RTTNews) - Monday, Thornburg Mortgage, Inc. (TMA: News ), a residential mortgage lending company, announced a jump in its profit for the second quarter 2008, primarily due to decreases in the fair value of the Principal Participation Agreement, Additional Warrant Liability and the Senior Subordinated Notes, along with a gain on the extinguishment of asset-based commercial paper. However, net interest income fell by 48%.
The Santa Fe, New Mexico-based company reported net income before preferred stock dividends of $412.3 million or $0.84 per share, for the second quarter, up from $83.4 million or $0.66 per share for the year-ago quarter. There were no dividends for second quarter, compared with $5.32 million given in the year-ago quarter.
The increase in net income was mainly due to decreases in the fair value of the Principal Participation Agreement and Additional Warrant Liability and the Senior Subordinated Notes of $536.9 million and $24.9 million, respectively, and a gain on the extinguishment of the company's remaining asset-backed commercial paper debt of $23.0 million, partially offset by a net loss on ARM Assets of $195.2 million.
Excluding items, the company's adjusted net income for the second quarter was $22.7 million.
Analysts polled by First Call / Thomson Financial expected the company to earn $0.07 per share for the second quarter.
Net interest income for the quarter fell 48% to $53.3 million from $102.3 million in the same quarter last year. Net non-interest income for the quarter rose to $377.8 million from $6.8 million a year ago.
Further, the company has commenced its exchange offer and consent solicitation for all of its outstanding preferred stock. Preferred shareholders will receive $5.00 in cash and 3.5 shares of the company's common stock for each share of preferred stock validly tendered and accepted.
TMA closed Monday's regular trade at $0.40, up $0.07 or 21.21%, on a volume of 15,527,750 shares on the NYSE. In after-hours, the stock gained $0.14 or 37.50%, trading at $0.55.
by RTT Staff Writer
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