Newport Beach-based Impac Mortgage Holdings Inc. on Wednesday reported lower earnings for the first quarter, but raised its dividend and was cautiously optimistic that its results would improve this year.
Shares of Impac were up about 5% in afterhours trading following the earnings release.
The company, a real estate investment trust that buys and sells mortgage loans, reported earnings available to shareholders fell to $27.1 million in the quarter, versus $56.8 million a year earlier.
The company’s mortgage operations acquired and originated $2.1 billion of mortgages in the quarter, compared to $6 billion for the fourth quarter and $4.7 billion a year earlier.
“With respect to our mortgage business, we believe that based on economic forecasts, we will continue to be in a healthy acquisition and origination market,” said Joseph R. Tomkinson, Impac’s chairman and chief executive. “However, as competition has intensified, many of our competitors have relaxed their underwriting guidelines and created what we believe to be more layered risk in the market.”
Impac plans to pay a quarterly dividend of 25 cents a share. The company’s dividend was 20 cents per share in the fourth quarter, which it slashed sharply from 45 cents per share in the third quarter.
Impac paid a dividend of 75 cents per share in the first quarter of 2005.
Shares of Impac have slumped amid rising interest rates and a slowdown in the mortgage market. About 54% of Impac’s mortgages are made in California.
The company reported that the percentage of the mortgages it owns that are 60 days or more delinquent rose to 3.4%, compared to 1.9% a year ago.
Shares were up about 6% on Wednesday, closing at $10.50. The stock was up to $11 in afterhours trading. Its 52-week high is $22.32.
