Impac Mortage Holdings Inc. (IMPM, Financial) filed Quarterly Report for the period ended 2012-03-31.
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The mortgage and real estate services include the mortgage lending operations and portfolio loss mitigation and real estate services, and had net earnings of $3.3 million in the first quarter of 2012, compared to $930 thousand in the comparable period in 2011. The increase was due to an increase in revenues and a decrease in expenses. Mortgage and real estate services fees were $14.0 million for the three months ended March 31, 2012, compared to $12.2 million for 2011 with the increase primarily due to an increase in mortgage lending net revenues, partially offset by a decrease in title and escrow fees due to the sale of the title company. The increase was primarily due to an increase in lending activities which produced revenues of $9.2 million while portfolio loss mitigation and real estate services revenues were $4.8 million. Additionally, title and escrow fees declined $4.3 million due to the sale of the title insurance company in 2011. As expected the portfolio loss mitigation and real estate services activities and revenues declined as lending activities and revenues increased including the increase in sales to and of the respective servicing portfolios of Fannie Mae and Ginnie Mae loans.
At March 31, 2012, the balance of deferred charge was $12.0 million. For the three months ended March 31, 2012, the Company was not required to record income tax expense resulting from deferred charge impairment write-downs based on changes in estimated fair value of securitized mortgage collateral. The deferred charge arose as a result of the deferral of income tax expense on inter-company profits that resulted from the sale of mortgages from taxable subsidiaries to IMH in prior years (when IMH was a REIT.) This balance is recorded as required by GAAP and does not have any realizable cash value.
During the three months ended March 31, 2012, the yield on interest-earning assets decreased to 10.25% from 14.37% in the comparable 2011 period. The yield on interest-bearing liabilities decreased to 10.15% for the three months ended March 31, 2012 from 14.29% for the comparable 2011 period. In connection with the fair value accounting for investment securities available-for-sale and securitized mortgage collateral and borrowings, interest income and interest expense is recognized using effective yields based on estimated fair values for these instruments. The decrease in yield for securitized mortgage collateral and securitized mortgage borrowings is primarily related to increased prices on mortgage-backed bonds which resulted in a decrease in yield. Bond prices received from pricing services and other market participants have increased over the past few quarters as investors demand for mortgage-backed securities has increased. This has resulted in an increase in fair value for both securitized mortgage collateral and securitized mortgage borrowings. These increases in fair value have decreased the effective yields used for purposes of recognizing interest income and interest expense on these instruments.
The $8.7 million increase in mortgage lending during the three months ended March 31, 2012 was primarily the result of an increase in net gain on sale of loans slightly offset by an increase in provision for repurchases as compared to the same period in 2011. For the three months ended March 31, 2012, net gain on sale of loans was $8.9 million as compared to $652 thousand in the first quarter of 2011. Provision for repurchases increased to $293 thousand for the three months ended March 31, 2012 as compared to $117 thousand for the same period in 2011. For the three months ended March 31, 2012, the increase in net gain on sale of loans and provision for repurchase was the result of $355.7 million in loan sales during the period as compared to $26.3 million of loans sold for the comparable 2011 period.
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Highlight of Business Operations:
· The mortgage lending operations originated $365.0 million and sold $355.7 million of loans during the three months ended March 31, 2012 as compared to $57.3 million and $26.3 million of loans originated and sold, respectively, for the comparable 2011 period. Additionally, mortgage lending revenues increased to $9.2 million during the three months ended March 31, 2012 as compared to $551 thousand for the comparable 2011 period.The mortgage and real estate services include the mortgage lending operations and portfolio loss mitigation and real estate services, and had net earnings of $3.3 million in the first quarter of 2012, compared to $930 thousand in the comparable period in 2011. The increase was due to an increase in revenues and a decrease in expenses. Mortgage and real estate services fees were $14.0 million for the three months ended March 31, 2012, compared to $12.2 million for 2011 with the increase primarily due to an increase in mortgage lending net revenues, partially offset by a decrease in title and escrow fees due to the sale of the title company. The increase was primarily due to an increase in lending activities which produced revenues of $9.2 million while portfolio loss mitigation and real estate services revenues were $4.8 million. Additionally, title and escrow fees declined $4.3 million due to the sale of the title insurance company in 2011. As expected the portfolio loss mitigation and real estate services activities and revenues declined as lending activities and revenues increased including the increase in sales to and of the respective servicing portfolios of Fannie Mae and Ginnie Mae loans.
At March 31, 2012, the balance of deferred charge was $12.0 million. For the three months ended March 31, 2012, the Company was not required to record income tax expense resulting from deferred charge impairment write-downs based on changes in estimated fair value of securitized mortgage collateral. The deferred charge arose as a result of the deferral of income tax expense on inter-company profits that resulted from the sale of mortgages from taxable subsidiaries to IMH in prior years (when IMH was a REIT.) This balance is recorded as required by GAAP and does not have any realizable cash value.
During the three months ended March 31, 2012, the yield on interest-earning assets decreased to 10.25% from 14.37% in the comparable 2011 period. The yield on interest-bearing liabilities decreased to 10.15% for the three months ended March 31, 2012 from 14.29% for the comparable 2011 period. In connection with the fair value accounting for investment securities available-for-sale and securitized mortgage collateral and borrowings, interest income and interest expense is recognized using effective yields based on estimated fair values for these instruments. The decrease in yield for securitized mortgage collateral and securitized mortgage borrowings is primarily related to increased prices on mortgage-backed bonds which resulted in a decrease in yield. Bond prices received from pricing services and other market participants have increased over the past few quarters as investors demand for mortgage-backed securities has increased. This has resulted in an increase in fair value for both securitized mortgage collateral and securitized mortgage borrowings. These increases in fair value have decreased the effective yields used for purposes of recognizing interest income and interest expense on these instruments.
The $8.7 million increase in mortgage lending during the three months ended March 31, 2012 was primarily the result of an increase in net gain on sale of loans slightly offset by an increase in provision for repurchases as compared to the same period in 2011. For the three months ended March 31, 2012, net gain on sale of loans was $8.9 million as compared to $652 thousand in the first quarter of 2011. Provision for repurchases increased to $293 thousand for the three months ended March 31, 2012 as compared to $117 thousand for the same period in 2011. For the three months ended March 31, 2012, the increase in net gain on sale of loans and provision for repurchase was the result of $355.7 million in loan sales during the period as compared to $26.3 million of loans sold for the comparable 2011 period.
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