##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 10-Q

|    |  |                                                                                        
|--- |  | ---------------------------------------------------------------------------------------
|[X] |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the period ended September 30, 2001

OR

|      |  |                                                                                         
|----- |  | ----------------------------------------------------------------------------------------
|[   ] |  | 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
(State or other jurisdiction of incorporation or organization)              |  | 95-3983415
(I. R. S. Employer Identification No.)
|                                                                                     |  |                                                  
|155 NORTH LAKE AVENUE, PASADENA, CALIFORNIA
(Address of principal executive offices) |  | 91101-7211
(Zip Code)                            

Registrants telephone number, including area code (800) 669-2300

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

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

Common stock outstanding as of October 31, 2001: 60,848,532 shares

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TABLE OF CONTENTS



|           |                                                                                               |                                                                          |  |  |  |  |  | 
|---------- | --------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------ |  |  |  |  |  | 
|           |                                                                                               | CONSOLIDATED BALANCE SHEETS                                             
|           |                                                                                               | CONSOLIDATED STATEMENTS OF EARNINGS                                     
|           |                                                                                               | CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY AND COMPREHENSIVE INCOME
|           |                                                                                               | CONSOLIDATED STATEMENTS OF CASH FLOWS                                   
|           |                                                                                               | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                              
|           | ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|           | ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK                            
|PART II   
|           | ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K                                                     
|SIGNATURES



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##### Table of Contents



INDYMAC BANCORP, INC.
FORM 10-Q QUARTERLY REPORT
FOR THE PERIOD ENDED SEPTEMBER 30, 2001

TABLE OF CONTENTS

|                                |                                                                                                 |                                                                          |  |      |   | 
|------------------------------- | ----------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------ |  | ---- | - | 
|                                |                                                                                                 |                                                                          |  | Page
|                                |                                                                                                 |                                                                          |  |     
|PART  I.  FINANCIAL INFORMATION |                                                                                                 |                                                                          |  |     
|                                | Item  1.  Financial Statements (Unaudited)                                                      |                                                                          |  |      |  
|                                |                                                                                                 | Consolidated Balance Sheets                                              |  |      | 3 | 
|                                |                                                                                                 | Consolidated Statements of Earnings                                      |  |      | 4 | 
|                                |                                                                                                 | Consolidated Statements of Shareholders Equity and Comprehensive Income |  |      | 5 | 
|                                |                                                                                                 | Consolidated Statements of Cash Flows                                    |  |      | 6 | 
|                                |                                                                                                 | Notes to Consolidated Financial Statements                               |  |      | 7 | 
|                                | Item  2.  Managements Discussion and Analysis of Financial Condition
and Results of Operations |                                                                          |  | 13   |  
|                                | Item  3. Quantitative and Qualitative Disclosure of Market Risk                                 |                                                                          |  | 28   |  
|PART  II.  OTHER INFORMATION    |                                                                                                 |                                                                          |  |     
|                                | Item  6.  Exhibits and Reports on Form 8-K                                                      |                                                                          |  | 31   |  

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##### Table of Contents



INDYMAC BANCORP, INC. AND SUBSIDIARIES




CONSOLIDATED BALANCE SHEETS


(Dollars in thousands)


|                                                                                                                                                                                               |                                                                                                                                                                                                                      |   |           |                                                                                                            |   |               |           |              |   |   |           | 
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | --------- | ---------------------------------------------------------------------------------------------------------- | - | ------------- | --------- | ------------ | - | - | --------- | 
|                                                                                                                                                                                               |                                                                                                                                                                                                                      |   |           |                                                                                                            |   | September 30, |           | December 31,
|                                                                                                                                                                                               |                                                                                                                                                                                                                      |   |           |                                                                                                            |   | 2001          |           | 2000        
|                                                                                                                                                                                               |                                                                                                                                                                                                                      |   |           |                                                                                                            |   |               |           |             
|                                                                                                                                                                                               |                                                                                                                                                                                                                      |   |           |                                                                                                            |   | (Unaudited)   |           |              |   |  
|Assets                                                                                                                                                                                         |                                                                                                                                                                                                                      |   |           |                                                                                                            |   |               |           |             
|Cash and cash equivalents                                                                                                                                                                      |                                                                                                                                                                                                                      | $ | 53,362    |                                                                                                            |   | $             | 67,867    |             
|Investment securities available for sale, amortized cost of
$4,269 and $18,298, respectively                                                                                                   |                                                                                                                                                                                                                      |   | 4,269     |                                                                                                            |   |               | 18,387    |             
|Mortgage-backed securities classified as trading securities ($184.7 million
pledged as collateral for financing facilities at September 30, 2001)                                              |                                                                                                                                                                                                                      |   | 211,623   |                                                                                                            |   |               |          |             
|Mortgage-backed securities available for sale, amortized cost of
$1,113,072 and $1,147,376, respectively ($938.1 million pledged as collateral
for financing facilities at September 30, 2001) |                                                                                                                                                                                                                      |   | 1,136,133 |                                                                                                            |   |               | 1,135,916 |             
|Loans receivable:                                                                                                                                                                              |                                                                                                                                                                                                                      |   |           |                                                                                                            |   |               |           |             
|                                                                                                                                                                                               | Loans held for sale                                                                                                                                                                                                  |   |           |                                                                                                            |   |               |           |              |  
|                                                                                                                                                                                               |                                                                                                                                                                                                                      |   |           | Prime                                                                                                      |   |               | 1,624,636 |              |   |   | 1,219,737 | 
|                                                                                                                                                                                               |                                                                                                                                                                                                                      |   |           | Subprime                                                                                                   |   |               | 337,452   |              |   |   | 201,035   | 
|                                                                                                                                                                                               | Loans held for investment                                                                                                                                                                                            |   |           |                                                                                                            |   |               |           |              |  
|                                                                                                                                                                                               |                                                                                                                                                                                                                      |   |           | Mortgage                                                                                                   |   |               | 1,734,866 |              |   |   | 1,578,216 | 
|                                                                                                                                                                                               |                                                                                                                                                                                                                      |   |           | Builder construction                                                                                       |   |               | 542,263   |              |   |   | 554,028   | 
|                                                                                                                                                                                               |                                                                                                                                                                                                                      |   |           | Consumer construction                                                                                      |   |               | 632,197   |              |   |   | 372,394   | 
|                                                                                                                                                                                               |                                                                                                                                                                                                                      |   |           | Income property                                                                                            |   |               | 58,432    |              |   |   | 57,717    | 
|                                                                                                                                                                                               |                                                                                                                                                                                                                      |   |           | Revolving warehouse lines of credit                                                                        |   |               | 2,393     |              |   |   | 57,492    | 
|                                                                                                                                                                                               | Allowance for loan losses                                                                                                                                                                                            |   |           | (65,670                                                                                                    | ) |               |           | (58,962      | )
|                                                                                                                                                                                               |                                                                                                                                                                                                                      |   |           |                                                                                                            |   |               |           |             
|                                                                                                                                                                                               |                                                                                                                                                                                                                      |   |           | Total loans receivable ($2.1 billion pledged as
collateral for financing facilities at September 30, 2001) |   |               | 4,866,569 |              |   |   | 3,981,657 | 
|Mortgage servicing rights                                                                                                                                                                      |                                                                                                                                                                                                                      |   | 285,174   |                                                                                                            |   |               | 211,127   |             
|Investment in Federal Home Loan Bank stock, at cost                                                                                                                                            |                                                                                                                                                                                                                      |   | 90,626    |                                                                                                            |   |               | 63,281    |             
|Interest receivable                                                                                                                                                                            |                                                                                                                                                                                                                      |   | 53,704    |                                                                                                            |   |               | 51,432    |             
|Goodwill and other intangible assets                                                                                                                                                           |                                                                                                                                                                                                                      |   | 36,374    |                                                                                                            |   |               | 38,724    |             
|Foreclosed assets                                                                                                                                                                              |                                                                                                                                                                                                                      |   | 21,125    |                                                                                                            |   |               | 16,265    |             
|Other assets                                                                                                                                                                                   |                                                                                                                                                                                                                      |   | 289,617   |                                                                                                            |   |               | 155,548   |             
|                                                                                                                                                                                               |                                                                                                                                                                                                                      |   |           |                                                                                                            |   |               |           |             
|                                                                                                                                                                                               |                                                                                                                                                                                                                      |   |           | Total assets                                                                                               |   | $             | 7,048,576 |              |   | $ | 5,740,204 | 
|                                                                                                                                                                                               |                                                                                                                                                                                                                      |   |           |                                                                                                            |   |               |           |             
|Liabilities and Shareholders Equity                                                                                                                                                           |                                                                                                                                                                                                                      |   |           |                                                                                                            |   |               |           |             
|Deposits                                                                                                                                                                                       |                                                                                                                                                                                                                      | $ | 2,801,200 |                                                                                                            |   | $             | 797,935   |             
|Advances from Federal Home Loan Bank                                                                                                                                                           |                                                                                                                                                                                                                      |   | 1,681,897 |                                                                                                            |   |               | 1,264,457 |             
|Borrowings                                                                                                                                                                                     |                                                                                                                                                                                                                      |   | 1,604,223 |                                                                                                            |   |               | 2,850,189 |             
|Other liabilities                                                                                                                                                                              |                                                                                                                                                                                                                      |   | 188,623   |                                                                                                            |   |               | 99,730    |             
|                                                                                                                                                                                               |                                                                                                                                                                                                                      |   |           |                                                                                                            |   |               |           |             
|                                                                                                                                                                                               | Total liabilities                                                                                                                                                                                                    |   |           | 6,275,943                                                                                                  |   |               |           | 5,012,311    |  
|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 83,072,114 shares (60,687,847 outstanding) at
September 30, 2001 and issued 81,758,312 shares
(62,176,316 outstanding) at December 31, 2000 |   |           | 831                                                                                                        |   |               |           | 818          |  
|                                                                                                                                                                                               | Additional paid-in-capital                                                                                                                                                                                           |   |           | 940,023                                                                                                    |   |               |           | 920,205      |  
|                                                                                                                                                                                               | Accumulated other comprehensive income (loss)                                                                                                                                                                        |   |           | 8,711                                                                                                      |   |               |           | (2,603       | )
|                                                                                                                                                                                               | Retained earnings                                                                                                                                                                                                    |   |           | 197,864                                                                                                    |   |               |           | 117,926      |  
|                                                                                                                                                                                               | Treasury stock, 22,384,267 shares and 19,581,996 shares, respectively                                                                                                                                                |   |           | (374,796                                                                                                   | ) |               |           | (308,453     | )
|                                                                                                                                                                                               |                                                                                                                                                                                                                      |   |           |                                                                                                            |   |               |           |             
|                                                                                                                                                                                               |                                                                                                                                                                                                                      |   |           | Total shareholders equity                                                                                 |   |               | 772,633   |              |   |   | 727,893   | 
|                                                                                                                                                                                               |                                                                                                                                                                                                                      |   |           |                                                                                                            |   |               |           |             
|                                                                                                                                                                                               |                                                                                                                                                                                                                      |   |           | Total liabilities and shareholders equity                                                                 |   | $             | 7,048,576 |              |   | $ | 5,740,204 | 
|                                                                                                                                                                                               |                                                                                                                                                                                                                      |   |           |                                                                                                            |   |               |           |             

The accompanying notes are an integral part of these statements.

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##### Table of Contents



INDYMAC BANCORP, INC. AND SUBSIDIARIES




CONSOLIDATED STATEMENTS OF EARNINGS


(Dollars and shares in thousands, except per share data)
(Unaudited)


|                                                                                                   |  |                                                      |              |                                                                       |         |                       |         |                           |         |               |         |               |         |        |         |   |         |        |         | 
|-------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------- | ------------ | --------------------------------------------------------------------- | ------- | --------------------- | ------- | ------------------------- | ------- | ------------- | ------- | ------------- | ------- | ------ | ------- | - | ------- | ------ | ------- | 
|                                                                                                   |  |                                                      |              |                                                                       |         | For the Quarter Ended |         | For the Nine Months Ended
|                                                                                                   |  |                                                      |              |                                                                       |         |                       |         |                          
|                                                                                                   |  |                                                      |              |                                                                       |         | September 30,         |         | September 30,             |         | September 30, |         | September 30,
|                                                                                                   |  |                                                      |              |                                                                       |         | 2001                  |         | 2000                      |         | 2001          |         | 2000         
|                                                                                                   |  |                                                      |              |                                                                       |         |                       |         |                           |         |               |         |              
|Interest income                                                                                    |  |                                                      |              |                                                                       |         |                       |         |                           |         |               |         |               |         |        |         |  
|Mortgage-backed and other securities                                                               |  | $                                                    | 31,489       |                                                                       |         | $                     | 21,981  |                           |         | $             | 93,515  |               |         | $      | 59,998  |  
|Loans held for sale                                                                                |  |                                                      |              |                                                                       |         |                       |         |                           |         |               |         |               |         |        |         |  
|                                                                                                   |  | Prime                                                |              |                                                                       | 44,592  |                       |         |                           | 23,476  |               |         |               | 122,256 |        |         |   | 55,275  |       
|                                                                                                   |  | Subprime                                             |              |                                                                       | 5,262   |                       |         |                           | 5,626   |               |         |               | 15,197  |        |         |   | 14,466  |       
|                                                                                                   |  | Income property                                      |              |                                                                       |        |                       |         |                           | 1,663   |               |         |               |        |        |         |   | 1,663   |       
|Loans held for investment                                                                          |  |                                                      |              |                                                                       |         |                       |         |                           |         |               |         |               |         |        |         |  
|                                                                                                   |  | Mortgage                                             |              |                                                                       | 34,891  |                       |         |                           | 32,941  |               |         |               | 105,158 |        |         |   | 89,068  |       
|                                                                                                   |  | Builder construction                                 |              |                                                                       | 13,419  |                       |         |                           | 17,541  |               |         |               | 42,542  |        |         |   | 59,576  |       
|                                                                                                   |  | Consumer construction                                |              |                                                                       | 11,019  |                       |         |                           | 6,953   |               |         |               | 29,496  |        |         |   | 19,468  |       
|                                                                                                   |  | Income property                                      |              |                                                                       | 1,154   |                       |         |                           | 1,181   |               |         |               | 3,741   |        |         |   | 3,537   |       
|                                                                                                   |  | Revolving warehouse lines of credit                  |              |                                                                       | 30      |                       |         |                           | 4,782   |               |         |               | 802     |        |         |   | 14,409  |       
|Other                                                                                              |  |                                                      | 1,254        |                                                                       |         |                       | 840     |                           |         |               | 4,366   |               |         |        | 1,053   |  
|                                                                                                   |  |                                                      |              |                                                                       |         |                       |         |                           |         |               |         |               |         |        |         |  
|                                                                                                   |  | Total interest income                                |              |                                                                       | 143,110 |                       |         |                           | 116,984 |               |         |               | 417,073 |        |         |   | 318,513 |       
|Interest expense                                                                                   |  |                                                      |              |                                                                       |         |                       |         |                           |         |               |         |               |         |        |         |  
|Deposits                                                                                           |  |                                                      | 29,744       |                                                                       |         |                       | 6,104   |                           |         |               | 64,520  |               |         |        | 6,104   |  
|Advances from Federal Home Loan Bank                                                               |  |                                                      | 24,736       |                                                                       |         |                       | 2,039   |                           |         |               | 70,894  |               |         |        | 2,039   |  
|Borrowings                                                                                         |  |                                                      | 32,440       |                                                                       |         |                       | 70,843  |                           |         |               | 130,173 |               |         |        | 189,507 |  
|                                                                                                   |  |                                                      |              |                                                                       |         |                       |         |                           |         |               |         |               |         |        |         |  
|                                                                                                   |  | Total interest expense                               |              |                                                                       | 86,920  |                       |         |                           | 78,986  |               |         |               | 265,587 |        |         |   | 197,650 |       
|                                                                                                   |  |                                                      |              |                                                                       |         |                       |         |                           |         |               |         |               |         |        |         |  
|                                                                                                   |  | Net interest income                                  |              |                                                                       | 56,190  |                       |         |                           | 37,998  |               |         |               | 151,486 |        |         |   | 120,863 |       
|Provision for loan losses                                                                          |  |                                                      | 5,700        |                                                                       |         |                       | 3,386   |                           |         |               | 17,726  |               |         |        | 12,108  |  
|                                                                                                   |  |                                                      |              |                                                                       |         |                       |         |                           |         |               |         |               |         |        |         |  
|                                                                                                   |  | Net interest income after provision for loan losses  |              |                                                                       | 50,490  |                       |         |                           | 34,612  |               |         |               | 133,760 |        |         |   | 108,755 |       
|Other income                                                                                       |  |                                                      |              |                                                                       |         |                       |         |                           |         |               |         |               |         |        |         |  
|                                                                                                   |  | Gain on sale of loans                                |              |                                                                       | 59,866  |                       |         |                           | 32,809  |               |         |               | 161,779 |        |         |   | 77,340  |       
|                                                                                                   |  | Service fee income                                   |              |                                                                       | 7,304   |                       |         |                           | 11,268  |               |         |               | 21,672  |        |         |   | 31,335  |       
|                                                                                                   |  | Gain on mortgage-backed securities, net              |              |                                                                       | 1,695   |                       |         |                           | 449     |               |         |               | 780     |        |         |   | 1,253   |       
|                                                                                                   |  | Fee and other income                                 |              |                                                                       | 13,651  |                       |         |                           | 7,514   |               |         |               | 38,011  |        |         |   | 19,249  |       
|                                                                                                   |  |                                                      |              |                                                                       |         |                       |         |                           |         |               |         |               |         |        |         |  
|                                                                                                   |  |                                                      |              | Total other income                                                    |         |                       | 82,516  |                           |         |               | 52,040  |               |         |        | 222,242 |   |         |        | 129,177 | 
|                                                                                                   |  |                                                      |              |                                                                       |         |                       |         |                           |         |               |         |               |         |        |         |  
|                                                                                                   |  |                                                      |              | Net revenues                                                          |         |                       | 133,006 |                           |         |               | 86,652  |               |         |        | 356,002 |   |         |        | 237,932 | 
|Other expense                                                                                      |  |                                                      |              |                                                                       |         |                       |         |                           |         |               |         |               |         |        |         |  
|                                                                                                   |  | Operating expenses                                   |              |                                                                       | 73,186  |                       |         |                           | 45,007  |               |         |               | 199,656 |        |         |   | 118,872 |       
|                                                                                                   |  | Amortization of goodwill and other intangible assets |              |                                                                       | 760     |                       |         |                           | 1,125   |               |         |               | 2,655   |        |         |   | 1,152   |       
|                                                                                                   |  | Non-recurring and other charges                      |              |                                                                       | 38      |                       |         |                           | 4,641   |               |         |               | (497    | )      |         |   | 16,209  |       
|                                                                                                   |  |                                                      |              |                                                                       |         |                       |         |                           |         |               |         |               |         |        |         |  
|                                                                                                   |  |                                                      |              | Total other expense                                                   |         |                       | 73,984  |                           |         |               | 50,773  |               |         |        | 201,814 |   |         |        | 136,233 | 
|                                                                                                   |  |                                                      |              |                                                                       |         |                       |         |                           |         |               |         |               |         |        |         |  
|Earnings before provision for income taxes and
cumulative effect of change in
accounting principle |  |                                                      | 59,022       |                                                                       |         |                       | 35,879  |                           |         |               | 154,188 |               |         |        | 101,699 |  
|                                                                                                   |  | Provision for income taxes                           |              |                                                                       | 24,524  |                       |         |                           | 15,069  |               |         |               | 64,065  |        |         |   | 42,713  |       
|                                                                                                   |  | Income tax benefit from termination of REIT status   |              |                                                                       |        |                       |         |                           |        |               |         |               |        |        |         |   | (36,100 | )     
|                                                                                                   |  |                                                      |              |                                                                       |         |                       |         |                           |         |               |         |               |         |        |         |  
|                                                                                                   |  |                                                      |              | Earnings before cumulative effect of a
change in accounting principle |         |                       | 34,498  |                           |         |               | 20,810  |               |         |        | 90,123  |   |         |        | 95,086  | 
|Cumulative effect of a change in accounting principle                                              |  |                                                      |             |                                                                       |         |                       |        |                           |         |               | (10,185 | )             |         |        |        |  
|                                                                                                   |  |                                                      |              |                                                                       |         |                       |         |                           |         |               |         |               |         |        |         |  
|                                                                                                   |  |                                                      | Net earnings |                                                                       | $       | 34,498                |         |                           | $       | 20,810        |         |               | $       | 79,938 |         |   | $       | 95,086 |        
|                                                                                                   |  |                                                      |              |                                                                       |         |                       |         |                           |         |               |         |               |         |        |         |  
|Earnings per share before cumulative effect of a change in
accounting principle                    |  |                                                      |              |                                                                       |         |                       |         |                           |         |               |         |               |         |        |         |  
|                                                                                                   |  | Basic                                                |              | $                                                                     | 0.57    |                       |         | $                         | 0.31    |               |         | $             | 1.47    |        |         | $ | 1.35    |       
|                                                                                                   |  | Diluted                                              |              | $                                                                     | 0.55    |                       |         | $                         | 0.31    |               |         | $             | 1.42    |        |         | $ | 1.33    |       
|Earnings per share from cumulative effect of a change in
accounting principle                      |  |                                                      |              |                                                                       |         |                       |         |                           |         |               |         |               |         |        |         |  
|                                                                                                   |  | Basic                                                |              | $                                                                     |        |                       |         | $                         |        |               |         | $             | (0.16   | )      |         | $ |        |       
|                                                                                                   |  | Diluted                                              |              | $                                                                     |        |                       |         | $                         |        |               |         | $             | (0.16   | )      |         | $ |        |       
|Net earnings per share                                                                             |  |                                                      |              |                                                                       |         |                       |         |                           |         |               |         |               |         |        |         |  
|                                                                                                   |  | Basic                                                |              | $                                                                     | 0.57    |                       |         | $                         | 0.31    |               |         | $             | 1.31    |        |         | $ | 1.35    |       
|                                                                                                   |  | Diluted                                              |              | $                                                                     | 0.55    |                       |         | $                         | 0.31    |               |         | $             | 1.26    |        |         | $ | 1.33    |       
|Weighted average shares outstanding                                                                |  |                                                      |              |                                                                       |         |                       |         |                           |         |               |         |               |         |        |         |  
|                                                                                                   |  | Basic                                                |              |                                                                       | 60,271  |                       |         |                           | 66,069  |               |         |               | 61,101  |        |         |   | 70,414  |       
|                                                                                                   |  | Diluted                                              |              |                                                                       | 62,543  |                       |         |                           | 67,704  |               |         |               | 63,458  |        |         |   | 71,396  |       

