A publicly-traded nonprime lender based in the state of New York reported record quarterly mortgage originations and increasing profits.
Net income was $8 million during the fourth quarter, Delta Financial Corp. announced today. Earnings were up from $5.7 million a year earlier.
The Woodbury-based company said fourth quarter residential production was $1.1 billion, up 13% from the third quarter and 3% higher than the same period in 2005. For all of 2006, production was $4.0 billion.
Delta said it sold $210 million in mortgages with an average premium of 3.9% on a whole-loan basis during the latest quarter.
"We continue to distinguish ourselves in the sector, particularly during a time that so many have struggled with loan performance, profitability and loan production issues," said Delta CEO Hugh Miller in the statement. "We attribute these results to predominantly two factors - our tenure and experience in the industry and our distinct business model."
"The majority of our senior management team has been with Delta in excess of 10 years. Of note, I have been with the company for 22 years and our chief financial officer has been with us for 14 years," Miller continued.
He noted that the key distinguishing elements of the business model "include originating predominantly fixed-rate loans, retaining the majority of the loans we originate and maintaining a diversified origination platform in which approximately 50 percent of our loan production emanates from our retail franchise."
Delta has avoided interest-only adjustable-rate mortgages and 100 percent loan-to-value stated-income loans, Miller added.
Delta reported it boosted its allowance for loan losses to $55.3 million as of Dec. 31, 2006, up from $36.8 million a year earlier.
Miller said their loss experience has stayed low because their portfolio was seasoned only 13 months on a weighted-average basis and because 2004 originations have performed better than expected.