Impac’s third quarter originations jump 30%

Mortgage & Real Estate

Impac’s mortgage origination pipeline didn’t let up in the third quarter, reporting that total originations increased 30% to $4.2 billion, the company stated in its quarterly filing.

This is compared to $3.2 billion in the second quarter of 2016. Retail originations drove the growth primarily, representing approximately 78% or $3.3 billion in total originations. 

For the first nine months of 2016, Impac’s total originations increased to $9.8 billion, a 34% increase as compared to $7.3 billion for the first nine months of 2015, with retail originations representing $7.4 billion or 76% of such originations.   

This supports Impac chairman and CEO Joseph Tomkinson’s prediction earlier this year that the lender expected to further grow its origination volume this year.

As a whole for the quarter, Impac reported GAAP net earnings of $16.5 million, and adjusted operating income of $47.4 million, as compared to GAAP net earnings of $19.3 million and adjusted operating income of $8.5 million in the third quarter of 2015.

This is also up from GAAP net earnings of $12.3 million and adjusted operating income of $18.5 million in the second quarter of 2016. 

In addition, operating income, excluding the changes in contingent consideration, increased to $47.4 million or $3.29 per diluted common share for the third quarter of 2016 as compared to $8.5 million or $0.63 per diluted common share in the third quarter of 2015.

Tomkinson also touched on the company’s recent reentry into the public equity markets again after a long stint away following the financial crisis.

“After being out of the public equity markets for ten years and spending six years after the financial crisis restructuring the balance sheet and resolving many of our legacy issues, we are pleased to see the strong demand from the institutional investment community in our equity offering,” said Joseph Tomkinson, chairman and CEO of Impac Mortgage Holdings.

“The proceeds from this offering will allow us to execute on our core growth strategies which include continuing to expand our origination and servicing platforms and to retain valuable MSR assets,” said Tomkinson. “We are very excited to add new high-quality institutional investor partners in connection with the offering and are pleased that they share in our enthusiasm for the opportunities at IMH.”

The third-quarter earnings stated that the “demand from the institutional investment community was strong and resulted in a 20% upsizing of the shares offered.”

Gross proceeds to Impac were approximately $44.9 million before deducting underwriter discounts and commissions and estimated expenses payable by Impac. 

Impac added that the proceeds from the offering are for general corporate purpose, including working capital and development costs, such as retention of servicing on new originations and to grow market share and geographic scope within the CashCall Mortgage retail channel, as well as continued growth in the correspondent and wholesale lending channels.

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