Online consumer-direct lender E-Loan this morning said its profit more than doubled in the second quarter of 2005, thanks to an increase in revenue despite a drop in loan volume.

The Pleasanton, Calif.-based lender is being acquired by Popular, Puerto Rico’s largest bank, in a move seen by its founder as a vote of confidence in the consumer-direct online lending model.

Quarterly profit for E-Loan grew to $409,000, or $0.01 per share, compared to $190,000, or zero cents per share, in the second quarter of 2004.

In the second quarter of 2005, E-Loan sold 18,139 loans, 11.3 percent fewer than the year before, with the total value falling 4 percent to $1.34 billion. The company’s volume of closed loans was down 7.8 percent to 18,520, while overall value inched up to $1.35 billion from $1.34 billion last year.

Last Wednesday, E-Loan said it agreed to be bought by Popular for about $300 million in cash, expanding Popular’s U.S. lending businesses. The transaction will expand Popular’s reach in the U.S. market and complement its existing nonprime and warehouse-lending businesses.

E-Loan shares climbed 33 percent in the wake of the acquisition news. The offer is expected to close in the fourth quarter.

E-Loan will maintain its brand and become a unit of Popular Financial Holdings, operating in Pleasanton, Calif. Mark Lefanowicz, the CEO and president of E-Loan, will serve as president. Additionally, E-Loan will retain most of its employees.

E-Loan originated more than $5 billion in mortgage, home equity and auto loans in 2004.

E-Loan’s revenues are primarily from the gain on sale of first mortgage, home equity and auto loans that the company originates, funds and then sells. E-Loan also earns interest income on mortgage and home equity loans from the time of funding through the time of sale.


Send tips or a Letter to the Editor to or call (510) 658-9252, ext. 140.

Show Comments Hide Comments


Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
Thank you for subscribing to Morning Headlines.
Back to top
We've updated our terms of use.Read them here×