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Sale of IndyMac appears imminent

December 23, 2008 |  4:09 pm

The long-awaited sale of IndyMac Bank may be announced as early as Wednesday.

The Federal Deposit Insurance Corp. has been looking for a buyer, or buyers, for the Pasadena lender since the government declared it insolvent and seized it in July.

Final bids were due by Dec. 12, and the FDIC has said it expected to close a deal by the end of the year. The American Banker newspaper reports today that the announcement could come Wednesday.

"We’re fully expecting to have something to say before the end of the year," Evan Wagner, a spokesman for the bank, told me.

Indymacdepositors IndyMac, which had $32 billion in assets and $18 billion in deposits when it was seized, at the time ranked as the second-largest failure in FDIC history. The bank crumbled under the weight of huge losses on mortgages gone bad.

IndyMac’s deposits have since fallen to $6 billion, as the FDIC has rid the bank of $6 billion in brokered deposits and as customers pulled another $6 billion out (remember the long lines outside the branches after the failure?).

Besides the remaining deposit base and the bank’s 33 Southern California branches, the FDIC must find a buyer for IndyMac’s loan-servicing business, which handles a portfolio worth $176 billion.

The FDIC has estimated that IndyMac’s failure will cost it $8.9 billion. The final loss figure will depend on how much the agency can get for the bank’s remains.

The FDIC has been trying to sell IndyMac in one piece, but it could break up the business if the sum of the parts is worth more than the whole. The company employs about 2,000 people, most in the Southland.

Based on a new disclosure Monday, the FDIC might have been spared much or all of the costly mess that IndyMac has become: As the Times reported here, the Treasury Department's inspector general said a banking regulator had allowed the bank in May to alter its financial statements in a way that delayed disclosure of the extent of its problems.

-- Tom Petruno

Photo: Crowd control outside an IndyMac branch in July. Credit: Al Seib / Los Angeles Times