Cool report: up 0.40 to $2.22
Impac Mortgage Holdings, Inc. Announces Results of Third Quarter 2011
MarketwirePress Release: Impac Mortgage Holdings, Inc. – Mon, Nov 14, 2011 4:35 PM EST
Companies:
* Impac Mortgage Holdings Inc.
RELATED QUOTES
Symbol Price Change
IMH 2.22 +0.40
IRVINE, CA--(Marketwire -11/14/11)- Impac Mortgage Holdings, Inc. (AMEX: IMH - News), a Maryland corporation, along with its subsidiaries and affiliates, or the "Company," reports third quarter 2011 net earnings of $3.1 million or $0.37 per diluted common share, as compared to net earnings of $974 thousand or $0.12 per diluted common share for the third quarter of 2010. Net earnings of $3.1 million for the third quarter 2011 included a non-cash charge of $949 thousand relating to the impairment of a deferred charge as further discussed below. No impairment was recorded during the third quarter 2010.
During the third quarter of 2011, the Company continued to expand its mortgage lending activities increasing loan originations and loan sales. During the three and nine months ended September 30, 2011, the Company originated $256.6 million and $538.1 million and sold $250.3 million and $485.5 million of loans, respectively, as compared to $22.1 million of loans originated in the first nine months of 2010. Consistent with the Company's strategy, it also increased it's servicing portfolio with an increase in sales of servicing retained loans to FannieMae and increases in GinnieMae issuances. The Company is currently focusing on originating FannieMae, FreddieMac, and government loans as it believes that having the ability to sell loans to FannieMae, FreddieMac, and issue GinnieMae securities makes it more competitive in the overall mortgage origination market.
During the third quarter of 2011, in an effort to improve warehouse borrowing terms, the Company replaced one $25 million facility with another $25 million facility, and increased the borrowing capacity of another facility by $10 million, bringing the total warehouse borrowings facilities to $87.5 million at September 30, 2011. The Company anticipates adding more warehouse capacity if needed to fund increasing origination volume.
Although the mortgage and real estate services segment was profitable in the third quarter of 2011, the startup costs and operating costs associated with the expansion of the mortgage lending activities have resulted in negative profit margins in 2011 for the mortgage lending operations. As the growth stabilizes, we expect the mortgage lending operations to improve profitability in the future.
In September and October 2011, the Company sold its interest in Experience 1, Inc., the parent of its title insurance company, for $3.7 million, recording a total gain of approximately $1.9 million ($1.78 million recorded in the third quarter and $160 thousand to be recorded in the fourth quarter), ceasing the Company's involvement in title and escrow activities. During the third quarter 2011, the Company received an unexpected opportunity to sell its interest in the title insurance company. After consideration of the increasing competition and lower margins in the title insurance industry along with a decision to focus the Company's efforts on expanding the mortgage lending platform, the Company's Board of Directors determined it was in the Company's best interest to sell its interest in the title insurance company in September 2011.
Selected Financial Results for the Three Months Ended September 30, 2011
* Earnings of $3.1 million for the third quarter of 2011, including a $1.78 million gain from the sale of Experience 1, Inc. and a non-cash impairment charge of a deferred charge of $949 thousand, compared to earnings of $974 thousand for the comparable 2010 period.
* Mortgage and real estate services fees of $17.9 million for the third quarter of 2011, compared to $15.5 million for the comparable 2010 period.
* In September and October 2011, the Company sold its interest in Experience 1, Inc., the parent of its title insurance company, for $3.7 million, recording a total gain of approximately $1.9 million ($1.78 million recorded in the third quarter and $160 thousand to be recorded in the fourth quarter) ceasing the Company's involvement in title and escrow activities.
* The mortgage lending operations originated $256.6 million and sold $250.3 million of loans during the third quarter as compared to a minimal amount of loans originated for the comparable period in 2010.
* Net interest income of $160 thousand for the third quarter of 2011, primarily from our long-term mortgage portfolio, compared to $1.7 million for the comparable 2010 period.
* Non-interest income - net trust assets of $3.4 million for the third quarter of 2011, compared to a loss of $574 thousand for the comparable 2010 period.
* Repurchase reserve was $5.4 million at September 30, 2011, compared to $6.2 million at June 30, 2011.
