SAN FRANCISCO -- Hamilton Financial Services Corp. announced a net loss of $5.85 million, or 97 cents a share, for the quarter ended Sept. 30. In the quarter a year earlier, it had net income of $1.81 million, or 30 cents a share.
For the first nine months of 1994, the company reported a net loss of $8.1 million, or $1.35 a share, compared with net income of $2.71 million, or 57 cents a share, in the year-earlier period.
The company attributed the deficit in the third quarter to losses on the origination and sale of loans, reduced gains on the sale of servicing rights, a drop in net interest income, and increased operating costs attributable to the expansion of the loan origination network.
Loan origination volume for the 1994 quarter was $305 million, a 51% decrease from the $621 million originated in the comparable 1993 period. For the first nine months of 1994, loan originations were $783 million, versus $1.5 billion in the first nine months of 1993.
"The decline in production volume was a result of rising interest rates and continued competitive pricing pressures from other loan originators in a shrinking overall market due to reduced refinancing activity," according to the company's announcement.
"Only 15% of the loan volume in the third quarter was attributable to refinances of existing mortgages, compared with 88% in the year-earlier period. Rates for 30-year fixed-rate mortgages have recently averaged over 9%, their highest level in over 2 1/2 years," the announcement added.
Overall costs and operating expenses increased just 6% in the third quarter from the year earlier period despite a significant expansion of the loan origination network, the company said.