The accompanying notes are an integral part of these statements.

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##### Table of Contents



INDYMAC BANCORP, INC. AND SUBSIDIARIES




CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY AND COMPREHENSIVE INCOME


(Dollars in thousands)
(Unaudited)


|                                                                                     |  |        |     |         |  |            |           |          |  |               |        |              |  |          |          |               |  |  |        |            |  |       |          |   |  |   |          |   |  |   |          |  
|------------------------------------------------------------------------------------ |  | ------ | --- | ------- |  | ---------- | --------- | -------- |  | ------------- | ------ | ------------ |  | -------- | -------- | ------------- |  |  | ------ | ---------- |  | ----- | -------- | - |  | - | -------- | - |  | - | -------- | -
|                                                                                     |  |        |     |         |  |            |           |          |  | Accumulated   |        |              |  |          |          |               |  |  |        |            |  |       |          |   |  |   |          |   |  |  
|                                                                                     |  |        |     |         |  |            |           |          |  | Comprehensive |        |              |  |          |          |               |  |  |        | Cumulative |  |       |          |   |  |   |          |  
|                                                                                     |  |        |     |         |  | Additional |           | Other    |  |               |        |              |  | Total    |          | Distributions |  |  |        |            |  | Total
|                                                                                     |  | Common |     | Paid-in |  | Income     |           | Retained |  | Comprehensive |        | to           |  | Treasury |          | Shareholders'
|                                                                                     |  | Stock  |     | Capital |  | (Loss)     |           | Earnings |  | Income        |        | Shareholders |  | Stock    |          | Equity       
|                                                                                     |  |        |     |         |  |            |           |          |  |               |        |              |  |          |          |              
|Balance at December 31, 1999                                                         |  | $      | 807 |         |  | $          | 1,080,327 |          |  | $             | 7,433  |              |  | $        | 393,149  |               |  |  |        |            |  | $     | (577,808 | ) |  | $ | (76,378  | ) |  | $ | 827,530  |  
|Common stock options
exercised                                                       |  |        | 5   |         |  |            | 4,714     |          |  |               |       |              |  |          |         |               |  |  |       |            |  |       |         |   |  |   |         |   |  |   | 4,719    |  
|Directors and officers
notes receivable                                            |  |        |    |         |  |            | 29        |          |  |               |       |              |  |          |         |               |  |  |       |            |  |       |         |   |  |   |         |   |  |   | 29       |  
|Deferred compensation,
restricted stock                                              |  |        |    |         |  |            | 3,204     |          |  |               |       |              |  |          |         |               |  |  |       |            |  |       |         |   |  |   |         |   |  |   | 3,204    |  
|401(k) contribution                                                                  |  |        |    |         |  |            | 830       |          |  |               |       |              |  |          |         |               |  |  |       |            |  |       |         |   |  |   |         |   |  |   | 830      |  
|Net loss on mortgage securities
available for sale                                   |  |        |    |         |  |            |          |          |  |               | (4,662 | )            |  |          |         |               |  |  | (4,662 | )          |  |       |         |   |  |   |         |   |  |   | (4,662   | )
|Dividend reinvestment plan                                                           |  |        |    |         |  |            | 135       |          |  |               |       |              |  |          |         |               |  |  |       |            |  |       |         |   |  |   |         |   |  |   | 135      |  
|Purchases of common stock                                                            |  |        |    |         |  |            |          |          |  |               |       |              |  |          |         |               |  |  |       |            |  |       |         |   |  |   | (181,279 | ) |  |   | (181,279 | )
|Close-out of cumulative
earnings and distributions
to additional paid-in capital     |  |        |    |         |  |            | (184,659  | )        |  |               |       |              |  |          | (393,149 | )             |  |  |       |            |  |       | 577,808  |   |  |   |         |   |  |   |         |  
|Net earnings                                                                         |  |        |    |         |  |            |          |          |  |               |       |              |  |          | 95,086   |               |  |  | 95,086 |            |  |       |         |   |  |   |         |   |  |   | 95,086   |  
|                                                                                     |  |        |     |         |  |            |           |          |  |               |        |              |  |          |          |               |  |  |        |            |  |       |          |   |  |   |          |   |  |   |          |  
|Net change                                                                           |  |        | 5   |         |  |            | (175,747  | )        |  |               | (4,662 | )            |  |          | (298,063 | )             |  |  | 90,424 |            |  |       | 577,808  |   |  |   | (181,279 | ) |  |   | (81,938  | )
|                                                                                     |  |        |     |         |  |            |           |          |  |               |        |              |  |          |          |               |  |  |        |            |  |       |          |   |  |   |          |   |  |   |          |  
|Balance at September 30, 2000                                                        |  | $      | 812 |         |  | $          | 904,580   |          |  | $             | 2,771  |              |  | $        | 95,086   |               |  |  |        |            |  | $     |         |   |  | $ | (257,657 | ) |  | $ | 745,592  |  
|                                                                                     |  |        |     |         |  |            |           |          |  |               |        |              |  |          |          |               |  |  |        |            |  |       |          |   |  |   |          |   |  |   |          |  
|Balance at December 31, 2000                                                         |  | $      | 818 |         |  | $          | 920,205   |          |  | $             | (2,603 | )            |  | $        | 117,926  |               |  |  |        |            |  | $     |         |   |  | $ | (308,453 | ) |  | $ | 727,893  |  
|Common stock options exercised                                                       |  |        | 13  |         |  |            | 17,503    |          |  |               |       |              |  |          |         |               |  |  |       |            |  |       |         |   |  |   |         |   |  |   | 17,516   |  
|Directors and officers
notes receivable                                            |  |        |    |         |  |            | (756      | )        |  |               |       |              |  |          |         |               |  |  |       |            |  |       |         |   |  |   |         |   |  |   | (756     | )
|Deferred compensation,
restricted stock                                              |  |        |    |         |  |            | 1,590     |          |  |               |       |              |  |          |         |               |  |  |       |            |  |       |         |   |  |   |         |   |  |   | 1,590    |  
|401(k) contribution                                                                  |  |        |    |         |  |            | 1,450     |          |  |               |       |              |  |          |         |               |  |  |       |            |  |       |         |   |  |   |         |   |  |   | 1,450    |  
|Net gain on mortgage
securities available for sale
and interest rate swap agreements |  |        |    |         |  |            |          |          |  |               | 11,314 |              |  |          |         |               |  |  | 11,314 |            |  |       |         |   |  |   |         |   |  |   | 11,314   |  
|Dividend reinvestment plan                                                           |  |        |    |         |  |            | 31        |          |  |               |       |              |  |          |         |               |  |  |       |            |  |       |         |   |  |   |         |   |  |   | 31       |  
|Purchases of common stock                                                            |  |        |    |         |  |            |          |          |  |               |       |              |  |          |         |               |  |  |       |            |  |       |         |   |  |   | (66,343  | ) |  |   | (66,343  | )
|Net earnings                                                                         |  |        |    |         |  |            |          |          |  |               |       |              |  |          | 79,938   |               |  |  | 79,938 |            |  |       |         |   |  |   |         |   |  |   | 79,938   |  
|                                                                                     |  |        |     |         |  |            |           |          |  |               |        |              |  |          |          |               |  |  |        |            |  |       |          |   |  |   |          |   |  |   |          |  
|Net change                                                                           |  |        | 13  |         |  |            | 19,818    |          |  |               | 11,314 |              |  |          | 79,938   |               |  |  | 91,252 |            |  |       |         |   |  |   | (66,343  | ) |  |   | 44,740   |  
|                                                                                     |  |        |     |         |  |            |           |          |  |               |        |              |  |          |          |               |  |  |        |            |  |       |          |   |  |   |          |   |  |   |          |  
|Balance at September 30, 2001                                                        |  | $      | 831 |         |  | $          | 940,023   |          |  | $             | 8,711  |              |  | $        | 197,864  |               |  |  |        |            |  | $     |         |   |  | $ | (374,796 | ) |  | $ | 772,633  |  
|                                                                                     |  |        |     |         |  |            |           |          |  |               |        |              |  |          |          |               |  |  |        |            |  |       |          |   |  |   |          |   |  |   |          |  

The accompanying notes are an integral part of these statements.

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##### Table of Contents



INDYMAC BANCORP, INC. AND SUBSIDIARIES




CONSOLIDATED STATEMENTS OF CASH FLOWS


(Dollars in thousands)
(Unaudited)


|                                                     |                                                                                 |                                                                                                                                                                                      |         |                                 |            |      |        |            |          |  
|---------------------------------------------------- | ------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------- | ------------------------------- | ---------- | ---- | ------ | ---------- | -------- | -
|                                                     |                                                                                 |                                                                                                                                                                                      |         | Nine months ended September 30,
|                                                     |                                                                                 |                                                                                                                                                                                      |         |                                
|                                                     |                                                                                 |                                                                                                                                                                                      |         | 2001                            |            | 2000
|                                                     |                                                                                 |                                                                                                                                                                                      |         |                                 |            |     
|Cash flows from operating activities:                |                                                                                 |                                                                                                                                                                                      |         |                                 |            |      |        |           
|                                                     | Net earnings                                                                    |                                                                                                                                                                                      | $       | 79,938                          |            |      | $      | 95,086     |         
|                                                     | Adjustments to reconcile net earnings
to net cash used in operating activities: |                                                                                                                                                                                      |         |                                 |            |      |        |            |         
|                                                     |                                                                                 | Amortization and hedging of securities and mortgage servicing rights                                                                                                                 |         |                                 | 136,376    |      |        |            | 110,229  |  
|                                                     |                                                                                 | Amortization of goodwill and other intangible assets                                                                                                                                 |         |                                 | 2,655      |      |        |            | 1,152    |  
|                                                     |                                                                                 | Other depreciation and amortization                                                                                                                                                  |         |                                 | 10,075     |      |        |            | 1,137    |  
|                                                     |                                                                                 | Gain on sale of loans                                                                                                                                                                |         |                                 | (161,779   | )    |        |            | (77,340  | )
|                                                     |                                                                                 | Gain on securities                                                                                                                                                                   |         |                                 | (780       | )    |        |            | (1,253   | )
|                                                     |                                                                                 | Provision for loan losses                                                                                                                                                            |         |                                 | 17,726     |      |        |            | 12,108   |  
|                                                     |                                                                                 | Non-cash compensation expense                                                                                                                                                        |         |                                 | 2,543      |      |        |            | 13,796   |  
|                                                     |                                                                                 | Cumulative effect of a change in accounting principle                                                                                                                                |         |                                 | 10,185     |      |        |            |         |  
|                                                     |                                                                                 | Income tax benefit from termination of REIT status                                                                                                                                   |         |                                 |           |      |        |            | (36,100  | )
|                                                     | Purchases and originations of mortgage loans held for sale                      |                                                                                                                                                                                      |         | (11,216,560                     | )          |      |        | (5,693,521 | )       
|                                                     | Sales of and payments from mortgage loans held for sale                         |                                                                                                                                                                                      |         | 10,094,160                      |            |      |        | 5,166,094  |         
|                                                     | Net increase in other assets and liabilities                                    |                                                                                                                                                                                      |         | (48,972                         | )          |      |        | (19,963    | )       
|                                                     |                                                                                 |                                                                                                                                                                                      |         |                                 |            |      |        |           
|                                                     |                                                                                 | Net cash used in operating activities                                                                                                                                                |         |                                 | (1,074,433 | )    |        |            | (428,575 | )
|                                                     |                                                                                 |                                                                                                                                                                                      |         |                                 |            |      |        |           
|Cash flows from investing activities:                |                                                                                 |                                                                                                                                                                                      |         |                                 |            |      |        |           
|                                                     | Purchases of mortgage loans held for investment                                 |                                                                                                                                                                                      |         | (131,055                        | )          |      |        | (72,985    | )       
|                                                     | Sales of and payments from mortgage loans held for investment                   |                                                                                                                                                                                      |         | 515,509                         |            |      |        | 153,226    |         
|                                                     | Net (increase) decrease in construction loans receivable                        |                                                                                                                                                                                      |         | (258,562                        | )          |      |        | 59,064     |         
|                                                     | Net decrease in revolving warehouse lines of credit                             |                                                                                                                                                                                      |         | 53,288                          |            |      |        | 77,332     |         
|                                                     | Purchases of mortgage securities available for sale                             |                                                                                                                                                                                      |         | (1,019,805                      | )          |      |        | (336,421   | )       
|                                                     | Sales of and payments from mortgage securities available for sale               |                                                                                                                                                                                      |         | 808,921                         |            |      |        | 75,280     |         
|                                                     | Net purchases of mortgage servicing rights                                      |                                                                                                                                                                                      |         | (2,172                          | )          |      |        | (663       | )       
|                                                     | Purchase of SGV Bancorp, Inc.                                                   |                                                                                                                                                                                      |         |                                |            |      |        | (53,357    | )       
|                                                     | Purchase of PNB Mortgage                                                        |                                                                                                                                                                                      |         |                                |            |      |        | (35,291    | )       
|                                                     | Net increase in investment in Federal Home Loan Bank stock, at cost             |                                                                                                                                                                                      |         | (27,345                         | )          |      |        | (6,068     | )       
|                                                     |                                                                                 |                                                                                                                                                                                      |         |                                 |            |      |        |           
|                                                     |                                                                                 | Net cash used in investing activities                                                                                                                                                |         |                                 | (61,221    | )    |        |            | (139,883 | )
|                                                     |                                                                                 |                                                                                                                                                                                      |         |                                 |            |      |        |           
|Cash flows from financing activities:                |                                                                                 |                                                                                                                                                                                      |         |                                 |            |      |        |           
|                                                     | Net increase in deposits                                                        |                                                                                                                                                                                      |         | 2,003,084                       |            |      |        | 199,034    |         
|                                                     | Net increase in advances from Federal Home Loan Bank                            |                                                                                                                                                                                      |         | 416,891                         |            |      |        | 138,360    |         
|                                                     | Net (decrease) increase in borrowings                                           |                                                                                                                                                                                      |         | (1,249,924                      | )          |      |        | 457,652    |         
|                                                     | Net proceeds from issuance of common stock and exercise of stock options        |                                                                                                                                                                                      |         | 17,441                          |            |      |        | 3,470      |         
|                                                     | Purchases of common stock                                                       |                                                                                                                                                                                      |         | (66,343                         | )          |      |        | (181,279   | )       
|                                                     |                                                                                 |                                                                                                                                                                                      |         |                                 |            |      |        |           
|                                                     |                                                                                 | Net cash provided by financing activities                                                                                                                                            |         |                                 | 1,121,149  |      |        |            | 617,237  |  
|                                                     |                                                                                 |                                                                                                                                                                                      |         |                                 |            |      |        |           
|Net (decrease) increase in cash and cash equivalents |                                                                                 |                                                                                                                                                                                      | (14,505 | )                               |            |      | 48,779 |           
|Cash and cash equivalents at beginning of period     |                                                                                 |                                                                                                                                                                                      | 67,867  |                                 |            |      | 4,488  |           
|                                                     |                                                                                 |                                                                                                                                                                                      |         |                                 |            |      |        |           
|Cash and cash equivalents at end of period           |                                                                                 | $                                                                                                                                                                                    | 53,362  |                                 |            | $    | 53,267 |           
|                                                     |                                                                                 |                                                                                                                                                                                      |         |                                 |            |      |        |           
|                                                     | Supplemental cash flow information:                                             |                                                                                                                                                                                      |         |                                 |            |      |        |            |         
|                                                     |                                                                                 | Cash paid for interest                                                                                                                                                               |         | $                               | 271,960    |      |        | $          | 192,196  |  
|                                                     |                                                                                 |                                                                                                                                                                                      |         |                                 |            |      |        |           
|                                                     |                                                                                 | Cash paid for income taxes                                                                                                                                                           |         | $                               | 2,309      |      |        | $          | 22,354   |  
|                                                     |                                                                                 |                                                                                                                                                                                      |         |                                 |            |      |        |           
|                                                     | Supplemental
disclosure of non cash investing and financing activities:         |                                                                                                                                                                                      |         |                                 |            |      |        |            |         
|                                                     |                                                                                 | The
fair value of noncash assets acquired and liabilities assumed in the
purchase of IndyMac, Inc. in January of 2000 was approximately $424
million and $332 million, respectively. |         |                                 |            |      |        |            |          |  

The accompanying notes are an integral part of these statements.

