            |               |       |            |        |            
|Total non-performing assets                                     |                                      | $                             | 122,713                             |             |        |           |            |               |       |            |        |            
|                                                                |                                      |                               |                                     |             |        |           |            |               |       |            |        |            
|Total non-performing assets as a percentage of
    total assets |                                      |                               | 0.76                                | %           |        |           |            |               |       |            |        |            
|                                                                |                                      |                               |                                     |             |        |           |            |               |       |            |        |            



---



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

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##### Table of Contents



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

|                                                                          |                             |                               |                                      |               |        |              |        |        |        |        |        |         |        |        | 
|------------------------------------------------------------------------- | --------------------------- | ----------------------------- | ------------------------------------ | ------------- | ------ | ------------ | ------ | ------ | ------ | ------ | ------ | ------- | ------ | ------ | 
|                                                                          |                             | September 30,                 |                                      | September 30, |        | December 31,
|                                                                          |                             | 2004                          |                                      | 2003          |        | 2003        
|                                                                          |                             |                               |                                      |               |        |             
|                                                                          |                             |                              
|                                                                          |                             | (Dollars in thousands)       
|Loans held for investment                                                 |                             |                               |                                      |               |        |              |        |        |        |        |        |        
|                                                                          | Portfolio loans             |                               |                                      |               |        |              |        |        |        |        |        |         |       
|                                                                          |                             | SFR mortgage loans            |                                      | $             | 10,882 |              |        | $      | 11,112 |        |        | $       | 12,414 |       
|                                                                          |                             | Land and other mortgage loans |                                      |               |       |              |        |        | 103    |        |        |         | 71     |       
|                                                                          |                             | Builder construction          |                                      |               | 15,369 |              |        |        | 11,884 |        |        |         | 9,704  |       
|                                                                          |                             | Consumer construction         |                                      |               | 9,966  |              |        |        | 8,555  |        |        |         | 8,954  |       
|                                                                          |                             |                               |                                      |               |        |              |        |        |        |        |        |        
|                                                                          |                             |                               | Total portfolio non-performing loans |               |        | 36,217       |        |        |        | 31,654 |        |         |        | 31,143 | 
|                                                                          | Discontinued product lines  |                               |                                      | 5,414         |        |              |        | 7,209  |        |        |        | 6,449   |       
|                                                                          |                             |                               |                                      |               |        |              |        |        |        |        |        |        
|Total non-performing loans held for investment                            |                             |                               | 41,631                               |               |        |              | 38,863 |        |        |        | 37,592 |        
|Non-performing loans held for sale                                        |                             |                               | 56,327                               |               |        |              | 31,414 |        |        |        | 38,855 |        
|                                                                          |                             |                               |                                      |               |        |              |        |        |        |        |        |        
|                                                                          | Total non-performing loans  |                               |                                      | 97,958        |        |              |        | 70,277 |        |        |        | 76,447  |       
|Foreclosed assets                                                         |                             |                               | 24,755                               |               |        |              | 27,676 |        |        |        | 23,677 |        
|                                                                          |                             |                               |                                      |               |        |              |        |        |        |        |        |        
|                                                                          | Total non-performing assets |                               | $                                    | 122,713       |        |              | $      | 97,953 |        |        | $      | 100,124 |       
|                                                                          |                             |                               |                                      |               |        |              |        |        |        |        |        |        
|Total non-performing assets to total assets                               |                             |                               | 0.76                                 | %             |        |              | 0.81   | %      |        |        | 0.76   | %      
|                                                                          |                             |                               |                                      |               |        |              |        |        |        |        |        |        
|Allowance for loan losses to non-performing loans
    held for investment |                             |                               | 127                                  | %             |        |              | 135    | %      |        |        | 140    | %      
|                                                                          |                             |                               |                                      |               |        |              |        |        |        |        |        |        

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

|                              |                               |                        |        |                   |      |               |        |               |        |   |        |        |        |   |        |        |        |  
|----------------------------- | ----------------------------- | ---------------------- | ------ | ----------------- | ---- | ------------- | ------ | ------------- | ------ | - | ------ | ------ | ------ | - | ------ | ------ | ------ | -
|                              |                               |                        |        |                  
|                              |                               | Three Months Ended     |        | Nine Months Ended
|                              |                               |                        |        |                  
|                              |                               | September 30,          |        | September 30,     |      | September 30, |        | September 30,
|                              |                               | 2004                   |        | 2003              |      | 2004          |        | 2003         
|                              |                               |                        |        |                   |      |               |        |              
|                              |                               |                       
|                              |                               | (Dollars in thousands)
|Core portfolio loans          |                               |                        |        |                   |      |               |        |               |        |   |        |        |        |   |        |       
|Balance, beginning of period  |                               | $                      | 45,285 |                   |      | $             | 42,346 |               |        | $ | 45,644 |        |        | $ | 41,314 |       
|Provision for loan losses     |                               |                        | 698    |                   |      |               | 4,100  |               |        |   | 2,799  |        |        |   | 10,625 |       
|Charge-offs net of recoveries |                               |                        |        |                   |      |               |        |               |        |   |        |        |        |   |        |       
|                              |                               | SFR mortgage loans     |        |                   | (488 | )             |        |               | (1,014 | ) |        |        | (2,534 | ) |        |        | (2,870 | )
|                              |                               | Builder construction   |        |                   | (7   | )             |        |               | (446   | ) |        |        | (17    | ) |        |        | (1,017 | )
|                              |                               | Consumer construction  |        |                   | (271 | )             |        |               | (100   | ) |        |        | (675   | ) |        |        | (3,166 | )
|                              |                               |                        |        |                   |      |               |        |               |        |   |        |        |        |   |        |       
|                              | Charge-offs net of recoveries |                        |        | (766              | )    |               |        | (1,560        | )      |   |        | (3,226 | )      |   |        | (7,053 | )     
|Balance, end of period        |                               |                        | 45,217 |                   |      |               | 44,886 |               |        |   | 45,217 |        |        |   | 44,886 |       

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|                                                                    |                               |                                 |       |                   |        |               |       |               |        |  |       |        |        |  |       |        |        | 
|------------------------------------------------------------------- | ----------------------------- | ------------------------------- | ----- | ----------------- | ------ | ------------- | ----- | ------------- | ------ |  | ----- | ------ | ------ |  | ----- | ------ | ------ | 
|                                                                    |                               |                                 |       |                  
|                                                                    |                               | Three Months Ended              |       | Nine Months Ended
|                                                                    |                               |                                 |       |                  
|                                                                    |                               | September 30,                   |       | September 30,     |        | September 30, |       | September 30,
|                                                                    |                               | 2004                            |       | 2003              |        | 2004          |       | 2003         
|                                                                    |                               |                                 |       |                   |        |               |       |              
|                                                                    |                               |                                
|                                                                    |                               | (Dollars in thousands)         
|Discontinued product lines                                          |                               |                                 |       |                   |        |               |       |               |        |  |       |        |        |  |       |       
|Balance, beginning of period                                        |                               |                                 | 7,511 |                   |        |               | 7,696 |               |        |  | 7,001 |        |        |  | 9,447 |       
|Provision for loan losses                                           |                               |                                 | 800   |                   |        |               | 2,100 |               |        |  | 3,399 |        |        |  | 5,575 |       
|                                                                    | Charge-offs net of recoveries |                                 |       | (700              | )      |               |       | (2,201        | )      |  |       | (2,789 | )      |  |       | (7,427 | )     
|                                                                    |                               |                                 |       |                   |        |               |       |               |        |  |       |        |        |  |       |       
|Balance, end of period                                              |                               |                                 | 7,611 |                   |        |               | 7,595 |               |        |  | 7,611 |        |        |  | 7,595 |       
|                                                                    |                               |                                 |       |                   |        |               |       |               |        |  |       |        |        |  |       |       
|                                                                    |                               | Total allowance for loan losses |       | $                 | 52,828 |               |       | $             | 52,481 |  |       | $      | 52,828 |  |       | $      | 52,481 | 
|                                                                    |                               |                                 |       |                   |        |               |       |               |        |  |       |        |        |  |       |       
|Annualized net charge-offs to average loans held
    for investment |                               |                                 | 0.09  | %                 |        |               | 0.30  | %             |        |  | 0.11  | %      |        |  | 0.42  | %     
|Annualized net charge-offs to quarterly production                  |                               |                                 | 0.06  | %                 |        |               | 0.17  | %             |        |  | 0.03  | %      |        |  | 0.08  | %     
|Core portfolio loans only:                                          |                               |                                 |       |                   |        |               |       |               |        |  |       |        |        |  |       |       
|Annualized net charge-offs to average loans held
    for investment |                               |                                 | 0.05  | %                 |        |               | 0.13  | %             |        |  | 0.06  | %      |        |  | 0.21  | %     
|Annualized net charge-offs to quarterly production                  |                               |                                 | 0.03  | %                 |        |               | 0.07  | %             |        |  | 0.02  | %      |        |  | 0.04  | %     

Total credit-related reserves, including the
allowance for loan losses and the market valuation reserves,
amounted to $65.9 million at September 30, 2004,
compared to $66.6 million at December 31, 2003. As of
September 30, 2004, the allowance for loan losses of
$52.8 million for loans held for investment, represented
0.78% of total loans held for investment. This compares to an
allowance for loan losses of $52.6 million, or 0.71% of
total loans held for investment, at December 31, 2003.
Charge-offs improved significantly during the third quarter of
2004, both in our core portfolio loans and discontinued product
lines. Total third quarter net charge-offs of $1.5 million
decreased 61% relative to the net charge-offs of
$3.8 million in the third quarter 2003.

Loans are generally placed on non-accrual status
when they are 90 days past due. Non-performing assets
include non-performing loans and foreclosed assets. We recorded
the balance of our assets acquired in foreclosure or by deed in
lieu of foreclosure at estimated net realizable value. The ratio
of non-performing assets to total assets was 0.76% at
September 30, 2004, unchanged from December 31, 2003.
Total non-performing assets amounted to $122.7 million at
September 30, 2004 as compared to $100.1 million at
December 31, 2003. The increase in non-performing loans was
driven by a $17.5 million increase in mortgage loans held
for sale primarily due to the loans acquired through clean-up
calls exercised during 2004. Additionally, the non-performing
loans in our builder construction portfolio increased
$5.7 million from December 31, 2003 due to two loans
on non-accrual. The Company does not expect to incur any losses
on these two loans.

With respect to the portfolio of loans held for
investment in IndyMacs core businesses, the allowance for
loan losses at September 30, 2004, was $45.2 million,
or 0.68% of the loan balance, compared to the 0.62% of total
loan balance at December 31, 2003.

With respect to IndyMacs non-core
liquidating portfolios, consisting primarily of manufactured
housing and home improvement loans, net charge-offs totaled
$0.7 million during the third quarter of 2004, down from
the $2.2 million of net charge-offs on these portfolios
during the third quarter of 2003. After provision for loan
losses of $0.8 million, the allocated allowance for loan
losses was $7.6 million, or 13.23% of the remaining
principal balance of such liquidating portfolios, compared to
the 10.07% reserve coverage at December 31, 2003.

Our determination of the level of the allowance
for loan losses and, correspondingly, the provision for loan
losses, is based on managements judgments and assumptions
regarding various matters, including general

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economic conditions, loan portfolio composition,
loan demand, delinquency trends and prior loan loss experience.
In assessing the adequacy of the allowance for loan losses,
management reviews the performance in the portfolios of loans
held for investment and the non-core portfolio of discontinued
product lines, which consists of manufactured housing and home
improvement loans. The allocation of the allowance among the
various loan products represents our judgments and assumptions
at a specific point in time and may be reallocated in the future
based on changes in performance and other circumstances.


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

With respect to mortgage loans held for sale,
IndyMac does not provide an allowance for loan losses, pursuant
to the applicable accounting rules. Instead, a component for
credit risk related to loans held for sale is embedded in the
market valuation for these loans. Market valuation adjustments
on loans held for sale totaled $13.1 million at
September 30, 2004.




SECONDARY MARKET RESERVE

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

|            |                       |                       |   |            |       |             |   |        |         |  |  |      |      |  
|----------- | --------------------- | --------------------- | - | ---------- | ----- | ----------- | - | ------ | ------- |  |  | ---- | ---- | -
|            |                       | Amount                |   |            |       | Percentage 
|            |                       | Repurchased           |   | Total Sold |       | Repurchased
|            |                       |                       |   |            |       |            
|            |                       |                      
|            |                       | (Dollars in millions)
|Loans Sold: |                       |                       |   |            |       |             |   |        |         |  |  |     
|            | GSEs and whole loans  |                       | $ | 134.3      |       |             | $ | 51,539 |         |  |  | 0.26 | %   
|            | Securitization trusts |                       |   | 9.3        |       |             |   | 67,970 |         |  |  | 0.01 | %   
|            |                       |                       |   |            |       |             |   |        |         |  |  |     
|            |                       | Total loans sold      |   | $          | 143.6 |             |   | $      | 119,509 |  |  |      | 0.12 | %
|            |                       |                       |   |            |       |             |   |        |         |  |  |     

The Company maintains secondary market reserves
for losses that arise in connection with loans that we are
required to repurchase from whole loan sales or securitization
transactions. These reserves, which totaled $35.4 million
at September 30, 2004, have two general components:
reserves for repurchases arising from representation and
warranty claims, and reserves for disputes with investors and
vendors with respect to

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contractual obligations pertaining to mortgage
operations. The table below shows the activity in the reserves
during the three and nine months ended September 30, 2004.


|                                                                                    |  |                        |        |        |  |   |         |  
|----------------------------------------------------------------------------------- |  | ---------------------- | ------ | ------ |  | - | ------- | -
|                                                                                    |  | Three                  |        | Nine  
|                                                                                    |  | Months                 |        | Months
|                                                                                    |  |                        |        |       
|                                                                                    |  |                       
|                                                                                    |  | (Dollars in thousands)
|Balance, beginning of period                                                        |  | $                      | 37,250 |        |  | $ | 34,000  |  
|Additions/provisions                                                                |  |                        | 3,331  |        |  |   | 19,310  |  
|Claims reimbursement and estimated discounts on
    loans held for sale/charge-offs |  |                        | (6,775 | )      |  |   | (21,094 | )
|Recoveries on previous claims                                                       |  |                        | 1,574  |        |  |   | 3,164   |  
|                                                                                    |  |                        |        |        |  |   |         |  
|Balance, September 30, 2004                                                         |  | $                      | 35,380 |        |  | $ | 35,380  |  
|                                                                                    |  |                        |        |        |  |   |         |  

