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SECURITIES AND EXCHANGE COMMISSION

Form 10-Q

Commission file number 1-8972

IndyMac Bancorp, Inc.

Registrant’s telephone number, including area code:

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

      Indicate 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 April 22, 2003: 55,217,166 shares

FORM 10-Q QUARTERLY REPORT

TABLE OF CONTENTS

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FORWARD-LOOKING STATEMENTS

      This Form 10-Q contains statements that may be deemed to be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include statements regarding our projected financial condition and results of operations, plans, objectives, future performance and business. Forward-looking statements typically include the words “anticipate,” “believe,” “estimate,” “expect,” “project,” “plan,” “forecast,” “intend” and other similar expressions. These statements reflect our current views with respect to future events and financial performance. They are subject to risks and uncertainties that could cause future results to differ materially from historical results or from the results anticipated. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates or as of the date hereof if no other date is identified. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. For further information on our key operating risks, refer to IndyMac’s annual report on Form 10-K for the year ended December 31, 2002.

      References to “IndyMac Bancorp” or “the Parent Company” refer to the parent company alone while references to “IndyMac,” the “Company,” or “we” refer to IndyMac Bancorp, Inc. and its consolidated subsidiaries. References to “IndyMac Bank” or the “Bank” refer to our subsidiary IndyMac Bank, F.S.B. and its consolidated subsidiaries. The following discussion addresses the Company’s financial condition and results of operations for the three months ended March 31, 2003.

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

      Highlights for the quarter ended March 31, 2003 were as follows:

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(1)	Dividends declared per common share as a percentage of basic earnings per share.
(2)	Defined as operating expenses divided by net interest income and other income.
(3)	Average equity divided by net interest income and other income.
(4)	Efficiency ratio multiplied by the capital to net revenue ratio.
(5)	Debt includes deposits.
(6)	IndyMac Bank, F.S.B. (excludes unencumbered cash at the Parent Company available for investment in IndyMac Bank). Risk based capital ratio is based on the regulatory standard risk weighting. With IndyMac’s additional subprime risk weightings, the ratios are 13.76%, 15.03% and 14.03% for the quarters ended March 31, 2003, March 31, 2002 and December 31, 2002, respectively.
(7)	Represents the total loan portfolio excluding amounts of loans from discontinued product lines.
(8)	Represents entire servicing portfolio including IndyMac owned loans and loans subserviced for others on an interim basis.
(9)	Includes newly originated commitments on construction loans.

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OVERALL RESULTS

      IndyMac’s overall results for the first quarter of 2003 were characterized by continued strong mortgage originations driving net income from mortgage banking activities. Interest rates declined during the first quarter of 2003 due to geopolitical issues resulting in strong industry wide mortgage refinance activity. IndyMac increased its production of mortgage loans by 57% in the first quarter of 2003 over the first quarter of 2002, exceeding the mortgage industry increase of 49% as published by the Mortgage Bankers’ Association of America (“MBA”). IndyMac sold 95% of its available mortgage loan production (total production excluding construction and home equity line of credit (“HELOC”) commitments) and increased its inventory of mortgage loans held for sale during the first quarter of 2003. In comparison, IndyMac sold 117% of its available mortgage production in the first quarter of 2002 resulting in a decrease of mortgage loans held for sale. Offsetting the strong financial results in our mortgage banking activities, the earnings related to our servicing-related assets declined due to the increased levels of prepayment activity which resulted from the record refinancing of mortgage loans throughout the industry.

      IndyMac’s operating expenses remained relatively flat with the fourth quarter of 2002, and up 20% from the first quarter of 2002. The ratio of operating expense to loan production of 1.45% reflects significant improvement due to the scalability of our operations in the strong mortgage environment relative to the 1.44% ratio during the fourth quarter of 2002 and the 1.89% ratio during the first quarter of 2002.

      Net earnings increased 3%, while earnings per share (“EPS”) increased 14% as a result of the Company’s significant share repurchase activities during 2002.