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##### Table of Contents



INDYMAC BANCORP, INC. AND SUBSIDIARIES




NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


September 30, 2001(Unaudited)


NOTE  1  BASIS OF PRESENTATION

IndyMac Bancorp, Inc. (IndyMac and, together with its subsidiaries, the
Company) conducts a diversified mortgage lending business, manages an
investment portfolio and offers commercial lending and retail banking products.

The consolidated financial statements include the
accounts of IndyMacSM and its
subsidiaries, including IndyMac Bank, F.S.B. (IndyMac Bank). All significant
intercompany balances and transactions with IndyMacs consolidated subsidiaries
have been eliminated in consolidation. The financial statements of the Company
are prepared in conformity with accounting principles generally accepted in the
United States of America (US GAAP). Certain reclassifications have been made
to the financial statements for the period ended September 30, 2000 to conform
to the September 30, 2001 presentation. In the opinion of management, all
adjustments (consisting solely of normal recurring adjustments) considered
necessary for a fair presentation of the Companys results of operations and
financial condition have been included. Operating results for the nine months
ended September 30, 2001 are not necessarily indicative of the results that may
be expected for the year ending December 31, 2001. For further information,
refer to the consolidated financial statements and footnotes thereto included
in the Companys annual report on Form 10-K for the year ended December 31,
2000.

NOTE  2  RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS

Effective January of 2001, the Company adopted the provisions of Statement of
Financial Accounting Standards No. 133, Accounting for Derivative Instruments
and Hedging Activities (SFAS 133), as amended by Statement of Financial
Accounting Standards No. 137, Accounting for Derivative Instruments and
Hedging Activities  Deferral of the Effective Date of FASB Statement No. 133,
and Statement of Financial Accounting Standards No. 138, Accounting for
Certain Derivative Instruments and Certain Hedging Activities  An Amendment of
FASB Statement No. 133, and Emerging Issues Task Force 99-20, Recognition of
Interest Income and Impairment on Certain Investments (EITF 99-20).
Additionally, effective April 1, 2001, the Company adopted the provisions of
Statement of Financial Accounting Standards No. 140, Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of Liabilities (SFAS
140). Most recently, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 141, Business Combinations
(SFAS 141) and No. 142, Goodwill and Other Intangible Assets (SFAS 142),
which becomes effective as of January 1, 2002 for the Company.

SFAS 133

SFAS 133 requires the recognition of all derivative financial instruments as
either assets or liabilities in the balance sheet and measurement of those
instruments at fair value. Changes in the fair values of those derivatives are
reported in earnings or other comprehensive income (OCI) depending on the use
of the derivative and whether it qualifies for hedge accounting. The
accounting for gains and losses associated with changes in the fair value of a
derivative and the effect on the consolidated financial statements will depend
on whether hedge accounting has been elected, its hedge designation and whether
the hedge meets criteria for being considered effective in achieving offsetting
changes in the fair value or cash flows of the asset or liability hedged.
Under the provisions of SFAS 133, the method that will be used for assessing
the effectiveness of a hedging derivative, as well as the measurement approach
for determining the ineffective aspects of the hedge, must be established at
the inception of the hedge.

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##### Table of Contents



The following derivative financial instruments were identified and recorded at
fair value as of January 1, 2001:



| |  |  | FNMA and FHLMC futures and forward contracts
| | - |  | --------------------------------------------
|
| |  |  | interest rate swap agreements               
|
| |  |  | interest rate floor agreements              
|
| |  |  | interest rate cap agreements                
|
| |  |  | loan commitments                            

Generally speaking, if interest rates increase, the value of the Companys
mortgage pipeline decreases and gain on sale margins are adversely impacted.
The Company hedges the risk of overall changes in fair value of loans held for
sale by selling forward contracts on securities of government sponsored
entities to economically hedge loan commitments and to create fair value hedges
against the funded loan portfolios. Under SFAS 133, these forward contracts
qualify as a fair value hedge of the funded loan portfolio. In January of
2001, a net after tax gain of $21 thousand was recorded as a transition
adjustment under SFAS 133 as a cumulative effect of a change in accounting
principle on the forward contracts and the funded loan portfolio. During the
nine months ended September 30, 2001, hedge ineffectiveness totaling $2.3
million was recorded as an increase to the gain on sale of loans. As of
September 30, 2001, the fair value of loan commitments recorded on the
Companys consolidated balance sheets was $10.9 million.

The Company uses interest rate swap agreements to reduce its exposure to
interest rate risk inherent in a portion of its repurchase agreement
borrowings, Federal Home Loan Bank (FHLB) advances, and its mortgage
servicing rights. A swap agreement is a contract between two parties to
exchange cash flows based on specified underlying notional amounts and indices.
Since the swap agreements used on the Companys repurchase agreement
borrowings qualify as a cash flow hedge under SFAS 133, the fair value of these
agreements, totaling $(2.5) million after tax, was recorded as a reduction to
OCI in shareholders equity in January of 2001. Future changes in fair value
on these interest rate swap agreements will be adjusted through OCI as long as
the cash flow hedge requirements are met. During the nine months ended
September 30, 2001, the change in the fair value of the Companys interest rate
swap agreements was $(4.8) million after tax, recorded as a component of OCI,
with actual ineffectiveness of $0.1 million being recorded through earnings as
a component of interest expense.

Although the Company has not elected SFAS 133 hedge accounting on its servicing
assets, interest rate floors, caps and swaps are used as an economic hedge for
these assets to mitigate valuation declines that result from changes and
volatility in the interest rate environment. Gains and losses on these
derivative financial instruments are reported as a component of service fee
income for servicing assets, and as a component of gain on mortgage-backed
securities, net, for the Companys AAA rated interest-only securities.

Under the provisions of SFAS 133, in January of 2001, the Company transferred
all of its AAA rated interest-only and principal-only securities from its
available for sale to its trading portfolio. The transfer of these securities
had the following effect on earnings and OCI upon adoption of SFAS 133:

|                                   |  |                        |         |           |  |               |      |            |  |               |     |  |  |   |   | 
|---------------------------------- |  | ---------------------- | ------- | --------- |  | ------------- | ---- | ---------- |  | ------------- | --- |  |  | - | - | 
|                                   |  |                        |         |           |  |               |      |            |  | After-tax     |     |  |  |  
|                                   |  |                        |         |           |  |               |      |            |  | adjustment to |     |  |  |  
|                                   |  |                        |         |           |  |               |      |            |  | Other         |     |  |  |  
|                                   |  | Trading                |         | After-tax |  | Comprehensive |      | Net Equity
|Security                           |  | (at Fair Value)        |         | Loss      |  | Income (Loss) |      | Impact    
|                                   |  |                        |         |           |  |               |      |           
|                                   |  | (Dollars in thousands) |         |           |  |               |      |            | 
|Principal-only securities          |  | $                      | 5,033   |           |  | $             | (437 | )          |  | $             | 437 |  |  | $ |  | 
|AAA rated interest-only securities |  |                        | 258,241 |           |  |               | (530 | )          |  |               | 530 |  |  |   |  | 
|                                   |  |                        |         |           |  |               |      |            |  |               |     |  |  |   |   | 
|                                   |  | $                      | 263,274 |           |  | $             | (967 | )          |  | $             | 967 |  |  | $ |  | 
|                                   |  |                        |         |           |  |               |      |            |  |               |     |  |  |   |   | 

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EITF 99-20

EITF 99-20 provides guidance on how transferors that retain an interest in a
securitization transaction, and companies that purchase a beneficial interest
in such a transaction, should account for interest income and impairment. The
EITF concluded that the holder of a beneficial interest should recognize
interest income over the life of the investment based on an anticipated yield
determined by periodically estimating cash flows. Interest income would be
revised prospectively for changes in cash flows. If the fair value of the
beneficial interest has declined below its carrying amount and the decline is
other-than-temporary, an entity should apply impairment of securities guidance
using the fair value method. This method differs significantly from the
previous accounting method whereby impairment was measured using a risk-free
rate of return. The Company periodically reviews its estimated cash flow
streams on its securities. As a result of its periodic reviews during the nine
months ended September 30, 2001, the Company recorded $9.2 million and $0.8
million in impairment charges on non-investment grade subordinated and residual
securities, respectively, in accordance with EITF 99-20.

The adoption of EITF 99-20 in January of 2001 was recorded as a cumulative
effect of a change in accounting principle, and had the following effect on net
earnings and OCI during the first quarter of 2001:

|                                                            |                                  |                                 |         |                        |        |               |       |        |       |     |        |   |        |  
|----------------------------------------------------------- | -------------------------------- | ------------------------------- | ------- | ---------------------- | ------ | ------------- | ----- | ------ | ----- | --- | ------ | - | ------ | -
|                                                            |                                  |                                 |         | Adjustments           
|                                                            |                                  |                                 |         |                       
|                                                            |                                  |                                 |         |                        |        |               |       | Other  |       | Net
|                                                            |                                  |                                 |         | After-tax              |        | Comprehensive |       | Equity
|                                                            |                                  |                                 |         | Earnings               |        | Income        |       | Impact
|                                                            |                                  |                                 |         |                        |        |               |       |       
|                                                            |                                  |                                 |         | (Dollars in thousands)
|Core operations:                                            |                                  |                                 |         |                        |        |               |       |        |       |     |        |  
|                                                            | Investment grade securities      |                                 | $       | (297                   | )      |               | $     | 297    |       |     | $      |  |       
|                                                            | Non-investment grade securities  |                                 |         | (459                   | )      |               |       | 459    |       |     |        |  |       
|                                                            | Residual securities              |                                 |         | (607                   | )      |               |       | 607    |       |     |        |  |       
|                                                            |                                  |                                 |         |                        |        |               |       |        |       |     |        |  
|Total core operations                                       |                                  |                                 | (1,363  | )                      |        |               | 1,363 |        |       |     |       |  
|Non-core operations:                                        |                                  |                                 |         |                        |        |               |       |        |       |     |        |  
|                                                            | Manufactured housing securities: |                                 |         |                        |        |               |       |        |       |     |        |   |       
|                                                            |                                  | Non-investment grade securities |         |                        | (6,612 | )             |       |        | 4,867 |     |        |   | (1,745 | )
|                                                            |                                  | Residual securities             |         |                        | (2,231 | )             |       |        | 1,889 |     |        |   | (342   | )
|                                                            |                                  |                                 |         |                        |        |               |       |        |       |     |        |  
|Total non-core operations                                   |                                  |                                 | (8,843  | )                      |        |               | 6,756 |        |       |     | (2,087 | )
|                                                            |                                  |                                 |         |                        |        |               |       |        |       |     |        |  
|Total cumulative effect of a change
in accounting principle |                                  | $                               | (10,206 | )                      |        | $             | 8,119 |        |       | $   | (2,087 | )
|                                                            |                                  |                                 |         |                        |        |               |       |        |       |     |        |  

SFAS 140

SFAS 140 revises the standards for accounting for securitizations and other
transfers of financial assets and collateral and requires certain additional
disclosures. The Company adopted SFAS 140 effective December 31, 2000 for
disclosures relating to securitization transactions and collateral, and
effective April 1, 2001 for transfers and servicing of financial assets and
extinguishments of liabilities. Adoption of SFAS 140 did not have a material
impact on the Companys consolidated financial statements.

SFAS 141 and SFAS 142

SFAS 141 and SFAS 142 eliminate the pooling of interests method of accounting
for business combinations initiated after July 1, 2001. They require that the
acquirers cost for an acquisition be allocated among the various assets
acquired, in proportion to their relative fair market values, and that any
unallocated cost be assigned to goodwill. Certain intangible assets that are
determined to have an indefinite useful life will not be amortized, but will be
tested for impairment at least annually.

These two statements must be adopted in fiscal years beginning after December 15,
2001. The Company does not expect the implementation of SFAS 141 and SFAS
142 to have a material impact to its financial statements upon adoption on
January 1, 2002.

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NOTE  3  SEGMENT REPORTING

The Companys reportable operating segments include Mortgage Banking,
Investment Portfolio and Commercial Lending.

The Mortgage Banking segmentpurchases conforming, jumbo and other
non-conforming mortgage loans from B2B customers (mortgage origination
companies), and funds loans directly to consumers (B2C). These loans are
then either securitized through the issuance of mortgage-backed securities
(MBS), sold to government sponsored entities, resold in bulk whole loan sales
to permanent investors, or retained by the Companys Investment Portfolio
segment. The Mortgage Banking segment also administers the related
construction advances for the purchase of construction-to-permanent mortgage
loans originated by or sourced through the Companys B2B sellers and direct
customers (consumer construction). Additionally, Mortgage Banking operates a
B2R channel, which allows real estate professionals to utilize the Companys
technology to facilitate the mortgage loan process for their customers in the
process of purchasing a home.

The Investment Portfolio segmentinvests in residential mortgage loans and
mortgage securities on a long-term basis. The Investment Portfolio segment
also manages mortgage servicing rights and conducts servicing, collection and
investor reporting activities.

The Commercial Lending segmentprimarily makes residential construction loans
to builders. During the first six months of 2000, the Commercial Lending
segment also engaged in secured warehouse lending operations for mortgage
brokers and mortgage bankers. In July of 2000, the Board of Directors approved
managements decision to begin a systematic wind-down of the Companys
warehouse lending activities. The Company continued to honor its outstanding
commitments, but did not enter into any new commitments.

Operating segment profitability is measured on a fully-leveraged basis.
Corporate costs such as corporate salaries and related expenses, excess
capital, and non-recurring corporate items are unallocated and are included in
the Other operating segment.

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Segment information for the three and nine months ended September 30, 2001 and
2000 were as follows:

|                                      |                                                                                  |   |                        |         |            |   |            |         |       |   |              |        |  |   |         |         |   |   |           |         |  
|------------------------------------- | -------------------------------------------------------------------------------- | - | ---------------------- | ------- | ---------- | - | ---------- | ------- | ----- | - | ------------ | ------ |  | - | ------- | ------- | - | - | --------- | ------- | -
|                                      |                                                                                  |   | Mortgage               |         | Investment |   | Commercial |         |       |   |              |        |  |   |        
|                                      |                                                                                  |   | Banking                |         | Portfolio  |   | Lending    |         | Other |   | Consolidated
|                                      |                                                                                  |   |                        |         |            |   |            |         |       |   |             
|                                      |                                                                                  |   | (Dollars in thousands)
|Three months ended September 30, 2001 |                                                                                  |   |                        |         |            |   |            |         |       |   |              |        |  |   |         |         |   |   |           |        
|                                      | Net interest income                                                              |   | $                      | 26,907  |            |   | $          | 17,471  |       |   | $            | 9,169  |  |   | $       | 2,643   |   |   | $         | 56,190  |  
|                                      | Net revenues                                                                     |   |                        | 98,856  |            |   |            | 22,307  |       |   |              | 8,835  |  |   |         | 3,008   |   |   |           | 133,006 |  
|                                      | Net earnings (loss)                                                              |   |                        | 33,119  |            |   |            | 7,811   |       |   |              | 3,178  |  |   |         | (9,610  | ) |   |           | 34,498  |  
|Three months ended September 30, 2000 |                                                                                  |   |                        |         |            |   |            |         |       |   |              |        |  |   |         |         |   |   |           |        
|                                      | Net interest income                                                              |   | $                      | 10,476  |            |   | $          | 10,598  |       |   | $            | 13,352 |  |   | $       | 3,572   |   |   | $         | 37,998  |  
|                                      | Net revenues                                                                     |   |                        | 49,194  |            |   |            | 20,196  |       |   |              | 13,406 |  |   |         | 3,856   |   |   |           | 86,652  |  
|                                      | Net earnings (loss)                                                              |   |                        | 14,638  |            |   |            | 8,730   |       |   |              | 5,813  |  |   |         | (8,371  | ) |   |           | 20,810  |  
|Nine months ended September 30, 2001  |                                                                                  |   |                        |         |            |   |            |         |       |   |              |        |  |   |         |         |   |   |           |        
|                                      | Net interest income                                                              |   | $                      | 64,099  |            |   | $          | 48,611  |       |   | $            | 26,622 |  |   | $       | 12,154  |   |   | $         | 151,486 |  
|                                      | Net revenues                                                                     |   |                        | 259,606 |            |   |            | 56,694  |       |   |              | 26,661 |  |   |         | 13,041  |   |   |           | 356,002 |  
|                                      | Net earnings (loss) before cumulative
effect of a change in accounting principle |   |                        | 83,753  |            |   |            | 19,402  |       |   |              | 10,634 |  |   |         | (23,666 | ) |   |           | 90,123  |  
|                                      | Cumulative effect of a change in accounting principle                            |   |                        | 21      |            |   |            | (10,206 | )     |   |              |       |  |   |         |        |   |   |           | (10,185 | )
|                                      | Net earnings (loss)                                                              |   |                        | 83,774  |            |   |            | 9,196   |       |   |              | 10,634 |  |   |         | (23,666 | ) |   |           | 79,938  |  
|Nine months ended September 30, 2000  |                                                                                  |   |                        |         |            |   |            |         |       |   |              |        |  |   |         |         |   |   |           |        
|                                      | Net interest income                                                              |   | $                      | 31,202  |            |   | $          | 29,304  |       |   | $            | 44,645 |  |   | $       | 15,712  |   |   | $         | 120,863 |  
|                                      | Net revenues                                                                     |   |                        | 122,536 |            |   |            | 52,918  |       |   |              | 44,855 |  |   |         | 17,623  |   |   |           | 237,932 |  
|                                      | Net earnings                                                                     |   |                        | 34,648  |            |   |            | 22,915  |       |   |              | 19,968 |  |   |         | 17,555  |   |   |           | 95,086  |  
|Assets as of September 30, 2001       |                                                                                  | $ | 2,846,637              |         |            | $ | 3,297,020  |         |       | $ | 775,022      |        |  | $ | 129,897 |         |   | $ | 7,048,576 |        
|Assets as of September 30, 2000       |                                                                                  | $ | 1,654,087              |         |            | $ | 2,401,680  |         |       | $ | 1,006,788    |        |  | $ | 139,259 |         |   | $ | 5,201,814 |        

