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UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





Form 10-Q




|  |                                                                                                                                                    
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------
|þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    
     SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended
    March 31, 2006

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.)
|                                                                  
|888 East Walnut Street, Pasadena, California                       |  | 91101-7211                          
|(Address of principal executive offices)                           |  | (Zip Code)                          

(Registrants telephone number, including area code)


(800) 669-2300


þ o


12b-2


þ o o


12b-2 o þ














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FORM 10-Q
QUARTERLY REPORT


For the Period Ended March 31, 2006


TABLE OF CONTENTS


|                                                                                                      |                                                                              |      |    |    | 
|----------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------- | ---- | -- | -- | 
|                                                                                                      |                                                                              | Page |   
|                                                                                                      |                                                                              |      |   
|PART I. FINANCIAL
    INFORMATION                                                                    
|Forward-Looking Statements                                                                            |                                                                              |      | 2  |   
|Item 2. Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations |                                                                              |      | 2  |   
|Highlights for the Quarter                                                                            |                                                                              |      | 2  |   
|Business Segment Results                                                                              |                                                                              |      | 6  |   
|Product Profitability Analysis                                                                        |                                                                              |      | 15 |   
|Loan Production                                                                                       |                                                                              |      | 23 |   
|Loan Sales                                                                                            |                                                                              |      | 27 |   
|Mortgage Servicing and Other Retained
    Assets                                                      |                                                                              |      | 28 |   
|Mortgage-Backed Securities and Loans Held
    for Investment                                          |                                                                              |      | 36 |   
|Net Interest Margin                                                                                   |                                                                              |      | 42 |   
|Interest Rate Sensitivity                                                                             |                                                                              |      | 43 |   
|Credit Risk and Reserves                                                                              |                                                                              |      | 46 |   
|Expenses                                                                                              |                                                                              |      | 50 |   
|Share Repurchase Activities                                                                           |                                                                              |      | 51 |   
|Future Outlook                                                                                        |                                                                              |      | 51 |   
|Liquidity and Capital Resources                                                                       |                                                                              |      | 52 |   
|Off-Balance Sheet Arrangements                                                                        |                                                                              |      | 55 |   
|Aggregate Contractual Obligations                                                                     |                                                                              |      | 56 |   
|Critical Accounting Policies and
    Judgments                                                        |                                                                              |      | 56 |   
|Item 3. Quantitative and
    Qualitative Disclosures About Market Risk                                |                                                                              |      | 56 |   
|Item 1. Financial Statements
    (Unaudited)                                                          |                                                                              |      | 57 |   
|                                                                                                      | Consolidated Balance Sheets                                                  |      |    | 57 | 
|                                                                                                      | Consolidated Statements of Earnings                                          |      |    | 59 | 
|                                                                                                      | Consolidated Statements of
    Shareholders Equity and Comprehensive Income |      |    | 60 | 
|                                                                                                      | Consolidated Statements of Cash Flows                                        |      |    | 61 | 
|                                                                                                      | Notes to Consolidated Financial
    Statements                               |      |    | 62 | 
|Item 4. Controls and
    Procedures                                                                   |                                                                              |      | 70 |   
|                                                                                                     
|PART II. OTHER INFORMATION                                                                           
|Item 1. Legal Proceedings                                                                             |                                                                              |      | 70 |   
|Item 1A. Risk Factors                                                                                 |                                                                              |      | 70 |   
|Item 2. Unregistered Sales of
    Equity Securities and Use of Proceeds                               |                                                                              |      | 78 |   
|Item 5. Other Information                                                                             |                                                                              |      | 78 |   
|Item 6. Exhibits                                                                                      |                                                                              |      | 78 |   
|Exhibit 10.1                                                                                         
|Exhibit 10.2                                                                                         
|Exhibit 31.1                                                                                         
|Exhibit 31.2                                                                                         
|Exhibit 32.1                                                                                         
|Exhibit 32.2                                                                                         



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FORWARD-LOOKING STATEMENTS


10-Q









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




HIGHLIGHTS FOR THE QUARTER


Share-Based Payment.


|                     |                                                     |                                              |   |       |           |  |   |              |        |  |   |       |        | 
|-------------------- | --------------------------------------------------- | -------------------------------------------- | - | ----- | --------- |  | - | ------------ | ------ |  | - | ----- | ------ | 
|                     |                                                     | Three Months Ended                           |  
|                     |                                                     |                                              |  
|                     |                                                     | March 31,                                    |   |       | March 31, |  |   | December 31, |       
|                     |                                                     | 2006                                         |   |       | 2005      |  |   | 2005         |       
|                     |                                                     |                                              |   |       |           |  |   |              |       
|                     |                                                     | (Dollars in millions, except per share data) |  
|Income Statement     |                                                     |                                              |   |       |           |  |   |              |        |  |   |      
|                     | Net interest income after provision for loan losses |                                              | $ | 123   |           |  | $ | 103          |        |  | $ | 108   |       
|                     | Gain on sale of loans                               |                                              |   | 141   |           |  |   | 144          |        |  |   | 137   |       
|                     | Other income                                        |                                              |   | 40    |           |  |   | 6            |        |  |   | 36    |       
|                     | Net revenues                                        |                                              |   | 305   |           |  |   | 253          |        |  |   | 281   |       
|                     | Operating expenses                                  |                                              |   | 172   |           |  |   | 148          |        |  |   | 163   |       
|                     | Net earnings                                        |                                              |   | 80    |           |  |   | 63           |        |  |   | 70    |       
|                     | Basic earnings per share(1)                         |                                              |   | 1.24  |           |  |   | 1.03         |        |  |   | 1.11  |       
|                     | Diluted earnings per share(2)                       |                                              | $ | 1.18  |           |  | $ | 0.98         |        |  | $ | 1.06  |       
|Other Per Share Data |                                                     |                                              |   |       |           |  |   |              |        |  |   |      
|                     | Dividends declared per share                        |                                              | $ | 0.44  |           |  | $ | 0.36         |        |  | $ | 0.42  |       
|                     | Dividends payout ratio(3)                           |                                              |   | 37.29 | %         |  |   | 36.73        | %      |  |   | 39.62 | %     
|                     | Book value per share at end of quarter              |                                              |   | 25.00 |           |  |   | 21.55        |        |  |   | 24.02 |       
|                     | Closing price per share at end of quarter           |                                              | $ | 40.93 |           |  | $ | 34.00        |        |  | $ | 39.02 |       
|                     | Average Common Shares (in thousands)                |                                              |   |       |           |  |   |              |        |  |   |       |       
|                     |                                                     | Basic                                        |   |       | 64,310    |  |   |              | 61,798 |  |   |       | 63,650 | 
|                     |                                                     | Diluted                                      |   |       | 67,528    |  |   |              | 64,830 |  |   |       | 66,737 | 

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|                                       |                                                                                 |                                              |   |        |           |  |   |              |   |  |   |        |  
|-------------------------------------- | ------------------------------------------------------------------------------- | -------------------------------------------- | - | ------ | --------- |  | - | ------------ | - |  | - | ------ | -
|                                       |                                                                                 | Three Months Ended                           |  
|                                       |                                                                                 |                                              |  
|                                       |                                                                                 | March 31,                                    |   |        | March 31, |  |   | December 31, |  
|                                       |                                                                                 | 2006                                         |   |        | 2005      |  |   | 2005         |  
|                                       |                                                                                 |                                              |   |        |           |  |   |              |  
|                                       |                                                                                 | (Dollars in millions, except per share data) |  
|Performance Ratios                     |                                                                                 |                                              |   |        |           |  |   |              |   |  |   |       
|                                       | Return on average equity (annualized)                                           |                                              |   | 20.26  | %         |  |   | 20.26        | % |  |   | 18.62  | %
|                                       | Return on average assets (annualized)                                           |                                              |   | 1.22   | %         |  |   | 1.39         | % |  |   | 1.18   | %
|                                       | Net interest income to pretax income after minority interest                    |                                              |   | 96.25  | %         |  |   | 99.95        | % |  |   | 93.44  | %
|                                       | Average cost of funds                                                           |                                              |   | 4.37   | %         |  |   | 2.98         | % |  |   | 3.99   | %
|                                       | Net interest margin                                                             |                                              |   | 2.15   | %         |  |   | 2.50         | % |  |   | 2.01   | %
|                                       | Net interest margin, thrift                                                     |                                              |   | 2.07   | %         |  |   | 2.37         | % |  |   | 1.99   | %
|                                       | Mortgage banking revenue (MBR) margin on loans
    sold(4)                    |                                              |   | 1.10   | %         |  |   | 1.82         | % |  |   | 1.10   | %
|                                       | Efficiency ratio(5)                                                             |                                              |   | 56     | %         |  |   | 58           | % |  |   | 58     | %
|                                       | Operating expenses to loan production                                           |                                              |   | 0.84   | %         |  |   | 1.24         | % |  |   | 0.88   | %
|Balance Sheet and Asset Quality Ratios |                                                                                 |                                              |   |        |           |  |   |              |   |  |   |       
|                                       | Average interest-earning assets                                                 |                                              | $ | 24,034 |           |  | $ | 17,039       |   |  | $ | 21,614 |  
|                                       | Average equity                                                                  |                                              | $ | 1,598  |           |  | $ | 1,270        |   |  | $ | 1,501  |  
|                                       | Debt to equity ratio(6)                                                         |                                              |   | 13.7:1 |           |  |   | 12.3:1       |   |  |   | 12.9:1 |  
|                                       | Core capital ratio(7)                                                           |                                              |   | 7.62   | %         |  |   | 7.35         | % |  |   | 8.21   | %
|                                       | Risk-based capital ratio(7)                                                     |                                              |   | 11.26  | %         |  |   | 11.85        | % |  |   | 12.20  | %
|                                       | Non-performing assets to total assets                                           |                                              |   | 0.43   | %         |  |   | 0.54         | % |  |   | 0.34   | %
|                                       | Allowance for loan losses to total loans held for investment                    |                                              |   | 0.65   | %         |  |   | 0.72         | % |  |   | 0.67   | %
|                                       | Allowance for loan losses and other credit reserves to
    non-performing loans |                                              |   | 74.80  | %         |  |   | 80.73        | % |  |   | 101.88 | %
|                                       | Allowance for loan losses to annualized net charge-offs                         |                                              |   | 858.61 | %         |  |   | 708.33       | % |  |   | 719.08 | %
|                                       | Provision for loan losses to net charge-offs                                    |                                              |   | 229.00 | %         |  |   | 131.89       | % |  |   | 80.97  | %
|Other Selected Items                   |                                                                                 |                                              |   |        |           |  |   |              |   |  |   |       
|                                       | Loans serviced for others(8)                                                    |                                              | $ | 96,512 |           |  | $ | 55,995       |   |  | $ | 84,495 |  
|                                       | Loan production(9)                                                              |                                              |   | 20,340 |           |  |   | 11,955       |   |  |   | 18,478 |  
|                                       | Mortgage industry share(10)                                                     |                                              |   | 3.89   | %         |  |   | 1.87         | % |  |   | 2.91   | %
|                                       | Pipeline of mortgage loans in process(11)                                       |                                              |   | 10,424 |           |  |   | 7,489        |   |  |   | 9,186  |  
|                                       | Loans sold                                                                      |                                              | $ | 16,708 |           |  | $ | 9,654        |   |  | $ | 15,570 |  
|                                       | Loans sold/mortgage loans produced                                              |                                              |   | 84     | %         |  |   | 83           | % |  |   | 86     | %






| |     |                                                                                                                                                                                                                                                                                         
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) | Net earnings for the period divided by weighted average basic
    shares outstanding for the period.                                                                                                                                                                                    
|
| | (2) | Net earnings for the period divided by weighted average dilutive
    shares outstanding for the period.                                                                                                                                                                                 
|
| | (3) | Dividends declared per common share as a percentage of diluted
    earnings per share.                                                                                                                                                                                                  
|
| | (4) | Mortgage banking revenue margin is calculated using the sum of
    consolidated gain on sale of loans and the net interest income
    earned on loans held for sale by our mortgage banking production
    divisions divided by total loans sold.                                       
|
| | (5) | Defined as operating expenses divided by net interest income and
    other income.                                                                                                                                                                                                      
|
| | (6) | Debt includes deposits.                                                                                                                                                                                                                                                                 
|
| | (7) | IndyMac Bank, F.S.B. (excludes unencumbered cash at the Parent
    Company available for investment in Indymac Bank). Risk-based
    capital ratio is calculated based on the regulatory standard
    risk weighting adjusted for the additional risk weightings for
    subprime loans.
|
| | (8) | Represents the unpaid principal balance on loans sold with
    servicing retained by Indymac.                                                                                                                                                                                           
|
| | (9) | Includes newly originated commitments on construction loans.                                                                                                                                                                                                                            



|     |                                                                                                                                                                                                                       
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(10) | Our market share is calculated based on our total loan
    production, both purchased (correspondent and conduit) and
    originated (retail and wholesale), in all of our channels (the
    numerator) divided by the

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|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | Mortgage Bankers Association (MBA) estimate of the
    overall mortgage market (the denominator) per its April 12,
    2006 Mortgage Finance Long-Term Forecast. As we review industry
    publications such as National Mortgage News, we have confirmed
    that our calculation is consistent with its methodologies for
    reporting market share of Indymac and our mortgage banking
    peers. It is important to note that these industry calculations
    cause purchased mortgages to be counted more than once, i.e.,
    first when they are originated and again by the purchasers
    (through correspondent and conduit channels) of the mortgages.
    Therefore, our market share calculation may not be
    mathematically precise in the absolute sense, but it is
    consistent with industry calculations, which provide investors
    with a good view of our relative standing compared to the other
    top mortgage lending peers.
|    
|(11) | The amount excludes $1,257 million, $634 million and
    $1,302 million of bulk rate lock commitments in our conduit
    pipeline at March 31, 2006, March 31, 2005 and
    December 31, 2005, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

SUMMARY OF OVERALL RESULTS






New Accounting Standards Adopted During the First Quarter
of 2006




Accounting for Stock Issued to
Employees Accounting for Stock-Based
Compensation


Share-Based Payment


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Stock-Based
Compensation Newly Adopted and New Accounting
Pronouncements


Accounting for
Servicing of Financial Assets Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of
Liabilities




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BUSINESS SEGMENT RESULTS






|                                       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|-------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Mortgage Professionals                 |  | This group is responsible for the production of mortgage loans
    through relationships with mortgage brokers, mortgage bankers,
    financial institutions and homebuilders. Mortgage loans are
    either funded by us (wholesale division) or obtained as closed
    loans on a flow basis (wholesale and correspondent divisions) or
    through bulk purchases (conduit division).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Consumer Direct                        |  | This division offers consumers mortgage lending through our
    Southern California retail banking branches, direct mail,
    Internet lead aggregators, outbound telesales, online
    advertising, and referral programs.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Financial Freedom                      |  | This group is responsible for the generation of predominantly
    reverse mortgage products with senior customers (age 62 or
    older). This group also services all reverse mortgage loans
    originated.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Retained Assets and Servicing Division |  | This division manages the assets the Company retains in
    conjunction with its mortgage loan sales. The assets held
    include the following asset classes:(i) mortgage servicing
    rights (MSRs), interest-only strips, prepayment
    penalty securities and residual securities;
    (ii) derivatives and securities held as hedges of such
    assets, including swaps, options, futures, principal-only
    securities, agency debentures and U.S. Treasury bonds;
    (iii) loans acquired through clean-up calls or originated
    through the Companys customer retention programs; and
    (iv) investment and non-investment grade securities.
    Further, the division continues to service all loans sold with
    servicing retained, loans held on the balance sheet pending sale
    and mortgage loans held for investment and undertakes
    solicitation and loan production activities related to retention
    of customers in the servicing portfolio.



|                                    |  |                                                                                                                                                                                                                                                                                                                                     
|----------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Mortgage-backed Securities (MBS)  |  | Assets include predominantly AAA-rated agency and private label
    MBS.                                                                                                                                                                                                                                                            
|Prime SFR Mortgage Loan             |  | Assets include all single-family residential mortgage loans held
    for investment other than discontinued products.                                                                                                                                                                                                               
|Home Equity Division                |  | This division specializes in providing HELOC and closed-end
    second mortgages nationwide through Indymacs wholesale and
    retail channels.                                                                                                                                                                                    
|Consumer Construction and Lot Loans |  | This division provides construction-to-permanent and lot loan
    financing to individuals who are in the process of building
    their own homes. This channel leverages our relationship sales
    force in the mortgage professional channel to produce these
    products in addition to programs offered directly to consumers.
|Builder Construction                |  | This division offers land acquisition, development and
    construction financing to homebuilders for residential
    construction.                                                                                                                                                                                                 
|Warehouse Lending                   |  | This group offers short-term lines of credit to approved
    correspondent sellers nationwide. The group functions as a
    financial intermediary for lenders, providing them with the
    financial capacity to fund loans and hold them on balance sheet
    until they are sold to approved investors.                          
|Discontinued Products               |  | Home improvement and manufactured housing loans.                                                                                                                                                                                                                                                                                    

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|                     |  |                        |         |          |          |   |         |       |  |   |         |    |       |           |         |    |         |   |        |          |  |   |           |    |  |   |         |    |  |   |           |  
|-------------------- |  | ---------------------- | ------- | -------- | -------- | - | ------- | ----- |  | - | ------- | -- | ----- | --------- | ------- | -- | ------- | - | ------ | -------- |  | - | --------- | -- |  | - | ------- | -- |  | - | --------- | -
|                     |  | Mortgage Banking       |         |          |          |   |         |       |  |   |         |    |      
|                     |  |                        |         |          |          |   |         |       |  |   |         |    |      
|                     |  |                        |         | MSRs and |          |   |         |       |  |   |         |    |       |           |         |    |        
|                     |  |                        |         | Other    |          |   |         |       |  |   |         |    | Total |           |         |    |         |  
|                     |  | Production             |         |          | Retained |   |         |       |  |   |         |    |       | Operating |         |    | Total   |   |        | Total    | 
|                     |  | Divisions              |         |          | Assets   |   |         | Total |  |   | Thrift  |    |       | Other(1)  |         |    | Results |   |        | Overhead |  |   | Company   |   
|                     |  |                        |         |          |          |   |         |       |  |   |         |    |       |           |         |    |         |   |        |          |  |   |           |   
|                     |  | (Dollars in thousands) |        
|Net Income Q106      |  | $                      | 64,185  |          |          | $ | 17,183  |       |  | $ | 81,368  |    |       | $         | 39,227  |    |         | $ | (5,796 | )        |  | $ | 114,799   |    |  | $ | (34,950 | )  |  | $ | 79,849    |  
|Net Income Q105      |  |                        | 66,285  |          |          |   | 6,297   |       |  |   | 72,582  |    |       |           | 33,152  |    |         |   | (6,962 | )        |  |   | 98,772    |    |  |   | (35,322 | )  |  |   | 63,450    |  
|                     |  |                        |         |          |          |   |         |       |  |   |         |    |       |           |         |    |         |   |        |          |  |   |           |   
|$ Change 1000000     |  | $                      | (2,100  | )        |          | $ | 10,886  |       |  | $ | 8,786   |    |       | $         | 6,075   |    |         | $ | 1,166  |          |  | $ | 16,027    |    |  | $ | 372     |    |  | $ | 16,399    |  
|% Change             |  |                        | (3      | )%       |          |   | 173     | %     |  |   | 12      | %  |       |           | 18      | %  |         |   | 17     | %        |  |   | 16        | %  |  |   | 1       | %  |  |   | 26        | %
|Average Capital Q106 |  | $                      | 508,532 |          |          | $ | 237,195 |       |  | $ | 745,727 |    |       | $         | 640,482 |    |         | $ | 43,332 |          |  | $ | 1,429,541 |    |  | $ | 168,765 |    |  | $ | 1,598,306 |  
|Average Capital Q105 |  |                        | 277,534 |          |          |   | 148,079 |       |  |   | 425,613 |    |       |           | 460,004 |    |         |   | 38,177 |          |  |   | 923,794   |    |  |   | 346,058 |    |  |   | 1,269,852 |  
|% Change             |  |                        | 83      | %        |          |   | 60      | %     |  |   | 75      | %  |       |           | 39      | %  |         |   | 14     | %        |  |   | 55        | %  |  |   | (51     | )% |  |   | 26        | %
|ROE Q106             |  |                        | 51      | %        |          |   | 29      | %     |  |   | 44      | %  |       |           | 25      | %  |         |   | N/A    |          |  |   | 33        | %  |  |   | N/A     |    |  |   | 20        | %
|ROE Q105             |  |                        | 97      | %        |          |   | 17      | %     |  |   | 69      | %  |       |           | 29      | %  |         |   | N/A    |          |  |   | 43        | %  |  |   | N/A     |    |  |   | 20        | %
|% Change             |  |                        | (47     | )%       |          |   | 71      | %     |  |   | (36     | )% |       |           | (14     | )% |         |   | N/A    |          |  |   | (23       | )% |  |   | N/A     |    |  |   | 0         | %

|                     |  |                                       |         |    |               |   |        |           |  |   |            |    |  |        |         |    |         |   |        |           |  |   |        |   |  |   |         |   
|-------------------- |  | ------------------------------------- | ------- | -- | ------------- | - | ------ | --------- |  | - | ---------- | -- |  | ------ | ------- | -- | ------- | - | ------ | --------- |  | - | ------ | - |  | - | ------- | --
|                     |  | Mortgage Banking Production Divisions |        
|                     |  |                                       |        
|                     |  | Mortgage Professionals Group          |         |    |              
|                     |  |                                       |         |    | Consumer      |   |        | Financial |  |   | Production |   
|                     |  | Wholesale                             |         |    | Correspondent |   |        | Conduit   |  |   | Total      |    |  | Direct |         |    | Freedom |   |        | Divisions | 
|                     |  |                                       |         |    |               |   |        |           |  |   |            |    |  |        |         |    |         |   |        |           | 
|                     |  | (Dollars in thousands)                |        
|Net Income Q106      |  | $                                     | 41,461  |    |               | $ | 5,804  |           |  | $ | 9,575      |    |  | $      | 56,840  |    |         | $ | (683   | )         |  | $ | 8,028  |   |  | $ | 64,185  |   
|Net Income Q105      |  |                                       | 53,034  |    |               |   | 4,499  |           |  |   | 5,424      |    |  |        | 62,957  |    |         |   | (894   | )         |  |   | 4,222  |   |  |   | 66,285  |   
|                     |  |                                       |         |    |               |   |        |           |  |   |            |    |  |        |         |    |         |   |        |           | 
|$ Change 1000000     |  | $                                     | (11,573 | )  |               | $ | 1,305  |           |  | $ | 4,151      |    |  | $      | (6,117  | )  |         | $ | 211    |           |  | $ | 3,806  |   |  | $ | (2,100  | ) 
|% Change             |  |                                       | (22     | )% |               |   | 29     | %         |  |   | 77         | %  |  |        | (10     | )% |         |   | 24     | %         |  |   | 90     | % |  |   | (3      | )%
|Average Capital Q106 |  | $                                     | 204,467 |    |               | $ | 46,483 |           |  | $ | 179,170    |    |  | $      | 430,120 |    |         | $ | 12,765 |           |  | $ | 65,647 |   |  | $ | 508,532 |   
|Average Capital Q105 |  |                                       | 123,499 |    |               |   | 13,237 |           |  |   | 65,999     |    |  |        | 202,735 |    |         |   | 14,918 |           |  |   | 59,881 |   |  |   | 277,534 |   
|% Change             |  |                                       | 66      | %  |               |   | 251    | %         |  |   | 171        | %  |  |        | 112     | %  |         |   | (14    | )%        |  |   | 10     | % |  |   | 83      | % 
|ROE Q106             |  |                                       | 82      | %  |               |   | 51     | %         |  |   | 22         | %  |  |        | 54      | %  |         |   | (22    | )%        |  |   | 50     | % |  |   | 51      | % 
|ROE Q105             |  |                                       | 174     | %  |               |   | 138    | %         |  |   | 33         | %  |  |        | 126     | %  |         |   | (24    | )%        |  |   | 29     | % |  |   | 97      | % 
|% Change             |  |                                       | (53     | )% |               |   | (63    | )%        |  |   | (33        | )% |  |        | (57     | )% |         |   | 8      | %         |  |   | 72     | % |  |   | (47     | )%

|                     |  |                        |        |          |           |   |         |          |  |   |              |    |  |              |         |    |           |   |        |              |  |   |              |    |  |   |       |    |  |   |         |   
|-------------------- |  | ---------------------- | ------ | -------- | --------- | - | ------- | -------- |  | - | ------------ | -- |  | ------------ | ------- | -- | --------- | - | ------ | ------------ |  | - | ------------ | -- |  | - | ----- | -- |  | - | ------- | --
|                     |  | Thrift                 |       
|                     |  |                        |       
|                     |  |                        |        | Consumer |           |   |        
|                     |  | Mortgage-              |        |          | Prime SFR |   |         | Home     |  |   | Construction |    |  | Builder      |         |    |          
|                     |  | Backed                 |        |          | Mortgage  |   |         | Equity   |  |   | and Lot      |    |  | Construction |         |    | Warehouse |   |        | Discontinued |  |   |             
|                     |  | Securities             |        |          | Loans     |   |         | Division |  |   | Loans        |    |  | Financing    |         |    | Lending   |   |        | Products     |  |   | Total Thrift |   
|                     |  |                        |        |          |           |   |         |          |  |   |              |    |  |              |         |    |           |   |        |              |  |   |              |   
|                     |  | (Dollars in thousands) |       
|Net Income Q106      |  | $                      | 5,606  |          |           | $ | 12,465  |          |  | $ | 8,262        |    |  | $            | 7,481   |    |           | $ | 5,639  |              |  | $ | (111         | )  |  | $ | (115  | )  |  | $ | 39,227  |   
|Net Income Q105      |  |                        | 5,462  |          |           |   | 9,874   |          |  |   | 5,855        |    |  |              | 8,426   |    |           |   | 3,959  |              |  |   | (344         | )  |  |   | (80   | )  |  |   | 33,152  |   
|                     |  |                        |        |          |           |   |         |          |  |   |              |    |  |              |         |    |           |   |        |              |  |   |              |   
|$ Change             |  | $                      | 144    |          |           | $ | 2,591   |          |  | $ | 2,407        |    |  | $            | (945    | )  |           | $ | 1,680  |              |  | $ | 233          |    |  | $ | (35   | )  |  | $ | 6,075   |   
|% Change             |  |                        | 3      | %        |           |   | 26      | %        |  |   | 41           | %  |  |              | (11     | )% |           |   | 42     | %            |  |   | 68           | %  |  |   | (44   | )% |  |   | 18      | % 
|Average Capital Q106 |  | $                      | 49,510 |          |           | $ | 220,742 |          |  | $ | 152,023      |    |  | $            | 113,989 |    |           | $ | 95,000 |              |  | $ | 5,513        |    |  | $ | 3,705 |    |  | $ | 640,482 |   
|Average Capital Q105 |  |                        | 38,186 |          |           |   | 181,135 |          |  |   | 90,763       |    |  |              | 85,050  |    |           |   | 60,173 |              |  |   | 16           |    |  |   | 4,681 |    |  |   | 460,004 |   
|% Change             |  |                        | 30     | %        |           |   | 22      | %        |  |   | 67           | %  |  |              | 34      | %  |           |   | 58     | %            |  |   | N/M          |    |  |   | (21   | )% |  |   | 39      | % 
|ROE Q106             |  |                        | 46     | %        |           |   | 23      | %        |  |   | 22           | %  |  |              | 27      | %  |           |   | 24     | %            |  |   | (8           | )% |  |   | (13   | )% |  |   | 25      | % 
|ROE Q105             |  |                        | 58     | %        |           |   | 22      | %        |  |   | 26           | %  |  |              | 40      | %  |           |   | 27     | %            |  |   | N/M          |    |  |   | (7    | )% |  |   | 29      | % 
|% Change             |  |                        | (21    | )%       |           |   | 5       | %        |  |   | (15          | )% |  |              | (33     | )% |           |   | (11    | )%           |  |   | N/M          |    |  |   | (86   | )% |  |   | (14     | )%






|    |                                                                                                
|--- | -----------------------------------------------------------------------------------------------
|(1) | Included are eliminations and treasury items, the details of
    which are provided on page 12.

8



---



##### Table of Contents





|                                        |                                   |                        |                   |          |                |        |         |        |        |        |            |         |         |           |            |        |         |        |            |          |        |        |            |         |         |         |         |        |         |         |            |         |         |        | 
|--------------------------------------- | --------------------------------- | ---------------------- | ----------------- | -------- | -------------- | ------ | ------- | ------ | ------ | ------ | ---------- | ------- | ------- | --------- | ---------- | ------ | ------- | ------ | ---------- | -------- | ------ | ------ | ---------- | ------- | ------- | ------- | ------- | ------ | ------- | ------- | ---------- | ------- | ------- | ------ | 
|                                        |                                   | Mortgage Banking       |                   |          |                |        |         |        |        |        |            |         |        
|                                        |                                   |                        |                   |          |                |        |         |        |        |        |            |         |        
|                                        |                                   |                        |                   | MSRs and |                |        |         |        |        |        |            |         | Total   |           |            |        |         |       
|Three Months Ended                      |                                   | Production             |                   |          | Other Retained |        |         |        |        |        |            |         |         | Operating |            |        | Total   |        |            | Total    |       
|March 31, 2006                          |                                   | Divisions              |                   |          | Assets         |        |         | Total  |        |        | Thrift     |         |         | Other(1)  |            |        | Results |        |            | Overhead |        |        | Company    |        
|                                        |                                   |                        |                   |          |                |        |         |        |        |        |            |         |         |           |            |        |         |        |            |          |        |        |            |        
|                                        |                                   | (Dollars in thousands) |                  
|Operating Results                       |                                   |                        |                   |          |                |        |         |        |        |        |            |         |         |           |            |        |         |        |            |          |        |        |            |         |         |         |         |        |         |         |            |        
|Net interest income                     |                                   | $                      | 43,251            |          |                | $      | 9,997   |        |        | $      | 53,248     |         |         | $         | 67,858     |        |         | $      | 8,089      |          |        | $      | 129,195    |         |         | $       | (1,985  | )      |         | $       | 127,210    |        
|Provision for loan losses               |                                   |                        |                  |          |                |        |        |        |        |        |           |         |         |           | (3,822     | )      |         |        |           |          |        |        | (3,822     | )       |         |         |        |        |         |         | (3,822     | )      
|Gain (loss) on sale of loans            |                                   |                        | 134,209           |          |                |        | 4,706   |        |        |        | 138,915    |         |         |           | 15,676     |        |         |        | (13,392    | )        |        |        | 141,199    |         |         |         |        |        |         |         | 141,199    |        
|Gain (loss) on securities               |                                   |                        |                  |          |                |        | (7,100  | )      |        |        | (7,100     | )       |         |           | (1,492     | )      |         |        | 5,977      |          |        |        | (2,615     | )       |         |         |        |        |         |         | (2,615     | )      
|Service fee income                      |                                   |                        | 4,437             |          |                |        | 30,570  |        |        |        | 35,007     |         |         |           | 1,020      |        |         |        | (5,138     | )        |        |        | 30,889     |         |         |         |        |        |         |         | 30,889     |        
|Other income                            |                                   |                        | 613               |          |                |        | 867     |        |        |        | 1,480      |         |         |           | 9,084      |        |         |        | (1,200     | )        |        |        | 9,364      |         |         |         | 2,310   |        |         |         | 11,674     |        
|                                        |                                   |                        |                   |          |                |        |         |        |        |        |            |         |         |           |            |        |         |        |            |          |        |        |            |        
|                                        | Net revenues (expense)            |                        |                   | 182,510  |                |        |         | 39,040 |        |        |            | 221,550 |         |           |            | 88,324 |         |        |            | (5,664   | )      |        |            | 304,210 |         |         |         | 325    |         |         |            | 304,535 |        
|                                        | Operating expenses                |                        |                   | 133,657  |                |        |         | 11,967 |        |        |            | 145,624 |         |           |            | 27,459 |         |        |            | 4,490    |        |        |            | 177,573 |         |         |         | 58,020 |         |         |            | 235,593 |        
|                                        | Deferral of expenses under FAS 91 |                        |                   | (57,349  | )              |        |         | (1,328 | )      |        |            | (58,677 | )       |           |            | (3,974 | )       |        |            | (575     | )      |        |            | (63,226 | )       |         |         |       |         |         |            | (63,226 | )      
|                                        |                                   |                        |                   |          |                |        |         |        |        |        |            |         |         |           |            |        |         |        |            |          |        |        |            |        
|                                        |                                   | Pretax income (loss)   |                   |          | 106,202        |        |         |        | 28,401 |        |            |         | 134,603 |           |            |        | 64,839  |        |            |          | (9,579 | )      |            |         | 189,863 |         |         |        | (57,695 | )       |            |         | 132,168 |       
|                                        |                                   |                        |                   |          |                |        |         |        |        |        |            |         |         |           |            |        |         |        |            |          |        |        |            |        
|                                        |                                   |                        | Net income (loss) |          | $              | 64,185 |         |        | $      | 17,183 |            |         | $       | 81,368    |            |        | $       | 39,227 |            |          | $      | (5,796 | )          |         | $       | 114,799 |         |        | $       | (34,950 | )          |         | $       | 79,849 | 
|                                        |                                   |                        |                   |          |                |        |         |        |        |        |            |         |         |           |            |        |         |        |            |          |        |        |            |        
|Relevant Financial and Performance Data |                                   |                        |                   |          |                |        |         |        |        |        |            |         |         |           |            |        |         |        |            |          |        |        |            |         |         |         |         |        |         |         |            |        
|Average interest-earning assets         |                                   | $                      | 8,976,934         |          |                | $      | 597,811 |        |        | $      | 9,574,745  |         |         | $         | 13,665,535 |        |         | $      | 726,334    |          |        | $      | 23,966,614 |         |         | $       | 67,559  |        |         | $       | 24,034,173 |        
|Allocated capital                       |                                   | $                      | 508,532           |          |                | $      | 237,195 |        |        | $      | 745,727    |         |         | $         | 640,482    |        |         | $      | 43,332     |          |        | $      | 1,429,541  |         |         | $       | 168,765 |        |         | $       | 1,598,306  |        
|Loans produced                          |                                   | $                      | 18,836,170        |          |                | $      | 427,355 |        |        | $      | 19,263,525 |         |         | $         | 1,076,525  |        |         | $      |           |          |        | $      | 20,340,050 |         |         | $       |        |        |         | $       | 20,340,050 |        
|Loans sold                              |                                   | $                      | 17,265,075        |          |                | $      | 309,466 |        |        | $      | 17,574,541 |         |         | $         | 1,243,892  |        |         | $      | (2,110,246 | )        |        | $      | 16,708,187 |         |         | $       |        |        |         | $       | 16,708,187 |        
|MBR margin                              |                                   |                        | 1.03              | %        |                |        | 1.52    | %      |        |        | 1.04       | %       |         |           | 1.26       | %      |         |        | N/A        |          |        |        | N/A        |         |         |         | N/A     |        |         |         | 1.10       | %      
|Return on average equity (ROE)          |                                   |                        | 51                | %        |                |        | 29      | %      |        |        | 44         | %       |         |           | 25         | %      |         |        | N/A        |          |        |        | 33         | %       |         |         | N/A     |        |         |         | 20         | %      
|Return on average assets (ROA)          |                                   |                        | 2.83              | %        |                |        | 3.59    | %      |        |        | 2.97       | %       |         |           | 1.15       | %      |         |        | N/A        |          |        |        | 1.81       | %       |         |         | N/A     |        |         |         | 1.22       | %      
|Net interest margin, thrift             |                                   |                        | N/A               |          |                |        | N/A     |        |        |        | N/A        |         |         |           | 2.01       | %      |         |        | N/A        |          |        |        | N/A        |         |         |         | N/A     |        |         |         | 2.07       | %      
|Average FTE                             |                                   |                        | 4,021             |          |                |        | 177     |        |        |        | 4,198      |         |         |           | 652        |        |         |        | 39         |          |        |        | 4,889      |         |         |         | 2,340   |        |         |         | 7,229      |        

|                                        |                                   |                        |                   |          |                |        |         |        |        |       |            |         |         |           |            |        |         |        |            |          |         |        |            |         |         |        |         |        |         |         |            |         |         |        | 
|--------------------------------------- | --------------------------------- | ---------------------- | ----------------- | -------- | -------------- | ------ | ------- | ------ | ------ | ----- | ---------- | ------- | ------- | --------- | ---------- | ------ | ------- | ------ | ---------- | -------- | ------- | ------ | ---------- | ------- | ------- | ------ | ------- | ------ | ------- | ------- | ---------- | ------- | ------- | ------ | 
|                                        |                                   | Mortgage Banking       |                   |          |                |        |         |        |        |       |            |         |        
|                                        |                                   |                        |                   |          |                |        |         |        |        |       |            |         |        
|                                        |                                   |                        |                   | MSRs and |                |        |         |        |        |       |            |         | Total   |           |            |        |         |       
|Three Months Ended                      |                                   | Production             |                   |          | Other Retained |        |         |        |        |       |            |         |         | Operating |            |        | Total   |        |            | Total    |        
|March 31, 2005                          |                                   | Divisions              |                   |          | Assets         |        |         | Total  |        |       | Thrift     |         |         | Other(1)  |            |        | Results |        |            | Overhead |         |        | Company    |        
|                                        |                                   |                        |                   |          |                |        |         |        |        |       |            |         |         |           |            |        |         |        |            |          |         |        |            |        
|                                        |                                   | (Dollars in thousands) |                  
|Operating Results                       |                                   |                        |                   |          |                |        |         |        |        |       |            |         |         |           |            |        |         |        |            |          |         |        |            |         |         |        |         |        |         |         |            |        
|Net interest income                     |                                   | $                      | 25,330            |          |                | $      | 13,335  |        |        | $     | 38,665     |         |         | $         | 58,082     |        |         | $      | 10,901     |          |         | $      | 107,648    |         |         | $      | (2,474  | )      |         | $       | 105,174    |        
|Provision for loan losses               |                                   |                        |                  |          |                |        |        |        |        |       |           |         |         |           | (2,490     | )      |         |        |           |          |         |        | (2,490     | )       |         |        |        |        |         |         | (2,490     | )      
|Gain (loss) on sale of loans            |                                   |                        | 148,623           |          |                |        | (466    | )      |        |       | 148,157    |         |         |           | 8,856      |        |         |        | (12,691    | )        |         |        | 144,322    |         |         |        |        |        |         |         | 144,322    |        
|Gain (loss) on securities               |                                   |                        |                  |          |                |        | (5,984  | )      |        |       | (5,984     | )       |         |           | 858        |        |         |        | 480        |          |         |        | (4,646     | )       |         |        |        |        |         |         | (4,646     | )      
|Service fee income                      |                                   |                        | 2,464             |          |                |        | 9,878   |        |        |       | 12,342     |         |         |           | 1,170      |        |         |        | (9,094     | )        |         |        | 4,418      |         |         |        |        |        |         |         | 4,418      |        
|Other income                            |                                   |                        | 525               |          |                |        | 711     |        |        |       | 1,236      |         |         |           | 6,062      |        |         |        | (2,317     | )        |         |        | 4,981      |         |         |        | 1,590   |        |         |         | 6,571      |        
|                                        |                                   |                        |                   |          |                |        |         |        |        |       |            |         |         |           |            |        |         |        |            |          |         |        |            |        
|                                        | Net revenues (expense)            |                        |                   | 176,942  |                |        |         | 17,474 |        |       |            | 194,416 |         |           |            | 72,538 |         |        |            | (12,721  | )       |        |            | 254,233 |         |        |         | (884   | )       |         |            | 253,349 |        
|                                        | Operating expenses                |                        |                   | 107,910  |                |        |         | 7,265  |        |       |            | 115,175 |         |           |            | 21,328 |         |        |            | 1,641    |         |        |            | 138,144 |         |        |         | 57,153 |         |         |            | 195,297 |        
|                                        | Deferral of expenses under FAS 91 |                        |                   | (40,531  | )              |        |         | (199   | )      |       |            | (40,730 | )       |           |            | (3,586 | )       |        |            | (2,855   | )       |        |            | (47,171 | )       |        |         |       |         |         |            | (47,171 | )      
|                                        |                                   |                        |                   |          |                |        |         |        |        |       |            |         |         |           |            |        |         |        |            |          |         |        |            |        
|                                        |                                   | Pretax income (loss)   |                   |          | 109,563        |        |         |        | 10,408 |       |            |         | 119,971 |           |            |        | 54,796  |        |            |          | (11,507 | )      |            |         | 163,260 |        |         |        | (58,037 | )       |            |         | 105,223 |       
|                                        |                                   |                        |                   |          |                |        |         |        |        |       |            |         |         |           |            |        |         |        |            |          |         |        |            |        
|                                        |                                   |                        | Net income (loss) |          | $              | 66,285 |         |        | $      | 6,297 |            |         | $       | 72,582    |            |        | $       | 33,152 |            |          | $       | (6,962 | )          |         | $       | 98,772 |         |        | $       | (35,322 | )          |         | $       | 63,450 | 
|                                        |                                   |                        |                   |          |                |        |         |        |        |       |            |         |         |           |            |        |         |        |            |          |         |        |            |        
|Relevant Financial and Performance Data |                                   |                        |                   |          |                |        |         |        |        |       |            |         |         |           |            |        |         |        |            |          |         |        |            |         |         |        |         |        |         |         |            |        
|Average interest-earning assets         |                                   | $                      | 4,783,880         |          |                | $      | 865,899 |        |        | $     | 5,649,779  |         |         | $         | 10,982,898 |        |         | $      | 373,370    |          |         | $      | 17,006,047 |         |         | $      | 33,020  |        |         | $       | 17,039,067 |        
|Allocated capital                       |                                   | $                      | 277,534           |          |                | $      | 148,079 |        |        | $     | 425,613    |         |         | $         | 460,004    |        |         | $      | 38,177     |          |         | $      | 923,794    |         |         | $      | 346,058 |        |         | $       | 1,269,852  |        
|Loans produced                          |                                   | $                      | 10,706,121        |          |                | $      | 221,769 |        |        | $     | 10,927,890 |         |         | $         | 1,026,614  |        |         | $      |           |          |         | $      | 11,954,504 |         |         | $      |        |        |         | $       | 11,954,504 |        
|Loans sold                              |                                   | $                      | 10,296,769        |          |                | $      | 364,734 |        |        | $     | 10,661,503 |         |         | $         | 557,867    |        |         | $      | (1,565,618 | )        |         | $      | 9,653,752  |         |         | $      |        |        |         | $       | 9,653,752  |        
|MBR margin                              |                                   |                        | 1.69              | %        |                |        | 0.92    | %      |        |       | 1.66       | %       |         |           | 1.96       | %      |         |        | N/A        |          |         |        | N/A        |         |         |        | N/A     |        |         |         | 1.82       | %      
|Return on average equity (ROE)          |                                   |                        | 97                | %        |                |        | 17      | %      |        |       | 69         | %       |         |           | 29         | %      |         |        | N/A        |          |         |        | 43         | %       |         |        | N/A     |        |         |         | 20         | %      
|Return on average equity (ROA)          |                                   |                        | 5.47              | %        |                |        | 1.59    | %      |        |       | 4.51       | %       |         |           | 1.22       | %      |         |        | N/A        |          |         |        | 2.20       | %       |         |        | N/A     |        |         |         | 1.39       | %      
|Net interest margin, thrift             |                                   |                        | N/A               |          |                |        | N/A     |        |        |       | N/A        |         |         |           | 2.14       | %      |         |        | N/A        |          |         |        | N/A        |         |         |        | N/A     |        |         |         | 2.37       | %      
|Average FTE                             |                                   |                        | 3,333             |          |                |        | 123     |        |        |       | 3,456      |         |         |           | 493        |        |         |        | 28         |          |         |        | 3,977      |         |         |        | 1,835   |        |         |         | 5,812      |        






|    |                                                                                                
|--- | -----------------------------------------------------------------------------------------------
|(1) | Included are eliminations and treasury items, the details of
    which are provided on page 12.

