For proof of how strongly segmented the mortgage banking market can be these days, look no further than Thornburg Financial — a prime lender whose business has been, frankly, overshadowed by high-flying and then crashing subprime lenders. Thornburg reported earnings yesterday that not only were up, but beat analyst estimates. And that’s not all: the company also said it will beat the high end of its 2007 earnings guidance. Reuters summarizes the second quarter’s results:

Mortgage originations for the second quarter rose 21 percent to $1.7 billion, Thornburg said in a statement. “…The credit performance of our prime quality mortgage loan portfolio remained exceptional…,” Chairman and Chief Executive officer Garrett Thornburg said. The Santa Fe, New Mexico-based company reported second-quarter net income of $83.4 million, or 66 cents a share, up from $69.7 million, or 61 cents a share, a year ago.

A 21 percent increase in originations tied to a nearly 20 percent increase in net income is a pretty good outcome, all things considered — and especially so given where most of the industry news is at right now. A big part of what’s helping the numbers, beyond the company’s focus on prime lending, is a loan portfolio that sports an average LTV of under 70 percent. With that much equity to work with, there are plenty of workout strategies — even in the current market — that can keep foreclosures and REO off the books. At the end of the second quarter, the company’s total of 60+ day delinquences and REO stood at a meager 0.21 percent of its total $24.7 billion loan portfolio.