NOTE  4  SHAREHOLDER RIGHTS PLAN

The Companys Board of Directors adopted a Shareholder Rights Plan (the Rights
Plan) on October 17, 2001. The Boards purpose in adopting the Rights Plan is
to protect shareholder value in the event of an unsolicited offer to acquire
the Company, particularly one that does not provide equitable treatment to all
shareholders. In connection with the adoption of the Rights Plan, the Company
declared a distribution of one right to purchase one one-hundredth of a share
of Series A Junior Participating Preferred Shares (Preferred Shares) for each
outstanding share of common stock, payable to the shareholders of record on
November 1, 2001. These rights automatically become associated with
outstanding shares of common stock on the books of the Company, and individual
shareholders need take no action with respect thereto. The rights will not
become exercisable unless an investor acquires 15 percent or more of the
Companys common shares, or announces a tender offer that would result in the
investor owning 15 percent or more of the common shares or makes certain
regulatory filings seeking authority to acquire 15 percent or more of the
common shares. If someone does acquire 15 percent or more of the Companys
common shares, or acquires the Company in a merger or other transaction, each
right would entitle the holder, other than the investor triggering the rights
and related persons, to purchase the Companys common shares, or shares of an
entity that acquires the Company, at half of the then current market price.
The Board of Directors authorized and directed the issuance of one right with
respect to each common share issued thereafter until the redemption date (as
defined in the Rights Agreement). The terms of the rights are set forth in the
Rights Agreement between the Company and the Bank of New York, as Rights Agent,
dated as of October 17, 2001. The rights will expire at the close of business
on October 17, 2011, unless earlier redeemed by the Company. The Preferred
Shares have a par value of $0.01 per share, are junior to all other series of
preferred shares of the Company, and are entitled to quarterly dividends at a
rate equal to the dividends paid, if any, on 100 common shares. Each one
one-hundredth of a Preferred Share entitles the holder to one vote on matters
submitted to a vote of the Companys shareholders. The Rights Plan can be
terminated or amended by the Board at any time.

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FOOTNOTE  5  SUBSEQUENT EVENT

On November 7, 2001, the Company offered units of Warrants and Income
Redeemable Equity Securities (WIRES) to investors, with closure of the
transaction expected on November 14, 2001. Gross proceeds of the transaction
will be $175 million, with underwriters granted a 30-day option to distribute
up to an additional $25 million to cover over-allotments. The securities were
offered as units consisting of a trust preferred security issued by a trust
formed by the Company and a warrant to purchase IndyMacs common stock. The
units will be separable after issuance and may subsequently be recombined at
the option of the holder. The Company expects to issue 3,500,000 units
(subject to a 500,000 unit underwriter over-allotment option), with a face
value of $50 each. The trust preferred component of the units will entitle the
holders to a fixed quarterly cash distribution equal to 6% of the liquidation
amount annually. Each warrant will be convertible into 1.5972 shares of
IndyMac common stock at an effective exercise price of $31.31 per share. The
debentures mature in November of 2031; however, the Company has the option to
redeem the warrants at any time after November of 2006 if the closing price of
IndyMacs common stock exceeds and has exceeded $37.57 per share for at least
20 trading days within the immediately preceding 30 consecutive trading days.
The proceeds will be used for general corporate
purposes.

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

OVERVIEW

IndyMac Bancorp, Inc. (IndyMac and, together with its consolidated
subsidiaries, the Company), conducts a diversified mortgage banking business,
manages an investment portfolio, and offers commercial lending and retail
banking products. References to IndyMac mean the parent company alone, while
references to the Company mean the parent company and its consolidated
subsidiaries.

Mortgage Banking Operations

The Companys Mortgage Banking group is its core business. It is a technology
based, highly scalable operation that includes the following distinct channels:
(1) a business-to-business (B2B) channel, with mortgage brokers, small
mortgage bankers and community financial institutions effectively providing the
Company with access to a variable cost, nationwide virtual branch network,
(2) a branchless, technology driven, business-to-consumer (B2C) channel, and
(3) a business-to-realtor (B2R or LoanWorks) channel, which allows real
estate professionals to utilize the Companys technology to facilitate the
mortgage loan process for their customers in the process of purchasing a home.
The Company has been able to successfully expand and leverage its proprietary
loan approval and pricing system, e-MITS®, across its mortgage banking
channels. These channels provide the Company with comprehensive coverage of
the consumer mortgage market.

The Companys principal sources of income from its mortgage banking operations
are gains recognized on the sale or securitization of mortgage loans, fee
income from the origination or purchase of such loans, and the net spread
between interest earned on mortgage loans and the interest costs associated
with financing such loans pending their sale or securitization.

The B2B channel funded $3.9 billion of loans during the third quarter of 2001
as follows:

|           |                       |                   |   |               |       |       |   |          |       |       |  |          |    |   |   |       |       |  |  |    |   |  
|---------- | --------------------- | ----------------- | - | ------------- | ----- | ----- | - | -------- | ----- | ----- |  | -------- | -- | - | - | ----- | ----- |  |  | -- | - | -
|           |                       |                   |   | Q3 01         |       | Q3 00 |   | % change |       | Q2 01 |  | % change
|           |                       |                   |   |               |       |       |   |          |       |       |  |         
|           |                       |                   |   | (in millions)
|Production |                       |                   |   |               |       |       |   |          |       |       |  |          |    |   |   |       |       |  |  |   
|           | Prime                 |                   | $ | 3,233         |       |       | $ | 1,711    |       |       |  | 89       | %  |   | $ | 3,077 |       |  |  | 5  | %
|           | Subprime              |                   |   | 292           |       |       |   | 350      |       |       |  | -17      | %  |   |   | 240   |       |  |  | 22 | %
|           | Consumer Construction |                   |   | 335           |       |       |   | 195      |       |       |  | 72       | %  |   |   | 310   |       |  |  | 8  | %
|           |                       |                   |   |               |       |       |   |          |       |       |  |          |    |   |   |       |       |  |  |   
|           |                       | Total             |   | $             | 3,860 |       |   | $        | 2,256 |       |  |          | 71 | % |   | $     | 3,627 |  |  |    | 6 | %
|           |                       |                   |   |               |       |       |   |          |       |       |  |          |    |   |   |       |       |  |  |   
|           |                       | e-MITS Production |   | $             | 3,408 |       |   | $        | 1,818 |       |  |          | 87 | % |   | $     | 3,213 |  |  |    | 6 | %
|           |                       |                   |   |               |       |       |   |          |       |       |  |          |    |   |   |       |       |  |  |   

With its predominantly branchless, consumer-direct strategy, the B2C channel
funded $503 million of mortgage loans during the third quarter of 2001, down
8 percent over the second quarter of 2001 and up 128 percent over the third
quarter of 2000 as follows:

|                                                |                                   |  |               |     |       |  |          |     |       |    |          |     |   |  |     |     |  |  |     |     |  
|----------------------------------------------- | --------------------------------- |  | ------------- | --- | ----- |  | -------- | --- | ----- | -- | -------- | --- | - |  | --- | --- |  |  | --- | --- | -
|                                                |                                   |  | Q3 01         |     | Q3 00 |  | % change |     | Q2 01 |    | % change
|                                                |                                   |  |               |     |       |  |          |     |       |    |         
|                                                |                                   |  | (in millions)
|Production                                      |                                   |  |               |     |       |  |          |     |       |    |          |     |   |  |     |     |  |  |     |    
|Web-based Production                            |                                   |  |               |     |       |  |          |     |       |    |          |     |   |  |     |     |  |  |     |    
|                                                | Direct at www.indymacmortgage.com |  | $             | 117 |       |  | $        | 15  |       |    |          | 680 | % |  | $   | 137 |  |  |     | -15 | %
|                                                | Indirect web-based leads          |  |               | 94  |       |  |          | 98  |       |    |          | -4  | % |  |     | 67  |  |  |     | 40  | %
|Cross-marketing and Portfolio Refinancing       |                                   |  | 248           |     |       |  | 91       |     |       |    | 173      | %   |   |  | 288 |     |  |  | -14 | %  
|Direct Telemarketing and Affinity Relationships |                                   |  | 43            |     |       |  | 17       |     |       |    | 153      | %   |   |  | 53  |     |  |  | -19 | %  
|Community Lending                               |                                   |  | 1             |     |       |  |         |     |       | nm |          |     |  |  |     | nm 
|                                                |                                   |  |               |     |       |  |          |     |       |    |          |     |   |  |     |     |  |  |     |    
|                                                | Total                             |  | $             | 503 |       |  | $        | 221 |       |    |          | 128 | % |  | $   | 545 |  |  |     | -8  | %
|                                                |                                   |  |               |     |       |  |          |     |       |    |          |     |   |  |     |     |  |  |     |    

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This channel has been a major beneficiary of a strong refinance market, and is
expected to continue to be more cyclical than the B2B and B2R channels, which
have closer associations with consumers in the market who are purchasing homes.
The combination of these three channels is intended to enhance the Companys
ability to efficiently generate loan production growth across a variety of
interest rate cycles.

B2R first began operations in April 2000. The LoanWorks® division allows real
estate professionals to provide expanded mortgage services for their customers
in the home buying process via its Website www.loanworks.com. It provides a
solid new source of purchase volume for the Mortgage Banking Group, without
relying on a high cost sales force and branch infrastructure like more
traditional lenders. Loans funded through this new channel totaled $78 million
during the third quarter of 2001, up 13 percent from second quarter production.

The Company sold $4.5 billion of loans during the third quarter of 2001,
compared with the $2.1 billion of loans sold during the third quarter of 2000.
The gain on loan sales for the third quarter of 2001 totaled $59.9 million, an
82 percent increase over the $32.8 million of such gain recorded in the third
quarter of 2000.

Investment Portfolio Operations

The Company invests in residential mortgage loans and mortgage securities
retained in connection with the issuance of mortgage-backed securities or
purchased in the secondary mortgage market. The Company acts as primary
servicer and master servicer with respect to substantially all the mortgage
loans it sells pursuant to private-label securitizations and loans sold to
government sponsored entities (GSEs). The Companys principal sources of
income from its investment portfolio operations are fee income from servicing
contracts, and the net spread between interest earned on residential loans and
mortgage securities and the interest costs associated with the borrowings used
to finance such loans and securities.

At September 30, 2001 and December 31, 2000, the Companys master servicing
portfolio had aggregate outstanding principal balances of $11.0 billion and
$14.1 billion, respectively. The weighted average coupon of the Companys
retained master servicing portfolio decreased slightly to 8.4% as of September
30, 2001, from 8.5% as of December 31, 2000. The Companys primary servicing
portfolio at September 30, 2001 and December 31, 2000 was $21.4 billion and
$15.4 billion, respectively, of which $18.2 billion and $12.8 billion,
respectively, represented loans sold with servicing retained for which a
mortgage servicing asset was capitalized. The weighted average coupon of the
Companys retained primary servicing portfolio decreased to 8.5% as of
September 30, 2001 from 8.8% as of December 31, 2000.

Commercial Lending Operations

The Company conducts its builder construction lending activities through its
Construction Lending Corporation of America® (CLCA) division, which offers a
variety of residential construction, land and lot loan programs for builders
and developers. The Companys principal sources of income from its commercial
lending operations are fee income from the origination of such loans, and the
net spread between interest earned on mortgage loans and the interest costs
associated with the borrowings and deposits used to finance such loans. CLCA®
had outstanding commitments to fund builder construction loans of $1.4 billion
at both September 30, 2001 and December 31, 2000.

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RESULTS OF OPERATIONS

Overview:The Companys net earnings before provision for income taxes,
non-recurring and other charges, and cumulative effect of a change in
accounting principle were $59.1 million for the three months ended September
30, 2001, compared to $40.5 million for the three months ended September 30,
2000. The increase was primarily due to a $27.1 million increase in gain on
sale of loans coupled with an $18.2 million increase in net interest income,
offset in part by a $28.2 million increase in operating expenses. The increase
in net revenues and expense for the three months ended September 30, 2001 as
compared with the same period in 2000 was primarily due to the Companys
overall growth strategy.

For the nine months ended September 30, 2001 and 2000, the Companys net
earnings before provision for income taxes, non-recurring and other charges,
and cumulative effect of a change in accounting principle were $153.7 million
and $117.9 million, respectively. The $35.8 million increase was primarily due
to an $84.4 million increase in gain on sale of loans in conjunction with a
$30.6 million increase in net interest income, offset in part by an $80.8
million increase in operating expenses. The increase in net revenues and
expense for the nine months ended September 30, 2001 as compared with the same
period in 2000 was primarily due to the Companys overall growth strategy,
including the acquisition of SGV Bancorp, Inc. (SGVB) in July of 2000.

During January of 2001, the Company recognized a $10.2 million charge to
earnings, net of tax, which was recorded as a cumulative effect of a change in
accounting principle in connection with the adoption of Emerging Issues Task
Force Issue No. 99-20, Recognition of Interest Income and Impairment on
Certain Investments (EITF 99-20). This charge was primarily attributable to
the non-investment grade and residual securities portfolio associated with the
Companys discontinued manufactured housing product line. The Company
discontinued its manufactured housing product line with dealers during 1999.
The portfolio investments that were retained from this product line continue to
be impacted by declining trends in the industry. These securities had
previously been marked to market through other comprehensive income (OCI), a
separate component of shareholders equity; as a result, this change did not
have a material effect on total shareholders equity.

Net Interest Income:Net interest income was $56.2 million and $38.0 million
for the three months ended September 30, 2001 and 2000, respectively. The net
interest margin was 3.20% in the third quarter of 2001, compared to 3.12% in
the third quarter of 2000, while the net spread increased to 2.99% during the
third quarter of 2001 from 2.37% during the third quarter of 2000. The net
interest spread is the difference between the weighted average yield on
interest-earning assets and the weighted average cost of interest-bearing
liabilities. The net interest margin measures net interest income as a
percentage of average interest-earning assets. The increase in the interest
margin is primarily attributable to the Companys 62 basis point increase in
interest spread, offset in part by an increase in leverage. The increase in
net interest spread was primarily due to three factors. The average cost of
funds decreased 206 basis points to 5.17% for the three months ended September
30, 2001, compared to 7.23% for the same period ended September 30, 2000. The
indices to which the Companys borrowings are tied decreased, on average,
approximately 294 basis points quarter over quarter, but the Companys overall
borrowing rate did not decrease in proportion to the decrease in indices due to
its changes in the composition of the Companys borrowings. Portions of the
Companys borrowings, including term certificates of deposit and FHLB advances,
are fixed rate borrowings to better match the Companys investment in fixed
rate interest-earning assets. This decrease in cost of funds was partially
offset by a decrease in asset yields, primarily mortgage rates, which, on
average, decreased 103 basis points quarter over quarter, caused primarily by
the lower interest rate environment. In addition, the Companys investment in
higher grade assets, consisting of AAA rated agency and non-agency securities,
increased $733.7 million year over year, resulting in a greater proportion of
the Companys assets consisting of higher quality, but lower yielding assets in
2001 compared to 2000. These lower risk securities earn a lower weighted
average yield (6.5% and 7.8% during the quarters ended September 30, 2001 and
2000, respectively) than other securities.

Net interest income was $151.5 million and $120.9 million for the nine months
ended September 30, 2001 and 2000, respectively. During this period, the net
interest margin was 3.10% and 3.72%, respectively, and the net spread increased
to 2.81% during the nine months ended September 30, 2001 from 2.72% during the
nine months ended September 30, 2000. The decrease in net interest margin was
primarily associated with the increase in leverage through asset growth and
share repurchases.

