Downey Financial Corp.'s quarterly loan originations continued to slide. The company touted its capital position despite its subprime business.
First quarter loan volume was $1.26 billion, down from $1.33 billion the prior quarter, according to an announcement today. Business tumbled from $2.80 billion a year earlier.
"Last year's challenging business environment, characterized by a softening in the residential housing market and an inverted yield curve, has carried into 2007 and contributed to further declines in our loan portfolio," said Downey President and CEO Daniel D. Rosenthal in the statement. "We continue to have a strong capital position which will allow us to take advantage of any opportunities that may arise."
Noting the recent decline in credit quality and increase in lender failures, Rosenthal added, "Downey has historically been involved in subprime lending and has had very few losses. Our subprime portfolio has declined and represents less than 6% of our loan portfolio."
Downey's servicing portfolio for others was $6.0 billion as of March 31, edging up from the prior period's end, the statement said. Residential loans held for investment subject to negative amortization totaled $10.1 billion at quarter's end.
Delinquency of at least 30 days was 1.32 percent, up 20 basis points from 1.03 percent the previous quarter, Downey, which started operations in 1957, said.
Net earnings were $42.9 million during the latest quarter, falling from $53.7 million in the fourth quarter 2006, the Newport Beach, Calif.-based company reported.