IndyMac suffers first annual loss - eliminates dividend

IndyMac has eliminated its dividend as a way to preserve liquidity after suffering its first annual loss in 23 years.  The company is eliminating the dividend in an attempt to ride out the mortgage market downturn.

The company has also initiated substantial layoffs to reduce their staff by 25%.

More on IndyMac’s elimination of their dividend to preserve liquidity from Market Watch:

 IndyMac Bancorp on Tuesday reported its first annual loss in its 23-year history, leading the company to suspend its dividend on common shares as it attempts to ride out the mortgage crunch.

The holding company for IndyMac Bank, one of the nation’s largest thrifts and mortgage originators, said it swung to a fourth-quarter net loss of $509.1 million, or $6.43 a share.

Faced with ongoing liquidity problems, IndyMac has decided to suspend its quarterly dividend on common shares “indefinitely.”

“Consistent with nearly every other large financial institution in the mortgage lending and securitization business, as a result of the rapidly deteriorating housing and mortgage markets, we took major write-downs and established significant credit reserves and recognized a significant loss in the fourth quarter,” said Chief Executive Michael Perry in a statement.

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