The Federal Deposit Insurance Corp. by default has become the cleanup crew for the IndyMac Bancorp debacle. The agency will have its hands full to rehabilitate the bank and sell it before its self-imposed 90-day deadline of Oct. 11. Even the agency's chairwoman Sheila Bair reportedly concedes in an upcoming Bloomberg TV interview this weekend that the Pasadena, Calif.-based bank may look unattractive to buyers because of its obvious mortgage losses, its reliance on brokered deposits and its relatively small "core deposit base." In other words, the FDIC may have to pay someone to take IndyMac off its hands.
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As for who would be willing and able to buy IndyMac? That's a tough one. Experts say only a handful of deep-pocketed players would be willing. Would private equity investors want to take the plunge? Perhaps. Prior to the FDIC's July 11 takeover of IndyMac, the Los Angeles Times reported that the bank was in preliminary talks with several private equity investors that included Thomas H. Lee Partners, Ares
Management LLC, Golden Gate Capital, Taconic Capital Advisors and Stone
Point Capital to pump money into the lender. The discussions never advanced because of the run on IndyMac in early July.
But whoever bids, they'll be getting a financial institution with a much improved balance sheet. "What we're trying to do now is do what we can to strengthen it, strengthen the asset quality, strengthen the servicing portfolio, so we can sell it off and get a better value, hopefully," Bair was quoted by the LA Times. - Gerald Magpily
See Dealcape: Move over FDIC, FBI is also watching IndyMac
See Dealscape: Roll Call: IndyMac bank run videos
See story from the Los Angeles Times
See Bloomberg article
