Aames Financial Corporation Reported Fiscal Year 2004 and Fourth Quarter 2004 Results.LOS ANGELES Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. -- Aames Aames is a surname and may refer to:
This page or section lists people with the surname Aames. Financial Corporation (OTCBB OTCBB See OTC Bulletin Board (OTCBB). :AMSF AMSF Australian Motor Sport Foundation AMSF Area Maintenance and Supply Facility (US Army) AMSF Army Morale Support Fund AMSF Area Maintenance Support Facility AMSF Army Maintenance Supply Facilities AMSF Alkali Metal Storage Facility ): --Fiscal Year 2004 Net Income of $90.7 Million. --Fiscal Year 2004 Loan Production of $7.0 Billion Compared to $4.4 Billion a Year Ago. --June 30, 2004 Quarter Net Income of $24.0 Million. --Quarter Ended June June: see month. 30, 2004 Mortgage Loan Production of $2.0 Billion Compared to $1.2 Billion During the Same Quarter a Year Ago. Aames Financial Corporation (OTCBB:AMSF), a 50 year old national subprime mortgage lender LENDER, contracts. He from whom a thing is borrowed. 2. The contract of loan confers rights, and imposes duties on the lender. 1. The lender has the right to revoke the loan at his mere pleasure; 9 Cowen, R. 687; 8 Johns. Rep. 432; 1 T. R. 480; 2 Campb. Rep. , today reported net income of $90.7 million during the year ended June 30, 2004, compared to net income of $29.2 million a year ago. Net income during the years ended June 30, 2004 and 2003 included income tax benefits of $17.7 million and $1.8 million, respectively. During the year ended June 30, 2004, basic and diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. net income to common stockholders were $77.7 million and $92.8 million, respectively, resulting in basic and diluted net income per common share of $11.02 and $0.89, respectively. In comparison, basic and diluted net income to common stockholders a year ago were $15.7 million and $29.2 million, respectively, resulting in basic and diluted net income per common share of $2.39 and $0.30, respectively. Dividends accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. on convertible preferred stock Convertible Preferred Stock Preferred stock that includes an option for the holder to convert the preferred shares into a fixed number of common shares, usually anytime after a predetermined date. Also known as "convertible preferred shares". were $13.1 million and $13.5 million during the years ended June 30, 2004 and 2003, respectively. All dividends accrued through June 30, 2004 on convertible preferred stock were paid on June 30, 2004. The Company experienced continued growth in its mortgage loan production, increasing loan production $2.5 billion, or 57.2%, to $7.0 billion during the year ended June 30, 2004, over $4.4 billion of total loan production a year ago. The Company sold $6.4 billion in mortgage loans during fiscal 2004, an increase of $1.9 billion, or 42.9%, over $4.5 billion sold in fiscal 2003. Summary of Financial Results for the Year Ended June 30, 2004 Net Interest Income and Other Income During the year ended June 30, 2004, net interest income and other income was $312.8 million, an increase of $81.1 million, or 35.0%, over $231.7 million of net interest income and other income reported a year ago, reflecting increases of $9.2 million and $71.9 million in net interest income and other income, respectively. Net interest income During the year ended June 30, 2004, net interest income (interest income less interest expense) was $43.2 million, an increase of $9.2 million, or 26.9%, over $34.1 million reported during the year ended June 30, 2003. Interest income was $69.4 million during the year ended June 30, 2004 an increase of $0.2 million, or 0.4%, over $69.2 million of interest income during the year ended June 30, 2003. Interest income increased during the year ended June 30, 2004 over a year ago primarily due to an increase of $12.4 million in interest income on loans held for sale. The increase in interest income on loans held for sale was attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to higher outstanding balances of loans held for sale by the Company during fiscal 2004 despite such loans having lower 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. rates during fiscal 2004 when compared to such balances and coupon rates Coupon rate In bonds, notes, or other fixed income securities, the stated percentage rate of interest, usually paid twice a year. during the year ended June 30, 2003. Offsetting the increase in interest income on loans held for sale was a $12.2 million decline in 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 income recognized by the Company on its residual interests Residual Interest A type of interest payment received by investors in a real estate mortgage investment conduit (REMIC). Notes: Investors receive interest payments after all required regular interest has been paid to investors within higher priority tranches. . During the year ended June 30, 2004, the Company's balances of residual interests were lower than during the year ended June 30, 2003. Interest expense declined $8.9 million, or 25.3%, to $26.2 million during the year ended June 30, 2004 from $35.1 million during the year ended June 30, 2003 due to lower interest rates on the Company's revolving warehouse and repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. facilities despite increased average borrowings under the facilities during fiscal 2004 when compared to such rates and average borrowings outstanding during fiscal 2003. All of the Company's revolving warehouse and repurchase facilities are indexed to one-month LIBOR LIBOR See: London Interbank Offered Rate LIBOR See London interbank offered rate (LIBOR). . During the year ended June 30, 2004, one-month LIBOR was lower than during the year ended June 30, 2003. To a lesser extent, the decrease in interest expense during the year ended June 30, 2004 from a year ago resulted from a decline in amounts outstanding under