Impac Mortgage Holdings, Inc. Announces Acquisition of CashCall’s Mortgage Operations
09 January 2015 - 1:15AM
Business Wire
Impac Mortgage Holdings, Inc. (NYSE MKT: IMH) (“Impac” or the
“Company”), is pleased to announce its subsidiary, Impac Mortgage
Corp., has signed a definitive agreement to acquire the mortgage
operations of CashCall, Inc. (“CashCall”). In 2013, CashCall’s
mortgage division was ranked by the Mortgage Bankers Association as
the 31st largest residential mortgage originator with approximately
$6.5 billion in total originations. In the fourth quarter of 2014,
CashCall’s mortgage division volume was approximately $800 million
and is expected to add significant retail direct origination volume
to the Impac Mortgage Corp. platform beginning in 2015. CashCall’s
mortgage operations will operate as a separate division of Impac
Mortgage Corp. under the name CashCall Mortgage.
The Company considers the acquisition to be a major strategic
accomplishment for Impac Mortgage Holdings, Inc. as it adds a
centralized retail call center to Impac Mortgage Corp.’s current
business to business origination channels. With this acquisition,
Impac Mortgage Corp. is expected to be a top ranked nationwide
mortgage originator, offering a full spectrum of loan products
including agency conventional, non-agency, prime jumbo and
non-qualified mortgages.
CashCall Mortgage’s operations are a centralized retail call
center where loan applications are received and taken by loan
agents directly from consumers and through the internet. The
transaction is structured as a purchase of certain of the assets of
CashCall, including CashCall Mortgage’s call center and lead
management technology, integrated with its highly customized loan
origination system. CashCall Mortgage is expected to operate in the
same facility as today with the current employees to be hired by
Impac Mortgage Corp. Impac believes that the centralized call
center operations, combined with this technology, makes CashCall
Mortgage a scalable retail origination platform that is able to
close loans faster than competitors in a highly efficient manner.
According to the Mortgage Bankers Associations (MBA) third quarter
2014 performance report, CashCall would rank among one of the most
efficient retail originators, closing on average over 4 loans per
production employee as compared to the MBA average of 2.1 loans and
over 13 closed loans per sales employee compared to MBA averages of
5.3 loans.
Impac Mortgage Corp. has been doing business with CashCall on a
correspondent basis since 2013, and CashCall’s overall loan
performance and delivery has reinforced Impac’s decision to
complete the acquisition. Therefore, the Company expects to
leverage CashCall Mortgage’s platform and proven multifaceted
marketing strategies to increase origination volume of expanded
products including the Company’s AltQM loan programs and government
insured Ginnie Mae programs. In addition this acquisition is
expected to unlock opportunities by expanding CashCall Mortgage’s
geographic footprint from 11 licensed states up to 42 states.
The transaction has been structured with a significant
contingent component of the purchase price with the intent to
minimize the financial risk for Impac Mortgage Holdings, Inc. while
being accretive to earnings. Also, with Impac’s significant tax
loss carry forwards, all net profits from CashCall Mortgage are
expected to generate significant tax benefits.
Mr. Joseph Tomkinson, Chairman and CEO of Impac Mortgage
Holdings, Inc., commented, “The CashCall Mortgage name adds
significant brand equity to the Impac franchise. Additionally, we
believe that the expansion of product capabilities and geographical
footprint, for both sides, will create significant strategic and
financial benefits. This transaction increases the scale of our
overall platform which is expected to leverage existing
infrastructure and enhance profitability. Furthermore, increased
profitability will accelerate the ability to monetize the value of
tax loss carry forwards.”
Forward-Looking Statements
This press release contains certain forward looking statements
within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. Forward looking
statements, some of which are based on various assumptions and
events that are beyond our control, may be identified by reference
to a future period or periods or by the use of forward looking
terminology, such as “may,” “will,” “intends,” “believe,” “expect,”
“likely,” ”appear,” “should,” “could,” “anticipate,”
“expectations,” “plan,” “considers,” or similar terms or variations
on those terms or the negative of those terms. The forward looking
statements are based on current management expectations. Actual
results may differ materially as a result of several factors,
including, but not limited to the following: legal or regulatory
proceedings or other matters that affect the timing or ability to
complete the transaction as contemplated; the possibility that the
transaction does not close, including but not limited to, due to
the failure to satisfy the closing conditions; adverse effects on
the Company’s stock price resulting from the announcement or
completion of the acquisition; failure to achieve the benefits
expected of the transaction; costs and difficulties related to the
integration of the business and operations with the Company’s
operations; whether the completion of the transaction will have the
accretive effect on the Company’s earnings that it expects;
unexpected costs, liabilities, charges or expenses resulting from
the transaction; successful development, marketing, sale and
financing of new mortgage products, including the non-Qualified
Mortgage and conventional and government loan programs; ability to
increase our market share in the various residential mortgage
businesses; volatility in the mortgage industry; unexpected
interest rate fluctuations and margin compression; our ability to
manage personnel expenses in relation to mortgage production
levels; our ability to successfully use warehousing capacity;
increased competition in the mortgage lending industry by larger or
more efficient companies; issues and system risks related to our
technology; more than expected increases in default rates or loss
severities and mortgage related losses; ability to obtain
additional financing through lending and repurchase facilities,
strategic relationships or otherwise; the terms of any financing
that we do obtain and our expected use of proceeds from any
financing; increase in loan repurchase requests and ability to
adequately settle repurchase obligations; failure to create brand
awareness; the outcome, including any settlements, of litigation or
regulatory actions pending against us or other legal contingencies;
and our compliance with applicable local, state and federal laws
and regulations and other general market and economic
conditions.
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 the annual and quarterly reports we
file with the Securities and Exchange Commission. 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
statements
About the Company
Impac Mortgage Holdings, Inc. (IMH or Impac) provides innovative
mortgage lending and warehouse lending solutions, as well as real
estate solutions that address the challenges of today’s economic
environment. Impac’s operations include mortgage and warehouse
lending, servicing, portfolio loss mitigation and real estate
services as well as the management of the securitized long-term
mortgage portfolio, which includes the residual interests in
securitizations.
For additional information, questions or comments, please call
Justin Moisio, VP Investor Relations at (949) 475-3988 or email
Justin.Moisio@ImpacMail.com. Web site: http://ir.impaccompanies.com
or www.impaccompanies.com
Impac Mortgage Holdings, Inc.Justin Moisio, 949-475-3988VP
Investor RelationsJustin.Moisio@ImpacMail.com
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