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




OPERATING EXPENSES

A summary of operating expenses follows:

|                                         |  |                        |         |                   |  |          |         |               |  |               |         |  |  |   |         |  |  |   |         | 
|---------------------------------------- |  | ---------------------- | ------- | ----------------- |  | -------- | ------- | ------------- |  | ------------- | ------- |  |  | - | ------- |  |  | - | ------- | 
|                                         |  |                        |         |                  
|                                         |  | Three Months Ended     |         | Nine Months Ended
|                                         |  |                        |         |                  
|                                         |  | September 30,          |         | September 30,     |  | June 30, |         | September 30, |  | September 30,
|                                         |  | 2004                   |         | 2003              |  | 2004     |         | 2004          |  | 2003         
|                                         |  |                        |         |                   |  |          |         |               |  |              
|                                         |  |                       
|                                         |  | (Dollars in thousands)
|Salaries and related                     |  | $                      | 73,411  |                   |  | $        | 63,100  |               |  | $             | 64,231  |  |  | $ | 200,680 |  |  | $ | 173,225 | 
|Premises and equipment                   |  |                        | 11,450  |                   |  |          | 9,591   |               |  |               | 9,938   |  |  |   | 30,981  |  |  |   | 26,035  | 
|Loan purchase costs                      |  |                        | 9,312   |                   |  |          | 8,176   |               |  |               | 10,244  |  |  |   | 26,863  |  |  |   | 23,044  | 
|Professional services                    |  |                        | 5,580   |                   |  |          | 5,581   |               |  |               | 5,844   |  |  |   | 16,497  |  |  |   | 15,277  | 
|Data processing                          |  |                        | 9,436   |                   |  |          | 11,430  |               |  |               | 8,580   |  |  |   | 26,607  |  |  |   | 26,325  | 
|Office                                   |  |                        | 4,658   |                   |  |          | 6,296   |               |  |               | 5,758   |  |  |   | 16,395  |  |  |   | 17,416  | 
|Advertising and promotion                |  |                        | 13,926  |                   |  |          | 6,705   |               |  |               | 9,167   |  |  |   | 31,949  |  |  |   | 19,349  | 
|Operations and sale of foreclosed assets |  |                        | 1,848   |                   |  |          | 1,506   |               |  |               | 1,419   |  |  |   | 5,401   |  |  |   | 3,256   | 
|Other                                    |  |                        | 5,499   |                   |  |          | 4,897   |               |  |               | 6,113   |  |  |   | 16,239  |  |  |   | 13,772  | 
|                                         |  |                        |         |                   |  |          |         |               |  |               |         |  |  |   |         |  |  |   |         | 
|                                         |  | $                      | 135,120 |                   |  | $        | 117,282 |               |  | $             | 121,294 |  |  | $ | 371,612 |  |  | $ | 317,699 | 
|                                         |  |                        |         |                   |  |          |         |               |  |               |         |  |  |   |         |  |  |   |         | 

General and administrative expenses, including
$6.7 million from Financial Freedom with $3.5 million
in salaries and related costs, totaled $135.1 million for
the third quarter 2004, compared to $117.3 million during
the same period in 2003 and $121.3 million for the second
quarter of 2004. Excluding the expenses related to Financial
Freedom, the increase was largely driven by increases in
salaries, advertising and promotion, and premises and equipment
as a result of the Companys operational expansion and
continued record-level of production volume. In a continuing
effort to penetrate the market and gain market share, the
Company increased its investment in direct marketing to further
promote its new product offerings: subprime and HELOC products.
Also, the Company incurred costs to expand its sales force
infrastructure with dedicated resources focused on new customer
activation, customer training and support, and improving its
conversion of loan submissions to fundings. As a result of the
Financial Freedom acquisition, increased production volume and
investments made in sales and customer service, the
Companys average full-time equivalent employees increased
during the year by 32%, from 3,726 during the quarter ended
September 30, 2003, to 4,910 during the quarter ended
September 30, 2004.

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DIVIDEND POLICY

IndyMacs Board of Directors declared a cash
dividend of $0.34 per share payable in the fourth quarter
of 2004, up 6.3% from the dividend paid in the third quarter of
this year. The cash dividend is payable December 9, 2004 to
stockholders of record on November 11, 2004. The current
dividend represents an annualized increase of 25% relative to
the dividend declared on July 30, 2004, and IndyMacs
sixth consecutive quarterly dividend increase. Over this period
of time, IndyMac has successfully increased its dividend payout
ratio to be more in line with other financial institution payout
ratios, which range from 30% to 50%. Looking forward, IndyMac
expects to continue to increase its dividend in accordance with
its potential growth in earnings per share. As a result, IndyMac
expects to increase future dividends within a targeted range
between IndyMacs long-term earnings per share growth goal
of 15% and its historic earnings per share growth rate of 26%
since 1992 under current management.




FUTURE OUTLOOK

On average, U.S. mortgage debt outstanding has
grown approximately 7% to 8% per year over the last two decades
and is projected, based on economic demographics, to continue
this level of approximate growth. At this rate, mortgage debt
outstanding roughly doubles every decade. We believe, based on
our confidence in our employees, hybrid thrift/ mortgage banking
business model, capital strength and ability to gain market
share, that we are positioned to grow earnings per share at a
compounded growth rate of approximately 15% over the long run,
or approximately double the rate of the industry. In fact,
IndyMacs historical track record has exceeded this target
over the last eleven years with compounded annual growth of 26%
under its current management team.

With that said, the past few years have been
extraordinary years for the mortgage industry. Industry mortgage
production has achieved historic highs as a result of
historically low interest rates, which led to record refinancing
of mortgages. The industry is in the midst of a major transition
from these historic highs back to more normalized levels. The
MBA is projecting that industry production will decline 30% in
2004. Given the significant industry transition, IndyMac expects
that its earnings per share in 2004 could lag its long-term
growth rate as we make this transition.

While forecasting remains difficult given the
significant changes taking place in the mortgage market and the
uncertain economic environment, we currently expect earnings per
share to be approximately $3.98 in 2005. This earnings per share
estimate is considered our best estimation in light of current
market expectations for interest rates and industry volumes in
2005. However, as margins remain volatile and highly
unpredictable our actual results could vary significantly from
this estimate.

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

Our principal financing needs are to fund
acquisitions of mortgage loans and our investment in mortgage
loans, mortgage-backed securities and MSRs. Our primary sources
of funds used to meet these financing needs are loan sales and
securitizations, deposits, advances from the Federal Home
Loan Bank (FHLB), borrowings, custodial
balances and retained earnings. The sources used vary depending
on such factors as rates paid, collateral requirements,
maturities and the impact on our capital. Additionally, we may
occasionally securitize mortgage loans that we intend to hold
for investment to lower our costs of borrowing against such
assets and reduce the capital requirement associated with such
assets. During the quarter ended September 30, 2004, we had
average total liquidity of $1.1 billion, which is
represented by unpledged liquid assets on hand plus amounts that
may be immediately raised through the pledging of other
available assets as collateral pursuant to committed financing
facilities. We currently believe that our liquidity level is in
excess of that

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necessary to satisfy our operating requirements
and meet our obligations and commitments in a timely and cost
effective manner.





PRINCIPAL SOURCES OF CASH

Loan Sales and
Securitizations

Our business model relies heavily upon selling
the majority of our mortgage loans shortly after acquisition.
The proceeds of these sales are a critical component of the
liquidity necessary for our ongoing operations. During the three
months ended September 30, 2004, we sold 90% of our funded
mortgage loans through three channels: (1) GSEs;
(2) private label securitizations; and (3) whole loan
sales. The remainder we retained in our investment portfolio. If
any of our sales channels were disrupted, and we were unable to
redirect such sales through alternative disposition channels,
our liquidity could be negatively impacted. Disruptions in our
GSE, whole loan sales and mortgage securitization transactions
can occur as a result of GSE demand for product, the performance
of our existing GSE and private securitizations, as well as
economic events or other factors beyond our control.

Deposits/ Retail Bank

We solicit deposits from the general public and
institutions by offering a variety of accounts and rates through
our network of 11 branches in Southern California, telebanking
and Internet channels. Through our Web site at
www.indymacbank.com, consumers can access their
accounts 24-hours a day, seven days a week. Online banking
allows customers to access their accounts, view balances,
transfer funds between accounts, view transactions, download
account information and pay their bills conveniently from any
computer terminal.

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

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

|                              |                     |                        |           |                    |  |                   |    |          |   |        |           |           |  |  |    |     |   |   |           |           |  |  |    |     |  
|----------------------------- | ------------------- | ---------------------- | --------- | ------------------ |  | ----------------- | -- | -------- | - | ------ | --------- | --------- |  |  | -- | --- | - | - | --------- | --------- |  |  | -- | --- | -
|                              |                     |                        |           |                    |  |                  
|                              |                     | September 30, 2004     |           | September 30, 2003 |  | December 31, 2003
|                              |                     |                        |           |                    |  |                  
|                              |                     |                        |           | % of               |  |                   |    | % of     |   |        |           | % of     
|                              |                     |                        |           | Total              |  |                   |    | Total    |   |        |           | Total    
|                              |                     | Amount                 |           | Deposits           |  | Amount            |    | Deposits |   | Amount |           | Deposits 
|                              |                     |                        |           |                    |  |                   |    |          |   |        |           |          
|                              |                     |                       
|                              |                     | (Dollars in thousands)
|Non-interest-bearing checking |                     | $                      | 51,768    |                    |  |                   | 1  | %        |   | $      | 42,897    |           |  |  | 1  | %   |   | $ | 44,353    |           |  |  | 1  | %  
|Interest-bearing checking     |                     |                        | 40,974    |                    |  |                   | 1  | %        |   |        | 37,649    |           |  |  | 1  | %   |   |   | 39,761    |           |  |  | 1  | %  
|Savings                       |                     |                        | 1,714,691 |                    |  |                   | 32 | %        |   |        | 1,440,208 |           |  |  | 35 | %   |   |   | 1,515,771 |           |  |  | 35 | %  
|Custodial accounts            |                     |                        | 567,089   |                    |  |                   | 11 | %        |   |        | 683,400   |           |  |  | 16 | %   |   |   | 528,724   |           |  |  | 12 | %  
|                              |                     |                        |           |                    |  |                   |    |          |   |        |           |           |  |  |    |     |   |   |           |           |  |  |    |    
|                              | Total core deposits |                        |           | 2,374,522          |  |                   |    | 45       | % |        |           | 2,204,154 |  |  |    | 53  | % |   |           | 2,128,609 |  |  |    | 49  | %
|Certificates of deposit       |                     |                        | 2,910,987 |                    |  |                   | 55 | %        |   |        | 1,942,180 |           |  |  | 47 | %   |   |   | 2,222,164 |           |  |  | 51 | %  
|                              |                     |                        |           |                    |  |                   |    |          |   |        |           |           |  |  |    |     |   |   |           |           |  |  |    |    
|                              | Total deposits      |                        | $         | 5,285,509          |  |                   |    | 100      | % |        | $         | 4,146,334 |  |  |    | 100 | % |   | $         | 4,350,773 |  |  |    | 100 | %
|                              |                     |                        |           |                    |  |                   |    |          |   |        |           |           |  |  |    |     |   |   |           |           |  |  |    |    

We have strategically increased our deposits
through branch network and certificates of deposits to support
our balance sheet growth.

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

|            |                |                        |           |                    |  |                   |    |          |   |        |           |           |  |  |    |     |   |   |           |           |  |  |    |     |  
|----------- | -------------- | ---------------------- | --------- | ------------------ |  | ----------------- | -- | -------- | - | ------ | --------- | --------- |  |  | -- | --- | - | - | --------- | --------- |  |  | -- | --- | -
|            |                |                        |           |                    |  |                  
|            |                | September 30, 2004     |           | September 30, 2003 |  | December 31, 2003
|            |                |                        |           |                    |  |                  
|            |                |                        |           | % of               |  |                   |    | % of     |   |        |           | % of     
|            |                |                        |           | Total              |  |                   |    | Total    |   |        |           | Total    
|            |                | Amount                 |           | Deposits           |  | Amount            |    | Deposits |   | Amount |           | Deposits 
|            |                |                        |           |                    |  |                   |    |          |   |        |           |          
|            |                |                       
|            |                | (Dollars in thousands)
|Branch      |                | $                      | 2,058,149 |                    |  |                   | 39 | %        |   | $      | 1,667,092 |           |  |  | 40 | %   |   | $ | 1,717,314 |           |  |  | 39 | %  
|Internet    |                |                        | 532,878   |                    |  |                   | 10 | %        |   |        | 569,034   |           |  |  | 14 | %   |   |   | 555,029   |           |  |  | 13 | %  
|Telebanking |                |                        | 541,903   |                    |  |                   | 10 | %        |   |        | 487,396   |           |  |  | 12 | %   |   |   | 463,755   |           |  |  | 11 | %  
|Money desk  |                |                        | 1,585,490 |                    |  |                   | 30 | %        |   |        | 739,412   |           |  |  | 18 | %   |   |   | 1,085,951 |           |  |  | 25 | %  
|Custodial   |                |                        | 567,089   |                    |  |                   | 11 | %        |   |        | 683,400   |           |  |  | 16 | %   |   |   | 528,724   |           |  |  | 12 | %  
|            |                |                        |           |                    |  |                   |    |          |   |        |           |           |  |  |    |     |   |   |           |           |  |  |    |    
|            | Total deposits |                        | $         | 5,285,509          |  |                   |    | 100      | % |        | $         | 4,146,334 |  |  |    | 100 | % |   | $         | 4,350,773 |  |  |    | 100 | %
|            |                |                        |           |                    |  |                   |    |          |   |        |           |           |  |  |    |     |   |   |           |           |  |  |    |    

Included in deposits at September 30, 2004,
and December 31, 2003, were non-interest-bearing custodial
accounts, primarily related to our GSE servicing portfolio,
totaling $567.1 million and $528.7 million,
respectively.

Advances from Federal Home
Loan Bank

The FHLB system functions as a borrowing source
for regulated financial depositories and similar institutions
that are engaged in residential housing finance. As a member of
the FHLB of San Francisco, we are required to own capital
stock of the FHLB and are authorized to apply for advances from
the FHLB, on a secured basis, in amounts determined by reference
to available collateral. SFR mortgage loans, agency and
AAA-rated mortgage-backed securities are the principal
collateral that may be used to secure these borrowings, although
certain other types of loans and other assets may also be
accepted pursuant to FHLB policies and statutory requirements.
Currently, the Bank is approved for collateralized advances of
up to $8.4 billion, of which $4.8 billion were
outstanding at September 30, 2004. The FHLB offers several
credit programs, each with its own fixed or floating interest
rate, and a range of maturities.

Trust Preferred Securities and
Warrants

On November 14, 2001, we completed an
offering of Warrants and Income Redeemable Equity Securities
(WIRES) to investors. Gross proceeds of the
transaction were $175.0 million. The securities were
offered as units consisting of a trust preferred security,
issued by a trust formed by us, and a warrant to
purchase IndyMac Bancorps common stock. In both the
months of July and December 2003, we issued an additional
$30.0 million of trust preferred securities, yielding 6.05%
and 6.30%, respectively. The proceeds of these securities have
been used in operations. These securities did not contain any
warrants on IndyMac Bancorp common stock.

Upon the adoption of FASB Interpretation
No. 46, Consolidation of Variable Interest
Entities, an Interpretation of Accounting Research Bulletin
(ARB) No. 51, on July 1, 2003,
the trusts have been deconsolidated from the financial
statements of the Company. The debentures underlying the trust
preferred securities, represent the liabilities due from IndyMac
Bancorp to IndyMac Capital Trusts and amounted to
$184.1 million and $183.6 million at
September 30, 2004, and December 31, 2003,
respectively. These debentures are included in Other Borrowings
on the consolidated balance sheets.

Other Borrowings, Excluding Debentures
Underlying Trust Preferred Securities

Other borrowings, excluding the debentures
underlying the trust preferred securities, consist of loans and
securities sold under committed financing facilities and
uncommitted agreements to repurchase, CMO collateral and notes
payable. Total other borrowings increased to $4.1 billion
at September 30, 2004, from $2.4 billion at
December 31, 2003. The increase of $1.7 billion was
primarily the result of additional draws on our credit
facilities to fund mortgage loan originations, the issuance of
$1.0 billion non-recourse AAA-rated HELOC-backed notes
during 2004, and reductions of other borrowings that previously
financed HELOC

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loans. Additionally, we continued to use borrowed
funds to fund our asset growth during the nine months ended
September 30, 2004.


