LOS ANGELES, July 14 (Xinhua) -- IndyMac Bank, seized last week by federal regulators, reopened on Monday as IndyMac Federal Bank.

    Hundreds of depositors lined up outside the bank to get their money back as bank executives tried to assuage their worries.

People enter an IndyMac Bank branch at the company's corporate headquarters, after waiting in line for it to open under federal management, in Pasadena, California July 14, 2008. Regulators seized Pasadena-based IndyMac on Friday after a bank run in which customers withdrew $1.3 billion of deposits over 11 business days, as worries about the company's survival grew, regulators said. (Xinhua/Reuters Photo) Photo Gallery>>>

    Bank executives reported that all 33 IndyMac branches were open for business.

    IndyMac was shut down Friday by federal regulators during a run on deposits. The federal Office of Thrift Supervision (OTS) reported that 1.9 billion U.S. dollars in consumer deposits were withdrawn.

    IndyMac, based in Pasadena, Los Angeles, is the largest bank in California ever to be taken over by regulators and the second largest bank failure in the U.S. history following the Continental Illinois National Bank in 1984.

    New IndyMac Chief Operating Officer John Bovenzi, a Federal Deposit Insurance Corp.(FDIC) executive, was in Pasadena Sunday telling the media the new bank was "as safe and sound a bank as any in the country."

    But Bovenzi's attempt to reassure jittery customers, stockholders and the financial markets in advance of Monday's reopening did little to assuage worried depositors, particularly those with individual accounts totaling more than 100,000 dollars.

    Under the law, individual accounts up to 100,000 dollars, joint accounts up to 200,000 and individual retirement accounts up to 250, 000 are fully insured by the FDIC. Accounts totaling more than that are not insured above those limits.

    At the time the bank was taken over by federal regulators IndyMac had about 250,000 customers whose accounts were totally insured. The bank also had 1 billion dollars of potentially uninsured deposits held by about 10,000 depositors.

    One of those people is Robert Soto who is worried he may lose part or all of 50,000 dollars -- above his fully insured total -- that he had set aside to buy a home.

    "So many people bought more than they could afford. Now I'm gonna be out of this money because other people didn't use common sense...I don't want to say common sense, but better judgment," Soto told ABC7. "It's not right. It's not just right."

    But Bovenzi told ABC7 that Soto's case as well as those of other depositors in his same position is far from hopeless. Bovenzi said the eventual return to those depositors could still be 100 percent or may have to be negotiated, depending on who eventually buys IndyMac from the feds.

    "So we are going to preserve its (IndyMac) value, market it and then return as much as we can to those uninsured depositors," Boventi told the TV channel.

    Customers with home-equity credit lines will find their accounts frozen, but transactions involving deposit accounts will be conducted as normal, according to federal regulators.

    In a bid to assuage jittery customers, Boventi said that "customers should just view this as a change in ownership".

    "I want to emphasize that customers should know that their insured money is safe," Boventi explained to the media on Sunday.

    "It's important to keep in mind the small percentage of uninsured are still covered for insured amounts and will have immediate access to 50 percent of their uninsured balances," Bovenzi said.

    Although the bank was closed over the weekend, customers still had access to their funds via ATMs, debit cards and conventional checks.

    "If you want to withdraw money, you can do that at any time," Bovenzi said. "We'll also be open for people who want to put money in the bank."

    But FDIC officials said Sunday that customers with home-equity credit lines will have their accounts frozen and "reviewed on a case-by-case basis" to insure the losses on the bank's loan portfolio don't balloon from current estimates.

    Credit lines to commercial construction contractors also will be frozen pending a review, but construction loans made to individual consumers will not be affected. Customers of IndyMac's reverse-mortgage subsidiary will continue to have access to their funds. Reverse mortgages provide older homeowners with periodic payments or a credit line secured by their homes.

    The bank will continue to honor existing terms on accounts for insured depositors, but not so-called brokered deposits brought in by Wall Street firms or other middlemen.

    IndyMac, which was already in trouble because of subprime mortgages it had with people with bad or no credit history, had been operating under close regulatory scrutiny since January, when the OTS determined that the company was floundering. It lost 614.8million dollars in 2007 and 184.2 million dollars during the firstquarter of this year, largely as the result of bad home loans.

    The company's stock, which traded as high as 50 dollars a sharein 2006, traded for as low as 28 cents Friday.