Newport Beach-based Impac Mortgage Holdings Inc. reported a 39% drop in income available to shareholders to $30 million in the third quarter, versus a year earlier.
The real estate investment trust, which invests in mortgages, is facing lower profit margins on loan sales and on loans held for investment, according to Chief Executive Joseph Tomkinson.
Tomkinson said despite some relief in the competitive pricing of loans among mortgage providers, the company’s income “may continue to come under some pressure.”
The company also is seeing a “heightened” level of prepayments, he said.
Impac and other mortgage companies have faced higher costs to make loans amid rising short-term interest rates.
“Once the Federal Reserve changes or modifies their stance on increasing short-term interest rates, we expect that our borrowing costs will begin to stabilize,” Tomkinson said.
The mortgage company said its net income was $126 million in the third quarter, versus a loss of $9 million a year ago, mostly as a result of a gain in the value of its derivative investments.
Impac’s board postponed its decision to set the fourth-quarter dividend rate from Nov. 29 to Dec. 13.
The company in September reduced its quarterly dividend from 75 cents a share to 45 cents.
