Impac Mortgage Holdings’ (IMH) reported first-quarter net earnings of $34 million or $2.94 per diluted common share, compared to a net loss of $3 million or $0.33 per diluted common share for the first quarter of 2014, and a net loss of $2.2 million or $(0.23) for the fourth quarter of 2014.
The growth in profit is mainly attributed to the increase of “gain on sale of loans” from higher origination volumes and the recognition of a portion of its deferred tax asset offset by a loss on “mortgage servicing rights” and an increase in the estimated fair value of the long-term debt.
Operating income, defined as revenues less operating expenses, increased to $17.2 million in the first quarter of 2015 as compared to operating losses of $2.8 million and $4.7 million in the fourth quarter of 2014 and the first quarter of 2014, respectively.
The increase in operating income was primarily caused by the increase in origination volumes in the first quarter and more specifically, the retail origination volumes of CashCall.
Back in January, Impac agreed to acquire the mortgage operations of CashCall, putting a name to industry talks first announced on Dec. 12.
“It is a consumer direct company that is giving us a very large retail presence. It also allows us to expand our non-Qualified Mortgage products and our VA and FHA products,” said Bill Ashmore, president of Impac Mortgage, in a previous interview with HousingWire.
Meanwhile, origination volume increased 106% in the first quarter of 2015 over the fourth quarter of 2014. "The first-quarter acquisition of CashCall Mortgage is already yielding significant results. The total origination volume in the first quarter was approximately $2.3 billion, which more than doubled the $1.1 billion in total originations in the fourth quarter of 2014. Of the $2.3 billion in total originations, approximately $1.4 billion was originated through the CCM retail channel, which significantly increased our net earnings. While in the fourth quarter of 2014, our retail originations contributed only 2% to our total origination volume."