Magazine article American Banker

Countrywide Had Good 4Q, 2d-Best Originations Year

Magazine article American Banker

Countrywide Had Good 4Q, 2d-Best Originations Year

Article excerpt

Reflecting the healthy state of the mortgage industry, Countrywide Credit Industries Inc. on Thursday posted fourth-quarter earnings of $104.2 million, up 9% from the third quarter and 4% from the year-earlier period.

The Calabasas, Calif., company's per-share earnings were 85 cents, beating the Thomson Financial/First Call analyst consensus estimate by 1 cent.

Countrywide executives gave partial credit to the vibrant refinance market, which has soared over the last four months as mortgage rates have plummeted to close to 7%.

"This is an economic environment that Countrywide excels in, and we're very well prepared to maximize the opportunity it presents," said Stanford L. Kurland, president and chief executive officer of Countrywide Home Loans.

The company pumped out $20.5 billion in originations in the fourth quarter, which ended Feb. 28, and $68.9 billion in originations on the year -- the second-highest one-year total in its history. Moreover, consumer mortgage originations provided 51% of earnings in the quarter, against 2% in the year-ago quarter.

Angelo R. Mozilo, chairman, chief executive, and president of the parent company, said Countrywide expects to report first-quarter earnings per share of 93 cents to 98 cents.

Countrywide's current pipeline of loans is $15.4 billion, up 82% over last year, and its servicing portfolio, representing nearly three million mortgage customers, stands at $294 billion.

Countrywide officials said their ancillary business units, such as insurance and technology ventures, accounted for 47% of fourth-quarter earnings, a rise of 9 percentage points over the previous quarter and 15 percentage points over the same quarter last year. Carlos Garcia, chief financial officer at Countrywide, said in a conference call Thursday that many of the units require very little capital yet generate high returns on equity. …

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