Countrywide Shows Signs Of MortgageSlowdown
CALABASAS, Calif. - (04/28/06) -- Countrywide Financial Corp., thenation's largest mortgage bank, reported Thursday that firstquarter profits slumped slightly, as the mortgage market continuedto cool off. The company, which operates 895 branches, said netincome for its first quarter was $684 million, or $1.10 a share,down from $689 million, or $1.13 a share, for the first quarterlast year. First quarter revenues grew a strong 18% to $2.8billion, due mostly to a gain of $330 million on the market valueof the company's servicing hedging portfolio. The company's loanproduction operation reported a 61% drop in pre-tax earnings to$284 million, due mainly to reduced margins on higher interestrates and a flatter yield curve, compared to a year ago's period.In addition, operating expenses in the unit rose by 26% for thequarter, as the company continued to build its infrastructure. Atthe end of the first quarter Countrywide's loan servicing portfoliohad grown to the industry's largest of $1.15 trillion, up 29% overthe past year.