At September 30, 2004, we had
$4.9 billion in committed financing facilities, of which
$2.9 billion was utilized. For the third quarter 2004, we
had an average of $750.1 million in operating liquidity
available for use, based on eligible collateral. Decisions by
our lenders and investors to make additional funds available to
us in the future will depend upon a number of factors. These
include our compliance with the terms of existing credit
arrangements, our financial performance, eligible collateral,
changes in our credit rating, industry and market trends in our
various businesses, the general availability and interest rates
applicable to financing and investments, the lenders
and/or investors own resources and policies concerning
loans and investments and the relative attractiveness of
alternative investment or lending opportunities. As of
September 30, 2004, we believe we were in compliance with
all representations, warranties and financial covenants under
our borrowing facilities.




PRINCIPAL USES OF CASH

In addition to the financing sources discussed
above, cash uses are funded by net cash flows from operations,
sales of mortgage-backed securities and principal and interest
payments on loans and securities. The amounts of net
acquisitions of loans held for sale and trading securities
included as components of net cash (used in) provided by
operating activities totaled $(3.6) billion during the nine
months ended September 30, 2004 and $0.5 billion
during the nine months ended September 30, 2003. Excluding
the purchase and sale activity for loans held for sale and
trading securities, the net cash provided by the Companys
operating activities totaled $521.2 million and
$(642.7) million for the nine months ended
September 30, 2004 and 2003, respectively. During the third
quarter 2003, the Company started to purchase swaptions and more
caps and floors to hedge certain liabilities and
servicing-related assets. The net decrease (increase) in
premiums paid for these derivative instruments totaled
$35.5 million and $(727.1) million for the nine months
ended September 30, 2004 and 2003, respectively. The net
cash provided by the Companys operating activities before
the activities for trading securities, loans held for sale and
premiums paid for derivative instruments amounted to
$485.7 million and $84.4 million for the nine months
ended September 30, 2004 and 2003, respectively.




ACCUMULATED OTHER COMPREHENSIVE LOSS

Accumulated other comprehensive loss was
$(31.2) million at September 30, 2004, compared to
$(26.5) million at December 31, 2003. This change was
a result of the decreases in both the fair value of the swaps
and swaptions designated as cash flow hedges of floating rate
borrowings, and the fair value of securities classified as
available for sale. It should be noted that accumulated other
comprehensive loss does not include the increases in the fair
value of loans held for investment that are funded by borrowings
that are hedged by a portion of these interest rate swaps and
swaptions. Accumulated other comprehensive loss is not a
component of the determination of regulatory capital.




REGULATORY CAPITAL REQUIREMENTS

The Bank is subject to regulatory capital
regulations administered by the federal banking agencies. In
addition, as a condition to its approval of our acquisition of
SGV Bancorp, Inc. in July 2000, the OTS required that the Bank
hold Tier 1 (core) capital of at least 8% of adjusted total
assets for three years following the consummation of the
transaction and maintain a total risk-based capital position of
at least 10% of total risk- weighted assets. This particular
condition expired on July 1, 2003. As of September 30,
2004, the Bank met all of the requirements of a
well-capitalized institution under the general
regulatory capital regulations.

During 2001, the OTS issued guidance for subprime
lending programs, which requires a lender to quantify the
additional risks in its subprime lending activities and
determine the appropriate amounts of allowances for loan losses
and capital it needs to offset those risks. The Company
generally classifies all loans in a first lien position with a
FICO score less than 620 and all loans in a second lien position
with a FICO score

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less than 660 as subprime. Loans meeting this
definition are supported by capital two times that of similar
prime loans. We report our subprime loan calculation in an
addendum to the Thrift Financial Report that we file with the
OTS. As of September 30, 2004, subprime loans totaled
$581.0 million as calculated for regulatory reporting
purposes, of which $509.6 million were loans held for sale.


The following table presents the Banks
actual and required capital ratios and the minimum required
capital ratios to be categorized as well-capitalized
at September 30, 2004. The impact of the additional
risk-weighting criteria related to subprime loans had the effect
of reducing IndyMacs total risk-based capital by
62 basis points as noted in the table below.

|                |                   |                |  |                     |   |                  |  |       |   |  |  |       |  
|--------------- | ----------------- | -------------- |  | ------------------- | - | ---------------- |  | ----- | - |  |  | ----- | -
|                |                   | As Reported    |  | Adjusted for        |   |                 
|                |                   | Pre-Subprime   |  | Additional Subprime |   | Well-Capitalized
|                |                   | Risk-Weighting |  | Risk-Weighting      |   | Minimum         
|                |                   |                |  |                     |   |                 
|Capital Ratios: |                   |                |  |                     |   |                  |  |       |   |  |  |      
|                | Tangible          |                |  | 7.53                | % |                  |  | 7.53  | % |  |  | 2.00  | %
|                | Tier 1 core       |                |  | 7.53                | % |                  |  | 7.53  | % |  |  | 5.00  | %
|                | Tier 1 risk-based |                |  | 11.89               | % |                  |  | 11.29 | % |  |  | 6.00  | %
|                | Total risk-based  |                |  | 12.45               | % |                  |  | 11.83 | % |  |  | 10.00 | %

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




ISSUANCE OF COMMON STOCK

On June 8, 2004, we issued
3,200,000 shares of common stock at a market price of
$31.75 through a public offering. On July 12, 2004, we
issued an additional 130,000 shares of common stock at a
market price of $31.75 upon the exercise of the
underwriters over-allotment options. The cash proceeds
from the initial closing, net of expenses, of
$96.25 million were recorded as equity during the second
quarter of 2004. The cash proceeds from the exercise of the
over-allotment option, net of expenses, of $3.9 million
were recorded as equity during the third quarter of 2004.
Certain of the proceeds were used to finance the acquisition of
Financial Freedom and the remaining proceeds are expected to be
used for general corporate purposes, including, but not limited
to, continued asset growth for IndyMac Bank.




SHARE REPURCHASES

In June 1999, our Board of Directors approved a
$100.0 million share repurchase program, which has since
been increased to $500.0 million and includes a special
repurchase of 3,640,860 shares from Countrywide Credit
Industries, Inc. (Countrywide). From the share
repurchase programs inception through December 31,
2002, we repurchased 28 million shares in open market
transactions and from Countrywide at an average price of
approximately $18.02 per share, for an aggregate investment
of $504.4 million. At September 30, 2004, we had
$63.6 million of remaining capacity to repurchase under the
current authorization from the Board of Directors. No share
repurchases under this program have been made since
December 31, 2002.

From time to time, we also repurchase shares from
certain employees and officers at the then-current market price
under the Companys internal benefit programs. The
following table summarizes the share repurchase activities from
our employees and officers during the first three quarters of
2004, as well as the

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information during the same period regarding our
publicly announced share repurchase program described above:


|                                           |                      |           |        |                 |  |                     |       |                     |  |  |   |   |  |   |      |  | 
|------------------------------------------ | -------------------- | --------- | ------ | --------------- |  | ------------------- | ----- | ------------------- |  |  | - | - |  | - | ---- |  | 
|                                           |                      |           |        |                 |  |                     |       | Maximum            
|                                           |                      |           |        |                 |  |                     |       | Approximate Dollar 
|                                           |                      |           |        |                 |  | Total Number of     |       | Value (in millions)
|                                           |                      |           |        |                 |  | Shares Purchased    |       | of Shares that May 
|                                           |                      |           |        | Weighted        |  | as Past of Publicly |       | Yet Be Purchased   
|                                           |                      | Number of |        | Average         |  | Announced Plans     |       | Under the Plans or 
|Period                                     |                      | Shares    |        | Price Per Share |  | or Programs(1)      |       | Programs(2)        
|                                           |                      |           |        |                 |  |                     |       |                    
|January 1, 2004  January 31, 2004         |                      |           | 15,275 |                 |  | $                   | 29.84 |                     |  |  |  |   |  | $ | 63.6 | 
|February 1, 2004  February 29,
    2004   |                      |           |       |                 |  |                     |      |                     |  |  |  |   |  |   | 63.6 | 
|March 1, 2004  March 31, 2004             |                      |           | 2,177  |                 |  |                     | 35.23 |                     |  |  |  |   |  |   | 63.6 | 
|                                           |                      |           |        |                 |  |                     |       |                     |  |  |   |   |  |   |      | 
|                                           | First Quarter Total  |           |        | 17,452          |  |                     |       | 30.51               |  |  |   |  |  |   |      |  | 
|                                           |                      |           |        |                 |  |                     |       |                     |  |  |   |   |  |   |      | 
|April 1, 2004  April 30, 2004             |                      |           |       |                 |  |                     |      |                     |  |  |  |   |  |   | 63.6 | 
|May 1, 2004  May 31, 2004                 |                      |           |       |                 |  |                     |      |                     |  |  |  |   |  |   | 63.6 | 
|June 1, 2004  June 30, 2004               |                      |           |       |                 |  |                     |      |                     |  |  |  |   |  |   | 63.6 | 
|                                           |                      |           |        |                 |  |                     |       |                     |  |  |   |   |  |   |      | 
|                                           | Second Quarter Total |           |        |                |  |                     |       |                    |  |  |   |  |  |   |      |  | 
|July 1, 2004  July 31, 2004               |                      |           | 314    |                 |  |                     | 31.36 |                     |  |  |  |   |  |   | 63.6 | 
|August 1, 2004  August 31, 2004           |                      |           |       |                 |  |                     |      |                     |  |  |  |   |  |   | 63.6 | 
|September 1, 2004  September 30,
    2004 |                      |           |       |                 |  |                     |      |                     |  |  |  |   |  | $ | 63.6 | 
|                                           |                      |           |        |                 |  |                     |       |                     |  |  |   |   |  |   |      | 
|                                           | Third Quarter Total  |           |        | 314             |  |                     |       | 31.36               |  |  |   |  |  |   |      |  | 
|                                           |                      |           |        |                 |  |                     |       |                     |  |  |   |   |  |   |      | 
|Nine Months Total                          |                      |           | 17,766 |                 |  | $                   | 30.55 |                     |  |  |  |   |  |   |      | 
|                                           |                      |           |        |                 |  |                     |       |                     |  |  |   |   |  |   |      | 



---



|    |                                                                                                                                                                                                                                   
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | All shares purchased during the periods indicated
    were purchased pursuant to the Companys internal benefit
    programs at the then  current market prices.                                                                 
|   
|(2) | Our Board of Directors approved a
    $100.0 million share repurchase program in June of 1999,
    which has since been increased to $500.0 million and
    include a special repurchase of 3,640,860 shares from
    Countrywide.




OFF-BALANCE SHEET ARRANGEMENTS

In the ordinary course of our business, we engage
in financial transactions that are not recorded on our balance
sheet. These transactions are structured to manage our interest
rate, credit or liquidity risks, to diversify funding sources or
to optimize our capital.

Substantially all of our off-balance sheet
arrangements relate to the securitization of mortgage loans. Our
mortgage loan securitizations are normally structured as sales
in accordance with SFAS 140, which involves the transfer of
the mortgage loans to qualifying special-purpose
entities that are not subject to consolidation. In a
securitization, an entity transferring the assets is able to
convert those assets into cash. Special-purpose entities used in
such securitizations obtain cash to acquire the assets by
issuing securities to investors. We also, generally, have the
right to repurchase mortgage loans from the special-purpose
entities if the remaining outstanding balance of the mortgage
loans falls to a level where the cost of servicing the loans
exceeds the revenues we earn.

In connection with our loan sales that are
securitization transactions, there are $26.7 billion in
loans owned by off-balance sheet trusts as of September 30,
2004. The trusts have issued bonds secured by these loans. We
have no obligation to provide funding support to either the
third party investors or the off-balance sheet trusts.
Generally, neither the third party investors nor the trusts have
recourse to our assets or us, and they have no ability to
require us to repurchase their loans other than for
non-credit-related recourse that can arise under standard
representations and warranties. We maintain secondary market
reserves for losses that

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could arise in connection with loans that we are
required to repurchase from whole loan sales or securitization
transactions.


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

Management does not believe that any of its
off-balance sheet arrangements have or are reasonably likely to
have a current or future material effect on our financial
condition, changes in financial condition, revenues or expenses,
results of operations, liquidity, capital expenditures or
capital resources.




AGGREGATE CONTRACTUAL OBLIGATIONS

The following table summarizes our material
contractual obligations as of September 30, 2004. The
payment amounts represent those amounts contractually due to the
recipient and do not include any unamortized premiums or
discounts, hedge basis adjustments, or other similar carrying
value adjustments. There have been no material changes outside
the ordinary course of our business in any specified contractual
obligations during the third quarter 2004.

|                                               |  |                 |           |              |  |              |           |              |  |       |         |  |  |   |         |  |  |   |            | 
|---------------------------------------------- |  | --------------- | --------- | ------------ |  | ------------ | --------- | ------------ |  | ----- | ------- |  |  | - | ------- |  |  | - | ---------- | 
|                                               |  |                
|                                               |  | Payment Due    
|                                               |  |                
|                                               |  | October 1, 2004 |           | January 1,   |  | January 1,   |           |             
|                                               |  | through         |           | 2005 through |  | 2008 through |           | After        |  |      
|                                               |  | December 31,    |           | December 31, |  | December 31, |           | December 31, |  |      
|                                               |  | 2004            |           | 2007         |  | 2009         |           | 2009         |  | Total
|                                               |  |                 |           |              |  |              |           |              |  |      
|                                               |  |                 |           |             
|                                               |  | (In thousands)  |           |             
|Deposits without a stated maturity             |  | $               | 2,374,522 |              |  | $            |          |              |  | $     |        |  |  | $ |        |  |  | $ | 2,374,522  | 
|Custodial Accounts and Certificates of Deposit |  |                 | 563,466   |              |  |              | 2,323,785 |              |  |       | 23,736  |  |  |   |        |  |  |   | 2,910,987  | 
|FHLB Advances                                  |  |                 | 3,330,000 |              |  |              | 1,252,000 |              |  |       | 200,000 |  |  |   |        |  |  |   | 4,782,000  | 
|Repurchase Agreements                          |  |                 | 3,084,425 |              |  |              |          |              |  |       |        |  |  |   |        |  |  |   | 3,084,425  | 
|HELOC Notes(1)                                 |  |                 |          |              |  |              | 996,635   |              |  |       |        |  |  |   |        |  |  |   | 996,635    | 
|CMOs                                           |  |                 |          |              |  |              |          |              |  |       |        |  |  |   | 193     |  |  |   | 193        | 
|Trust Preferred                                |  |                 |          |              |  |              |          |              |  |       |        |  |  |   | 184,114 |  |  |   | 184,114    | 
|Accrued Interest Payable                       |  |                 | 40,678    |              |  |              |          |              |  |       |        |  |  |   |        |  |  |   | 40,678     | 
|Deferred Compensation(2)                       |  |                 |          |              |  |              |          |              |  |       |        |  |  |   | 19,868  |  |  |   | 19,868     | 
|Operating Leases(3)                            |  |                 | 1,932     |              |  |              | 45,533    |              |  |       | 24,852  |  |  |   | 18,580  |  |  |   | 90,897     | 
|Employment Agreements(4)                       |  |                 | 2,291     |              |  |              | 17,071    |              |  |       |        |  |  |   |        |  |  |   | 19,362     | 
|Purchase Obligations                           |  |                 | 2,704     |              |  |              | 13,672    |              |  |       |        |  |  |   |        |  |  |   | 16,376     | 
|                                               |  |                 |           |              |  |              |           |              |  |       |         |  |  |   |         |  |  |   |            | 
|Total                                          |  | $               | 9,400,018 |              |  | $            | 4,648,696 |              |  | $     | 248,588 |  |  | $ | 222,755 |  |  | $ | 14,520,057 | 
|                                               |  |                 |           |              |  |              |           |              |  |       |         |  |  |   |         |  |  |   |            | 



---



|    |                                                                                                                                                                                                                                                                                    
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | HELOC notes are non-recourse, and secured by
    AAA-rated HELOC certificates.                                                                                                                                                                                                     
|   
|(2) | The amount excludes $6.5 million of deferred
    compensation that is included in obligations under employment
    agreements.                                                                                                                                                     
|   
|(3) | Total lease commitments are net of sublease
    rental income. A new lease with total commitments of
    $34.5 million was entered into during the quarter ended
    September 30, 2004.                                                                                           
|   
|(4) | 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 and includes the $6.5 million
    deferred compensation noted in (2).

