2 ‘Sub-Prime’ Lenders Still Strong Amid Turmoil

Two Orange County-based lenders indicated Friday they are thriving despite financial turmoil that has shaken the “sub-prime” lending industry.

New Century Financial Corp. of Irvine posted record earnings for the third quarter, and Long Beach Financial Corp. of Orange said it expects to report record quarterly results later this month.

New Century, benefiting from a nationwide expansion, said net income for the three months increased 23% to $8.6 million, or 57 cents a share, from $7 million, or 46 cents a share, for the same period a year ago. Revenue was up 49% to $48.3 million from $32.5 million.

Loan originations surged 59% to $914 million from $574 million a year earlier, the company said.

As a result of its expansion, the company generated 40% of its revenue outside of California, up from 25% in the third quarter last year, Chief Executive Robert Cole said. New Century now has 140 offices in 33 states.

Long Beach Financial said it expects to report record quarterly earnings and loan production when it releases results Oct. 26.

Earnings should hit 34 cents a share, surpassing analysts’ estimates by a penny. A year ago, the company earned 30 cents a share.

The company also said its loan production should top its previous record of $652 million in the second quarter.

In August, Long Beach said it had pre-sold mortgages that the company expects to originate through the end of the year--volume that should surpass $1 billion--to a Wall Street investment firm.

The companies’ stocks were mixed Friday. New Century closed at $7.50, down 88 cents, while Long Beach Financial was up 94 cents to $6.56. Both stocks are trading far below their highs for the year.

Shares of sub-prime mortgage lenders, which provide loans to people with less than stellar credit, have plummeted recently amid concerns that a credit crunch would leave their companies in financial disarray.