DEAR SHAREHOLDERS:

We are proud to report to you that 2002 was another strong year for IndyMac.
Once again, we achieved record financial and operating results. Our mortgage production grew 23% during the year, representing the third consecutive year of strong growth. Earnings per share (EPS) in 2002 exceeded the top end of our projected range at $2.41, representing growth of 21% over 2001.

Similar to last year, and quite the opposite from what we expected, the mortgage industry had another record year as well. U.S. mortgage industry production grew 21% to approximately $2.4 trillion, the largest production year in history.

Although originations continued to surge in 2002, mortgage companies were not impervious to overall market tendencies. As the stock market fell, IndyMac's share price moved with the market, declining 21% in 2002. Also weighing on the valuations of companies in the mortgage industry was the knowledge that the industry would eventually transition to more normal volume levels. Because of these factors, the price/earnings multiples for IndyMac, and the mortgage industry in general, are now at historically low levels.

We recognize that low interest rates and record mortgage originations will not continue year-in and year-out. In the long run, we believe that we are well positioned to continue to grow earnings. In the short run, we are confident we will outperform our competitors even when the mortgage market finally does decline.

Last year also marked a ten-year milestone for the Company.
IndyMac was originally founded in 1985 as a passive mortgage real estate investment trust. I was brought on board at the beginning of 1993 to establish a new management team and to implement a plan for transforming the Company into an actively managed mortgage lender. Over these last ten years, we have achieved an enviable record of growth and strong returns for our shareholders. We have reported compounded annual growth in revenues, net earnings and EPS of 53%, 40% and 28%, respectively. Our total annualized return to shareholders over this period is 20%, well ahead of the 12% and 9% annualized returns for the Dow Jones Industrial Average and the S&P 500 Index for this period.

With ten years of achievement behind us, we mean to take IndyMac to the next level of success.
During 2002, we concentrated on positioning our business for the time when the mortgage market returns to a more normal level. We were also keenly focused on refining our long-term strategy.

We embarked on an extensive strategic planning process, in which we pooled the resources of our dedicated and creative managers. Our goal was simple and straightforward — to enhance overall enterprise value over a five-year horizon. After debating among ourselves and with our Board of Directors the merits of many different strategies, we determined that our long-term strategic and financial plan for 2003-2007 will remain focused on doing what we do best — single-family residential mortgage lending — and continuing to build on our core competencies in this field to drive growth, scale, efficiency and profitability.

With this basic focus, we have established four key strategies:

• We will enhance and expand our established mortgage banking franchise, both in our business relationship channels (IndyMac Mortgage Bank) and in our consumer direct channels (IndyMac Consumer Bank).
• We will diversify our revenue stream using our core mortgage lending expertise to grow our scale and income in our servicing and investing activities.
• We will maintain expert enterprise risk management as we execute these strategies.
• We will achieve superior growth in revenues, earnings and EPS solely through internal growth and retained earnings, while paying regular and growing dividends.