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A schedule of significant commitments at
September 30, 2004, follows:

|                                     |                                                          |                        |       |           | 
|------------------------------------ | -------------------------------------------------------- | ---------------------- | ----- | --------- | 
|                                     |                                                          | Payment Due           
|                                     |                                                          |                       
|                                     |                                                          | (Dollars in thousands)
|Investment portfolio commitments to: |                                                          |                        |       |          
|                                     | Purchase loans pursuant to exercising clean-up
    calls |                        | $     | 161,162   | 
|Undisbursed loan commitments:        |                                                          |                        |       |          
|                                     | Builder construction                                     |                        |       | 672,074   | 
|                                     | Consumer construction                                    |                        |       | 1,120,448 | 
|                                     | HELOCs                                                   |                        |       | 1,055,769 | 
|Letters of credit                    |                                                          |                        | 7,211 |          

Additionally, in connection with standard
representations and warranties on loan sales and
securitizations, we are occasionally required to repurchase
loans or make certain payments to settle breaches of these
representations and warranties. From inception of our active
mortgage banking operations on January 1, 1993, through
September 30, 2004, we sold $119.5 billion in loans,
and repurchased $143.6 million in loans, or 0.12% of total
loans sold. To provide for probable future losses related to
loans sold, we have established a reserve based on estimated
losses on actual pending claims and repurchase requests,
historical experience, loan sales volume and loan sale
distribution channels, which is included in Other Liabilities in
the consolidated balance sheets. The balance in this reserve
totaled $35.4 million at September 30, 2004. See the
caption Secondary Market Reserve above for further
information.




KEY OPERATING RISKS

Like all businesses, we assume a certain amount
of risk in order to earn returns on our capital. The following
is a summary discussion of key operating risks. For further
information on these and other key operating risks, refer to
IndyMacs annual report on Form 10-K for the year
ended December 31, 2003.




INTEREST RATE RISK

Due to the characteristics of our financial
assets and liabilities and the nature of our business
activities, our liquidity, financial position and results of
operations may be materially affected by changes in interest
rates in various ways. While we have devised and implemented a
comprehensive asset/liability management strategy that seeks, on
an economic and an accounting basis, to mitigate significant
fluctuations in our financial position and results of operations
likely to be caused by market interest rate changes, there can
be no assurance that this strategy (including assumptions
concerning the correlation thought to exist among different
types of instruments) or its implementation will be successful
in any particular interest rate environment. In addition, the
impact of our interest rate risk management strategies on our
economic and accounting performance may differ materially
because GAAP results may not be consistent with economic
performance.




VALUATION RISK

In connection with the loan sale process, we
retain certain assets for which the market is limited and
illiquid. As a result, valuations are derived using complex
modeling and significant assumptions and judgments, in the
absence of active market quotations or sale information to value
such assets. The assets include AAA-rated and agency
interest-only securities, MSRs, non-investment grade securities
and residuals. In addition, from time to time, we may acquire
these types of securities from third party issuers. These assets
represented 5% of total assets and 73% of total equity at
September 30, 2004. The fair value of these assets could
vary significantly as market conditions change. We periodically
obtain appraisals from mortgage servicing brokers who benchmark
our valuation assumptions to those of our industry peers and
consider this information in the estimation of fair value.

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CREDIT RISK

A significant portion of our Investment Portfolio
consists of prime residential SFR loans held for investment, and
non-investment grade securities and residuals collateralized by
mortgage loans. We also provide construction lending to
consumers and developers to build residential properties. The
credit risk profile on consumer loans is very similar to that of
our permanent mortgage loans, while builder construction loans
tend to have higher credit risk profile than permanent mortgage
loans. While the majority of our loans are to prime quality
borrowers and secured by residential property, there is no
guarantee that, in the event of borrower default, we will be
able to recoup the full principal amount and interest due on a
loan. We have adopted underwriting and loan quality monitoring
systems, procedures and credit policies, including the
establishment and review of the allowance for loan losses, that
management believes are prudent and appropriate to minimize this
risk by tracking loan performance, assessing the likelihood of
nonperformance and diversifying our loan portfolio. Such
policies and procedures, however, may not prevent unexpected
losses that could adversely affect our results. In addition,
while we have discontinued our home improvement and manufactured
housing lending programs, we continue to liquidate portfolios of
these loans, which have greater credit risk than that of our
core mortgage loan portfolios. At September 30, 2004, the
book value of these non-core portfolios was $49.9 million,
net of reserves.

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




LIQUIDITY RISK/ ACCESS TO CAPITAL
MARKETS

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

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




GOVERNMENT REGULATION AND MONETARY
POLICY

The banking industry in general is extensively
regulated at the federal and state levels. Insured depository
institutions and their holding companies are subject to
comprehensive regulation and supervision by financial regulatory
authorities covering all aspects of their organization,
management and operations. The OTS and the FDIC are primarily
responsible for the federal regulation and supervision of the
Bank and its affiliated entities. In addition to their
regulatory powers, these two agencies also have significant
enforcement authority that they can use to address unsafe and
unsound banking practices, violations of laws, and capital and
operational deficiencies. Enforcement powers can be exercised in
a number of ways, through either formal or informal actions.
Informal enforcement actions customarily remain confidential
between the regulator and the financial institution, while more
formal enforcement actions are customarily publicly disclosed.
Further, the Banks operations are subject to regulation at
the state level, including a variety of consumer protection
provisions. Banking institutions also are affected by the
various monetary and fiscal policies of the
U.S. government, including those of the Federal Reserve
Board, and these policies can influence financial regulatory
actions.

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Accordingly, the actions of those governmental
authorities responsible for regulatory, fiscal and monetary
affairs can have a significant impact on the activities of
financial services firms such as ours.


The Companys financial condition and
results of operations are reported in accordance with
U.S. GAAP. While not impacting economic results, future
changes in accounting principles issued by the Financial
Accounting Standards Board could impact our operational results
as reported under U.S. GAAP.




COMPETITION

We face significant competition in acquiring and
selling loans. In our mortgage banking operations, we compete
with other mortgage bankers, GSEs, established third party
lending programs, investment banking firms, banks, savings and
loan associations, and other lenders and entities purchasing
mortgage assets. With regard to mortgage-backed securities
issued through our mortgage banking operations, we face
competition from other investment opportunities available to
prospective investors. We estimate our market share of the
U.S. mortgage market to be approximately 1.6%. A number of
our competitors have significantly larger market share and
financial resources. We seek to compete with financial
institutions and mortgage companies through an emphasis on
quality of service, diversified products and maximum use of
technology.

The GSEs have made and we believe will continue
to make significant technological and economic advances to
broaden their customer bases. When the GSEs contract or expand,
there are both positive and negative impacts on our mortgage
banking lending operations. As GSEs expand, additional liquidity
is brought to the market, and loan products can be resold more
quickly. Conversely, expanding GSEs increase competition for
loans, which may reduce profit margins on loan sales. We seek to
address these competitive pressures by making a strong effort to
maximize our use of technology, by diversifying into other
residential mortgage products that are less affected by GSEs,
and by operating in a more cost-effective manner than our
competitors.




OTHER RISKS

We are subject to various other risks, including
changes in the demand for mortgage loans, which historically
tends to decrease as interest rates increase. Also, a majority
of our loan acquisitions are geographically concentrated in
certain states, including California, New York, Florida and New
Jersey. Any adverse economic conditions in these markets could
cause the number of loans acquired to decrease and delinquencies
to increase, causing a corresponding decline in revenues.
Further, there are no guarantees as to our degree of success in
managing loan portfolio concentrations, anticipating and taking
advantage of technological advances, or executing upon our
growth plans for our mortgage banking operations. Lastly,
political conditions could impact the Companys earnings.
Acts or threats of war or terrorism, as well as actions taken by
the U.S. or other governments in response to such acts or
threats, could impact business and economic conditions in which
the Company operates.




CRITICAL ACCOUNTING POLICIES

Various elements of our accounting policies, by
their nature, are inherently subject to estimation techniques,
valuation assumptions and other subjective assessments. In
particular, we have identified six policies, that, due to the
judgments, estimates and assumptions inherent in those policies,
are critical to an understanding of our financial statements.
These policies relate to (a) the valuation of AAA-rated and
agency interest-only strips; (b) the valuation of MSRs;
(c) the valuation of non-investment grade securities and
residuals; (d) derivatives and other hedging instruments;
(e) the methodology for determining our allowance for loan
losses; and (f) the valuation of our secondary market
reserve. Management discusses these critical accounting policies
and related judgments with IndyMacs audit committee and
external auditors on a quarterly basis. We believe that the
judgments, estimates and assumptions used in the preparation of
our consolidated financial statements are appropriate given the
factual circumstances at the time; however, given the
sensitivity of our consolidated financial statements to these
critical accounting policies, the use of other judgments,
estimates and assumptions could result in material differences
in our results of operations or

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financial condition. For further information on
the Companys critical accounting policies and the impact
of SAB No. 105 on our accounting policy for rate lock loan
commitments, refer to IndyMacs annual report on
Form 10-K for the year ended December 31, 2003 and
Note 2  New Accounting Pronouncement and
Guidance, accompanying the consolidated financial statements on
page 70.







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

See Overall Interest Rate Risk
Management beginning on page 48 for quantitative and
qualitative disclosure about market risk.

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|        |                                     
|------- | ------------------------------------
|ITEM 1. | FINANCIAL STATEMENTS
    (UNAUDITED)

INDYMAC BANCORP, INC. AND
SUBSIDIARIES



CONSOLIDATED BALANCE SHEETS


|                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                       |                         |                                 |                                                                                                                                                               |           |            |            |           |           |            |            | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------- | ------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------- | ---------- | ---------- | --------- | --------- | ---------- | ---------- | 
|                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                       | September 30,           |                                 | December 31,                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                       | 2004                    |                                 | 2003                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                       |                         |                                 |                                                                                                                                                              
|                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                       | (Unaudited)             |                                 |                                                                                                                                                              
|                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                       |                        
|                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                       | (Dollars in thousands) 
|ASSETS                                                                                                                                                                                                                                                                                                   
|Cash and cash equivalents                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                       | $                       | 468,885                         |                                                                                                                                                               |           | $          | 115,485    |          
|Securities classified as trading
    ($61.9 million and $70.9 million pledged as collateral
    for borrowings at September 30, 2004 and December 31,
    2003, respectively)                                                                                                                             |                                                                                                                                                                                                                                       |                         | 235,707                         |                                                                                                                                                               |           |            | 223,632    |          
|Securities classified as available for sale,
    amortized cost of $3.4 billion and $1.6 billion at
    September 30, 2004 and December 31, 2003, respectively
    ($2.1 billion and $1.5 billion pledged as collateral
    for borrowings at September 30, 2004 and December 31,
    2003, respectively) |                                                                                                                                                                                                                                       |                         | 3,342,824                       |                                                                                                                                                               |           |            | 1,613,974  |          
|Loans receivable:                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                       |                         |                                 |                                                                                                                                                               |           |            |            |          
|                                                                                                                                                                                                                                                                                                          | Loans held for sale                                                                                                                                                                                                                   |                         |                                 |                                                                                                                                                               |           |            |            |           |          
|                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                       | Prime                   |                                 |                                                                                                                                                               | 2,840,936 |            |            |           | 2,196,488 |           
|                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                       | Subprime                |                                 |                                                                                                                                                               | 433,424   |            |            |           | 295,008   |           
|                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                       | HELOC                   |                                 |                                                                                                                                                               | 471,489   |            |            |           |          |           
|                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                       | Consumer lot loans      |                                 |                                                                                                                                                               | 152,977   |            |            |           | 81,752    |           
|                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                       |                         |                                 |                                                                                                                                                               |           |            |            |          
|                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                       |                         | Total loans held for sale       |                                                                                                                                                               |           | 3,898,826  |            |           |           | 2,573,248  |           
|                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                       |                         |                                 |                                                                                                                                                               |           |            |            |          
|                                                                                                                                                                                                                                                                                                          | Loans held for investment                                                                                                                                                                                                             |                         |                                 |                                                                                                                                                               |           |            |            |           |          
|                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                       | SFR mortgage            |                                 |                                                                                                                                                               | 4,550,156 |            |            |           | 4,945,439 |           
|                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                       | Consumer construction   |                                 |                                                                                                                                                               | 1,383,147 |            |            |           | 1,145,526 |           
|                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                       | Builder construction    |                                 |                                                                                                                                                               | 565,381   |            |            |           | 484,397   |           
|                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                       | HELOC                   |                                 |                                                                                                                                                               | 48,299    |            |            |           | 711,494   |           
|                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                       | Land and other mortgage |                                 |                                                                                                                                                               | 191,606   |            |            |           | 126,044   |           
|                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                       | Income property         |                                 |                                                                                                                                                               | 7,201     |            |            |           | 36,285    |           
|                                                                                                                                                                                                                                                                                                          | Allowance for loan losses                                                                                                                                                                                                             |                         |                                 | (52,828                                                                                                                                                       | )         |            |            | (52,645   | )        
|                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                       |                         |                                 |                                                                                                                                                               |           |            |            |          
|                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                       |                         | Total loans held for investment |                                                                                                                                                               |           | 6,692,962  |            |           |           | 7,396,540  |           
|                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                       |                         |                                 |                                                                                                                                                               |           |            |            |          
|                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                       |                         |                                 | Total loans receivable ($8.0 billion and
    $7.6 billion pledged as collateral for borrowings at
    September 30, 2004 and December 31, 2003, respectively) |           |            | 10,591,788 |           |           |            | 9,969,788  | 
|                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                       |                         |                                 |                                                                                                                                                               |           |            |            |          
|Mortgage servicing rights                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                       |                         | 551,811                         |                                                                                                                                                               |           |            | 443,688    |          
|Investment in Federal Home Loan Bank stock,
    at cost                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                       |                         | 362,154                         |                                                                                                                                                               |           |            | 313,284    |          
|Interest receivable                                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                       |                         | 64,010                          |                                                                                                                                                               |           |            | 51,758     |          
|Goodwill and other intangible assets                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                       |                         | 80,066                          |                                                                                                                                                               |           |            | 33,697     |          
|Foreclosed assets                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                       |                         | 24,755                          |                                                                                                                                                               |           |            | 23,677     |          
|Other assets                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                       |                         | 418,084                         |                                                                                                                                                               |           |            | 451,408    |          
|                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                       |                         |                                 |                                                                                                                                                               |           |            |            |          
|                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                       |                         |                                 | Total assets                                                                                                                                                  |           | $          | 16,140,084 |           |           | $          | 13,240,391 | 
|                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                       |                         |                                 |                                                                                                                                                               |           |            |            |          
|                                                                                                                                                                                                                                                                                                         
|LIABILITIES AND STOCKHOLDERS
    EQUITY                                                                                                                                                                                                                                                                 
|Liabilities                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                       |                         |                                 |                                                                                                                                                               |           |            |            |          
|                                                                                                                                                                                                                                                                                                          | Deposits                                                                                                                                                                                                                              |                         | $                               | 5,285,509                                                                                                                                                     |           |            | $          | 4,350,773 |          
|                                                                                                                                                                                                                                                                                                          | Advances from Federal Home Loan Bank                                                                                                                                                                                                  |                         |                                 | 4,782,000                                                                                                                                                     |           |            |            | 4,934,911 |          
|                                                                                                                                                                                                                                                                                                          | Other borrowings                                                                                                                                                                                                                      |                         |                                 | 4,265,368                                                                                                                                                     |           |            |            | 2,622,094 |          
|                                                                                                                                                                                                                                                                                                          | Other liabilities                                                                                                                                                                                                                     |                         |                                 | 591,171                                                                                                                                                       |           |            |            | 315,182   |          
|                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                       |                         |                                 |                                                                                                                                                               |           |            |            |          
|                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                       |                         | Total liabilities               |                                                                                                                                                               |           | 14,924,048 |            |           |           | 12,222,960 |           
|                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                       |                         |                                 |                                                                                                                                                               |           |            |            |          
|Stockholders 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
    91,091,715 shares (61,919,772 outstanding) at
    September 30, 2004, and issued 85,914,552 shares
    (56,760,375 outstanding) at December 31, 2003 |                         |                                 | 911                                                                                                                                                           |           |            |            | 859       |          
|                                                                                                                                                                                                                                                                                                          | Additional paid-in-capital                                                                                                                                                                                                            |                         |                                 | 1,184,392                                                                                                                                                     |           |            |            | 1,043,856 |          
|                                                                                                                                                                                                                                                                                                          | Accumulated other comprehensive loss                                                                                                                                                                                                  |                         |                                 | (31,160                                                                                                                                                       | )         |            |            | (26,454   | )        
|                                                                                                                                                                                                                                                                                                          | Retained earnings                                                                                                                                                                                                                     |                         |                                 | 581,674                                                                                                                                                       |           |            |            | 518,408   |          
|                                                                                                                                                                                                                                                                                                          | Treasury stock, 29,171,943 shares and
    29,154,177 shares at September 30, 2004 and
    December 31, 2003, respectively                                                                                                             |                         |                                 | (519,781                                                                                                                                                      | )         |            |            | (519,238  | )        
|                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                       |                         |                                 |                                                                                                                                                               |           |            |            |          
|                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                       |                         | Total stockholders equity      |                                                                                                                                                               |           | 1,216,036  |            |           |           | 1,017,431  |           
|                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                       |                         |                                 |                                                                                                                                                               |           |            |            |          
|                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                       |                         |                                 | Total liabilities and stockholders equity                                                                                                                    |           | $          | 16,140,084 |           |           | $          | 13,240,391 | 
|                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                       |                         |                                 |                                                                                                                                                               |           |            |            |          

