Irvine-based ECC Capital Corp. said Monday that its loan production fell 23% to $1.7 billion in the first quarter, versus a year earlier.
The struggling subprime mortgage financier made $4.2 billion in loans in the fourth quarter.
ECC, whose lending arm is Encore Credit, reported a net loss of $49.8 million in the fourth quarter. The company’s full earnings results had been delayed for an accounting review.
The company said it planned to hire an investment bank to review its options in the wake of the losses and its inability to pay a divident.
The first quarter was by far the worst one for the troubled real estate investment trust. For all of 2005, ECC posted a loss of $64.1 million.
Officials cited a sharp decline in loan prices for the rough fourth quarter. Rising short-term interest rates have made it harder for ECC to make money by selling loans packaged together as bonds.
The results could have been worse. ECC’s core net loss for the fourth quarter was $66.3 million, but the company was aided by profits from derivative investments.
Monday’s earnings announcement is the latest in a string of bad news for the company.
Last week ECC said it would cut its staff by 17%, or 170 workers. In January, ECC said it would lay off 440 workers.
In February, ECC said it wouldn’t pay a first-quarter dividend,another sign of shrinking profits for some subprime mortgage lenders.
ECC raised $354 million in the county’s largest initial public offering last year. It now counts a market value of about $138 million.
