AMERICAN BUSINESS FINANCIAL SERVICES REPORTS RECORD THIRD QUARTER EPS; ORIGINATIONS INCREASE 40 %.Business Editors BALA CYNWYD Cynwyd is a small village in Denbighshire, Wales, about two miles south-west of the town of Corwen. It is home to a large factory, run by Ifor Williams Trailers. See also
American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Business Financial Services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. , Inc. (Nasdaq: ABFI) a leading provider of diversified financial The diversified financial services segment includes a range of consumer and commercially-oriented companies offering a wide variety of products and services, including various lending products (such as home equity loans and credit cards), insurance, and securities and investment services, today reported results for the Company's third fiscal quarter ended March 31, 2000. The Company reported earnings per share of $1.12, up 22% from $0.92 a year earlier, and a 12% increase in net income from $3.5 million to $3.9 million. The Company also had $295 million of loan originations The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. for the third quarter, up 40% from the same period of the previous year, and a 40 basis point decline in delinquencies to 3.18% from the previous quarter, ending December December: see month. 31, 1999. As of March 31, 2000, the Company's managed portfolio was $1.7 billion, up 68% from the same period a year earlier.
----------------------------- ------------------------------------
Third Quarter
(in millions, except EPS) FY00 FY99 change
----------------------------- ------------- ------------ ---------
Total Revenues $34.1 $23.0 49%
Originations $295 $211 40%
Net Income $3.9 $3.5 12%
EPS (diluted) $1.12 $0.92 22%
3/31/00 12/31/99
Delinquencies 3.18% 3.58% -40bp
----------------------------- ------------- ------------ ---------
----------------------------- ------------------------------------
Nine Months
(in millions, except EPS) FY00 FY99 change
----------------------------- ------------ ------------- ---------
Total Revenues $92.6 $61.2 51%
Originations $801 $620 29%
Net Income $11.5 $10.4 10%
EPS (diluted) $3.23 $2.74 18%
Delinquencies
----------------------------- ------------ ------------- ---------
Focusing on this quarter's record originations, ABFI chairman and chief executive officer, Anthony J. Santilli, said, "We continue to build a valuable portfolio of serviced loans. The income we earn from our serviced portfolio is significant to the quality of our earnings both now and in the future." He added that ABFI's ability to originate o·rig·i·nate v. 1. To bring into being; create. 2. To come into being; start. , fund and service high quality loans enables the Company to profit from an increasing stream of fees, accretion The act of adding portions of soil to the soil already in possession of the owner by gradual deposition through the operation of natural causes. The growth of the value of a particular item given to a person as a specific bequest under the provisions of a will between the , and servicing income. "Our growing servicing portfolio enhances the long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. value of our franchise, reduces earnings risk, and provides a growing source of cash to fund future growth," Santilli said. The average coupon A certificate evidencing the obligation to pay an installment of interest or a dividend that must be cut and presented to its issuer for payment when it is due. Coupons are usually attached to a document, such as a promissory note, bond, share of stock, or a bearer on ABFI's pool of business and consumer loans was almost 12% for loans originated during the quarter. This was higher than the industry average for the period of 10.4%. Santilli noted, "Because of our unique mix of business loans and home equity loans, we were able to experience a better weighted average coupon Weighted average Coupon The weighted average of the gross interest rates of mortgages underlying a pool as of the pool issue date; the balance of each mortgage is used as the weighting factor. , which sets us apart from our competitors COMPETITORS, French law. Persons who compete or aspire to the same office, rank or employment. As an English word in common use, it has a much wider application. Ferriere, Dict. de Dr. h.t. ." ABFI's delinquency delinquency Criminal behaviour carried out by a juvenile. Young males make up the bulk of the delinquent population (about 80% in the U.S.) in all countries in which the behaviour is reported. rate of 3.18%, which is down 40 basis points from the second fiscal quarter ended December 1999, remains one of the lowest in the industry. In addition, ABFI's "over 30 day delinquency rate" of 5.3% on a trailing 12-month basis remains well below the industry average. The Company's REO reo Noun NZ a language [Maori] (foreclosed properties and deeds deed n. 1. Something that is carried out; an act or action. 2. A usually praiseworthy act; a feat or exploit. 3. Action or performance in general: Deeds, not words, matter most. acquired in lieu of Instead of; in place of; in substitution of. It does not mean in addition to. foreclosure foreclosure Legal proceeding by which a borrower's rights to a mortgaged property may be extinguished if the borrower fails to live up to the obligations agreed to in the loan contract. ) was 0.85% of the total portfolio, down from 0.90% at the end of December 1999. Santilli explained, "We attribute (1) In relational database management, a field within a record. (2) In object technology, a single element of data. See instance attribute and static attribute. our asset quality to a number of factors including retail origination Origination The process through which a mortgage lender creates a mortgage secured by some amount of the mortgagor's real property. Notes: Also known as loan origination, everyone must go through the origination process when securing a mortgage for a piece of real and centralized cen·tral·ize v. cen·tral·ized, cen·tral·iz·ing, cen·tral·iz·es v.tr. 1. To draw into or toward a center; consolidate. 2. underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. . Our emphasis on prompt and proactive collections is equally important. The absolute dollar increase in delinquencies between the second and third quarter was $430 thousand, while our overall managed portfolio grew by more than $200 million." Nine Month Results Total revenues for nine months ended March 31, 2000 were $92.6 million, an increase of 51% over the same period last year. For nine months, fee income was $8.9 million, up 28% and servicing income was approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $3.4 million up 74% from the same period last year. Nine month net income was $11.5 million, a 10% increase over net income of $10.4 million for the nine months ended March 31, 1999. Fully diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of for the nine months was $3.23, an increase of 18% over fully diluted earnings per share of $2.74 a year earlier. Other Third Quarter Highlights - Launched EasyLoan Advisor, a proprietary patent-pending system which provides personalized per·son·al·ize tr.v. per·son·al·ized, per·son·al·iz·ing, per·son·al·iz·es 1. To take (a general remark or characterization) in a personal manner. 2. To attribute human or personal qualities to; personify. services and solutions to retail customers through interactive web dialog on its www.UplandMortgage.com web site. - The Company entered into a strategic partnership with VerticalNet (Verticalnet Inc., Malvern, PA, www.verticalnet.com) A company that was an early pioneer in the development and operation of business-to-business Web portals for scientific, industrial and manufacturing industries. (NASDAQ:VERT) that will enable ABFI to offer secured business loans across VerticalNet's online trading Online Trading Making trades via the Internet. Notes: The use of online trading increased dramatically in the mid to late 1990's with the advent of high-speed computers and Internet connections. Stocks, bonds, options, futures, and currencies can all be traded online. communities. - ABFI completed its largest securitization Securitization The process of creating a financial instrument by combining other financial assets and then marketing them to investors. Notes: Mortgage backed securities are a perfect example of securitization. May also be spelled as "securitisation. ever. The Company's third quarter $237 million deal represents its 9th consecutive quarterly securitization, and ranks it as a Top 20 subprime mortgage loan securitizer. - ABFI's newly formed subsidiary, Upland Upland, city (1990 pop. 63,374), San Bernardino co., S Calif., in a citrus-fruit region at the foot of the San Gabriel Mts.; inc. 1906. Citrus fruits and grapes are packed and processed in the city. Paint, orchard heaters, auto parts, and feed products are also made. Bank, filed an application with the Federal Deposit Insurance Corporation Federal Deposit Insurance Corporation (FDIC), an independent U.S. federal executive agency designed to promote public confidence in banks and to provide insurance coverage for bank deposits up to $100,000. (FDIC FDIC See: Federal Deposit Insurance Corporation FDIC See Federal Deposit Insurance Corporation (FDIC). ) and the Utah Department of Financial Institutions, for a bank charter in the state of Utah as a Utah Industrial Loan Corporation. About American Business Financial Services, Inc.: American Business Financial Services, Inc. is a diversified financial services company which provides credit services and investment products to consumers and businesses, including business loans, first and second home equity mortgage loans, and subordinated Subordinated A claim ranked lower in priority than other claims. Common stock claims are always subordinated to debt. investment notes. The Company offers its products and services to consumers and businesses nationwide. For further information contact Albert Albert, German churchman Albert, 1490–1545, German churchman, cardinal of the Roman Catholic Church. A member of the house of Brandenburg, he became (1514) Archbishop of Mainz. W. Mandia, Executive Vice President and CFO See Chief Financial Officer. , 610-617-4939, Keith Keith may refer to: People with the given name Keith:
Bratz is a 2001 childrens and teens doll franchise produced by MGA Entertainment. , VP-Corporate Communications, 610-617-7475, or David R. Evanson, Financial Communications Associates, Inc., 610-649-3604. Certain statements contained in this press release which are not historical fact, may be deemed to be forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. under federal securities laws. There are many important factors that could cause American Business Financial Services and its subsidiaries' actual results to differ materially from those indicated in the forward-looking statements. Such factors include, but are not limited to, general economic conditions, including interest rate risk, future residential real estate values, regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. changes (legislative and otherwise) affecting the real estate market and mortgage lending activities, competition, demand for ABFI's and its subsidiaries' services, availability of funding, loan payment rates, delinquency and default rates, changes in factors influencing the loan securitization market and other risks identified in American Business Financial Services, Inc.'s Security and Exchange Commission filings. TABLES TO FOLLOW
AMERICAN BUSINESS FINANCIAL SERVICES, INC.