The accompanying notes are an integral part of
these statements.

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INDYMAC BANCORP, INC. AND
SUBSIDIARIES



CONSOLIDATED STATEMENTS OF EARNINGS


|                                                                      |                                           |                                                         |        |                     |         |      |        |         |         |   |         |         |         |   |         |         |         | 
|--------------------------------------------------------------------- | ----------------------------------------- | ------------------------------------------------------- | ------ | ------------------- | ------- | ---- | ------ | ------- | ------- | - | ------- | ------- | ------- | - | ------- | ------- | ------- | 
|                                                                      |                                           |                                                         |        |                    
|                                                                      |                                           | For the Three Months                                    |        | For the Nine Months
|                                                                      |                                           | Ended September 30,                                     |        | Ended September 30,
|                                                                      |                                           |                                                         |        |                    
|                                                                      |                                           | 2004                                                    |        | 2003                |         | 2004 |        | 2003   
|                                                                      |                                           |                                                         |        |                     |         |      |        |        
|                                                                      |                                           |                                                        
|                                                                      |                                           | (Unaudited)                                            
|                                                                      |                                           |                                                        
|                                                                      |                                           | (Dollars in thousands,                                 
|                                                                      |                                           | except share and per share data)                       
|Interest income                                                       |                                           |                                                         |        |                     |         |      |        |         |         |   |         |         |         |   |         |        
|Mortgage-backed and other securities                                  |                                           | $                                                       | 36,129 |                     |         | $    | 20,437 |         |         | $ | 97,349  |         |         | $ | 57,508  |        
|Loans held for sale                                                   |                                           |                                                         |        |                     |         |      |        |         |         |   |         |         |         |   |         |        
|                                                                      | Prime                                     |                                                         |        | 51,545              |         |      |        | 52,571  |         |   |         | 154,718 |         |   |         | 133,340 |        
|                                                                      | Subprime                                  |                                                         |        | 11,949              |         |      |        | 6,784   |         |   |         | 28,138  |         |   |         | 20,170  |        
|                                                                      | HELOC                                     |                                                         |        | 7,516               |         |      |        |        |         |   |         | 7,516   |         |   |         |        |        
|                                                                      | Consumer lot loans                        |                                                         |        | 1,917               |         |      |        | 2,578   |         |   |         | 6,696   |         |   |         | 6,085   |        
|                                                                      |                                           |                                                         |        |                     |         |      |        |         |         |   |         |         |         |   |         |        
|                                                                      |                                           | Total loans held for sale                               |        |                     | 72,927  |      |        |         | 61,933  |   |         |         | 197,068 |   |         |         | 159,595 | 
|Loans held for investment                                             |                                           |                                                         |        |                     |         |      |        |         |         |   |         |         |         |   |         |        
|                                                                      | SFR mortgage                              |                                                         |        | 50,770              |         |      |        | 30,140  |         |   |         | 149,732 |         |   |         | 90,113  |        
|                                                                      | Consumer construction                     |                                                         |        | 18,203              |         |      |        | 15,591  |         |   |         | 51,201  |         |   |         | 44,627  |        
|                                                                      | Builder construction                      |                                                         |        | 9,075               |         |      |        | 8,191   |         |   |         | 25,222  |         |   |         | 25,474  |        
|                                                                      | HELOC                                     |                                                         |        | 827                 |         |      |        | 5,834   |         |   |         | 11,511  |         |   |         | 14,931  |        
|                                                                      | Land and other mortgage                   |                                                         |        | 2,940               |         |      |        | 1,793   |         |   |         | 8,162   |         |   |         | 5,886   |        
|                                                                      | Income property                           |                                                         |        | 150                 |         |      |        | 787     |         |   |         | 863     |         |   |         | 2,991   |        
|                                                                      |                                           |                                                         |        |                     |         |      |        |         |         |   |         |         |         |   |         |        
|                                                                      |                                           | Total loans held for investment                         |        |                     | 81,965  |      |        |         | 62,336  |   |         |         | 246,691 |   |         |         | 184,022 | 
|Other                                                                 |                                           |                                                         | 3,982  |                     |         |      | 2,633  |         |         |   | 10,762  |         |         |   | 6,887   |        
|                                                                      |                                           |                                                         |        |                     |         |      |        |         |         |   |         |         |         |   |         |        
|                                                                      |                                           | Total interest income                                   |        |                     | 195,003 |      |        |         | 147,339 |   |         |         | 551,870 |   |         |         | 408,012 | 
|Interest expense                                                      |                                           |                                                         |        |                     |         |      |        |         |         |   |         |         |         |   |         |        
|Deposits                                                              |                                           |                                                         | 26,527 |                     |         |      | 22,261 |         |         |   | 72,706  |         |         |   | 65,899  |        
|Advances from Federal Home Loan Bank                                  |                                           |                                                         | 37,660 |                     |         |      | 28,959 |         |         |   | 102,499 |         |         |   | 82,824  |        
|Trust preferred securities                                            |                                           |                                                         | 3,832  |                     |         |      | 3,275  |         |         |   | 11,470  |         |         |   | 8,803   |        
|Other borrowings                                                      |                                           |                                                         | 26,394 |                     |         |      | 10,391 |         |         |   | 63,694  |         |         |   | 37,494  |        
|                                                                      |                                           |                                                         |        |                     |         |      |        |         |         |   |         |         |         |   |         |        
|                                                                      |                                           | Total interest expense                                  |        |                     | 94,413  |      |        |         | 64,886  |   |         |         | 250,369 |   |         |         | 195,020 | 
|                                                                      |                                           |                                                         |        |                     |         |      |        |         |         |   |         |         |         |   |         |        
|                                                                      |                                           | Net interest income                                     |        |                     | 100,590 |      |        |         | 82,453  |   |         |         | 301,501 |   |         |         | 212,992 | 
|Provision for loan losses                                             |                                           |                                                         | 1,498  |                     |         |      | 6,200  |         |         |   | 6,198   |         |         |   | 16,200  |        
|                                                                      |                                           |                                                         |        |                     |         |      |        |         |         |   |         |         |         |   |         |        
|                                                                      |                                           | Net interest income after provision for loan
    losses |        |                     | 99,092  |      |        |         | 76,253  |   |         |         | 295,303 |   |         |         | 196,792 | 
|Other income                                                          |                                           |                                                         |        |                     |         |      |        |         |         |   |         |         |         |   |         |        
|                                                                      | Gain on sale of loans                     |                                                         |        | 98,052              |         |      |        | 121,498 |         |   |         | 247,804 |         |   |         | 307,428 |        
|                                                                      | Service fee income (loss)                 |                                                         |        | 8,742               |         |      |        | (11,113 | )       |   |         | (22,209 | )       |   |         | (10,130 | )      
|                                                                      | Losses on mortgage-backed securities, net |                                                         |        | (9,438              | )       |      |        | (8,647  | )       |   |         | (17,839 | )       |   |         | (24,816 | )      
|                                                                      | Fee and other income                      |                                                         |        | 21,024              |         |      |        | 21,655  |         |   |         | 58,520  |         |   |         | 60,634  |        
|                                                                      |                                           |                                                         |        |                     |         |      |        |         |         |   |         |         |         |   |         |        
|                                                                      |                                           | Total other income                                      |        |                     | 118,380 |      |        |         | 123,393 |   |         |         | 266,276 |   |         |         | 333,116 | 
|                                                                      |                                           |                                                         |        |                     |         |      |        |         |         |   |         |         |         |   |         |        
|                                                                      |                                           | Net revenues                                            |        |                     | 217,472 |      |        |         | 199,646 |   |         |         | 561,579 |   |         |         | 529,908 | 
|Other expense                                                         |                                           |                                                         |        |                     |         |      |        |         |         |   |         |         |         |   |         |        
|                                                                      | Operating expenses                        |                                                         |        | 135,120             |         |      |        | 117,282 |         |   |         | 371,612 |         |   |         | 317,699 |        
|                                                                      | Amortization of other intangible assets   |                                                         |        | 171                 |         |      |        | 208     |         |   |         | 538     |         |   |         | 655     |        
|                                                                      |                                           |                                                         |        |                     |         |      |        |         |         |   |         |         |         |   |         |        
|                                                                      |                                           | Total other expense                                     |        |                     | 135,291 |      |        |         | 117,490 |   |         |         | 372,150 |   |         |         | 318,354 | 
|                                                                      |                                           |                                                         |        |                     |         |      |        |         |         |   |         |         |         |   |         |        
|Earnings before provision for income taxes and
    minority interests |                                           |                                                         | 82,181 |                     |         |      | 82,156 |         |         |   | 189,429 |         |         |   | 211,554 |        
|                                                                      | Provision for income taxes                |                                                         |        | 32,461              |         |      |        | 32,452  |         |   |         | 74,824  |         |   |         | 83,564  |        
|                                                                      |                                           |                                                         |        |                     |         |      |        |         |         |   |         |         |         |   |         |        
|                                                                      |                                           | Net earnings before
    minority interests              |        |                     | 49,720  |      |        |         | 49,704  |   |         |         | 114,605 |   |         |         | 127,990 | 
|                                                                      | Minority interests                        |                                                         |        | 6                   |         |      |        |        |         |   |         | 6       |         |   |         |        |        
|                                                                      |                                           |                                                         |        |                     |         |      |        |         |         |   |         |         |         |   |         |        
|                                                                      |                                           | Net earnings                                            |        | $                   | 49,726  |      |        | $       | 49,704  |   |         | $       | 114,611 |   |         | $       | 127,990 | 
|                                                                      |                                           |                                                         |        |                     |         |      |        |         |         |   |         |         |         |   |         |        
|Earnings per share                                                    |                                           |                                                         |        |                     |         |      |        |         |         |   |         |         |         |   |         |        
|                                                                      | Basic                                     |                                                         | $      | 0.81                |         |      | $      | 0.90    |         |   | $       | 1.95    |         |   | $       | 2.33    |        
|                                                                      | Diluted                                   |                                                         | $      | 0.78                |         |      | $      | 0.87    |         |   | $       | 1.87    |         |   | $       | 2.26    |        
|Weighted average shares outstanding                                   |                                           |                                                         |        |                     |         |      |        |         |         |   |         |         |         |   |         |        
|                                                                      | Basic                                     |                                                         |        | 61,254              |         |      |        | 55,255  |         |   |         | 58,800  |         |   |         | 55,034  |        
|                                                                      | Diluted                                   |                                                         |        | 63,904              |         |      |        | 56,991  |         |   |         | 61,421  |         |   |         | 56,561  |        
|Dividends declared per share                                          |                                           | $                                                       | 0.32   |                     |         | $    | 0.15   |         |         | $ | 0.87    |         |         | $ | 0.35    |        

The accompanying notes are an integral part of
these statements.