9



---



##### Table of Contents





|                                        |                                   |                                       |                   |         |               |           |           |          |       |       |            |        |        |        |            |         |           |        |         |           |        |      |           |        |        |       |            |         |         |        | 
|--------------------------------------- | --------------------------------- | ------------------------------------- | ----------------- | ------- | ------------- | --------- | --------- | -------- | ----- | ----- | ---------- | ------ | ------ | ------ | ---------- | ------- | --------- | ------ | ------- | --------- | ------ | ---- | --------- | ------ | ------ | ----- | ---------- | ------- | ------- | ------ | 
|                                        |                                   | Mortgage Banking Production Divisions |                  
|                                        |                                   |                                       |                  
|                                        |                                   |                                       |                   |         |               | Financial |           |          |      
|                                        |                                   | Mortgage Professionals                |                   |         |               |           | Freedom   |          |       | Total |           
|Three Months Ended                      |                                   |                                       |                   |         | Consumer      |           |           | (Reverse |       |       | Production |       
|March 31, 2006                          |                                   | Wholesale                             |                   |         | Correspondent |           |           | Conduit  |       |       | Total      |        |        | Direct |            |         | Mortgage) |        |         | Divisions |       
|                                        |                                   |                                       |                   |         |               |           |           |          |       |       |            |        |        |        |            |         |           |        |         |           |       
|                                        |                                   | (Dollars in thousands)                |                  
|Operating Results                       |                                   |                                       |                   |         |               |           |           |          |       |       |            |        |        |        |            |         |           |        |         |           |        |      |           |        |        |       |            |        
|Net interest income                     |                                   | $                                     | 16,790            |         |               | $         | 3,477     |          |       | $     | 20,852     |        |        | $      | 41,119     |         |           | $      | 766     |           |        | $    | 1,366     |        |        | $     | 43,251     |        
|Provision for loan losses               |                                   |                                       |                  |         |               |           |          |          |       |       |           |        |        |        |           |         |           |        |        |           |        |      |          |        |        |       |           |        
|Gain (loss) on sale of loans            |                                   |                                       | 84,698            |         |               |           | 10,454    |          |       |       | 1,667      |        |        |        | 96,819     |         |           |        | 9,150   |           |        |      | 28,240    |        |        |       | 134,209    |        
|Gain (loss) on securities               |                                   |                                       |                  |         |               |           |          |          |       |       |           |        |        |        |           |         |           |        |        |           |        |      |          |        |        |       |           |        
|Service fee income                      |                                   |                                       |                  |         |               |           |          |          |       |       |           |        |        |        |           |         |           |        |        |           |        |      | 4,437     |        |        |       | 4,437      |        
|Other income                            |                                   |                                       |                  |         |               |           |          |          |       |       | 235        |        |        |        | 235        |         |           |        | (33     | )         |        |      | 411       |        |        |       | 613        |        
|                                        |                                   |                                       |                   |         |               |           |           |          |       |       |            |        |        |        |            |         |           |        |         |           |       
|                                        | Net revenues (expense)            |                                       |                   | 101,488 |               |           |           | 13,931   |       |       |            | 22,754 |        |        |            | 138,173 |           |        |         | 9,883     |        |      |           | 34,454 |        |       |            | 182,510 |        
|                                        | Operating expenses                |                                       |                   | 71,471  |               |           |           | 9,914    |       |       |            | 6,928  |        |        |            | 88,313  |           |        |         | 17,342    |        |      |           | 28,002 |        |       |            | 133,657 |        
|                                        | Deferral of expenses under FAS 91 |                                       |                   | (38,514 | )             |           |           | (5,576   | )     |       |            |       |        |        |            | (44,090 | )         |        |         | (6,329    | )      |      |           | (6,930 | )      |       |            | (57,349 | )      
|                                        |                                   |                                       |                   |         |               |           |           |          |       |       |            |        |        |        |            |         |           |        |         |           |       
|                                        |                                   | Pretax income (loss)                  |                   |         | 68,531        |           |           |          | 9,593 |       |            |        | 15,826 |        |            |         | 93,950    |        |         |           | (1,130 | )    |           |        | 13,382 |       |            |         | 106,202 |       
|                                        |                                   |                                       |                   |         |               |           |           |          |       |       |            |        |        |        |            |         |           |        |         |           |       
|                                        |                                   |                                       | Net income (loss) |         | $             | 41,461    |           |          | $     | 5,804 |            |        | $      | 9,575  |            |         | $         | 56,840 |         |           | $      | (683 | )         |        | $      | 8,028 |            |         | $       | 64,185 | 
|                                        |                                   |                                       |                   |         |               |           |           |          |       |       |            |        |        |        |            |         |           |        |         |           |       
|Relevant Financial and Performance Data |                                   |                                       |                   |         |               |           |           |          |       |       |            |        |        |        |            |         |           |        |         |           |        |      |           |        |        |       |            |        
|Average interest-earning assets         |                                   | $                                     | 3,778,924         |         |               | $         | 856,353   |          |       | $     | 3,814,192  |        |        | $      | 8,449,469  |         |           | $      | 231,300 |           |        | $    | 296,165   |        |        | $     | 8,976,934  |        
|Allocated capital                       |                                   | $                                     | 204,467           |         |               | $         | 46,483    |          |       | $     | 179,170    |        |        | $      | 430,120    |         |           | $      | 12,765  |           |        | $    | 65,647    |        |        | $     | 508,532    |        
|Loans produced                          |                                   | $                                     | 8,780,708         |         |               | $         | 2,276,214 |          |       | $     | 6,135,724  |        |        | $      | 17,192,646 |         |           | $      | 525,270 |           |        | $    | 1,118,254 |        |        | $     | 18,836,170 |        
|Loans sold                              |                                   |                                       | 7,968,626         |         |               |           | 2,095,509 |          |       |       | 5,645,770  |        |        |        | 15,709,905 |         |           |        | 509,978 |           |        |      | 1,045,192 |        |        |       | 17,265,075 |        
|MBR margin                              |                                   |                                       | 1.27              | %       |               |           | 0.66      | %        |       |       | 0.40       | %      |        |        | 0.88       | %       |           |        | 1.94    | %         |        |      | 2.83      | %      |        |       | 1.03       | %      
|Pretax income/loan sold                 |                                   |                                       | 0.86              | %       |               |           | 0.46      | %        |       |       | 0.28       | %      |        |        | 0.60       | %       |           |        | (0.22   | )%        |        |      | 1.28      | %      |        |       | 0.62       | %      
|ROE                                     |                                   |                                       | 82                | %       |               |           | 51        | %        |       |       | 22         | %      |        |        | 54         | %       |           |        | (22     | )%        |        |      | 50        | %      |        |       | 51         | %      
|ROA                                     |                                   |                                       | 4.44              | %       |               |           | 2.74      | %        |       |       | 1.01       | %      |        |        | 2.71       | %       |           |        | (1.13   | )%        |        |      | 7.37      | %      |        |       | 2.83       | %      
|Net interest margin                     |                                   |                                       | 1.80              | %       |               |           | 1.65      | %        |       |       | 2.22       | %      |        |        | 1.97       | %       |           |        | 1.34    | %         |        |      | 1.87      | %      |        |       | 1.95       | %      
|Average FTE                             |                                   |                                       | 2,158             |         |               |           | 209       |          |       |       | 135        |        |        |        | 2,502      |         |           |        | 462     |           |        |      | 1,057     |        |        |       | 4,021      |        

|                                        |                                   |                                       |                   |         |               |           |         |          |       |       |            |        |       |        |           |         |           |        |         |           |        |      |         |        |       |       |            |         |         |        | 
|--------------------------------------- | --------------------------------- | ------------------------------------- | ----------------- | ------- | ------------- | --------- | ------- | -------- | ----- | ----- | ---------- | ------ | ----- | ------ | --------- | ------- | --------- | ------ | ------- | --------- | ------ | ---- | ------- | ------ | ----- | ----- | ---------- | ------- | ------- | ------ | 
|                                        |                                   | Mortgage Banking Production Divisions |                  
|                                        |                                   |                                       |                  
|                                        |                                   |                                       |                   |         |               | Financial |         |          |      
|                                        |                                   | Mortgage Professionals                |                   |         |               |           | Freedom |          |       | Total |           
|Three Months Ended                      |                                   |                                       |                   |         | Consumer      |           |         | (Reverse |       |       | Production |       
|March 31, 2005                          |                                   | Wholesale                             |                   |         | Correspondent |           |         | Conduit  |       |       | Total      |        |       | Direct |           |         | Mortgage) |        |         | Divisions |       
|                                        |                                   |                                       |                   |         |               |           |         |          |       |       |            |        |       |        |           |         |           |        |         |           |       
|                                        |                                   | (Dollars in thousands)                |                  
|Operating Results                       |                                   |                                       |                   |         |               |           |         |          |       |       |            |        |       |        |           |         |           |        |         |           |        |      |         |        |       |       |            |        
|Net interest income                     |                                   | $                                     | 10,476            |         |               | $         | 1,377   |          |       | $     | 11,219     |        |       | $      | 23,072    |         |           | $      | 1,795   |           |        | $    | 463     |        |       | $     | 25,330     |        
|Provision for loan losses               |                                   |                                       |                  |         |               |           |        |          |       |       |           |        |       |        |          |         |           |        |        |           |        |      |        |        |       |       |           |        
|Gain (loss) on sale of loans            |                                   |                                       | 107,347           |         |               |           | 8,321   |          |       |       | 1,574      |        |       |        | 117,242   |         |           |        | 15,463  |           |        |      | 15,918  |        |       |       | 148,623    |        
|Gain (loss) on securities               |                                   |                                       |                  |         |               |           |        |          |       |       |           |        |       |        |          |         |           |        |        |           |        |      |        |        |       |       |           |        
|Service fee income                      |                                   |                                       |                  |         |               |           |        |          |       |       | (276       | )      |       |        | (276      | )       |           |        |        |           |        |      | 2,740   |        |       |       | 2,464      |        
|Other income                            |                                   |                                       | 152               |         |               |           |        |          |       |       | 51         |        |       |        | 203       |         |           |        | 134     |           |        |      | 188     |        |       |       | 525        |        
|                                        |                                   |                                       |                   |         |               |           |         |          |       |       |            |        |       |        |           |         |           |        |         |           |       
|                                        | Net revenues (expense)            |                                       |                   | 117,975 |               |           |         | 9,698    |       |       |            | 12,568 |       |        |           | 140,241 |           |        |         | 17,392    |        |      |         | 19,309 |       |       |            | 176,942 |        
|                                        | Operating expenses                |                                       |                   | 57,372  |               |           |         | 5,092    |       |       |            | 3,602  |       |        |           | 66,066  |           |        |         | 25,707    |        |      |         | 16,137 |       |       |            | 107,910 |        
|                                        | Deferral of expenses under FAS 91 |                                       |                   | (27,056 | )             |           |         | (2,831   | )     |       |            |       |       |        |           | (29,887 | )         |        |         | (6,837    | )      |      |         | (3,807 | )     |       |            | (40,531 | )      
|                                        |                                   |                                       |                   |         |               |           |         |          |       |       |            |        |       |        |           |         |           |        |         |           |       
|                                        |                                   | Pretax income (loss)                  |                   |         | 87,659        |           |         |          | 7,437 |       |            |        | 8,966 |        |           |         | 104,062   |        |         |           | (1,478 | )    |         |        | 6,979 |       |            |         | 109,563 |       
|                                        |                                   |                                       |                   |         |               |           |         |          |       |       |            |        |       |        |           |         |           |        |         |           |       
|                                        |                                   |                                       | Net income (loss) |         | $             | 53,034    |         |          | $     | 4,499 |            |        | $     | 5,424  |           |         | $         | 62,957 |         |           | $      | (894 | )       |        | $     | 4,222 |            |         | $       | 66,285 | 
|                                        |                                   |                                       |                   |         |               |           |         |          |       |       |            |        |       |        |           |         |           |        |         |           |       
|Relevant Financial and Performance Data |                                   |                                       |                   |         |               |           |         |          |       |       |            |        |       |        |           |         |           |        |         |           |        |      |         |        |       |       |            |        
|Average interest-earning assets         |                                   | $                                     | 2,658,826         |         |               | $         | 299,467 |          |       | $     | 1,418,753  |        |       | $      | 4,377,046 |         |           | $      | 301,505 |           |        | $    | 105,329 |        |       | $     | 4,783,880  |        
|Allocated capital                       |                                   | $                                     | 123,499           |         |               | $         | 13,237  |          |       | $     | 65,999     |        |       | $      | 202,735   |         |           | $      | 14,918  |           |        | $    | 59,881  |        |       | $     | 277,534    |        
|Loans produced                          |                                   | $                                     | 6,015,773         |         |               | $         | 892,815 |          |       | $     | 2,604,513  |        |       | $      | 9,513,101 |         |           | $      | 686,308 |           |        | $    | 506,712 |        |       | $     | 10,706,121 |        
|Loans sold                              |                                   |                                       | 5,993,336         |         |               |           | 733,278 |          |       |       | 2,344,208  |        |       |        | 9,070,822 |         |           |        | 705,569 |           |        |      | 520,378 |        |       |       | 10,296,769 |        
|MBR margin                              |                                   |                                       | 1.97              | %       |               |           | 1.32    | %        |       |       | 0.55       | %      |       |        | 1.55      | %       |           |        | 2.45    | %         |        |      | 3.15    | %      |       |       | 1.69       | %      
|Pretax income/loan sold                 |                                   |                                       | 1.46              | %       |               |           | 1.01    | %        |       |       | 0.38       | %      |       |        | 1.15      | %       |           |        | (0.21   | )%        |        |      | 1.34    | %      |       |       | 1.06       | %      
|ROE                                     |                                   |                                       | 174               | %       |               |           | 138     | %        |       |       | 33         | %      |       |        | 126       | %       |           |        | (24     | )%        |        |      | 29      | %      |       |       | 97         | %      
|ROA                                     |                                   |                                       | 8.07              | %       |               |           | 6.08    | %        |       |       | 1.55       | %      |       |        | 5.82      | %       |           |        | (1.16   | )%        |        |      | 7.95    | %      |       |       | 5.47       | %      
|Net interest margin                     |                                   |                                       | 1.60              | %       |               |           | 1.86    | %        |       |       | 3.21       | %      |       |        | 2.14      | %       |           |        | 2.41    | %         |        |      | 1.78    | %      |       |       | 2.15       | %      
|Average FTE                             |                                   |                                       | 1,793             |         |               |           | 145     |          |       |       | 88         |        |       |        | 2,026     |         |           |        | 668     |           |        |      | 639     |        |       |       | 3,333      |        

10



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##### Table of Contents





|                                        |                                   |                        |                   |          |           |       |           |          |        |        |              |        |        |              |           |        |           |       |         |              |       |       |              |     |      |      |        |      |      |      |            |        |        |        | 
|--------------------------------------- | --------------------------------- | ---------------------- | ----------------- | -------- | --------- | ----- | --------- | -------- | ------ | ------ | ------------ | ------ | ------ | ------------ | --------- | ------ | --------- | ----- | ------- | ------------ | ----- | ----- | ------------ | --- | ---- | ---- | ------ | ---- | ---- | ---- | ---------- | ------ | ------ | ------ | 
|                                        |                                   | Thrift                 |                  
|                                        |                                   |                        |                  
|                                        |                                   |                        |                   | Consumer |           |       |          
|                                        |                                   | Mortgage-              |                   |          | Prime SFR |       |           | Home     |        |        | Construction |        |        | Builder      |           |        |          
|Three Months Ended                      |                                   | Backed                 |                   |          | Mortgage  |       |           | Equity   |        |        | and Lot      |        |        | Construction |           |        | Warehouse |       |         | Discontinued |       |       |             
|March 31, 2006                          |                                   | Securities             |                   |          | Loans     |       |           | Division |        |        | Loans        |        |        | Financing    |           |        | Lending   |       |         | Products     |       |       | Total Thrift |    
|                                        |                                   |                        |                   |          |           |       |           |          |        |        |              |        |        |              |           |        |           |       |         |              |       |       |              |    
|                                        |                                   | (Dollars in thousands) |                  
|Operating Results                       |                                   |                        |                   |          |           |       |           |          |        |        |              |        |        |              |           |        |           |       |         |              |       |       |              |     |      |      |        |      |      |      |            |       
|Net interest income                     |                                   | $                      | 10,172            |          |           | $     | 22,373    |          |        | $      | 10,235       |        |        | $            | 11,295    |        |           | $     | 12,665  |              |       | $     | 414          |     |      | $    | 704    |      |      | $    | 67,858     |       
|Provision for loan losses               |                                   |                        |                  |          |           |       | (1,750    | )        |        |        |             |        |        |              | (941      | )      |           |       | (250    | )            |       |       | (71          | )   |      |      | (810   | )    |      |      | (3,822     | )     
|Gain (loss) on sale of loans            |                                   |                        |                  |          |           |       | 122       |          |        |        | 6,454        |        |        |              | 9,100     |        |           |       |        |              |       |       |             |     |      |      |       |      |      |      | 15,676     |       
|Gain (loss) on securities               |                                   |                        | (678              | )        |           |       | 384       |          |        |        | (1,523       | )      |        |              | 325       |        |           |       |        |              |       |       |             |     |      |      |       |      |      |      | (1,492     | )     
|Service fee income                      |                                   |                        |                  |          |           |       |          |          |        |        | 1,020        |        |        |              |          |        |           |       |        |              |       |       |             |     |      |      |       |      |      |      | 1,020      |       
|Other income                            |                                   |                        |                  |          |           |       | 332       |          |        |        | 1,991        |        |        |              | 6,230     |        |           |       | 236     |              |       |       | 295          |     |      |      |       |      |      |      | 9,084      |       
|                                        |                                   |                        |                   |          |           |       |           |          |        |        |              |        |        |              |           |        |           |       |         |              |       |       |              |    
|                                        | Net revenues (expense)            |                        |                   | 9,494    |           |       |           | 21,461   |        |        |              | 18,177 |        |              |           | 26,009 |           |       |         | 12,651       |       |       |              | 638 |      |      |        | (106 | )    |      |            | 88,324 |       
|                                        | Operating expenses                |                        |                   | 228      |           |       |           | 857      |        |        |              | 4,787  |        |              |           | 15,901 |           |       |         | 4,780        |       |       |              | 822 |      |      |        | 84   |      |      |            | 27,459 |       
|                                        | Deferral of expenses under FAS 91 |                        |                   |         |           |       |           |         |        |        |              | (266   | )      |              |           | (2,258 | )         |       |         | (1,450       | )     |       |              |    |      |      |        |     |      |      |            | (3,974 | )     
|                                        |                                   |                        |                   |          |           |       |           |          |        |        |              |        |        |              |           |        |           |       |         |              |       |       |              |    
|                                        |                                   | Pretax income (loss)   |                   |          | 9,266     |       |           |          | 20,604 |        |              |        | 13,656 |              |           |        | 12,366    |       |         |              | 9,321 |       |              |     | (184 | )    |        |      | (190 | )    |            |        | 64,839 |       
|                                        |                                   |                        |                   |          |           |       |           |          |        |        |              |        |        |              |           |        |           |       |         |              |       |       |              |    
|                                        |                                   |                        | Net income (loss) |          | $         | 5,606 |           |          | $      | 12,465 |              |        | $      | 8,262        |           |        | $         | 7,481 |         |              | $     | 5,639 |              |     | $    | (111 | )      |      | $    | (115 | )          |        | $      | 39,227 | 
|                                        |                                   |                        |                   |          |           |       |           |          |        |        |              |        |        |              |           |        |           |       |         |              |       |       |              |    
|Relevant Financial and Performance Data |                                   |                        |                   |          |           |       |           |          |        |        |              |        |        |              |           |        |           |       |         |              |       |       |              |     |      |      |        |      |      |      |            |       
|Average interest-earning assets         |                                   | $                      | 2,659,112         |          |           | $     | 5,541,875 |          |        | $      | 2,038,001    |        |        | $            | 2,354,582 |        |           | $     | 971,064 |              |       | $     | 56,218       |     |      | $    | 44,683 |      |      | $    | 13,665,535 |       
|Allocated capital                       |                                   | $                      | 49,510            |          |           | $     | 220,742   |          |        | $      | 152,023      |        |        | $            | 113,989   |        |           | $     | 95,000  |              |       | $     | 5,513        |     |      | $    | 3,705  |      |      | $    | 640,482    |       
|Loans produced                          |                                   | $                      |                  |          |           | $     |          |          |        | $      | 29,584       |        |        | $            | 684,156   |        |           | $     | 362,785 |              |       | $     |             |     |      | $    |       |      |      | $    | 1,076,525  |       
|Loans sold                              |                                   | $                      |                  |          |           | $     |          |          |        | $      | 586,055      |        |        | $            | 657,837   |        |           | $     |        |              |       | $     |             |     |      | $    |       |      |      | $    | 1,243,892  |       
|ROE                                     |                                   |                        | 46                | %        |           |       | 23        | %        |        |        | 22           | %      |        |              | 27        | %      |           |       | 24      | %            |       |       | (8           | )%  |      |      | (13    | )%   |      |      | 25         | %     
|ROA                                     |                                   |                        | 0.84              | %        |           |       | 0.90      | %        |        |        | 1.60         | %      |        |              | 1.29      | %      |           |       | 2.37    | %            |       |       | (0.80        | )%  |      |      | (1.20  | )%   |      |      | 1.15       | %     
|Net interest margin                     |                                   |                        | 1.55              | %        |           |       | 1.64      | %        |        |        | 2.04         | %      |        |              | 1.95      | %      |           |       | 5.29    | %            |       |       | 2.99         | %   |      |      | 6.39   | %    |      |      | 2.01       | %     
|Efficiency ratio                        |                                   |                        | 2                 | %        |           |       | 4         | %        |        |        | 25           | %      |        |              | 51        | %      |           |       | 26      | %            |       |       | 116          | %   |      |      | 12     | %    |      |      | 25         | %     
|Average FTE                             |                                   |                        | 5                 |          |           |       | 13        |          |        |        | 67           |        |        |              | 441       |        |           |       | 102     |              |       |       | 24           |     |      |      |       |      |      |      | 652        |       

|                                        |                                   |                        |                   |          |           |       |           |          |        |       |              |        |       |              |           |        |           |       |         |              |       |       |              |     |      |      |        |     |      |     |            |        |        |        | 
|--------------------------------------- | --------------------------------- | ---------------------- | ----------------- | -------- | --------- | ----- | --------- | -------- | ------ | ----- | ------------ | ------ | ----- | ------------ | --------- | ------ | --------- | ----- | ------- | ------------ | ----- | ----- | ------------ | --- | ---- | ---- | ------ | --- | ---- | --- | ---------- | ------ | ------ | ------ | 
|                                        |                                   | Thrift                 |                  
|                                        |                                   |                        |                  
|                                        |                                   |                        |                   | Consumer |           |       |          
|                                        |                                   | Mortgage-              |                   |          | Prime SFR |       |           | Home     |        |       | Construction |        |       | Builder      |           |        |          
|Three Months Ended                      |                                   | Backed                 |                   |          | Mortgage  |       |           | Equity   |        |       | and Lot      |        |       | Construction |           |        | Warehouse |       |         | Discontinued |       |       |             
|March 31, 2005                          |                                   | Securities             |                   |          | Loans     |       |           | Division |        |       | Loans        |        |       | Financing    |           |        | Lending   |       |         | Products     |       |       | Total Thrift |    
|                                        |                                   |                        |                   |          |           |       |           |          |        |       |              |        |       |              |           |        |           |       |         |              |       |       |              |    
|                                        |                                   | (Dollars in thousands) |                  
|Operating Results                       |                                   |                        |                   |          |           |       |           |          |        |       |              |        |       |              |           |        |           |       |         |              |       |       |              |     |      |      |        |     |      |     |            |       
|Net interest income                     |                                   | $                      | 9,192             |          |           | $     | 17,478    |          |        | $     | 8,305        |        |       | $            | 13,291    |        |           | $     | 8,928   |              |       | $     | 2            |     |      | $    | 886    |     |      | $   | 58,082     |       
|Provision for loan losses               |                                   |                        |                  |          |           |       | (950      | )        |        |       |             |        |       |              | (475      | )      |           |       | (400    | )            |       |       |             |     |      |      | (665   | )   |      |     | (2,490     | )     
|Gain (loss) on sale of loans            |                                   |                        |                  |          |           |       | 377       |          |        |       | 980          |        |       |              | 7,509     |        |           |       |        |              |       |       |             |     |      |      | (10    | )   |      |     | 8,856      |       
|Gain (loss) on securities               |                                   |                        | 52                |          |           |       |          |          |        |       | 612          |        |       |              | 194       |        |           |       |        |              |       |       |             |     |      |      |       |     |      |     | 858        |       
|Service fee income                      |                                   |                        |                  |          |           |       |          |          |        |       | 1,170        |        |       |              |          |        |           |       |        |              |       |       |             |     |      |      |       |     |      |     | 1,170      |       
|Other income                            |                                   |                        |                  |          |           |       | (1        | )        |        |       | 1,425        |        |       |              | 3,924     |        |           |       | 704     |              |       |       | 6            |     |      |      | 4      |     |      |     | 6,062      |       
|                                        |                                   |                        |                   |          |           |       |           |          |        |       |              |        |       |              |           |        |           |       |         |              |       |       |              |    
|                                        | Net revenues (expense)            |                        |                   | 9,244    |           |       |           | 16,904   |        |       |              | 12,492 |       |              |           | 24,443 |           |       |         | 9,232        |       |       |              | 8   |      |      |        | 215 |      |     |            | 72,538 |       
|                                        | Operating expenses                |                        |                   | 216      |           |       |           | 583      |        |       |              | 3,232  |       |              |           | 12,444 |           |       |         | 3,930        |       |       |              | 576 |      |      |        | 347 |      |     |            | 21,328 |       
|                                        | Deferral of expenses under FAS 91 |                        |                   |         |           |       |           |         |        |       |              | (417   | )     |              |           | (1,928 | )         |       |         | (1,241       | )     |       |              |    |      |      |        |    |      |     |            | (3,586 | )     
|                                        |                                   |                        |                   |          |           |       |           |          |        |       |              |        |       |              |           |        |           |       |         |              |       |       |              |    
|                                        |                                   | Pretax income (loss)   |                   |          | 9,028     |       |           |          | 16,321 |       |              |        | 9,677 |              |           |        | 13,927    |       |         |              | 6,543 |       |              |     | (568 | )    |        |     | (132 | )   |            |        | 54,796 |       
|                                        |                                   |                        |                   |          |           |       |           |          |        |       |              |        |       |              |           |        |           |       |         |              |       |       |              |    
|                                        |                                   |                        | Net income (loss) |          | $         | 5,462 |           |          | $      | 9,874 |              |        | $     | 5,855        |           |        | $         | 8,426 |         |              | $     | 3,959 |              |     | $    | (344 | )      |     | $    | (80 | )          |        | $      | 33,152 | 
|                                        |                                   |                        |                   |          |           |       |           |          |        |       |              |        |       |              |           |        |           |       |         |              |       |       |              |    
|Relevant Financial and Performance Data |                                   |                        |                   |          |           |       |           |          |        |       |              |        |       |              |           |        |           |       |         |              |       |       |              |     |      |      |        |     |      |     |            |       
|Average interest-earning assets         |                                   | $                      | 2,177,781         |          |           | $     | 4,649,775 |          |        | $     | 1,548,724    |        |       | $            | 1,882,041 |        |           | $     | 671,861 |              |       | $     | 147          |     |      | $    | 52,569 |     |      | $   | 10,982,898 |       
|Allocated capital                       |                                   | $                      | 38,186            |          |           | $     | 181,135   |          |        | $     | 90,763       |        |       | $            | 85,050    |        |           | $     | 60,173  |              |       | $     | 16           |     |      | $    | 4,681  |     |      | $   | 460,004    |       
|Loans produced                          |                                   | $                      |                  |          |           | $     |          |          |        | $     | 42,107       |        |       | $            | 631,018   |        |           | $     | 353,489 |              |       | $     |             |     |      | $    |       |     |      | $   | 1,026,614  |       
|Loans sold                              |                                   | $                      |                  |          |           | $     | 59,088    |          |        | $     | 161,726      |        |       | $            | 337,053   |        |           | $     |        |              |       | $     |             |     |      | $    |       |     |      | $   | 557,867    |       
|ROE                                     |                                   |                        | 58                | %        |           |       | 22        | %        |        |       | 26           | %      |       |              | 40        | %      |           |       | 27      | %            |       |       | N/M          |     |      |      | (7     | )%  |      |     | 29         | %     
|ROA                                     |                                   |                        | 1.01              | %        |           |       | 0.86      | %        |        |       | 1.52         | %      |       |              | 1.81      | %      |           |       | 2.40    | %            |       |       | N/M          |     |      |      | (0.71  | )%  |      |     | 1.22       | %     
|Net interest margin                     |                                   |                        | 1.71              | %        |           |       | 1.52      | %        |        |       | 2.17         | %      |       |              | 2.86      | %      |           |       | 5.39    | %            |       |       | 5.52         | %   |      |      | 6.84   | %   |      |     | 2.14       | %     
|Efficiency ratio                        |                                   |                        | 2                 | %        |           |       | 3         | %        |        |       | 23           | %      |       |              | 42        | %      |           |       | 28      | %            |       |       | N/M          |     |      |      | 39     | %   |      |     | 24         | %     
|Average FTE                             |                                   |                        | 5                 |          |           |       | 10        |          |        |       | 27           |        |       |              | 336       |        |           |       | 85      |              |       |       | 17           |     |      |      | 13     |     |      |     | 493        |       

11



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##### Table of Contents





|                                        |                                   |                      |                   |               |            |        |            |        |        |        |        |       |      |      |            |        |        |        |  
|--------------------------------------- | --------------------------------- | -------------------- | ----------------- | ------------- | ---------- | ------ | ---------- | ------ | ------ | ------ | ------ | ----- | ---- | ---- | ---------- | ------ | ------ | ------ | -
|                                        |                                   |                      |                   | Eliminations  |           
|                                        |                                   |                      |                   |               |           
|Three Months Ended                      |                                   |                      |                   | Interdivision |            |        |           
|March 31, 2006                          |                                   | Treasury             |                   |               | Loan Sales |        |            | Other  |        |        | Total  |      
|                                        |                                   |                      |                   |               |            |        |            |        |        |        |        |      
|Operating Results                       |                                   |                      |                   |               |            |        |            |        |        |        |        |       |      |      |            |       
|Net interest income                     |                                   | $                    | (1,933            | )             |            | $      | 6,799      |        |        | $      | 3,223  |       |      | $    | 10,022     |       
|Provision for loan losses               |                                   |                      |                  |               |            |        |           |        |        |        |       |       |      |      |           |       
|Gain (loss) on sale of loans            |                                   |                      |                  |               |            |        | (13,392    | )      |        |        |       |       |      |      | (13,392    | )     
|Service fee income                      |                                   |                      |                  |               |            |        | 5,977      |        |        |        |       |       |      |      | 5,977      |       
|Gain (loss) on sale of securities       |                                   |                      |                  |               |            |        | (5,138     | )      |        |        |       |       |      |      | (5,138     | )     
|Other income                            |                                   |                      | 180               |               |            |        |           |        |        |        | (1,380 | )     |      |      | (1,380     | )     
|                                        |                                   |                      |                   |               |            |        |            |        |        |        |        |      
|                                        | Net revenues (expense)            |                      |                   | (1,753        | )          |        |            | (5,754 | )      |        |        | 1,843 |      |      |            | (3,911 | )     
|                                        | Operating expenses                |                      |                   | 1,739         |            |        |            |       |        |        |        | 2,751 |      |      |            | 2,751  |       
|                                        | Deferral of expenses under FAS 91 |                      |                   |              |            |        |            |       |        |        |        | (575  | )    |      |            | (575   | )     
|                                        |                                   |                      |                   |               |            |        |            |        |        |        |        |      
|                                        |                                   | Pretax income (loss) |                   |               | (3,492     | )      |            |        | (5,754 | )      |        |       | (333 | )    |            |        | (6,087 | )     
|                                        |                                   |                      |                   |               |            |        |            |        |        |        |        |      
|                                        |                                   |                      | Net income (loss) |               | $          | (2,113 | )          |        | $      | (3,481 | )      |       | $    | (202 | )          |        | $      | (3,683 | )
|                                        |                                   |                      |                   |               |            |        |            |        |        |        |        |      
|Relevant Financial and Performance Data |                                   |                      |                   |               |            |        |            |        |        |        |        |       |      |      |            |       
|Average interest-earning assets         |                                   | $                    | 811,173           |               |            | $      | (84,839    | )      |        | $      |       |       |      | $    | (84,839    | )     
|Allocated capital                       |                                   | $                    | 43,332            |               |            | $      |           |        |        | $      |       |       |      | $    |           |       
|Loans produced                          |                                   | $                    |                  |               |            | $      |           |        |        | $      |       |       |      | $    |           |       
|Loans sold                              |                                   | $                    |                  |               |            | $      | (2,110,246 | )      |        | $      |       |       |      | $    | (2,110,246 | )     
|ROE                                     |                                   |                      | N/A               |               |            |        | N/A        |        |        |        | N/A    |       |      |      | N/A        |       
|ROA                                     |                                   |                      | N/A               |               |            |        | N/A        |        |        |        | N/A    |       |      |      | N/A        |       
|Net interest margin                     |                                   |                      | N/A               |               |            |        | N/A        |        |        |        | N/A    |       |      |      | N/A        |       
|Average FTE                             |                                   |                      | 39                |               |            |        |           |        |        |        |       |       |      |      |           |       

|                                        |                                   |                        |                   |               |            |       |              |        |        |        |         |         |         |        |        |        |       |     |            |         |         |        |  
|--------------------------------------- | --------------------------------- | ---------------------- | ----------------- | ------------- | ---------- | ----- | ------------ | ------ | ------ | ------ | ------- | ------- | ------- | ------ | ------ | ------ | ----- | --- | ---------- | ------- | ------- | ------ | -
|                                        |                                   |                        |                   | Eliminations  |           
|                                        |                                   |                        |                   |               |           
|Three Months Ended                      |                                   |                        |                   | Interdivision |            |       | MSR Economic |        |        |       
|March 31, 2005                          |                                   | Treasury               |                   |               | Loan Sales |       |              | Value  |        |        | Other   |         |         | Total  |       
|                                        |                                   |                        |                   |               |            |       |              |        |        |        |         |         |         |        |       
|                                        |                                   | (Dollars in thousands) |                  
|Operating Results                       |                                   |                        |                   |               |            |       |              |        |        |        |         |         |         |        |        |        |       |     |            |        
|Net interest income                     |                                   | $                      | 4,598             |               |            | $     | 3,993        |        |        | $      |        |         |         | $      | 2,310  |        |       | $   | 6,303      |        
|Provision for loan losses               |                                   |                        |                  |               |            |       |             |        |        |        |        |         |         |        |       |        |       |     |           |        
|Gain (loss) on sale of loans            |                                   |                        |                  |               |            |       | (12,691      | )      |        |        |        |         |         |        |       |        |       |     | (12,691    | )      
|Service fee income                      |                                   |                        |                  |               |            |       | 480          |        |        |        |        |         |         |        |       |        |       |     | 480        |        
|Gain (loss) on sale of securities       |                                   |                        |                  |               |            |       | 1,008        |        |        |        | (10,102 | )       |         |        |       |        |       |     | (9,094     | )      
|Other income                            |                                   |                        | 128               |               |            |       |             |        |        |        |        |         |         |        | (2,445 | )      |       |     | (2,445     | )      
|                                        |                                   |                        |                   |               |            |       |              |        |        |        |         |         |         |        |       
|                                        | Net revenues (expense)            |                        |                   | 4,726         |            |       |              | (7,210 | )      |        |         | (10,102 | )       |        |        | (135   | )     |     |            | (17,447 | )      
|                                        | Operating expenses                |                        |                   | 151           |            |       |              |       |        |        |         |        |         |        |        | 1,490  |       |     |            | 1,490   |        
|                                        | Deferral of expenses under FAS 91 |                        |                   |              |            |       |              |       |        |        |         |        |         |        |        | (2,855 | )     |     |            | (2,855  | )      
|                                        |                                   |                        |                   |               |            |       |              |        |        |        |         |         |         |        |       
|                                        |                                   | Pretax income (loss)   |                   |               | 4,575      |       |              |        | (7,210 | )      |         |         | (10,102 | )      |        |        | 1,230 |     |            |         | (16,082 | )     
|                                        |                                   |                        |                   |               |            |       |              |        |        |        |         |         |         |        |       
|                                        |                                   |                        | Net income (loss) |               | $          | 2,768 |              |        | $      | (4,362 | )       |         | $       | (6,112 | )      |        | $     | 744 |            |         | $       | (9,730 | )
|                                        |                                   |                        |                   |               |            |       |              |        |        |        |         |         |         |        |       
|Relevant Financial and Performance Data |                                   |                        |                   |               |            |       |              |        |        |        |         |         |         |        |        |        |       |     |            |        
|Average interest-earning assets         |                                   | $                      | 412,794           |               |            | $     | (39,424      | )      |        | $      |        |         |         | $      |       |        |       | $   | (39,424    | )      
|Allocated capital                       |                                   | $                      | 38,177            |               |            | $     |             |        |        | $      |        |         |         | $      |       |        |       | $   |           |        
|Loans produced                          |                                   | $                      |                  |               |            | $     |             |        |        | $      |        |         |         | $      |       |        |       | $   |           |        
|Loans sold                              |                                   | $                      |                  |               |            | $     | (1,565,618   | )      |        | $      |        |         |         | $      |       |        |       | $   | (1,565,618 | )      
|ROE                                     |                                   |                        | N/A               |               |            |       | N/A          |        |        |        | N/A     |         |         |        | N/A    |        |       |     | N/A        |        
|ROA                                     |                                   |                        | N/A               |               |            |       | N/A          |        |        |        | N/A     |         |         |        | N/A    |        |       |     | N/A        |        
|Net interest margin                     |                                   |                        | N/A               |               |            |       | N/A          |        |        |        | N/A     |         |         |        | N/A    |        |       |     | N/A        |        
|Average FTE                             |                                   |                        | 28                |               |            |       |             |        |        |        |        |         |         |        |       |        |       |     |           |        