The following table sets forth information regarding the Companys consolidated
average balance sheets, together with the total amounts of interest income and
interest expense and the weighted average interest rates

-15-



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##### Table of Contents



for the periods presented. Average balances are calculated on a daily basis.
Non-accrual loans are included in the average balances for the periods
indicated. The allowance for loan losses is excluded from the average loan
balances. The average investment securities and other interest-earning asset
balances for the three and nine months ended September 30, 2000 have been
reclassified to conform to the presentation for the three and nine months ended
September 30, 2001.

|                                                     |                                            |   |                                  |           |          |   |        |         |         |  |          |      |      |   |           |           |       |   |        |         |  |  |       |      |  
|---------------------------------------------------- | ------------------------------------------ | - | -------------------------------- | --------- | -------- | - | ------ | ------- | ------- |  | -------- | ---- | ---- | - | --------- | --------- | ----- | - | ------ | ------- |  |  | ----- | ---- | -
|                                                     |                                            |   | Three months ended September 30,
|                                                     |                                            |   |                                 
|                                                     |                                            |   | 2001                             |           | 2000    
|                                                     |                                            |   |                                  |           |         
|                                                     |                                            |   | Average                          |           |          |   |        |         | Yield   |  | Average  |      |      |   |           |           | Yield
|                                                     |                                            |   | Balance                          |           | Interest |   | Rate   |         | Balance |  | Interest |      | Rate
|                                                     |                                            |   |                                  |           |          |   |        |         |         |  |          |      |     
|                                                     |                                            |   | (Dollars in thousands)          
|Investment securities                                |                                            | $ | 4,270                            |           |          | $ | 61     |         |         |  | 5.67     | %    |      | $ | 20,595    |           |       | $ | 343    |         |  |  | 6.63  | %   
|Mortgage-backed securities                           |                                            |   | 1,456,277                        |           |          |   | 31,428 |         |         |  | 8.56     | %    |      |   | 850,726   |           |       |   | 21,638 |         |  |  | 10.12 | %   
|Mortgage loans held for sale                         |                                            |   | 2,542,204                        |           |          |   | 49,854 |         |         |  | 7.78     | %    |      |   | 1,373,300 |           |       |   | 30,765 |         |  |  | 8.91  | %   
|Mortgage loans held for investment                   |                                            |   | 2,852,216                        |           |          |   | 60,513 |         |         |  | 8.42     | %    |      |   | 2,555,631 |           |       |   | 63,398 |         |  |  | 9.87  | %   
|Investment in Federal Home Loan Bank stock and other |                                            |   | 101,317                          |           |          |   | 1,254  |         |         |  | 4.91     | %    |      |   | 48,959    |           |       |   | 840    |         |  |  | 6.83  | %   
|                                                     |                                            |   |                                  |           |          |   |        |         |         |  |          |      |      |   |           |           |       |   |        |         |  |  |       |     
|                                                     | Total interest-earning assets              |   |                                  | 6,956,284 |          |   |        | 143,110 |         |  |          | 8.16 | %    |   |           | 4,849,211 |       |   |        | 116,984 |  |  |       | 9.60 | %
|Other                                                |                                            |   | 622,550                          |           |          |   |        |         |         |  |          |      |      |   | 367,949   |           |       |   |        |         |  |  |       |     
|                                                     |                                            |   |                                  |           |          |   |        |         |         |  |          |      |      |   |           |           |       |   |        |         |  |  |       |     
|                                                     | Total assets                               |   | $                                | 7,578,834 |          |   |        |         |         |  |          |      |      |   | $         | 5,217,160 |       |   |        |         |  |  |       |      |  
|                                                     |                                            |   |                                  |           |          |   |        |         |         |  |          |      |      |   |           |           |       |   |        |         |  |  |       |     
|Deposits                                             |                                            | $ | 2,314,676                        |           |          |   | 29,744 |         |         |  | 5.10     | %    |      | $ | 426,243   |           |       |   | 6,104  |         |  |  | 5.70  | %   
|Advances from Federal Home Loan Bank                 |                                            |   | 1,732,919                        |           |          |   | 24,736 |         |         |  | 5.66     | %    |      |   | 119,353   |           |       |   | 2,039  |         |  |  | 6.80  | %   
|Borrowings                                           |                                            |   | 2,626,194                        |           |          |   | 32,440 |         |         |  | 4.90     | %    |      |   | 3,798,347 |           |       |   | 70,843 |         |  |  | 7.42  | %   
|                                                     |                                            |   |                                  |           |          |   |        |         |         |  |          |      |      |   |           |           |       |   |        |         |  |  |       |     
|                                                     | Total interest-bearing liabilities         |   |                                  | 6,673,789 |          |   |        | 86,920  |         |  |          | 5.17 | %    |   |           | 4,343,943 |       |   |        | 78,986  |  |  |       | 7.23 | %
|Other                                                |                                            |   | 152,203                          |           |          |   |        |         |         |  |          |      |      |   | 73,546    |           |       |   |        |         |  |  |       |     
|                                                     |                                            |   |                                  |           |          |   |        |         |         |  |          |      |      |   |           |           |       |   |        |         |  |  |       |     
|                                                     | Total liabilities                          |   |                                  | 6,825,992 |          |   |        |         |         |  |          |      |      |   |           | 4,417,489 |       |   |        |         |  |  |       |      |  
|                                                     | Shareholders equity                       |   |                                  | 752,842   |          |   |        |         |         |  |          |      |      |   |           | 799,671   |       |   |        |         |  |  |       |      |  
|                                                     |                                            |   |                                  |           |          |   |        |         |         |  |          |      |      |   |           |           |       |   |        |         |  |  |       |     
|                                                     | Total liabilities and shareholders equity |   | $                                | 7,578,834 |          |   |        |         |         |  |          |      |      |   | $         | 5,217,160 |       |   |        |         |  |  |       |      |  
|                                                     |                                            |   |                                  |           |          |   |        |         |         |  |          |      |      |   |           |           |       |   |        |         |  |  |       |     
|Net interest spread                                  |                                            |   |                                  |           |          |   |        |         |         |  | 2.99     | %    |      |   |           |           |       |   |        |         |  |  | 2.37  | %   
|                                                     |                                            |   |                                  |           |          |   |        |         |         |  |          |      |      |   |           |           |       |   |        |         |  |  |       |     
|Net interest margin                                  |                                            |   |                                  |           |          |   |        |         |         |  | 3.20     | %    |      |   |           |           |       |   |        |         |  |  | 3.12  | %   
|                                                     |                                            |   |                                  |           |          |   |        |         |         |  |          |      |      |   |           |           |       |   |        |         |  |  |       |     

|                                                     |                                            |   |                                 |           |          |   |         |         |         |  |          |      |      |   |           |           |       |   |         |         |  |  |       |      |  
|---------------------------------------------------- | ------------------------------------------ | - | ------------------------------- | --------- | -------- | - | ------- | ------- | ------- |  | -------- | ---- | ---- | - | --------- | --------- | ----- | - | ------- | ------- |  |  | ----- | ---- | -
|                                                     |                                            |   | Nine months ended September 30,
|                                                     |                                            |   |                                
|                                                     |                                            |   | 2001                            |           | 2000    
|                                                     |                                            |   |                                 |           |         
|                                                     |                                            |   | Average                         |           |          |   |         |         | Yield   |  | Average  |      |      |   |           |           | Yield
|                                                     |                                            |   | Balance                         |           | Interest |   | Rate    |         | Balance |  | Interest |      | Rate
|                                                     |                                            |   |                                 |           |          |   |         |         |         |  |          |      |     
|                                                     |                                            |   | (Dollars in thousands)         
|Investment securities                                |                                            | $ | 7,983                           |           |          | $ | 388     |         |         |  | 6.50     | %    |      | $ | 6,865     |           |       | $ | 343     |         |  |  | 6.67  | %   
|Mortgage-backed securities                           |                                            |   | 1,391,129                       |           |          |   | 93,127  |         |         |  | 8.95     | %    |      |   | 771,816   |           |       |   | 59,655  |         |  |  | 10.32 | %   
|Mortgage loans held for sale                         |                                            |   | 2,286,173                       |           |          |   | 137,453 |         |         |  | 8.04     | %    |      |   | 1,036,803 |           |       |   | 71,404  |         |  |  | 9.20  | %   
|Mortgage loans held for investment                   |                                            |   | 2,746,700                       |           |          |   | 181,739 |         |         |  | 8.85     | %    |      |   | 2,505,541 |           |       |   | 186,058 |         |  |  | 9.92  | %   
|Investment in Federal Home Loan Bank stock and other |                                            |   | 93,185                          |           |          |   | 4,366   |         |         |  | 6.26     | %    |      |   | 22,327    |           |       |   | 1,053   |         |  |  | 6.31  | %   
|                                                     |                                            |   |                                 |           |          |   |         |         |         |  |          |      |      |   |           |           |       |   |         |         |  |  |       |     
|                                                     | Total interest-earning assets              |   |                                 | 6,525,170 |          |   |         | 417,073 |         |  |          | 8.55 | %    |   |           | 4,343,352 |       |   |         | 318,513 |  |  |       | 9.80 | %
|Other                                                |                                            |   | 531,140                         |           |          |   |         |         |         |  |          |      |      |   | 288,902   |           |       |   |         |         |  |  |       |     
|                                                     |                                            |   |                                 |           |          |   |         |         |         |  |          |      |      |   |           |           |       |   |         |         |  |  |       |     
|                                                     | Total assets                               |   | $                               | 7,056,310 |          |   |         |         |         |  |          |      |      |   | $         | 4,632,254 |       |   |         |         |  |  |       |      |  
|                                                     |                                            |   |                                 |           |          |   |         |         |         |  |          |      |      |   |           |           |       |   |         |         |  |  |       |     
|Deposits                                             |                                            | $ | 1,565,064                       |           |          |   | 64,520  |         |         |  | 5.51     | %    |      | $ | 142,081   |           |       |   | 6,104   |         |  |  | 5.74  | %   
|Advances from Federal Home Loan Bank                 |                                            |   | 1,591,739                       |           |          |   | 70,894  |         |         |  | 5.95     | %    |      |   | 39,784    |           |       |   | 2,039   |         |  |  | 6.85  | %   
|Borrowings                                           |                                            |   | 3,028,403                       |           |          |   | 130,173 |         |         |  | 5.75     | %    |      |   | 3,545,136 |           |       |   | 189,507 |         |  |  | 7.14  | %   
|                                                     |                                            |   |                                 |           |          |   |         |         |         |  |          |      |      |   |           |           |       |   |         |         |  |  |       |     
|                                                     | Total interest-bearing liabilities         |   |                                 | 6,185,206 |          |   |         | 265,587 |         |  |          | 5.74 | %    |   |           | 3,727,001 |       |   |         | 197,650 |  |  |       | 7.08 | %
|Other                                                |                                            |   | 125,676                         |           |          |   |         |         |         |  |          |      |      |   | 50,355    |           |       |   |         |         |  |  |       |     
|                                                     |                                            |   |                                 |           |          |   |         |         |         |  |          |      |      |   |           |           |       |   |         |         |  |  |       |     
|                                                     | Total liabilities                          |   |                                 | 6,310,882 |          |   |         |         |         |  |          |      |      |   |           | 3,777,356 |       |   |         |         |  |  |       |      |  
|                                                     | Shareholders equity                       |   |                                 | 745,428   |          |   |         |         |         |  |          |      |      |   |           | 854,918   |       |   |         |         |  |  |       |      |  
|                                                     |                                            |   |                                 |           |          |   |         |         |         |  |          |      |      |   |           |           |       |   |         |         |  |  |       |     
|                                                     | Total liabilities and shareholders equity |   | $                               | 7,056,310 |          |   |         |         |         |  |          |      |      |   | $         | 4,632,274 |       |   |         |         |  |  |       |      |  
|                                                     |                                            |   |                                 |           |          |   |         |         |         |  |          |      |      |   |           |           |       |   |         |         |  |  |       |     
|Net interest spread                                  |                                            |   |                                 |           |          |   |         |         |         |  | 2.81     | %    |      |   |           |           |       |   |         |         |  |  | 2.72  | %   
|                                                     |                                            |   |                                 |           |          |   |         |         |         |  |          |      |      |   |           |           |       |   |         |         |  |  |       |     
|Net interest margin                                  |                                            |   |                                 |           |          |   |         |         |         |  | 3.10     | %    |      |   |           |           |       |   |         |         |  |  | 3.72  | %   
|                                                     |                                            |   |                                 |           |          |   |         |         |         |  |          |      |      |   |           |           |       |   |         |         |  |  |       |     

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

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##### Table of Contents



by the prior periods rate) and (ii) changes in the rate (changes in the
average interest rate multiplied by the prior periods volume). Changes in
rate/volume (changes in rates times the changes in volume) are allocated
proportionately to the effect from the changes in volume and the changes in
rates.

|                                                     |                        |   |                                  |        |      |   |              |         |   |   |         |        | 
|---------------------------------------------------- | ---------------------- | - | -------------------------------- | ------ | ---- | - | ------------ | ------- | - | - | ------- | ------ | 
|                                                     |                        |   | Three months ended September 30,
|                                                     |                        |   | 2001 vs 2000                    
|                                                     |                        |   |                                 
|                                                     |                        |   | Increase/(decrease) due to      
|                                                     |                        |   | Volume                           |        | Rate |   | Total Change
|                                                     |                        |   |                                  |        |      |   |             
|                                                     |                        |   | (Dollars in thousands)          
|Interest income                                      |                        |   |                                  |        |      |   |              |         |   |   |         |       
|Investment securities                                |                        | $ | (238                             | )      |      | $ | (44          | )       |   | $ | (282    | )     
|Mortgage-backed securities                           |                        |   | 12,489                           |        |      |   | (2,699       | )       |   |   | 9,790   |       
|Loans held for sale                                  |                        |   | 22,437                           |        |      |   | (3,348       | )       |   |   | 19,089  |       
|Loans held for investment                            |                        |   | 10,785                           |        |      |   | (13,670      | )       |   |   | (2,885  | )     
|Investment in Federal Home Loan Bank stock and other |                        |   | 561                              |        |      |   | (147         | )       |   |   | 414     |       
|                                                     |                        |   |                                  |        |      |   |              |         |   |   |         |       
|                                                     | Total interest income  |   |                                  | 46,034 |      |   |              | (19,908 | ) |   |         | 26,126 | 
|Interest expense                                     |                        |   |                                  |        |      |   |              |         |   |   |         |       
|Deposits                                             |                        |   | 24,215                           |        |      |   | (575         | )       |   |   | 23,640  |       
|Advances from Federal Home Loan Bank                 |                        |   | 22,980                           |        |      |   | (283         | )       |   |   | 22,697  |       
|Borrowings                                           |                        |   | (18,285                          | )      |      |   | (20,118      | )       |   |   | (38,403 | )     
|                                                     |                        |   |                                  |        |      |   |              |         |   |   |         |       
|                                                     | Total interest expense |   |                                  | 28,910 |      |   |              | (20,976 | ) |   |         | 7,934  | 
|                                                     |                        |   |                                  |        |      |   |              |         |   |   |         |       
|                                                     | Net interest income    |   | $                                | 17,124 |      |   | $            | 1,068   |   |   | $       | 18,192 | 
|                                                     |                        |   |                                  |        |      |   |              |         |   |   |         |       

|                                                     |                        |   |                                 |         |      |   |              |         |   |   |         |        | 
|---------------------------------------------------- | ---------------------- | - | ------------------------------- | ------- | ---- | - | ------------ | ------- | - | - | ------- | ------ | 
|                                                     |                        |   | Nine months ended September 30,
|                                                     |                        |   | 2001 vs 2000                   
|                                                     |                        |   |                                
|                                                     |                        |   | Increase/(decrease) due to     
|                                                     |                        |   | Volume                          |         | Rate |   | Total Change
|                                                     |                        |   |                                 |         |      |   |             
|                                                     |                        |   | (Dollars in thousands)         
|Interest income                                      |                        |   |                                 |         |      |   |              |         |   |   |         |       
|Investment securities                                |                        | $ | 54                              |         |      | $ | (9           | )       |   | $ | 45      |       
|Mortgage-backed securities                           |                        |   | 40,128                          |         |      |   | (6,656       | )       |   |   | 33,472  |       
|Loans held for sale                                  |                        |   | 73,774                          |         |      |   | (7,725       | )       |   |   | 66,049  |       
|Loans held for investment                            |                        |   | 34,923                          |         |      |   | (39,242      | )       |   |   | (4,319  | )     
|Investment in Federal Home Loan Bank stock and other |                        |   | 3,320                           |         |      |   | (7           | )       |   |   | 3,313   |       
|                                                     |                        |   |                                 |         |      |   |              |         |   |   |         |       
|                                                     | Total interest income  |   |                                 | 152,199 |      |   |              | (53,639 | ) |   |         | 98,560 | 
|Interest expense                                     |                        |   |                                 |         |      |   |              |         |   |   |         |       
|Deposits                                             |                        |   | 58,647                          |         |      |   | (231         | )       |   |   | 58,416  |       
|Advances from Federal Home Loan Bank                 |                        |   | 69,086                          |         |      |   | (231         | )       |   |   | 68,855  |       
|Borrowings                                           |                        |   | (25,369                         | )       |      |   | (33,965      | )       |   |   | (59,334 | )     
|                                                     |                        |   |                                 |         |      |   |              |         |   |   |         |       
|                                                     | Total interest expense |   |                                 | 102,364 |      |   |              | (34,427 | ) |   |         | 67,937 | 
|                                                     |                        |   |                                 |         |      |   |              |         |   |   |         |       
|                                                     | Net interest income    |   | $                               | 49,835  |      |   | $            | (19,212 | ) |   | $       | 30,623 | 
|                                                     |                        |   |                                 |         |      |   |              |         |   |   |         |       

Provision for Loan Losses:The provision for loan losses was $5.7 million and
$3.4 million for the three months ended September 30, 2001 and 2000,
respectively, and $17.7 million and $12.1 million for the nine month periods
then ended. The $5.6 million increase during the nine months ended September
30, 2001 compared to 2000 was primarily related to the Companys $118.6 million
remaining portfolio of high loan-to-value debt consolidation and home
improvement loans, which are primarily loans secured by second trust deeds.
While these loans are secured by equity in single-family residences, they tend
to perform more like unsecured consumer lines of credit with little effective
recourse to the secured property. The portfolio has declined from $250 million
at the time that the Company discontinued this line of business; but
charge-offs in this portfolio have

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been significant. The Company determined during the first quarter of 2001 that
it should bolster the reserves associated with this portfolio. The Company
believes that its allowance for loan losses was adequate at September 30, 2001.

In addition to the allowance for loan losses, the Company has built a reserve
for credit losses that arise in connection with loans that the Company is
required to repurchase from whole loan sale or securitization transactions.
This repurchase reserve relates primarily to loan repurchases arising from
whole loan sales and sales to the government sponsored entities, as these
distribution channels are priced to require somewhat higher repurchase
responsibilities on the part of the seller than private-label securitizations.
The balance in this reserve at September 30, 2001 was $16.2 million, and is
included on the balance sheet as part of Other Liabilitie s. This reserve is a
function of loan volume and loan sales distribution channels. The Company will
continue to evaluate the adequacy of this reserve and, likely will continue to
allocate a portion of its gain on sale proceeds to this reserve going forward.
In addition, in the normal course of business, the Company may have disputes
with investors and vendors with respect to contractual obligations pertaining
to mortgage operations. In connection with an assessment of these issues in
the third quarter, the Company established a $10 million reserve to cover
potential adverse claims or settlements. While the ultimate outcome of any such
disputes is uncertain, management believes that this is a fair reserve for
these purposes. This reserve is also included on the balance sheet as part of
Other Liabilities.

