INVESTOR AND MEDIA CONTACT:
Pamela Marsh (626) 535-8465
Meg Wade (626) 535-5905
INDYMAC BANCORP EVALUATING POTENTIAL INITIAL PUBLIC OFFERING
OF FINANCIAL FREEDOM SENIOR FUNDING CORPORATION
PASADENA, Calif. – May 1, 2006 – IndyMac Bancorp, Inc. (NYSE: NDE) (“Indymac®” or the “Company”),
the holding company for IndyMac Bank,F.S.B. (“Indymac Bank®”), today announced that its
board of directors has authorized management to evaluate and plan for the potential sale of a
minority economic stake of approximately 20 percent in Indymac Bank’s reverse mortgage subsidiary,
Financial Freedom Senior Funding Corporation (“Financial Freedom”), through an initial public
offering. Financial Freedom originated $1.1 billion in reverse mortgages and earned $8.0 million in
the first quarter of 2006, compared to $507 million in originations and $4.2 million in earnings
for the first quarter of 2005. For the full year 2005, Financial Freedom’s national market share is
estimated to be 56 percent of reverse mortgage originations and 53 percent of reverse mortgage
servicing. As of March 31, 2006, Financial Freedom had 984 employees.
The strategic rationale for the potential offering includes the following:
Public company structure expected to drive growth and opportunities.
Creates vehicle to align Financial Freedom management incentives directly with
performance which, additionally, enhances ability to attract and retain talent.
Provides Indymac the ability to monetize its initial investment in Financial Freedom
while continuing to maintain a controlling interest.
Enhances shareholder value of Indymac as the investing community could identify more
easily the value of the Financial Freedom franchise.
Provides a template to attract entrepreneurs to Indymac.
The potential benefits from an initial public offering to Indymac’s shareholders will be offset to
a minor extent by management time and costs that will be incurred to oversee another public
company. The decision to proceed with the offering remains subject to future board approval and
other factors, including market conditions.
This announcement shall not constitute an offer to sell or the solicitation of an offer to buy any
securities described herein, nor shall there be any sale of these securities in any state or
jurisdiction in which the offer, solicitation or sale would be unlawful. This announcement is
being issued pursuant to and in accordance with Rule 135 under the Securities Act of 1933.
About Indymac Bank
IndyMac Bancorp, Inc. (NYSE: NDE) (Indymac®) is the holding company for IndyMac Bank,
F.S.B. (Indymac Bank®), the largest savings and loan in Los Angeles and the 10th largest
mortgage originator in the nation. Indymac Bank, operating as a hybrid thrift/mortgage banker,
provides cost-efficient financing for the acquisition, development, and improvement of
single-family homes. Indymac also provides financing secured by single-family homes and other
banking products to facilitate consumers’ personal financial goals.
With an increased focus on building customer relationships and a valuable consumer franchise,
Indymac is committed to becoming a top six mortgage lender in the U.S. by 2010, while maintaining
annualized earnings per share growth in excess of 15 percent. The company is dedicated to
constantly raising expectations and conducting itself with the highest level of ethics.
Certain statements contained in this press release may be deemed to be forward-looking statements
within the meaning of the federal securities laws. The words “anticipate,”“believe,”“estimate,”“expect,”“project,”“plan,”“forecast,”“intend,”“goal,”“target,” and similar expressions
identify forward-looking statements that are inherently subject to risks and uncertainties, many of
which cannot be predicted or quantified. Actual results and the timing of certain events could
differ materially from those projected in or contemplated by the forward-looking statements due to
a number of factors, including, the effect of economic and market conditions including industry
volumes and margins; the level and volatility of interest rates; the Company’s hedging strategies,
hedge effectiveness and asset and liability management; the accuracy of subjective estimates used
in determining the fair value of financial assets of Indymac; the credit risks with respect to our
loans and other financial assets; the actions undertaken by both current and potential new
competitors; the availability of funds from Indymac’s lenders and from loan sales and
securitizations, to fund mortgage loan originations and portfolio investments; the execution of
Indymac’s growth plans and ability to gain market share in a significant market transition; the
impact of disruptions triggered by natural disasters, including the assessment of the effects of
the Gulf Coast Hurricanes and the effects of any future hurricanes; the impact of current, pending
or future legislation, regulations or litigation; and other risk factors described in the reports
that Indymac files with the Securities and Exchange Commission, including the Annual Report on Form
10-K, Quarterly Reports on Form 10-Q, and its reports on Form 8-K.
While all of the above items are important, the highlighted items represent those that, in
management’s view, merit increased focus given current conditions.