      “IndyMac delivered another strong quarter highlighted by record loan production and significant growth in our pipeline of mortgage loans in process. Our pipeline at the end of the quarter was more than double the level a year ago. Interest rates at 40-year lows continued to support a very strong mortgage origination environment in the first quarter of this year, while placing our investment portfolio activities including the servicing-related assets under pressure due to continued unprecedented refinancing activity. We continued to increase our portfolio of mortgage loans serviced for others as we expect this asset to provide substantially stronger returns when the refinancing boom, now in its third wave, begins to abate at some point in the future,” commented Michael W. Perry, IndyMac’s Chairman and Chief Executive Officer.

      “We expect the strong mortgage origination environment to continue throughout the majority of this year. In fact, the MBA recently concluded in its updated forecast that industry mortgage originations in 2003 will surpass the record levels achieved in 2002. As a result of the strong mortgage market this year, we expect that our EPS for 2003 will be at the upper end of our previously forecasted range of $2.41 to $2.75. With our continued focus on customer, product and geographic expansion across our multiple production channels we believe we are positioned to outperform our peers as the transition to a more normal mortgage market occurs,” concluded Mr. Perry.

OUR BUSINESS

      IndyMac is structured to achieve synergies among its operations and enhance customer service. Operating through its three main segments, IndyMac Mortgage Bank, IndyMac Consumer Bank and the Investment Portfolio Group, the common denominator of the Company’s business is providing consumers with single-family residential mortgages through relationships with each segment’s core customers via the channels in which each operates. IndyMac Mortgage Bank is focused on providing consumers with mortgage products through relationships with the Company’s business customers — mortgage brokers, mortgage bankers, financial institutions, real estate professionals and homebuilders. IndyMac Consumer Bank provides the platform for the mortgage and deposit services that IndyMac offers directly to consumers. The Investment Portfolio Group serves as the main link to customers whose mortgages we service. Through its investments in single-family residential (“SFR”) mortgages, mortgage-backed securities (“MBS”) and mortgage servicing rights (“MSRs”), the Investment Portfolio Group serves a critical support function for IndyMac’s mortgage lending operations.

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      While our segments are structured to achieve synergies with our varying customer base and marketing strategies, our operating activities primarily consist of two broad categories: Mortgage banking activities and Investing activities. Both of these activities are performed to varying degrees by each of our main segments as shown in the table that follows. Mortgage banking activities are characterized by high asset turnover (the production and sale of mortgage loans) and efficient utilization of capital but can be cyclical in nature depending on interest rates. Revenues generated by mortgage banking activities include gain on sale of mortgage loans, fee income and net spread (interest) income during the period loans are held pending sale. Investing activities tend to provide a source of revenues which is generally counter-cyclical to mortgage banking revenues, comprised primarily of net interest income and servicing fees. IndyMac is strategically focused on increasing the relative size of its portfolios of mortgage loans and HELOC loans held for investment and mortgage servicing to achieve greater balance between its mortgage banking activities and its core investing activities. Over the long-term, we believe that our investing activities will provide a more stable source of core income. In addition to its revenue contribution, the Investment Portfolio Group performs the mortgage servicing function. This creates an added opportunity to recapture current customers when the interest rate environment makes it attractive for them to refinance. Servicing customers can also be cross-marketed with other Company products.

      The following table summarizes the Company’s financial results for the first three months of 2003, illustrating the revenues earned in its mortgage banking activities and investing activities by each of its divisions. The profitability of each operating segment is measured on a fully-leveraged basis after allocating capital based on regulatory capital rules. The Company uses a match-funded transfer pricing system to allocate net interest income to the operating segments. Each operating segment is allocated funding with maturities and interest rates matched with the expected lives, repricing frequencies and financing liquidities of the segment’s assets. Deposits receive a funding credit using a similar methodology. The difference between these allocations and the Company’s actual net interest income and capital levels resulting from centralized management of funding costs is reported in the Treasury unit.

      During the first quarter of 2003, the Treasury unit reported net interest expense of $10.7 million compared with $18.1 million in the first quarter of last year. These amounts include the interest expense related to the Trust Preferred Securities, which is not allocated to the business units. Additionally, the net expense in Treasury reflects fixed rate liabilities assumed in prior years with maturities longer than the related assets and the subsequent decline in net interest income as interest rates fell. As these liabilities continue to mature the Company expects the loss in Treasury to decline further.

      Corporate overhead costs related to managing the Company as a whole are not allocated to the operating segments.

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