Other Income:Other income consisted of the following:

|                                        |                    |   |                        |        |                   |   |        |        |      |   |         |         |  |   |        |         | 
|--------------------------------------- | ------------------ | - | ---------------------- | ------ | ----------------- | - | ------ | ------ | ---- | - | ------- | ------- |  | - | ------ | ------- | 
|                                        |                    |   | Three months ended     |        | Nine months ended
|                                        |                    |   | September 30,          |        | September 30,    
|                                        |                    |   |                        |        |                  
|                                        |                    |   | 2001                   |        | 2000              |   | 2001   |        | 2000
|                                        |                    |   |                        |        |                   |   |        |        |     
|                                        |                    |   | (Dollars in thousands)
|Gain on sale of loans                   |                    | $ | 59,866                 |        |                   | $ | 32,809 |        |      | $ | 161,779 |         |  | $ | 77,340 |        
|Service fee income                      |                    |   | 7,304                  |        |                   |   | 11,268 |        |      |   | 21,672  |         |  |   | 31,335 |        
|Gain on mortgage-backed securities, net |                    |   | 1,695                  |        |                   |   | 449    |        |      |   | 780     |         |  |   | 1,253  |        
|Fee and other income                    |                    |   | 13,651                 |        |                   |   | 7,514  |        |      |   | 38,011  |         |  |   | 19,249 |        
|                                        |                    |   |                        |        |                   |   |        |        |      |   |         |         |  |   |        |        
|                                        | Total other income |   | $                      | 82,516 |                   |   | $      | 52,040 |      |   | $       | 222,242 |  |   | $      | 129,177 | 
|                                        |                    |   |                        |        |                   |   |        |        |      |   |         |         |  |   |        |        

The gain on sale of loans was $59.9 million for the three months ended
September 30, 2001, up from $32.8 million for the same period in 2000, and was
$161.8 million for the nine months ended September 30, 2001, up from $77.3
million in the same period a year ago. The results for both the quarter and
year to date periods reflect an increase in the aggregate principal amount of
loans sold. During the quarter ended September 30, 2001, $4.5 billion of loans
were sold at a 1.32% profit margin, compared to $2.1 billion at 1.54% a year
ago. The decrease in the profit margin during 2001 compared to 2000 was due in
part to the reserve for loan repurchases the Company recorded related to
potential loan repurchases (discussed above), as well as the lower percentage
of subprime loans sold during the third quarter of 2001 compared to the third
quarter of 2000. During the nine months ended September 30, 2001, $10.0
billion of loans were sold at a 1.61% profit margin, compared to $5.1 billion
at 1.51% a year ago. The impact of the provision for the reserve for loan
repurchases recorded during the nine months ended September 30, 2001 was offset
by higher profit margins on subprime securitizations in 2001 compared to 2000.

Service fee income totaled $7.3 million for the three months ended September 30,
2001, compared to $11.3 million for the same period in 2000, and was $21.7
million for the nine months ended September 30, 2001, down from $31.3 million
in the same period a year ago. The decrease in service fee income for both the
quarter over quarter and nine month over nine month periods was primarily
attributable to a decrease in valuations (net of hedges). For the three and
nine months ended September 30, 2001, net valuations totaled $(1.2) million and
$(3.8) million, respectively. For the three and nine months ended September 30,
2000, net valuations totaled $2.4 million and $6.1 million, respectively.

The Company recorded a net gain on sale of mortgage-backed securities of $1.7
million for the three months ended September 30, 2001, compared to $0.4 million
for the same period in 2000. The increase in gain was primarily due to a $3.1 million
increase in recorded net realized gain on sale of securities. This
resulted from an increase of $55.3 million in mortgage-backed securities sales,
offset by a $1.3 million increase in impairment on

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mortgage-backed securities
and a $0.6 million decrease in valuations (net of hedges). For the nine months
ended September 30, 2001 and 2000, the Company recorded net gains on sale of
mortgage-backed securities of $0.8 million and $1.3 million, respectively. The
decreases in gain were primarily due to a $6.9 million increase in impairment
on mortgage-backed securities, offset in part by a $6.1 million increase in
recorded net realized gain on sale of securities resulting from an increase of
$173.7 million in mortgage-backed securities sales and a $0.3 million increase
in valuations (net of hedges).

Fee income increased to $13.7 million for the three months ended September 30,
2001 from $7.5 million for the same period in 2000, and was $38.0 million for
the nine months ended September 30, 2001, up from $19.2 million in the same
period a year ago. The 82% increase during the third quarter of 2001 compared
to the third
quarter of 2000, and the 97% increase during the nine months ended September 30,
2001 compared to the nine months ended September 30, 2000, were primarily
due to fees such as table funding and application fees, resulting from an
increase in mortgage production volume. The mortgage production volume
increased 79% and 93% during the respective periods.

Total Expense:Total expense consisted of the following:

|                                                     |               |   |                            |        |                           |   |        |        |      |   |         |         |  |   |        |         | 
|---------------------------------------------------- | ------------- | - | -------------------------- | ------ | ------------------------- | - | ------ | ------ | ---- | - | ------- | ------- |  | - | ------ | ------- | 
|                                                     |               |   | For the three months ended |        | For the nine months ended
|                                                     |               |   | September 30,              |        | September 30,            
|                                                     |               |   |                            |        |                          
|                                                     |               |   | 2001                       |        | 2000                      |   | 2001   |        | 2000
|                                                     |               |   |                            |        |                           |   |        |        |     
|                                                     |               |   | (Dollars in thousands)    
|Salaries and related                                 |               | $ | 44,768                     |        |                           | $ | 28,740 |        |      | $ | 122,766 |         |  | $ | 75,590 |        
|Premises and equipment                               |               |   | 6,632                      |        |                           |   | 4,089  |        |      |   | 16,882  |         |  |   | 11,322 |        
|Data processing                                      |               |   | 4,640                      |        |                           |   | 1,747  |        |      |   | 11,495  |         |  |   | 5,291  |        
|Office                                               |               |   | 3,853                      |        |                           |   | 2,114  |        |      |   | 11,040  |         |  |   | 5,328  |        
|Advertising and promotion                            |               |   | 2,750                      |        |                           |   | 2,420  |        |      |   | 7,785   |         |  |   | 5,977  |        
|Professional services                                |               |   | 3,219                      |        |                           |   | 1,786  |        |      |   | 10,306  |         |  |   | 4,856  |        
|Loan purchase costs                                  |               |   | 4,533                      |        |                           |   | 1,805  |        |      |   | 11,369  |         |  |   | 4,388  |        
|Foreclosure related activities                       |               |   | 898                        |        |                           |   | 828    |        |      |   | 2,216   |         |  |   | 1,837  |        
|Amortization of goodwill and other intangible assets |               |   | 760                        |        |                           |   | 1,125  |        |      |   | 2,655   |         |  |   | 1,152  |        
|Non-recurring and other charges                      |               |   | 38                         |        |                           |   | 4,641  |        |      |   | (497    | )       |  |   | 16,209 |        
|Other                                                |               |   | 1,893                      |        |                           |   | 1,478  |        |      |   | 5,797   |         |  |   | 4,283  |        
|                                                     |               |   |                            |        |                           |   |        |        |      |   |         |         |  |   |        |        
|                                                     | Total expense |   | $                          | 73,984 |                           |   | $      | 50,773 |      |   | $       | 201,814 |  |   | $      | 136,233 | 
|                                                     |               |   |                            |        |                           |   |        |        |      |   |         |         |  |   |        |        

The increases in salaries and related and general and administrative expenses
are due to the Companys overall growth, including the acquisitions of SGVB in
July of 2000 and PNB Mortgage in September of 2000, and the expansion of
mortgage banking operations to Sacramento, California and Atlanta, Georgia.

During the three months ended September 30, 2001, amortization of goodwill and
intangibles was $0.8 million, down from $1.1 million for the same period in
2000, and was $2.7 million for the nine months ended September 30, 2001,
compared to $1.2 million in the same period a year ago. The quarter over
quarter decrease in amortization of $0.4 million was primarily attributable to
non-competition agreements that were recorded on July 1, 2000 in conjunction
with the Companys acquisition of SGVB and which became fully amortized as of
June 30, 2001. The $1.5 million increase in amortization for the nine months
ended September 30, 2001 compared to 2000 primarily resulted from the recording
of goodwill and core deposit intangible assets totaling $37.8 million on July 1,
2000 in conjunction with the Companys acquisition of SGVB, which was
accounted for using the purchase method.

Non-recurring and other charges during the nine months ended September 30, 2001
and the nine months ended September 30, 2000 represent variable plan accounting
for director stock options repriced after December 15, 1998. Additionally,
$9.4 million in compensation expense related to the resignation of the
Companys former Vice Chairman and President was incurred in the first quarter
of 2000.

Income Taxes:Income taxes of $24.5 million and $64.1 million for the three
and nine months ended September 30, 2001 represented an effective tax rate of
41.55%. For the three months ended September 30, 2000, the Company recorded a
tax expense of $15.1 million, constituting a 42% effective tax rate. For the
nine months ended September 30, 2000, the Company recorded a net tax expense of
$6.6 million, which consisted of $42.7 million in income tax expense offset by
a one-time tax benefit of $36.1 million due to IndyMacs conversion from a real
estate investment trust to a fully taxable entity, effective January of 2000.
Excluding this tax benefit, the Companys effective tax rate for the nine
months ended September 30, 2000 would have been approximately 42%.

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FINANCIAL CONDITION

Investment and Mortgage-Backed Securities: At September 30, 2001 and December 31,
2000, the carrying value of the Companys investment and mortgage-backed
securities portfolio totaled $1.4 billion and $1.2 billion, respectively. The
Companys AAA rated interest-only securities and AAA rated principal-only
securities were reclassified to the trading securities classification from the
available for sale classification upon adoption of SFAS 133 in January of 2001.
All other securities are classified as available for sale. The balances
consisted of the following types of securities:

|                            |                                          |                                                       |   |                        |           |              |   |         |           | 
|--------------------------- | ---------------------------------------- | ----------------------------------------------------- | - | ---------------------- | --------- | ------------ | - | ------- | --------- | 
|                            |                                          |                                                       |   | September 30,          |           | December 31,
|                            |                                          |                                                       |   | 2001                   |           | 2000        
|                            |                                          |                                                       |   |                        |           |             
|                            |                                          |                                                       |   | (Dollars in thousands)
|Investment securities:      |                                          |                                                       |   |                        |           |              |   |        
|                            | Agency notes                             |                                                       | $ |                       |           |              | $ | 10,829  |          
|                            | Corporate notes and other                |                                                       |   | 4,269                  |           |              |   | 7,558   |          
|                            |                                          |                                                       |   |                        |           |              |   |        
|                            |                                          | Total investment securities                           |   |                        | 4,269     |              |   |         | 18,387    | 
|                            |                                          |                                                       |   |                        |           |              |   |        
|Mortgage-backed securities: |                                          |                                                       |   |                        |           |              |   |        
|                            | AAA rated interest-only securities       |                                                       |   | 206,865                |           |              |   | 258,241 |          
|                            | AAA rated agency securities              |                                                       |   | 108,552                |           |              |   | 261,225 |          
|                            | AAA rated non-agency securities          |                                                       |   | 895,318                |           |              |   | 484,138 |          
|                            | Other investment grade securities        |                                                       |   | 56,297                 |           |              |   | 69,483  |          
|                            |                                          |                                                       |   |                        |           |              |   |        
|                            |                                          | Total investment grade mortgage-backed securities     |   |                        | 1,267,032 |              |   |         | 1,073,087 | 
|                            |                                          |                                                       |   |                        |           |              |   |        
|                            | Non-investment grade residual securities |                                                       |   | 75,549                 |           |              |   | 41,672  |          
|                            | Other non-investment grade securities    |                                                       |   | 5,175                  |           |              |   | 21,157  |          
|                            |                                          |                                                       |   |                        |           |              |   |        
|                            |                                          | Total non-investment grade mortgage-backed securities |   |                        | 80,724    |              |   |         | 62,829    | 
|                            |                                          |                                                       |   |                        |           |              |   |        
|                            |                                          | Total mortgage-backed securities                      |   |                        | 1,347,756 |              |   |         | 1,135,916 | 
|                            |                                          |                                                       |   |                        |           |              |   |        
|                            |                                          | Total investment and mortgage-backed securities       |   | $                      | 1,352,025 |              |   | $       | 1,154,303 | 
|                            |                                          |                                                       |   |                        |           |              |   |        

The Company evaluates the carrying value of its AAA rated interest-only
securities and its residual securities each month by discounting estimated net
future cash flows. On these securities, estimated net future cash flows are
primarily based on assumptions related to prepayment speeds, in addition to
expected credit loss assumptions on the residual securities. Adjustments to
the carrying value of residual securities are recorded as a component of OCI in
shareholders equity. Adjustments to the carrying value of AAA rated
interest-only securities were recorded as a component of OCI during 2000.
Following reclassification on January of 2001 to trading, such adjustments are
recorded as gain or loss on mortgage-backed securities through the statement of
earnings. The increase in the residual securities during the nine months ended
September 30, 2001 was due to the retention of $40.2 million from prime and
subprime securitizations, as well as the purchase of $18.1 million in residual
securities at a significant discount from third parties.

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##### Table of Contents



The assumptions used to value these securities at September 30, 2001 and
December 31, 2000 follow:

|                                   |  |                        |         |            |  |       |            |                |  |           |       |            |  |      |      |   |  |         |      |      |  |  |      | 
|---------------------------------- |  | ---------------------- | ------- | ---------- |  | ----- | ---------- | -------------- |  | --------- | ----- | ---------- |  | ---- | ---- | - |  | ------- | ---- | ---- |  |  | ---- | 
|                                   |  | Actual                
|                                   |  |                       
|                                   |  |                        |         |            |  |       |            |                |  |           |       |            |  |      |      |   |  | 3-Month |      | Wtd.
|                                   |  | Book                   |         | Collateral |  | Gross |            |                |  |           |       | Prepayment |  | Avg.
|                                   |  | Value                  |         | Balance    |  | WAC   |            | Interest Strip |  | Speeds(1) |       | Multiple  
|                                   |  |                        |         |            |  |       |            |                |  |           |       |           
|                                   |  | (Dollars in thousands)
|September 30, 2001                 |  |                        |         |            |  |       |            |                |  |           |       |            |  |      |      |   |  |         |      |      |  |  |      | 
|AAA rated interest-only securities |  | $                      | 206,865 |            |  | $     | 8,838,511  |                |  |           | 8.24  | %          |  |      | 0.81 | % |  |         | 30.5 | %    |  |  | 2.89 | 
|                                   |  |                        |         |            |  |       |            |                |  |           |       |            |  |      |      |   |  |         |      |      |  |  |      | 
|Residual securities(4)             |  | $                      | 77,549  |            |  | $     | 2,728,017  |                |  |           | 9.59  | %          |  |      | 2.82 | % |  |         | 31.1 | %    |  |  | 0.98 | 
|                                   |  |                        |         |            |  |       |            |                |  |           |       |            |  |      |      |   |  |         |      |      |  |  |      | 
|December 31, 2000                  |  |                        |         |            |  |       |            |                |  |           |       |            |  |      |      |   |  |         |      |      |  |  |      | 
|AAA rated interest-only securities |  | $                      | 258,241 |            |  | $     | 11,089,253 |                |  |           | 8.27  | %          |  |      | 0.85 | % |  |         | 12.6 | %    |  |  | 2.74 | 
|                                   |  |                        |         |            |  |       |            |                |  |           |       |            |  |      |      |   |  |         |      |      |  |  |      | 
|Residual securities                |  | $                      | 41,672  |            |  | $     | 1,887,525  |                |  |           | 10.05 | %          |  |      | 1.95 | % |  |         | 17.5 | %    |  |  | 1.13 | 
|                                   |  |                        |         |            |  |       |            |                |  |           |       |            |  |      |      |   |  |         |      |      |  |  |      | 

|                                   |  |                       |      |          |  |           |      |   |  |           |     |  
|---------------------------------- |  | --------------------- | ---- | -------- |  | --------- | ---- | - |  | --------- | --- | -
|                                   |  | Valuation Assumptions
|                                   |  |                      
|                                   |  |                       |      |          |  |           |      |   |  | Remaining
|                                   |  | Prepayment            |      | Discount |  | Cum. Loss
|                                   |  | Speeds(2)             |      | Yield    |  | Rate(3)  
|                                   |  |                       |      |          |  |          
|September 30, 2001                 |  |                       |      |          |  |           |      |   |  |          
|AAA rated interest-only securities |  |                       | 20.3 | %        |  |           | 9.4  | % |  | NA       
|Residual securities                |  |                       | 29.3 | %        |  |           | 20.8 | % |  |           | 1.2 | %
|December 31, 2000                  |  |                       |      |          |  |           |      |   |  |          
|AAA rated interest-only securities |  |                       | 18.9 | %        |  |           | 12.9 | % |  | NA       
|Residual securities                |  |                       | 24.2 | %        |  |           | 21.4 | % |  |           | 2.4 | %



---

|(1) |  | CPR                                                                                                                                                                                  
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(2) |  | Reflects lifetime prepayment speeds. Embedded in the lifetime prepayment speeds as of September 30, 2001 are 6-month
prepayment speeds of 29% for AAA rated interest-only securities.
|   
|   
|   
|   
|(3) |  | As of September 30, 2001, the actual cumulative loss rate totaled 0.6% for residuals. The weighted average seasoning of the
underlying collateral was 14.7 months.                   
|   
|   
|   
|   
|(4) |  | The book value is comprised primarily of subprime residuals. The Company has no balance as of September 30, 2001 related to
manufactured housing residuals.                          