67



---



##### Table of Contents



INDYMAC BANCORP, INC. AND
SUBSIDIARIES



CONSOLIDATED STATEMENTS OF STOCKHOLDERS
EQUITY AND COMPREHENSIVE INCOME


|                                                                              |  |                        |            |        |  |            |     |               |  |          |           |               |  |          |         |               |  |   |         |   |  |   |         |   |  |   |          |   |  |   |           |  
|----------------------------------------------------------------------------- |  | ---------------------- | ---------- | ------ |  | ---------- | --- | ------------- |  | -------- | --------- | ------------- |  | -------- | ------- | ------------- |  | - | ------- | - |  | - | ------- | - |  | - | -------- | - |  | - | --------- | -
|                                                                              |  |                        |            |        |  |            |     | Accumulated   |  |          |           |               |  |          |         |              
|                                                                              |  |                        |            |        |  | Additional |     | Other         |  |          |           | Total         |  |          |         | Total        
|                                                                              |  | Shares                 |            | Common |  | Paid-In-   |     | Comprehensive |  | Retained |           | Comprehensive |  | Treasury |         | Stockholders
|                                                                              |  | Outstanding            |            | Stock  |  | Capital    |     | Loss          |  | Earnings |           | Income        |  | Stock    |         | Equity       
|                                                                              |  |                        |            |        |  |            |     |               |  |          |           |               |  |          |         |              
|                                                                              |  |                       
|                                                                              |  | (Unaudited)           
|                                                                              |  |                       
|                                                                              |  | (Dollars in thousands)
|Balance at December 31, 2002                                                  |  |                        | 54,829,486 |        |  | $          | 840 |               |  | $        | 1,007,936 |               |  | $        | (17,747 | )             |  | $ | 377,707 |   |  |   |         |   |  | $ | (518,771 | ) |  | $ | 849,965   |  
|Common stock options exercised                                                |  |                        | 552,148    |        |  |            | 7   |               |  |          | 9,159     |               |  |          |        |               |  |   |        |   |  | $ |        |   |  |   |         |   |  |   | 9,166     |  
|Directors and officers notes
    receivable                                 |  |                        |           |        |  |            |    |               |  |          | 196       |               |  |          |        |               |  |   |        |   |  |   |        |   |  |   |         |   |  |   | 196       |  
|Deferred compensation, restricted stock                                       |  |                        | 204,013    |        |  |            |    |               |  |          | 1,662     |               |  |          |        |               |  |   |        |   |  |   |        |   |  |   |         |   |  |   | 1,662     |  
|Net loss on mortgage- backed securities available
    for sale, net of tax    |  |                        |           |        |  |            |    |               |  |          |          |               |  |          | (3,468  | )             |  |   |        |   |  |   | (3,468  | ) |  |   |         |   |  |   | (3,468    | )
|Net unrealized loss on derivatives used in cash
    flow hedges, net of taxes |  |                        |           |        |  |            |    |               |  |          |          |               |  |          | (6,137  | )             |  |   |        |   |  |   | (6,137  | ) |  |   |         |   |  |   | (6,137    | )
|Purchases of common stock                                                     |  |                        | (24,135    | )      |  |            |    |               |  |          |          |               |  |          |        |               |  |   |        |   |  |   |        |   |  |   | (466     | ) |  |   | (466      | )
|Cash dividends                                                                |  |                        |           |        |  |            |    |               |  |          |          |               |  |          |        |               |  |   | (19,348 | ) |  |   |        |   |  |   |         |   |  |   | (19,348   | )
|Net earnings                                                                  |  |                        |           |        |  |            |    |               |  |          |          |               |  |          |        |               |  |   | 127,990 |   |  |   | 127,990 |   |  |   |         |   |  |   | 127,990   |  
|                                                                              |  |                        |            |        |  |            |     |               |  |          |           |               |  |          |         |               |  |   |         |   |  |   |         |   |  |   |          |   |  |   |           |  
|Total comprehensive income                                                    |  |                        |           |        |  |            |    |               |  |          |          |               |  |          |        |               |  |   |        |   |  | $ | 118,385 |   |  |   |         |   |  |   |          |  
|                                                                              |  |                        |            |        |  |            |     |               |  |          |           |               |  |          |         |               |  |   |         |   |  |   |         |   |  |   |          |   |  |   |           |  
|Balance at September 30, 2003                                                 |  |                        | 55,561,512 |        |  | $          | 847 |               |  | $        | 1,018,953 |               |  | $        | (27,352 | )             |  | $ | 486,349 |   |  |   |         |   |  | $ | (519,237 | ) |  | $ | 959,560   |  
|                                                                              |  |                        |            |        |  |            |     |               |  |          |           |               |  |          |         |               |  |   |         |   |  |   |         |   |  |   |          |   |  |   |           |  
|Balance at December 31, 2003                                                  |  |                        | 56,760,375 |        |  | $          | 859 |               |  | $        | 1,043,856 |               |  | $        | (26,454 | )             |  | $ | 518,408 |   |  |   |         |   |  | $ | (519,238 | ) |  | $ | 1,017,431 |  
|Common stock issued                                                           |  |                        | 3,330,000  |        |  |            | 33  |               |  |          | 100,138   |               |  |          |        |               |  |   |        |   |  | $ |        |   |  |   |         |   |  |   | 100,171   |  
|Common stock options exercised                                                |  |                        | 1,733,116  |        |  |            | 17  |               |  |          | 38,366    |               |  |          |        |               |  |   |        |   |  |   |        |   |  |   |         |   |  |   | 38,383    |  
|Directors and officers notes
    receivable                                 |  |                        |           |        |  |            |    |               |  |          | 43        |               |  |          |        |               |  |   |        |   |  |   |        |   |  |   |         |   |  |   | 43        |  
|Deferred compensation, restricted stock                                       |  |                        | 114,047    |        |  |            | 2   |               |  |          | 1,989     |               |  |          |        |               |  |   |        |   |  |   |        |   |  |   |         |   |  |   | 1,991     |  
|Net loss on mortgage- backed securities available
    for sale, net of taxes  |  |                        |           |        |  |            |    |               |  |          |          |               |  |          | (1,719  | )             |  |   |        |   |  |   | (1,719  | ) |  |   |         |   |  |   | (1,719    | )
|Net unrealized gain on derivatives used in cash
    flow hedges, net of taxes |  |                        |           |        |  |            |    |               |  |          |          |               |  |          | (2,987  | )             |  |   |        |   |  |   | (2,987  | ) |  |   |         |   |  |   | (2,987    | )
|Purchases of common stock                                                     |  |                        | (17,766    | )      |  |            |    |               |  |          |          |               |  |          |        |               |  |   |        |   |  |   |        |   |  |   | (543     | ) |  |   | (543      | )
|Cash dividends                                                                |  |                        |           |        |  |            |    |               |  |          |          |               |  |          |        |               |  |   | (51,345 | ) |  |   |        |   |  |   |         |   |  |   | (51,345   | )
|Net earnings                                                                  |  |                        |           |        |  |            |    |               |  |          |          |               |  |          |        |               |  |   | 114,611 |   |  |   | 114,611 |   |  |   |         |   |  |   | 114,611   |  
|                                                                              |  |                        |            |        |  |            |     |               |  |          |           |               |  |          |         |               |  |   |         |   |  |   |         |   |  |   |          |   |  |   |           |  
|Total comprehensive income                                                    |  |                        |           |        |  |            |    |               |  |          |          |               |  |          |        |               |  |   |        |   |  | $ | 109,905 |   |  |   |         |   |  |   |          |  
|                                                                              |  |                        |            |        |  |            |     |               |  |          |           |               |  |          |         |               |  |   |         |   |  |   |         |   |  |   |          |   |  |   |           |  
|Balance at September 30, 2004                                                 |  |                        | 61,919,772 |        |  | $          | 911 |               |  | $        | 1,184,392 |               |  | $        | (31,160 | )             |  | $ | 581,674 |   |  |   |         |   |  | $ | (519,781 | ) |  | $ | 1,216,036 |  
|                                                                              |  |                        |            |        |  |            |     |               |  |          |           |               |  |          |         |               |  |   |         |   |  |   |         |   |  |   |          |   |  |   |           |  

The accompanying notes are an integral part of
these statements.

68



---



##### Table of Contents



INDYMAC BANCORP, INC. AND
SUBSIDIARIES



CONSOLIDATED STATEMENTS OF CASH
FLOWS


|                                                                           |                                                                                            |                                                                         |                                                                                                                                                             |           |            |            |         |            |          |            |  
|-------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------ | ----------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------- | --------- | ---------- | ---------- | ------- | ---------- | -------- | ---------- | -
|                                                                           |                                                                                            |                                                                        
|                                                                           |                                                                                            | For the Nine Months Ended                                              
|                                                                           |                                                                                            | September 30,                                                          
|                                                                           |                                                                                            |                                                                        
|                                                                           |                                                                                            | 2004                                                                    |                                                                                                                                                             | 2003     
|                                                                           |                                                                                            |                                                                         |                                                                                                                                                             |          
|                                                                           |                                                                                            |                                                                        
|                                                                           |                                                                                            | (Unaudited)                                                            
|                                                                           |                                                                                            |                                                                        
|                                                                           |                                                                                            | (Dollars in thousands)                                                 
|Cash flows from operating
    activities:                                  |                                                                                            |                                                                         |                                                                                                                                                             |           |            |            |         |           
|                                                                           | Net earnings                                                                               |                                                                         | $                                                                                                                                                           | 114,611   |            |            | $       | 127,990    |         
|                                                                           | Adjustments to reconcile net earnings to net cash
    used in operating activities:        |                                                                         |                                                                                                                                                             |           |            |            |         |            |         
|                                                                           |                                                                                            | Total amortization and depreciation                                     |                                                                                                                                                             |           | 163,373    |            |         |            | 145,836  |           
|                                                                           |                                                                                            | Provision for valuation adjustment of mortgage
    servicing rights     |                                                                                                                                                             |           | 59,040     |            |         |            | 14,670   |           
|                                                                           |                                                                                            | Gain on sale of loans                                                   |                                                                                                                                                             |           | (247,804   | )          |         |            | (307,428 | )         
|                                                                           |                                                                                            | Loss on mortgage-backed securities, net                                 |                                                                                                                                                             |           | 17,839     |            |         |            | 24,816   |           
|                                                                           |                                                                                            | Provision for loan losses                                               |                                                                                                                                                             |           | 6,198      |            |         |            | 16,200   |           
|                                                                           |                                                                                            | Net decrease in other assets and liabilities                            |                                                                                                                                                             |           | 372,443    |            |         |            | 62,307   |           
|                                                                           |                                                                                            |                                                                         |                                                                                                                                                             |           |            |            |         |           
|                                                                           |                                                                                            |                                                                         | Net cash provided by operating activities before
    activity for trading securities, premiums paid for derivative
    instruments, and loans held for sale |           |            | 485,700    |         |            |          | 84,391     |  
|                                                                           |                                                                                            | Net sales of trading securities                                         |                                                                                                                                                             |           | 58,599     |            |         |            | 589,876  |           
|                                                                           |                                                                                            | Net decrease (increase) on premiums paid for
    derivative instruments |                                                                                                                                                             |           | 35,541     |            |         |            | (118,407 | )         
|                                                                           |                                                                                            | Net purchases of loans held for sale                                    |                                                                                                                                                             |           | (3,708,016 | )          |         |            | (727,073 | )         
|                                                                           |                                                                                            |                                                                         |                                                                                                                                                             |           |            |            |         |           
|                                                                           |                                                                                            |                                                                         | Net cash used in operating activities                                                                                                                       |           |            | (3,128,176 | )       |            |          | (171,213   | )
|                                                                           |                                                                                            |                                                                         |                                                                                                                                                             |           |            |            |         |           
|Cash flows from investing
    activities:                                  |                                                                                            |                                                                         |                                                                                                                                                             |           |            |            |         |           
|                                                                           | Net sales of (purchases of) and payments from
    loans held for investment                |                                                                         |                                                                                                                                                             | 1,411,939 |            |            |         | (1,925,254 | )       
|                                                                           | Net (purchases of) payments from securities
    available for sale                         |                                                                         |                                                                                                                                                             | (195,954  | )          |            |         | 46,145     |         
|                                                                           | Net increase in investment in Federal Home
    Loan Bank stock, at cost                    |                                                                         |                                                                                                                                                             | (48,870   | )          |            |         | (111,753   | )       
|                                                                           | Net purchases of property, plant and equipment                                             |                                                                         |                                                                                                                                                             | (36,920   | )          |            |         | (28,236    | )       
|                                                                           | Purchase of Financial Freedom, net of cash
    received                                    |                                                                         |                                                                                                                                                             | (81,408   | )          |            |         |           |         
|                                                                           |                                                                                            |                                                                         |                                                                                                                                                             |           |            |            |         |           
|                                                                           |                                                                                            |                                                                         | Net cash provided by (used in) investing
    activities                                                                                                     |           |            | 1,048,787  |         |            |          | (2,019,098 | )
|                                                                           |                                                                                            |                                                                         |                                                                                                                                                             |           |            |            |         |           
|Cash flows from financing
    activities:                                  |                                                                                            |                                                                         |                                                                                                                                                             |           |            |            |         |           
|                                                                           | Net increase in deposits                                                                   |                                                                         |                                                                                                                                                             | 934,736   |            |            |         | 1,005,832  |         
|                                                                           | Net (decrease) increase in advances from Federal
    Home Loan Bank                        |                                                                         |                                                                                                                                                             | (153,000  | )          |            |         | 1,337,914  |         
|                                                                           | Net increase (decrease) in borrowings                                                      |                                                                         |                                                                                                                                                             | 1,564,344 |            |            |         | (74,373    | )       
|                                                                           | Net proceeds from issuance of common stock                                                 |                                                                         |                                                                                                                                                             | 100,170   |            |            |         |           |         
|                                                                           | Net proceeds from issuance of trust preferred
    debentures                               |                                                                         |                                                                                                                                                             |          |            |            |         | 29,550     |         
|                                                                           | Net proceeds from stock options and notes
    receivable                                   |                                                                         |                                                                                                                                                             | 38,427    |            |            |         | 9,362      |         
|                                                                           | Cash dividends paid                                                                        |                                                                         |                                                                                                                                                             | (51,345   | )          |            |         | (19,348    | )       
|                                                                           | Purchases of common stock                                                                  |                                                                         |                                                                                                                                                             | (543      | )          |            |         | (466       | )       
|                                                                           |                                                                                            |                                                                         |                                                                                                                                                             |           |            |            |         |           
|                                                                           |                                                                                            |                                                                         | Net cash provided by financing activities                                                                                                                   |           |            | 2,432,789  |         |            |          | 2,288,471  |  
|                                                                           |                                                                                            |                                                                         |                                                                                                                                                             |           |            |            |         |           
|Net increase in cash and cash equivalents                                  |                                                                                            |                                                                         | 353,400                                                                                                                                                     |           |            |            | 98,160  |           
|Cash and cash equivalents at beginning of period                           |                                                                                            |                                                                         | 115,485                                                                                                                                                     |           |            |            | 196,720 |           
|                                                                           |                                                                                            |                                                                         |                                                                                                                                                             |           |            |            |         |           
|Cash and cash equivalents at end of period                                 |                                                                                            | $                                                                       | 468,885                                                                                                                                                     |           |            | $          | 294,880 |           
|                                                                           |                                                                                            |                                                                         |                                                                                                                                                             |           |            |            |         |           
|Supplemental cash flow information:                                        |                                                                                            |                                                                         |                                                                                                                                                             |           |            |            |         |           
|                                                                           | Cash paid for interest                                                                     |                                                                         | $                                                                                                                                                           | 229,305   |            |            | $       | 193,569    |         
|                                                                           |                                                                                            |                                                                         |                                                                                                                                                             |           |            |            |         |           
|                                                                           | Cash paid for income taxes                                                                 |                                                                         | $                                                                                                                                                           | 31,335    |            |            | $       | 35,875     |         
|                                                                           |                                                                                            |                                                                         |                                                                                                                                                             |           |            |            |         |           
|Supplemental disclosure of noncash investing
    and financing activities: |                                                                                            |                                                                         |                                                                                                                                                             |           |            |            |         |           
|                                                                           | Net transfer of loans held for sale to loans held
    for investment                       |                                                                         | $                                                                                                                                                           | 1,766,881 |            |            | $       | 1,786,048  |         
|                                                                           |                                                                                            |                                                                         |                                                                                                                                                             |           |            |            |         |           
|                                                                           | Transfer of loans held for investment to
    mortgage-backed securities available for sale |                                                                         | $                                                                                                                                                           | 1,000,262 |            |            | $       |           |         
|                                                                           |                                                                                            |                                                                         |                                                                                                                                                             |           |            |            |         |           
|                                                                           | Net transfer mortgage-servicing rights to trading
    securities                           |                                                                         | $                                                                                                                                                           | 13,898    |            |            | $       | 47,311     |         
|                                                                           |                                                                                            |                                                                         |                                                                                                                                                             |           |            |            |         |           

The accompanying notes are an integral part of
these statements.

