InvestmentsMortgage

Impac boosts lending capabilities with $30M loan from Macquarie Group

Plans to use funds to “opportunistically” retain mortgage servicing rights

Impac Mortgage Holdings (IMH), which is already having itself quite a year, is set to grow its lending capability even more, thanks to a capital infusion from the Macquarie Group.

Impac announced Wednesday that it entered into a $30 million credit facility with Macquarie, which Impac said will help the company “provide liquidity needed to opportunistically retain mortgage servicing rights and to fund the continued growth of mortgage loan origination volumes.”

The infusion of funds should only help to boost Impac. The company’s first-quarter net earnings were $34 million, compared to a net loss of $3 million for the first quarter of 2014, and a net loss of $2.2 million for the fourth quarter of 2014.

According to Impac, its operating income, defined as revenues less operating expenses, increased to $17.2 million in the first quarter of 2015, 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 company said that the increase in operating income was primarily driven by the increase in origination volumes in the first quarter and more specifically, the retail origination volumes of CashCall, which Impac agreed to acquire in January, putting a name to industry talks first announced on Dec. 12.

Impac saw its origination volume increase 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 company said at the time.

Impac’s 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 CashCall retail channel, which significantly increased the company’s net earnings.

“We are pleased to further our relationship with Macquarie Group and believe it is a significant accomplishment to raise capital, allowing us to continue to grow our mortgage lending platform,” Joseph Tomkinson, chairman and CEO of Impac.

“This transaction not only strengthens our liquidity, but also provides the ability to selectively retain mortgage servicing rights as well as a greater ability to take advantage of opportunities that may arise in the mortgage lending industry,” Tomkinson added.

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