Calif. Lender Sees Surge After Money-Losing Year

First Mortgage Corp. has reported disappointing results for its 1995 fiscal year.

First Mortgage, based in Diamond Bar, Calif., lost $548,000, or 9 cents a share, for the year ended March 31, according to its yearly earnings report. That's compared with a profit of $5 million the previous year.

Revenue declined 55.5%, to $12.89 million, the company announced.

But it also said that loan production surged in March, April, and May; the portfolio of loans waiting to be closed grew fourfold.

Company officials cited higher interest rates and "difficult market conditions" for the fiscal-1995 downturn.

Clement Ziroli, the mortgage bank's chairman, president, and chief executive, said he expected the company to resume its growth if interest rates "remain stable or continue to decline."

As interest rates climbed last year, First Mortgage was hit hard.

The volume of its originations - the majority in FHA and VA loans - dropped off significantly last year.

The company has been steadily buying back stock - a practice generally used to buttress a stock's price. It also tends to increase earnings per share.

First Mortgage's stock has been hovering at $4. It has not been traded actively.

In the last quarter, the number of loans yet to close at First Mortgage quadrupled to $44 million, apparently benefiting from the stabilization of interest rates. The mortgage bank also funded $18.5 million of loans, double what it did during the third quarter.

It originated and purchased $175 million of loans for the year ended March 31. And its servicing portfolio grew 3%, to $1.5 billion.