12



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##### Table of Contents





|                                        |                        |                        |                   |       |           |        |     |          |        |        |           |       |        |          |         |        |         |         |         |        |         |         |  
|--------------------------------------- | ---------------------- | ---------------------- | ----------------- | ----- | --------- | ------ | --- | -------- | ------ | ------ | --------- | ----- | ------ | -------- | ------- | ------ | ------- | ------- | ------- | ------ | ------- | ------- | -
|Three Months Ended                      |                        | MB                     |                   |       | Servicing |        |     | Deposit  |        |        | Corporate |       |        | Total    |        
|March 31, 2006                          |                        | Overhead               |                   |       | Overhead  |        |     | Overhead |        |        | Overhead  |       |        | Overhead |        
|                                        |                        |                        |                   |       |           |        |     |          |        |        |           |       |        |          |        
|                                        |                        | (Dollars in thousands) |                  
|Operating Results                       |                        |                        |                   |       |           |        |     |          |        |        |           |       |        |          |         |        |         |         |         |       
|Net interest income                     |                        | $                      | (114              | )     |           | $      | (32 | )        |        | $      |          |       |        | $        | (1,839  | )      |         | $       | (1,985  | )     
|Provision for loan losses               |                        |                        |                  |       |           |        |    |          |        |        |          |       |        |          |        |        |         |         |        |       
|Gain (loss) on sale of loans            |                        |                        |                  |       |           |        |    |          |        |        |          |       |        |          |        |        |         |         |        |       
|Service fee income                      |                        |                        |                  |       |           |        |    |          |        |        |          |       |        |          |        |        |         |         |        |       
|Gain (loss) on sale of securities       |                        |                        |                  |       |           |        |    |          |        |        |          |       |        |          |        |        |         |         |        |       
|Other income                            |                        |                        | 197               |       |           |        | 669 |          |        |        | 790       |       |        |          | 654     |        |         |         | 2,310   |       
|                                        |                        |                        |                   |       |           |        |     |          |        |        |           |       |        |          |        
|                                        | Net revenues (expense) |                        |                   | 83    |           |        |     | 637      |        |        |           | 790   |        |          |         | (1,185 | )       |         |         | 325    |        
|                                        | Expenses               |                        |                   | 9,513 |           |        |     | 4,258    |        |        |           | 5,969 |        |          |         | 38,280 |         |         |         | 58,020 |        
|                                        |                        |                        |                   |       |           |        |     |          |        |        |           |       |        |          |        
|                                        |                        | Pretax income (loss)   |                   |       | (9,430    | )      |     |          | (3,621 | )      |           |       | (5,179 | )        |         |        | (39,465 | )       |         |        | (57,695 | )      
|                                        |                        |                        |                   |       |           |        |     |          |        |        |           |       |        |          |        
|                                        |                        |                        | Net income (loss) |       | $         | (5,705 | )   |          | $      | (2,191 | )         |       | $      | (3,133   | )       |        | $       | (23,921 | )       |        | $       | (34,950 | )
|                                        |                        |                        |                   |       |           |        |     |          |        |        |           |       |        |          |        
|Relevant Financial and Performance Data |                        |                        |                   |       |           |        |     |          |        |        |           |       |        |          |         |        |         |         |         |       
|Average interest-earning assets         |                        | $                      | 3,614             |       |           | $      |    |          |        | $      | 192       |       |        | $        | 63,753  |        |         | $       | 67,559  |       
|Allocated capital                       |                        | $                      | 12,239            |       |           | $      | 270 |          |        | $      | 1,792     |       |        | $        | 154,464 |        |         | $       | 168,765 |       
|Loans produced                          |                        | $                      |                  |       |           | $      |    |          |        | $      |          |       |        | $        |        |        |         | $       |        |       
|Loans sold                              |                        | $                      |                  |       |           | $      |    |          |        | $      |          |       |        | $        |        |        |         | $       |        |       
|ROE                                     |                        |                        | N/A               |       |           |        | N/A |          |        |        | N/A       |       |        |          | N/A     |        |         |         | N/A     |       
|ROA                                     |                        |                        | N/A               |       |           |        | N/A |          |        |        | N/A       |       |        |          | N/A     |        |         |         | N/A     |       
|Net interest margin                     |                        |                        | N/A               |       |           |        | N/A |          |        |        | N/A       |       |        |          | N/A     |        |         |         | N/A     |       
|Efficiency ratio                        |                        |                        | N/A               |       |           |        | N/A |          |        |        | N/A       |       |        |          | N/A     |        |         |         | N/A     |       
|Average FTE                             |                        |                        | 430               |       |           |        | 528 |          |        |        | 256       |       |        |          | 1,126   |        |         |         | 2,340   |       

|                                        |                        |                        |                   |       |           |        |       |          |        |        |           |       |        |          |         |        |         |         |         |        |         |         |  
|--------------------------------------- | ---------------------- | ---------------------- | ----------------- | ----- | --------- | ------ | ----- | -------- | ------ | ------ | --------- | ----- | ------ | -------- | ------- | ------ | ------- | ------- | ------- | ------ | ------- | ------- | -
|Three Months Ended                      |                        | MB                     |                   |       | Servicing |        |       | Deposit  |        |        | Corporate |       |        | Total    |        
|March 31, 2005                          |                        | Overhead               |                   |       | Overhead  |        |       | Overhead |        |        | Overhead  |       |        | Overhead |        
|                                        |                        |                        |                   |       |           |        |       |          |        |        |           |       |        |          |        
|                                        |                        | (Dollars in thousands) |                  
|Operating Results                       |                        |                        |                   |       |           |        |       |          |        |        |           |       |        |          |         |        |         |         |         |       
|Net interest income                     |                        | $                      | 288               |       |           | $      | (327  | )        |        | $      |          |       |        | $        | (2,435  | )      |         | $       | (2,474  | )     
|Provision for loan losses               |                        |                        |                  |       |           |        |      |          |        |        |          |       |        |          |        |        |         |         |        |       
|Gain (loss) on sale of loans            |                        |                        |                  |       |           |        |      |          |        |        |          |       |        |          |        |        |         |         |        |       
|Service fee income                      |                        |                        |                  |       |           |        |      |          |        |        |          |       |        |          |        |        |         |         |        |       
|Gain (loss) on sale of securities       |                        |                        |                  |       |           |        |      |          |        |        |          |       |        |          |        |        |         |         |        |       
|Other income                            |                        |                        | (1                | )     |           |        | 354   |          |        |        | 504       |       |        |          | 733     |        |         |         | 1,590   |       
|                                        |                        |                        |                   |       |           |        |       |          |        |        |           |       |        |          |        
|                                        | Net revenues (expense) |                        |                   | 287   |           |        |       | 27       |        |        |           | 504   |        |          |         | (1,702 | )       |         |         | (884   | )      
|                                        | Expenses               |                        |                   | 7,428 |           |        |       | 4,669    |        |        |           | 4,905 |        |          |         | 40,151 |         |         |         | 57,153 |        
|                                        |                        |                        |                   |       |           |        |       |          |        |        |           |       |        |          |        
|                                        |                        | Pretax income (loss)   |                   |       | (7,141    | )      |       |          | (4,642 | )      |           |       | (4,401 | )        |         |        | (41,853 | )       |         |        | (58,037 | )      
|                                        |                        |                        |                   |       |           |        |       |          |        |        |           |       |        |          |        
|                                        |                        |                        | Net income (loss) |       | $         | (4,320 | )     |          | $      | (2,808 | )         |       | $      | (2,663   | )       |        | $       | (25,531 | )       |        | $       | (35,322 | )
|                                        |                        |                        |                   |       |           |        |       |          |        |        |           |       |        |          |        
|Relevant Financial and Performance Data |                        |                        |                   |       |           |        |       |          |        |        |           |       |        |          |         |        |         |         |         |       
|Average interest-earning assets         |                        | $                      |                  |       |           | $      |      |          |        | $      | 180       |       |        | $        | 32,840  |        |         | $       | 33,020  |       
|Allocated capital                       |                        | $                      | 5,171             |       |           | $      | 4,515 |          |        | $      | 1,062     |       |        | $        | 335,310 |        |         | $       | 346,058 |       
|Loans produced                          |                        | $                      |                  |       |           | $      |      |          |        | $      |          |       |        | $        |        |        |         | $       |        |       
|Loans sold                              |                        | $                      |                  |       |           | $      |      |          |        | $      |          |       |        | $        |        |        |         | $       |        |       
|ROE                                     |                        |                        | N/A               |       |           |        | N/A   |          |        |        | N/A       |       |        |          | N/A     |        |         |         | N/A     |       
|ROA                                     |                        |                        | N/A               |       |           |        | N/A   |          |        |        | N/A       |       |        |          | N/A     |        |         |         | N/A     |       
|Net interest margin                     |                        |                        | N/A               |       |           |        | N/A   |          |        |        | N/A       |       |        |          | N/A     |        |         |         | N/A     |       
|Efficiency ratio                        |                        |                        | N/A               |       |           |        | N/A   |          |        |        | N/A       |       |        |          | N/A     |        |         |         | N/A     |       
|Average FTE                             |                        |                        | 218               |       |           |        | 462   |          |        |        | 183       |       |        |          | 972     |        |         |         | 1,835   |       

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Accounting Methodology for Reporting Segment Financial
Results












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PRODUCT PROFITABILITY ANALYSIS




|                                                                  |                                          |                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                          
|----------------------------------------------------------------- | ---------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Standard Consumer Home Loans Held for Sale                        |                                          | Includes first mortgage products originated for sale through the
    various Indymac channels (excluding servicing retained and
    consumer construction channels). These products include:
|                                                                  | Agency Conforming/Jumbo                  |                                                                                                                                                                                              | First mortgage loans for sale that meet the underwriting
    guidelines of Fannie Mae and Freddie Mac. Also includes loans
    that meet all these guidelines, but exceed the loan size
    acceptable to these agencies.                                                                                                                                
|                                                                  | Alt-A                                    |                                                                                                                                                                                              | First mortgage loans for sale that have prime credit
    characteristics, but do not meet the GSE underwriting
    guidelines. We sell some Alt-A loans to the GSEs on a negotiated
    basis even though the loans do not meet the GSE underwriting
    guidelines.                                                                                     
|                                                                  | Subprime                                 |                                                                                                                                                                                              | Includes first mortgage loans that are extended to borrowers
    with impaired credit with one or more of the following
    characteristics: 1) FICO score of less than 620;
    2) late mortgage payment in the last 12 months; and
    3) bankruptcy in the last 2 years.                                                                              
|Specialty Consumer Home Loans Held for Sale and/or
    Investment |                                          | Includes specialty mortgage products originated through the
    various Indymac channels and adjusted for intercompany activity.
    These products include:                                
|                                                                  | HELOCs/ Seconds                          |                                                                                                                                                                                              | Home equity lines of credit and closed-end second mortgages.                                                                                                                                                                                                                                                                                             
|                                                                  | Reverse Mortgages                        |                                                                                                                                                                                              | Reverse mortgage loans extended to borrowers age 62 and
    older secured by equity in a primary residence.                                                                                                                                                                                                                                              
|                                                                  | CTP/ Lot                                 |                                                                                                                                                                                              | Loans made to homeowners for the construction of new custom
    homes and the subsequent permanent mortgage, and lot loans.                                                                                                                                                                                                                              
|                                                                  | Discontinued                             |                                                                                                                                                                                              | Dealer originated manufactured housing and home improvement
    loans.                                                                                                                                                                                                                                                                                   
|Home Loans and Related Investments                                |                                          | Includes all investment related activity such as home loans held
    for investment, variable cash flow instruments, mortgage-backed
    securities and other related investments.          
|                                                                  | Retained Assets and Retention Activities |                                                                                                                                                                                              | Mortgage banking, trading and hedging activity associated with
    the purchase, management and sale of mortgage banking assets and
    variable cash flow instruments retained in connection with the
    Companys loan sales. Activity also includes loans acquired
    through clean-up calls and originated through customer retention
    programs.
|                                                                  | MBS                                      |                                                                                                                                                                                              | Trading and investment activity related to the purchase,
    management and sale of investment grade mortgage-backed
    securities.                                                                                                                                                                                                                     
|                                                                  | SFR Loans Held for Investment            |                                                                                                                                                                                              | Company-wide loan investment activity related to the purchase,
    management and sale of single family residential mortgage loans
    held for investment.                                                                                                                                                                                              

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|                                               |                           |                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                
|---------------------------------------------- | ------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                               | Loan Servicing Operations |                                                                                                                                                                                                                                                                                                 | Includes all fixed operating costs associated with servicing
    loans held for sale, held for investment and loans serviced for
    others that are not allocated to the respective products for
    which these services are provided.                                                                                                                                                                       
|Specialty Commercial Loans Held for Investment |                           | Includes the consolidated loan activity associated with loans
    that are made to commercial customers, such as homebuilders,
    commercial builders and mortgage brokers and bankers for the
    purposes of either building residential homes or financing the
    purchase of these homes.
|                                               | Single Spec               |                                                                                                                                                                                                                                                                                                 | Loans that are made to homebuilders to build individual custom
    homes for resale to consumers.                                                                                                                                                                                                                                                                                                              
|                                               | Subdivision Construction  |                                                                                                                                                                                                                                                                                                 | Subdivision lending for commercial acquisition, development and
    construction loans to commercial builders.                                                                                                                                                                                                                                                                                                 
|                                               | Warehouse Lending         |                                                                                                                                                                                                                                                                                                 | Warehouse lines of credit to mortgage brokers to finance their
    inventory of loans prior to sale.                                                                                                                                                                                                                                                                                                           
|Other                                          |                           |                                                                                                                                                                                                                                                                                                
|                                               | Treasury                  |                                                                                                                                                                                                                                                                                                 | Includes all financing activity related to providing funds (FHLB
    and private borrowings, debt and other securities issuances and
    deposits generation) to Indymac businesses to fund loans and
    investments. The use of funds is charged to each business unit
    according to Indymacs capital allocation and funds
    transfer pricing methodology with the difference residing in
    Treasury.
|                                               | MB Overhead               |                                                                                                                                                                                                                                                                                                 | Includes administrative fixed operating costs associated with
    originating and selling of mortgage loans.                                                                                                                                                                                                                                                                                                   
|                                               | Servicing Overhead        |                                                                                                                                                                                                                                                                                                 | Includes all fixed operating costs associated with servicing
    loans held for sale, held for investment and loans serviced for
    others that are not allocated to the respective products for
    which these services are provided.                                                                                                                                                                       
|                                               | Deposits                  |                                                                                                                                                                                                                                                                                                 | Includes all deposit generating activities to raise deposits
    from retail bank branch customers to be used in certain lending
    activities. The Deposits group is organized as a cost center
    whereby its interest expense from deposits as well as the
    variable cost associated with deposit generation are offset by
    allocations from Treasury.                                              
|                                               | Corporate Overhead        |                                                                                                                                                                                                                                                                                                 | Includes all corporate fixed costs that do not vary in the short
    term with changes in business activity. Fixed costs include
    corporate administration, financial management, enterprise risk
    management, centralized information technology and other
    unallocated fixed costs.                                                                                                                 

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|                                  |                                   |                        |                   |         |            |        |           |             |        |        |            |        |        |          |           |        |          |       |         |         |        |        |         |        |         |         |            |         |         |        | 
|--------------------------------- | --------------------------------- | ---------------------- | ----------------- | ------- | ---------- | ------ | --------- | ----------- | ------ | ------ | ---------- | ------ | ------ | -------- | --------- | ------ | -------- | ----- | ------- | ------- | ------ | ------ | ------- | ------ | ------- | ------- | ---------- | ------- | ------- | ------ | 
|                                  |                                   |                        |                   |         |            | Home   |           |             |        |        |            |        |        |          |          
|                                  |                                   | Standard               |                   |         | Specialty  |        |           | Loans &     |        |        | Specialty  |        |        |          |           |        |          |      
|Three Months Ended                |                                   | Consumer Home          |                   |         | Consumer   |        |           | Related     |        |        | Commercial |        |        |          |           |        |          | Total |        
|March 31, 2006                    |                                   | Loans                  |                   |         | Home Loans |        |           | Investments |        |        | Loans      |        |        | Treasury |           |        | Overhead |       |         | Company |       
|                                  |                                   |                        |                   |         |            |        |           |             |        |        |            |        |        |          |           |        |          |       |         |         |       
|                                  |                                   | (Dollars in thousands) |                  
|Operating Results                 |                                   |                        |                   |         |            |        |           |             |        |        |            |        |        |          |           |        |          |       |         |         |        |        |         |        |         |         |            |        
|Net interest income               |                                   | $                      | 30,281            |         |            | $      | 36,727    |             |        | $      | 44,137     |        |        | $        | 17,041    |        |          | $     | (1,933  | )       |        | $      | 957     |        |         | $       | 127,210    |        
|Provision for loan losses         |                                   |                        |                  |         |            |        | (1,679    | )           |        |        | (1,750     | )      |        |          | (393      | )      |          |       |        |         |        |        |        |        |         |         | (3,822     | )      
|Gain (loss) on sale of loans      |                                   |                        | 101,369           |         |            |        | 35,002    |             |        |        | 4,828      |        |        |          |          |        |          |       |        |         |        |        |        |        |         |         | 141,199    |        
|Service fee income                |                                   |                        |                  |         |            |        | 5,457     |             |        |        | 25,041     |        |        |          |          |        |          |       |        |         |        |        | 391     |        |         |         | 30,889     |        
|Gain (loss) on sale of securities |                                   |                        |                  |         |            |        | (1,198    | )           |        |        | (1,417     | )      |        |          |          |        |          |       |        |         |        |        |        |        |         |         | (2,615     | )      
|Other income                      |                                   |                        |                  |         |            |        | 7,755     |             |        |        | 1,199      |        |        |          | 1,408     |        |          |       | 180     |         |        |        | 1,132   |        |         |         | 11,674     |        
|                                  |                                   |                        |                   |         |            |        |           |             |        |        |            |        |        |          |           |        |          |       |         |         |       
|                                  | Net revenue (expense)             |                        |                   | 131,650 |            |        |           | 82,064      |        |        |            | 72,038 |        |          |           | 18,056 |          |       |         | (1,753  | )      |        |         | 2,480  |         |         |            | 304,535 |        
|                                  | Variable expenses                 |                        |                   | 56,295  |            |        |           | 38,900      |        |        |            | 949    |        |          |           | 3,258  |          |       |         |        |        |        |         |       |         |         |            | 99,402  |        
|                                  | Deferral of expenses under FAS 91 |                        |                   | (43,545 | )          |        |           | (17,327     | )      |        |            | (827   | )      |          |           | (1,527 | )        |       |         |        |        |        |         |       |         |         |            | (63,226 | )      
|                                  | Fixed expenses                    |                        |                   | 39,093  |            |        |           | 19,684      |        |        |            | 11,564 |        |          |           | 3,340  |          |       |         | 1,739   |        |        |         | 60,771 |         |         |            | 136,191 |        
|                                  |                                   |                        |                   |         |            |        |           |             |        |        |            |        |        |          |           |        |          |       |         |         |       
|                                  |                                   | Pretax income (loss)   |                   |         | 79,807     |        |           |             | 40,807 |        |            |        | 60,352 |          |           |        | 12,985   |       |         |         | (3,492 | )      |         |        | (58,291 | )       |            |         | 132,168 |       
|                                  |                                   |                        |                   |         |            |        |           |             |        |        |            |        |        |          |           |        |          |       |         |         |       
|                                  |                                   |                        | Net income (loss) |         | $          | 48,284 |           |             | $      | 24,620 |            |        | $      | 36,513   |           |        | $        | 7,856 |         |         | $      | (2,113 | )       |        | $       | (35,311 | )          |         | $       | 79,849 | 
|                                  |                                   |                        |                   |         |            |        |           |             |        |        |            |        |        |          |           |        |          |       |         |         |       
|Balance Sheet Data                |                                   |                        |                   |         |            |        |           |             |        |        |            |        |        |          |           |        |          |       |         |         |        |        |         |        |         |         |            |        
|Average interest-earning assets   |                                   | $                      | 7,712,367         |         |            | $      | 5,426,475 |             |        | $      | 8,778,529  |        |        | $        | 1,268,342 |        |          | $     | 811,173 |         |        | $      | 37,287  |        |         | $       | 24,034,173 |        
|Allocated capital                 |                                   | $                      | 362,914           |         |            | $      | 345,600   |             |        | $      | 506,616    |        |        | $        | 118,992   |        |          | $     | 43,332  |         |        | $      | 220,852 |        |         | $       | 1,598,306  |        
|Performance Ratios                |                                   |                        |                   |         |            |        |           |             |        |        |            |        |        |          |           |        |          |       |         |         |        |        |         |        |         |         |            |        
|Return on average equity (ROE)    |                                   |                        | 54                | %       |            |        | 29        | %           |        |        | 29         | %      |        |          | 27        | %      |          |       | N/A     |         |        |        | N/A     |        |         |         | 20         | %      
|Net interest margin               |                                   |                        | 1.59              | %       |            |        | 2.74      | %           |        |        | 2.04       | %      |        |          | 5.45      | %      |          |       | N/A     |         |        |        | N/A     |        |         |         | 2.15       | %      
|MBR margin                        |                                   |                        | 0.98              | %       |            |        | 1.60      | %           |        |        | 1.56       | %      |        |          | N/A       |        |          |       | N/A     |         |        |        | N/A     |        |         |         | 1.10       | %      
|Efficiency ratio                  |                                   |                        | 39                | %       |            |        | 49        | %           |        |        | 16         | %      |        |          | 27        | %      |          |       | N/A     |         |        |        | N/A     |        |         |         | 56         | %      
|Operating Data                    |                                   |                        |                   |         |            |        |           |             |        |        |            |        |        |          |           |        |          |       |         |         |        |        |         |        |         |         |            |        
|Loan production                   |                                   | $                      | 15,535,795        |         |            | $      | 4,077,455 |             |        | $      | 317,525    |        |        | $        | 409,274   |        |          | $     |        |         |        | $      |        |        |         | $       | 20,340,049 |        
|Loans sold                        |                                   | $                      | 13,395,747        |         |            | $      | 3,002,974 |             |        | $      | 309,466    |        |        | $        |          |        |          | $     |        |         |        | $      |        |        |         | $       | 16,708,187 |        

|                                  |                                   |                        |                   |         |            |        |           |             |        |        |            |        |        |          |         |        |          |       |         |         |       |       |         |        |         |         |            |         |         |        | 
|--------------------------------- | --------------------------------- | ---------------------- | ----------------- | ------- | ---------- | ------ | --------- | ----------- | ------ | ------ | ---------- | ------ | ------ | -------- | ------- | ------ | -------- | ----- | ------- | ------- | ----- | ----- | ------- | ------ | ------- | ------- | ---------- | ------- | ------- | ------ | 
|                                  |                                   |                        |                   |         |            | Home   |           |             |        |        |            |        |        |          |        
|                                  |                                   | Standard               |                   |         | Specialty  |        |           | Loans &     |        |        | Specialty  |        |        |          |         |        |          |      
|Three Months Ended                |                                   | Consumer Home          |                   |         | Consumer   |        |           | Related     |        |        | Commercial |        |        |          |         |        |          | Total |        
|March 31, 2005                    |                                   | Loans                  |                   |         | Home Loans |        |           | Investments |        |        | Loans      |        |        | Treasury |         |        | Overhead |       |         | Company |      
|                                  |                                   |                        |                   |         |            |        |           |             |        |        |            |        |        |          |         |        |          |       |         |         |      
|                                  |                                   | (Dollars in thousands) |                  
|Operating Results                 |                                   |                        |                   |         |            |        |           |             |        |        |            |        |        |          |         |        |          |       |         |         |       |       |         |        |         |         |            |        
|Net interest income               |                                   | $                      | 23,682            |         |            | $      | 25,610    |             |        | $      | 41,318     |        |        | $        | 11,228  |        |          | $     | 4,598   |         |       | $     | (1,262  | )      |         | $       | 105,174    |        
|Provision for loan losses         |                                   |                        |                  |         |            |        | (1,021    | )           |        |        | (950       | )      |        |          | (519    | )      |          |       |        |         |       |       |        |        |         |         | (2,490     | )      
|Gain (loss) on sale of loans      |                                   |                        | 115,925           |         |            |        | 25,526    |             |        |        | 2,871      |        |        |          |        |        |          |       |        |         |       |       |        |        |         |         | 144,322    |        
|Service fee income                |                                   |                        |                  |         |            |        | 3,910     |             |        |        | 6,918      |        |        |          |        |        |          |       |        |         |       |       | (6,410  | )      |         |         | 4,418      |        
|Gain (loss) on sale of securities |                                   |                        |                  |         |            |        | 806       |             |        |        | (5,452     | )      |        |          |        |        |          |       |        |         |       |       |        |        |         |         | (4,646     | )      
|Other income                      |                                   |                        |                  |         |            |        | 5,336     |             |        |        | 710        |        |        |          | 915     |        |          |       | 128     |         |       |       | (518    | )      |         |         | 6,571      |        
|                                  |                                   |                        |                   |         |            |        |           |             |        |        |            |        |        |          |         |        |          |       |         |         |      
|                                  | Net revenue (expense)             |                        |                   | 139,607 |            |        |           | 60,167      |        |        |            | 45,415 |        |          |         | 11,624 |          |       |         | 4,726   |       |       |         | (8,190 | )       |         |            | 253,349 |        
|                                  | Variable expenses                 |                        |                   | 50,354  |            |        |           | 25,972      |        |        |            | 1,013  |        |          |         | 3,697  |          |       |         |        |       |       |         |       |         |         |            | 81,036  |        
|                                  | Deferral of expenses under FAS 91 |                        |                   | (35,414 | )          |        |           | (10,182     | )      |        |            | (199   | )      |          |         | (1,376 | )        |       |         |        |       |       |         |       |         |         |            | (47,171 | )      
|                                  | Fixed expenses                    |                        |                   | 35,137  |            |        |           | 11,626      |        |        |            | 7,002  |        |          |         | 1,980  |          |       |         | 151     |       |       |         | 58,365 |         |         |            | 114,261 |        
|                                  |                                   |                        |                   |         |            |        |           |             |        |        |            |        |        |          |         |        |          |       |         |         |      
|                                  |                                   | Pretax income (loss)   |                   |         | 89,530     |        |           |             | 32,751 |        |            |        | 37,599 |          |         |        | 7,323    |       |         |         | 4,575 |       |         |        | (66,555 | )       |            |         | 105,223 |       
|                                  |                                   |                        |                   |         |            |        |           |             |        |        |            |        |        |          |         |        |          |       |         |         |      
|                                  |                                   |                        | Net income (loss) |         | $          | 54,165 |           |             | $      | 19,814 |            |        | $      | 22,748   |         |        | $        | 4,431 |         |         | $     | 2,768 |         |        | $       | (40,476 | )          |         | $       | 63,450 | 
|                                  |                                   |                        |                   |         |            |        |           |             |        |        |            |        |        |          |         |        |          |       |         |         |      
|Balance Sheet Data                |                                   |                        |                   |         |            |        |           |             |        |        |            |        |        |          |         |        |          |       |         |         |       |       |         |        |         |         |            |        
|Average interest-earning assets   |                                   | $                      | 4,599,849         |         |            | $      | 3,506,887 |             |        | $      | 7,672,095  |        |        | $        | 816,308 |        |          | $     | 412,794 |         |       | $     | 31,134  |        |         | $       | 17,039,067 |        
|Allocated capital                 |                                   | $                      | 211,310           |         |            | $      | 185,661   |             |        | $      | 366,332    |        |        | $        | 71,183  |        |          | $     | 38,177  |         |       | $     | 397,189 |        |         | $       | 1,269,852  |        
|Performance Ratios                |                                   |                        |                   |         |            |        |           |             |        |        |            |        |        |          |         |        |          |       |         |         |       |       |         |        |         |         |            |        
|Return on average equity (ROE)    |                                   |                        | 104               | %       |            |        | 43        | %           |        |        | 25         | %      |        |          | 25      | %      |          |       | N/A     |         |       |       | N/A     |        |         |         | 20         | %      
|Net interest margin               |                                   |                        | 2.09              | %       |            |        | 2.96      | %           |        |        | 2.18       | %      |        |          | 5.58    | %      |          |       | N/A     |         |       |       | N/A     |        |         |         | 2.50       | %      
|MBR margin                        |                                   |                        | 1.75              | %       |            |        | 2.37      | %           |        |        | 1.58       | %      |        |          | N/A     |        |          |       | N/A     |         |       |       | N/A     |        |         |         | 1.82       | %      
|Efficiency ratio                  |                                   |                        | 36                | %       |            |        | 45        | %           |        |        | 17         | %      |        |          | 35      | %      |          |       | N/A     |         |       |       | N/A     |        |         |         | 58         | %      
|Operating Data                    |                                   |                        |                   |         |            |        |           |             |        |        |            |        |        |          |         |        |          |       |         |         |       |       |         |        |         |         |            |        
|Loan production                   |                                   | $                      | 9,256,668         |         |            | $      | 2,048,180 |             |        | $      | 221,769    |        |        | $        | 427,887 |        |          | $     |        |         |       | $     |        |        |         | $       | 11,954,504 |        
|Loans sold                        |                                   | $                      | 7,996,538         |         |            | $      | 1,233,392 |             |        | $      | 423,822    |        |        | $        |        |        |          | $     |        |         |       | $     |        |        |         | $       | 9,653,752  |        

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|                                  |                                   |                                            |                   |        |       |      |            |          |        |        |           |        |       |       |            |         |        |        | 
|--------------------------------- | --------------------------------- | ------------------------------------------ | ----------------- | ------ | ----- | ---- | ---------- | -------- | ------ | ------ | --------- | ------ | ----- | ----- | ---------- | ------- | ------ | ------ | 
|                                  |                                   | Standard Consumer Home Loans Held for Sale |                  
|                                  |                                   |                                            |                  
|                                  |                                   | Agency                                     |                   |        |      
|Three Months Ended                |                                   | Conforming/                                |                   |        |      
|March 31, 2006                    |                                   | Jumbo                                      |                   |        | Alt-A |      |            | Subprime |        |        | Total     |       
|                                  |                                   |                                            |                   |        |       |      |            |          |        |        |           |       
|                                  |                                   | (Dollars in thousands)                     |                  
|Operating Results                 |                                   |                                            |                   |        |       |      |            |          |        |        |           |        |       |       |            |        
|Net interest income               |                                   | $                                          | 2,339             |        |       | $    | 19,736     |          |        | $      | 8,206     |        |       | $     | 30,281     |        
|Provision for loan losses         |                                   |                                            |                  |        |       |      |           |          |        |        |          |        |       |       |           |        
|Gain (loss) on sale of loans      |                                   |                                            | 555               |        |       |      | 95,122     |          |        |        | 5,692     |        |       |       | 101,369    |        
|Service fee income                |                                   |                                            |                  |        |       |      |           |          |        |        |          |        |       |       |           |        
|Gain (loss) on sale of securities |                                   |                                            |                  |        |       |      |           |          |        |        |          |        |       |       |           |        
|Other income                      |                                   |                                            |                  |        |       |      |           |          |        |        |          |        |       |       |           |        
|                                  |                                   |                                            |                   |        |       |      |            |          |        |        |           |       
|                                  | Net revenues (expense)            |                                            |                   | 2,894  |       |      |            | 114,858  |        |        |           | 13,898 |       |       |            | 131,650 |       
|                                  | Variable expenses                 |                                            |                   | 3,259  |       |      |            | 45,968   |        |        |           | 7,068  |       |       |            | 56,295  |       
|                                  | Deferral of expenses under FAS 91 |                                            |                   | (2,521 | )     |      |            | (35,557  | )      |        |           | (5,467 | )     |       |            | (43,545 | )     
|                                  | Fixed expenses                    |                                            |                   | 2,336  |       |      |            | 33,005   |        |        |           | 3,752  |       |       |            | 39,093  |       
|                                  |                                   |                                            |                   |        |       |      |            |          |        |        |           |       
|                                  |                                   | Pretax income (loss)                       |                   |        | (180  | )    |            |          | 71,442 |        |           |        | 8,545 |       |            |         | 79,807 |       
|                                  |                                   |                                            |                   |        |       |      |            |          |        |        |           |       
|                                  |                                   |                                            | Net income (loss) |        | $     | (109 | )          |          | $      | 43,223 |           |        | $     | 5,170 |            |         | $      | 48,284 | 
|                                  |                                   |                                            |                   |        |       |      |            |          |        |        |           |       
|Balance Sheet Data                |                                   |                                            |                   |        |       |      |            |          |        |        |           |        |       |       |            |        
|Average interest-earning assets   |                                   | $                                          | 611,780           |        |       | $    | 5,836,548  |          |        | $      | 1,264,039 |        |       | $     | 7,712,367  |        
|Allocated capital                 |                                   | $                                          | 25,516            |        |       | $    | 258,926    |          |        | $      | 78,472    |        |       | $     | 362,914    |        
|Performance Ratios                |                                   |                                            |                   |        |       |      |            |          |        |        |           |        |       |       |            |        
|Return on average equity (ROE)    |                                   |                                            | (2                | )%     |       |      | 68         | %        |        |        | 27        | %      |       |       | 54         | %      
|Net interest margin               |                                   |                                            | 1.55              | %      |       |      | 1.37       | %        |        |        | 2.63      | %      |       |       | 1.59       | %      
|MBR margin                        |                                   |                                            | 0.58              | %      |       |      | 0.94       | %        |        |        | 2.06      | %      |       |       | 0.98       | %      
|Efficiency ratio                  |                                   |                                            | 106               | %      |       |      | 38         | %        |        |        | 39        | %      |       |       | 39         | %      
|Operating Data                    |                                   |                                            |                   |        |       |      |            |          |        |        |           |        |       |       |            |        
|Loan production                   |                                   | $                                          | 540,991           |        |       | $    | 14,453,534 |          |        | $      | 541,270   |        |       | $     | 15,535,795 |        
|Loans sold                        |                                   | $                                          | 499,115           |        |       | $    | 12,223,520 |          |        | $      | 673,112   |        |       | $     | 13,395,747 |        

|                                  |                                   |                                            |                   |        |       |       |           |          |        |        |         |        |       |       |           |         |        |        | 
|--------------------------------- | --------------------------------- | ------------------------------------------ | ----------------- | ------ | ----- | ----- | --------- | -------- | ------ | ------ | ------- | ------ | ----- | ----- | --------- | ------- | ------ | ------ | 
|                                  |                                   | Standard Consumer Home Loans Held for Sale |                  
|                                  |                                   |                                            |                  
|                                  |                                   | Agency                                     |                   |        |      
|Three Months Ended                |                                   | Conforming/                                |                   |        |      
|March 31, 2005                    |                                   | Jumbo                                      |                   |        | Alt-A |       |           | Subprime |        |        | Total   |       
|                                  |                                   |                                            |                   |        |       |       |           |          |        |        |         |       
|                                  |                                   | (Dollars in thousands)                     |                  
|Operating Results                 |                                   |                                            |                   |        |       |       |           |          |        |        |         |        |       |       |           |        
|Net interest income               |                                   | $                                          | 1,932             |        |       | $     | 15,260    |          |        | $      | 6,490   |        |       | $     | 23,682    |        
|Provision for loan losses         |                                   |                                            |                  |        |       |       |          |          |        |        |        |        |       |       |          |        
|Gain (loss) on sale of loans      |                                   |                                            | 6,889             |        |       |       | 103,200   |          |        |        | 5,836   |        |       |       | 115,925   |        
|Service fee income                |                                   |                                            |                  |        |       |       |          |          |        |        |        |        |       |       |          |        
|Gain (loss) on sale of securities |                                   |                                            |                  |        |       |       |          |          |        |        |        |        |       |       |          |        
|Other income                      |                                   |                                            |                  |        |       |       |          |          |        |        |        |        |       |       |          |        
|                                  |                                   |                                            |                   |        |       |       |           |          |        |        |         |       
|                                  | Net revenues (expense)            |                                            |                   | 8,821  |       |       |           | 118,460  |        |        |         | 12,326 |       |       |           | 139,607 |       
|                                  | Variable expenses                 |                                            |                   | 3,174  |       |       |           | 37,127   |        |        |         | 10,053 |       |       |           | 50,354  |       
|                                  | Deferral of expenses under FAS 91 |                                            |                   | (2,220 | )     |       |           | (26,163  | )      |        |         | (7,031 | )     |       |           | (35,414 | )     
|                                  | Fixed expenses                    |                                            |                   | 2,379  |       |       |           | 27,420   |        |        |         | 5,338  |       |       |           | 35,137  |       
|                                  |                                   |                                            |                   |        |       |       |           |          |        |        |         |       
|                                  |                                   | Pretax income (loss)                       |                   |        | 5,488 |       |           |          | 80,076 |        |         |        | 3,966 |       |           |         | 89,530 |       
|                                  |                                   |                                            |                   |        |       |       |           |          |        |        |         |       
|                                  |                                   |                                            | Net income (loss) |        | $     | 3,320 |           |          | $      | 48,446 |         |        | $     | 2,399 |           |         | $      | 54,165 | 
|                                  |                                   |                                            |                   |        |       |       |           |          |        |        |         |       
|Balance Sheet Data                |                                   |                                            |                   |        |       |       |           |          |        |        |         |        |       |       |           |        
|Average interest-earning assets   |                                   | $                                          | 357,547           |        |       | $     | 3,570,111 |          |        | $      | 672,191 |        |       | $     | 4,599,849 |        
|Allocated capital                 |                                   | $                                          | 15,102            |        |       | $     | 154,090   |          |        | $      | 42,118  |        |       | $     | 211,310   |        
|Performance Ratios                |                                   |                                            |                   |        |       |       |           |          |        |        |         |        |       |       |           |        
|Return on average equity (ROE)    |                                   |                                            | 89                | %      |       |       | 128       | %        |        |        | 23      | %      |       |       | 104       | %      
|Net interest margin               |                                   |                                            | 2.19              | %      |       |       | 1.73      | %        |        |        | 3.92    | %      |       |       | 2.09      | %      
|MBR margin                        |                                   |                                            | 1.59              | %      |       |       | 1.79      | %        |        |        | 1.48    | %      |       |       | 1.75      | %      
|Efficiency ratio                  |                                   |                                            | 38                | %      |       |       | 32        | %        |        |        | 68      | %      |       |       | 36        | %      
|Operating Data                    |                                   |                                            |                   |        |       |       |           |          |        |        |         |        |       |       |           |        
|Loan production                   |                                   | $                                          | 727,510           |        |       | $     | 8,048,548 |          |        | $      | 480,610 |        |       | $     | 9,256,668 |        
|Loans sold                        |                                   | $                                          | 555,838           |        |       | $     | 6,605,248 |          |        | $      | 835,452 |        |       | $     | 7,996,538 |        

18



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##### Table of Contents





|                                  |                                   |                                                               |                   |        |           |       |           |         |        |       |              |        |        |       |        |      |      |      |           |         |        |        | 
|--------------------------------- | --------------------------------- | ------------------------------------------------------------- | ----------------- | ------ | --------- | ----- | --------- | ------- | ------ | ----- | ------------ | ------ | ------ | ----- | ------ | ---- | ---- | ---- | --------- | ------- | ------ | ------ | 
|                                  |                                   | Specialty Consumer Home Loans Held for Sale and/or Investment |                  
|                                  |                                   |                                                               |                  
|Three Months Ended                |                                   | HELOCs/                                                       |                   |        | Reverse   |       |           |        
|March 31, 2006                    |                                   | Seconds                                                       |                   |        | Mortgages |       |           | CTP/Lot |        |       | Discontinued |        |        | Total |       
|                                  |                                   |                                                               |                   |        |           |       |           |         |        |       |              |        |        |       |       
|                                  |                                   | (Dollars in thousands)                                        |                  
|Operating Results                 |                                   |                                                               |                   |        |           |       |           |         |        |       |              |        |        |       |        |      |      |      |           |        
|Net interest income               |                                   | $                                                             | 23,806            |        |           | $     | 1,366     |         |        | $     | 10,851       |        |        | $     | 704    |      |      | $    | 36,727    |        
|Provision for loan losses         |                                   |                                                               |                  |        |           |       |          |         |        |       | (869         | )      |        |       | (810   | )    |      |      | (1,679    | )      
|Gain (loss) on sale of loans      |                                   |                                                               | (5,563            | )      |           |       | 28,240    |         |        |       | 12,325       |        |        |       |       |      |      |      | 35,002    |        
|Service fee income                |                                   |                                                               | 1,020             |        |           |       | 4,437     |         |        |       |             |        |        |       |       |      |      |      | 5,457     |        
|Gain (loss) on sale of securities |                                   |                                                               | (1,523            | )      |           |       |          |         |        |       | 325          |        |        |       |       |      |      |      | (1,198    | )      
|Other income                      |                                   |                                                               | 1,991             |        |           |       | 411       |         |        |       | 5,353        |        |        |       |       |      |      |      | 7,755     |        
|                                  |                                   |                                                               |                   |        |           |       |           |         |        |       |              |        |        |       |       
|                                  | Net revenues (expense)            |                                                               |                   | 19,731 |           |       |           | 34,454  |        |       |              | 27,985 |        |       |        | (106 | )    |      |           | 82,064  |       
|                                  | Variable expenses                 |                                                               |                   | 12,937 |           |       |           | 16,167  |        |       |              | 9,796  |        |       |        |     |      |      |           | 38,900  |       
|                                  | Deferral of expenses under FAS 91 |                                                               |                   | (8,216 | )         |       |           | (6,930  | )      |       |              | (2,181 | )      |       |        |     |      |      |           | (17,327 | )     
|                                  | Fixed expenses                    |                                                               |                   | 2,656  |           |       |           | 11,835  |        |       |              | 5,109  |        |       |        | 84   |      |      |           | 19,684  |       
|                                  |                                   |                                                               |                   |        |           |       |           |         |        |       |              |        |        |       |       
|                                  |                                   | Pretax income (loss)                                          |                   |        | 12,354    |       |           |         | 13,382 |       |              |        | 15,261 |       |        |      | (190 | )    |           |         | 40,807 |       
|                                  |                                   |                                                               |                   |        |           |       |           |         |        |       |              |        |        |       |       
|                                  |                                   |                                                               | Net income (loss) |        | $         | 7,474 |           |         | $      | 8,028 |              |        | $      | 9,233 |        |      | $    | (115 | )         |         | $      | 24,620 | 
|                                  |                                   |                                                               |                   |        |           |       |           |         |        |       |              |        |        |       |       
|Balance Sheet Data                |                                   |                                                               |                   |        |           |       |           |         |        |       |              |        |        |       |        |      |      |      |           |        
|Average interest-earning assets   |                                   | $                                                             | 2,979,563         |        |           | $     | 296,165   |         |        | $     | 2,106,064    |        |        | $     | 44,683 |      |      | $    | 5,426,475 |        
|Allocated capital                 |                                   | $                                                             | 229,793           |        |           | $     | 17,204    |         |        | $     | 94,898       |        |        | $     | 3,705  |      |      | $    | 345,600   |        
|Performance Ratios                |                                   |                                                               |                   |        |           |       |           |         |        |       |              |        |        |       |        |      |      |      |           |        
|Return on average equity (ROE)    |                                   |                                                               | 13                | %      |           |       | 189       | %       |        |       | 39           | %      |        |       | (13    | )%   |      |      | 29        | %      
|Net interest margin               |                                   |                                                               | 3.24              | %      |           |       | 1.87      | %       |        |       | 2.09         | %      |        |       | 6.39   | %    |      |      | 2.74      | %      
|MBR margin                        |                                   |                                                               | 0.46              | %      |           |       | 2.83      | %       |        |       | 1.87         | %      |        |       | N/A    |      |      |      | 1.60      | %      
|Efficiency ratio                  |                                   |                                                               | 37                | %      |           |       | 61        | %       |        |       | 44           | %      |        |       | 12     | %    |      |      | 49        | %      
|Operating Data                    |                                   |                                                               |                   |        |           |       |           |         |        |       |              |        |        |       |        |      |      |      |           |        
|Loan production                   |                                   | $                                                             | 1,643,233         |        |           | $     | 1,118,254 |         |        | $     | 1,315,968    |        |        | $     |       |      |      | $    | 4,077,455 |        
|Loans sold                        |                                   | $                                                             | 1,299,945         |        |           | $     | 1,045,192 |         |        | $     | 657,837      |        |        | $     |       |      |      | $    | 3,002,974 |        

|                                  |                                   |                                                               |                   |        |           |       |         |         |       |       |              |        |        |       |        |     |      |     |           |         |        |        | 
|--------------------------------- | --------------------------------- | ------------------------------------------------------------- | ----------------- | ------ | --------- | ----- | ------- | ------- | ----- | ----- | ------------ | ------ | ------ | ----- | ------ | --- | ---- | --- | --------- | ------- | ------ | ------ | 
|                                  |                                   | Specialty Consumer Home Loans Held for Sale and/or Investment |                  
|                                  |                                   |                                                               |                  
|Three Months Ended                |                                   | HELOCs/                                                       |                   |        | Reverse   |       |         |        
|March 31, 2005                    |                                   | Seconds                                                       |                   |        | Mortgages |       |         | CTP/Lot |       |       | Discontinued |        |        | Total |       
|                                  |                                   |                                                               |                   |        |           |       |         |         |       |       |              |        |        |       |       
|                                  |                                   | (Dollars in thousands)                                        |                  
|Operating Results                 |                                   |                                                               |                   |        |           |       |         |         |       |       |              |        |        |       |        |     |      |     |           |        
|Net interest income               |                                   | $                                                             | 10,868            |        |           | $     | 463     |         |       | $     | 13,393       |        |        | $     | 886    |     |      | $   | 25,610    |        
|Provision for loan losses         |                                   |                                                               |                  |        |           |       |        |         |       |       | (356         | )      |        |       | (665   | )   |      |     | (1,021    | )      
|Gain (loss) on sale of loans      |                                   |                                                               | 2,102             |        |           |       | 15,918  |         |       |       | 7,516        |        |        |       | (10    | )   |      |     | 25,526    |        
|Service fee income                |                                   |                                                               | 1,170             |        |           |       | 2,740   |         |       |       |             |        |        |       |       |     |      |     | 3,910     |        
|Gain (loss) on sale of securities |                                   |                                                               | 612               |        |           |       |        |         |       |       | 194          |        |        |       |       |     |      |     | 806       |        
|Other income                      |                                   |                                                               | 1,425             |        |           |       | 188     |         |       |       | 3,719        |        |        |       | 4      |     |      |     | 5,336     |        
|                                  |                                   |                                                               |                   |        |           |       |         |         |       |       |              |        |        |       |       
|                                  | Net revenues (expense)            |                                                               |                   | 16,177 |           |       |         | 19,309  |       |       |              | 24,466 |        |       |        | 215 |      |     |           | 60,167  |       
|                                  | Variable expenses                 |                                                               |                   | 9,028  |           |       |         | 9,757   |       |       |              | 7,187  |        |       |        |    |      |     |           | 25,972  |       
|                                  | Deferral of expenses under FAS 91 |                                                               |                   | (4,582 | )         |       |         | (3,807  | )     |       |              | (1,793 | )      |       |        |    |      |     |           | (10,182 | )     
|                                  | Fixed expenses                    |                                                               |                   | 813    |           |       |         | 6,380   |       |       |              | 4,086  |        |       |        | 347 |      |     |           | 11,626  |       
|                                  |                                   |                                                               |                   |        |           |       |         |         |       |       |              |        |        |       |       
|                                  |                                   | Pretax income (loss)                                          |                   |        | 10,918    |       |         |         | 6,979 |       |              |        | 14,986 |       |        |     | (132 | )   |           |         | 32,751 |       
|                                  |                                   |                                                               |                   |        |           |       |         |         |       |       |              |        |        |       |       
|                                  |                                   |                                                               | Net income (loss) |        | $         | 6,605 |         |         | $     | 4,222 |              |        | $      | 9,067 |        |     | $    | (80 | )         |         | $      | 19,814 | 
|                                  |                                   |                                                               |                   |        |           |       |         |         |       |       |              |        |        |       |       
|Balance Sheet Data                |                                   |                                                               |                   |        |           |       |         |         |       |       |              |        |        |       |        |     |      |     |           |        
|Average interest-earning assets   |                                   | $                                                             | 1,611,248         |        |           | $     | 105,329 |         |       | $     | 1,737,741    |        |        | $     | 52,569 |     |      | $   | 3,506,887 |        
|Allocated capital                 |                                   | $                                                             | 95,488            |        |           | $     | 11,436  |         |       | $     | 74,056       |        |        | $     | 4,681  |     |      | $   | 185,661   |        
|Performance Ratios                |                                   |                                                               |                   |        |           |       |         |         |       |       |              |        |        |       |        |     |      |     |           |        
|Return on average equity (ROE)    |                                   |                                                               | 28                | %      |           |       | 150     | %       |       |       | 50           | %      |        |       | (7     | )%  |      |     | 43        | %      
|Net interest margin               |                                   |                                                               | 2.74              | %      |           |       | 1.78    | %       |       |       | 3.13         | %      |        |       | 6.84   | %   |      |     | 2.96      | %      
|MBR margin                        |                                   |                                                               | 0.88              | %      |           |       | 3.15    | %       |       |       | 2.82         | %      |        |       | N/A    |     |      |     | 2.37      | %      
|Efficiency ratio                  |                                   |                                                               | 33                | %      |           |       | 64      | %       |       |       | 38           | %      |        |       | 39     | %   |      |     | 45        | %      
|Operating Data                    |                                   |                                                               |                   |        |           |       |         |         |       |       |              |        |        |       |        |     |      |     |           |        
|Loan production                   |                                   | $                                                             | 553,690           |        |           | $     | 506,712 |         |       | $     | 987,778      |        |        | $     |       |     |      | $   | 2,048,180 |        
|Loans sold                        |                                   | $                                                             | 373,988           |        |           | $     | 520,378 |         |       | $     | 339,026      |        |        | $     |       |     |      | $   | 1,233,392 |        

