Mortgage lenders are seeing improvements in first-quarter earnings, aided partly by comparisons with a very weak quarter a year earlier.
Earnings of Dallas-based Capstead Mortgage Corp. climbed 42%, to $26.8 million, or 70 cents a share.
Mortgage servicing accounted for $9.9 million of earnings, up 5% from the same quarter the previous year. Capstead's servicing portfolio increased $2.2 billion, to $27.7 billion, during the first quarter. The average weighted coupon of the portfolio is 7.39%.
Prepayments of loans in the servicing portfolio were at an annual rate of 12.58% during the quarter, up from 6.15% in the first quarter of 1995.
"The mortgage servicing portfolio continues to be productive, and we expect 1996 mortgage servicing profits to grow approximately 10% from 1995 results," said Ronn Lytle, chairman and chief executive.
The company made commitments in the quarter to purchase $4.8 billion of mortgage servicing rights with a weighted average rate of 7.31%.
Resource Bancshares Mortgage Group also experienced a dramatic increase in its first-quarter earnings from last year.
The Columbia, S.C.-based lender's earnings increased 350%, to $4.5 million for the first quarter.
Earnings were up, despite the harsh winter weather in the Northeast that kept retail originations lower than the company expected, said Lee Shelton, vice chairman and managing director at Resource.
Resource started its retail lending division less than a year ago. That division accounted for 25%, or $118,169 in loans during the quarter.
Loan production was $3 billion in the quarter, up from $500,000 for the first quarter of 1995. Resource's servicing portfolio grew to $5.8 billion during the quarter, up from $4 billion in the first quarter last year. The weighted average coupon was 7.67%, down from 7.92% during the same period last year.
Ryland Group Inc., a major home builder based in Columbia, Md., said its retail mortgage operations showed an increase of 73% in pretax earnings in the first quarter, to $1.9 million.
Loan originations increased 42%, reflecting the favorable interest rate environment in the early part of the first quarter, the company said. Higher gains from the sale of mortgages and mortgage servicing rights also contributed to the increase in retail earnings.
The company reported overall first-quarter earnings of $939,000 from continuing operations, against a loss of $1.5 million from continuing operations a year earlier.
Earlier, North American Mortgage Co., Santa Rosa, Calif., reported a 32% increase in earnings for the first quarter. The lender's president, Terrance G. Hodel, attributed the sharp increase to the improved California housing market, where it has a large presence.