Another mortgage banking company today announced record revenues and earnings. United Financial Mortgage Corp (UFM) announced results for the quarter ended July 31, 2003. In a press release to shareholders, the CEO had this to say:
"Although the recent sharp rise in interest rates has resulted in a decrease in the number of mortgage applications, it has presented the company with an opportunity to increase market share. We believe that we will have the opportunity to attract experienced mortgage professionals as our competitors have difficulty reacting to the changes in the market."
He must have read the INV press release some weeks ago.
Back in the days (not that long ago really) when NCEN was trending back downward into the mid teens (pre-split) we were all wondering the exact same thing .. "who the hell is selling?". The only difference I can see is back then and yet still today there is/was a significant amount of short seller activity. This doesn't exist with INV so it's a real head scratcher until there's either a suitor or the institutions get active.
- correct - i took everything you said into consideration - INV's profits w/ go down by the items you mention & also increased sales force - but profits s/ go up b/c they're predicting higher revenues - so on balance - i'm saying about $2/share in '04 - but we'll know more in mid Nov when mngt gives guidance - meantime - i'm gritting my teeth & wondering who the heck is selling
"The Company projects that 2003 consolidated net income will be in the range of $30 to $32 million, or between $3.50 and $3.75 per diluted share, inclusive of tax benefits recorded in the first and second quarters, totaling $9.1 million, or $1.04 per diluted share"
This $1.04 in tax cedits won't be included in 2004 earnings. Now, what do you think?
Wondering how you derived $1.00 in 2004 earnings?
INV increasing new apps by 18% comes as no real surprise, IMO, because they had already increased seasoned account execs by over 25%. If they can't grow market share, then production will be cut in half, from "expected" levels. Never mind, September was less than half July.
Do you think that INV will be able to grow market share to fully compensate market contraction in 2004? If so, what would drive the 2003 operating earnings drop from approximately $2.60 to $1.00?
Curious how you derive $2.00 in '04 earnings.
For instance, do you use a higher tax rate? When comparing to 2003, I assume you ignore 2003 earnings due to tax credits.
Do you think INV expansion can outstrip overall market contraction? Do you have any estimate of the impact of office expansion on profit margin?
I was away on vacation but am very glad to see to Sept. applications up 18% to $1.3BN.
I think this is a GREAT number.
Applications for the overall market barely budged. CFC's Sept. application grew 2.8%! This is a sign that we continue to maintain/gain market share.
The addition of $100MM to credit is also positive.
I wonder if INV can keep to their earlier earnings guidance. Given volume perhaps its a tad high.
2004 guidance should be interesting although I'm afraid some people might be dissapointed. I am expecting something around $1.
MBAA's market forecast at the end of Oct. should also be interesting.
I agree, when I do the math, I get the same number you do - $700MM funding in September. However, my $800 number is guided by Robbins comments in the 8/28/03 press release when he talked about the increasing ratio of closed loans to apps:
"While average daily new loan applications declined from June to July, AmNet's ratio of closed loans increased significantly from June to July," Robbins noted. "A larger percentage of our rate locked loan pipeline should close as interest rates rise, because the borrower's loan is guaranteed at a more favorable rate than the current market."
Anyway, we shall see when the numbers come out.