19



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##### Table of Contents





|                                  |                                   |                                    |                   |        |        |        |           |            |       |       |           |        |        |        |           |        |        |        | 
|--------------------------------- | --------------------------------- | ---------------------------------- | ----------------- | ------ | ------ | ------ | --------- | ---------- | ----- | ----- | --------- | ------ | ------ | ------ | --------- | ------ | ------ | ------ | 
|                                  |                                   | Home Loans and Related Investments |                  
|                                  |                                   |                                    |                  
|                                  |                                   | Retained Assets                    |                   |        |        |        | SFR Loans |            |       |      
|                                  |                                   | and Retention                      |                   |        |        |        | Held for  |            |       |      
|                                  |                                   | Activities                         |                   |        | MBS    |        |           | Investment |       |       | Total     |       
|                                  |                                   |                                    |                   |        |        |        |           |            |       |       |           |       
|                                  |                                   | (Dollars in thousands)             |                  
|Three Months Ended March 31, 2006 |                                   |                                    |                   |        |        |        |           |            |       |       |           |        |        |        |           |       
|Operating Results                 |                                   |                                    |                   |        |        |        |           |            |       |       |           |        |        |        |           |       
|Net interest income               |                                   | $                                  | 9,997             |        |        | $      | 10,172    |            |       | $     | 23,968    |        |        | $      | 44,137    |       
|Provision for loan losses         |                                   |                                    |                  |        |        |        |          |            |       |       | (1,750    | )      |        |        | (1,750    | )     
|Gain (loss) on sale of loans      |                                   |                                    | 4,706             |        |        |        |          |            |       |       | 122       |        |        |        | 4,828     |       
|Service fee income                |                                   |                                    | 25,041            |        |        |        |          |            |       |       |          |        |        |        | 25,041    |       
|Gain (loss) on sale of securities |                                   |                                    | (1,123            | )      |        |        | (678      | )          |       |       | 384       |        |        |        | (1,417    | )     
|Other income                      |                                   |                                    | 867               |        |        |        |          |            |       |       | 332       |        |        |        | 1,199     |       
|                                  |                                   |                                    |                   |        |        |        |           |            |       |       |           |       
|                                  | Net revenues (expense)            |                                    |                   | 39,488 |        |        |           | 9,494      |       |       |           | 23,056 |        |        |           | 72,038 |       
|                                  | Variable expenses                 |                                    |                   | 949    |        |        |           |           |       |       |           |       |        |        |           | 949    |       
|                                  | Deferral of expenses under FAS 91 |                                    |                   | (827   | )      |        |           |           |       |       |           |       |        |        |           | (827   | )     
|                                  | Fixed expenses                    |                                    |                   | 10,479 |        |        |           | 228        |       |       |           | 857    |        |        |           | 11,564 |       
|                                  |                                   |                                    |                   |        |        |        |           |            |       |       |           |       
|                                  |                                   | Pretax income (loss)               |                   |        | 28,887 |        |           |            | 9,266 |       |           |        | 22,199 |        |           |        | 60,352 |       
|                                  |                                   |                                    |                   |        |        |        |           |            |       |       |           |       
|                                  |                                   |                                    | Net income (loss) |        | $      | 17,477 |           |            | $     | 5,606 |           |        | $      | 13,430 |           |        | $      | 36,513 | 
|                                  |                                   |                                    |                   |        |        |        |           |            |       |       |           |       
|Balance Sheet Data                |                                   |                                    |                   |        |        |        |           |            |       |       |           |        |        |        |           |       
|Average interest-earning assets   |                                   | $                                  | 597,811           |        |        | $      | 2,659,112 |            |       | $     | 5,521,606 |        |        | $      | 8,778,529 |       
|Allocated capital                 |                                   | $                                  | 237,195           |        |        | $      | 49,510    |            |       | $     | 219,911   |        |        | $      | 506,616   |       
|Performance Ratios                |                                   |                                    |                   |        |        |        |           |            |       |       |           |        |        |        |           |       
|Return on equity (ROE)            |                                   |                                    | 30                | %      |        |        | 46        | %          |       |       | 25        | %      |        |        | 29        | %     
|Net interest margin               |                                   |                                    | 6.78              | %      |        |        | 1.55      | %          |       |       | 1.76      | %      |        |        | 2.04      | %     
|MBR margin                        |                                   |                                    | 1.52              | %      |        |        | N/A       |            |       |       | N/A       |        |        |        | 1.56      | %     
|Efficiency ratio                  |                                   |                                    | 27                | %      |        |        | 2         | %          |       |       | 3         | %      |        |        | 16        | %     
|Operating Data                    |                                   |                                    |                   |        |        |        |           |            |       |       |           |        |        |        |           |       
|Loan production                   |                                   | $                                  | 317,525           |        |        | $      |          |            |       | $     |          |        |        | $      | 317,525   |       
|Loans sold                        |                                   | $                                  | 309,466           |        |        | $      |          |            |       | $     |          |        |        | $      | 309,466   |       

|                                  |                                   |                                    |                   |        |        |       |           |            |       |       |           |        |        |        |           |        |        |        | 
|--------------------------------- | --------------------------------- | ---------------------------------- | ----------------- | ------ | ------ | ----- | --------- | ---------- | ----- | ----- | --------- | ------ | ------ | ------ | --------- | ------ | ------ | ------ | 
|                                  |                                   | Home Loans and Related Investments |                  
|                                  |                                   |                                    |                  
|                                  |                                   | Retained Assets                    |                   |        |        |       | SFR Loans |            |       |      
|                                  |                                   | and Retention                      |                   |        |        |       | Held for  |            |       |      
|                                  |                                   | Activities                         |                   |        | MBS    |       |           | Investment |       |       | Total     |       
|                                  |                                   |                                    |                   |        |        |       |           |            |       |       |           |       
|                                  |                                   | (Dollars in thousands)             |                  
|Three Months Ended March 31, 2005 |                                   |                                    |                   |        |        |       |           |            |       |       |           |        |        |        |           |       
|Operating Results                 |                                   |                                    |                   |        |        |       |           |            |       |       |           |        |        |        |           |       
|Net interest income               |                                   | $                                  | 13,335            |        |        | $     | 9,192     |            |       | $     | 18,791    |        |        | $      | 41,318    |       
|Provision for loan losses         |                                   |                                    |                  |        |        |       |          |            |       |       | (950      | )      |        |        | (950      | )     
|Gain (loss) on sale of loans      |                                   |                                    | 2,494             |        |        |       |          |            |       |       | 377       |        |        |        | 2,871     |       
|Service fee income                |                                   |                                    | 6,918             |        |        |       |          |            |       |       |          |        |        |        | 6,918     |       
|Gain (loss) on sale of securities |                                   |                                    | (5,504            | )      |        |       | 52        |            |       |       |          |        |        |        | (5,452    | )     
|Other income                      |                                   |                                    | 711               |        |        |       |          |            |       |       | (1        | )      |        |        | 710       |       
|                                  |                                   |                                    |                   |        |        |       |           |            |       |       |           |       
|                                  | Net revenues (expense)            |                                    |                   | 17,954 |        |       |           | 9,244      |       |       |           | 18,217 |        |        |           | 45,415 |       
|                                  | Variable expenses                 |                                    |                   | 1,013  |        |       |           |           |       |       |           |       |        |        |           | 1,013  |       
|                                  | Deferral of expenses under FAS 91 |                                    |                   | (199   | )      |       |           |           |       |       |           |       |        |        |           | (199   | )     
|                                  | Fixed expenses                    |                                    |                   | 6,203  |        |       |           | 216        |       |       |           | 583    |        |        |           | 7,002  |       
|                                  |                                   |                                    |                   |        |        |       |           |            |       |       |           |       
|                                  |                                   | Pretax income (loss)               |                   |        | 10,937 |       |           |            | 9,028 |       |           |        | 17,634 |        |           |        | 37,599 |       
|                                  |                                   |                                    |                   |        |        |       |           |            |       |       |           |       
|                                  |                                   |                                    | Net income (loss) |        | $      | 6,617 |           |            | $     | 5,462 |           |        | $      | 10,669 |           |        | $      | 22,748 | 
|                                  |                                   |                                    |                   |        |        |       |           |            |       |       |           |       
|Balance Sheet Data                |                                   |                                    |                   |        |        |       |           |            |       |       |           |        |        |        |           |       
|Average interest-earning assets   |                                   | $                                  | 865,899           |        |        | $     | 2,177,781 |            |       | $     | 4,628,415 |        |        | $      | 7,672,095 |       
|Allocated capital                 |                                   | $                                  | 148,079           |        |        | $     | 38,186    |            |       | $     | 180,067   |        |        | $      | 366,332   |       
|Performance Ratios                |                                   |                                    |                   |        |        |       |           |            |       |       |           |        |        |        |           |       
|Return on equity (ROE)            |                                   |                                    | 18                | %      |        |       | 58        | %          |       |       | 24        | %      |        |        | 25        | %     
|Net interest margin               |                                   |                                    | 6.25              | %      |        |       | 1.71      | %          |       |       | 1.65      | %      |        |        | 2.18      | %     
|MBR margin                        |                                   |                                    | 1.73              | %      |        |       | N/A       |            |       |       | N/A       |        |        |        | 1.58      | %     
|Efficiency ratio                  |                                   |                                    | 39                | %      |        |       | 2         | %          |       |       | 3         | %      |        |        | 17        | %     
|Operating Data                    |                                   |                                    |                   |        |        |       |           |            |       |       |           |        |        |        |           |       
|Loan production                   |                                   | $                                  | 221,769           |        |        | $     |          |            |       | $     |          |        |        | $      | 221,769   |       
|Loans sold                        |                                   | $                                  | 364,734           |        |        | $     |          |            |       | $     | 59,088    |        |        | $      | 423,822   |       

20



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##### Table of Contents





|                                  |                                   |                                                |                   |       |             |       |           |         |       |       |        |     |      |      |           |        |        |       | 
|--------------------------------- | --------------------------------- | ---------------------------------------------- | ----------------- | ----- | ----------- | ----- | --------- | ------- | ----- | ----- | ------ | --- | ---- | ---- | --------- | ------ | ------ | ----- | 
|                                  |                                   | Specialty Commercial Loans Held for Investment |                  
|                                  |                                   |                                                |                  
|                                  |                                   | Single                                         |                   |       |             |       | Warehouse |         |       |      
|                                  |                                   | Spec                                           |                   |       | Subdivision |       |           | Lending |       |       | Total  |    
|                                  |                                   |                                                |                   |       |             |       |           |         |       |       |        |    
|                                  |                                   | (Dollars in thousands)                         |                  
|Three Months Ended March 31, 2006 |                                   |                                                |                   |       |             |       |           |         |       |       |        |     |      |      |           |       
|Operating Results                 |                                   |                                                |                   |       |             |       |           |         |       |       |        |     |      |      |           |       
|Net interest income               |                                   | $                                              | 3,962             |       |             | $     | 12,665    |         |       | $     | 414    |     |      | $    | 17,041    |       
|Provision for loan losses         |                                   |                                                | (72               | )     |             |       | (250      | )       |       |       | (71    | )   |      |      | (393      | )     
|Gain (loss) on sale of loans      |                                   |                                                |                  |       |             |       |          |         |       |       |       |     |      |      |          |       
|Service fee income                |                                   |                                                |                  |       |             |       |          |         |       |       |       |     |      |      |          |       
|Gain (loss) on sale of securities |                                   |                                                |                  |       |             |       |          |         |       |       |       |     |      |      |          |       
|Other income                      |                                   |                                                | 877               |       |             |       | 236       |         |       |       | 295    |     |      |      | 1,408     |       
|                                  |                                   |                                                |                   |       |             |       |           |         |       |       |        |    
|                                  | Net revenues (expense)            |                                                |                   | 4,767 |             |       |           | 12,651  |       |       |        | 638 |      |      |           | 18,056 |       
|                                  | Variable expenses                 |                                                |                   | 630   |             |       |           | 2,628   |       |       |        |    |      |      |           | 3,258  |       
|                                  | Deferral of expenses under FAS 91 |                                                |                   | (77   | )           |       |           | (1,450  | )     |       |        |    |      |      |           | (1,527 | )     
|                                  | Fixed expenses                    |                                                |                   | 366   |             |       |           | 2,152   |       |       |        | 822 |      |      |           | 3,340  |       
|                                  |                                   |                                                |                   |       |             |       |           |         |       |       |        |    
|                                  |                                   | Pretax income (loss)                           |                   |       | 3,848       |       |           |         | 9,321 |       |        |     | (184 | )    |           |        | 12,985 |      
|                                  |                                   |                                                |                   |       |             |       |           |         |       |       |        |    
|                                  |                                   |                                                | Net income (loss) |       | $           | 2,328 |           |         | $     | 5,639 |        |     | $    | (111 | )         |        | $      | 7,856 | 
|                                  |                                   |                                                |                   |       |             |       |           |         |       |       |        |    
|Balance Sheet Data                |                                   |                                                |                   |       |             |       |           |         |       |       |        |     |      |      |           |       
|Average interest-earning assets   |                                   | $                                              | 241,060           |       |             | $     | 971,064   |         |       | $     | 56,218 |     |      | $    | 1,268,342 |       
|Allocated capital                 |                                   | $                                              | 18,479            |       |             | $     | 95,000    |         |       | $     | 5,513  |     |      | $    | 118,992   |       
|Performance Ratios                |                                   |                                                |                   |       |             |       |           |         |       |       |        |     |      |      |           |       
|Return on equity (ROE)            |                                   |                                                | 51                | %     |             |       | 24        | %       |       |       | N/A    |     |      |      | 27        | %     
|Net interest margin               |                                   |                                                | 6.67              | %     |             |       | 5.29      | %       |       |       | N/A    |     |      |      | 5.45      | %     
|Efficiency ratio                  |                                   |                                                | 19                | %     |             |       | 26        | %       |       |       | N/A    |     |      |      | 27        | %     
|Operating Data                    |                                   |                                                |                   |       |             |       |           |         |       |       |        |     |      |      |           |       
|Loan production                   |                                   | $                                              | 46,489            |       |             | $     | 362,785   |         |       | $     |       |     |      | $    | 409,274   |       
|Loans sold                        |                                   | $                                              |                  |       |             | $     |          |         |       | $     |       |     |      | $    |          |       

|                                  |                                   |                                                |                   |       |             |     |           |         |       |       |       |     |      |      |         |        |       |       | 
|--------------------------------- | --------------------------------- | ---------------------------------------------- | ----------------- | ----- | ----------- | --- | --------- | ------- | ----- | ----- | ----- | --- | ---- | ---- | ------- | ------ | ----- | ----- | 
|                                  |                                   | Specialty Commercial Loans Held for Investment |                  
|                                  |                                   |                                                |                  
|                                  |                                   | Single                                         |                   |       |             |     | Warehouse |         |       |      
|                                  |                                   | Spec                                           |                   |       | Subdivision |     |           | Lending |       |       | Total |    
|                                  |                                   |                                                |                   |       |             |     |           |         |       |       |       |    
|                                  |                                   | (Dollars in thousands)                         |                  
|Three Months Ended March 31, 2005 |                                   |                                                |                   |       |             |     |           |         |       |       |       |     |      |      |         |       
|Operating Results                 |                                   |                                                |                   |       |             |     |           |         |       |       |       |     |      |      |         |       
|Net interest income               |                                   | $                                              | 2,298             |       |             | $   | 8,928     |         |       | $     | 2     |     |      | $    | 11,228  |       
|Provision for loan losses         |                                   |                                                | (119              | )     |             |     | (400      | )       |       |       |      |     |      |      | (519    | )     
|Gain (loss) on sale of loans      |                                   |                                                |                  |       |             |     |          |         |       |       |      |     |      |      |        |       
|Service fee income                |                                   |                                                |                   |       |             |     |          |         |       |       |      |     |      |      |        |       
|Gain (loss) on sale of securities |                                   |                                                |                  |       |             |     |          |         |       |       |      |     |      |      |        |       
|Other income                      |                                   |                                                | 205               |       |             |     | 704       |         |       |       | 6     |     |      |      | 915     |       
|                                  |                                   |                                                |                   |       |             |     |           |         |       |       |       |    
|                                  | Net revenues (expense)            |                                                |                   | 2,384 |             |     |           | 9,232   |       |       |       | 8   |      |      |         | 11,624 |      
|                                  | Variable expenses                 |                                                |                   | 776   |             |     |           | 2,921   |       |       |       |    |      |      |         | 3,697  |      
|                                  | Deferral of expenses under FAS 91 |                                                |                   | (135  | )           |     |           | (1,241  | )     |       |       |    |      |      |         | (1,376 | )    
|                                  | Fixed expenses                    |                                                |                   | 395   |             |     |           | 1,009   |       |       |       | 576 |      |      |         | 1,980  |      
|                                  |                                   |                                                |                   |       |             |     |           |         |       |       |       |    
|                                  |                                   | Pretax income (loss)                           |                   |       | 1,348       |     |           |         | 6,543 |       |       |     | (568 | )    |         |        | 7,323 |      
|                                  |                                   |                                                |                   |       |             |     |           |         |       |       |       |    
|                                  |                                   |                                                | Net income (loss) |       | $           | 816 |           |         | $     | 3,959 |       |     | $    | (344 | )       |        | $     | 4,431 | 
|                                  |                                   |                                                |                   |       |             |     |           |         |       |       |       |    
|Balance Sheet Data                |                                   |                                                |                   |       |             |     |           |         |       |       |       |     |      |      |         |       
|Average interest-earning assets   |                                   | $                                              | 144,300           |       |             | $   | 671,861   |         |       | $     | 147   |     |      | $    | 816,308 |       
|Allocated capital                 |                                   | $                                              | 10,994            |       |             | $   | 60,173    |         |       | $     | 16    |     |      | $    | 71,183  |       
|Performance Ratios                |                                   |                                                |                   |       |             |     |           |         |       |       |       |     |      |      |         |       
|Return on equity (ROE)            |                                   |                                                | 30                | %     |             |     | 27        | %       |       |       | N/A   |     |      |      | 25      | %     
|Net interest margin               |                                   |                                                | 6.46              | %     |             |     | 5.39      | %       |       |       | N/A   |     |      |      | 5.58    | %     
|Efficiency ratio                  |                                   |                                                | 41                | %     |             |     | 28        | %       |       |       | N/A   |     |      |      | 35      | %     
|Operating Data                    |                                   |                                                |                   |       |             |     |           |         |       |       |       |     |      |      |         |       
|Loan production                   |                                   | $                                              | 74,398            |       |             | $   | 353,489   |         |       | $     |      |     |      | $    | 427,887 |       
|Loans sold                        |                                   | $                                              |                  |       |             | $   |          |         |       | $     |      |     |      | $    |        |       

21



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##### Table of Contents





|                                  |                                   |                        |                   |       |        |        |        |            |        |        |              |       |        |                |         |        |         |         |         |        |         |         |  
|--------------------------------- | --------------------------------- | ---------------------- | ----------------- | ----- | ------ | ------ | ------ | ---------- | ------ | ------ | ------------ | ----- | ------ | -------------- | ------- | ------ | ------- | ------- | ------- | ------ | ------- | ------- | -
|Three Months Ended                |                                   |                        |                   |       |        |        |        |            |        |       
|March 31, 2006                    |                                   | Servicing OH           |                   |       | MB OH  |        |        | Deposit OH |        |        | Corporate OH |       |        | Total Overhead |        
|                                  |                                   |                        |                   |       |        |        |        |            |        |        |              |       |        |                |        
|                                  |                                   | (Dollars in thousands) |                  
|Operating Results                 |                                   |                        |                   |       |        |        |        |            |        |        |              |       |        |                |         |        |         |         |         |       
|Net interest income               |                                   | $                      | (32               | )     |        | $      | (114   | )          |        | $      | 2,898        |       |        | $              | (1,795  | )      |         | $       | 957     |       
|Provision for loan losses         |                                   |                        |                  |       |        |        |       |            |        |        |             |       |        |                |        |        |         |         |        |       
|Gain (loss) on sale of loans      |                                   |                        |                  |       |        |        |       |            |        |        |             |       |        |                |        |        |         |         |        |       
|Service fee income                |                                   |                        |                  |       |        |        |       |            |        |        |             |       |        |                | 391     |        |         |         | 391     |       
|Gain (loss) on sale of securities |                                   |                        |                  |       |        |        |       |            |        |        |             |       |        |                |        |        |         |         |        |       
|Other income                      |                                   |                        | 669               |       |        |        | 197    |            |        |        | 790          |       |        |                | (524    | )      |         |         | 1,132   |       
|                                  |                                   |                        |                   |       |        |        |        |            |        |        |              |       |        |                |        
|                                  | Net revenues (expense)            |                        |                   | 637   |        |        |        | 83         |        |        |              | 3,688 |        |                |         | (1,928 | )       |         |         | 2,480  |        
|                                  | Variable expenses                 |                        |                   |      |        |        |        |           |        |        |              |      |        |                |         |       |         |         |         |       |        
|                                  | Deferral of expenses under FAS 91 |                        |                   |      |        |        |        |           |        |        |              |      |        |                |         |       |         |         |         |       |        
|                                  | Fixed expenses                    |                        |                   | 4,258 |        |        |        | 9,513      |        |        |              | 8,867 |        |                |         | 38,133 |         |         |         | 60,771 |        
|                                  |                                   |                        |                   |       |        |        |        |            |        |        |              |       |        |                |        
|                                  |                                   | Pretax income (loss)   |                   |       | (3,621 | )      |        |            | (9,430 | )      |              |       | (5,179 | )              |         |        | (40,061 | )       |         |        | (58,291 | )      
|                                  |                                   |                        |                   |       |        |        |        |            |        |        |              |       |        |                |        
|                                  |                                   |                        | Net income (loss) |       | $      | (2,191 | )      |            | $      | (5,705 | )            |       | $      | (3,133         | )       |        | $       | (24,282 | )       |        | $       | (35,311 | )
|                                  |                                   |                        |                   |       |        |        |        |            |        |        |              |       |        |                |        
|Balance Sheet Data                |                                   |                        |                   |       |        |        |        |            |        |        |              |       |        |                |         |        |         |         |         |       
|Average interest-earning assets   |                                   | $                      |                  |       |        | $      | 3,614  |            |        | $      | 192          |       |        | $              | 33,481  |        |         | $       | 37,287  |       
|Allocated capital                 |                                   | $                      | 270               |       |        | $      | 12,239 |            |        | $      | 1,792        |       |        | $              | 206,551 |        |         | $       | 220,852 |       
|Performance Ratios                |                                   |                        |                   |       |        |        |        |            |        |        |              |       |        |                |         |        |         |         |         |       
|Return on equity (ROE)            |                                   |                        | N/A               |       |        |        | N/A    |            |        |        | N/A          |       |        |                | N/A     |        |         |         | N/A     |       
|Net interest margin               |                                   |                        | N/A               |       |        |        | N/A    |            |        |        | N/A          |       |        |                | N/A     |        |         |         | N/A     |       
|Efficiency ratio                  |                                   |                        | N/A               |       |        |        | N/A    |            |        |        | N/A          |       |        |                | N/A     |        |         |         | N/A     |       
|Operating Data                    |                                   |                        |                   |       |        |        |        |            |        |        |              |       |        |                |         |        |         |         |         |       
|Loan production                   |                                   | $                      |                  |       |        | $      |       |            |        | $      |             |       |        | $              |        |        |         | $       |        |       
|Loans sold                        |                                   | $                      |                  |       |        | $      |       |            |        | $      |             |       |        | $              |        |        |         | $       |        |       

|                                  |                                   |                        |                   |       |        |        |       |            |        |        |              |       |        |                |         |         |         |         |         |        |         |         |  
|--------------------------------- | --------------------------------- | ---------------------- | ----------------- | ----- | ------ | ------ | ----- | ---------- | ------ | ------ | ------------ | ----- | ------ | -------------- | ------- | ------- | ------- | ------- | ------- | ------ | ------- | ------- | -
|Three Months Ended                |                                   |                        |                   |       |        |        |       |            |        |       
|March 31, 2005                    |                                   | Servicing OH           |                   |       | MB OH  |        |       | Deposit OH |        |        | Corporate OH |       |        | Total Overhead |        
|                                  |                                   |                        |                   |       |        |        |       |            |        |        |              |       |        |                |        
|                                  |                                   | (Dollars in thousands) |                  
|Operating Results                 |                                   |                        |                   |       |        |        |       |            |        |        |              |       |        |                |         |         |         |         |         |       
|Net interest income               |                                   | $                      | (327              | )     |        | $      | 288   |            |        | $      | 1,212        |       |        | $              | (2,435  | )       |         | $       | (1,262  | )     
|Provision for loan losses         |                                   |                        |                  |       |        |        |      |            |        |        |             |       |        |                |        |         |         |         |        |       
|Gain (loss) on sale of loans      |                                   |                        |                  |       |        |        |      |            |        |        |             |       |        |                |        |         |         |         |        |       
|Service fee income                |                                   |                        |                  |       |        |        |      |            |        |        |             |       |        |                | (6,410  | )       |         |         | (6,410  | )     
|Gain (loss) on sale of securities |                                   |                        |                  |       |        |        |      |            |        |        |             |       |        |                |        |         |         |         |        |       
|Other income                      |                                   |                        | 354               |       |        |        | (1    | )          |        |        | 504          |       |        |                | (1,375  | )       |         |         | (518    | )     
|                                  |                                   |                        |                   |       |        |        |       |            |        |        |              |       |        |                |        
|                                  | Net revenues (expense)            |                        |                   | 27    |        |        |       | 287        |        |        |              | 1,716 |        |                |         | (10,220 | )       |         |         | (8,190 | )      
|                                  | Variable expenses                 |                        |                   |      |        |        |       |           |        |        |              |      |        |                |         |        |         |         |         |       |        
|                                  | Deferral of expenses under FAS 91 |                        |                   |      |        |        |       |           |        |        |              |      |        |                |         |        |         |         |         |       |        
|                                  | Fixed expenses                    |                        |                   | 4,669 |        |        |       | 7,428      |        |        |              | 6,117 |        |                |         | 40,151  |         |         |         | 58,365 |        
|                                  |                                   |                        |                   |       |        |        |       |            |        |        |              |       |        |                |        
|                                  |                                   | Pretax income (loss)   |                   |       | (4,642 | )      |       |            | (7,141 | )      |              |       | (4,401 | )              |         |         | (50,371 | )       |         |        | (66,555 | )      
|                                  |                                   |                        |                   |       |        |        |       |            |        |        |              |       |        |                |        
|                                  |                                   |                        | Net income (loss) |       | $      | (2,808 | )     |            | $      | (4,320 | )            |       | $      | (2,663         | )       |         | $       | (30,685 | )       |        | $       | (40,476 | )
|                                  |                                   |                        |                   |       |        |        |       |            |        |        |              |       |        |                |        
|Balance Sheet Data                |                                   |                        |                   |       |        |        |       |            |        |        |              |       |        |                |         |         |         |         |         |       
|Average interest-earning assets   |                                   | $                      |                  |       |        | $      |      |            |        | $      | 180          |       |        | $              | 30,954  |         |         | $       | 31,134  |       
|Allocated capital                 |                                   | $                      | 4,515             |       |        | $      | 5,171 |            |        | $      | 1,062        |       |        | $              | 386,441 |         |         | $       | 397,189 |       
|Performance Ratios                |                                   |                        |                   |       |        |        |       |            |        |        |              |       |        |                |         |         |         |         |         |       
|Return on equity (ROE)            |                                   |                        | N/A               |       |        |        | N/A   |            |        |        | N/A          |       |        |                | N/A     |         |         |         | N/A     |       
|Net interest margin               |                                   |                        | N/A               |       |        |        | N/A   |            |        |        | N/A          |       |        |                | N/A     |         |         |         | N/A     |       
|Efficiency ratio                  |                                   |                        | N/A               |       |        |        | N/A   |            |        |        | N/A          |       |        |                | N/A     |         |         |         | N/A     |       
|Operating Data                    |                                   |                        |                   |       |        |        |       |            |        |        |              |       |        |                |         |         |         |         |         |       
|Loan production                   |                                   | $                      |                  |       |        | $      |      |            |        | $      |             |       |        | $              |        |         |         | $       |        |       
|Loans sold                        |                                   | $                      |                  |       |        | $      |      |            |        | $      |             |       |        | $              |        |         |         | $       |        |       

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LOAN PRODUCTION












|                                               |  |                                      |        |   |           |   |        |         |  |  |              |   |  |         |        |   |  |  |    |  
|---------------------------------------------- |  | ------------------------------------ | ------ | - | --------- | - | ------ | ------- |  |  | ------------ | - |  | ------- | ------ | - |  |  | -- | -
|                                               |  | As of and for the Three Months Ended |       
|                                               |  |                                      |       
|                                               |  | March 31,                            |        |   | March 31, |   |        | Percent |  |  | December 31, |   |  | Percent |       
|                                               |  | 2006                                 |        |   | 2005      |   |        | Change  |  |  | 2005         |   |  | Change  |       
|                                               |  |                                      |        |   |           |   |        |         |  |  |              |   |  |         |       
|                                               |  | (Dollars in millions)                |       
|Production and Pipeline by Purpose:            |  |                                      |        |   |           |   |        |         |  |  |              |   |  |         |        |   |  |  |    |  
|Mortgage loan production:                      |  |                                      |        |   |           |   |        |         |  |  |              |   |  |         |        |   |  |  |    |  
|Purchase transactions                          |  | $                                    | 7,778  |   |           | $ | 4,895  |         |  |  | 59           | % |  | $       | 6,917  |   |  |  | 12 | %
|Cash-out refinance transactions                |  |                                      | 9,779  |   |           |   | 5,342  |         |  |  | 83           | % |  |         | 8,745  |   |  |  | 12 | %
|Rate/term refinance transactions               |  |                                      | 2,420  |   |           |   | 1,365  |         |  |  | 77           | % |  |         | 2,363  |   |  |  | 2  | %
|                                               |  |                                      |        |   |           |   |        |         |  |  |              |   |  |         |       
|Total mortgage loan production                 |  | $                                    | 19,977 |   |           | $ | 11,602 |         |  |  | 72           | % |  | $       | 18,025 |   |  |  | 11 | %
|                                               |  |                                      |        |   |           |   |        |         |  |  |              |   |  |         |       
|% purchase and cash-out refinance transactions |  |                                      | 88     | % |           |   | 88     | %       |  |  |              |   |  |         | 87     | % |  |  |    |  
|Mortgage industry market share                 |  |                                      | 3.89   | % |           |   | 1.87   | %       |  |  | 108          | % |  |         | 2.91   | % |  |  | 34 | %
|Mortgage pipeline:                             |  |                                      |        |   |           |   |        |         |  |  |              |   |  |         |        |   |  |  |    |  
|Purchase transactions                          |  | $                                    | 4,517  |   |           | $ | 3,296  |         |  |  | 37           | % |  | $       | 3,617  |   |  |  | 25 | %
|Cash-out refinance transactions                |  |                                      | 4,558  |   |           |   | 3,036  |         |  |  | 50           | % |  |         | 4,332  |   |  |  | 5  | %
|Rate/term refinance transactions               |  |                                      | 1,349  |   |           |   | 1,157  |         |  |  | 17           | % |  |         | 1,237  |   |  |  | 9  | %
|                                               |  |                                      |        |   |           |   |        |         |  |  |              |   |  |         |       
|Mortgage pipeline at period end(1)             |  | $                                    | 10,424 |   |           | $ | 7,489  |         |  |  | 39           | % |  | $       | 9,186  |   |  |  | 13 | %
|                                               |  |                                      |        |   |           |   |        |         |  |  |              |   |  |         |       
|% purchase and cash-out refinance transactions |  |                                      | 87     | % |           |   | 85     | %       |  |  |              |   |  |         | 87     | % |  |  |    |  

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|                                                                         |                           |                    |     |    |           |  |     |              |   |  |     |    |  
|------------------------------------------------------------------------ | ------------------------- | ------------------ | --- | -- | --------- |  | --- | ------------ | - |  | --- | -- | -
|                                                                         |                           | Three Months Ended |    
|                                                                         |                           |                    |    
|                                                                         |                           | March 31,          |     |    | March 31, |  |     | December 31, |  
|                                                                         |                           | 2006               |     |    | 2005      |  |     | 2005         |  
|                                                                         |                           |                    |     |    |           |  |     |              |  
|Production by Amortization Type as a Percent of Mortgage
    Production: |                           |                    |     |    |           |  |     |              |   |  |     |   
|                                                                         | Fixed Rate Mortgages      |                    |     | 30 | %         |  |     | 25           | % |  |     | 30 | %
|                                                                         | Option ARMs               |                    |     | 27 | %         |  |     | 33           | % |  |     | 26 | %
|                                                                         | ARMs and Hybrid ARMs      |                    |     | 20 | %         |  |     | 17           | % |  |     | 20 | %
|                                                                         | Hybrid ARMs Interest Only |                    |     | 23 | %         |  |     | 25           | % |  |     | 24 | %
|                                                                         |                           |                    |     |    |           |  |     |              |  
|                                                                         |                           |                    | 100 | %  |           |  | 100 | %            |   |  | 100 | % 
|                                                                         |                           |                    |     |    |           |  |     |              |  






|    |                                                                                                                                                                                                                       
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The amount does not include $1,257 million,
    $634 million, and $1,302 million of bulk rate lock
    commitments in the conduit pipeline at March 31, 2006,
    March 31, 2005, and December 31, 2005, respectively.

|                                                          |                   |                              |        |        |           |  |       |         |        |  |              |     |    |         |        |        |        |  |     |     |    |  
|--------------------------------------------------------- | ----------------- | ---------------------------- | ------ | ------ | --------- |  | ----- | ------- | ------ |  | ------------ | --- | -- | ------- | ------ | ------ | ------ |  | --- | --- | -- | -
|                                                          |                   | Three Months Ended           |       
|                                                          |                   |                              |       
|                                                          |                   | March 31,                    |        |        | March 31, |  |       | Percent |        |  | December 31, |     |    | Percent |       
|                                                          |                   | 2006                         |        |        | 2005      |  |       | Change  |        |  | 2005         |     |    | Change  |       
|                                                          |                   |                              |        |        |           |  |       |         |        |  |              |     |    |         |       
|                                                          |                   | (Dollars in millions)        |       
|Total Production:                                         |                   |                              |        |        |           |  |       |         |        |  |              |     |    |         |        |        |        |  |     |    
|Standard First Mortgage Products:                         |                   |                              |        |        |           |  |       |         |        |  |              |     |    |         |        |        |        |  |     |    
|                                                          | Alt-A             |                              | $      | 15,117 |           |  | $     | 8,545   |        |  |              | 77  | %  |         | $      | 13,353 |        |  |     | 13  | % 
|                                                          | Jumbo             |                              |        | 332    |           |  |       | 518     |        |  |              | (36 | )% |         |        | 594    |        |  |     | (44 | )%
|                                                          | Agency conforming |                              |        | 279    |           |  |       | 287     |        |  |              | (3  | )% |         |        | 249    |        |  |     | 12  | % 
|                                                          | Subprime          |                              |        | 554    |           |  |       | 485     |        |  |              | 14  | %  |         |        | 700    |        |  |     | (21 | )%
|                                                          |                   |                              |        |        |           |  |       |         |        |  |              |     |    |         |       
|Total standard first mortgage products (S&P evaluated)(1) |                   |                              | 16,282 |        |           |  | 9,835 |         |        |  | 66           | %   |    |         | 14,896 |        |        |  | 9   | %  
|Specialty Consumer Home Mortgage Products:                |                   |                              |        |        |           |  |       |         |        |  |              |     |    |         |        |        |        |  |     |    
|Home equity line of credit/ Seconds                       |                   |                              | 1,643  |        |           |  | 561   |         |        |  | 193          | %   |    |         | 1,234  |        |        |  | 33  | %  
|Reverse mortgages                                         |                   |                              | 1,118  |        |           |  | 507   |         |        |  | 121          | %   |    |         | 955    |        |        |  | 17  | %  
|Consumer construction                                     |                   |                              | 934    |        |           |  | 699   |         |        |  | 34           | %   |    |         | 940    |        |        |  | (1  | )% 
|                                                          |                   |                              |        |        |           |  |       |         |        |  |              |     |    |         |       
|                                                          |                   | Subtotal mortgage production |        |        | 19,977    |  |       |         | 11,602 |  |              |     | 72 | %       |        |        | 18,025 |  |     |     | 11 | %
|Builder construction commitments                          |                   |                              | 363    |        |           |  | 353   |         |        |  | 3            | %   |    |         | 453    |        |        |  | (20 | )% 
|                                                          |                   |                              |        |        |           |  |       |         |        |  |              |     |    |         |       
|                                                          |                   | Total production             |        | $      | 20,340    |  |       | $       | 11,955 |  |              |     | 70 | %       |        | $      | 18,478 |  |     |     | 10 | %
|                                                          |                   |                              |        |        |           |  |       |         |        |  |              |     |    |         |       

