First Mortgage Corp., a regional nonbank lender, broke even in its fourth fiscal quarter as its revenues declined 5%.
First Mortgage reported revenues of $3.87 million for the quarter ended May 31, a 5% decline from the year before. And it broke even for the quarter, compared with net income of $384,000, or 7 cents a share, in the year-earlier period.
Although loan volume remained stable, the company said a one-percentage- point increase in interest rates during February and March hurt its profitability.
The interest rate spike reduced the company's gain on the sale of mortgage loans, to $1.06 million for the most recent quarter from $1.29 million the year before, according to the company statement.
In addition, investments in loan production employees and reorganization plan costs crimped the bottom line, said Bruce G. Norman, president.
But Mr. Norman put a positive spin on all the negative events.
"First Mortgage performed very well for the year and the quarter in light of cut-throat competition from major banks and the numerous consolidations in our industry," he said.
Loan production during the quarter was $89.5 million. That was a 238% increase from the preceding fiscal year's fourth quarter. Origination revenue was $559,000, up 37%, and servicing income was $1.74 million, up slightly from $1.71 million in the preceding year's fourth quarter.
Mr. Norman said he plans to expand First Mortgage's retail branch system by 10 offices in the next two years.
The new offices will be in East Los Angeles and other Southern California cities, Northern California, Oregon, Washington, Arizona, Texas, New Mexico, and Utah.
The company will expand regardless of whether interest rates rise or fall, Mr. Norman said.
PASADENA, Calif. - Countrywide Credit Industries reported earnings of $60.6 million, or 58 cents per share, for its first fiscal quarter, ended May 31.
That was a 68% increase from the first quarter of the preceding fiscal year.
Loan production was $11 billion during the quarter, of which $6.4 billion was for purchase loans.
- Juliana Ratner