CONSOLIDATED STATEMENTS OF INCOME
( $ in thousands )
Three Months Ended Nine Months Ended
March 31, March 31,
------------------- -------------------
2000 1999 2000 1999
-------- -------- -------- --------
(Unaudited) (Unaudited)
REVENUES
Gain on sale
of loans and
leases $23,412 $17,417 $63,025 $45,789
Interest and
fees 4,723 4,271 14,219 12,717
Interest
accretion on
interest-only
strips 4,836 307 11,902 699
Servicing income 1,173 952 3,412 1,967
Other income 2 22 5 37
-------- -------- -------- --------
Total Revenues 34,146 22,969 92,563 61,209
-------- -------- -------- --------
EXPENSES
Interest 10,112 6,126 26,175 15,674
Provision for
credit losses 331 542 1,040 745
Employee related
costs 2,820 1,157 7,342 3,666
Sales and
marketing 6,081 5,830 19,945 15,083
General and
administrative 8,277 3,832 18,956 9,910
-------- -------- -------- --------
Total Expenses 27,621 17,487 73,458 45,078
-------- -------- -------- --------
INCOME BEFORE
PROVISION FOR
INCOME TAXES 6,525 5,482 19,105 16,131
PROVISION FOR
INCOME TAXES 2,610 1,973 7,642 5,704
-------- -------- -------- --------
NET INCOME $ 3,915 $ 3,509 $11,463 $10,427
======== ======== ======== ========
EARNINGS PER
COMMON SHARE
Basic $ 1.16 $ 0.95 $ 3.32 $ 2.82
======== ======== ======== ========
Diluted $ 1.12 $ 0.92 $ 3.23 $ 2.74
======== ======== ======== ========
Average Common
Shares:
Basic 3,375 3,703 3,451 3,700
Diluted 3,502 3,806 3,538 3,810
American Business Financial Services, Inc. and Subsidiaries
Consolidated Balance Sheets
(dollars in thousands)
March 31, June 30,
2000 1999
----------- ----------
(Unaudited) (Note)
Assets
Cash and cash equivalents $ 45,399 $ 22,395
Loan and lease receivables, net
Available for sale 33,259 33,776
Other 10,819 6,863
Interest-only and residual strips 258,772 178,218
Receivable for sold loans and leases 62,651 66,086
Prepaid expenses 4,412 1,671
Property and equipment, net 17,299 10,671
Servicing rights 66,081 43,210
Other assets 35,065 33,411
--------- ---------
Total Assets $ 533,757 $ 396,301
========= =========
Liabilities and Stockholders' Equity
Liabilities
Subordinated debt $ 329,038 $ 211,652
Warehouse lines and other notes payable 57,302 58,691
Accounts payable and accrued expenses 27,148 26,826
Deferred income taxes 26,198 16,604
Other liabilities 27,579 24,282
--------- ---------
Total Liabilities 467,265 338,055
--------- ---------
Stockholders' Equity
Preferred stock, par value $.001,
Authorized, 1,000,000 shares
Issued and outstanding, none -- --
Common stock, par value $.001,
Authorized 9,000,000 shares
Issued: 3,639,704 and 3,703,514
shares (including treasury
shares of 250,300 and 116,550) 4 3
Additional paid-in capital 24,284 23,339
Accumulated other comprehensive income 3,663 3,354
Retained earnings 42,125 33,596
Treasury stock: 250,300 and 116,550 shares (2,984) (1,446)
--------- ---------
67,092 58,846
Note receivable (600) (600)
--------- ---------
Total stockholders' equity 66,492 58,246
--------- ---------
Total liabilities and
stockholders' equity $ 533,757 $ 396,301
========= =========
Note: The balance sheet at June 30, 1999 has been derived from the
audited financial statements at that date. See accompanying notes to
consolidated financial statements
American Business Financial Services, Inc. and Subsidiaries
Managed Portfolio Quality
The following table provides data concerning delinquency
experience, REO and loss experience for the managed loan and lease
portfolio (dollars in thousands):
March 31, 2000 December 31, 1999
-------------------- ---------------------
Delinquency
by Type Amount % Amount %
------------- ------ ------------- -------
Business
Purpose Loans
Total managed
portfolio $ 205,590 $ 185,820
========== ==========
Period of
delinquency
31-60 days $ 1,302 .63% $ 605 .33%
61-90 days 990 .48 1,328 .71
Over 90 days 10,903 5.30 8,729 4.70
---------- ------ ---------- -------
Total delinquencies $ 13,195 6.41% $ 10,662 5.74%
========== ====== ========== ======
REO $ 2,314 $ 3,211
========== ==========
Home Equity Loans
Total managed portfolio $1,356,772 $ 1,155,438
========== ===========
Period of delinquency
31-60 days $ 5,965 .44% $ 8,272 .72%
