Don't Stand in Lines at IndyMac. It's a Waste of Time.

As a veteran of 18 years in the federally insured banking system and one failed Savings and Loan, I can tell you the scene today at IndyMac Bank headquarters in Pasadena is just ridiculous.

PASADENA, California (Reuters) - Hundreds of worried IndyMac Bancorp Inc customers descended on the company's branches on Monday to withdraw their money, after regulators seized what was once one of the largest mortgage lenders in the United States.

Regulators took over the Pasadena-based lender on Friday after a bank run in which customers -- panicked over IndyMac's survival prospects -- withdrew $1.3 billion over 11 business days, regulators said.

At a branch at IndyMac's headquarters, customers began arriving at 4 a.m., five hours before the doors opened. The Federal Deposit Insurance Corp now operates the thrift's 33 Southern California branches.

"I didn't think anything like this would happen," said retired teacher Charles Tengeri from Pasadena, who was first to emerge from the branch after withdrawing $171,000 -- about two-thirds of his life savings. "I withdrew as much as I could. I know it's going to take a little time."

The FDIC said the renamed IndyMac Federal Bank will cover insured deposits, mostly up to $100,000, and initially cover 50 percent of uninsured deposits.

"I have $360,000 in this bank, and I was misled by this bank," said Robert Clark, a Glendale resident. "I gave the names of my mother, my sister and my brother on the account so I thought I would be insured. I don't know what to do. I really don't know what to do."

John Bovenzi, an FDIC official working as IndyMac Federal's chief executive, talked with customers as they waited for the doors to open, assuring one that "this bank is as safe and as sound as any bank in the country right now."

The FDIC is hoping to sell IndyMac within 90 days. Among IndyMac's assets are a rapidly deteriorating mortgage loan book, the 33 branches, and the Financial Freedom unit that makes "reverse" mortgages for older Americans.

If you had less than $100,000 in the bank, your funds are safer today than they were on Friday and there's no reason to run down there and make a panic withdrawal. If you had more than $100,000, depending on how the accounts were vested you might have some money in the uninsured category, which means you'll only get 50% of the uninsured amounts if you panic and pull it out now with some of the rest coming later (you hope). Either way, you're not going to get any more than that, and if you had it in a product with a good rate, it makes no sense to pull it out. IndyMac Bank went from shaky to incredibly solvent over the weekend, so relax, folks.

I saw some of this in 1985 when S&Ls were failing all around us and my company took a dive too thank to real estate fraud. Nobody lost a dime of deposits at Beverly Hills Savings (we were pretty scrupulous about making sure large accounts were vested correctly to get maximum insurance coverage), but even accounts that could have been considered uninsured were covered in full by the Feds. It might be different this time with IndyMac, but either way, it makes no sense to stand in long lines to withdraw money that's perfectly safe.

Unfortunately, the images we see today will only spark panic in depositors at other institutions, and as rumors circulate, we could see wholesale runs on other companies thus hastening their collapse.

My advice as a former banker - make sure what you have in the bank is fully insured and then stop worrying. If you bank goes the way of the banking dinosaurs your money will still be there when the dust settles. This isn't the 1930's anymore.