Thornburg Mortgage (TMA) tumbled 11% after the struggling mortgage lender suspended its dividend and posted a steep third-quarter loss.
The Santa Fe, N.M., maker of jumbo loans said it lost $1.08 billion, or $8.83 a share, for the quarter ended Sept. 30, reversing the year-ago profit of $75 million, or 64 cents a share.
The latest quarter included $1.09 billion in losses tied to the sale of part of its mortgage-backed securities portfolio. The company also incurred a $12.4 million loss on its loan fundings during the quarter and a $3.7 million loss from hedging these commitments on loans that were funded during the third quarter in which the company had locked an interest rate for borrowers prior to the increase in mortgage interest rates that occurred in the third quarter.
The company said it also found it necessary to obtain additional short-term financing during the quarter in order to avoid additional asset sales, and was able to do so by paying commitment fees to certain finance counterparties in exchange for short-term financing commitments.
Thornburg's bad news comes amid a flurry of mortgage-related writedowns at big financial companies, ranging from
. Countrywide, led by stock-selling CEO Angelo Mozilo, reported late Tuesday that it would take up to $150 million in charges in coming quarters to cover the costs of a mass firing that will cost 12,000 workers their jobs.
Thornburg, like many of its peers, continues to blame the summer's credit crunch for the mess it finds itself in.
"Given the unprecedented turmoil in the credit markets that negatively impacted the company's financial results for the third quarter, our ongoing concern about existing leveraged mortgage investors whose financing needs have yet to be resolved and the lack of clarity about normalized earnings given all of the changes in our balance sheet, we believe it is in the best long-term interests of our shareholders to forgo payment of a common dividend for the quarter and to make conserving cash, enhancing liquidity and selectively acquiring new assets our key priorities during the fourth quarter," Thornburg said.
Shares fell $1.31 to $10.09.