Impac Mortgage Holdings reported a year-over-year drop in net income during the second quarter as a more substantial loss on mortgage servicing rights and costs related to the CashCall Mortgage merger weighed on earnings.
The Irvine, Calif.-based company's net income fell 27% from the second quarter of 2015, to $12.3 million. Diluted earnings per share were 92 cents.
The company's total revenue did grow from last year by 41%, to $69.2 million. But revenue could have grown even more were it not for the company recording a greater loss on mortgage servicing rights due to the interest rate environment. The loss on mortgage servicing rights during the second quarter was $14.5 million versus $2.8 million a year ago.
Impac also noted that its total expenses nearly doubled from last year, rising 87% to $60.9 million. Primarily, this growth stemmed from a change in the fair value of the contingent consideration from Impac's 2015 purchase of CashCall Mortgage, which came in this quarter as an $8.4 million expense rather than an $11.3 million benefit last year. Personnel and business promotions expenses also grew.
Retail originations at Impac rose 61% year-over-year to $2.5 billion, offsetting drops in correspondent and wholesale originations. Correspondent originations shrank 34% to $419 million, while wholesale originations decreased 20% to $334.5 million.
