Mr. Tomkinson, Chairman and CEO of Impac Mortgage Holdings, Inc., stated, “The net earnings and cash flows from the Company’s mortgage operations are, and will continue to be, the main drivers of the Company’s consolidated earnings. In fact, origination volumes have grown quarter over quarter to new record levels since our re-emergence in the mortgage lending business. Although it has taken over four years, through our hard work and persistence the Company and our employees are finally seeing the fruits of our labor.”Discontinued Operations The Company’s discontinued operations had a net loss of $(9.0) million or $(1.15) per diluted share for the third quarter 2012. This loss was primarily due to the Company taking a charge of $6.1 million during the third quarter of this year, as a result of its intentions to settle two of its remaining legacy lawsuits. Given our significant lending and securitization volumes completed by the previously discontinued mortgage lending operations in years prior to 2008, we, like others, have been sued, sometimes alongside dozens of other co-defendants. We have diligently defended each, sometimes at considerable expense, because, we believed that the Company ultimately had, in most cases, much less exposure, if any, from these claims, and had hoped to end them in a manner where we could preserve as much shareholder value as possible. Management believes it is in the best interest of the shareholders to settle these lawsuits rather than be faced with the uncertainty of any court rulings, the exorbitant cost in terms of legal fees, the time involved and the distractions these suits create in defending them. It is also important to note that the terms of the settlements have been structured in a manner to minimize impact to our cash flows. The legal settlement charge will result in the Company reporting a consolidated net loss of approximately $(2.3) million or $(0.29) per share in the third quarter of 2012, as compared to net earnings of $4.2 million in the second quarter of 2012. Excluding the legal settlement charge, the third quarter 2012 results would be consistent with the second quarter 2012.
Mr. Tomkinson stated, “With these settlements, management will be able to take what we believe to be its final steps in resolving the legacy obligations and contingencies of IMH, and put the Company’s mortgage lending business in its best position since the financial crisis began in 2007. Further, it helps put the Company in a position to take advantage of opportunities that exist today in the mortgage lending market.”
|Q3 2012||Q2 2012||Q3 YTD|
|Net earnings (loss)||Diluted EPS||Net earnings (loss)||Diluted EPS||Net earnings (loss)||Diluted EPS|
|Real Estate Services||3,585||0.46||4,012||0.48||10,562||1.35|
|Net (loss) earnings attributable to IMH||$||(2,279||)||$||(0.29||)||$||4,212||$||0.51||$||(2,857||)||$||(0.36||)|
For a discussion of these and other risks and uncertainties that could cause actual results to differ from those contained in the forward looking statements, see Item 1A. “Risk Factors” and Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the period ending December 31, 2011. This document speaks only as of its date and we do not undertake, and specifically disclaim any obligation, to release publicly the results of any revisions that may be made to any forward looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statementsAbout the Company Impac Mortgage Holdings, Inc. (IMH) provides mortgage and real estate solutions that address the challenges of today’s economic environment. Impac’s operations include mortgage lending, portfolio loss mitigation and real estate services. The Company also specializes in the management of long-term mortgage portfolios, including the residual interest in securitizations, to mitigate losses and maximize cash flows. For additional information, questions or comments, please call Justin Moisio in Investor Relations at (949) 475-3988 or email firstname.lastname@example.org. Web site: http://ir.impaccompanies.com or www.impaccompanies.com