69



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INDYMAC BANCORP, INC. AND
SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

September 30, 2004


(Unaudited)




|         |                      
|-------- | ---------------------
|Note 1  | Basis of Presentation

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

The consolidated financial statements include the
accounts of IndyMac Bancorp and all of its wholly-owned and
majority-owned subsidiaries, including IndyMac Bank®,
F.S.B. (IndyMac Bank). All significant intercompany
balances and transactions with IndyMacs consolidated
subsidiaries have been eliminated in consolidation. Minority
interests in the IndyMacs majority-owned subsidiary are
included in other liabilities on the consolidated
balance sheets and the minority interests in IndyMacs
earnings are reported separately. The consolidated financial
statements of IndyMac are prepared in conformity with accounting
principles generally accepted in the United States of America
(US GAAP). The foregoing financial statements are
unaudited; however, in the opinion of management, all
adjustments, consisting only of normal recurring adjustments
necessary for a fair statement of the results for the interim
periods have been included. Operating results for the three and
nine months ended September 30, 2004, are not necessarily
indicative of the results that may be expected for the year
ending December 31, 2004. For further information, refer to
the consolidated financial statements and footnotes thereto
included in IndyMacs annual report on Form 10-K for
the year ended December 31, 2003.



|         |                                              
|-------- | ---------------------------------------------
|Note 2  | New Accounting Pronouncement and
    Guidance

Emerging Issues Task Force (EITF)
Issue No. 03-1, The Meaning of Other-Than-Temporary
Impairment and Its Application to Certain Investments
(EITF 03-1), provides application guidance that
should be used to determine when an investment is considered
impaired, whether that impairment is other-than-temporary, and
the recognition of an impairment loss. The guidance also
includes accounting considerations subsequent to the recognition
of an other-than-temporary impairment and requires certain
disclosures about unrealized losses that have not been
recognized as other-than-temporary impairments. In September
2004, the FASB delayed the accounting requirements of
EITF 03-1 until additional implementation guidance is
issued and goes into effect.

On March 9, 2004, the Securities and
Exchange Commission (SEC) issued Staff Accounting
Bulletin No. 105, Application of Accounting
Principles to Loan Commitments,which provides
guidance regarding loan commitments that are accounted for as
derivative instruments. In this Bulletin, the SEC determined
that an interest rate lock commitment should generally be valued
at zero at inception. The rate locks will continue to be
adjusted for changes in value resulting from changes in market
interest rates. The Company adopted this new standard
prospectively effective April 1, 2004. Under the new
accounting guidance, the Company no longer recognizes any
revenue at the inception of the rate lock. Profits inherent in
the rate lock are recognized at the time of the sale of the
underlying loans. The implementation of the standard had a
negative impact on gain on sale of $5.1 million before-tax
and $52.2 million before-tax for the third quarter and
second quarter of 2004, respectively. Once all loans are sold
that were rate locked prior to April 1, 2004, SAB
No. 105 will no longer have a negative impact to earnings.
We currently expect all remaining loans to be sold prior to
December 31, 2004.



|         |            
|-------- | -----------
|Note 3  | Acquisition

On July 16, 2004, the Company completed the
acquisition of 93.75% of the outstanding shares of common stock
of Financial Freedom Holdings Inc. (Financial
Freedom), the leading provider of reverse

70



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INDYMAC BANCORP, INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

mortgages in the United States of America, and
the related assets from Lehman Brothers Bank, F.S.B. and its
affiliates for an aggregate cash purchase price of approximately
$83.8 million. The remaining shares (6.25%) of the common
stock of Financial Freedom are held by its Chief Executive
Officer. The acquisition was accounted for using the purchase
accounting method and accordingly the results of operations for
the period from July 16, 2004 to September 30, 2004
have been included in the consolidated financial statements for
the three months and nine months ended
September 30, 2004. As part of the allocation of the
purchase price, we recorded loans held for sale and the loan
application pipeline at their fair values at the acquisition
date. By allocating a portion of the purchase price to these
assets, we increased the cost basis of the loans that are
subsequently sold. This increased cost basis decreases the gain
on sale when the related loans are sold. We allocated total of
$8.1 million in purchase price to the loan portfolio and
loan application pipeline. Of this amount, $6.0 million was
recognized as the related loans were sold during the third
quarter of 2004. The Financial Freedom acquisition has added
$71.0 million in loans held for sale and $41.8 million
in MSRs related to the $4.0 billion portfolio of loans
serviced for others to our consolidated balance sheets. The
acquisition resulted in $46.9 million of goodwill. The
acquisition was consummated as Financial Freedoms focus on
the reverse mortgage industry aligns well with our strategy to
increase market share by offering niche mortgage products and
servicing a broad customer base.



|         |           
|-------- | ----------
|Note 4  | Securities

The following table details our securities
classified as trading and securities available for sale as of
September 30, 2004, and December 31, 2003:

|                                             |                                                           |                                                   |   |              |           |  |   |           |           | 
|-------------------------------------------- | --------------------------------------------------------- | ------------------------------------------------- | - | ------------ | --------- |  | - | --------- | --------- | 
|                                             |                                                           | September 30,                                     |   | December 31,
|                                             |                                                           | 2004                                              |   | 2003        
|                                             |                                                           |                                                   |   |             
|                                             |                                                           |                                                  
|                                             |                                                           | (Dollars in thousands)                           
|Securities Classified as Trading:            |                                                           |                                                   |   |              |           |  |   |          
|                                             | AAA-rated and agency interest-only strips                 |                                                   | $ | 145,556      |           |  | $ | 148,275   |          
|                                             | AAA-rated principal-only securities                       |                                                   |   | 18,564       |           |  |   | 8,518     |          
|                                             | Other investment grade securities                         |                                                   |   | 9,155        |           |  |   | 8,922     |          
|                                             | Other non-investment grade securities                     |                                                   |   | 367          |           |  |   | 1,760     |          
|                                             | Non-investment grade residual securities                  |                                                   |   | 62,065       |           |  |   | 56,157    |          
|                                             |                                                           |                                                   |   |              |           |  |   |          
|                                             |                                                           | Total securities classified as trading            |   | $            | 235,707   |  |   | $         | 223,632   | 
|                                             |                                                           |                                                   |   |              |           |  |   |          
|Securities Classified as Available for Sale: |                                                           |                                                   |   |              |           |  |   |          
|                                             | AAA-rated agency mortgage-backed securities               |                                                   | $ | 16,405       |           |  | $ | 25,193    |          
|                                             | AAA-rated non-agency mortgage-backed securities           |                                                   |   | 3,146,437    |           |  |   | 1,407,984 |          
|                                             | Agency notes                                              |                                                   |   |             |           |  |   | 143,689   |          
|                                             | Other investment grade mortgage-backed securities         |                                                   |   | 72,735       |           |  |   | 26,926    |          
|                                             | Other non-investment grade mortgage-backed
    securities |                                                   |   | 56,191       |           |  |   | 10,182    |          
|                                             | Non-investment grade HELOC residual securities            |                                                   |   | 51,056       |           |  |   |          |          
|                                             |                                                           |                                                   |   |              |           |  |   |          
|                                             |                                                           | Total securities classified as available for sale |   | $            | 3,342,824 |  |   | $         | 1,613,974 | 
|                                             |                                                           |                                                   |   |              |           |  |   |          

The significant increase in AAA-rated non-agency
mortgage-backed securities from $1.4 billion at
December 31, 2003 to $3.1 billion at
September 30, 2004 was primarily due to the
reclassification of approximately $1.0 billion HELOC loans
to securities and the retention of a $346 million senior
note from our SFR mortgage loans held for investment
securitization during 2004.

71



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INDYMAC BANCORP, INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The unrealized losses and fair value of
securities that have been in a continuous unrealized loss
position for less than 12 months and 12 months or
greater were as follows:

|                                 |                                   |                                       |   |                      |         |            |   |           |           |            |   |        |        |   |   |         |         |  |   |         |         |   |   |           |           | 
|-------------------------------- | --------------------------------- | ------------------------------------- | - | -------------------- | ------- | ---------- | - | --------- | --------- | ---------- | - | ------ | ------ | - | - | ------- | ------- |  | - | ------- | ------- | - | - | --------- | --------- | 
|                                 |                                   |                                      
|                                 |                                   | As of September 30, 2004             
|                                 |                                   |                                      
|                                 |                                   |                                       |   |                      |         |           
|                                 |                                   | Less Than 12 Months                   |   | 12 Months or Greater |         | Total     
|                                 |                                   |                                       |   |                      |         |           
|                                 |                                   | Unrealized                            |   | Fair                 |         | Unrealized |   | Fair      |           | Unrealized |   | Fair  
|                                 |                                   | Losses                                |   | Value                |         | Losses     |   | Value     |           | Losses     |   | Value 
|                                 |                                   |                                       |   |                      |         |            |   |           |           |            |   |       
|                                 |                                   |                                      
|                                 |                                   | (Dollars in thousands)               
|Securities  Available for Sale: |                                   |                                       |   |                      |         |            |   |           |           |            |   |        |        |   |   |         |         |  |   |         |         |   |   |          
|                                 | AAA-rated agency securities       |                                       | $ |                     |         |            | $ |          |           |            | $ | (296   | )      |   | $ | 7,534   |         |  | $ | (296    | )       |   | $ | 7,534     |          
|                                 | AAA-rated non-agency securities   |                                       |   | (10,445              | )       |            |   | 1,246,989 |           |            |   | (7,344 | )      |   |   | 306,984 |         |  |   | (17,789 | )       |   |   | 1,553,973 |          
|                                 | Other investment grade securities |                                       |   | (167                 | )       |            |   | 30,393    |           |            |   |       |        |   |   |        |         |  |   | (167    | )       |   |   | 30,393    |          
|                                 |                                   |                                       |   |                      |         |            |   |           |           |            |   |        |        |   |   |         |         |  |   |         |         |   |   |          
|                                 |                                   | Total Securities  Available for Sale |   | $                    | (10,612 | )          |   | $         | 1,277,382 |            |   | $      | (7,640 | ) |   | $       | 314,518 |  |   | $       | (18,252 | ) |   | $         | 1,591,900 | 
|                                 |                                   |                                       |   |                      |         |            |   |           |           |            |   |        |        |   |   |         |         |  |   |         |         |   |   |          

The securities that have been in unrealized loss
position for 12 months or more are primarily related to
14 AAA-rated securities issued by private institutions.
These unrealized losses are primarily attributable to changes in
interest rates and individually were 6% or less of their
respective amortized cost basis.



|         |                  
|-------- | -----------------
|Note 5  | Segment Reporting

IndyMac operates through four main segments,
Mortgage Banking Divisions, IndyMac Consumer Bank, Specialty
Product Divisions and Investing Divisions. The common
denominator of the Companys business is providing
consumers with single-family residential (SFR)
mortgages through relationships with each segments core
customers via the channel in which each operates. Mortgage
Banking Divisions provide consumers with all single-family
permanent mortgage lending through relationships with mortgage
professionals  mortgage brokers, mortgage bankers,
community financial institutions, real estate professionals, and
consumers. IndyMac Consumer Bank provides the platform for the
mortgage and deposit services that IndyMac offers directly to
consumers through its branch network. Specialty Product
Divisions support the production of construction lending, home
equity lines of credit (HELOCs), reverse mortgages, and other
non-SFR permanent mortgage products through all of
IndyMacs relationship and consumer direct production
channels. Investing Divisions serves as the main link to
customers whose mortgages we service. Through their investments
in SFR mortgages, mortgage-backed securities (MBS)
and mortgage servicing rights (MSRs), the Investing
Divisions generate core spread and fee income and provides
critical support to IndyMacs mortgage lending operations.

The profitability of each operating segment is
measured on a fully-leveraged basis after allocating capital
based on regulatory capital rules. Operating segments that
originate mortgage loans are credited with gain on sale at
funding based on the estimated fair value. Any difference
between the actual gain on sale realized and the estimate is
credited or charged to the operating segment in the period the
loan is sold or transferred to the held for investment
portfolio. Differences between the gain on sale credited to the
operating segments and the consolidated gain on sale due to
timing of loan sales or transfers to the held for investment
portfolio are eliminated in consolidation. The Company uses a
fund transfer pricing system to allocate net interest income to
the operating segments. Each operating segment is allocated
funding with maturities and interest rates matched with the
expected lives and repricing frequencies of the segments
assets. Deposits receive a funding credit using a similar
methodology. The difference between these allocations and the
Companys actual net interest income and capital levels
resulting from centralized management of funding costs is
reported in the line item titled Other. Also
included in the line item titled Other are
unallocated corporate costs such as corporate salaries and
related expenses, excess capital, and non-recurring corporate
items.

72



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INDYMAC BANCORP, INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Segment information for the three and nine months
ended September 30, 2004 and 2003, was as follows:

|                                      |                               |                        |           |          |  |           |         |           |   |       |           |              |  |            |           |              |  |   |         |         |   |   |            |         |  |   |   |         |   |   |            |         | 
|------------------------------------- | ----------------------------- | ---------------------- | --------- | -------- |  | --------- | ------- | --------- | - | ----- | --------- | ------------ |  | ---------- | --------- | ------------ |  | - | ------- | ------- | - | - | ---------- | ------- |  | - | - | ------- | - | - | ---------- | ------- | 
|                                      |                               | Mortgage               |           | IndyMac  |  | Specialty |         |           |   |       |           |              |  |            |           |             
|                                      |                               | Banking                |           | Consumer |  | Product   |         | Investing |   |       |           | Pro Forma    |  |            |           | GAAP        
|                                      |                               | Divisions              |           | Bank     |  | Divisions |         | Divisions |   | Other |           | Consolidated |  | Adjustment |           | Consolidated
|                                      |                               |                        |           |          |  |           |         |           |   |       |           |              |  |            |           |             
|                                      |                               |                       
|                                      |                               | (Dollars in thousands)
|Three months ended September 30, 2004 |                               |                        |           |          |  |           |         |           |   |       |           |              |  |            |           |              |  |   |         |         |   |   |            |         |  |   |   |         |   |   |            |        
|                                      | Net interest income (expense) |                        | $         | 39,138   |  |           | $       | 10,307    |   |       | $         | 23,268       |  |            | $         | 38,274       |  |   | $       | (10,397 | ) |   | $          | 100,590 |  |   | $ |        |   |   | $          | 100,590 | 
|                                      | Net revenues (expense)        |                        |           | 126,590  |  |           |         | 11,713    |   |       |           | 47,377       |  |            |           | 39,275       |  |   |         | 3,621   |   |   |            | 228,576 |  |   |   | (11,104 | ) |   |            | 217,472 | 
|                                      | Net earnings (loss)           |                        |           | 34,526   |  |           |         | 2,649     |   |       |           | 16,566       |  |            |           | 16,434       |  |   |         | (13,734 | ) |   |            | 56,441  |  |   |   | (6,715  | ) |   |            | 49,726  | 
|Assets as of September 30, 2004       |                               | $                      | 3,667,167 |          |  | $         | 121,546 |           |   | $     | 2,955,433 |              |  | $          | 8,422,134 |              |  | $ | 973,804 |         |   | $ | 16,140,084 |         |  | $ |  |         |   | $ | 16,140,084 |        
|Three months ended September 30, 2003 |                               |                        |           |          |  |           |         |           |   |       |           |              |  |            |           |              |  |   |         |         |   |   |            |         |  |   |   |         |   |   |            |        
|                                      | Net interest income (expense) |                        | $         | 40,389   |  |           | $       | 3,613     |   |       | $         | 21,424       |  |            | $         | 26,001       |  |   | $       | (8,974  | ) |   | $          | 82,453  |  |   | $ |        |   |   | $          | 82,453  | 
|                                      | Net revenues (expense)        |                        |           | 177,761  |  |           |         | 6,770     |   |       |           | 28,486       |  |            |           | 14,917       |  |   |         | (28,288 | ) |   |            | 199,646 |  |   |   |        |   |   |            | 199,646 | 
|                                      | Net earnings (loss)           |                        |           | 69,485   |  |           |         | (142      | ) |       |           | 10,352       |  |            |           | 2,067        |  |   |         | (32,058 | ) |   |            | 49,704  |  |   |   |        |   |   |            | 49,704  | 
|Assets as of September 30, 2003       |                               | $                      | 2,592,067 |          |  | $         | 98,677  |           |   | $     | 2,080,548 |              |  | $          | 6,661,884 |              |  | $ | 634,291 |         |   | $ | 12,067,467 |         |  | $ |  |         |   | $ | 12,067,467 |        
|Nine months ended September 30, 2004  |                               |                        |           |          |  |           |         |           |   |       |           |              |  |            |           |              |  |   |         |         |   |   |            |         |  |   |   |         |   |   |            |        
|                                      | Net interest income (expense) |                        | $         | 115,366  |  |           | $       | 23,870    |   |       | $         | 69,292       |  |            | $         | 122,737      |  |   | $       | (29,764 | ) |   | $          | 301,501 |  |   | $ |        |   |   | $          | 301,501 | 
|                                      | Net revenues (expense)        |                        |           | 390,059  |  |           |         | 29,709    |   |       |           | 118,201      |  |            |           | 110,642      |  |   |         | (23,705 | ) |   |            | 624,906 |  |   |   | (63,327 | ) |   |            | 561,579 | 
|                                      | Net earnings (loss)           |                        |           | 118,296  |  |           |         | 4,931     |   |       |           | 44,643       |  |            |           | 44,381       |  |   |         | (59,330 | ) |   |            | 152,921 |  |   |   | (38,310 | ) |   |            | 114,611 | 
|Assets as of September 30, 2004       |                               | $                      | 3,667,167 |          |  | $         | 121,546 |           |   | $     | 2,955,433 |              |  | $          | 8,422,134 |              |  | $ | 973,804 |         |   | $ | 16,140,084 |         |  | $ |  |         |   | $ | 16,140,084 |        
|Nine months ended September 30, 2003  |                               |                        |           |          |  |           |         |           |   |       |           |              |  |            |           |              |  |   |         |         |   |   |            |         |  |   |   |         |   |   |            |        
|                                      | Net interest income (expense) |                        | $         | 107,236  |  |           | $       | 6,934     |   |       | $         | 61,238       |  |            | $         | 61,706       |  |   | $       | (24,122 | ) |   | $          | 212,992 |  |   | $ |        |   |   | $          | 212,992 | 
|                                      | Net revenues (expense)        |                        |           | 443,935  |  |           |         | 13,912    |   |       |           | 81,643       |  |            |           | 49,442       |  |   |         | (59,024 | ) |   |            | 529,908 |  |   |   |        |   |   |            | 529,908 | 
|                                      | Net earnings (loss)           |                        |           | 166,282  |  |           |         | (3,058    | ) |       |           | 31,268       |  |            |           | 10,487       |  |   |         | (76,989 | ) |   |            | 127,990 |  |   |   |        |   |   |            | 127,990 | 
|Assets as of June 30, 2003            |                               | $                      | 2,592,067 |          |  | $         | 98,677  |           |   | $     | 2,080,548 |              |  | $          | 6,661,884 |              |  | $ | 634,291 |         |   | $ | 12,067,467 |         |  | $ |  |         |   | $ | 12,067,467 |        



