Hammond Co. Reports Drop in First-Period Net

The Hammond Co., a Newport Beach-based mortgage banking company, reported a $112,000 profit for the period ended June 30. While earnings for the first quarter of Hammond’s 1986 fiscal year were down 65% from the $321,577 reported a year earlier, they represented the first quarterly profit the company has had in a year and came despite a slight decline in new loans.

Company officials said that while loan originations for the quarter declined 7% to $58.6 million from $63.1 million last year, revenues grew 47%, to $4.7 million from $3.2 million. Thomas T. Hammond, president of the company, said the larger revenues came from higher interest income generated because the company was warehousing loans--holding onto them rather than selling them to other institutions.

Net income dropped because the cost of borrowing money to finance loans increased, cutting into profits from loan interest.

Additionally, Hammond had a lower volume of new loans, so revenues from loan origination fees as well as from the sale of loans to other institutions, were reduced.