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|                                         |  |                       |      |   |                |   |         |                   |  |  |            |         |  |           |       |   |            |  |      |   |  |   |        |  
|---------------------------------------- |  | --------------------- | ---- | - | -------------- | - | ------- | ----------------- |  |  | ---------- | ------- |  | --------- | ----- | - | ---------- |  | ---- | - |  | - | ------ | -
|                                         |  | Three Months Ended    |     
|                                         |  |                       |     
|                                         |  | March 31, 2006        |      |   | March 31, 2005 |   |         | December 31, 2005 | 
|                                         |  |                       |      |   |                |   |         |                   | 
|                                         |  | Average               |      |   |                |   | Average |                   |  |  |            | Average |  |           |      
|                                         |  | Lifetime              |      |   | Percent of     |   |         | Lifetime          |  |  | Percent of |         |  | Lifetime  |       |   | Percent of | 
|                                         |  | Loss Rate             |      |   | Total          |   |         | Loss Rate         |  |  | Total      |         |  | Loss Rate |       |   | Total      | 
|                                         |  |                       |      |   |                |   |         |                   |  |  |            |         |  |           |       |   |            | 
|                                         |  | (Dollars in millions) |     
|Volume by S&P Lifetime Loss Estimate(1): |  |                       |      |   |                |   |         |                   |  |  |            |         |  |           |       |   |            |  |      |   |  |   |        |  
|Agency conforming equivalent (<45 bps)   |  |                       | 0.22 | % |                |   | 58      | %                 |  |  | 0.21       | %       |  |           | 66    | % |            |  | 0.20 | % |  |   | 63     | %
|Prime Alt-A Equivalent (45-80 bps)       |  |                       | 0.59 | % |                |   | 28      | %                 |  |  | 0.58       | %       |  |           | 25    | % |            |  | 0.59 | % |  |   | 26     | %
|Subprime Equivalent (>80 bps)            |  |                       | 1.57 | % |                |   | 14      | %                 |  |  | 1.99       | %       |  |           | 9     | % |            |  | 2.05 | % |  |   | 11     | %
|                                         |  |                       |      |   |                |   |         |                   |  |  |            |         |  |           |       |   |            | 
|Total S&P lifetime loss estimate         |  |                       | 0.51 | % |                |   | 100     | %                 |  |  | 0.47       | %       |  |           | 100   | % |            |  | 0.51 | % |  |   | 100    | %
|                                         |  |                       |      |   |                |   |         |                   |  |  |            |         |  |           |       |   |            | 
|Total S&P evaluated production           |  |                       |      |   |                | $ | 16,282  |                   |  |  |            |         |  | $         | 9,835 |   |            |  |      |   |  | $ | 14,896 |  
|                                         |  |                       |      |   |                |   |         |                   |  |  |            |         |  |           |       |   |            | 






|    |                                                                                                                                                                                                                             
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | While Indymac production is evaluated using the S&P Levels
    model, the data are not audited or endorsed by S&P. S&P
    evaluated production excludes second liens, HELOC, reverse
    mortgages, and construction loans.



|                         |            |           |  |    |           |   |  |              |     |   |  |    |     |  
|------------------------ | ---------- | --------- |  | -- | --------- | - |  | ------------ | --- | - |  | -- | --- | -
|                         |            | March 31, |  |    | March 31, |   |  | December 31, |    
|                         |            | 2006      |  |    | 2005      |   |  | 2005         |    
|                         |            |           |  |    |           |   |  |              |    
|Geographic distribution: |            |           |  |    |           |   |  |              |     |   |  |   
|                         | California |           |  | 44 | %         |   |  | 46           | %   |   |  | 44 | %  
|                         | Florida    |           |  | 9  | %         |   |  | 8            | %   |   |  | 8  | %  
|                         | New York   |           |  | 6  | %         |   |  | 6            | %   |   |  | 6  | %  
|                         | Virginia   |           |  | 5  | %         |   |  | 3            | %   |   |  | 4  | %  
|                         | New Jersey |           |  | 4  | %         |   |  | 4            | %   |   |  | 4  | %  
|                         | Other      |           |  | 32 | %         |   |  | 33           | %   |   |  | 34 | %  
|                         |            |           |  |    |           |   |  |              |    
|                         |            | Total     |  |    | 100       | % |  |              | 100 | % |  |    | 100 | %
|                         |            |           |  |    |           |   |  |              |    

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|                            |                               |                                |                  |       |           |        |  |         |        |        |              |     |     |         |   |     |        |        |  |     |    |    |  
|--------------------------- | ----------------------------- | ------------------------------ | ---------------- | ----- | --------- | ------ |  | ------- | ------ | ------ | ------------ | --- | --- | ------- | - | --- | ------ | ------ |  | --- | -- | -- | -
|                            |                               | Three Months Ended             |                 
|                            |                               |                                |                 
|                            |                               | March 31,                      |                  |       | March 31, |        |  | Percent |        |        | December 31, |     |     | Percent |  
|Volume by Divisions:        |                               | 2006                           |                  |       | 2005      |        |  | Change  |        |        | 2005         |     |     | Change  |  
|                            |                               |                                |                  |       |           |        |  |         |        |        |              |     |     |         |  
|                            |                               | (Dollars in millions)          |                 
|Mortgage Loan Production:   |                               |                                |                  |       |           |        |  |         |        |        |              |     |     |         |   |     |        |        |  |    
|                            | Mortgage Professionals,       |                                |                  |       |           |        |  |         |        |        |              |     |     |         |   |     |        |        |  |     |   
|                            |                               | Wholesale                      |                  | $     | 8,781     |        |  | $       | 6,016  |        |              |     | 46  | %       |   | $   | 8,188  |        |  |     | 7  | % 
|                            |                               | Correspondent                  |                  |       | 2,276     |        |  |         | 893    |        |              |     | 155 | %       |   |     | 1,754  |        |  |     | 30 | % 
|                            |                               | Conduit                        |                  |       | 6,136     |        |  |         | 2,605  |        |              |     | 136 | %       |   |     | 5,281  |        |  |     | 16 | % 
|                            | Consumer Direct               |                                |                  | 525   |           |        |  | 686     |        |        |              | (23 | )%  |         |   | 667 |        |        |  | (21 | )%
|                            | Financial Freedom             |                                |                  | 1,118 |           |        |  | 507     |        |        |              | 121 | %   |         |   | 955 |        |        |  | 17  | % 
|                            | Servicing Retention           |                                |                  | 427   |           |        |  | 222     |        |        |              | 92  | %   |         |   | 353 |        |        |  | 21  | % 
|                            | Home Equity Division          |                                |                  | 30    |           |        |  | 42      |        |        |              | (29 | )%  |         |   | 53  |        |        |  | (43 | )%
|                            | Consumer Construction and Lot |                                |                  | 684   |           |        |  | 631     |        |        |              | 8   | %   |         |   | 774 |        |        |  | (12 | )%
|                            |                               |                                |                  |       |           |        |  |         |        |        |              |     |     |         |  
|                            |                               | Total Mortgage Loan Production |                  |       | 19,977    |        |  |         | 11,602 |        |              |     | 72  | %       |   |     | 18,025 |        |  |     | 11 | % 
|Commercial Loan Production: |                               |                                |                  |       |           |        |  |         |        |        |              |     |     |         |   |     |        |        |  |    
|                            | Builder Construction          |                                |                  | 363   |           |        |  | 353     |        |        |              | 3   | %   |         |   | 453 |        |        |  | (20 | )%
|                            |                               |                                |                  |       |           |        |  |         |        |        |              |     |     |         |  
|                            |                               |                                | Total Production |       | $         | 20,340 |  |         | $      | 11,955 |              |     |     | 70      | % |     | $      | 18,478 |  |     |    | 10 | %
|                            |                               |                                |                  |       |           |        |  |         |        |        |              |     |     |         |  



|                                       |  |                    |       |  |           |  |       |         |  |  |              |   |  |         |       |  |  |  |    |  
|-------------------------------------- |  | ------------------ | ----- |  | --------- |  | ----- | ------- |  |  | ------------ | - |  | ------- | ----- |  |  |  | -- | -
|                                       |  | Three Months Ended |      
|                                       |  |                    |      
|                                       |  | March 31,          |       |  | March 31, |  |       | Percent |  |  | December 31, |   |  | Percent |      
|                                       |  | 2006               |       |  | 2005      |  |       | Change  |  |  | 2005         |   |  | Change  |      
|                                       |  |                    |       |  |           |  |       |         |  |  |              |   |  |         |      
|Key Production Drivers:                |  |                    |       |  |           |  |       |         |  |  |              |   |  |         |       |  |  |  |    |  
|Active customers during the quarter(1) |  |                    | 7,174 |  |           |  | 5,394 |         |  |  | 33           | % |  |         | 6,728 |  |  |  | 7  | %
|Sales personnel                        |  |                    | 811   |  |           |  | 640   |         |  |  | 27           | % |  |         | 712   |  |  |  | 14 | %
|Number of regional offices             |  |                    | 13    |  |           |  | 10    |         |  |  | 30           | % |  |         | 13    |  |  |  | 0  | %






|    |                                                                                                                     
|--- | --------------------------------------------------------------------------------------------------------------------
|(1) | Active customers are defined as customers who funded at least
    one loan during the most recent
    90-day period.

WAREHOUSE LENDING DIVISION




26



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##### Table of Contents






LOAN SALES




|                                |  |                        |            |   |           |   |           |         |  |  |              |    |  |         |            |   |  |  |     |   
|------------------------------- |  | ---------------------- | ---------- | - | --------- | - | --------- | ------- |  |  | ------------ | -- |  | ------- | ---------- | - |  |  | --- | --
|                                |  | Three Months Ended     |           
|                                |  |                        |           
|                                |  | March 31,              |            |   | March 31, |   |           | Percent |  |  | December 31, |    |  | Percent |           
|                                |  | 2006                   |            |   | 2005      |   |           | Change  |  |  | 2005         |    |  | Change  |           
|                                |  |                        |            |   |           |   |           |         |  |  |              |    |  |         |           
|                                |  | (Dollars in thousands) |           
|Total loans sold                |  | $                      | 16,708,187 |   |           | $ | 9,653,752 |         |  |  | 73           | %  |  | $       | 15,570,179 |   |  |  | 7   | % 
|Ratios:                         |  |                        |            |   |           |   |           |         |  |  |              |    |  |         |            |   |  |  |     |   
|Gross MBR margin before hedging |  |                        | 0.86       | % |           |   | 1.54      | %       |  |  | (44          | )% |  |         | 0.97       | % |  |  | (11 | )%
|Net MBR margin after hedging    |  |                        | 1.10       | % |           |   | 1.82      | %       |  |  | (40          | )% |  |         | 1.10       | % |  |  | 0   | % 





|                       |                  |                    |      |      |           |  |      |              |   |  |      |      |  
|---------------------- | ---------------- | ------------------ | ---- | ---- | --------- |  | ---- | ------------ | - |  | ---- | ---- | -
|                       |                  | Three Months Ended |     
|                       |                  |                    |     
|                       |                  | March 31,          |      |      | March 31, |  |      | December 31, |  
|MBR Margin by Channel: |                  | 2006               |      |      | 2005      |  |      | 2005         |  
|                       |                  |                    |      |      |           |  |      |              |  
|Wholesale              |                  |                    | 1.27 | %    |           |  | 1.97 | %            |   |  | 1.20 | %   
|Correspondent          |                  |                    | 0.66 | %    |           |  | 1.32 | %            |   |  | 0.53 | %   
|Conduit                |                  |                    | 0.40 | %    |           |  | 0.55 | %            |   |  | 0.49 | %   
|Consumer Direct        |                  |                    | 1.94 | %    |           |  | 2.45 | %            |   |  | 1.87 | %   
|Financial Freedom      |                  |                    | 2.83 | %    |           |  | 3.15 | %            |   |  | 2.89 | %   
|Other                  |                  |                    | 1.26 | %    |           |  | 1.96 | %            |   |  | 0.95 | %   
|                       | Total MBR margin |                    |      | 1.10 | %         |  |      | 1.82         | % |  |      | 1.10 | %

|                         |                  |                    |      |      |           |  |      |              |   |  |      |      |  
|------------------------ | ---------------- | ------------------ | ---- | ---- | --------- |  | ---- | ------------ | - |  | ---- | ---- | -
|                         |                  | Three Months Ended |     
|                         |                  |                    |     
|                         |                  | March 31,          |      |      | March 31, |  |      | December 31, |  
|MBR Margin by Product:   |                  | 2006               |      |      | 2005      |  |      | 2005         |  
|                         |                  |                    |      |      |           |  |      |              |  
|Agency Conforming/ Jumbo |                  |                    | 0.58 | %    |           |  | 1.59 | %            |   |  | 0.50 | %   
|Alt-A                    |                  |                    | 0.94 | %    |           |  | 1.79 | %            |   |  | 0.87 | %   
|Subprime                 |                  |                    | 2.06 | %    |           |  | 1.48 | %            |   |  | 1.98 | %   
|HELOC/ Seconds           |                  |                    | 0.46 | %    |           |  | 0.88 | %            |   |  | N/M  | (1) 
|Reverse Mortgages        |                  |                    | 2.83 | %    |           |  | 3.15 | %            |   |  | 2.89 | %   
|CTP/ Lot                 |                  |                    | 1.87 | %    |           |  | 2.82 | %            |   |  | 1.37 | %   
|Other                    |                  |                    | 1.56 | %    |           |  | 1.58 | %            |   |  | 1.81 | %   
|                         | Total MBR margin |                    |      | 1.10 | %         |  |      | 1.82         | % |  |      | 1.10 | %






|    |                                                                                                  
|--- | -------------------------------------------------------------------------------------------------
|(1) | Not meaningful due to relatively small amount of loans sold
    during the fourth quarter of 2005



27



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




|                                                                        |                                    |                       |    |        |              |  |    |              |   |  |    |        |  
|----------------------------------------------------------------------- | ---------------------------------- | --------------------- | -- | ------ | ------------ |  | -- | ------------ | - |  | -- | ------ | -
|                                                                        |                                    | Three Months Ended    |   
|                                                                        |                                    |                       |   
|                                                                        |                                    | March 31,             |    |        | March 31,    |  |    | December 31, |  
|                                                                        |                                    | 2006                  |    |        | 2005         |  |    | 2005         |  
|                                                                        |                                    | Distribution          |    |        | Distribution |  |    | Distribution |  
|                                                                        |                                    | Percentages           |    |        | Percentages  |  |    | Percentages  |  
|                                                                        |                                    |                       |    |        |              |  |    |              |  
|                                                                        |                                    | (Dollars in millions) |   
|Sales of government-sponsored enterprises (GSEs)
    equivalent loans |                                    |                       | 21 | %      |              |  | 19 | %            |   |  | 17 | %     
|Private-label securitizations                                           |                                    |                       | 38 | %      |              |  | 51 | %            |   |  | 44 | %     
|Whole loan sales, servicing retained                                    |                                    |                       | 36 | %      |              |  | 17 | %            |   |  | 33 | %     
|Whole loan sales, servicing released                                    |                                    |                       | 2  | %      |              |  | 4  | %            |   |  | 1  | %     
|                                                                        |                                    |                       |    |        |              |  |    |              |  
|                                                                        | Subtotal sales                     |                       |    | 97     | %            |  |    | 91           | % |  |    | 95     | %
|Investment portfolio acquisitions                                       |                                    |                       | 3  | %      |              |  | 9  | %            |   |  | 5  | %     
|                                                                        |                                    |                       |    |        |              |  |    |              |  
|                                                                        | Total loan distribution percentage |                       |    | 100    | %            |  |    | 100          | % |  |    | 100    | %
|                                                                        |                                    |                       |    |        |              |  |    |              |  
|                                                                        | Total loan distribution            |                       | $  | 17,319 |              |  | $  | 10,571       |   |  | $  | 16,222 |  
|                                                                        |                                    |                       |    |        |              |  |    |              |  








MORTGAGE SERVICING AND OTHER RETAINED ASSETS


MORTGAGE SERVICING AND MORTGAGE SERVICING RIGHTS




28



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|                                                |  |                       |        |   |           |   |        |              |  |   |        |  
|----------------------------------------------- |  | --------------------- | ------ | - | --------- | - | ------ | ------------ |  | - | ------ | -
|                                                |  | Servicing Portfolio   |       
|                                                |  |                       |       
|                                                |  | Three Months Ended    |       
|                                                |  |                       |       
|                                                |  | March 31,             |        |   | March 31, |   |        | December 31, | 
|                                                |  | 2006                  |        |   | 2005      |   |        | 2005         | 
|                                                |  |                       |        |   |           |   |        |              | 
|                                                |  | (Dollars in millions) |       
|Unpaid principal balance at beginning of period |  | $                     | 84,495 |   |           | $ | 50,219 |              |  | $ | 73,787 |  
|Additions                                       |  |                       | 16,691 |   |           |   | 9,553  |              |  |   | 15,815 |  
|Clean-up calls exercised                        |  |                       |       |   |           |   | (53    | )            |  |   | (27    | )
|Loan payments and prepayments                   |  |                       | (4,674 | ) |           |   | (3,724 | )            |  |   | (5,080 | )
|                                                |  |                       |        |   |           |   |        |              | 
|Unpaid principal balance at end of period       |  | $                     | 96,512 |   |           | $ | 55,995 |              |  | $ | 84,495 |  
|                                                |  |                       |        |   |           |   |        |              | 



|                 |                              |           |  |    |           |   |  |              |     |   |  |    |     |  
|---------------- | ---------------------------- | --------- |  | -- | --------- | - |  | ------------ | --- | - |  | -- | --- | -
|                 |                              | As of     | 
|                 |                              |           | 
|                 |                              | March 31, |  |    | March 31, |   |  | December 31, |    
|                 |                              | 2006      |  |    | 2005      |   |  | 2005         |    
|                 |                              |           |  |    |           |   |  |              |    
|By Product Type: |                              |           |  |    |           |   |  |              |     |   |  |   
|                 | Fixed Rate Mortgages         |           |  | 36 | %         |   |  | 44           | %   |   |  | 35 | %  
|                 | Option ARMs                  |           |  | 25 | %         |   |  | 19           | %   |   |  | 26 | %  
|                 | Hybrid ARMs                  |           |  | 27 | %         |   |  | 24           | %   |   |  | 27 | %  
|                 | Reverse Mortgages (all ARMs) |           |  | 9  | %         |   |  | 10           | %   |   |  | 9  | %  
|                 | HELOCs                       |           |  | 2  | %         |   |  | 2            | %   |   |  | 2  | %  
|                 | Other                        |           |  | 1  | %         |   |  | 1            | %   |   |  | 1  | %  
|                 |                              |           |  |    |           |   |  |              |    
|                 |                              | Total     |  |    | 100       | % |  |              | 100 | % |  |    | 100 | %
|                 |                              |           |  |    |           |   |  |              |    

|                                                     |            |           |     |    |           |   |     |              |     |   |     |    |     |  
|---------------------------------------------------- | ---------- | --------- | --- | -- | --------- | - | --- | ------------ | --- | - | --- | -- | --- | -
|                                                     |            | March 31, |     |    | March 31, |   |     | December 31, |    
|Additional Information, Excluding Reverse Mortgages: |            | 2006      |     |    | 2005      |   |     | 2005         |    
|                                                     |            |           |     |    |           |   |     |              |    
|Weighted average FICO                                |            |           | 698 |    |           |   | 696 |              |     |   | 699 |   
|Weighted average original LTV/ CLTV                  |            |           | 73  | %  |           |   | 73  | %            |     |   | 73  | % 
|Average original loan size (in thousands)            |            |           | 222 |    |           |   | 192 |              |     |   | 221 |   
|Percent of portfolio that is interest-only           |            |           | 25  | %  |           |   | 14  | %            |     |   | 23  | % 
|Percent of portfolio with prepayment penalty         |            |           | 38  | %  |           |   | 30  | %            |     |   | 37  | % 
|By Geographic Distribution:                          |            |           |     |    |           |   |     |              |     |   |     |   
|                                                     | California |           |     | 42 | %         |   |     | 42           | %   |   |     | 42 | %  
|                                                     | New York   |           |     | 9  | %         |   |     | 11           | %   |   |     | 9  | %  
|                                                     | Florida    |           |     | 8  | %         |   |     | 6            | %   |   |     | 7  | %  
|                                                     | New Jersey |           |     | 5  | %         |   |     | 5            | %   |   |     | 5  | %  
|                                                     | Virginia   |           |     | 4  | %         |   |     | 3            | %   |   |     | 4  | %  
|                                                     | Other      |           |     | 32 | %         |   |     | 33           | %   |   |     | 33 | %  
|                                                     |            |           |     |    |           |   |     |              |    
|                                                     |            | Total     |     |    | 100       | % |     |              | 100 | % |     |    | 100 | %
|                                                     |            |           |     |    |           |   |     |              |    

29



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|                                                                                                |  |                        |           |   |           |   |         |              |  |   |           |  
|----------------------------------------------------------------------------------------------- |  | ---------------------- | --------- | - | --------- | - | ------- | ------------ |  | - | --------- | -
|                                                                                                |  | Three Months Ended     |          
|                                                                                                |  |                        |          
|                                                                                                |  | March 31,              |           |   | March 31, |   |         | December 31, | 
|                                                                                                |  | 2006                   |           |   | 2005      |   |         | 2005         | 
|                                                                                                |  |                        |           |   |           |   |         |              | 
|                                                                                                |  | (Dollars in thousands) |          
|Balance at beginning of period                                                                  |  | $                      | 1,094,490 |   |           | $ | 640,794 |              |  | $ | 940,606   |  
|Cumulative-effect adjustment due to change in accounting for MSRs                               |  |                        | 17,561    |   |           |   |        |              |  |   |          |  
|Additions                                                                                       |  |                        | 230,057   |   |           |   | 132,900 |              |  |   | 211,357   |  
|Transfers from (to) prepayment penalty and/or AAA-rated and
    agency interest-only securities |  |                        |          |   |           |   | (5,127  | )            |  |   |          |  
|Clean-up calls exercised                                                                        |  |                        |          |   |           |   | (1,396  | )            |  |   | (1,314    | )
|Change in fair value due to runoff                                                              |  |                        | (68,158   | ) |           |   | N/A     |              |  |   | N/A       |  
|Change in fair value due to market changes                                                      |  |                        | 84,054    |   |           |   | N/A     |              |  |   | N/A       |  
|Change in fair value due to application of external benchmarking
    policies                   |  |                        | (3,571    | ) |           |   | N/A     |              |  |   | N/A       |  
|Amortization                                                                                    |  |                        | N/A       |   |           |   | (45,792 | )            |  |   | (68,298   | )
|Valuation/impairment                                                                            |  |                        | N/A       |   |           |   | 12,859  |              |  |   | 12,139    |  
|                                                                                                |  |                        |           |   |           |   |         |              | 
|Balance at end of period                                                                        |  | $                      | 1,354,433 |   |           | $ | 734,238 |              |  | $ | 1,094,490 |  
|                                                                                                |  |                        |           |   |           |   |         |              | 
|MSRs as basis points of unpaid principal balance                                                |  |                        | 140       |   |           |   | 131     |              |  |   | 130       |  



30



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|                              |                                                                                                  |                                    |   |         |             |  |           |      |    |  |          |              |       |      |  |     |          |  |   |         |        |  |  |     |   | 
|----------------------------- | ------------------------------------------------------------------------------------------------ | ---------------------------------- | - | ------- | ----------- |  | --------- | ---- | -- |  | -------- | ------------ | ----- | ---- |  | --- | -------- |  | - | ------- | ------ |  |  | --- | - | 
|                              |                                                                                                  | Three Months Ended                 |  
|                              |                                                                                                  |                                    |  
|                              |                                                                                                  | March 31,                          |   |         |             |  | March 31, |      |    |  |          | December 31, |       |      | 
|                              |                                                                                                  | 2006                               |   |         | % of UPB(1) |  |           | 2005 |    |  | % of UPB |              |       | 2005 |  |     | % of UPB | 
|                              |                                                                                                  |                                    |   |         |             |  |           |      |    |  |          |              |       |      |  |     |          | 
|                              |                                                                                                  | (Dollars in thousands)             |  
|Service fee (expense) income: |                                                                                                  |                                    |   |         |             |  |           |      |    |  |          |              |       |      |  |     |          |  |   |         |        |  |  |    
|                              | Gross service fee income                                                                         |                                    | $ | 98,193  |             |  |           | 44   |    |  | $        | 54,989       |       |      |  | 42  |          |  | $ | 87,826  |        |  |  | 45  |  
|                              | Change in value due to portfolio run offs/ Amortization                                          |                                    |   | (68,158 | )           |  |           | (31  | )  |  |          | (45,792      | )     |      |  | (35 | )        |  |   | (68,298 | )      |  |  | (35 | )
|                              |                                                                                                  |                                    |   |         |             |  |           |      |    |  |          |              |       |      |  |     |          | 
|                              | Service fee income (expense), net of change in value due to
    portfolio run offs/ amortization |                                    |   | 30,035  |             |  |           | 13   |    |  |          | 9,197        |       |      |  | 7   |          |  |   | 19,528  |        |  |  | 10  |  
|                              | Change in value due to application of external benchmarking
    policies                         |                                    |   | (3,571  | )           |  |           | (2   | )  |  |          |             |       |      |  |    |          |  |   |        |        |  |  |    |  
|                              | Valuation adjustment due to market changes                                                       |                                    |   | 84,054  |             |  |           | 38   |    |  |          | 12,859       |       |      |  | 10  |          |  |   | 12,139  |        |  |  | 6   |  
|                              | Hedge loss on MSRs                                                                               |                                    |   | (79,629 | )           |  |           | (36  | )  |  |          | (17,638      | )     |      |  | (13 | )        |  |   | (12,953 | )      |  |  | (7  | )
|                              |                                                                                                  |                                    |   |         |             |  |           |      |    |  |          |              |       |      |  |     |          | 
|                              |                                                                                                  | Total service fee (expense) income |   | $       | 30,889      |  |           |      | 13 |  |          | $            | 4,418 |      |  |     | 4        |  |   | $       | 18,714 |  |  |     | 9 | 
|                              |                                                                                                  |                                    |   |         |             |  |           |      |    |  |          |              |       |      |  |     |          | 






|    |                                                                                                                                                 
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Represents the service fee income or expense in basis points of
    average unpaid principal balance of the capitalized servicing
    portfolio.

OTHER RETAINED ASSETS






|                                               |                   |                                           |   |        |           |   |   |              |        |   |   |        |        |  
|---------------------------------------------- | ----------------- | ----------------------------------------- | - | ------ | --------- | - | - | ------------ | ------ | - | - | ------ | ------ | -
|                                               |                   | Three Months Ended                        |  
|                                               |                   |                                           |  
|                                               |                   | March 31,                                 |   |        | March 31, |   |   | December 31, |       
|                                               |                   | 2006                                      |   |        | 2005      |   |   | 2005         |       
|                                               |                   |                                           |   |        |           |   |   |              |       
|                                               |                   | (Dollars in thousands)                    |  
|AAA-rated and agency interest-only securities: |                   |                                           |   |        |           |   |   |              |        |   |   |       
|                                               | Beginning balance |                                           | $ | 78,731 |           |   | $ | 90,658       |        |   | $ | 74,005 |       
|                                               |                   | Retained investments from securitizations |   |        | 5,196     |   |   |              |       |   |   |        | 9,504  |  
|                                               |                   | Cash received, net of accretion           |   |        | (5,606    | ) |   |              | (6,214 | ) |   |        | (5,708 | )
|                                               |                   | Valuation gains (losses) before hedges    |   |        | 6,495     |   |   |              | (1,364 | ) |   |        | 930    |  
|                                               |                   |                                           |   |        |           |   |   |              |       
|                                               | Ending balance    |                                           | $ | 84,816 |           |   | $ | 83,080       |        |   | $ | 78,731 |       
|                                               |                   |                                           |   |        |           |   |   |              |       

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|                                 |                   |                                           |   |         |           |   |   |              |         |   |   |         |          |  
|-------------------------------- | ----------------- | ----------------------------------------- | - | ------- | --------- | - | - | ------------ | ------- | - | - | ------- | -------- | -
|                                 |                   | Three Months Ended                        |  
|                                 |                   |                                           |  
|                                 |                   | March 31,                                 |   |         | March 31, |   |   | December 31, |        
|                                 |                   | 2006                                      |   |         | 2005      |   |   | 2005         |        
|                                 |                   |                                           |   |         |           |   |   |              |        
|                                 |                   | (Dollars in thousands)                    |  
|Principal only securities:       |                   |                                           |   |         |           |   |   |              |         |   |   |        
|                                 | Beginning balance |                                           | $ | 9,483   |           |   | $ | 18,598       |         |   | $ | 2,351   |         
|                                 |                   | Retained investments from securitizations |   |         | 4,224     |   |   |              | 1,419   |   |   |         | 9,303    |  
|                                 |                   | Purchases                                 |   |         |          |   |   |              |        |   |   |         | 123,048  |  
|                                 |                   | Sales                                     |   |         |          |   |   |              | (18,342 | ) |   |         | (122,684 | )
|                                 |                   | Cash received, net of accretion           |   |         | 7         |   |   |              | (466    | ) |   |         | (1,922   | )
|                                 |                   | Valuation gains (losses)                  |   |         | (894      | ) |   |              | (96     | ) |   |         | (613     | )
|                                 |                   |                                           |   |         |           |   |   |              |        
|                                 | Ending balance    |                                           | $ | 12,820  |           |   | $ | 1,113        |         |   | $ | 9,483   |         
|                                 |                   |                                           |   |         |           |   |   |              |        
|Prepayment penalty securities:   |                   |                                           |   |         |           |   |   |              |         |   |   |        
|                                 | Beginning balance |                                           | $ | 75,741  |           |   | $ | 33,451       |         |   | $ | 76,178  |         
|                                 |                   | Retained investments from securitizations |   |         | 8,591     |   |   |              | 8,393   |   |   |         | 7,602    |  
|                                 |                   | Transfer from MSRs                        |   |         |          |   |   |              | 5,127   |   |   |         |         |  
|                                 |                   | Cash received, net of accretion           |   |         | (11,131   | ) |   |              | (2,813  | ) |   |         | (11,250  | )
|                                 |                   | Valuation (losses) gains                  |   |         | (6,252    | ) |   |              | 1,491   |   |   |         | 3,211    |  
|                                 |                   |                                           |   |         |           |   |   |              |        
|                                 | Ending balance    |                                           | $ | 66,949  |           |   | $ | 45,649       |         |   | $ | 75,741  |         
|                                 |                   |                                           |   |         |           |   |   |              |        
|Residual securities(1):          |                   |                                           |   |         |           |   |   |              |         |   |   |        
|                                 | Beginning balance |                                           | $ | 167,771 |           |   | $ | 135,386      |         |   | $ | 154,334 |         
|                                 |                   | Retained investments from securitizations |   |         | 41,876    |   |   |              | 30      |   |   |         | 22,812   |  
|                                 |                   | Cash received, net of accretion           |   |         | (6,049    | ) |   |              | (2,960  | ) |   |         | (8,619   | )
|                                 |                   | Valuation (losses) gains before hedges    |   |         | 1,530     |   |   |              | (1,082  | ) |   |         | (756     | )
|                                 |                   |                                           |   |         |           |   |   |              |        
|                                 | Ending balance    |                                           | $ | 205,128 |           |   | $ | 131,374      |         |   | $ | 167,771 |         
|                                 |                   |                                           |   |         |           |   |   |              |        
|Investment-grade securities:     |                   |                                           |   |         |           |   |   |              |         |   |   |        
|                                 | Beginning balance |                                           | $ | 92,120  |           |   | $ | 146,822      |         |   | $ | 93,440  |         
|                                 |                   | Retained investments from securitizations |   |         | 14,801    |   |   |              | 33,924  |   |   |         | 4,317    |  
|                                 |                   | Purchases                                 |   |         | 41,023    |   |   |              |        |   |   |         |         |  
|                                 |                   | Impairment                                |   |         | (183      | ) |   |              | (217    | ) |   |         | (33      | )
|                                 |                   | Sales                                     |   |         |          |   |   |              | (34,908 | ) |   |         |         |  
|                                 |                   | Cash received, net of accretion           |   |         | (1,424    | ) |   |              | (1,707  | ) |   |         | (5,027   | )
|                                 |                   | Valuation (losses) gains before hedges    |   |         | (838      | ) |   |              | 118     |   |   |         | (577     | )
|                                 |                   |                                           |   |         |           |   |   |              |        
|                                 | Ending balance    |                                           | $ | 145,499 |           |   | $ | 144,032      |         |   | $ | 92,120  |         
|                                 |                   |                                           |   |         |           |   |   |              |        
|Non-Investment grade securities: |                   |                                           |   |         |           |   |   |              |         |   |   |        
|                                 | Beginning balance |                                           | $ | 57,712  |           |   | $ | 83,052       |         |   | $ | 53,041  |         
|                                 |                   | Retained investments from securitizations |   |         | 8,649     |   |   |              |        |   |   |         | 4,496    |  
|                                 |                   | Impairment                                |   |         | (252      | ) |   |              | (120    | ) |   |         | (22      | )
|                                 |                   | Sales                                     |   |         |          |   |   |              | (4,004  | ) |   |         |         |  
|                                 |                   | Cash received, net of accretion           |   |         | 207       |   |   |              | 714     |   |   |         | 20       |  
|                                 |                   | Valuation (losses) gains before hedges    |   |         | 23        |   |   |              | 126     |   |   |         | 177      |  
|                                 |                   |                                           |   |         |           |   |   |              |        
|                                 | Ending balance    |                                           | $ | 66,339  |           |   | $ | 79,768       |         |   | $ | 57,712  |         
|                                 |                   |                                           |   |         |           |   |   |              |        






|    |                                                                                                                                                                                                                                                                                     
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Included in the residual securities balance at March 31,
    2006 were $47.9 million of HELOC residuals retained from
    two separate guaranteed mortgage securitization transactions.
    There was no gain on sale of loans recognized in connection with
    these transactions.

32



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|                                                   |       |                                                             |   |         |            |  |   |           |              |      |            |        |         |            |   |        |         |  |   |        |        | 
|-------------------------------------------------- | ----- | ----------------------------------------------------------- | - | ------- | ---------- |  | - | --------- | ------------ | ---- | ---------- | ------ | ------- | ---------- | - | ------ | ------- |  | - | ------ | ------ | 
|                                                   |       | March 31, 2006                                              |   |         |           
|                                                   |       |                                                             |   |         |           
|                                                   |       |                                                             |   | Premium |            |  |   |           | December 31, |     
|                                                   |       | Current                                                     |   |         | (Discount) |  |   |           |              | 2005 |           
|                                                   |       | Face                                                        |   |         | to Face    |  |   | Amortized |              |      |            |        |         |           
|                                                   |       | Value                                                       |   |         | Value      |  |   | Cost      |              |      | Fair Value |        |         | Fair Value |  
|                                                   |       |                                                             |   |         |            |  |   |           |              |      |            |        |         |            |  
|                                                   |       | (Dollars in thousands)                                      |  
|Other investment grade mortgage-backed securities: |       |                                                             |   |         |            |  |   |           |              |      |            |        |         |            |   |        |         |  |   |       
|                                                   | AA    |                                                             | $ | 68,918  |            |  | $ | (479      | )            |      | $          | 68,439 |         |            | $ | 67,250 |         |  | $ | 21,787 |       
|                                                   | A     |                                                             |   | 2,443   |            |  |   | (124      | )            |      |            | 2,319  |         |            |   | 2,335  |         |  |   | 239    |       
|                                                   | BBB   |                                                             |   | 30,718  |            |  |   | (1,345    | )            |      |            | 29,373 |         |            |   | 29,681 |         |  |   | 29,848 |       
|                                                   | BBB-  |                                                             |   | 49,922  |            |  |   | (3,639    | )            |      |            | 46,283 |         |            |   | 46,233 |         |  |   | 40,246 |       
|                                                   |       |                                                             |   |         |            |  |   |           |              |      |            |        |         |            |  
|                                                   |       | Total other investment grade mortgage-backed securities     |   | $       | 152,001    |  |   | $         | (5,587       | )    |            | $      | 146,414 |            |   | $      | 145,499 |  |   | $      | 92,120 | 
|                                                   |       |                                                             |   |         |            |  |   |           |              |      |            |        |         |            |  
|Non-investment grade mortgage-backed securities:   |       |                                                             |   |         |            |  |   |           |              |      |            |        |         |            |   |        |         |  |   |       
|                                                   | BB    |                                                             | $ | 50,868  |            |  | $ | (6,159    | )            |      | $          | 44,709 |         |            | $ | 45,195 |         |  | $ | 36,873 |       
|                                                   | BB-   |                                                             |   | 13,523  |            |  |   | (122      | )            |      |            | 13,401 |         |            |   | 13,523 |         |  |   | 13,523 |       
|                                                   | B     |                                                             |   | 14,918  |            |  |   | (9,177    | )            |      |            | 5,741  |         |            |   | 6,820  |         |  |   | 6,458  |       
|                                                   | Other |                                                             |   | 10,066  |            |  |   | (9,520    | )            |      |            | 546    |         |            |   | 801    |         |  |   | 858    |       
|                                                   |       |                                                             |   |         |            |  |   |           |              |      |            |        |         |            |  
|                                                   |       | Total other non-investment grade mortgage-backed securities |   | $       | 89,375     |  |   | $         | (24,978      | )    |            | $      | 64,397  |            |   | $      | 66,339  |  |   | $      | 57,712 | 
|                                                   |       |                                                             |   |         |            |  |   |           |              |      |            |        |         |            |  





|                               |                                                                                                                                              |                                      |   |        |           |   |   |              |        |   |   |       |       | 
|------------------------------ | -------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------ | - | ------ | --------- | - | - | ------------ | ------ | - | - | ----- | ----- | 
|                               |                                                                                                                                              | Three Months Ended                   |  
|                               |                                                                                                                                              |                                      |  
|                               |                                                                                                                                              | March 31,                            |   |        | March 31, |   |   | December 31, |       
|                               |                                                                                                                                              | 2006                                 |   |        | 2005      |   |   | 2005         |       
|                               |                                                                                                                                              |                                      |   |        |           |   |   |              |       
|                               |                                                                                                                                              | (Dollars in thousands)               |  
|Net gain (loss) on securities: |                                                                                                                                              |                                      |   |        |           |   |   |              |        |   |   |      
|                               | Realized gain on available for sale securities                                                                                               |                                      | $ |       |           |   | $ | (350         | )      |   | $ |      |      
|                               | Impairment on available for sale securities                                                                                                  |                                      |   | (435   | )         |   |   | (337         | )      |   |   | (54   | )    
|                               | Unrealized (loss) gain on prepayment penalty securities                                                                                      |                                      |   | (6,252 | )         |   |   | 1,491        |        |   |   | 3,211 |      
|                               | Unrealized gain (loss) on AAA-rated and agency interest-only and
    residual securities                                                     |                                      |   | 6,284  |           |   |   | (4,268       | )      |   |   | 642   |      
|                               | Net (loss) gain on trading securities and other instruments used
    to hedge AAA-rated and agency interest-only and residual
    securities |                                      |   | (2,212 | )         |   |   | (1,182       | )      |   |   | 2,134 |      
|                               |                                                                                                                                              |                                      |   |        |           |   |   |              |       
|                               |                                                                                                                                              | Total (loss) gain on securities, net |   | $      | (2,615    | ) |   | $            | (4,646 | ) |   | $     | 5,933 | 
|                               |                                                                                                                                              |                                      |   |        |           |   |   |              |       

