Anyone who thinks the morthgage organization boom is being matched by profit gains should take a look at second-quarter earnings at the nation's publicly traded mortgage banks.
"Across the board, earnings were up a lot less than originations," says Sy Jacobs, an analyst at Alex. Brown & Sons.
Fleet Mortgage Group, the most glaring example, more than doubled its loan production from the second quarter of 1992, to $10.7 billion. But the unit of Fleet Financial Group posted a loss of $35.4 billion for the quarter, due to a writedown of servicing assets tied to refinancings.
Some other companies, such as Plaza Home Mortgage Corp., saw their profit growth restrained by aggressive pricing in new markets, Mr. Jacobs said.
Plaza's earnings fell 11% from a year earlier, to $3.3 million - even though originations soared 62%, to $2.3 billion.
In other results, North American Mortgage Co. posted a 62% jump in second-quarter earnings, to $13.1 million. Margaretten Financial Corp. was up 19.4%, to $7.5 million, and American Residential Holding Corp. was up 110%, to $7.7 million.