Hibernia Cites MSR Charge in Earnings Drop

Hibernia Corp., New Orleans, has reported net income of $56.2 million ($0.36 per share) for the first quarter, down 5% from $59.2 million ($0.37 per share) a year earlier, citing a temporary impairment of its mortgage servicing rights as a factor in the decline.The company said the $14.5 million noncash expense for the MSR impairment was due chiefly to an increase in the expected prepayment rate on the mortgage loans. Without the charge, net income would have totaled $65.6 million in the first quarter, up 11% from that of a year earlier, Hibernia said. "Management believes that net income excluding the mortgage impairment charge is a useful measure of operating results, because the impairment expense is a temporary noncash charge that may be recaptured in future periods if interest rates rise and prepayment speeds slow down," the company said. Hibernia can be found online at http://www.hibernia.com.