33



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##### Table of Contents



VALUATION OF MSRS, INTEREST-ONLY, PREPAYMENT PENALTY,


AND RESIDUAL SECURITIES




|                                               |  |                        |           |            |                       |   |            |        |  |              |       |   |            |        |      |          |          |  |            |        |  |            |        |           |          |       |      |            |              |  |      |   |  |  |      |   |  |  |      |  
|---------------------------------------------- |  | ---------------------- | --------- | ---------- | --------------------- | - | ---------- | ------ |  | ------------ | ----- | - | ---------- | ------ | ---- | -------- | -------- |  | ---------- | ------ |  | ---------- | ------ | --------- | -------- | ----- | ---- | ---------- | ------------ |  | ---- | - |  |  | ---- | - |  |  | ---- | -
|                                               |  | Actual                 |           |            | Valuation Assumptions |  
|                                               |  |                        |           |            |                       |  
|                                               |  |                        |           | Gross Wtd. |                       |   | Servicing  |        |  | 3-Month      |       |   | Weighted   |        |      | Lifetime |          |  | 3-Month    |        |  |            |        | Remaining |         
|                                               |  |                        |           | Collateral |                       |   | Average    |        |  | Fee/Interest |       |   | Prepayment |        |      | Average  |          |  | Prepayment |        |  | Prepayment |        |           | Discount |       |      | Cumulative |             
|                                               |  | Book Value             |           |            | Balance               |   |            | Coupon |  |              | Strip |   |            | Speeds |      |          | Multiple |  |            | Speeds |  |            | Speeds |           |          | Yield |      |            | Loss Rate(1) | 
|                                               |  |                        |           |            |                       |   |            |        |  |              |       |   |            |        |      |          |          |  |            |        |  |            |        |           |          |       |      |            |              | 
|                                               |  | (Dollars in thousands) |          
|March 31, 2006                                 |  |                        |           |            |                       |   |            |        |  |              |       |   |            |        |      |          |          |  |            |        |  |            |        |           |          |       |      |            |              |  |      |   |  |  |      |   |  |  |      |  
|MSRs                                           |  | $                      | 1,354,433 |            |                       | $ | 96,511,574 |        |  |              | 6.43  | % |            |        | 0.37 | %        |          |  | 17.6       | %      |  |            | 3.82   |           |          |       | 21.0 | %          |              |  | 17.5 | % |  |  | 10.3 | % |  |  | N/A  |  
|                                               |  |                        |           |            |                       |   |            |        |  |              |       |   |            |        |      |          |          |  |            |        |  |            |        |           |          |       |      |            |              | 
|AAA-rated and agency interest-only securities  |  | $                      | 84,816    |            |                       | $ | 7,708,837  |        |  |              | 6.62  | % |            |        | 0.39 | %        |          |  | 15.6       | %      |  |            | 2.86   |           |          |       | 20.7 | %          |              |  | 18.2 | % |  |  | 10.2 | % |  |  | N/A  |  
|                                               |  |                        |           |            |                       |   |            |        |  |              |       |   |            |        |      |          |          |  |            |        |  |            |        |           |          |       |      |            |              | 
|Prepayment penalty securities                  |  | $                      | 66,949    |            |                       | $ | 14,528,867 |        |  |              | 6.61  | % |            |        | N/A  |          |          |  | 17.4       | %      |  |            | N/A    |           |          |       | 20.9 | %          |              |  | 22.1 | % |  |  | 10.5 | % |  |  | N/A  |  
|                                               |  |                        |           |            |                       |   |            |        |  |              |       |   |            |        |      |          |          |  |            |        |  |            |        |           |          |       |      |            |              | 
|Prime residual securities                      |  | $                      | 3,954     |            |                       | $ | 1,117,251  |        |  |              | 6.19  | % |            |        | N/M  |          |          |  | 72.1       | %      |  |            | N/M    |           |          |       | 45.4 | %          |              |  | 51.6 | % |  |  | 15.0 | % |  |  | 0.18 | %
|Lot loan residual securities                   |  |                        | 50,649    |            |                       | $ | 1,103,266  |        |  |              | 8.02  | % |            |        | 2.79 | %        |          |  | 29.3       | %      |  |            | 1.64   |           |          |       | 42.7 | %          |              |  | 41.4 | % |  |  | 22.1 | % |  |  | 0.37 | %
|HELOC residual securities                      |  |                        | 80,819    |            |                       | $ | 1,929,000  |        |  |              | 8.64  | % |            |        | 2.70 | %        |          |  | 48.1       | %      |  |            | 1.55   |           |          |       | 50.2 | %          |              |  | 48.2 | % |  |  | 19.2 | % |  |  | 0.74 | %
|Subprime residual securities                   |  |                        | 69,706    |            |                       | $ | 5,726,600  |        |  |              | 7.53  | % |            |        | 1.72 | %        |          |  | 24.7       | %      |  |            | 0.71   |           |          |       | 37.5 | %          |              |  | 30.4 | % |  |  | 24.9 | % |  |  | 3.11 | %
|                                               |  |                        |           |            |                       |   |            |        |  |              |       |   |            |        |      |          |          |  |            |        |  |            |        |           |          |       |      |            |              | 
|Total non-investment grade residual securities |  | $                      | 205,128   |            |                       |   |            |        |  |              |       |   |            |        |      |          |          |  |            |        |  |            |        |           |          |       |      |            |              |  |      |   |  |  |      |   |  |  |      |  
|                                               |  |                        |           |            |                       |   |            |        |  |              |       |   |            |        |      |          |          |  |            |        |  |            |        |           |          |       |      |            |              | 
|March 31, 2005                                 |  |                        |           |            |                       |   |            |        |  |              |       |   |            |        |      |          |          |  |            |        |  |            |        |           |          |       |      |            |              |  |      |   |  |  |      |   |  |  |      |  
|MSRs                                           |  | $                      | 734,238   |            |                       | $ | 55,994,639 |        |  |              | 5.79  | % |            |        | 0.36 | %        |          |  | 21.4       | %      |  |            | 3.64   |           |          |       | 20.5 | %          |              |  | 20.6 | % |  |  | 11.0 | % |  |  | N/A  |  
|                                               |  |                        |           |            |                       |   |            |        |  |              |       |   |            |        |      |          |          |  |            |        |  |            |        |           |          |       |      |            |              | 
|AAA-rated and agency interest-only securities  |  | $                      | 83,080    |            |                       | $ | 7,623,711  |        |  |              | 6.30  | % |            |        | 0.37 | %        |          |  | 29.7       | %      |  |            | 2.95   |           |          |       | 14.4 | %          |              |  | 25.4 | % |  |  | 11.0 | % |  |  | N/A  |  
|                                               |  |                        |           |            |                       |   |            |        |  |              |       |   |            |        |      |          |          |  |            |        |  |            |        |           |          |       |      |            |              | 
|Prepayment penalty securities                  |  | $                      | 45,649    |            |                       | $ | 8,351,419  |        |  |              | 5.22  | % |            |        | N/A  |          |          |  | 21.6       | %      |  |            | N/A    |           |          |       | 20.6 | %          |              |  | 19.0 | % |  |  | 13.5 | % |  |  | N/A  |  
|                                               |  |                        |           |            |                       |   |            |        |  |              |       |   |            |        |      |          |          |  |            |        |  |            |        |           |          |       |      |            |              | 
|Prime residual securities                      |  | $                      | 4,813     |            |                       | $ | 1,510,690  |        |  |              | 6.40  | % |            |        | 1.01 | %        |          |  | 36.8       | %      |  |            | 0.31   |           |          |       | 29.9 | %          |              |  | 37.2 | % |  |  | 15.0 | % |  |  | 0.20 | %
|Lot loan residual securities                   |  |                        | 18,594    |            |                       | $ | 394,413    |        |  |              | 7.09  | % |            |        | 3.65 | %        |          |  | 35.1       | %      |  |            | 1.29   |           |          |       | 42.2 | %          |              |  | 42.8 | % |  |  | 19.6 | % |  |  | 0.39 | %
|HELOC residual securities                      |  |                        | 59,800    |            |                       | $ | 1,372,162  |        |  |              | 6.87  | % |            |        | 3.28 | %        |          |  | 47.5       | %      |  |            | 1.33   |           |          |       | 49.1 | %          |              |  | 50.0 | % |  |  | 19.0 | % |  |  | 0.72 | %
|Subprime residual securities                   |  |                        | 48,167    |            |                       | $ | 3,451,302  |        |  |              | 7.29  | % |            |        | 2.56 | %        |          |  | 26.9       | %      |  |            | 0.54   |           |          |       | 34.1 | %          |              |  | 22.1 | % |  |  | 24.9 | % |  |  | 2.88 | %
|                                               |  |                        |           |            |                       |   |            |        |  |              |       |   |            |        |      |          |          |  |            |        |  |            |        |           |          |       |      |            |              | 
|Total non-investment grade residual securities |  | $                      | 131,374   |            |                       |   |            |        |  |              |       |   |            |        |      |          |          |  |            |        |  |            |        |           |          |       |      |            |              |  |      |   |  |  |      |   |  |  |      |  
|                                               |  |                        |           |            |                       |   |            |        |  |              |       |   |            |        |      |          |          |  |            |        |  |            |        |           |          |       |      |            |              | 
|December 31, 2005                              |  |                        |           |            |                       |   |            |        |  |              |       |   |            |        |      |          |          |  |            |        |  |            |        |           |          |       |      |            |              |  |      |   |  |  |      |   |  |  |      |  
|MSRs                                           |  | $                      | 1,094,490 |            |                       | $ | 84,495,133 |        |  |              | 6.19  | % |            |        | 0.37 | %        |          |  | 21.7       | %      |  |            | 3.54   |           |          |       | 21.4 | %          |              |  | 16.2 | % |  |  | 10.7 | % |  |  | N/A  |  
|                                               |  |                        |           |            |                       |   |            |        |  |              |       |   |            |        |      |          |          |  |            |        |  |            |        |           |          |       |      |            |              | 
|AAA-rated and agency interest-only securities  |  | $                      | 78,731    |            |                       | $ | 7,583,643  |        |  |              | 6.63  | % |            |        | 0.38 | %        |          |  | 27.5       | %      |  |            | 2.73   |           |          |       | 20.3 | %          |              |  | 22.7 | % |  |  | 8.0  | % |  |  | N/A  |  
|                                               |  |                        |           |            |                       |   |            |        |  |              |       |   |            |        |      |          |          |  |            |        |  |            |        |           |          |       |      |            |              | 
|Prepayment penalty securities                  |  | $                      | 75,741    |            |                       | $ | 13,657,946 |        |  |              | 6.30  | % |            |        | N/A  |          |          |  | 22.7       | %      |  |            | N/A    |           |          |       | 23.7 | %          |              |  | 20.3 | % |  |  | 9.0  | % |  |  | N/A  |  
|                                               |  |                        |           |            |                       |   |            |        |  |              |       |   |            |        |      |          |          |  |            |        |  |            |        |           |          |       |      |            |              | 
|Prime residual securities                      |  | $                      | 2,438     |            |                       | $ | 1,183,361  |        |  |              | 5.85  | % |            |        | 0.61 | %        |          |  | 60.0       | %      |  |            | 0.34   |           |          |       | 46.3 | %          |              |  | 51.4 | % |  |  | 15.0 | % |  |  | 0.18 | %
|Lot loan residual securities                   |  |                        | 41,066    |            |                       | $ | 939,005    |        |  |              | 7.55  | % |            |        | 2.90 | %        |          |  | 33.2       | %      |  |            | 1.51   |           |          |       | 43.1 | %          |              |  | 41.4 | % |  |  | 21.6 | % |  |  | 0.36 | %
|HELOC residual securities                      |  |                        | 66,041    |            |                       | $ | 1,430,473  |        |  |              | 8.26  | % |            |        | 3.18 | %        |          |  | 55.8       | %      |  |            | 1.45   |           |          |       | 44.0 | %          |              |  | 49.6 | % |  |  | 19.0 | % |  |  | 0.87 | %
|Subprime residual securities                   |  |                        | 58,226    |            |                       | $ | 4,831,675  |        |  |              | 7.40  | % |            |        | 2.17 | %        |          |  | 28.9       | %      |  |            | 0.55   |           |          |       | 37.1 | %          |              |  | 29.4 | % |  |  | 24.9 | % |  |  | 2.94 | %
|                                               |  |                        |           |            |                       |   |            |        |  |              |       |   |            |        |      |          |          |  |            |        |  |            |        |           |          |       |      |            |              | 
|Total non-investment grade residual securities |  | $                      | 167,771   |            |                       |   |            |        |  |              |       |   |            |        |      |          |          |  |            |        |  |            |        |           |          |       |      |            |              |  |      |   |  |  |      |   |  |  |      |  
|                                               |  |                        |           |            |                       |   |            |        |  |              |       |   |            |        |      |          |          |  |            |        |  |            |        |           |          |       |      |            |              | 






|    |                                                                                                                                                                                                                                                                          
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | As a percentage of the original pool balance, the actual
    cumulative loss rate to date totaled 0.09%, 0.23%, and 0.55% for
    prime, HELOC, and subprime loans, respectively, at
    March 31, 2006. No loss has been incurred on lot loans as
    of March 31, 2006.

34



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##### Table of Contents











HEDGING INTEREST RATE RISK ON SERVICING-RELATED ASSETS










35



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##### Table of Contents







|                                           |  |                        |         |   |           |  |        |             |  |  |        |   |  |  |         |  
|------------------------------------------ |  | ---------------------- | ------- | - | --------- |  | ------ | ----------- |  |  | ------ | - |  |  | ------- | -
|                                           |  | Servicing              |         |   | AAA IO    |  |        | Credit Risk |  |  |       
|For the three months ended March 31, 2006: |  | Portfolio              |         |   | Portfolio |  |        | Portfolio   |  |  | Total  |  
|                                           |  |                        |         |   |           |  |        |             |  |  |        |  
|                                           |  | (Dollars in thousands) |        
|Net earnings                               |  | $                      | 12,313  |   |           |  | (1,040 | )           |  |  | 5,910  |   |  |  | 17,183  |  
|Average capital deployed                   |  | $                      | 140,835 |   |           |  | 9,377  |             |  |  | 86,983 |   |  |  | 237,195 |  
|Return on equity                           |  |                        | 35      | % |           |  | (45    | )%          |  |  | 28     | % |  |  | 29      | %




MORTGAGE-BACKED SECURITIES AND LOANS HELD FOR INVESTMENT




AAA-rated




36



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##### Table of Contents





|                                      |                                     |                                                     |                                            |           |              |           |   |           |           |           | 
|------------------------------------- | ----------------------------------- | --------------------------------------------------- | ------------------------------------------ | --------- | ------------ | --------- | - | --------- | --------- | --------- | 
|                                      |                                     | March 31,                                           |                                            |           | December 31, |          
|                                      |                                     | 2006                                                |                                            |           | 2005         |          
|                                      |                                     |                                                     |                                            |           |              |          
|                                      |                                     | (Dollars in thousands)                              |                                           
|Loans held for investment:            |                                     |                                                     |                                            |           |              |           |   |          
|                                      | SFR mortgage                        |                                                     | $                                          | 5,663,142 |              |           | $ | 5,441,521 |          
|                                      | Consumer construction               |                                                     |                                            | 1,726,226 |              |           |   | 1,656,963 |          
|                                      | Builder construction                |                                                     |                                            | 972,241   |              |           |   | 838,772   |          
|                                      | HELOC                               |                                                     |                                            | 31,101    |              |           |   | 31,882    |          
|                                      | Land and other mortgage             |                                                     |                                            | 313,253   |              |           |   | 260,615   |          
|                                      | Revolving warehouse lines of credit |                                                     |                                            | 78,331    |              |           |   | 48,616    |          
|                                      |                                     |                                                     |                                            |           |              |          
|                                      |                                     |                                                     | Total  loans held for investment          |           | $            | 8,784,294 |   |           | $         | 8,278,369 | 
|                                      |                                     |                                                     |                                            |           |              |          
|AAA-rated mortgage-backed securities: |                                     |                                                     |                                            |           |              |           |   |          
|                                      |                                     | AAA-rated non-agency securities, trading            |                                            | $         | 24,244       |           |   | $         | 52,633    |          
|                                      |                                     | AAA-rated non-agency securities, available for sale |                                            |           | 3,917,482    |           |   |           | 3,524,952 |          
|                                      |                                     | AAA-rated agency securities, available for sale     |                                            |           | 40,675       |           |   |           | 43,014    |          
|                                      |                                     |                                                     |                                            |           |              |          
|                                      |                                     |                                                     | Total AAA-rated mortgage-backed securities |           | $            | 3,982,401 |   |           | $         | 3,620,599 | 
|                                      |                                     |                                                     |                                            |           |              |          

SFR MORTGAGE LOANS HELD FOR INVESTMENT






|                                                    |  |                        |           |   |              |   |           |           |  |   |           |  
|--------------------------------------------------- |  | ---------------------- | --------- | - | ------------ | - | --------- | --------- |  | - | --------- | -
|                                                    |  | March 31,              |           |   | December 31, |   |           | March 31, | 
|                                                    |  | 2006                   |           |   | 2005         |   |           | 2005      | 
|                                                    |  |                        |           |   |              |   |           |           | 
|                                                    |  | (Dollars in thousands) |          
|SFR mortgage loans held for investment (book value) |  | $                      | 5,663,142 |   |              | $ | 5,441,521 |           |  | $ | 5,059,627 |  
|Average loan size                                   |  | $                      | 292       |   |              | $ | 292       |           |  | $ | 302       |  
|Non-performing loans as a percentage of SFR loans   |  |                        | 0.69      | % |              |   | 0.62      | %         |  |   | 0.54      | %
|Estimated average life in years(1)                  |  |                        | 2.3       |   |              |   | 2.4       |           |  |   | 2.4       |  
|Estimated average duration in years(2)              |  |                        | 1.4       |   |              |   | 1.4       |           |  |   | 1.5       |  
|Estimated average net duration in month(3)          |  |                        | 0.8       |   |              |   | 0.1       |           |  |   | (0.1      | )
|Annualized yield                                    |  |                        | 5.61      | % |              |   | 5.06      | %         |  |   | 4.72      | %
|Percent of loans with active prepayment penalty     |  |                        | 40        | % |              |   | 35        | %         |  |   | 29        | %
|Prepayment penalty fees collected                   |  | $                      | 1,313     |   |              | $ | 1,756     |           |  | $ | 754       |  
|Fixed-rate mortgages                                |  |                        | 6         | % |              |   | 6         | %         |  |   | 8         | %
|Option ARMs                                         |  |                        | 24        | % |              |   | 25        | %         |  |   | 17        | %
|Adjustable rate mortgages                           |  |                        | 3         | % |              |   | 4         | %         |  |   | 5         | %
|Hybrid ARMs                                         |  |                        | 16        | % |              |   | 16        | %         |  |   | 20        | %
|Hybrid ARMs interest only                           |  |                        | 51        | % |              |   | 49        | %         |  |   | 50        | %

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|    |                                                                                                                                                                                                                                                                                                                                                     
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(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) | Average net duration measures the expected change in the value
    of a financial instrument in response to changes in interest
    rates, taking into consideration the impact of the related
    hedges. The negative net duration implies an increase in value
    as rates rise while the positive net duration implies a decrease
    in value.

|                                            |                     |           |     |    |              |   |     |           |     |   |     |    |     |  
|------------------------------------------- | ------------------- | --------- | --- | -- | ------------ | - | --- | --------- | --- | - | --- | -- | --- | -
|                                            |                     | March 31, |     |    | December 31, |   |     | March 31, |    
|Additional Information                      |                     | 2006      |     |    | 2005         |   |     | 2005      |    
|                                            |                     |           |     |    |              |   |     |           |    
|Average FICO score(1)                       |                     |           | 713 |    |              |   | 715 |           |     |   | 717 |   
|Original average loan to value ratio        |                     |           | 73  | %  |              |   | 72  | %         |     |   | 72  | % 
|Current average loan to value ratio(2)      |                     |           | 59  | %  |              |   | 58  | %         |     |   | 59  | % 
|Geographic distribution of top five states: |                     |           |     |    |              |   |     |           |     |   |     |   
|                                            | Southern California |           |     | 31 | %            |   |     | 32        | %   |   |     | 30 | %  
|                                            | Northern California |           |     | 21 | %            |   |     | 21        | %   |   |     | 21 | %  
|                                            | Florida             |           |     | 6  | %            |   |     | 5         | %   |   |     | 5  | %  
|                                            | Michigan            |           |     | 4  | %            |   |     | 4         | %   |   |     | 5  | %  
|                                            | New York            |           |     | 4  | %            |   |     | 4         | %   |   |     | 4  | %  
|                                            | Virginia            |           |     | 3  | %            |   |     | 3         | %   |   |     | 3  | %  
|                                            | Other               |           |     | 31 | %            |   |     | 31        | %   |   |     | 32 | %  
|                                            |                     |           |     |    |              |   |     |           |    
|                                            |                     | Total     |     |    | 100          | % |     |           | 100 | % |     |    | 100 | %
|                                            |                     |           |     |    |              |   |     |           |    






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | 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.
|   
|(2) | Current average
    loan-to-value ratio is
    estimated based on the Office of the Federal Housing Enterprise
    Oversight House Price Index Metropolitan Statistical Area data
    on a loan level basis.                                                                                                                                                                                                                     

loan-to loan-to


CONSUMER CONSTRUCTION


construction-to


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|                                                |  |                        |           |   |              |   |           |           |  |   |           |  
|----------------------------------------------- |  | ---------------------- | --------- | - | ------------ | - | --------- | --------- |  | - | --------- | -
|                                                |  | As of                  |          
|                                                |  |                        |          
|                                                |  | March 31,              |           |   | December 31, |   |           | March 31, | 
|                                                |  | 2006                   |           |   | 2005         |   |           | 2005      | 
|                                                |  |                        |           |   |              |   |           |           | 
|                                                |  | (Dollars in thousands) |          
|Construction loans (book value)                 |  | $                      | 1,726,226 |   |              | $ | 1,656,963 |           |  | $ | 1,451,370 |  
|Lot, land and other mortgage loans (book value) |  | $                      | 92,687    |   |              | $ | 107,164   |           |  | $ | 154,762   |  
|Total commitments                               |  | $                      | 3,034,222 |   |              | $ | 2,949,430 |           |  | $ | 2,662,193 |  
|Average loan commitment                         |  | $                      | 453       |   |              | $ | 442       |           |  | $ | 393       |  
|Non-performing loans                            |  |                        | 0.70      | % |              |   | 0.51      | %         |  |   | 0.51      | %
|Annualized yield on construction loans          |  |                        | 6.14      | % |              |   | 5.67      | %         |  |   | 5.70      | %
|Fixed-rate loans                                |  |                        | 96        | % |              |   | 96        | %         |  |   | 91        | %
|Adjustable-rate loans                           |  |                        | 4         | % |              |   | 4         | %         |  |   | 9         | %

Additional Information


|                                            |                             |           |     |     |              |  |     |           |   |  |     |     |  
|------------------------------------------- | --------------------------- | --------- | --- | --- | ------------ |  | --- | --------- | - |  | --- | --- | -
|                                            |                             | March 31, |     |     | December 31, |  |     | March 31, |  
|                                            |                             | 2006      |     |     | 2005         |  |     | 2005      |  
|                                            |                             |           |     |     |              |  |     |           |  
|Average loan-to-value ratio(1)              |                             |           | 75  | %   |              |  | 75  | %         |   |  | 74  | %  
|Average FICO score                          |                             |           | 713 |     |              |  | 713 |           |   |  | 710 |    
|Geographic distribution of top five states: |                             |           |     |     |              |  |     |           |   |  |     |    
|                                            | Southern California         |           |     | 29  | %            |  |     | 29        | % |  |     | 30  | %
|                                            | Northern California         |           |     | 17  | %            |  |     | 18        | % |  |     | 17  | %
|                                            | Florida                     |           |     | 9   | %            |  |     | 8         | % |  |     | 5   | %
|                                            | Hawaii                      |           |     | 5   | %            |  |     | 5         | % |  |     | 6   | %
|                                            | New York                    |           |     | 3   | %            |  |     | 4         | % |  |     | 5   | %
|                                            | Washington                  |           |     | 3   | %            |  |     | 3         | % |  |     | 3   | %
|                                            | Other                       |           |     | 34  | %            |  |     | 33        | % |  |     | 34  | %
|                                            |                             |           |     |     |              |  |     |           |  
|                                            | Total Consumer Construction |           |     | 100 | %            |  |     | 100       | % |  |     | 100 | %
|                                            |                             |           |     |     |              |  |     |           |  






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

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HOME EQUITY DIVISION








|                                 |  |                        |           |   |              |   |           |           |  |   |         |  
|-------------------------------- |  | ---------------------- | --------- | - | ------------ | - | --------- | --------- |  | - | ------- | -
|                                 |  | March 31,              |           |   | December 31, |   |           | March 31, | 
|                                 |  | 2006                   |           |   | 2005         |   |           | 2005      | 
|                                 |  |                        |           |   |              |   |           |           | 
|                                 |  | (Dollars in thousands) |          
|Outstanding balance (book value) |  | $                      | 666,848   |   |              | $ | 786,922   |           |  | $ | 409,948 |  
|Total commitments(1)             |  | $                      | 1,534,414 |   |              | $ | 1,493,415 |           |  | $ | 821,991 |  
|Average spread over prime        |  |                        | 1.23      | % |              |   | 1.47      | %         |  |   | 1.31    | %
|Average FICO score               |  |                        | 728       |   |              |   | 728       |           |  |   | 729     |  
|Average CLTV ratio(2)            |  |                        | 77        | % |              |   | 78        | %         |  |   | 76      | %

Additional Information as of March 31, 2006


|            |       |                        |         |              |            |   |     |                |  |  |          |      |   |             |     |     |  |  |      |      |  
|----------- | ----- | ---------------------- | ------- | ------------ | ---------- | - | --- | -------------- |  |  | -------- | ---- | - | ----------- | --- | --- |  |  | ---- | ---- | -
|            |       |                        |         | Average Loan |            |   |     |                |  |  | 30+ Days |     
|            |       | Outstanding            |         |              | Commitment |   |     | Average Spread |  |  | Average  |      |   | Delinquency |    
|CLTV        |       | Balance                |         |              | Balance    |   |     | Over Prime     |  |  | FICO     |      |   | Percentage  |    
|            |       |                        |         |              |            |   |     |                |  |  |          |      |   |             |    
|            |       | (Dollars in thousands) |        
|96% to 100% |       | $                      | 79,234  |              |            | $ | 103 |                |  |  | 2.37     | %    |   |             | 722 |     |  |  | 1.10 | %   
|91% to 95%  |       |                        | 64,606  |              |            |   | 89  |                |  |  | 2.20     | %    |   |             | 712 |     |  |  | 0.15 | %   
|81% to 90%  |       |                        | 244,867 |              |            |   | 84  |                |  |  | 1.55     | %    |   |             | 711 |     |  |  | 0.38 | %   
|71% to 80%  |       |                        | 144,590 |              |            |   | 128 |                |  |  | 0.50     | %    |   |             | 732 |     |  |  | 0.54 | %   
|70% or less |       |                        | 133,551 |              |            |   | 131 |                |  |  | 0.26     | %    |   |             | 746 |     |  |  | 0.22 | %   
|            |       |                        |         |              |            |   |     |                |  |  |          |      |   |             |    
|            | Total |                        | $       | 666,848      |            |   | $   | 107            |  |  |          | 1.23 | % |             |     | 728 |  |  |      | 0.45 | %
|            |       |                        |         |              |            |   |     |                |  |  |          |      |   |             |    






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

BUILDER CONSTRUCTION




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loan-to




|                                                          |  |                        |           |   |              |   |           |           |  |   |           |  
|--------------------------------------------------------- |  | ---------------------- | --------- | - | ------------ | - | --------- | --------- |  | - | --------- | -
|                                                          |  | As of                  |          
|                                                          |  |                        |          
|                                                          |  | March 31,              |           |   | December 31, |   |           | March 31, | 
|                                                          |  | 2006                   |           |   | 2005         |   |           | 2005      | 
|                                                          |  |                        |           |   |              |   |           |           | 
|                                                          |  | (Dollars in thousands) |          
|Construction loans (book value)                           |  | $                      | 972,241   |   |              | $ | 838,772   |           |  | $ | 670,977   |  
|Lot, land and other mortgage loans (book value)           |  |                        | 303,745   |   |              |   | 252,427   |           |  |   | 167,043   |  
|Total commitments                                         |  |                        | 2,263,630 |   |              |   | 2,181,698 |           |  |   | 1,624,376 |  
|Average loan commitments, excluding single-spec portfolio |  |                        | 10,832    |   |              |   | 10,824    |           |  |   | 7,927     |  
|Average loan commitments, single-spec portfolio           |  | $                      | 396       |   |              | $ | 387       |           |  | $ | 396       |  
|Non-performing loans                                      |  |                        | 0.15      | % |              |   | 0.04      | %         |  |   | 0.87      | %
|Annualized yield on construction loans                    |  |                        | 9.56      | % |              |   | 10.01     | %         |  |   | 8.04      | %

Additional Information


|                                            |                            |           |    |     |              |  |    |           |   |  |    |     |  
|------------------------------------------- | -------------------------- | --------- | -- | --- | ------------ |  | -- | --------- | - |  | -- | --- | -
|                                            |                            | March 31, |    |     | December 31, |  |    | March 31, |  
|                                            |                            | 2006      |    |     | 2005         |  |    | 2005      |  
|                                            |                            |           |    |     |              |  |    |           |  
|Average loan-to-value ratio(1)              |                            |           | 70 | %   |              |  | 71 | %         |   |  | 70 | %  
|Geographic distribution of top five states: |                            |           |    |     |              |  |    |           |   |  |    |    
|                                            | Southern California        |           |    | 38  | %            |  |    | 40        | % |  |    | 42  | %
|                                            | Northern California        |           |    | 16  | %            |  |    | 17        | % |  |    | 19  | %
|                                            | Illinois                   |           |    | 11  | %            |  |    | 9         | % |  |    | 11  | %
|                                            | Florida                    |           |    | 10  | %            |  |    | 9         | % |  |    | 4   | %
|                                            | New York                   |           |    | 4   | %            |  |    | 4         | % |  |    | 3   | %
|                                            | Oregon                     |           |    | 4   | %            |  |    | 3         | % |  |    | 1   | %
|                                            | Other                      |           |    | 17  | %            |  |    | 18        | % |  |    | 20  | %
|                                            |                            |           |    |     |              |  |    |           |  
|                                            | Total Builder Construction |           |    | 100 | %            |  |    | 100       | % |  |    | 100 | %
|                                            |                            |           |    |     |              |  |    |           |  






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



41



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NET INTEREST MARGIN




|                                                     |                                            |                        |            |            |                |   |         |                   |  |         |         |      |   |          |           |            |      |         |         |         |  |  |          |      |   |      |           |            |  |   |         |         |  |  |       |      |  
|---------------------------------------------------- | ------------------------------------------ | ---------------------- | ---------- | ---------- | -------------- | - | ------- | ----------------- |  | ------- | ------- | ---- | - | -------- | --------- | ---------- | ---- | ------- | ------- | ------- |  |  | -------- | ---- | - | ---- | --------- | ---------- |  | - | ------- | ------- |  |  | ----- | ---- | -
|                                                     |                                            | Three Months Ended     |           
|                                                     |                                            |                        |           
|                                                     |                                            | March 31, 2006         |            |            | March 31, 2005 |   |         | December 31, 2005 | 
|                                                     |                                            |                        |            |            |                |   |         |                   | 
|                                                     |                                            | Average                |            |            |                |   | Yield/  |                   |  | Average |         |      |   |          | Yield/    |            |      | Average |         |         |  |  | Yield/   |     
|                                                     |                                            | Balance                |            |            | Interest       |   |         | Rate              |  |         | Balance |      |   | Interest |           |            | Rate |         |         | Balance |  |  | Interest |      |   | Rate |          
|                                                     |                                            |                        |            |            |                |   |         |                   |  |         |         |      |   |          |           |            |      |         |         |         |  |  |          |      |   |      |          
|                                                     |                                            | (Dollars in thousands) |           
|Securities                                           |                                            | $                      | 4,130,581  |            |                | $ | 66,483  |                   |  |         | 6.53    | %    |   | $        | 3,657,831 |            |      | $       | 51,324  |         |  |  | 5.69     | %    |   | $    | 3,798,159 |            |  | $ | 56,911  |         |  |  | 5.94  | %   
|Loans held for sale                                  |                                            |                        | 10,626,563 |            |                |   | 173,561 |                   |  |         | 6.62    | %    |   |          | 6,047,608 |            |      |         | 79,383  |         |  |  | 5.32     | %    |   |      | 9,029,154 |            |  |   | 137,749 |         |  |  | 6.05  | %   
|Mortgage loans held for investment                   |                                            |                        | 5,945,154  |            |                |   | 82,179  |                   |  |         | 5.61    | %    |   |          | 4,890,267 |            |      |         | 56,974  |         |  |  | 4.72     | %    |   |      | 5,534,897 |            |  |   | 70,634  |         |  |  | 5.06  | %   
|Builder construction and income property             |                                            |                        | 902,822    |            |                |   | 21,284  |                   |  |         | 9.56    | %    |   |          | 656,007   |            |      |         | 12,993  |         |  |  | 8.03     | %    |   |      | 854,451   |            |  |   | 21,562  |         |  |  | 10.01 | %   
|Consumer construction                                |                                            |                        | 1,614,253  |            |                |   | 24,443  |                   |  |         | 6.14    | %    |   |          | 1,371,321 |            |      |         | 19,285  |         |  |  | 5.70     | %    |   |      | 1,550,080 |            |  |   | 22,155  |         |  |  | 5.67  | %   
|Investment in Federal Home Loan Bank stock and other |                                            |                        | 814,800    |            |                |   | 9,896   |                   |  |         | 4.93    | %    |   |          | 416,033   |            |      |         | 4,393   |         |  |  | 4.28     | %    |   |      | 846,985   |            |  |   | 9,549   |         |  |  | 4.47  | %   
|                                                     |                                            |                        |            |            |                |   |         |                   |  |         |         |      |   |          |           |            |      |         |         |         |  |  |          |      |   |      |          
|                                                     | Total interest-earning assets              |                        |            | 24,034,173 |                |   |         | 377,846           |  |         |         | 6.38 | % |          |           | 17,039,067 |      |         |         | 224,352 |  |  |          | 5.34 | % |      |           | 21,613,726 |  |   |         | 318,560 |  |  |       | 5.85 | %
|                                                     |                                            |                        |            |            |                |   |         |                   |  |         |         |      |   |          |           |            |      |         |         |         |  |  |          |      |   |      |          
|Other                                                |                                            |                        | 2,482,990  |            |                |   |         |                   |  |         |         |      |   |          | 1,529,126 |            |      |         |         |         |  |  |          |      |   |      | 2,065,129 |            |  |   |         |         |  |  |       |     
|                                                     |                                            |                        |            |            |                |   |         |                   |  |         |         |      |   |          |           |            |      |         |         |         |  |  |          |      |   |      |          
|                                                     | Total assets                               |                        | $          | 26,517,163 |                |   |         |                   |  |         |         |      |   |          | $         | 18,568,193 |      |         |         |         |  |  |          |      |   |      | $         | 23,678,855 |  |   |         |         |  |  |       |      |  
|                                                     |                                            |                        |            |            |                |   |         |                   |  |         |         |      |   |          |           |            |      |         |         |         |  |  |          |      |   |      |          
|Interest-bearing deposits                            |                                            | $                      | 7,322,611  |            |                |   | 74,243  |                   |  |         | 4.11    | %    |   | $        | 5,258,418 |            |      |         | 35,892  |         |  |  | 2.77     | %    |   | $    | 6,693,009 |            |  |   | 63,049  |         |  |  | 3.74  | %   
|Advances from Federal Home Loan Bank                 |                                            |                        | 9,975,973  |            |                |   | 103,609 |                   |  |         | 4.21    | %    |   |          | 7,300,102 |            |      |         | 52,713  |         |  |  | 2.93     | %    |   |      | 9,181,222 |            |  |   | 88,218  |         |  |  | 3.81  | %   
|Other borrowings                                     |                                            |                        | 5,951,582  |            |                |   | 72,784  |                   |  |         | 4.96    | %    |   |          | 3,635,020 |            |      |         | 30,573  |         |  |  | 3.41     | %    |   |      | 4,905,885 |            |  |   | 57,894  |         |  |  | 4.68  | %   
|                                                     |                                            |                        |            |            |                |   |         |                   |  |         |         |      |   |          |           |            |      |         |         |         |  |  |          |      |   |      |          
|                                                     | Total interest-bearing liabilities         |                        |            | 23,250,166 |                |   |         | 250,636           |  |         |         | 4.37 | % |          |           | 16,193,540 |      |         |         | 119,178 |  |  |          | 2.98 | % |      |           | 20,780,116 |  |   |         | 209,161 |  |  |       | 3.99 | %
|                                                     |                                            |                        |            |            |                |   |         |                   |  |         |         |      |   |          |           |            |      |         |         |         |  |  |          |      |   |      |          
|Other                                                |                                            |                        | 1,668,691  |            |                |   |         |                   |  |         |         |      |   |          | 1,104,801 |            |      |         |         |         |  |  |          |      |   |      | 1,398,092 |            |  |   |         |         |  |  |       |     
|                                                     |                                            |                        |            |            |                |   |         |                   |  |         |         |      |   |          |           |            |      |         |         |         |  |  |          |      |   |      |          
|                                                     | Total liabilities                          |                        |            | 24,918,857 |                |   |         |                   |  |         |         |      |   |          |           | 17,298,341 |      |         |         |         |  |  |          |      |   |      |           | 22,178,208 |  |   |         |         |  |  |       |      |  
|                                                     | Shareholders equity                       |                        |            | 1,598,306  |                |   |         |                   |  |         |         |      |   |          |           | 1,269,852  |      |         |         |         |  |  |          |      |   |      |           | 1,500,647  |  |   |         |         |  |  |       |      |  
|                                                     |                                            |                        |            |            |                |   |         |                   |  |         |         |      |   |          |           |            |      |         |         |         |  |  |          |      |   |      |          
|                                                     | Total liabilities and shareholders equity |                        | $          | 26,517,163 |                |   |         |                   |  |         |         |      |   |          | $         | 18,568,193 |      |         |         |         |  |  |          |      |   |      | $         | 23,678,855 |  |   |         |         |  |  |       |      |  
|                                                     |                                            |                        |            |            |                |   |         |                   |  |         |         |      |   |          |           |            |      |         |         |         |  |  |          |      |   |      |          
|Net interest income                                  |                                            |                        |            |            |                | $ | 127,210 |                   |  |         |         |      |   |          |           |            |      | $       | 105,174 |         |  |  |          |      |   |      |           |            |  | $ | 109,399 |         |  |  |       |     
|                                                     |                                            |                        |            |            |                |   |         |                   |  |         |         |      |   |          |           |            |      |         |         |         |  |  |          |      |   |      |          
|Net interest spread                                  |                                            |                        |            |            |                |   |         |                   |  |         | 2.01    | %    |   |          |           |            |      |         |         |         |  |  | 2.36     | %    |   |      |           |            |  |   |         |         |  |  | 1.86  | %   
|                                                     |                                            |                        |            |            |                |   |         |                   |  |         |         |      |   |          |           |            |      |         |         |         |  |  |          |      |   |      |          
|Net interest margin                                  |                                            |                        |            |            |                |   |         |                   |  |         | 2.15    | %    |   |          |           |            |      |         |         |         |  |  | 2.50     | %    |   |      |           |            |  |   |         |         |  |  | 2.01  | %   
|                                                     |                                            |                        |            |            |                |   |         |                   |  |         |         |      |   |          |           |            |      |         |         |         |  |  |          |      |   |      |          

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|                         |               |                       |        |        |                |   |    |                   |  |  |         |      |   |          |        |        |          |   |    |         |  |  |          |      |   |          |        |        |  |   |    |     |  |  |      |      |  
|------------------------ | ------------- | --------------------- | ------ | ------ | -------------- | - | -- | ----------------- |  |  | ------- | ---- | - | -------- | ------ | ------ | -------- | - | -- | ------- |  |  | -------- | ---- | - | -------- | ------ | ------ |  | - | -- | --- |  |  | ---- | ---- | -
|                         |               | Three Months Ended    |       
|                         |               |                       |       
|                         |               | March 31, 2006        |        |        | March 31, 2005 |   |    | December 31, 2005 | 
|                         |               |                       |        |        |                |   |    |                   | 
|                         |               | Average               |        |        | Net            |   |    | Net               |  |  | Average |      |   | Net      |        |        | Net      |   |    | Average |  |  | Net      |      |   | Net      |       
|                         |               | Earning               |        |        | Interest       |   |    | Interest          |  |  | Earning |      |   | Interest |        |        | Interest |   |    | Earning |  |  | Interest |      |   | Interest |       
|                         |               | Assets                |        |        | Income         |   |    | Margin            |  |  | Assets  |      |   | Income   |        |        | Margin   |   |    | Assets  |  |  | Income   |      |   | Margin   |       
|                         |               |                       |        |        |                |   |    |                   |  |  |         |      |   |          |        |        |          |   |    |         |  |  |          |      |   |          |       
|                         |               | (Dollars in millions) |       
|By Segment:              |               |                       |        |        |                |   |    |                   |  |  |         |      |   |          |        |        |          |   |    |         |  |  |          |      |   |          |        |        |  |   |    |     |  |  |      |     
|Thrift segment and other |               | $                     | 14,459 |        |                | $ | 74 |                   |  |  | 2.07    | %    |   | $        | 11,389 |        |          | $ | 66 |         |  |  | 2.37     | %    |   | $        | 13,365 |        |  | $ | 67 |     |  |  | 1.99 | %   
|Mortgage banking segment |               |                       | 9,575  |        |                |   | 53 |                   |  |  | 2.26    | %    |   |          | 5,650  |        |          |   | 39 |         |  |  | 2.78     | %    |   |          | 8,249  |        |  |   | 42 |     |  |  | 2.03 | %   
|                         |               |                       |        |        |                |   |    |                   |  |  |         |      |   |          |        |        |          |   |    |         |  |  |          |      |   |          |       
|                         | Total Company |                       | $      | 24,034 |                |   | $  | 127               |  |  |         | 2.15 | % |          | $      | 17,039 |          |   | $  | 105     |  |  |          | 2.50 | % |          | $      | 21,614 |  |   | $  | 109 |  |  |      | 2.01 | %
|                         |               |                       |        |        |                |   |    |                   |  |  |         |      |   |          |        |        |          |   |    |         |  |  |          |      |   |          |       





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

|                  |                                                      |                                            |                     |        |        |        |   |        |        |         |              |        |        |        |   |        |         |        | 
|----------------- | ---------------------------------------------------- | ------------------------------------------ | ------------------- | ------ | ------ | ------ | - | ------ | ------ | ------- | ------------ | ------ | ------ | ------ | - | ------ | ------- | ------ | 
|                  |                                                      | Three Months Ended March 31, 2006 vs. 2005 |                    
|                  |                                                      |                                            |                    
|                  |                                                      | Increase/(Decrease) Due to                 |                    
|                  |                                                      |                                            |                    
|                  |                                                      | Volume                                     |                     |        | Rate   |        |   | Mix    |        |         | Total Change |       
|                  |                                                      |                                            |                     |        |        |        |   |        |        |         |              |       
|                  |                                                      | (Dollars in thousands)                     |                    
|Interest income:  |                                                      |                                            |                     |        |        |        |   |        |        |         |              |        |        |        |   |       
|                  | Mortgage-backed securities                           |                                            | $                   | 6,633  |        |        | $ | 7,550  |        |         | $            | 976    |        |        | $ | 15,159 |        
|                  | Loans held for sale                                  |                                            |                     | 60,105 |        |        |   | 19,391 |        |         |              | 14,682 |        |        |   | 94,178 |        
|                  | Mortgage loans held for investment                   |                                            |                     | 12,290 |        |        |   | 10,623 |        |         |              | 2,292  |        |        |   | 25,205 |        
|                  | Builder construction and income property             |                                            |                     | 4,888  |        |        |   | 2,472  |        |         |              | 931    |        |        |   | 8,291  |        
|                  | Consumer construction                                |                                            |                     | 3,416  |        |        |   | 1,480  |        |         |              | 262    |        |        |   | 5,158  |        
|                  | Investment in Federal Home Loan Bank stock and other |                                            |                     | 4,211  |        |        |   | 660    |        |         |              | 632    |        |        |   | 5,503  |        
|                  |                                                      |                                            |                     |        |        |        |   |        |        |         |              |       
|                  |                                                      | Total interest income                      |                     |        | 91,543 |        |   |        | 42,176 |         |              |        | 19,775 |        |   |        | 153,494 |       
|Interest expense: |                                                      |                                            |                     |        |        |        |   |        |        |         |              |        |        |        |   |       
|                  | Interest-bearing deposits                            |                                            |                     | 14,089 |        |        |   | 17,422 |        |         |              | 6,840  |        |        |   | 38,351 |        
|                  | Advances from Federal Home Loan Bank                 |                                            |                     | 19,322 |        |        |   | 23,105 |        |         |              | 8,469  |        |        |   | 50,896 |        
|                  | Other borrowings                                     |                                            |                     | 19,484 |        |        |   | 13,881 |        |         |              | 8,846  |        |        |   | 42,211 |        
|                  |                                                      |                                            |                     |        |        |        |   |        |        |         |              |       
|                  |                                                      | Total interest expense                     |                     |        | 52,895 |        |   |        | 54,408 |         |              |        | 24,155 |        |   |        | 131,458 |       
|                  |                                                      |                                            |                     |        |        |        |   |        |        |         |              |       
|                  |                                                      |                                            | Net interest income |        | $      | 38,648 |   |        | $      | (12,232 | )            |        | $      | (4,380 | ) |        | $       | 22,036 | 
|                  |                                                      |                                            |                     |        |        |        |   |        |        |         |              |       




