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In addition to mortgage
brokers and bankers, IndyMac has established relationships with
other real estate professionals such as Realtors and homebuilders
who have close associations with consumers in the market for a new
home. During 2003, our Realtor and homebuilder channels produced
$970 million and $508 million of mortgage loans, respectively. While
still relatively small, these numbers reflect growth of 81% and
306%, respectively, from 2002, demonstrating the strong potential
that these lines of business hold.
We have also begun an initiative to reestablish correspondent relationships
with mid to large size mortgage bankers and financial institutions
on a delegated basis. These institutions can effectively use our
technology and broad product line to expand their business. We believe
that the correspondent market offers an efficient way of increasing
market share and shareholder returns due to its lower cost structure.
We expect this initiative to approximate 10% of our mortgage production
in 2004. |
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Taking advantage of our location in
Southern California, one of the strongest consumer and housing markets
in the nation, we have made a commitment to increase our retail banking
presence. We plan to expand our current 10-branch system to 40 branches
by the end of 2006, and possibly to 100 branches by 2008. These branches
will be focused on providing mortgage and home equity loans and raising
deposits throughout Los Angeles and Orange Counties. Our projections
show that a larger branch network with an emphasis on mortgage lending
will better leverage our retail banking general and administrative
costs and lower the cost of deposits, thus enabling the retail branch
system to make a meaningful contribution to the bottom line. We believe
this strategy will also work to create more shareholder value, as
thrifts with retail franchises tend to command higher price/earnings
multiples. |
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