Editor's note: This story has been updated to fix a reporting error made on staffing levels.
Citing “significant market pressure,” Impac Mortgage announced during its second quarter earnings call that staffing has been reduced over 48% since the beginning of 2022. A company roster that once totaled 330 now stands at 170 as of Aug. 12.
Jon Gloeckner, Impac’s principal accounting officer, said on the earnings call that the reduction was due to overall reduced volume. Operating costs decreased from $19.4 million in the first quarter of 2022 to $14.7 million in the second quarter of 2022, largely driven by a $3.9 million reduction in personnel costs.
For the second quarter of 2022, according to the earnings report, Impac reported a net loss of $13.5 million, or 64 cents per diluted common share, and an adjusted loss of $15.4 million or 71 cents per diluted common share, as compared to a net loss of $8.9 million, or 42 cents per diluted common share, and an adjusted loss of $6.9 million, or 32 cents per diluted common share, for the second quarter of 2021.
Net loss for the three months ended June 30, 2022, increased to $13.5 million as compared to $8.9 million for the three months ended June 30, 2021, the company said. The quarter-over-quarter increase in net loss was primarily due to a $10.5 million decrease in net gain on sale of loans, partially offset by a $5 million decrease in operating expenses and a $886,000 increase in other income, the company said.
The sharp and unexpected decline in net gain on sale of loans, the company said, “reflects the intense pressure on mortgage originations due to the dramatic collapse of the mortgage refinance market and the weakening mortgage purchase market, which has suffered from a lack of housing inventory and significant increase in mortgage interest rates resulting in customer affordability issues.”
George A. Mangiaracina, chairman and CEO of Impac Mortgage Holdings Inc., said the company’s financial results for the second quarter of 2022 reflect the adverse effects of the historic market dislocation and volatility across the mortgage origination industry that commenced in the fourth quarter of 2021. We continue to navigate this environment by remaining disciplined in our origination approach and vigilant in our capital markets activities with respect to product and price offerings and hedging strategies.”
Impac’s mortgage servicing portfolio decreased to $71.4 million at June 30, 2022, as compared to $71.8 million at December 31, 2021, and $48.6 million at June 30, 2021.
During the fourth quarter of 2021, it originated $382.1 million in Non-QM loans and was on pace to exceed its fourth quarter 2021 Non-QM originations during the first quarter of 2022, “prior to the recent dislocation in Non-QM pricing as a result of widening credit spreads,” the company reported. During the second quarter of 2022, Non-QM originations decreased to $80.2 million from $314.3 million during the first quarter of 2022, and down from $100.6 million during the second quarter of 2021.