INTEREST RATE SENSITIVITY




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|                                     |                   |                        |           |                     |                   |   |           |            |                     |   |            |            |  |         |           |            |         |   |           |            |  |   |           |            | 
|------------------------------------ | ----------------- | ---------------------- | --------- | ------------------- | ----------------- | - | --------- | ---------- | ------------------- | - | ---------- | ---------- |  | ------- | --------- | ---------- | ------- | - | --------- | ---------- |  | - | --------- | ---------- | 
|                                     |                   | March 31, 2006         |           |                     | December 31, 2005 |  
|                                     |                   |                        |           |                     |                   |  
|                                     |                   |                        |           | 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            |                   | $                      | 439,793   |                     |                   | $ | 439,793   |            |                     | $ | 439,793    |            |  | $       | 442,059   |            |         | $ | 442,059   |            |  | $ | 442,059   |           
|Trading securities                   |                   |                        | 365,208   |                     |                   |   | 374,420   |            |                     |   | 350,328    |            |  |         | 342,545   |            |         |   | 348,982   |            |  |   | 323,577   |           
|Available for sale securities        |                   |                        | 3,142,060 |                     |                   |   | 3,210,485 |            |                     |   | 3,054,881  |            |  |         | 2,680,955 |            |         |   | 2,727,144 |            |  |   | 2,613,690 |           
|Loans held for sale                  |                   |                        | 7,449,554 |                     |                   |   | 7,495,853 |            |                     |   | 7,305,168  |            |  |         | 6,057,556 |            |         |   | 6,111,131 |            |  |   | 5,972,194 |           
|Loans held for investment            |                   |                        | 8,731,946 |                     |                   |   | 8,833,243 |            |                     |   | 8,661,671  |            |  |         | 8,213,754 |            |         |   | 8,279,424 |            |  |   | 8,119,628 |           
|MSRs                                 |                   |                        | 1,354,433 |                     |                   |   | 1,148,652 |            |                     |   | 1,489,627  |            |  |         | 1,114,630 |            |         |   | 930,932   |            |  |   | 1,239,189 |           
|Other assets                         |                   |                        | 1,437,868 |                     |                   |   | 1,535,899 |            |                     |   | 1,454,724  |            |  |         | 1,372,896 |            |         |   | 1,436,900 |            |  |   | 1,391,549 |           
|                                     |                   |                        |           |                     |                   |   |           |            |                     |   |            |            |  |         |           |            |         |  
|                                     | Total assets      |                        | $         | 22,920,862          |                   |   | $         | 23,038,345 |                     |   | $          | 22,756,192 |  |         | $         | 20,224,395 |         |   | $         | 20,276,572 |  |   | $         | 20,101,886 | 
|                                     |                   |                        |           |                     |                   |   |           |            |                     |   |            |            |  |         |           |            |         |  
|Deposits                             |                   | $                      | 8,244,492 |                     |                   | $ | 8,272,572 |            |                     | $ | 8,197,536  |            |  | $       | 7,629,227 |            |         | $ | 7,665,078 |            |  | $ | 7,594,015 |           
|Advances from Federal Home Loan Bank |                   |                        | 8,033,149 |                     |                   |   | 8,079,621 |            |                     |   | 7,988,524  |            |  |         | 6,966,946 |            |         |   | 6,993,439 |            |  |   | 6,940,884 |           
|Other borrowings                     |                   |                        | 3,840,408 |                     |                   |   | 3,842,968 |            |                     |   | 3,837,852  |            |  |         | 2,990,570 |            |         |   | 2,992,630 |            |  |   | 2,988,513 |           
|Other liabilities                    |                   |                        | 443,409   |                     |                   |   | 443,755   |            |                     |   | 443,062    |            |  |         | 433,995   |            |         |   | 434,287   |            |  |   | 433,705   |           
|                                     |                   |                        |           |                     |                   |   |           |            |                     |   |            |            |  |         |           |            |         |  
|                                     | Total liabilities |                        |           | 20,561,458          |                   |   |           | 20,638,916 |                     |   |            | 20,466,974 |  |         |           | 18,020,738 |         |   |           | 18,085,434 |  |   |           | 17,957,117 | 
|Shareholders equity (NPV)           |                   | $                      | 2,359,404 |                     |                   | $ | 2,399,429 |            |                     | $ | 2,289,218  |            |  | $       | 2,203,657 |            |         | $ | 2,191,138 |            |  | $ | 2,144,769 |           
|                                     |                   |                        |           |                     |                   |   |           |            |                     |   |            |            |  |         |           |            |         |  
|% Change from base case              |                   |                        |           |                     |                   |   | 1.70      | %          |                     |   | (2.97      | )%         |  |         |           |            |         |   | (0.57     | )%         |  |   | (2.67     | )%        
|                                     |                   |                        |           |                     |                   |   |           |            |                     |   |            |            |  |         |           |            |         |  







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45



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CREDIT RISK AND RESERVES




|                                                            |                                                |                                      |           |           |            |   |        |                |        |               |            |      |            |        |        |          |             |  |        |        |        |  |   |     |       | 
|----------------------------------------------------------- | ---------------------------------------------- | ------------------------------------ | --------- | --------- | ---------- | - | ------ | -------------- | ------ | ------------- | ---------- | ---- | ---------- | ------ | ------ | -------- | ----------- |  | ------ | ------ | ------ |  | - | --- | ----- | 
|                                                            |                                                |                                      |           |           |            |   |        | Total Reserves |        |               |            |      | QTD Net    |       
|                                                            |                                                |                                      |           | Allowance |            |   |        |                | as a   |               |            | Non- |            |        | Charge |         
|                                                            |                                                |                                      |           | for Loan  |            |   | Credit |                |        | Percentage of |            |      | Performing |        |        | Offs/Net |            
|Type of Loan                                                |                                                | Book Value                           |           |           | Losses     |   |        | Discounts(2)   |        |               | Book Value |      |            | Assets |        |          | REO (Gains) | 
|                                                            |                                                |                                      |           |           |            |   |        |                |        |               |            |      |            |        |        |          |             | 
|Held for investment portfolio                               |                                                |                                      |           |           |            |   |        |                |        |               |            |      |            |        |        |          |             |  |        |        |        |  |   |    
|                                                            | SFR mortgage loans and HELOCs                  |                                      | $         | 5,651,437 |            |   | $      | 21,623         |        |               | $          |     |            |        |        | 0.38%    |             |  | $      | 35,049 |        |  | $ | 420 |      
|                                                            | Land and other mortgage loans                  |                                      |           | 313,253   |            |   |        | 4,400          |        |               |            |     |            |        |        | 1.40%    |             |  |        | 121    |        |  |   |    |      
|                                                            | Builder construction and income property loans |                                      |           | 972,241   |            |   |        | 14,140         |        |               |            |     |            |        |        | 1.45%    |             |  |        | 1,894  |        |  |   | 156 |      
|                                                            | Consumer construction loans                    |                                      |           | 1,726,226 |            |   |        | 10,687         |        |               |            |     |            |        |        | 0.62%    |             |  |        | 12,316 |        |  |   | 228 |      
|                                                            | Revolving warehouse lines of credit            |                                      |           | 78,331    |            |   |        | 188            |        |               |            |     |            |        |        | 0.24%    |             |  |        |       |        |  |   |    |      
|                                                            |                                                |                                      |           |           |            |   |        |                |        |               |            |      |            |        |        |          |             | 
|                                                            |                                                | Total core held for investment loans |           |           | 8,741,488  |   |        |                | 51,038 |               |            |      |           |        |        |          | 0.58%       |  |        |        | 49,380 |  |   |     | 804   | 
|                                                            | Discontinued product lines(1)                  |                                      |           | 42,806    |            |   |        | 6,283          |        |               |            |     |            |        |        | 14.68%   |             |  |        | 4,637  |        |  |   | 865 |      
|                                                            |                                                |                                      |           |           |            |   |        |                |        |               |            |      |            |        |        |          |             | 
|                                                            |                                                | Total held for investment portfolio  |           |           | 8,784,294  |   |        | $              | 57,321 |               |            |      |           |        |        |          | 0.65%       |  |        |        | 54,017 |  |   |     | 1,669 | 
|                                                            |                                                |                                      |           |           |            |   |        |                |        |               |            |      |            |        |        |          |             | 
|Held for sale portfolio                                     |                                                |                                      | 7,445,783 |           |            |   |        |                |        | $             | 11,439     |      |            |        | 0.15%  |          |             |  | 40,549 |        |        |  |  |    
|                                                            |                                                |                                      |           |           |            |   |        |                |        |               |            |      |            |        |        |          |             | 
|                                                            |                                                | Total loans                          |           | $         | 16,230,077 |   |        |                |        |               |            |      |            |        |        |          |             |  |        |        | 94,566 |  |   | $   | 1,669 | 
|                                                            |                                                |                                      |           |           |            |   |        |                |        |               |            |      |            |        |        |          |             | 
|Foreclosed assets                                           |                                                |                                      |           |           |            |   |        |                |        |               |            |      |            |        |        |          |             |  |        |        |        |  |   |    
|Core portfolios                                             |                                                |                                      | 8,159     |           |            | $ | 356    |               
|Discontinued product lines                                  |                                                |                                      | 360       |           |            |   | (9     | )             
|                                                            |                                                |                                      |           |           |            |  
|Total foreclosed assets                                     |                                                |                                      | 8,519     |           |            | $ | 347    |               
|                                                            |                                                |                                      |           |           |            |  
|Total non-performing assets                                 |                                                | $                                    | 103,085   |           |            |   |        |               
|                                                            |                                                |                                      |           |           |            |  
|Total non-performing assets as a percentage of total assets |                                                |                                      | 0.43      | %         |            |   |        |               
|                                                            |                                                |                                      |           |           |            |  






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

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|                                            |                 |                                                                           |                                                |   |           |         |        |              |        |        |       |   |        |        | 
|------------------------------------------- | --------------- | ------------------------------------------------------------------------- | ---------------------------------------------- | - | --------- | ------- | ------ | ------------ | ------ | ------ | ----- | - | ------ | ------ | 
|                                            |                 | March 31,                                                                 |                                                |   | March 31, |         |        | December 31, |       
|                                            |                 | 2006                                                                      |                                                |   | 2005      |         |        | 2005         |       
|                                            |                 |                                                                           |                                                |   |           |         |        |              |       
|                                            |                 | (Dollars in thousands)                                                    |                                               
|Loans held for investment                   |                 |                                                                           |                                                |   |           |         |        |              |        |        |       |  
|                                            | Portfolio loans |                                                                           |                                                |   |           |         |        |              |        |        |       |   |       
|                                            |                 | SFR mortgage loans                                                        |                                                | $ | 35,049    |         |        | $            | 22,409 |        |       | $ | 28,335 |       
|                                            |                 | Land and other mortgage loans                                             |                                                |   | 121       |         |        |              |       |        |       |   | 197    |       
|                                            |                 | Builder construction and income property loans                            |                                                |   | 1,894     |         |        |              | 7,308  |        |       |   | 430    |       
|                                            |                 | Consumer construction loans                                               |                                                |   | 12,316    |         |        |              | 8,119  |        |       |   | 8,819  |       
|                                            |                 |                                                                           |                                                |   |           |         |        |              |       
|                                            |                 |                                                                           | Total portfolio non-performing loans           |   |           | 49,380  |        |              |        | 37,836 |       |   |        | 37,781 | 
|                                            |                 | Discontinued product lines                                                |                                                |   | 4,637     |         |        |              | 5,654  |        |       |   | 5,623  |       
|                                            |                 |                                                                           |                                                |   |           |         |        |              |       
|                                            |                 |                                                                           | Total non-performing loans held for investment |   |           | 54,017  |        |              |        | 43,490 |       |   |        | 43,404 | 
|                                            |                 |                                                                           |                                                |   |           |         |        |              |       
|                                            |                 | Allowance for loan losses to non-performing loans held for
    investment |                                                |   | 106       | %       |        |              | 123    | %      |       |   | 127    | %     
|                                            |                 |                                                                           |                                                |   |           |         |        |              |       
|                                            |                 | Non-performing loans held for sale                                        |                                                |   | 40,549    |         |        |              | 36,186 |        |       |   | 20,805 |       
|                                            |                 |                                                                           |                                                |   |           |         |        |              |       
|                                            |                 |                                                                           | Total non-performing loans                     |   |           | 94,566  |        |              |        | 79,676 |       |   |        | 64,209 | 
|Foreclosed assets                           |                 |                                                                           | 8,519                                          |   |           |         | 16,464 |              |        |        | 8,817 |  
|                                            |                 |                                                                           |                                                |   |           |         |        |              |       
|                                            |                 |                                                                           | Total non-performing assets                    |   | $         | 103,085 |        |              | $      | 96,140 |       |   | $      | 73,026 | 
|                                            |                 |                                                                           |                                                |   |           |         |        |              |       
|Total non-performing assets to total assets |                 |                                                                           | 0.43                                           | % |           |         | 0.54   | %            |        |        | 0.34  | %
|                                            |                 |                                                                           |                                                |   |           |         |        |              |       



|                                                            |                            |                        |        |      |           |   |        |              |   |   |        |        |  
|----------------------------------------------------------- | -------------------------- | ---------------------- | ------ | ---- | --------- | - | ------ | ------------ | - | - | ------ | ------ | -
|                                                            |                            | Three Months Ended     |       
|                                                            |                            |                        |       
|                                                            |                            | March 31,              |        |      | March 31, |   |        | December 31, |  
|                                                            |                            | 2006                   |        |      | 2005      |   |        | 2005         |  
|                                                            |                            |                        |        |      |           |   |        |              |  
|                                                            |                            | (Dollars in thousands) |       
|Balance, beginning of period                                |                            | $                      | 55,168 |      |           | $ | 52,891 |              |   | $ | 55,533 |       
|Provision for loan losses                                   |                            |                        | 3,822  |      |           |   | 2,490  |              |   |   | 1,553  |       
|Charge-offs net of recoveries:                              |                            |                        |        |      |           |   |        |              |   |   |        |       
|                                                            | SFR mortgage loans         |                        |        | (420 | )         |   |        | (821         | ) |   |        | (208   | )
|                                                            | Builder construction       |                        |        | (156 | )         |   |        |             |   |   |        | (33    | )
|                                                            | Consumer construction      |                        |        | (228 | )         |   |        | (495         | ) |   |        | (585   | )
|                                                            | Discontinued product lines |                        |        | (865 | )         |   |        | (572         | ) |   |        | (1,092 | )
|                                                            |                            |                        |        |      |           |   |        |              |  
|Charge-offs net of recoveries                               |                            |                        | (1,669 | )    |           |   | (1,888 | )            |   |   | (1,918 | )     
|                                                            |                            |                        |        |      |           |   |        |              |  
|Balance, end of period                                      |                            | $                      | 57,321 |      |           | $ | 53,493 |              |   | $ | 55,168 |       
|                                                            |                            |                        |        |      |           |   |        |              |  
|Annualized charge-offs to average loans held for investment |                            |                        | 0.08   | %    |           |   | 0.11   | %            |   |   | 0.10   | %     
|Charge-offs to quarterly production                         |                            |                        | 0.01   | %    |           |   | 0.02   | %            |   |   | 0.01   | %     



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SECONDARY MARKET RESERVES




|                      |       |                       |       |       |            |   |            |             |  |  |      |      |  
|--------------------- | ----- | --------------------- | ----- | ----- | ---------- | - | ---------- | ----------- |  |  | ---- | ---- | -
|                      |       | Amount                |       |       |            |   | Percentage |            
|                      |       | Repurchased           |       |       | Total Sold |   |            | Repurchased | 
|                      |       |                       |       |       |            |   |            |             | 
|                      |       | (Dollars in millions) |      
|Loans sold:           |       |                       |       |       |            |   |            |             |  |  |      |     
|GSEs and whole loans  |       | $                     | 275.5 |       |            | $ | 87,518     |             |  |  | 0.31 | %   
|Securitization trusts |       |                       | 19.4  |       |            |   | 110,546    |             |  |  | 0.02 | %   
|                      |       |                       |       |       |            |   |            |             | 
|                      | Total |                       | $     | 294.9 |            |   | $          | 198,064     |  |  |      | 0.15 | %
|                      |       |                       |       |       |            |   |            |             | 





|                              |  |            |        |  
|----------------------------- |  | ---------- | ------ | -
|                              |  | Total      |       
|                              |  |            |       
|                              |  | (Dollars   |       
|                              |  | in         |       
|                              |  | thousands) |       
|Balance, December 31, 2005    |  | $          | 27,638 |  
|Additions/provisions          |  |            | 4,527  |  
|Actual losses/mark-to-market  |  |            | (2,526 | )
|Recoveries on previous claims |  |            | 774    |  
|                              |  |            |       
|Balance, March 31, 2006       |  | $          | 30,413 |  
|                              |  |            |       



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EXPENSES


GENERAL




|                                         |                          |                        |        |         |           |   |        |              |  |   |        |         | 
|---------------------------------------- | ------------------------ | ---------------------- | ------ | ------- | --------- | - | ------ | ------------ |  | - | ------ | ------- | 
|                                         |                          | Three Months Ended     |       
|                                         |                          |                        |       
|                                         |                          | March 31,              |        |         | March 31, |   |        | December 31, | 
|                                         |                          | 2006                   |        |         | 2005      |   |        | 2005         | 
|                                         |                          |                        |        |         |           |   |        |              | 
|                                         |                          | (Dollars in thousands) |       
|Salaries and related                     |                          | $                      | 91,227 |         |           | $ | 78,022 |              |  | $ | 86,761 |        
|Premises and equipment                   |                          |                        | 16,972 |         |           |   | 12,580 |              |  |   | 15,291 |        
|Loan purchase and servicing costs        |                          |                        | 11,011 |         |           |   | 8,720  |              |  |   | 10,428 |        
|Professional services                    |                          |                        | 8,108  |         |           |   | 6,956  |              |  |   | 8,320  |        
|Data processing                          |                          |                        | 14,275 |         |           |   | 9,945  |              |  |   | 12,850 |        
|Office and related                       |                          |                        | 15,095 |         |           |   | 10,159 |              |  |   | 14,937 |        
|Advertising and promotion                |                          |                        | 11,217 |         |           |   | 11,150 |              |  |   | 11,552 |        
|Operations and sale of foreclosed assets |                          |                        | 542    |         |           |   | 1,601  |              |  |   | 425    |        
|Litigation settlement                    |                          |                        |       |         |           |   | 6,000  |              |  |   |       |        
|Other                                    |                          |                        | 3,319  |         |           |   | 2,561  |              |  |   | 2,712  |        
|                                         |                          |                        |        |         |           |   |        |              | 
|                                         | Total operating expenses |                        |        | 171,766 |           |   |        | 147,694      |  |   |        | 163,276 | 
|Amortization of other intangible assets  |                          |                        | 134    |         |           |   | 157    |              |  |   | 139    |        
|                                         |                          |                        |        |         |           |   |        |              | 
|                                         | Total expenses           |                        | $      | 171,900 |           |   | $      | 147,851      |  |   | $      | 163,415 | 
|                                         |                          |                        |        |         |           |   |        |              | 







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SHARE REPURCHASE ACTIVITIES




|                |       |              |        |        |                |                 |                  |                     |              |                         |                     |   |  |  |      |  | 
|--------------- | ----- | ------------ | ------ | ------ | -------------- | --------------- | ---------------- | ------------------- | ------------ | ----------------------- | ------------------- | - |  |  | ---- |  | 
|                |       |              |        |        |                |                 |                  | Maximum Approximate |             
|                |       |              |        |        |                | Total Number of |                  |                     | Dollar Value |                        
|                |       | Total        |        |        |                |                 | Shares Purchased |                     |              | (in millions) of Shares |                    
|                |       | Number of    |        |        | Weighted       |                 |                  | as Part of Publicly |              |                         | that May Yet Be     |  
|                |       | Shares       |        |        | Average Price  |                 |                  | Announced Plans or  |              |                         | Purchased Under the |  
|Calendar Month: |       | Purchased(1) |        |        | Paid Per Share |                 |                  | Programs            |              |                         | Plans orPrograms(2) |  
|                |       |              |        |        |                |                 |                  |                     |              |                         |                     |  
|January 2006    |       |              |       |        |                |                 |                 |                     |              |                         |                    |   |  |  | 63.6 | 
|February 2006   |       |              | 16,904 |        |                |                 | 39.26            |                     |              |                         |                    |   |  |  | 63.6 | 
|March 2006      |       |              | 32,785 |        |                |                 | 40.07            |                     |              |                         |                    |   |  |  | 63.6 | 
|                |       |              |        |        |                |                 |                  |                     |              |                         |                     |  
|                | Total |              |        | 49,689 |                |                 |                  | 39.79               |              |                         |                     |  |  |  |      |  | 
|                |       |              |        |        |                |                 |                  |                     |              |                         |                     |  






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | All shares purchased during the periods indicated were purchased
    pursuant to the Companys stock incentive plans at the
    then-current market prices.                                                                                                                                                                                                                                                                                                               
|   
|(2) | Our Board of Directors approved a $100 million share
    repurchase program in June of 1999, which was subsequently
    increased by the Board in $100 million increments to a
    total of $500 million in April, August and October 2000,
    May 2001 and July 2002. The Board of Directors also approved a
    special repurchase of 3,640,860 shares from Countrywide,
    which was not a part of our share repurchase program and was
    completed in August 2000.




FUTURE OUTLOOK








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.


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LIQUIDITY AND CAPITAL RESOURCES


OVERVIEW




PRINCIPAL SOURCES OF CASH


Loan Sales and Securitizations






Advances from Federal Home Loan Bank




Deposits/ Retail Bank




www.indymacbank.com 24-hours


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|                              |                     |                        |           |           |                   |  |     |                |   |   |           |           |  |        |     |     |      |   |           |           |  |  |     |     |  
|----------------------------- | ------------------- | ---------------------- | --------- | --------- | ----------------- |  | --- | -------------- | - | - | --------- | --------- |  | ------ | --- | --- | ---- | - | --------- | --------- |  |  | --- | --- | -
|                              |                     | March 31, 2006         |           |           | December 31, 2005 |  |     | March 31, 2005 |  
|                              |                     |                        |           |           |                   |  |     |                |  
|                              |                     | Amount                 |           |           | Rate              |  |     | Amount         |   |   | Rate      |           |  | Amount |     |     | Rate |  
|                              |                     |                        |           |           |                   |  |     |                |   |   |           |           |  |        |     |     |      |  
|                              |                     | (Dollars in thousands) |          
|Non-interest-bearing checking |                     | $                      | 66,076    |           |                   |  | 0.0 | %              |   | $ | 63,308    |           |  |        | 0.0 | %   |      | $ | 57,358    |           |  |  | 0.0 | %  
|Interest-bearing checking     |                     |                        | 57,143    |           |                   |  | 1.3 | %              |   |   | 55,479    |           |  |        | 1.3 | %   |      |   | 51,134    |           |  |  | 1.1 | %  
|Savings                       |                     |                        | 1,257,956 |           |                   |  | 4.2 | %              |   |   | 1,194,963 |           |  |        | 3.6 | %   |      |   | 1,323,267 |           |  |  | 2.7 | %  
|Custodial accounts            |                     |                        | 563,046   |           |                   |  | 0.0 | %              |   |   | 493,936   |           |  |        | 0.0 | %   |      |   | 646,370   |           |  |  | 0.0 | %  
|                              |                     |                        |           |           |                   |  |     |                |   |   |           |           |  |        |     |     |      |  
|                              | Total core deposits |                        |           | 1,944,221 |                   |  |     | 2.7            | % |   |           | 1,807,686 |  |        |     | 2.4 | %    |   |           | 2,078,129 |  |  |     | 1.7 | %
|Certificates of deposit       |                     |                        | 6,322,155 |           |                   |  | 4.3 | %              |   |   | 5,864,238 |           |  |        | 4.0 | %   |      |   | 4,027,760 |           |  |  | 3.0 | %  
|                              |                     |                        |           |           |                   |  |     |                |   |   |           |           |  |        |     |     |      |  
|                              | Total deposits      |                        | $         | 8,266,376 |                   |  |     | 3.9            | % |   | $         | 7,671,924 |  |        |     | 3.6 | %    |   | $         | 6,105,889 |  |  |     | 2.6 | %
|                              |                     |                        |           |           |                   |  |     |                |   |   |           |           |  |        |     |     |      |  



|            |                |                        |           |           |                   |  |    |                |       |   |           |           |  |        |    |     |          |   |           |           |  |  |    |     |  
|----------- | -------------- | ---------------------- | --------- | --------- | ----------------- |  | -- | -------------- | ----- | - | --------- | --------- |  | ------ | -- | --- | -------- | - | --------- | --------- |  |  | -- | --- | -
|            |                | March 31, 2006         |           |           | December 31, 2005 |  |    | March 31, 2005 |      
|            |                |                        |           |           |                   |  |    |                |      
|            |                |                        |           | % of      |                   |  |    |                | % of  |   |           |           |  | % of   |   
|            |                |                        |           | Total     |                   |  |    |                | Total |   |           |           |  | Total  |   
|            |                | Amount                 |           |           | Deposits          |  |    | Amount         |       |   | Deposits  |           |  | Amount |    |     | Deposits |  
|            |                |                        |           |           |                   |  |    |                |       |   |           |           |  |        |    |     |          |  
|            |                | (Dollars in thousands) |          
|Branch      |                | $                      | 3,627,684 |           |                   |  | 44 | %              |       | $ | 3,322,752 |           |  |        | 43 | %   |          | $ | 2,543,879 |           |  |  | 42 | %  
|Internet    |                |                        | 822,608   |           |                   |  | 10 | %              |       |   | 798,518   |           |  |        | 10 | %   |          |   | 608,432   |           |  |  | 10 | %  
|Telebanking |                |                        | 981,756   |           |                   |  | 12 | %              |       |   | 934,572   |           |  |        | 12 | %   |          |   | 703,017   |           |  |  | 12 | %  
|Money desk  |                |                        | 2,271,282 |           |                   |  | 27 | %              |       |   | 2,122,146 |           |  |        | 28 | %   |          |   | 1,604,191 |           |  |  | 26 | %  
|Custodial   |                |                        | 563,046   |           |                   |  | 7  | %              |       |   | 493,936   |           |  |        | 7  | %   |          |   | 646,370   |           |  |  | 10 | %  
|            |                |                        |           |           |                   |  |    |                |       |   |           |           |  |        |    |     |          |  
|            | Total deposits |                        | $         | 8,266,376 |                   |  |    | 100            | %     |   | $         | 7,671,924 |  |        |    | 100 | %        |   | $         | 6,105,889 |  |  |    | 100 | %
|            |                |                        |           |           |                   |  |    |                |       |   |           |           |  |        |    |     |          |  



Trust Preferred Securities and Warrants




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3-month


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


Other Borrowings, Excluding Subordinated Debentures
Underlying Trust Preferred Securities






PRINCIPAL USES OF CASH




ACCUMULATED OTHER COMPREHENSIVE LOSS




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REGULATORY CAPITAL REQUIREMENTS








|                  |  |                |       |   |                     |  |       |                  |  |  |       |  
|----------------- |  | -------------- | ----- | - | ------------------- |  | ----- | ---------------- |  |  | ----- | -
|                  |  | As Reported    |       |   | Adjusted for        |  |       |                 
|                  |  | Pre-Subprime   |       |   | Additional Subprime |  |       | Well-Capitalized | 
|                  |  | Risk-Weighting |       |   | Risk-Weighting      |  |       | Minimum          | 
|                  |  |                |       |   |                     |  |       |                  | 
|Capital Ratios:   |  |                |       |   |                     |  |       |                  |  |  |       |  
|Tier 1 core       |  |                | 7.62  | % |                     |  | 7.62  | %                |  |  | 5.00  | %
|Tier 1 risk-based |  |                | 11.07 | % |                     |  | 10.87 | %                |  |  | 6.00  | %
|Total risk-based  |  |                | 11.45 | % |                     |  | 11.26 | %                |  |  | 10.00 | %






OFF-BALANCE SHEET ARRANGEMENTS








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AGGREGATE CONTRACTUAL OBLIGATIONS


10-K 10-K). 10-K





CRITICAL ACCOUNTING POLICIES AND JUDGMENTS











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



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

INDYMAC BANCORP, INC. AND SUBSIDIARIES





CONSOLIDATED BALANCE SHEETS


|                                                                                                                                                                                                                                                                                              |                           |                                                                                                                                                             |                                 |         |              |           |           |         |            |           | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------- | ------- | ------------ | --------- | --------- | ------- | ---------- | --------- | 
|                                                                                                                                                                                                                                                                                              |                           | March 31,                                                                                                                                                   |                                 |         | December 31, |          
|                                                                                                                                                                                                                                                                                              |                           | 2006                                                                                                                                                        |                                 |         | 2005         |          
|                                                                                                                                                                                                                                                                                              |                           |                                                                                                                                                             |                                 |         |              |          
|                                                                                                                                                                                                                                                                                              |                           | (Unaudited)                                                                                                                                                 |                                 |         |             
|                                                                                                                                                                                                                                                                                              |                           | (Dollars in thousands)                                                                                                                                      |                                
|Assets                                                                                                                                                                                                                                                                                        |                           |                                                                                                                                                             |                                 |         |              |           |           |        
|Cash and cash equivalents                                                                                                                                                                                                                                                                     |                           | $                                                                                                                                                           | 442,086                         |         |              | $         | 442,525   |        
|Securities classified as trading ($98.8 million and
    $96.8 million pledged as collateral for borrowings at
    March 31, 2006 and December 31, 2005, respectively)                                                                                                                         |                           |                                                                                                                                                             | 372,954                         |         |              |           | 348,962   |        
|Securities classified as available for sale, amortized cost of
    $4.2 billion and $3.8 billion at March 31, 2006
    and December 31, 2005, respectively ($3.1 billion and
    $2.7 billion pledged as collateral for borrowings at
    March 31, 2006 and December 31, 2005, respectively) |                           |                                                                                                                                                             | 4,190,998                       |         |              |           | 3,753,195 |        
|Loans receivable:                                                                                                                                                                                                                                                                             |                           |                                                                                                                                                             |                                 |         |              |           |           |        
|                                                                                                                                                                                                                                                                                              | Loans held for sale       |                                                                                                                                                             |                                 |         |              |           |           |         |           
|                                                                                                                                                                                                                                                                                              |                           | SFR mortgage                                                                                                                                                |                                 |         | 6,715,418    |           |           |         | 5,170,168  |          
|                                                                                                                                                                                                                                                                                              |                           | HELOC                                                                                                                                                       |                                 |         | 635,747      |           |           |         | 755,040    |          
|                                                                                                                                                                                                                                                                                              |                           | Consumer lot loans                                                                                                                                          |                                 |         | 83,179       |           |           |         | 98,976     |          
|                                                                                                                                                                                                                                                                                              |                           |                                                                                                                                                             |                                 |         |              |          
|                                                                                                                                                                                                                                                                                              |                           |                                                                                                                                                             | Total loans held for sale       |         |              | 7,434,344 |           |         |            | 6,024,184 | 
|                                                                                                                                                                                                                                                                                              |                           |                                                                                                                                                             |                                 |         |              |          
|                                                                                                                                                                                                                                                                                              | Loans held for investment |                                                                                                                                                             |                                 |         |              |           |           |         |           
|                                                                                                                                                                                                                                                                                              |                           | SFR mortgage                                                                                                                                                |                                 |         | 5,663,142    |           |           |         | 5,441,521  |          
|                                                                                                                                                                                                                                                                                              |                           | Consumer construction                                                                                                                                       |                                 |         | 1,726,226    |           |           |         | 1,656,963  |          
|                                                                                                                                                                                                                                                                                              |                           | Builder construction                                                                                                                                        |                                 |         | 972,241      |           |           |         | 838,772    |          
|                                                                                                                                                                                                                                                                                              |                           | HELOC                                                                                                                                                       |                                 |         | 31,101       |           |           |         | 31,882     |          
|                                                                                                                                                                                                                                                                                              |                           | Land and other mortgage                                                                                                                                     |                                 |         | 313,253      |           |           |         | 260,615    |          
|                                                                                                                                                                                                                                                                                              |                           | Revolving warehouse lines of credit                                                                                                                         |                                 |         | 78,331       |           |           |         | 48,616     |          
|                                                                                                                                                                                                                                                                                              | Allowance for loan losses |                                                                                                                                                             |                                 | (57,321 | )            |           |           | (55,168 | )         
|                                                                                                                                                                                                                                                                                              |                           |                                                                                                                                                             |                                 |         |              |          
|                                                                                                                                                                                                                                                                                              |                           |                                                                                                                                                             | Total loans held for investment |         |              | 8,726,973 |           |         |            | 8,223,201 | 
|                                                                                                                                                                                                                                                                                              |                           |                                                                                                                                                             |                                 |         |              |          
|                                                                                                                                                                                                                                                                                              |                           | Total loans receivable ($11.8 billion and
    $10.2 billion pledged as collateral for borrowings at
    March 31, 2006 and December 31, 2005, respectively) |                                 |         | 16,161,317   |           |           |         | 14,247,385 |          
|Mortgage servicing rights                                                                                                                                                                                                                                                                     |                           |                                                                                                                                                             | 1,354,433                       |         |              |           | 1,094,490 |        
|Investment in Federal Home Loan Bank stock                                                                                                                                                                                                                                                    |                           |                                                                                                                                                             | 589,916                         |         |              |           | 556,262   |        
|Interest receivable                                                                                                                                                                                                                                                                           |                           |                                                                                                                                                             | 156,499                         |         |              |           | 131,644   |        
|Goodwill and other intangible assets                                                                                                                                                                                                                                                          |                           |                                                                                                                                                             | 80,712                          |         |              |           | 80,847    |        
|Foreclosed assets                                                                                                                                                                                                                                                                             |                           |                                                                                                                                                             | 8,519                           |         |              |           | 8,817     |        
|Other assets                                                                                                                                                                                                                                                                                  |                           |                                                                                                                                                             | 845,813                         |         |              |           | 788,172   |        
|                                                                                                                                                                                                                                                                                              |                           |                                                                                                                                                             |                                 |         |              |          
|                                                                                                                                                                                                                                                                                              |                           | Total assets                                                                                                                                                |                                 | $       | 24,203,247   |           |           | $       | 21,452,299 |          
|                                                                                                                                                                                                                                                                                              |                           |                                                                                                                                                             |                                 |         |              |          

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|                                     |                                                                                                                                                                                                                                   |                                            |           |           |              |   |           |           |            | 
|------------------------------------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | --------- | --------- | ------------ | - | --------- | --------- | ---------- | 
|                                     |                                                                                                                                                                                                                                   | March 31,                                  |           |           | December 31, |  
|                                     |                                                                                                                                                                                                                                   | 2006                                       |           |           | 2005         |  
|                                     |                                                                                                                                                                                                                                   |                                            |           |           |              |  
|                                     |                                                                                                                                                                                                                                   | (Unaudited)                                |           |           |             
|                                     |                                                                                                                                                                                                                                   | (Dollars in thousands)                     |          
|                                    
|Liabilities and Shareholders Equity |                                                                                                                                                                                                                                   |                                            |           |           |              |   |           |          
|Deposits                             |                                                                                                                                                                                                                                   | $                                          | 8,266,376 |           |              | $ | 7,671,924 |          
|Advances from Federal Home Loan Bank |                                                                                                                                                                                                                                   |                                            | 7,995,000 |           |              |   | 6,953,000 |          
|Other borrowings                     |                                                                                                                                                                                                                                   |                                            | 5,194,698 |           |              |   | 4,367,270 |          
|Other liabilities                    |                                                                                                                                                                                                                                   |                                            | 1,103,631 |           |              |   | 916,664   |          
|                                     |                                                                                                                                                                                                                                   |                                            |           |           |              |  
|                                     |                                                                                                                                                                                                                                   | Total liabilities                          |           |           | 22,559,705   |   |           |           | 19,908,858 | 
|                                     |                                                                                                                                                                                                                                   |                                            |           |           |              |  
|Shareholders Equity                 |                                                                                                                                                                                                                                   |                                            |           |           |              |   |           |          
|                                     | Preferred stock  authorized, 10,000,000 shares
    of $0.01 par value; none issued                                                                                                                                               |                                            |           |          |              |   |           |          |           
|                                     | Common stock  authorized, 200,000,000 shares of
    $0.01 par value; issued 94,987,327 shares (65,747,783
    outstanding) at March 31, 2006, and issued
    93,436,622 shares (64,246,767 outstanding) at
    December 31, 2005 |                                            |           | 950       |              |   |           | 934       |           
|                                     | Additional paid-in-capital                                                                                                                                                                                                        |                                            |           | 1,360,496 |              |   |           | 1,318,751 |           
|                                     | Accumulated other comprehensive loss                                                                                                                                                                                              |                                            |           | (16,469   | )            |   |           | (15,157   | )         
|                                     | Retained earnings                                                                                                                                                                                                                 |                                            |           | 820,959   |              |   |           | 759,330   |           
|                                     | Treasury stock, 29,239,544 shares and
    29,189,855 shares at March 31, 2006 and
    December 31, 2005, respectively                                                                                                             |                                            |           | (522,394  | )            |   |           | (520,417  | )         
|                                     |                                                                                                                                                                                                                                   |                                            |           |           |              |  
|                                     |                                                                                                                                                                                                                                   | Total shareholders equity                 |           |           | 1,643,542    |   |           |           | 1,543,441  | 
|                                     |                                                                                                                                                                                                                                   |                                            |           |           |              |  
|                                     |                                                                                                                                                                                                                                   | Total liabilities and shareholders equity |           | $         | 24,203,247   |   |           | $         | 21,452,299 | 
|                                     |                                                                                                                                                                                                                                   |                                            |           |           |              |  



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INDYMAC BANCORP, INC. AND SUBSIDIARIES





CONSOLIDATED STATEMENTS OF EARNINGS


|                                     |                                                                   |                            |                                 |                                                     |        |         |         |         |        |         |         | 
|------------------------------------ | ----------------------------------------------------------------- | -------------------------- | ------------------------------- | --------------------------------------------------- | ------ | ------- | ------- | ------- | ------ | ------- | ------- | 
|                                     |                                                                   | For the Three Months       |                                
|                                     |                                                                   | Ended March 31,            |                                
|                                     |                                                                   |                            |                                
|                                     |                                                                   | 2006                       |                                 |                                                     | 2005   |        
|                                     |                                                                   |                            |                                 |                                                     |        |        
|                                     |                                                                   | (Unaudited)                |                                
|                                     |                                                                   | (Dollars in thousands,     |                                
|                                     |                                                                   | except per share data)     |                                
|Interest income                      |                                                                   |                            |                                 |                                                     |        |         |         |        
|Mortgage-backed and other securities |                                                                   | $                          | 66,483                          |                                                     |        | $       | 51,324  |        
|Loans held for sale                  |                                                                   |                            |                                 |                                                     |        |         |         |        
|                                     | SFR mortgage                                                      |                            |                                 | 153,397                                             |        |         |         | 71,794  |       
|                                     | HELOC                                                             |                            |                                 | 17,745                                              |        |         |         | 6,352   |       
|                                     | Consumer lot loans                                                |                            |                                 | 2,419                                               |        |         |         | 1,237   |       
|                                     |                                                                   |                            |                                 |                                                     |        |        
|                                     |                                                                   |                            | Total loans held for sale       |                                                     |        | 173,561 |         |         |        | 79,383  |        
|Loans held for investment            |                                                                   |                            |                                 |                                                     |        |         |         |        
|                                     | SFR mortgage                                                      |                            |                                 | 73,795                                              |        |         |         | 52,752  |       
|                                     | Consumer construction                                             |                            |                                 | 24,443                                              |        |         |         | 19,285  |       
|                                     | Builder construction                                              |                            |                                 | 21,284                                              |        |         |         | 12,993  |       
|                                     | Land and other mortgage                                           |                            |                                 | 6,848                                               |        |         |         | 3,637   |       
|                                     | HELOC                                                             |                            |                                 | 614                                                 |        |         |         | 583     |       
|                                     | Revolving warehouse lines of credit                               |                            |                                 | 922                                                 |        |         |         | 2       |       
|                                     |                                                                   |                            |                                 |                                                     |        |        
|                                     |                                                                   |                            | Total loans held for investment |                                                     |        | 127,906 |         |         |        | 89,252  |        
|Other                                |                                                                   |                            | 9,896                           |                                                     |        |         | 4,393   |        
|                                     |                                                                   |                            |                                 |                                                     |        |        
|                                     |                                                                   |                            | Total interest income           |                                                     |        | 377,846 |         |         |        | 224,352 |        
|Interest expense                     |                                                                   |                            |                                 |                                                     |        |         |         |        
|                                     | Deposits                                                          |                            |                                 | 74,243                                              |        |         |         | 35,892  |       
|                                     | Advances from Federal Home Loan Bank                              |                            |                                 | 103,609                                             |        |         |         | 52,713  |       
|                                     | Other borrowings                                                  |                            |                                 | 72,784                                              |        |         |         | 30,573  |       
|                                     |                                                                   |                            |                                 |                                                     |        |        
|                                     |                                                                   |                            | Total interest expense          |                                                     |        | 250,636 |         |         |        | 119,178 |        
|                                     |                                                                   |                            |                                 |                                                     |        |        
|                                     |                                                                   |                            |                                 | Net interest income                                 |        |         | 127,210 |         |        |         | 105,174 | 
|Provision for loan losses            |                                                                   |                            | 3,822                           |                                                     |        |         | 2,490   |        
|                                     |                                                                   |                            |                                 |                                                     |        |        
|                                     |                                                                   |                            |                                 | Net interest income after provision for loan losses |        |         | 123,388 |         |        |         | 102,684 | 
|Other income                         |                                                                   |                            |                                 |                                                     |        |         |         |        
|                                     | Gain on sale of loans                                             |                            |                                 | 141,199                                             |        |         |         | 144,322 |       
|                                     | Service fee income                                                |                            |                                 | 30,889                                              |        |         |         | 4,418   |       
|                                     | Gain (loss) on mortgage-backed securities, net                    |                            |                                 | (2,615                                              | )      |         |         | (4,646  | )     
|                                     | Fee and other income                                              |                            |                                 | 11,674                                              |        |         |         | 6,571   |       
|                                     |                                                                   |                            |                                 |                                                     |        |        
|                                     |                                                                   |                            | Total other income              |                                                     |        | 181,147 |         |         |        | 150,665 |        
|                                     |                                                                   |                            |                                 |                                                     |        |        
|                                     |                                                                   |                            |                                 | Net revenues                                        |        |         | 304,535 |         |        |         | 253,349 | 
|Other expense                        |                                                                   |                            |                                 |                                                     |        |         |         |        
|                                     | Operating expenses                                                |                            |                                 | 171,766                                             |        |         |         | 147,694 |       
|                                     | Amortization of other intangible assets                           |                            |                                 | 134                                                 |        |         |         | 157     |       
|                                     |                                                                   |                            |                                 |                                                     |        |        
|                                     |                                                                   |                            | Total other expense             |                                                     |        | 171,900 |         |         |        | 147,851 |        
|                                     |                                                                   |                            |                                 |                                                     |        |        
|                                     | Earnings before provision for income taxes and minority interests |                            |                                 | 132,635                                             |        |         |         | 105,498 |       
|                                     |                                                                   | Provision for income taxes |                                 |                                                     | 52,319 |         |         |         | 41,773 |        
|                                     |                                                                   |                            |                                 |                                                     |        |        
|                                     |                                                                   |                            |                                 | Net earnings before minority interests              |        |         | 80,316  |         |        |         | 63,725  | 
|                                     | Minority interests                                                |                            |                                 | 467                                                 |        |         |         | 275     |       
|                                     |                                                                   |                            |                                 |                                                     |        |        
|                                     |                                                                   |                            |                                 | Net earnings                                        |        | $       | 79,849  |         |        | $       | 63,450  | 
|                                     |                                                                   |                            |                                 |                                                     |        |        
|Earnings per share:                  |                                                                   |                            |                                 |                                                     |        |         |         |        
|                                     | Basic                                                             |                            | $                               | 1.24                                                |        |         | $       | 1.03    |       
|                                     | Diluted                                                           |                            | $                               | 1.18                                                |        |         | $       | 0.98    |       
|Weighted-average shares outstanding: |                                                                   |                            |                                 |                                                     |        |         |         |        
|                                     | Basic                                                             |                            |                                 | 64,310                                              |        |         |         | 61,798  |       
|                                     | Diluted                                                           |                            |                                 | 67,528                                              |        |         |         | 64,830  |       
|Dividends declared per share         |                                                                   | $                          | 0.44                            |                                                     |        | $       | 0.36    |        



