PSMH: Update on Iowa Mortgage Professionals, Inc. Acquisition
Ann Heffron, CFA
On January 13, 2012, PSMH released pro forma financial statements for its acquisition of Iowa Mortgage Professionals, Inc. (IMP), which closed on November 1, 2011. Iowa Mortgage Professionals, Inc. is a mortgage banking and brokerage company based in Des Moines, Iowa, and had annual loan production of $164 million in 2010. The principal owner of IMP, Mr. Randy Stevens, received 1,285,714 shares of PSMH in exchange for all the outstanding equity shares of IMP. In addition, Mr. Stevens was named a Vice President of UCMC and Regional Manager for the Iowa operations. The region includes Iowa, Wisconsin, Minnesota, Nebraska, Illinois, and Missouri. Mr. Stevens also became a member of the UCMC board of directors.
In other news, PSMH announced the resignation of Matt Lamoreux as director of the Company on January 3, 2012 and on December 29, 2011, the change of domicile for the Company to the State of Delaware from the State of Nevada.
PSMH also made changes to its stock incentive plan. On December 12, 2011, shareholders approved the 2012 Stock Incentive Plan (2012 Plan) for the issuance of up to 6,000,000 shares of common stock with a $0.001 par value per share that became effective on January 1, 2012 and extends for 10 years. All of the Company’s employees, officers and directors, as well as consultants and advisors to the Company are eligible to be granted awards under the 2012 Plan. The previous plan, the 2002 Stock Option/Stock Issuance Plan under which 3,250,000 shares had been authorized and 3,111,194 total shares had been issued, expired on December 31, 2011. As of the expiration date, 400,000 unvested restricted shares were outstanding under the 2002 Plan and will continue to have full force and effect.
We have made no changes to our EPS estimates as a result of the 2012 Stock Incentive Plan or the release of the pro forma financial statements for Iowa Mortgage Professionals, Inc. We had already incorporated the impact of the IMP acquisition on financial results in our earlier estimates. Therefore, we are maintaining our diluted earnings per share estimates of $0.25 in fiscal 2012 (June 30) and of $0.50 in fiscal 2013, as well as our Outperform recommendation and $3.00 12-month price target.
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 two wholly owned subsidiaries, PrimeSource Mortgage, Inc. (PSMI) and United Community Mortgage Corp. (UCMC). Through its subsidiaries, PSMH operates and is licensed in the following 17 states: Arkansas, California, Colorado, Georgia, Idaho, Iowa, Kentucky, Louisiana, Montana, Nebraska, New Jersey, New Mexico, New York, Oklahoma, Texas, Washington, and Wyoming. State license applications are pending in an additional 17 states, with the majority expected to be approved by June 30, 2012.
To view our most recent research report on PSMH or subscribe to our daily morning email alert, visit http://scr.zacks.com/.
PSM HOLDINGS (PSMH): Free Stock Analysis Report
To read this article on Zacks.com click here.
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment