IndyMac Bancorp, which runs one of Southern California’s largest savings and loans, today reported a 26 percent rise in first-quarter profit, helped by higher mortgage production.

The company also raised its 2006 earnings forecast.

IndyMac said its net income rose to $80 million, or $1.18 a share, for the first quarter of 2006, from $63 million, or 98 cents a share, a year earlier. Revenue jumped 20 percent to $304.5 million

Mortgage production for the Pasadena-based parent of IndyMac Bank rose 72 percent in the quarter to a record $20 billion, the company said. This helped to more than double its share of the mortgage market to 3.89 percent from 1.87 percent a year ago.

IndyMac said it deployed $505 million more in capital, an increase of 55 percent, and reduced its underdeployed capital to $169 million from $346 million.

It deployed $509 million of its capital to its mortgage production divisions, an 83 percent rise on a year ago, but narrowing mortgage banking revenue margins in the industry brought the savings and loan’s return on equity on this capital down to 51 percent from 97 percent.

The company said in light of its strong performance in the first quarter, it was raising its forecast for full-year 2006 earnings to between $5 and $5.40 a share, from a prior range of $4.50 to $5.20.

IndyMac also raised its cash dividend to 46 cents a share, up by 21 percent from the second quarter last year. The dividend is payable on June 8 to shareholders of record on May 11.

The company reported record mortgage loan production of $20 billion, up 72 percent. It also reported record mortgage market share of 3.89 percent, up approximately 108 percent based on the MBA’s April 2006 mortgage finance long-term forecast.

The company said it had a record pipeline of mortgage loans in process of $10.4 billion at March 31, 2006, up 39 percent, and a record portfolio of loans serviced for others of $96.5 billion at March 31, 2006, up 72 percent.

The bank’s stock was trading at $47.21 a share at midday Tuesday, up $3.04 a share, or 6.88 percent.

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