Fair value for the Companys other investment and non-investment grade
mortgage-backed securities is estimated based on market quotes when available
or discounted cash flow techniques using assumptions for prepayment rates,
market yield requirements and credit losses. Adjustments to the carrying value
are recorded as a component of OCI in shareholders equity except for the
Companys AAA rated principal-only securities, which are recorded as a
component of gain on mortgage-backed securities through the statement of
earnings beginning January of 2001 following reclassification as a trading
portfolio. The detail of other investment and non-investment grade securities
by credit rating as of September 30, 2001 and December 31, 2000 follows:

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|                                    |                                                                            |   |                        |         |            |   |           |         |       |   |        |        |  |   |        |        | 
|----------------------------------- | -------------------------------------------------------------------------- | - | ---------------------- | ------- | ---------- | - | --------- | ------- | ----- | - | ------ | ------ |  | - | ------ | ------ | 
|                                    |                                                                            |   |                        |         |            |   | Premium   |         |       |   |        |        |  |   |       
|                                    |                                                                            |   | Current                |         | (Discount) |   |           |         |       |   |        |        | 
|                                    |                                                                            |   | Face                   |         | To Face    |   | Amortized |         | Book 
|                                    |                                                                            |   | Value                  |         | Value      |   | Cost      |         | Value
|                                    |                                                                            |   |                        |         |            |   |           |         |      
|                                    |                                                                            |   | (Dollars in thousands)
|September 30, 2001                  |                                                                            |   |                        |         |            |   |           |         |       |   |        |        |  |   |        |       
|AAA rated principal-only securities |                                                                            | $ | 6,132                  |         |            | $ | (1,100    | )       |       | $ | 5,032  |        |  | $ | 4,758  |       
|AA                                  |                                                                            |   | 21,418                 |         |            |   | (131      | )       |       |   | 21,287 |        |  |   | 22,235 |       
|A+                                  |                                                                            |   | 107                    |         |            |   | 5         |         |       |   | 112    |        |  |   | 109    |       
|A                                   |                                                                            |   | 2,389                  |         |            |   | (144      | )       |       |   | 2,245  |        |  |   | 2,374  |       
|A-                                  |                                                                            |   | 129                    |         |            |   | (9        | )       |       |   | 120    |        |  |   | 123    |       
|BBB                                 |                                                                            |   | 25,223                 |         |            |   | (1,642    | )       |       |   | 23,581 |        |  |   | 23,782 |       
|BBB-                                |                                                                            |   | 3,021                  |         |            |   | (247      | )       |       |   | 2,774  |        |  |   | 2,916  |       
|                                    |                                                                            |   |                        |         |            |   |           |         |       |   |        |        |  |   |        |       
|                                    | Total other investment grade mortgage-backed
securities                    |   |                        | 58,419  |            |   |           | (3,268  | )     |   |        | 55,151 |  |   |        | 56,297 | 
|                                    |                                                                            |   |                        |         |            |   |           |         |       |   |        |        |  |   |        |       
|BB                                  |                                                                            |   | 4,579                  |         |            |   | (2,872    | )       |       |   | 1,707  |        |  |   | 1,717  |       
|CCC                                 |                                                                            |   | 16,011                 |         |            |   | (12,553   | )       |       |   | 3,458  |        |  |   | 3,458  |       
|                                    |                                                                            |   |                        |         |            |   |           |         |       |   |        |        |  |   |        |       
|                                    | Total other non-investment grade
mortgage-backed securities                |   |                        | 20,590  |            |   |           | (15,425 | )     |   |        | 5,165  |  |   |        | 5,175  | 
|                                    |                                                                            |   |                        |         |            |   |           |         |       |   |        |        |  |   |        |       
|                                    | Total other investment and non-investment
grade mortgage-backed securities |   | $                      | 79,009  |            |   | $         | (18,693 | )     |   | $      | 60,316 |  |   | $      | 61,472 | 
|                                    |                                                                            |   |                        |         |            |   |           |         |       |   |        |        |  |   |        |       
|December 31, 2000                   |                                                                            |   |                        |         |            |   |           |         |       |   |        |        |  |   |        |       
|AAA rated principal-only securities |                                                                            | $ | 7,056                  |         |            | $ | (1,271    | )       |       | $ | 5,785  |        |  | $ | 5,033  |       
|AA                                  |                                                                            |   | 8,762                  |         |            |   | 81        |         |       |   | 8,843  |        |  |   | 9,023  |       
|A                                   |                                                                            |   | 12,732                 |         |            |   | (388      | )       |       |   | 12,344 |        |  |   | 12,300 |       
|BBB                                 |                                                                            |   | 46,218                 |         |            |   | (3,358    | )       |       |   | 42,860 |        |  |   | 43,127 |       
|                                    |                                                                            |   |                        |         |            |   |           |         |       |   |        |        |  |   |        |       
|                                    | Total other investment grade mortgage-backed
securities                    |   |                        | 74,768  |            |   |           | (4,936  | )     |   |        | 69,832 |  |   |        | 69,483 | 
|                                    |                                                                            |   |                        |         |            |   |           |         |       |   |        |        |  |   |        |       
|BB                                  |                                                                            |   | 17,665                 |         |            |   | (4,588    | )       |       |   | 13,077 |        |  |   | 10,561 |       
|B                                   |                                                                            |   | 17,928                 |         |            |   | (2,277    | )       |       |   | 15,651 |        |  |   | 9,350  |       
|NR                                  |                                                                            |   | 6,324                  |         |            |   | (5,749    | )       |       |   | 575    |        |  |   | 1,246  |       
|                                    |                                                                            |   |                        |         |            |   |           |         |       |   |        |        |  |   |        |       
|                                    | Total other non-investment grade
mortgage-backed securities                |   |                        | 41,917  |            |   |           | (12,614 | )     |   |        | 29,303 |  |   |        | 21,157 | 
|                                    |                                                                            |   |                        |         |            |   |           |         |       |   |        |        |  |   |        |       
|                                    | Total other investment and non-investment
grade mortgage-backed securities |   | $                      | 116,685 |            |   | $         | (17,550 | )     |   | $      | 99,135 |  |   | $      | 90,640 | 
|                                    |                                                                            |   |                        |         |            |   |           |         |       |   |        |        |  |   |        |       

Loans Receivable: Total loans (exclusive of the allowance for loan losses)
increased to $4.9 billion at September 30, 2001, from $4.0 billion at December 31,
2000. The increase in loans receivable was primarily driven by the
Companys overall growth strategy.

Non-Accrual Loans: Loans are generally placed on non-accrual status when they
are 90 days past due. Non-performing assets, which include non-accrual loans
and foreclosed assets, were $113.3 million or 1.6% of total assets at September
30, 2001, compared to $113.9 million or 2.0% of total assets at December 31,
2000. The Companys foreclosed assets (properties acquired in foreclosure or
by deed in lieu of foreclosure) balance, which is recorded at estimated net
realizable value, totaled $21.1 million and $16.3 million at September 30,
2001, and December 31, 2000, respectively. The Company recognized a total of
$1.7 million in net gains on sale of foreclosed assets during the nine months
ended September 30, 2001.

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##### Table of Contents



A summary of the Companys non-performing assets follows:

|                          |                                     |                             |        |                        |         |              |        |        |         | 
|------------------------- | ----------------------------------- | --------------------------- | ------ | ---------------------- | ------- | ------------ | ------ | ------ | ------- | 
|                          |                                     |                             |        | September 30,          |         | December 31,
|                          |                                     |                             |        | 2001                   |         | 2000        
|                          |                                     |                             |        |                        |         |             
|                          |                                     |                             |        | (Dollars in thousands)
|Loans held for sale       |                                     | $                           | 20,817 |                        |         | $            | 13,235 |       
|Loans held for investment |                                     |                             |        |                        |         |              |        |       
|                          | Mortgage loans                      |                             |        | 39,813                 |         |              |        | 45,044 |        
|                          | Residential construction            |                             |        | 28,782                 |         |              |        | 32,826 |        
|                          | Revolving warehouse lines of credit |                             |        | 2,775                  |         |              |        | 6,509  |        
|                          |                                     |                             |        |                        |         |              |        |       
|                          |                                     | Total non-performing loans  |        |                        | 92,187  |              |        |        | 97,614  | 
|Foreclosed assets         |                                     |                             | 21,125 |                        |         |              | 16,265 |       
|                          |                                     |                             |        |                        |         |              |        |       
|                          |                                     | Total non-performing assets |        | $                      | 113,312 |              |        | $      | 113,879 | 
|                          |                                     |                             |        |                        |         |              |        |       

The average balance of non-performing loans during the three months ended
September 30, 2001, was approximately $107.7 million. Non-performing loans as
a percentage of total loans decreased to 1.87% at September 30, 2001, compared
to 2.41% at December 31, 2000.

Allowance for Loan Losses: An allowance is maintained to absorb losses inherent
in the loan portfolio. The adequacy of the allowance is periodically evaluated
by management to ensure the allowance is maintained at a level that is
sufficient to absorb expected loan losses. The allowance for loan losses is
increased by provisions for loan losses, and is decreased by charge-offs (net
of recoveries). The Company charges current earnings with a provision for
estimated credit losses on loans receivable. The provision considers both
specifically identified problem loans as well as credit risks not specifically
identified in the loan portfolio. The adequacy of the allowance is based on
past loan loss experience, known and inherent risks in the loan portfolio,
adverse situations that may affect the borrowers ability to repay, the
estimated value of underlying collateral and economic conditions.

The following table sets forth the allocation of the Companys allowance for
loan losses and the percentage of allowance in each loan category to total
loans at the dates indicated:

|                           |                                 |   |                        |        |                   |  |            |      |       |   |        |        |            |  |      |      |  
|-------------------------- | ------------------------------- | - | ---------------------- | ------ | ----------------- |  | ---------- | ---- | ----- | - | ------ | ------ | ---------- |  | ---- | ---- | -
|                           |                                 |   | September 30, 2001     |        | December 31, 2000
|                           |                                 |   |                        |        |                  
|                           |                                 |   |                        |        |                   |  | % of Total |      |       |   |        |        | % of Total
|                           |                                 |   | Balance                |        | Loans             |  | Balance    |      | Loans
|                           |                                 |   |                        |        |                   |  |            |      |      
|                           |                                 |   | (Dollars in thousands)
|Residential construction   |                                 | $ | 25,312                 |        |                   |  | 0.51       | %    |       | $ | 26,329 |        |            |  | 0.65 | %   
|Prime and subprime loans   |                                 |   | 14,958                 |        |                   |  | 0.30       | %    |       |   | 17,021 |        |            |  | 0.42 | %   
|Discontinued product lines |                                 |   | 25,400                 |        |                   |  | 0.51       | %    |       |   | 15,612 |        |            |  | 0.39 | %   
|                           |                                 |   |                        |        |                   |  |            |      |       |   |        |        |            |  |      |     
|                           | Total allowance for loan losses |   | $                      | 65,670 |                   |  |            | 1.32 | %     |   | $      | 58,962 |            |  |      | 1.46 | %
|                           |                                 |   |                        |        |                   |  |            |      |       |   |        |        |            |  |      |     

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The following table summarizes the activity in the allowance for loan losses
for the periods indicated:

|                               |  |                        |        |                   |  |      |        |      |  |   |         |   |  |   |        |  
|------------------------------ |  | ---------------------- | ------ | ----------------- |  | ---- | ------ | ---- |  | - | ------- | - |  | - | ------ | -
|                               |  | Three Months Ended     |        | Nine Months Ended
|                               |  | September 30,          |        | September 30,    
|                               |  |                        |        |                  
|                               |  | 2001                   |        | 2000              |  | 2001 |        | 2000
|                               |  |                        |        |                   |  |      |        |     
|                               |  | (Dollars in thousands)
|Balance, beginning of period   |  | $                      | 64,016 |                   |  | $    | 57,356 |      |  | $ | 58,962  |   |  | $ | 53,880 |  
|Provision for loan losses      |  |                        | 5,700  |                   |  |      | 3,386  |      |  |   | 17,726  |   |  |   | 12,108 |  
|Charge-offs, net of recoveries |  |                        | (4,046 | )                 |  |      | (1,878 | )    |  |   | (11,018 | ) |  |   | (7,124 | )
|                               |  |                        |        |                   |  |      |        |      |  |   |         |   |  |   |        |  
|Balance, end of period         |  | $                      | 65,670 |                   |  | $    | 58,864 |      |  | $ | 65,670  |   |  | $ | 58,864 |  
|                               |  |                        |        |                   |  |      |        |      |  |   |         |   |  |   |        |  

Net charge-offs as a percentage of average loans were 0.08% for the third
quarter of 2001 and 0.05% for the third quarter of 2000.

Mortgage Servicing Rights: The Companys capitalized value of mortgage
servicing rights totaled $285.2 million at September 30, 2001, an increase of
35% from $211.1 million at December 31, 2000. The increase in the mortgage
servicing rights was primarily due to mortgage servicing rights retained from
securitizations and sales to GSEs during the nine months ended September 30,
2001. The assumptions used to value mortgage servicing rights at September 30,
2001, and December 31, 2000, follow:

|                                |  |                        |         |                       |  |       |            |           |  |          |      |            |  |          |      |   |  |      |      |  |  |  |      |   |  |  |      |  
|------------------------------- |  | ---------------------- | ------- | --------------------- |  | ----- | ---------- | --------- |  | -------- | ---- | ---------- |  | -------- | ---- | - |  | ---- | ---- |  |  |  | ---- | - |  |  | ---- | -
|                                |  | Actual                 |         | Valuation Assumptions
|                                |  |                        |         |                      
|                                |  |                        |         |                       |  |       |            |           |  |          |      |            |  |          |      |   |  | Wtd. |      |  |  |  |      |   |  | 
|                                |  | Book                   |         | Collateral            |  | Gross |            | Servicing |  | Avg.     |      | Prepayment |  | Discount
|                                |  | Value                  |         | Balance               |  | WAC   |            | Fee       |  | Multiple |      | Speeds(1)  |  | Yield   
|                                |  |                        |         |                       |  |       |            |           |  |          |      |            |  |         
|                                |  | (Dollars in thousands)
|September 30, 2001              |  |                        |         |                       |  |       |            |           |  |          |      |            |  |          |      |   |  |      |      |  |  |  |      |   |  |  |      |  
|Master Servicing(2)             |  | $                      | 34,454  |                       |  | $     | 10,981,325 |           |  |          | 8.40 | %          |  |          | 0.10 | % |  |      | 3.14 |  |  |  | 20.3 | % |  |  | 18.3 | %
|                                |  |                        |         |                       |  |       |            |           |  |          |      |            |  |          |      |   |  |      |      |  |  |  |      |   |  |  |      |  
|Primary Servicing(3)            |  |                        | 250,720 |                       |  | $     | 17,894,343 |           |  |          | 8.49 | %          |  |          | 0.46 | % |  |      | 3.05 |  |  |  | 23.5 | % |  |  | 12.5 | %
|                                |  |                        |         |                       |  |       |            |           |  |          |      |            |  |          |      |   |  |      |      |  |  |  |      |   |  |  |      |  
|Total mortgage servicing rights |  | $                      | 285,174 |                       |  |       |            |           |  |          |      |            |  |          |      |   |  |      |      |  |  |  |      |   |  |  |      |  
|                                |  |                        |         |                       |  |       |            |           |  |          |      |            |  |          |      |   |  |      |      |  |  |  |      |   |  |  |      |  
|December 31, 2000               |  |                        |         |                       |  |       |            |           |  |          |      |            |  |          |      |   |  |      |      |  |  |  |      |   |  |  |      |  
|Master Servicing(2)             |  | $                      | 51,691  |                       |  | $     | 14,118,761 |           |  |          | 8.47 | %          |  |          | 0.10 | % |  |      | 3.60 |  |  |  | 18.4 | % |  |  | 20.4 | %
|                                |  |                        |         |                       |  |       |            |           |  |          |      |            |  |          |      |   |  |      |      |  |  |  |      |   |  |  |      |  
|Primary Servicing               |  |                        | 159,436 |                       |  | $     | 12,759,143 |           |  |          | 8.80 | %          |  |          | 0.41 | % |  |      | 3.05 |  |  |  | 20.3 | % |  |  | 13.5 | %
|                                |  |                        |         |                       |  |       |            |           |  |          |      |            |  |          |      |   |  |      |      |  |  |  |      |   |  |  |      |  
|Total mortgage servicing rights |  | $                      | 211,127 |                       |  |       |            |           |  |          |      |            |  |          |      |   |  |      |      |  |  |  |      |   |  |  |      |  
|                                |  |                        |         |                       |  |       |            |           |  |          |      |            |  |          |      |   |  |      |      |  |  |  |      |   |  |  |      |  



---

|(1) |  | CPR                                                                                                                                                                                                                          
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(2) |  | Included in the master servicing portfolio are loans included in the primary servicing portfolio with an unpaid principal
balance of $5.6 billion and $8.0 billion at September 30, 2001 and December 31, 2000, respectively.
|   
|   
|   
|   
|(3) |  | Loans sold with servicing retained only do not include a total of $3.5 billion in IndyMac owned-loans and loans
subserviced for others on an interim basis.                                                                  

Deposits: Deposits totaled $2.8 billion at September 30, 2001, compared to
$0.8 billion at December 31, 2000. The increase in deposits was primarily
attributable to the Companys marketing efforts to increase its certificates of
deposit (CD) portfolio. The Companys strategy has been to focus on large
balance, low transaction cost deposits. The primary tool in this strategy has
been to be among the price leaders in CD rates for selected maturities. See
Liquidity and Capital Resources below.

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##### Table of Contents



The composition of the Companys deposits and the deposit rate at September 30,
2001, and December 31, 2000, were as follows:

|                             |                     |   |                        |           |                   |  |        |      |      |   |         |         |  |  |      |      |  
|---------------------------- | ------------------- | - | ---------------------- | --------- | ----------------- |  | ------ | ---- | ---- | - | ------- | ------- |  |  | ---- | ---- | -
|                             |                     |   | September 30, 2001     |           | December 31, 2000
|                             |                     |   |                        |           |                  
|                             |                     |   | Amount                 |           | Rate              |  | Amount |      | Rate
|                             |                     |   |                        |           |                   |  |        |      |     
|                             |                     |   | (Dollars in thousands)
|Noninterest-bearing checking |                     | $ | 19,704                 |           |                   |  | 0.00   | %    |      | $ | 16,324  |         |  |  | 0.00 | %   
|Interest-bearing checking    |                     |   | 27,418                 |           |                   |  | 1.71   | %    |      |   | 23,588  |         |  |  | 1.94 | %   
|Savings                      |                     |   | 382,700                |           |                   |  | 3.71   | %    |      |   | 99,980  |         |  |  | 5.02 | %   
|                             |                     |   |                        |           |                   |  |        |      |      |   |         |         |  |  |      |     
|                             | Total core deposits |   |                        | 429,822   |                   |  |        | 3.41 | %    |   |         | 139,892 |  |  |      | 3.91 | %
|Certificates of deposit      |                     |   | 2,371,378              |           |                   |  | 5.01   | %    |      |   | 658,043 |         |  |  | 6.65 | %   
|                             |                     |   |                        |           |                   |  |        |      |      |   |         |         |  |  |      |     
|                             | Total deposits      |   | $                      | 2,801,200 |                   |  |        | 4.77 | %    |   | $       | 797,935 |  |  |      | 6.17 | %
|                             |                     |   |                        |           |                   |  |        |      |      |   |         |         |  |  |      |     

The weighted average remaining maturity of the Companys certificates of
deposit at September 30, 2001 was 14 months.

