Loan Quality Continues to Slide
Nonperforming loans totaled $1.85 billion as of March 31, increasing a whopping 40.56% just from last quarter. Loan-loss reserves totaled $483 million, or 26% of nonperforming loans. However, previous markdowns of problem loans transferred from held-for-sale to IndyMac's investment portfolio, created "embedded credit reserves" of $481 million. When these are factored in, IndyMac's loan-loss reserves covered 52% of nonperforming loans as of March 31, according to the holding company's 10-Q filing. On the holding-company level, nonperforming assets, including nonaccrual loans and repossessed real estate, comprised 6.51% of total assets as of March 31, compared to 4.61% last quarter and 1.09% in March 2007. In the 10-Q filing, the company stated it expects "to have an even higher level of non-performing loans in the future due to the continued market disruption." Net loan charge-offs totaled $46 million for the quarter, while loan-loss provisions totaled $132 million. So loan-loss provisions continued to outpace charge-offs. During IndyMac's earnings conference call, CEO Michael Perry stated that the company did not expect to make extraordinarily large quarterly provisions for loan-loss reserves over the next four quarters, as the company had built credit reserves in advance of actual losses.Featured Photo Galleries
Sign up for our FREE newsletters now.
See All
Sponsored by:




