May 13, 2008 / 3:02 PM / 11 years ago

IndyMac slides after analyst says needs capital

NEW YORK (Reuters) - Shares of IndyMac Bancorp Inc IMB.N fell as much as 22.5 percent to an all-time low on Tuesday after an analyst said the independent mortgage lender needed to raise significant capital.

Friedman, Billings, Ramsey analyst Paul Miller also cut his target on the stock to $1 from $3 and said the bank’s year-end book value would likely fall below $4.50.

Miller, who rates the stock “underperform,” said that with an estimated capital cushion of just $107 million, which includes stock issued to date, IndyMac would struggle with losses of over $200 million through year-end.

“Our primary concern is that IndyMac has minimal capital cushion, but losses will continue at least through year-end,” Miller wrote. “IndyMac needs to raise additional capital - the question is not if, but how much and at what cost.”

On Monday, IndyMac posted a steeper-than-expected first-quarter loss and said it would halt interest and dividend payments on some securities.

Shares of the company were down 60 cents at $2.46 on the New York Stock Exchange. Earlier in the session, they hit an all-time low of $2.37 a share.

So far this year, IndyMac shares are down 58 percent.

Reporting by Tenzin Pema in Bangalore and Christian Plumb in New York; Editing by Neha Singh and Dave Zimmerman

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