Delta Financial Reports, Suspends Outlook
Catching up on a story I'd blogged about last week, Delta Financial formally reported earnings today -- net income for the second quarter was at the $770,000 mark initially reported by the company last week, a number that missed analyst estimates badly. The company also admitted to a "strain" on liquidity, and said that it had obtained $60 million in financing from affiliate of Angelo, Gordon & Co. and agreed to issue $10 million of convertible notes to one of the company's largest stockholders. The poor operating results for the second quarter came in spite of the company's best-ever quarter for originations: Delta originated $1.4 billion of mortgage loans, up 9 percent from the first quarter 2007 and an approximate 39 percent jump from year-ago period. Delta CEO Hugh Miller also said the company will suspend its future and prior earnings guidance, saying that "the second half of 2007 is going to be very challenging." Credit performance for the quarter underscores just how difficult things have already become: Delta said that 6.2 percent of its loans were severely delinquent (90+ days or greater) at the end of the quarter.