UNIONDALE, N.Y. -- Arbor National Holdings Inc. said its net income increased 30% to $2.6 million in its first fiscal quarter, which ended May 31. In the quarter a year earlier, it earned $2 million.
Earnings per share rose to 38 cents for the quarter, up from 30 cents for the first quarter a year ago.
According to Ivan Kaufman, Arbor's chairman and chief executive, the company's gain was primarily due to the sale of $631 million of servicing rights at attractive prices.
Despite the sale, Arbor's servicing portfolio increased 58% to $4.9 billion as of May 31, from from $3.1 billion.
The company said it intends to retain servicing rights on about 50% of originations in fiscal 1995.
Net income was also bolstered by a 49% increase in servicing revenue derived from the company's larger servicing portfolio.
First quarter originations decreased 11% because of a large decline in refinances, partially offset by an increase in home purchase originations.
According to Mr. Kaufman, the company's margins from loans sold during the first quarter into the were higher than
"However, these margins may not continue in the future because of the increased pricing competition among lenders in the current market," Mr. Kaufman said.
