Increased competition and declining home sales lowered the net income of the Hammond Co., a Newport Beach mortgage banking firm, to $144,227 for its fiscal third quarter, ended Dec. 31. That marked an 85% drop from $964,952 earned in the previous year's third quarter. Quarterly revenues fell 37.5%, to $6 million from $9.6 million a year earlier. For the 9-month period, the company reported $609,925 in net income, a 49% drop from the $1.2 million earned in the same period the previous year. Total revenues in the period fell 18%, to $19.4 million from $23.7 million the previous year. Thomas Hammond, the company's president, said volatile interest rates also contributed to the lower financial results.