Impac Mortgage Holdings recorded a “significant” year-over-year expansion of its mortgage lending in the first quarter, but other costs largely stemming from legacy issues produced a consolidated net loss of $4.8 million during the period.
In the first quarter a year ago, Impac took a net loss of $987,000.
The company said the loss stemmed primarily from its receipt of residual interests cash flows of $3.2 million during the quarter and an increase in expected future LIBOR rates, as these hurt the estimated fair value of its net trust assets and REO.
Additional repurchase provisions from legacy loan sales completed in prior years by the company’s discontinued nonconforming division also contributed to the overall net loss, as did $1.3 million loss from discontinued operations.
At the same time, the company’s originations on a year-over-year basis grew fivefold from the first quarter a year ago, rising to $365 million from $57.3 million.
Executives told listeners during the company’s earnings call that they continue to see increases in its new originations. (Impac originates through retail and wholesale channels, as well as a recently started correspondent effort.)
The increase in mortgage and real estate services fees due to an increase in mortgage lending net revenue offset a decrease in portfolio loss mitigation and real estate service fees and a decrease in title and escrow fees due to the sale of the title insurance agency last year.
In addition to growing originations, the company also is growing its servicing portfolio. However, it added that it also is selectively selling servicing on a flow and bulk basis, and noted that its growth might be limited at some point by available capital.
The company’s stock priced initially climbed a bit upon the release of earnings late Tuesday. It was only slightly lower, but still up from where it had been prior to the earnings’ release, after the company’s conference call Wednesday. Impac’s stock as of Wednesday at deadline was trading above $2 per share.