Advances from Federal Home Loan Bank:Advances from the Federal Home Loan
Bank of San Francisco totaled $1.7 billion at September 30, 2001, compared to
$1.3 billion at December 31, 2000. The increase in FHLB advances was
primarily due to the Companys strategy to diversify its borrowing facilities
into longer-term, lower-cost liabilities.

Borrowings: The Companys other borrowings totaled $1.6 billion at September 30,
2001, compared to $2.9 billion at December 31, 2000. Although the
Companys assets increased $1.3 billion, other borrowings decreased $1.2
million. This is due to the Companys strategy to continue to diversify its
borrowing facilities into more stable sources of funds such as term deposits
and advances from the FHLB.

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##### Table of Contents



LIQUIDITY AND CAPITAL RESOURCES

The Companys principal financing needs are the financing of its mortgage loan
inventory and its investment in mortgage and other loans, mortgage-backed
securities, and servicing. The Companys primary sources of funds include cash
flow from operations, deposits, advances from the FHLB, and committed borrowing
facilities. The Company does not currently pay dividends to its shareholders
and has no current plans to institute such a policy.

At September 30, 2001, the Company had liquidity approximating $2.0 billion,
with a leverage ratio (debt to equity) of 8.1 to 1. Liquidity is defined as
cash on hand and borrowing availability under committed lines of credit secured
by assets certified as eligible by the Companys collateral custodian. The
Company believes that its liquidity levels and borrowing capacity are
sufficient to meet its current operating requirements. As of September 30,
2001, the Companys committed financing totaled $7.1 billion, with outstanding
balances of $3.3 billion. Included in the committed financing balance is $2.2
billion in approved FHLB credit, of which $1.7 billion was outstanding at
September 30, 2001. During the third quarter of 2001, the Company increased
its financing commitments by $532 million, and extended the maturity dates on
several of its financing facilities.

In addition to the Companys financing facilities discussed above, the
Companys consumer bank, IndyMac BankSM, F.S.B. (IndyMac Bank) accepts
deposits from the general public. Deposits are obtained in California through
IndyMac Banks existing branch network and a centralized telebanking operation,
as well as nationally through the Internet. The Company reported $2.8 billion
in deposits at September 30, 2001 compared to $0.8 billion at December 31,
2000. At September 30, 2001, core deposits (defined as non-term deposits, such
as checking and non-term savings accounts) represented 15% of total deposits,
while term CDs represented 85% of total deposits.

Additionally, on November 7, 2001, the Company offered Warrants and Income
Redeemable Equity Securities to investors, with closure of the transaction
expected on November 14, 2001. Gross proceeds of the transaction will be $175
million, with underwriters granted a 30-day option to distribute up to an
additional $25 million to cover over-allotments. The securities were offered
as units consisting of a trust preferred security issued by a trust formed by
the Company and a warrant to purchase IndyMacs common stock. See further
discussion in Footnote 5  Subsequent Event.

As presented in the consolidated statements of cash flows, the sources of
liquidity vary between periods. The statements of cash flows include
operating, investing, and financing categories. Net cash used in operating
activities totaled $1.1 billion and $429 million for the nine months ended
September 30, 2001 and 2000, respectively. The changes in amounts from period
to period primarily resulted from mortgage banking activity. Purchases and
originations of mortgage loans held for sale exceeded the subsequent sale of
such loans. Net cash used in investing activities totaled $61 million and $140
million for the nine months ended September 30, 2001 and 2000, respectively.
The $140 million in 2000 includes $89 million in costs related to business
acquisitions in third quarter of 2000. Net cash provided from financing
activities totaled $1.1 billion and $617 million for the nine months ended
September 30, 2001 and 2000, respectively. Net cash provided from financing
activities increased during 2001 compared to 2000 due to the Companys strategy
to increase net assets and leverage.

The Companys ability to meet its long-term liquidity requirements is subject
to the renewal of its repurchase and credit facilities, and the Companys
ability to increase its federally insured customer deposits and advances from
the FHLB and to issue additional debt or equity from time to time. Decisions
by the Companys lenders and investors to make additional funds available to
the Company in the future will depend upon a number of factors. These include
the Companys compliance with the terms of its existing credit arrangements,
the Companys financial performance, industry and market trends in the
Companys various businesses, the general availability of, and rates applicable
to, financing and investments, such lenders and/or investors own resources
and policies concerning loans and investments, and the relative attractiveness
of alternative investment or lending opportunities.

The Company did not repurchase any shares of its outstanding common stock
during third quarter of 2001 pursuant to its share repurchase program. From the
share repurchase programs inception through September 30, 2001, the Company
has repurchased 21.3 million shares, at an average cost of $17.00 per share,
for a total of $361.7 million.

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OTS capital regulations require savings associations to satisfy three minimum
capital ratio requirements: tangible capital, Tier 1 core (leverage) capital,
and risk-based capital. In general, an associations tangible capital, which
must be at least 1.5% of adjusted total assets, is the sum of common
shareholders equity adjusted for the effects of OCI, less goodwill and other
disallowed assets. An associations ratio of Tier 1 core capital to adjusted
total assets (the core capital or leverage ratio) must be at least 3% for
the most highly rated associations and 4% for others. Tier 1 core capital
generally is the sum of tangible capital less certain intangible assets,
servicing assets, and investments. Under the risk-based capital requirement, a
savings association must have total capital (core capital plus supplementary
capital) equal to at least 8% of risk-weighted assets. Supplementary capital
mainly consists of qualifying subordinate debt and the allowance for loan
losses.

The capital requirements are viewed as minimum standards by the OTS. Most
associations are expected to maintain the above-mentioned capital ratios at
levels well above the minimum. Additionally, to qualify as a well-capitalized
institution a savings associations Tier 1 risk-based capital (core capital
plus supplementary capital less allowance for loan losses) must be equal to at
least 6% of risk-weighted assets. In connection with the acquisition of SGVB
in July of 2000, IndyMac Bank was mandated by the OTS to maintain its Tier 1
core capital ratio at 8% for three years following the consummation of the
transaction and to maintain a well-capitalized risk based capital position. In
addition, IndyMac Bank must double the risk weighting normally assigned to
subprime loans. The regulatory capital ratios of IndyMac Bank and the minimum
regulatory requirements to be categorized as well-capitalized under OTS
regulations were as follows:

|                |                   |  |                    |       |              |  |                  |       |   |  |  |       |  
|--------------- | ----------------- |  | ------------------ | ----- | ------------ |  | ---------------- | ----- | - |  |  | ----- | -
|                |                   |  | September 30, 2001
|                |                   |  |                   
|                |                   |  | As                 |       | Double risk- |  | Well-Capitalized
|                |                   |  | reported           |       | weighted     |  | Minimum         
|                |                   |  |                    |       |              |  |                 
|Capital Ratios: |                   |  |                    |       |              |  |                  |       |   |  |  |      
|                | Tangible          |  |                    | 9.22  | %            |  |                  | 9.22  | % |  |  | 2.00  | %
|                | Tier 1 core       |  |                    | 9.22  | %            |  |                  | 9.22  | % |  |  | 5.00  | %
|                | Tier 1 risk-based |  |                    | 12.52 | %            |  |                  | 12.00 | % |  |  | 6.00  | %
|                | Risk-based        |  |                    | 13.67 | %            |  |                  | 13.09 | % |  |  | 10.00 | %

At September 30, 2001, the Company had $143 million of capital (on a
consolidated basis) in excess of that required to be held by IndyMac Bank under
the core capital ratio calculation, with $84 million of excess capital held at
IndyMac Bank and $59 million of excess capital held at the holding company. As
the holding company currently funds $31 million of holding company assets with
capital, excess capital at or available to IndyMac Bank totaled $112 million.

In February of 2001 the OTS issued guidance for subprime lending programs which
requires a subprime lender to quantify the additional risks in its subprime
lending activities and determine the appropriate amounts of allowances for loan
and lease losses and capital it needs to offset those risks. The OTS guidance
suggests that subprime portfolios be supported by capital equal to one and
one-half to three times greater than what is appropriate for prime assets of a
similar type. As noted above, IndyMac Bank operates in a manner consistent
with such guidance in that it currently complies with a specific mandate to
double the risk-weighting otherwise assigned to subprime loans for risk-based
capital purposes.

In October of 2001, the Federal Deposit Insurance Corporation (FDIC) approved
a final rule related to recourse and residuals, which imposes a concentration
limit on residual securities of 25% of Tier 1 Capital, requires dollar for
dollar capital deduction for residual securities not deducted from Tier 1
Capital, applies a ratings-based approach to determine capital requirements for
other positions in securitized transactions, and provides technical guidance to
determine when certain provisions of securitizations such as representation and
warranties, early default clauses, and clean-up calls constitute recourse
arrangements. Ratification and adoption by the OTS of this proposal is
expected during the fourth quarter of 2001, and is expected to be effective
January 1, 2002. On a pro forma basis, the Companys risk-based capital as of
September 30, 2001 assuming full implementation of the FDICs proposal would
have been 12.68%, well above the well-capitalized minimum.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Due to the characteristics of its financial assets and liabilities, and the
nature of its business activities, the Companys financial position and results
of operations may be materially affected by changes in interest rates in
various ways. With respect to its financial assets and liabilities, the
Company has devised and implemented a general asset/liability investment
management strategy that seeks, on an economic basis, to mitigate significant
fluctuations in the financial position and results of operations of the Company
likely to be caused by market interest rate changes. This strategy attempts,
among other things, to balance investments in various types of financial
instruments whose values could be expected to move inversely to each other in
response to the movement in market interest rate changes. The Company invests
in servicing and servicing related assets to hedge potential decreases in
production volumes and gain on sale of loans due to increases in interest
rates. The Company also hedges its servicing and servicing related assets to
mitigate losses resulting from increased prepayments in a declining interest
rate environment. However, there can be no assurance that this strategy
(including assumptions concerning the correlation thought to exist between
different types of instruments) or its implementation will be successful in any
particular interest rate environment. In addition, cash flow considerations
may require the Company to utilize different strategies with respect to hedging
certain assets and/or production pipelines, including utilizing options as
opposed to futures contracts and principal-only mortgage securities.

The Company is also subject to certain business and credit risks in connection
with interest rate changes. Increases in interest rates may discourage
potential mortgagors from borrowing or refinancing mortgage loans, thus
decreasing the volume of loans available to be purchased through the Companys
B2B operations, originated through B2C or B2R, or financed through the
Companys construction lending operations. Additionally, with respect to
adjustable rate loans, the rate of delinquency may increase in periods of
increasing interest rates as borrowers face higher adjusted mortgage payments.
The Companys liquidity position and net interest income could also be
adversely affected by significant interest rate fluctuations. Each of the
Companys collateralized borrowing facilities noted above in Liquidity and
Capital Resources permits the lender or lenders there-under to require the
Company to repay amounts outstanding and/or pledge additional assets in the
event that the value of the pledged collateral declines due to changes in
market interest rates. In addition, increases in short-term borrowing rates
relative to rates earned on asset holdings that have not been financed to
maturity through the issuance of CMOs or other debt securities may also
adversely affect the Companys spread income on such assets and thus reduce
the Companys earnings.

To hedge changes in the value of its AAA rated interest-only securities
portfolio and mortgage servicing rights, the Company generally chooses among
various instruments, consisting of options, swaps, futures, or buying
mortgage-backed or U.S. Treasury-based securities, depending on various
factors. The Company uses hedging instruments to reduce its exposure to
interest rate risk, not to speculate on the direction of market interest rates.
As part of its interest rate risk management process, the Company performs
various interest rate calculations that quantify the financial impact of
changes in interest rates on its interest-earning assets, commitments and
hedges. As of September 30, 2001, the Company estimates that an instantaneous
parallel downward shift in the U.S. Treasury yield curve of 50 basis points, or
0.50%, all else being constant, would result in an increase in after tax income
for the Company of $12.1 million. The after-tax gain on available for sale
mortgage securities, recorded as a component of OCI, would be $7.1 million.
The combined result would be an increase to comprehensive income of $19.2
million. The Company estimates that an instantaneous parallel upward shift in
the U.S. Treasury yield curve and short-term indices of 50 basis points, or
0.50%, all else being constant, would result in an increase to after tax income
for the Company of $10.2 million. The after-tax loss on available for sale
mortgage securities, recorded as a component of OCI, would be $5.5 million.
The combined result would be an increase to comprehensive income of $4.7
million.

Given the current interest rate environment, the Company believes a 100 basis
point decrease in interest rates in the near future is remote. However, a 100
basis point decrease in interest rates was considered probable as of December
31, 2000. As of December 31, 2000, the Company estimated that an instantaneous
parallel downward shift in the U.S. Treasury yield curve of 100 basis points,
or 1.00%, all else being constant, would result in a combined after tax gain to
total comprehensive income of $5.0 million. The Companys estimate of an
instantaneous parallel upward shift in the U. S. Treasury yield curve of 100
basis points, or 1.00%, all else being constant, was an $8.5 million after tax
loss to total comprehensive income as of December 31, 2000.

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The assumptions used in the Companys interest rate risk management process
include valuation changes in an instantaneous and parallel rate shock and also
include assumptions as to a degree of correlation between the hedges and hedged
assets and as a result are subject to basis risk (i.e., the spread-widening or
spread-tightening risk among the change in rates on U.S. Treasury bonds, swaps
and/or mortgage-backed securities). Changes in OCI do not reflect fair value
changes in liabilities. As a result, the impact on OCI reported above tends to
overstate gains and losses in decreasing and increasing rate environments,
respectively. In addition, the sensitivity analyses described in the prior two
paragraphs are limited by the fact that they are performed at a particular
point in time and do not incorporate other factors that would impact the
Companys financial performance in such a scenario, such as increases in income
associated with the increase in production volume that could result from the
decrease in interest rates or the decrease in loan volume that could result
from interest rate increases. Consequently, the preceding estimates should not
be viewed as a forecast and there can be no assurance that actual results would
not vary significantly from the analysis discussed above.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this Form 10-Q may be deemed to be
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
Forward-looking statements include the Companys statements regarding
liquidity, provisions for loan losses, capital resources, anticipated future
earnings and expense levels and other anticipated aspects of future operations.
Forward-looking statements typically include the words anticipate,
believe, estimate, expect, project, plan, forecast, intend, and
other similar expressions. These statements reflect the Companys current
views with respect to future events and financial performance. They are
subject to risks and uncertainties, including those identified below, which
could cause future results to differ materially from historical results or from
the results anticipated. Readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of their respective dates
or as of the date hereof if no other date is identified. The Company
undertakes no obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.

The following factors, among others, could cause future results to differ
materially from historical results or those anticipated in any forward-looking
statements herein:



|(1)  |  | the level of demand for mortgage loans and construction loans, which can
be affected by such external factors as (a) the level of interest rates,
(b) tax laws, (c) the strength of various segments of the economy
(including the strength of the stock market), and (d) demographics of the
Companys lending markets;                                                                                                                                                       
|---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|(2)  |  | the direction of interest rates and the relationship between interest
rates and the Companys assets, liabilities, and hedging strategies;                                                                                                                                                                                                                                                                                                                                     
|    
|(3)  |  | the Company uses financial models, including option based models, to
value cash flow sensitive assets (i.e. AAA rated interest only securities,
mortgage servicing rights, non-investment grade securities, and residual
securities), derivatives, and to manage the overall interest rate
risk of the Company. These models are complex
and include a variety of assumptions that may not accurately predict the
actual results, especially in volatile economic environments;
|    
|(4)  |  | the rate of loan losses incurred by the Company, the level of loss
reserves maintained by the Company, and Company managements judgments
regarding the collectibility of loans;                                                                                                                                                                                                                                                                                               
|    
|(5)  |  | liquidity requirements of the Company, which may change as a result of
fluctuations in assets and liabilities and off-balance sheet exposures of
the Company;                                                                                                                                                                                                                                                                                                                  
|    
|(6)  |  | the implementation of recently issued Financial Accounting Standards
Board pronouncements (SFAS 133, SFAS 137 and SFAS 138) may cause increased
volatility in the Companys earnings reported in accordance with US GAAP;                                                                                                                                                                                                                                                      
|    
|(7)  |  | federal and state regulation of the Companys consumer lending and
banking operations  the Companys principal subsidiary is a regulated
federal savings bank;                                                                                                                                                                                                                                                                                                                
|    
|(8)  |  | actions undertaken by current and potential competitors of the Company,
many of which have lower costs of funds or other competitive advantages
over the Company;                                                                                                                                                                                                                                                                                                              
|    
|(9)  |  | the availability of funds from the Companys lenders and other sources of
financing that support the Companys lending activities;                                                                                                                                                                                                                                                                                                                                             
|    
|(10) |  | decisions by the Company to securitize, sell, or purchase loans or
securities;                                                                                                                                                                                                                                                                                                                                                                                                 
|    
|(11) |  | the Companys management of the borrower, product and geographic
concentrations represented in its loan portfolio;                                                                                                                                                                                                                                                                                                                                                             

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|(12) |  | the degree of success of the Company in executing upon its growth plans
for its consumer and mortgage banking operations;                           
|---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------
|    
|(13) |  | economic downturns or business disruptions triggered by natural disasters
or acts of war or terrorism;                                              
|    
|(14) |  | other risks and uncertainties detailed herein under Item 2.
Managements Discussion and Analysis of Financial Condition and Results of
Operations.

In addition, the banking industry in general is subject to various monetary and
fiscal policies and regulations, which include those determined by the Federal
Reserve Board, the FDIC and the OTS, which could affect the Companys results.
At the time of the filing of this Form 10-Q, there are, without limitation, new
rules and regulations concerning subprime lending and institutional capital
requirements that could impact the Companys operations or financial results.

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PART II




ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K



|(a) |  | Exhibits           
|--- |  | -------------------
|   
|    |  | None.              
|   
|(b) |  | Reports on Form 8-K
|   
|    |  | None.              

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Pasadena,
State of California, on November 13, 2001 for the nine months ended September 30, 2001.

| |  |                       |  |                                                                                                             
| |  | --------------------- |  | ------------------------------------------------------------------------------------------------------------
| |  | INDYMAC BANCORP, INC.
| |  | By:                   |  | /s/   Michael W. Perry

Michael W. Perry
Vice Chairman of the Board of Directors and
Chief Executive Officer
| |  |                       |  |                                                                                                             
| |  | By:                   |  | /s/   Carmella L. Grahn

Carmella L. Grahn
Executive Vice President and
Chief Financial Officer             

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