|         |                         
|-------- | ------------------------
|Note 6  | Stock-Based Compensation

We have two stock incentive plans, the 2002
Incentive Plan, as amended and restated, and the 2000 Stock
Incentive Plan, as amended (collectively, the
Plans), which provide for the granting of
non-qualified stock options, incentive stock options, restricted
stock awards, performance stock awards, stock bonuses and other
awards to our employees (including officers and directors).
Options and awards are granted at the average market price of
our stock on the grant date, vest over varying periods generally
beginning at least one year from the date of grant, and expire
ten years from the date of grant.

As permitted by SFAS 123,
Accounting for Stock-Based Compensation,we
continue to measure and recognize compensation expense using the
intrinsic value method specified in Accounting Principles Board
Opinion No. 25, Accounting for Stock Issued to
Employees.As required under the provisions of
SFAS 148, Accounting for Stock-Based
Compensation  Transition and Disclosure,the following table discloses the

73



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INDYMAC BANCORP, INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

pro forma net income and pro forma basic and
diluted earnings per share had the fair value method been
applied to all stock awards for the three and nine months ended
September 30, 2004 and 2003:

|                           |             |                                               |   |                   |        |      |   |        |        |   |   |         |        |   |   |         |         |  
|-------------------------- | ----------- | --------------------------------------------- | - | ----------------- | ------ | ---- | - | ------ | ------ | - | - | ------- | ------ | - | - | ------- | ------- | -
|                           |             |                                               |   |                  
|                           |             | Three Months Ended                            |   | Nine Months Ended
|                           |             | September 30,                                 |   | September 30,    
|                           |             |                                               |   |                  
|                           |             | 2004                                          |   | 2003              |        | 2004 |   | 2003  
|                           |             |                                               |   |                   |        |      |   |       
|                           |             |                                              
|                           |             | (Dollars in thousands, except per share data)
|Net Earnings               |             |                                               |   |                   |        |      |   |        |        |   |   |         |        |   |   |        
|                           | As reported |                                               | $ | 49,726            |        |      | $ | 49,704 |        |   | $ | 114,611 |        |   | $ | 127,990 |        
|                           |             | Stock-based compensation expense              |   |                   | (2,784 | )    |   |        | (4,257 | ) |   |         | (8,353 | ) |   |         | (12,546 | )
|                           |             | Tax effect                                    |   |                   | 1,100  |      |   |        | 1,682  |   |   |         | 3,300  |   |   |         | 4,956   |  
|                           |             |                                               |   |                   |        |      |   |        |        |   |   |         |        |   |   |        
|                           | Pro forma   |                                               | $ | 48,042            |        |      | $ | 47,129 |        |   | $ | 109,558 |        |   | $ | 120,400 |        
|                           |             |                                               |   |                   |        |      |   |        |        |   |   |         |        |   |   |        
|Basic Earnings Per Share   |             |                                               |   |                   |        |      |   |        |        |   |   |         |        |   |   |        
|                           | As reported |                                               | $ | 0.81              |        |      | $ | 0.90   |        |   | $ | 1.95    |        |   | $ | 2.33    |        
|                           | Pro forma   |                                               | $ | 0.78              |        |      | $ | 0.85   |        |   | $ | 1.86    |        |   | $ | 2.19    |        
|Diluted Earnings Per Share |             |                                               |   |                   |        |      |   |        |        |   |   |         |        |   |   |        
|                           | As reported |                                               | $ | 0.78              |        |      | $ | 0.87   |        |   | $ | 1.87    |        |   | $ | 2.26    |        
|                           | Pro forma   |                                               | $ | 0.75              |        |      | $ | 0.83   |        |   | $ | 1.78    |        |   | $ | 2.13    |        

During the three months ended September 30,
2004 and 2003, we recognized compensation expense of $764,000
($462,000, net of taxes) and $370,000 ($224,000, net of taxes),
respectively, related to restricted stock awards. These expenses
were included in net earnings as reported.



|         |                                                   
|-------- | --------------------------------------------------
|Note 7  | Defined Benefit Pension Plan Net Periodic
    Cost

We provided a defined benefit pension plan (the
DBP Plan) to substantially all of our employees
hired prior to January 1, 2003. The net periodic benefit
cost of the DBP Plan, which is based on actuarial assumptions,
is presented in the following table for the three and nine
months ended September 30, 2004 and 2003:

|                                   |  |                        |       |                   |  |      |       |      |  |   |       |   |  |   |       |  
|---------------------------------- |  | ---------------------- | ----- | ----------------- |  | ---- | ----- | ---- |  | - | ----- | - |  | - | ----- | -
|                                   |  |                        |       |                  
|                                   |  | Three Months Ended     |       | Nine Months Ended
|                                   |  | September 30,          |       | September 30,    
|                                   |  |                        |       |                  
|                                   |  | 2004                   |       | 2003              |  | 2004 |       | 2003
|                                   |  |                        |       |                   |  |      |       |     
|                                   |  |                       
|                                   |  | (Dollars in thousands)
|Service cost                       |  | $                      | 1,209 |                   |  | $    | 932   |      |  | $ | 3,627 |   |  | $ | 2,796 |  
|Interest cost                      |  |                        | 323   |                   |  |      | 222   |      |  |   | 969   |   |  |   | 666   |  
|Expected return on assets          |  |                        | (294  | )                 |  |      | (165  | )    |  |   | (882  | ) |  |   | (495  | )
|Amortization of net loss           |  |                        | 73    |                   |  |      | 47    |      |  |   | 219   |   |  |   | 141   |  
|Amortization of prior service cost |  |                        | 14    |                   |  |      | 14    |      |  |   | 42    |   |  |   | 42    |  
|                                   |  |                        |       |                   |  |      |       |      |  |   |       |   |  |   |       |  
|Net periodic benefit costs         |  | $                      | 1,325 |                   |  | $    | 1,050 |      |  | $ | 3,975 |   |  | $ | 3,150 |  
|                                   |  |                        |       |                   |  |      |       |      |  |   |       |   |  |   |       |  

The actuarial assumptions used in accounting for
the net periodic cost at September 30, 2004 and 2003, were
as follows:

|                              |  |                    |      |      |  |  |      |  
|----------------------------- |  | ------------------ | ---- | ---- |  |  | ---- | -
|                              |  |                   
|                              |  | Three Months Ended
|                              |  | September 30,     
|                              |  |                   
|                              |  | 2004               |      | 2003
|                              |  |                    |      |     
|Assumed discount rate         |  |                    | 6.00 | %    |  |  | 6.75 | %
|Rate of compensation increase |  |                    | 4.00 | %    |  |  | 4.00 | %
|Expected return on assets     |  |                    | 7.50 | %    |  |  | 7.50 | %

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INDYMAC BANCORP, INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The Company contributed $6.0 million to the
DBP Plan during the third quarter 2004 and is expected to make
no further contributions to the DBP Plan for the remainder of
2004.



|         |              
|-------- | -------------
|Note 8  | Legal Matters

On February 3, 2004, Washington Mutual
Mortgage Securities Corporation filed a lawsuit against IndyMac
in the Superior Court of the State of California. The lawsuit
involves a contractual dispute about standard representations
and warranties on single-family mortgage loans that were sold to
PNC Mortgage Corporation during the period 1997 to 2000, prior
to Washington Mutuals acquisition of PNC Mortgage
Corporation in 2001. Washington Mutual alleges damages of
approximately $50 million, the bulk of which includes the
principal balance of the loans in question, with the remainder
of the amount consisting of interest and alleged losses. The
loans in question represent less than 1% of the nearly
$6 billion in loans that were sold to PNC between 1997 and
2000. IndyMac maintains a reserve for potential losses related
to its standard representations and warranties on loans sold and
discusses such reserve in its financial statements filed with
the SEC. Management believes that the resolution of this dispute
will not have a material impact on the financial condition of
IndyMac.

Additionally, the Company has been named as a
defendant in a class-action lawsuit involving worker
classification issues under the Fair Labor Standards Act.
Similar lawsuits have been filed recently against other
companies in the industry and many employers throughout the
nation. The Company will vigorously defend this lawsuit. In this
matter, no discovery has been conducted as of yet to determine
the viability of the claims alleged, and no evidence is in the
Companys possession that would allow for a meaningful
analysis to support a reasonable estimate of damages. The
Company reviews this matter on an on-going basis and follows the
provisions of Statement of Financial Accounting Standards
No. 5, Accounting for Contingencies when
making accrual and disclosure decisions. When assessing
reasonably possible and probable outcomes, the Company bases its
decisions on the evidence discovered and in its possession, the
strength of the probable witness testimony, the viability of its
defenses, and the likelihood of prevailing at trial or resolving
the matter through alternative dispute resolution. Management
expects that, while this matter may be material to the
Companys operating results for any particular period if an
unfavorable outcome results, this matter will not have a
material adverse effect on the consolidated financial condition
of the Company.

We are involved in other litigation including
class actions lawsuits arising from normal operations.
Management has accrued for those that are both probable and
reasonably estimable. In the opinion of management in
consultation with counsel, none of these matters are likely to
have a material adverse effect on our financial condition.

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

As of September 30, 2004, an evaluation was
performed under the supervision and with the participation of
the Companys management, including the Chief Executive
Officer (CEO) and Chief Financial Officer
(CFO), of the effectiveness of the design and
operation of the Companys disclosure controls and
procedures. Based on that evaluation, the Companys
management, including the CEO and CFO, concluded that the
Companys disclosure controls and procedures were effective
as of September 30, 2004. There have been no significant
changes in the Companys internal control over financial
reporting identified in connection with the foregoing evaluation
that could materially affect, or would be reasonably likely to
materially affect, the Companys internal control over
financial reporting.




PART II.     OTHER
INFORMATION






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

On February 3, 2004, Washington Mutual
Mortgage Securities Corporation filed a lawsuit against IndyMac
in the Superior Court of the State of California. The lawsuit
involves a contractual dispute about standard representations
and warranties on single-family mortgage loans that were sold to
PNC Mortgage Corporation during the period 1997 to 2000, prior
to Washington Mutuals acquisition of PNC Mortgage
Corporation in 2001. Washington Mutual alleges damages of
approximately $50 million, the bulk of which includes the
principal balance of the loans in question, with the remainder
of the amount consisting of interest and alleged losses. The
loans in question represent less than 1% of the nearly
$6 billion in loans that were sold to PNC between 1997 and
2000. IndyMac maintains a reserve for potential losses related
to its standard representations and warranties on loans sold and
discusses such reserve in its financial statements filed with
the SEC. Management believes that the resolution of this dispute
will not have a material impact on the financial condition of
IndyMac.

Additionally, the Company has been named as a
defendant in a class-action lawsuit involving worker
classification issues under the Fair Labor Standards Act.
Similar lawsuits have been filed recently against other
companies in the industry and many employers throughout the
nation. The Company will vigorously defend this lawsuit. In this
matter, no discovery has been conducted as of yet to determine
the viability of the claims alleged, and no evidence is in the
Companys possession that would allow for a meaningful
analysis to support a reasonable estimate of damages. The
Company reviews this matter on an on-going basis and follows the
provisions of Statement of Financial Accounting Standards
No. 5, Accounting for Contingencies when
making accrual and disclosure decisions. When assessing
reasonably possible and probable outcomes, the Company bases its
decisions on the evidence discovered and in its possession, the
strength of the probable witness testimony, the viability of its
defenses, and the likelihood of prevailing at trial or resolving
the matter through alternative dispute resolution. Management
expects that, while this matter may be material to the
Companys operating results for any particular period if an
unfavorable outcome results, this matter will not have a
material adverse effect on the consolidated financial condition
of the Company.

We are involved in other litigation including
class actions lawsuits arising from normal operations.
Management has accrued for those that are both probable and
reasonably estimable. In the opinion of management in
consultation with counsel, none of these matters are likely to
have a material adverse effect on our financial condition.






|        |                                                                                      
|------- | -------------------------------------------------------------------------------------
|ITEM 2. | CHANGES IN SECURITIES, USE OF PROCEEDS,
    AND ISSUER PURCHASES OF EQUITY SECURITIES

See Share Repurchases beginning on
page 59 for a discussion of share repurchases conducted by
IndyMac during the third quarter of 2004.

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|        |         
|------- | --------
|ITEM 6. | EXHIBITS

| |      |  |  |                                                                                                                                                          
| | ---- |  |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------
| | 10.1 |  |  | IndyMac Bancorp, Inc. Board Compensation
    Policy & Stock Ownership Requirements.                                                                      
| | 10.2 |  |  | IndyMac Bancorp, Inc. Cash Incentive Award
    Program Under the 2002 Incentive Plan, as Amended and Restated.                                           
| | 10.3 |  |  | Summary of Terms of Stock Awards Granted to
    Executive Officers.                                                                                      
| | 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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SIGNATURES

Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned thereunto duly
authorized, in the City of Pasadena, State of California, on
October 28, 2004.



| |                      
| | ---------------------
| | 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

78