IndyMac Bancorp Inc. said its second-quarter earnings dropped 44%, to $23 million, because of a change in its accounting for interest rate locks.
The switch, mandated by the Securities and Exchange Commission, deferred the recognition of $32 million of profits.
Were it not for the accounting change, IndyMac said, net income would have risen 34%, to $55 million, or 90 cents a share. Using those figures, the Pasadena, Calif., thrift company raised its full-year guidance to $3.35 to $3.55 a share, from $3.10 to $3.30 a share.
Under generally accepted accounting principles, it said, it would likely earn $2.83 to $3.03 a share this year.
In a press release, Michael W. Perry, IndyMac's chairman and chief executive, said the second-quarter results "give us confidence" that it can continue to increase profits in a shrinking market.
"Our mortgage market share was up 66% over the second quarter of 2003" - to 1.11% nationally - "in a period where many of our peers declined both in volumes and market share," he said.