59



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##### Table of Contents



INDYMAC BANCORP, INC. AND SUBSIDIARIES





CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY AND
COMPREHENSIVE INCOME


|                                                                                      |  |                        |            |   |        |            |     |             |       |   |               |  |  |          |         |   |               |   |         |          |  |   |               |   |  |   |          |   |  |   |           |  
|------------------------------------------------------------------------------------- |  | ---------------------- | ---------- | - | ------ | ---------- | --- | ----------- | ----- | - | ------------- |  |  | -------- | ------- | - | ------------- | - | ------- | -------- |  | - | ------------- | - |  | - | -------- | - |  | - | --------- | -
|                                                                                      |  |                        |            |   |        |            |     | Accumulated |       |   |               |  |  |          |         |   |              
|                                                                                      |  |                        |            |   |        | Additional |     |             | Other |   |               |  |  | Total    |         |   |               |   | Total   |         
|                                                                                      |  | Shares                 |            |   | Common |            |     | Paid-In-    |       |   | Comprehensive |  |  | Retained |         |   | Comprehensive |   |         | Treasury |  |   | Shareholders |  
|                                                                                      |  | Outstanding            |            |   | Stock  |            |     | Capital     |       |   | Loss          |  |  | Earnings |         |   | Income        |   |         | Stock    |  |   | Equity        |  
|                                                                                      |  |                        |            |   |        |            |     |             |       |   |               |  |  |          |         |   |               |   |         |          |  |   |               |  
|                                                                                      |  | (Unaudited)            |           
|                                                                                      |  | (Dollars in thousands) |           
|Balance at December 31, 2004                                                          |  |                        | 61,995,480 |   |        | $          | 912 |             |       | $ | 1,186,682     |  |  | $        | (20,304 | ) |               | $ | 616,516 |          |  | $ |              |   |  | $ | (519,835 | ) |  | $ | 1,263,971 |  
|Cumulative-effect adjustment due to change in accounting for
    common stock options |  |                        |           |   |        |            |    |             |       |   | 68,111        |  |  |          |        |   |               |   | (51,811 | )        |  |   |              |   |  |   |         |   |  |   | 16,300    |  
|                                                                                      |  |                        |            |   |        |            |     |             |       |   |               |  |  |          |         |   |               |   |         |          |  |   |               |  
|Balance at December 31, 2004, retrospectively adjusted
    (see Note 2)               |  |                        | 61,995,480 |   |        | $          | 912 |             |       | $ | 1,254,793     |  |  | $        | (20,304 | ) |               | $ | 564,705 |          |  | $ |              |   |  | $ | (519,835 | ) |  | $ | 1,280,271 |  
|Exercises of common stock options                                                     |  |                        | 214,317    |   |        |            | 2   |             |       |   | 4,904         |  |  |          |        |   |               |   |        |          |  |   |              |   |  |   |         |   |  |   | 4,906     |  
|Compensation expenses for common stock options                                        |  |                        |           |   |        |            |    |             |       |   | 3,182         |  |  |          |        |   |               |   |        |          |  |   |              |   |  |   |         |   |  |   | 3,182     |  
|Deferred compensation, restricted stock, net of forfeitures and
    amortization      |  |                        | 261,434    |   |        |            | 2   |             |       |   | 1,058         |  |  |          |        |   |               |   |        |          |  |   |              |   |  |   |         |   |  |   | 1,060     |  
|Net unrealized loss on mortgage-backed securities available for
    sale              |  |                        |           |   |        |            |    |             |       |   |              |  |  |          | (10,027 | ) |               |   |        |          |  |   | (10,027       | ) |  |   |         |   |  |   | (10,027   | )
|Net unrealized gain on derivatives used in cash flow hedges                           |  |                        |           |   |        |            |    |             |       |   |              |  |  |          | 25,954  |   |               |   |        |          |  |   | 25,954        |   |  |   |         |   |  |   | 25,954    |  
|Purchases of common stock                                                             |  |                        | (13,609    | ) |        |            |    |             |       |   |              |  |  |          |        |   |               |   |        |          |  |   |              |   |  |   | (472     | ) |  |   | (472      | )
|Cash dividends                                                                        |  |                        |           |   |        |            |    |             |       |   |              |  |  |          |        |   |               |   | (22,390 | )        |  |   |              |   |  |   |         |   |  |   | (22,390   | )
|Net earnings, retrospectively adjusted (see Note 2)                                   |  |                        |           |   |        |            |    |             |       |   |              |  |  |          |        |   |               |   | 63,450  |          |  |   | 63,450        |   |  |   |         |   |  |   | 63,450    |  
|                                                                                      |  |                        |            |   |        |            |     |             |       |   |               |  |  |          |         |   |               |   |         |          |  |   |               |  
|Total comprehensive income                                                            |  |                        |           |   |        |            |    |             |       |   |              |  |  |          |        |   |               |   |        |          |  | $ | 79,377        |   |  |   |         |   |  |   |          |  
|                                                                                      |  |                        |            |   |        |            |     |             |       |   |               |  |  |          |         |   |               |   |         |          |  |   |               |  
|Balance at March 31, 2005, retrospectively adjusted                                   |  |                        | 62,457,622 |   |        | $          | 916 |             |       | $ | 1,263,937     |  |  | $        | (4,377  | ) |               | $ | 605,765 |          |  |   |               |   |  | $ | (520,307 | ) |  | $ | 1,345,934 |  
|                                                                                      |  |                        |            |   |        |            |     |             |       |   |               |  |  |          |         |   |               |   |         |          |  |   |               |  
|Balance at December 31, 2005                                                          |  |                        | 64,246,767 |   |        | $          | 934 |             |       | $ | 1,242,500     |  |  | $        | (15,157 | ) |               | $ | 818,241 |          |  | $ |              |   |  | $ | (520,417 | ) |  | $ | 1,526,101 |  
|Cumulative-effect adjustment due to change in accounting for
    common stock options |  |                        |           |   |        |            |    |             |       |   | 76,251        |  |  |          |        |   |               |   | (58,911 | )        |  |   |              |   |  |   |         |   |  |   | 17,340    |  
|                                                                                      |  |                        |            |   |        |            |     |             |       |   |               |  |  |          |         |   |               |   |         |          |  |   |               |  
|Balance at December 31, 2005, retrospectively
    adjusted                            |  |                        | 64,246,767 |   |        | $          | 934 |             |       | $ | 1,318,751     |  |  | $        | (15,157 | ) |               | $ | 759,330 |          |  | $ |              |   |  | $ | (520,417 | ) |  | $ | 1,543,441 |  
|Cumulative-effect adjustment due to change in accounting for MSRs                     |  |                        |           |   |        |            |    |             |       |   |              |  |  |          |        |   |               |   | 10,624  |          |  |   |              |   |  |   |         |   |  |   | 10,624    |  
|Issuance of common stock                                                              |  |                        | 617,414    |   |        |            | 6   |             |       |   | 23,919        |  |  |          |        |   |               |   |        |          |  |   |              |   |  |   |         |   |  |   | 23,925    |  
|Exercises of common stock options and warrants                                        |  |                        | 569,315    |   |        |            | 6   |             |       |   | 13,127        |  |  |          |        |   |               |   |        |          |  |   |              |   |  |   |         |   |  |   | 13,133    |  
|Compensation expenses for common stock options                                        |  |                        |           |   |        |            |    |             |       |   | 2,515         |  |  |          |        |   |               |   |        |          |  |   |              |   |  |   |         |   |  |   | 2,515     |  
|Net directors and officers notes receivable payments                                |  |                        |           |   |        |            |    |             |       |   | 18            |  |  |          |        |   |               |   |        |          |  |   |              |   |  |   |         |   |  |   | 18        |  
|Deferred compensation, restricted stock, net of forfeitures and
    amortization      |  |                        | 363,976    |   |        |            | 4   |             |       |   | 2,166         |  |  |          |        |   |               |   |        |          |  |   |              |   |  |   |         |   |  |   | 2,170     |  
|Net unrealized loss on mortgage-backed securities available for
    sale              |  |                        |           |   |        |            |    |             |       |   |              |  |  |          | (11,287 | ) |               |   |        |          |  |   | (11,287       | ) |  |   |         |   |  |   | (11,287   | )
|Net unrealized gain on derivatives used in cash flow hedges                           |  |                        |           |   |        |            |    |             |       |   |              |  |  |          | 9,975   |   |               |   |        |          |  |   | 9,975         |   |  |   |         |   |  |   | 9,975     |  
|Purchases of common stock                                                             |  |                        | (49,689    | ) |        |            |    |             |       |   |              |  |  |          |        |   |               |   |        |          |  |   |              |   |  |   | (1,977   | ) |  |   | (1,977    | )
|Cash dividends                                                                        |  |                        |           |   |        |            |    |             |       |   |              |  |  |          |        |   |               |   | (28,844 | )        |  |   |              |   |  |   |         |   |  |   | (28,844   | )
|Net earnings                                                                          |  |                        |           |   |        |            |    |             |       |   |              |  |  |          |        |   |               |   | 79,849  |          |  |   | 79,849        |   |  |   |         |   |  |   | 79,849    |  
|                                                                                      |  |                        |            |   |        |            |     |             |       |   |               |  |  |          |         |   |               |   |         |          |  |   |               |  
|Total comprehensive income                                                            |  |                        |           |   |        |            |    |             |       |   |              |  |  |          |        |   |               |   |        |          |  | $ | 78,537        |   |  |   |         |   |  |   |          |  
|                                                                                      |  |                        |            |   |        |            |     |             |       |   |               |  |  |          |         |   |               |   |         |          |  |   |               |  
|Balance at March 31, 2006                                                             |  |                        | 65,747,783 |   |        | $          | 950 |             |       | $ | 1,360,496     |  |  | $        | (16,469 | ) |               | $ | 820,959 |          |  |   |               |   |  | $ | (522,394 | ) |  | $ | 1,643,542 |  
|                                                                                      |  |                        |            |   |        |            |     |             |       |   |               |  |  |          |         |   |               |   |         |          |  |   |               |  



60



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##### Table of Contents



INDYMAC BANCORP, INC. AND SUBSIDIARIES





CONSOLIDATED STATEMENTS OF CASH FLOWS


|                                                                            |                                                                                                                        |                                                                          |                                                     |            |          |            |         |            |          |            |  
|--------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------ | --------------------------------------------------- | ---------- | -------- | ---------- | ------- | ---------- | -------- | ---------- | -
|                                                                            |                                                                                                                        | For the Three Months Ended                                               |                                                    
|                                                                            |                                                                                                                        | March 31,                                                                |                                                    
|                                                                            |                                                                                                                        |                                                                          |                                                    
|                                                                            |                                                                                                                        | 2006                                                                     |                                                     |            | 2005     |           
|                                                                            |                                                                                                                        |                                                                          |                                                     |            |          |           
|                                                                            |                                                                                                                        | (Unaudited)                                                              |                                                    
|                                                                            |                                                                                                                        | (Dollars in thousands)                                                   |                                                    
|Cash flows from operating activities:                                       |                                                                                                                        |                                                                          |                                                     |            |          |            |         |           
|                                                                            | Net earnings                                                                                                           |                                                                          | $                                                   | 79,849     |          |            | $       | 63,450     |         
|                                                                            | Adjustments to reconcile net earnings to net cash used in
    operating activities:                                    |                                                                          |                                                     |            |          |            |         |            |         
|                                                                            |                                                                                                                        | Gain on sale of loans                                                    |                                                     |            | (141,199 | )          |         |            | (144,322 | )         
|                                                                            |                                                                                                                        | Compensation expenses related to stock options and restricted
    stocks |                                                     |            | 4,685    |            |         |            | 4,242    |           
|                                                                            |                                                                                                                        | Other amortization and depreciation                                      |                                                     |            | 14,586   |            |         |            | 53,141   |           
|                                                                            |                                                                                                                        | Change in valuation of mortgage servicing rights                         |                                                     |            | (12,325  | )          |         |            | (12,859  | )         
|                                                                            |                                                                                                                        | Loss on mortgage-backed securities, net                                  |                                                     |            | 2,615    |            |         |            | 4,646    |           
|                                                                            |                                                                                                                        | Provision for loan losses                                                |                                                     |            | 3,822    |            |         |            | 2,490    |           
|                                                                            |                                                                                                                        | Net decrease in deferred tax liability                                   |                                                     |            | 82,222   |            |         |            | 29,249   |           
|                                                                            |                                                                                                                        | Net decrease (increase) in other assets and liabilities                  |                                                     |            | 47,804   |            |         |            | (18,098  | )         
|                                                                            |                                                                                                                        |                                                                          |                                                     |            |          |           
|                                                                            | Net cash provided by (used in) operating activities before
    activity for trading securities and loans held for sale |                                                                          |                                                     | 82,059     |          |            |         | (18,061    | )       
|                                                                            | Net sales of trading securities                                                                                        |                                                                          |                                                     | 99,286     |          |            |         | 14,559     |         
|                                                                            | Net purchases and originations of loans held for sale                                                                  |                                                                          |                                                     | (2,661,562 | )        |            |         | (1,227,963 | )       
|                                                                            |                                                                                                                        |                                                                          |                                                     |            |          |           
|                                                                            |                                                                                                                        |                                                                          | Net cash used in operating activities               |            |          | (2,480,217 | )       |            |          | (1,231,465 | )
|                                                                            |                                                                                                                        |                                                                          |                                                     |            |          |           
|Cash flows from investing activities:                                       |                                                                                                                        |                                                                          |                                                     |            |          |            |         |           
|                                                                            | Net sales of and payments from loans held for investment                                                               |                                                                          |                                                     | 102,095    |          |            |         | 280,850    |         
|                                                                            | Purchases of mortgage-backed securities available for sale                                                             |                                                                          |                                                     | (192,630   | )        |            |         | (98,283    | )       
|                                                                            | Proceeds from sales of and principal payments from
    mortgage-backed securities available for sale                   |                                                                          |                                                     | 158,193    |          |            |         | 173,330    |         
|                                                                            | Net increase in investment in Federal Home Loan Bank stock,
    at cost                                                |                                                                          |                                                     | (33,654    | )        |            |         | (36,432    | )       
|                                                                            | Net increase in real estate investment                                                                                 |                                                                          |                                                     | 3,324      |          |            |         |           |         
|                                                                            | Net purchases of property, plant and equipment                                                                         |                                                                          |                                                     | (25,198    | )        |            |         | (17,482    | )       
|                                                                            |                                                                                                                        |                                                                          |                                                     |            |          |           
|                                                                            |                                                                                                                        |                                                                          | Net cash provided by investing activities           |            |          | 12,130     |         |            |          | 301,983    |  
|                                                                            |                                                                                                                        |                                                                          |                                                     |            |          |           
|Cash flows from financing activities:                                       |                                                                                                                        |                                                                          |                                                     |            |          |            |         |           
|                                                                            | Net increase in deposits                                                                                               |                                                                          |                                                     | 593,476    |          |            |         | 362,410    |         
|                                                                            | Net increase in advances from Federal Home Loan Bank                                                                   |                                                                          |                                                     | 1,042,000  |          |            |         | 546,000    |         
|                                                                            | Net increase in borrowings                                                                                             |                                                                          |                                                     | 825,917    |          |            |         | 96,407     |         
|                                                                            | Net proceeds from issuance of common stock                                                                             |                                                                          |                                                     | 23,925     |          |            |         |           |         
|                                                                            | Net proceeds from stock options, warrants and notes receivable                                                         |                                                                          |                                                     | 13,151     |          |            |         | 4,906      |         
|                                                                            | Cash dividends paid                                                                                                    |                                                                          |                                                     | (28,844    | )        |            |         | (22,390    | )       
|                                                                            | Purchases of common stock                                                                                              |                                                                          |                                                     | (1,977     | )        |            |         | (472       | )       
|                                                                            |                                                                                                                        |                                                                          |                                                     |            |          |           
|                                                                            |                                                                                                                        |                                                                          | Net cash (used in) provided by financing activities |            |          | 2,467,648  |         |            |          | 986,861    |  
|                                                                            |                                                                                                                        |                                                                          |                                                     |            |          |           
|Net (decrease) increase in cash and cash equivalents                        |                                                                                                                        |                                                                          | (439                                                | )          |          |            | 57,379  |           
|Cash and cash equivalents at beginning of period                            |                                                                                                                        |                                                                          | 442,525                                             |            |          |            | 356,157 |           
|                                                                            |                                                                                                                        |                                                                          |                                                     |            |          |           
|Cash and cash equivalents at end of period                                  |                                                                                                                        | $                                                                        | 442,086                                             |            |          | $          | 413,536 |           
|                                                                            |                                                                                                                        |                                                                          |                                                     |            |          |           
|Supplemental cash flow information:                                         |                                                                                                                        |                                                                          |                                                     |            |          |            |         |           
|                                                                            | Cash paid for interest                                                                                                 |                                                                          | $                                                   | 239,390    |          |            | $       | 108,567    |         
|                                                                            |                                                                                                                        |                                                                          |                                                     |            |          |           
|                                                                            | Cash (received) paid for income taxes                                                                                  |                                                                          | $                                                   | (49,425    | )        |            | $       | 10,404     |         
|                                                                            |                                                                                                                        |                                                                          |                                                     |            |          |           
|Supplemental disclosure of non-cash investing and financing
    activities: |                                                                                                                        |                                                                          |                                                     |            |          |            |         |           
|                                                                            | Net transfer of loans held for sale to loans held for investment                                                       |                                                                          | $                                                   | 621,116    |          |            | $       | 943,514    |         
|                                                                            |                                                                                                                        |                                                                          |                                                     |            |          |           
|                                                                            | Net transfer of mortgage servicing rights to trading securities                                                        |                                                                          | $                                                   |           |          |            | $       | 5,127      |         
|                                                                            |                                                                                                                        |                                                                          |                                                     |            |          |           



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INDYMAC BANCORP, INC. AND SUBSIDIARIES





NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


March 31, 2006


(Unaudited)


NOTE 1  BASIS OF PRESENTATION




10-K


NOTE 2  NEWLY ADOPTED AND NEW ACCOUNTING
PRONOUNCEMENTS


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




|                                       |  |                                       |        |  |         |   |        |         |  |   |         |  |  |          |        |  |  |   |         | 
|-------------------------------------- |  | ------------------------------------- | ------ |  | ------- | - | ------ | ------- |  | - | ------- |  |  | -------- | ------ |  |  | - | ------- | 
|                                       |  | Q1 2005                               |        |  | Q2 2005 |   |        | Q3 2005 |  |   | Q4 2005 |  |  | YTD 2005 |       
|                                       |  |                                       |        |  |         |   |        |         |  |   |         |  |  |          |       
|                                       |  | (In thousands, except per share data) |       
|Reported net earnings                  |  | $                                     | 65,476 |  |         | $ | 83,146 |         |  | $ | 79,275  |  |  | $        | 72,329 |  |  | $ | 300,226 | 
|Retrospective application of SFAS 123R |  |                                       | 2,026  |  |         |   | 1,432  |         |  |   | 1,749   |  |  |          | 1,891  |  |  |   | 7,098   | 
|                                       |  |                                       |        |  |         |   |        |         |  |   |         |  |  |          |       
|Adjusted net earnings                  |  | $                                     | 63,450 |  |         | $ | 81,714 |         |  | $ | 77,526  |  |  | $        | 70,438 |  |  | $ | 293,128 | 
|Adjusted average dilutive shares       |  |                                       | 64,830 |  |         |   | 65,793 |         |  |   | 67,100  |  |  |          | 66,737 |  |  |   | 66,115  | 
|Reported dilutive earnings per share   |  | $                                     | 1.01   |  |         | $ | 1.26   |         |  | $ | 1.18    |  |  | $        | 1.09   |  |  | $ | 4.54    | 
|Adjusted dilutive earnings per share   |  | $                                     | 0.98   |  |         | $ | 1.24   |         |  | $ | 1.16    |  |  | $        | 1.06   |  |  | $ | 4.43    | 

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INDYMAC BANCORP, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Accounting for
Servicing of Financial Assets, Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of
Liabilities


Accounting for Certain Hybrid Financial
Instruments


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INDYMAC BANCORP, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


NOTE 3  MORTGAGE-BACKED SECURITIES AND AGENCY
NOTES




|                                                                     |                                               |                                                                            |   |           |              |  |   |           |           | 
|-------------------------------------------------------------------- | --------------------------------------------- | -------------------------------------------------------------------------- | - | --------- | ------------ |  | - | --------- | --------- | 
|                                                                     |                                               | March 31,                                                                  |   |           | December 31, | 
|                                                                     |                                               | 2006                                                                       |   |           | 2005         | 
|                                                                     |                                               |                                                                            |   |           |              | 
|                                                                     |                                               | (Dollars in thousands)                                                     |  
|Mortgage-backed securities  Trading                                 |                                               |                                                                            |   |           |              |  |   |          
|                                                                     | AAA-rated non-agency securities               |                                                                            | $ | 24,244    |              |  | $ | 52,633    |          
|                                                                     | AAA-rated and agency interest-only securities |                                                                            |   | 84,816    |              |  |   | 78,731    |          
|                                                                     | AAA-rated principal-only securities           |                                                                            |   | 12,820    |              |  |   | 9,483     |          
|                                                                     | Prepayment penalty securities                 |                                                                            |   | 66,949    |              |  |   | 75,741    |          
|                                                                     | Other investment grade securities             |                                                                            |   | 13,603    |              |  |   | 8,830     |          
|                                                                     | Other non-investment grade securities         |                                                                            |   | 13,258    |              |  |   | 4,480     |          
|                                                                     | Non-investment grade residual securities      |                                                                            |   | 157,264   |              |  |   | 119,064   |          
|                                                                     |                                               |                                                                            |   |           |              | 
|                                                                     |                                               | Total mortgage-backed securities  Trading                                 |   | $         | 372,954      |  |   | $         | 348,962   | 
|                                                                     |                                               |                                                                            |   |           |              | 
|Mortgage-backed securities and agency notes 
    Available for sale |                                               |                                                                            |   |           |              |  |   |          
|                                                                     | AAA-rated non-agency securities               |                                                                            | $ | 3,917,482 |              |  | $ | 3,524,952 |          
|                                                                     | AAA-rated agency securities                   |                                                                            |   | 40,675    |              |  |   | 43,014    |          
|                                                                     | Other investment grade securities             |                                                                            |   | 131,896   |              |  |   | 83,290    |          
|                                                                     | Other non-investment grade securities         |                                                                            |   | 53,081    |              |  |   | 53,232    |          
|                                                                     | Non-investment grade residual securities      |                                                                            |   | 47,864    |              |  |   | 48,707    |          
|                                                                     |                                               |                                                                            |   |           |              | 
|                                                                     |                                               | Total mortgage-backed securities and agency notes 
    Available for sale |   | $         | 4,190,998    |  |   | $         | 3,753,195 | 
|                                                                     |                                               |                                                                            |   |           |              | 



|                                 |                                   |                                       |   |         |                      |   |            |           |           |  |            |            |         |        |   |           |            |  |   |         |         |   |   |           |           | 
|-------------------------------- | --------------------------------- | ------------------------------------- | - | ------- | -------------------- | - | ---------- | --------- | --------- |  | ---------- | ---------- | ------- | ------ | - | --------- | ---------- |  | - | ------- | ------- | - | - | --------- | --------- | 
|                                 |                                   | As of March 31, 2006                  |  
|                                 |                                   |                                       |  
|                                 |                                   | Less Than 12 Months                   |   |         | 12 Months or Greater |   |            | Total     |          
|                                 |                                   |                                       |   |         |                      |   |            |           |          
|                                 |                                   | Unrealized                            |   |         |                      |   | Unrealized |           |           |  |            | Unrealized |         |        |  
|                                 |                                   | Losses                                |   |         | Fair Value           |   |            | Losses    |           |  | Fair Value |            |         | Losses |   |           | Fair Value | 
|                                 |                                   |                                       |   |         |                      |   |            |           |           |  |            |            |         |        |   |           |            | 
|                                 |                                   | (Dollars in thousands)                |  
|Securities  Available for Sale: |                                   |                                       |   |         |                      |   |            |           |           |  |            |            |         |        |   |           |            |  |   |         |         |   |   |          
|                                 | AAA-rated agency securities       |                                       | $ | (628    | )                    |   | $          | 35,784    |           |  | $          |           |         |        | $ |          |            |  | $ | (628    | )       |   | $ | 35,784    |          
|                                 | AAA-rated non-agency securities   |                                       |   | (18,683 | )                    |   |            | 1,238,704 |           |  |            | (43,642    | )       |        |   | 1,197,626 |            |  |   | (62,325 | )       |   |   | 2,436,330 |          
|                                 | Other investment grade securities |                                       |   | (1,577  | )                    |   |            | 74,132    |           |  |            |           |         |        |   |          |            |  |   | (1,577  | )       |   |   | 74,132    |          
|                                 | Residuals                         |                                       |   | (368    | )                    |   |            | 19,581    |           |  |            |           |         |        |   |          |            |  |   | (368    | )       |   |   | 19,581    |          
|                                 |                                   |                                       |   |         |                      |   |            |           |           |  |            |            |         |        |   |           |            | 
|                                 |                                   | Total Securities  Available for Sale |   | $       | (21,256              | ) |            | $         | 1,368,201 |  |            | $          | (43,642 | )      |   | $         | 1,197,626  |  |   | $       | (64,898 | ) |   | $         | 2,565,827 | 
|                                 |                                   |                                       |   |         |                      |   |            |           |           |  |            |            |         |        |   |           |            | 



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INDYMAC BANCORP, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


NOTE 4  SEGMENT REPORTING


The Company operates through two primary segments:






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INDYMAC BANCORP, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|                                  |                        |                        |           |         |                 |   |           |        |  |   |            |        |  |         |           |         |   |   |            |         | 
|--------------------------------- | ---------------------- | ---------------------- | --------- | ------- | --------------- | - | --------- | ------ |  | - | ---------- | ------ |  | ------- | --------- | ------- | - | - | ---------- | ------- | 
|                                  |                        | Mortgage Banking       |           |         |                 |   |           |        | 
|                                  |                        |                        |           |         |                 |   |           |        | 
|                                  |                        | Production             |           |         | MSRs and        |   |           |        |  |   |            | Total  | 
|                                  |                        | Divisions              |           |         | Retained Assets |   |           | Thrift |  |   | Other      |        |  | Company |          
|                                  |                        |                        |           |         |                 |   |           |        |  |   |            |        |  |         |          
|                                  |                        | (Dollars in thousands) |          
|Three months ended March 31, 2006 |                        |                        |           |         |                 |   |           |        |  |   |            |        |  |         |           |         |   |   |            |        
|                                  | Net interest income    |                        | $         | 43,251  |                 |   | $         | 9,997  |  |   | $          | 67,858 |  |         | $         | 6,104   |   |   | $          | 127,210 | 
|                                  | Net revenues (expense) |                        |           | 182,510 |                 |   |           | 39,040 |  |   |            | 88,324 |  |         |           | (5,339  | ) |   |            | 304,535 | 
|                                  | Net earnings (loss)    |                        |           | 64,185  |                 |   |           | 17,183 |  |   |            | 39,227 |  |         |           | (40,746 | ) |   |            | 79,849  | 
|Allocated average capital         |                        |                        | 508,532   |         |                 |   | 237,195   |        |  |   | 640,482    |        |  |         | 212,097   |         |   |   | 1,598,306  |        
|Assets as of March 31, 2006       |                        | $                      | 6,528,415 |         |                 | $ | 2,173,621 |        |  | $ | 14,022,273 |        |  | $       | 1,478,938 |         |   | $ | 24,203,247 |        
|Return on equity                  |                        |                        | 51        | %       |                 |   | 29        | %      |  |   | 25         | %      |  |         | N/A       |         |   |   | 20         | %      
|Three months ended March 31, 2005 |                        |                        |           |         |                 |   |           |        |  |   |            |        |  |         |           |         |   |   |            |        
|                                  | Net interest income    |                        | $         | 25,330  |                 |   | $         | 13,335 |  |   | $          | 58,082 |  |         | $         | 8,427   |   |   | $          | 105,174 | 
|                                  | Net revenues (expense) |                        |           | 176,942 |                 |   |           | 17,474 |  |   |            | 72,538 |  |         |           | (13,605 | ) |   |            | 253,349 | 
|                                  | Net earnings (loss)    |                        |           | 66,285  |                 |   |           | 6,297  |  |   |            | 33,152 |  |         |           | (42,284 | ) |   |            | 63,450  | 
|Allocated average capital         |                        |                        | 277,534   |         |                 |   | 148,079   |        |  |   | 460,004    |        |  |         | 384,235   |         |   |   | 1,269,852  |        
|Assets as of March 31, 2005       |                        | $                      | 3,846,498 |         |                 | $ | 1,456,979 |        |  | $ | 11,469,063 |        |  | $       | 1,193,787 |         |   | $ | 17,966,327 |        
|Return on equity                  |                        |                        | 97        | %       |                 |   | 17        | %      |  |   | 29         | %      |  |         | N/A       |         |   |   | 20         | %      

NOTE 5  STOCK-BASED COMPENSATION




Accounting for Stock Issued to
Employees, Accounting for Stock-Based
Compensation


Share-Based Payment


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INDYMAC BANCORP, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|                                          |  |      |              |   |      |  |              |  
|----------------------------------------- |  | ---- | ------------ | - | ---- |  | ------------ | -
|                                          |  | 2006 |              |   | 2005 | 
|                                          |  |      |              |   |      | 
|Expected volatility                       |  |      | 28.11- 28.44 | % |      |  | 28.99- 29.42 | %
|Expected dividends                        |  |      | 4.00-4.60    | % |      |  | 3.72-4.07    | %
|Weighted average expected term (in years) |  |      | 6.89-7.34    |   |      |  | 5.00         |  
|Risk-free rate                            |  |      | 4.54-4.73    | % |      |  | 4.16-4.54    | %





|                                        |  |        |           |           |       |          |             |                |  |           |            |  |  |   |        | 
|--------------------------------------- |  | ------ | --------- | --------- | ----- | -------- | ----------- | -------------- |  | --------- | ---------- |  |  | - | ------ | 
|                                        |  |        |           |           |       | Weighted |             |                | 
|                                        |  |        |           | Weighted- |       |          | Average     |                |  |          
|                                        |  |        |           | Average   |       |          | Remaining   |                |  |          
|                                        |  |        |           | Exercise  |       |          | Contractual |                |  | Aggregate |           
|Options:                                |  | Shares |           |           | Price |          |             | Term           |  |           | Fair Value | 
|                                        |  |        |           |           |       |          |             |                |  |           |            | 
|                                        |  |        |           |           |       |          |             | (In thousands) | 
|Options outstanding, beginning of year  |  |        | 7,851,820 |           |       | $        | 24.82       |                |  |           |            |  |  |   |        | 
|Options granted                         |  |        | 788,140   |           |       |          | 39.11       |                |  |           |            |  |  |   |        | 
|Options exercised                       |  |        | (179,914  | )         |       |          | 22.42       |                |  |           |            |  |  |   |        | 
|Options canceled, forfeited and expired |  |        | (5,152    | )         |       |          | 34.77       |                |  |           |            |  |  |   |        | 
|                                        |  |        |           |           |       |          |             |                |  |           |            | 
|Options outstanding at March 31, 2006   |  |        | 8,454,894 |           |       | $        | 26.20       |                |  |           | 6.52       |  |  | $ | 63,665 | 
|                                        |  |        |           |           |       |          |             |                |  |           |            | 
|Options exercisable at March 31, 2006   |  |        | 6,190,234 |           |       | $        | 23.51       |                |  |           | 5.77       |  |  | $ | 45,388 | 
|                                        |  |        |           |           |       |          |             |                |  |           |            | 



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INDYMAC BANCORP, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                |  |        |            |            |            |   |      | 
|------------------------------- |  | ------ | ---------- | ---------- | ---------- | - | ---- | 
|                                |  |        |            | Weighted-  |           
|                                |  |        |            | Average    |           
|                                |  |        |            | Grant-Date |           
|Nonvested Options:              |  | Shares |            |            | Fair Value |  
|                                |  |        |            |            |            |  
|Nonvested, beginning of year    |  |        | 2,660,324  |            |            | $ | 7.54 | 
|Granted                         |  |        | 788,140    |            |            |   | 9.13 | 
|Vested                          |  |        | (1,180,709 | )          |            |   | 7.58 | 
|Canceled, forfeited and expired |  |        | (3,095     | )          |            |   | 7.60 | 
|                                |  |        |            |            |            |  
|Nonvested at March 31, 2006     |  |        | 2,264,660  |            |            | $ | 8.07 | 
|                                |  |        |            |            |            |  









|                             |  |        |          |            |            |   |       | 
|---------------------------- |  | ------ | -------- | ---------- | ---------- | - | ----- | 
|                             |  |        |          | Weighted-  |           
|                             |  |        |          | Average    |           
|                             |  |        |          | Grant-Date |           
|Restricted Stock:            |  | Shares |          |            | Fair Value |  
|                             |  |        |          |            |            |  
|Nonvested, beginning of year |  |        | 582,401  |            |            | $ | 32.59 | 
|Granted                      |  |        | 375,856  |            |            |   | 39.21 | 
|Vested                       |  |        | (158,435 | )          |            |   | 23.51 | 
|Canceled and forfeited       |  |        | (10,457  | )          |            |   | 37.33 | 
|                             |  |        |          |            |            |  
|Nonvested at March 31, 2006  |  |        | 789,365  |            |            | $ | 37.50 | 
|                             |  |        |          |            |            |  



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



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INDYMAC BANCORP, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                   |  |                        |       |   |      |   |       |  
|---------------------------------- |  | ---------------------- | ----- | - | ---- | - | ----- | -
|                                   |  | Three Months           |      
|                                   |  | Ended                  |      
|                                   |  | March 31,              |      
|                                   |  |                        |      
|                                   |  | 2006                   |       |   | 2005 |  
|                                   |  |                        |       |   |      |  
|                                   |  | (Dollars in thousands) |      
|Service cost                       |  | $                      | 1,575 |   |      | $ | 1,486 |  
|Interest cost                      |  |                        | 568   |   |      |   | 453   |  
|Expected return on assets          |  |                        | (582  | ) |      |   | (440  | )
|Recognized actuarial loss          |  |                        | 81    |   |      |   | 85    |  
|Amortization of prior service cost |  |                        | 14    |   |      |   | 14    |  
|                                   |  |                        |       |   |      |  
|Net periodic expense               |  | $                      | 1,656 |   |      | $ | 1,598 |  
|                                   |  |                        |       |   |      |  



|                              |  |              |      |   |      |  |      |  
|----------------------------- |  | ------------ | ---- | - | ---- |  | ---- | -
|                              |  | Three Months |     
|                              |  | Ended        |     
|                              |  | March 31,    |     
|                              |  |              |     
|                              |  | 2006         |      |   | 2005 | 
|                              |  |              |      |   |      | 
|Assumed discount rate         |  |              | 6.00 | % |      |  | 6.00 | %
|Rate of compensation increase |  |              | 4.00 | % |      |  | 4.00 | %
|Expected return on assets     |  |              | 7.50 | % |      |  | 7.50 | %





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

Accounting for
Contingencies


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

13a-15 15d-15 10-Q







PART II. OTHER INFORMATION







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

Accounting for
Contingencies







|         |             
|-------- | ------------
|ITEM 1A. | RISK FACTORS

Risks Related to Our Business Generally




| |                                                                                                                                                 
| | ------------------------------------------------------------------------------------------------------------------------------------------------
| | The level of demand for our mortgage loans may decrease as
    a result of rising interest rates, which could adversely impact
    our earnings.



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| |                                                                                                                            
| | ---------------------------------------------------------------------------------------------------------------------------
| | Actions undertaken by current and potential competitors
    could adversely impact our earnings and financial
    position.







| |                                                                                                    
| | ---------------------------------------------------------------------------------------------------
| | We are subject to changing government regulations, which
    could adversely affect our operations.









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| |                                                                                                                                                                                 
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Economic downturns or disasters in our principal lending
    markets, including California, New York, Michigan, Florida and
    New Jersey, could adversely impact our earnings.





| |                                                                                          
| | -----------------------------------------------------------------------------------------
| | Our business is highly dependent upon technology for
    execution of our business model.







| |                                                               
| | --------------------------------------------------------------
| | We may be adversely affected by unusual employee
    turnover.



Risks Related to Our Interest Rate Hedging Strategies




| |                                                                                                                                                        
| | -------------------------------------------------------------------------------------------------------------------------------------------------------
| | Certain hedging strategies that we use to manage our
    assets and liabilities may be ineffective to mitigate the impact
    of interest rate changes.







| |                                                                                                                                                                                                                       
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Certain hedging strategies that we use to manage our
    mortgage pipeline may be ineffective to mitigate the risk of
    overall changes in fair value of loans held for sale and
    interest rate lock commitments.



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| |                                                                                                                                                                                                                                                              
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Certain hedging strategies that we use to manage our
    investment in Mortgage Servicing Rights and other retained
    assets may be ineffective to mitigate the risk of changes in the
    fair value of these assets due to changes in interest
    rates.





| |                                                                                                                                                                                                   
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Certain hedging and asset/liability management strategies
    that we use to manage our other financial instruments may be
    ineffective to mitigate the risk of interest rate
    fluctuations.





| |                                                                                                                                                                 
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------
| | There can be no assurance that our interest rate risk
    strategies or their implementation will be successful in any
    particular interest rate environment.



Basis Risk.


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Options Risk. over-the


Repricing Risk.


Yield Curve Risk.


Risks Related to Our Valuation of Assets




| |                                                                                                                                                                                                                                                                                                                                                                                
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We use estimates in determining the fair value of certain
    assets, such as Mortgage Servicing Rights, AAA-rated and agency
    interest-only securities, non-investment grade securities, and
    residual securities. If our estimates prove to be incorrect, we
    may be required to write down the value of these assets which
    could adversely impact our earnings.



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| |                                                                                                                                                      
| | -----------------------------------------------------------------------------------------------------------------------------------------------------
| | Our valuation assumptions regarding securities acquired
    from third party issuers may be incorrect, which could adversely
    impact our earnings.



Risks Related to Our Assumption of Credit Risk




| |                                                                                                                                     
| | ------------------------------------------------------------------------------------------------------------------------------------
| | Our risk management policies and practices may not
    adequately manage our exposure to credit risk in our business
    operations.





| |                                                                                                                                    
| | -----------------------------------------------------------------------------------------------------------------------------------
| | Our earnings could be adversely impacted if the
    assumptions underlying our risk-based pricing models prove to be
    incorrect.

e-MITs e-MITS,




| |                                                                                                                                        
| | ---------------------------------------------------------------------------------------------------------------------------------------
| | Our earnings could be adversely impacted by incidences of
    fraud and compliance failures that are not within our direct
    control.



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| |                                                                   
| | ------------------------------------------------------------------
| | We are exposed to credit risk from the sale of mortgage
    loans.





| |                                                                                                                                                                            
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our management of the credit risk associated with
    non-investment grade MBS and residual securities depends upon
    estimates and assumptions that may not be accurate.











| |                                                                                                                               
| | ------------------------------------------------------------------------------------------------------------------------------
| | The rate of loan losses we incur may exceed the level of
    our loss reserves, which could adversely impact our
    earnings.





| |                                                                                                                                                                                                     
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We make and hold in our portfolio a significant number of
    construction loans, which may pose more credit risk than other
    types of mortgage loans typically made by savings
    institutions.



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| |                                                                                                                                                                                                                             
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We are exposed to credit risk related to counterparties in
    many of our businesses. If these counterparties are unable to
    perform according to the terms of our contract, our earnings may
    be adversely impacted.



Risks Related to Our Liquidity




| |                                                                                                               
| | --------------------------------------------------------------------------------------------------------------
| | Our ability to borrow funds and raise capital could be
    limited, which could adversely affect our earnings.







| |                                                                                                                                                                    
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The level of demand for, and the value of, our mortgage
    loans may decrease as a result of rising interest rates, which
    could adversely impact our earnings.



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






ITEM 5.     OTHER
INFORMATION









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

|     |  |                                                                                                                                                          
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------
|10.1 |  | Revised Form of Director Indemnification Agreement.                                                                                                      
|10.2 |  | Form of Director Emeritus Program applicable to Lyle E. Gramley.                                                                                         
|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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##### Table of Contents



SIGNATURE






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



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

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



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

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

79