Accredited Home Lenders achieved all-time high quarterly and annual fundings, as well as record earnings, and it expects to continue this pace of growth for at least another three years. The projection sharply contrasts the outlook for the company from one investment publication -- which calls Accredited a "ticking time bomb."
The San Diego-headquartered lender announced it originated a milestone $3.5 billion in subprime loans during the fourth quarter as it surpassed the third quarter's $3.2 billion and the previous record in the second quarter, 2004.
Record full-year 2004 fundings of $12.4 billion swallowed the previous year's $8.0 billion.
Wholesale originations accounted for 90% of the year's volume and retail loans made up the remaining 10%, the subprime company reported.
The size of the servicing portfolio grew a whopping 82% over the year to $6.7 billion primarily due to Accredited's quarterly securitization program and an increase in the loans held for disposition.
As of the end of the fourth quarter, delinquent loans of 30 days or more past due, including foreclosures and real estate owned, were reported at 1.7% of the serviced portfolio, which is slightly better than 1.8% a year earlier.
Accredited said its annual net income of $130.8 million grew 31% from 2003.
"We view 2005 as a year of opportunity and challenge, and believe that we have reflected both in our forecast of a 15% average annual earnings growth for the next three to five years and $6.90 earnings per share for 2005," commented company chief executive James Konrath in the announcement.
In a recent report, FindProfit referred to Accredited as a "ticking time bomb," noting that its portfolio is already leveraged up by around 18x, which means that there's little room to grow through additional leverage.