PSMH: June Loan Production Better than Expected
Ann Heffron, CFA
PSM Holdings, Inc. announced that it had achieved $57 million in loan production for the month of June, a record for the Company, and up 15% from May’s $49.7 million. For the 2012 fiscal year ending June 30, 2012, loan production was about $422 million, a gain of 194% from fiscal 2011’s $143.7 million, largely reflecting the acquisition of five companies within the last 15 months.
Positively, June loan origination volume was about $7 million higher than our estimate, a creditable performance in this environment. According to PSMH, year-to-date loan production consisted of 51% new purchase and 49% refinance transactions, and 44% were closed through conventional loans and 56% were closed through government type loans.
Despite better-than-expected loan production for June, we are making no changes to our earnings estimates at this time. PSMH should report fiscal fourth quarter earnings for the period ending June 30, 2012 in mid-September, as it typically does.
PSM Holdings, Inc. is engaged in the businesses of mortgage banking, in which PSMH both originates and funds mortgage loans through its own warehouse lines of credit and currently accounts for about 90% of closed loans, as well as mortgage brokerage, in which PSMH originates mortgage loans funded by over 50 third-party lenders. PSMH immediately sells these loans to its third-party lenders or into the secondary mortgage market. The Company offers a full range of mortgage loan products, including adjustable rate mortgages, fifteen, twenty, and thirty-year fixed rate loans, and balloon loans with a variety of maturities, as well as refinancing, construction loans, second mortgages, debt consolidation, and home equity loans.
PSMH had total assets of $5.1 million at the 2011 fiscal yearend on June 30, 2011, total revenues of $3.9 million for the 2011 fiscal year, and closed 845 mortgage loans, worth $144 million, during this period. Operations are carried out by the Company’s wholly owned subsidiary, PrimeSource Mortgage, Inc. (PSMI). Through this subsidiary, PSMH operates and is licensed in the following 13 states: Arkansas, Colorado, Florida, Iowa, Montana, Missouri, Nebraska, New Jersey, New Mexico, New York, Oklahoma, Texas, and Utah.
To view a free copy of our most recent research report on PSMH, visit Ann Heffron's page at Zacks Small Cap Research.