61-90 days 4,814 .35 5,371 .46
Over 90 days 28,068 2.07 27,505 2.38
---------- ------ ---------- ------
Total delinquencies $ 38,847 2.86% $ 41,148 3.56%
========== ====== ========== ======
REO $ 12,146 $ 10,221
========== ==========
Equipment Leases
Total managed portfolio $ 134,854 $ 155,282
========== ==========
Period of delinquency
31-60 days $ 597 .44% $ 612 .39%
61-90 days 524 .39 379 .24
Over 90 days 885 .66 817 .53
---------- ------ ---------- ------
Total delinquencies $ 2,006 1.49% $ 1,808 1.16%
========== ====== ========== ======
Combined
Total managed portfolio $1,697,216 $ 1,496,540
========== ===========
Period of delinquency
31-60 days $ 7,864 .46% $ 9,489 .63%
61-90 days 6,328 .37 7,078 .47
Over 90 days 39,856 2.35 37,051 2.48
---------- ------ ---------- ------
Total delinquencies $ 54,048 3.18% $ 53,618 3.58%
========== ====== ========== ======
REO $ 14,460 .85% $ 13,432 .90%
========== ====== ========== ======
Losses (recoveries)
experienced during
the 3 month
period(a)(b)
Loans $ 751 .21% $ 686 .22%
====== ======
Leases 212 .67% 893 2.62%
---------- ====== ---------- ======
Total managed
portfolio $ 963 .25% $ 1,579 .46%
========== ====== ========== ======
(a) Percentage based on annualized losses and average managed
portfolio.
(b) Losses recorded on our books were $575,000 and losses absorbed by
loan securitization trusts were $388,000 for the three months
ended March 31, 2000. Losses recorded on our books were $1.1
million and losses absorbed by loan securitization trusts were
$517,000 for the three months ended December 31, 1999. Losses
recorded on our books were $10,000 and losses absorbed by
securitization trusts were $751,000 for the three months ended
September 30, 1999.
September 30, 1999
-----------------------
Amount %
------------ ---------
Delinquency
by Type
Business Purpose
Loans
Total managed portfolio $ 165,827
==========
Period of delinquency
31-60 days $ 710 .43%
61-90 days 1,165 .70
Over 90 days 8,732 5.27
---------- ------
Total delinquencies $ 10,607 6.40%
========== ======
REO $ 3,434
==========
Home Equity Loans
Total managed portfolio $ 1,006,075
===========
Period of delinquency
31-60 days $ 5,614 .56%
61-90 days 4,807 .48
Over 90 days 20,379 2.02
---------- ------
Total delinquencies $ 30,800 3.06%
========== ======
REO $ 8,873
==========
Equipment Leases
Total managed portfolio $ 168,973
==========
Period of delinquency
31-60 days $ 300 .18%
61-90 days 236 .14
Over 90 days 2,011 1.19
---------- ------
Total delinquencies $ 2,547 1.51%
========== ======
Combined
Total managed portfolio $1,340,875
==========
Period of delinquency
31-60 days $ 6,624 .50%
61-90 days 6,208 .46
Over 90 days 31,122 2.32
---------- ------
Total delinquencies $ 43,954 3.28%
========== ======
REO $ 12,307 .92%
========== ======
Losses (recoveries)
experienced during
the 3 month
period(a)(b)
Loans $ 770 .28%
========== ======
Leases (9) (.03)%
---------- ======
Total managed
portfolio $ 761 .25%
========== ======
(a) Percentage based on annualized losses and average managed
portfolio.
(b) Losses recorded on our books were $575,000 and losses absorbed by
loan securitization trusts were $388,000 for the three months
ended March 31, 2000. Losses recorded on our books were $1.1
million and losses absorbed by loan securitization trusts were
$517,000 for the three months ended December 31, 1999. Losses
recorded on our books were $10,000 and losses absorbed by
securitization trusts were $751,000 for the three months ended
September 30, 1999.
AMERICAN BUSINESS FINANCIAL SERVICES, INC. AND SUBSIDIARIES
LOAN AND LEASE ORIGINATIONS
(in thousands)
Three Months Ended Nine Months Ended
March 31, March 31,
--------------------- ---------------------
2000 1999 2000 1999
---------- ---------- ---------- ----------
American Business
Credit $ 28,815 $ 16,771 $ 81,056 $ 42,721
Upland Mortgage /
NJMIC 252,290 161,317 663,394 474,815
Processing
Service Center 13,676 8,408 36,900 25,306
American Business
Leasing 22 24,441 19,631 76,745
-------- -------- -------- --------
Total Company $294,803 $210,937 $800,981 $619,587
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