nonrevolving borrowings and such nonrevolving borrowings bearing lower average interest rates during fiscal 2004 when compared to outstanding balances and interest rates a year ago. Other income Gain on sale of loans. During the year ended June 30, 2004, gain on sale of loans increased $72.8 million, or 53.8%, to $208.4 million over $135.6 million in gain on sale of loans reported a year ago. The increase in gain on sale is attributable to the $1.9 billion, or 42.9%, increase to $6.4 billion in the total amount of loans sold during the year ended June 30, 2004 over $4.5 billion of total loans sold during the year ended June 30, 2003. Origination fees A charge imposed by a lending institution or a bank for the service of processing a loan. For example, a bank might charge an individual who has applied for a student loan an origination fee of one percent for processing the application and granting the loan. , net. During the year ended June 30, 2004, origination fees, net, increased $0.2 million, or 0.3%, to $53.4 million over $53.2 million during the year ended June 30, 2003. The $0.2 million increase in net origination fee revenue consists of an $8.9 million increase in origination fee revenue, offset by an $8.7 million increase in the deferral deferral - Waiting for quiet on the Ethernet. of origination fee income during the year ended June 30, 2004, when compared to amounts reported a year ago. The $8.9 million increase in origination fees, net, during the year ended June 30, 2004 over the amount reported during the year ended June 30, 2003 was primarily due to a $21.0 million increase in the points and fees charged at the time of 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 by the retail channel, partially offset by a $12.1 million increase in net yield spread premium 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. paid by the wholesale channel. The increase in retail points and fees collected is primarily due to the $605.0 million increase in retail 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. , and the increase in the net yield spread premium is due primarily to the $1.9 billion increase in wholesale loan originations during the year ended June 30, 2004 when compared to such originations during the year ended June 30, 2003. Loan servicing Loan servicing is the process by which a mortgage bank or subservicing firm collects the timely payment of interest and principal from borrowers. The level of service varies depending on the type loan and the terms negotiated between the firm and the investor seeking their services. . Loan servicing income declined to $7.8 million during the year ended June 30, 2004 from $8.9 million a year ago, due to the $512.0 million decline in the Company's portfolio of mortgage loans in 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. trusts serviced in-house In-house In the context of general equities, keeping an activity within the firm. For example, rather than go to the marketplace and sell a security for a client to anyone, an attempt is made to find a buyer to complete the transaction with the firm. during fiscal 2004 when compared to the level of such mortgage loans serviced during the year ended June 30, 2003. Operating Expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. During the year ended June 30, 2004, operating expenses, which includes personnel, production, general and administrative expenses and residual interest write-downs, increased $3.7 million, or 1.6%, to $239.8 million over the $236.1 million of total operating expenses during the year ended June 30, 2003. The increase in operating expenses was attributable to increases of $28.6 million, $9.3 million and $0.7 million in personnel, production, and general and administrative expenses, respectively, from levels reported during the year ended June 30, 2003. These increases were partially offset by a $34.9 million decline in residual interest write-downs during the year ended June 30, 2004 from a year ago, as there were no residual interest write-downs during fiscal 2004. Personnel expense. The $28.6 million increase in personnel expense during the year ended June 30, 2004 over a year ago was due primarily to the following: (i) a $25.6 million increase in commissions and bonuses relative to the $2.5 billion increase in the Company's total loan production, (ii) an $11.1 million increase in salaries due to increased staff levels and (iii) a $4.6 million increase in medical and other benefit costs, all of which were partially offset by an increase of $12.7 million in the deferral of direct origination compensatory compensatory /com·pen·sa·to·ry/ (kom-pen´sah-tor?e) making good a defect or loss; restoring a lost balance. com·pen·sa·to·ry adj. Relating to or characterized by compensation. costs during the year ended June 30, 2004 over the amounts reported a year ago. Production expense. The $9.3 million increase in production expense during the year ended June 30, 2004 over a year ago is attributable to the $2.5 billion increase during fiscal 2004 in the Company's total mortgage loan production from loan origination levels reported a year ago. Production expense consists primarily of advertising, outside appraisal costs, travel and entertainment and credit reporting fees. General and administrative expense. The $0.7 million increase in general and administrative expenses during the year ended June 30, 2004 over a year ago is due primarily to increases in occupancy Gaining or having physical possession of real property subject to, or in the absence of, legal right or title. In a fire insurance policy, for example, the term occupancy , communication and professional expenses, partially offset by decreases in legal and other expenses. Residual interest write-downs. During the year ended June 30, 2004, the Company did not record any residual interest write-downs. During the year ended June 30, 2003, the Company recorded write-downs to its residual interests of $34.9 million. Of the $34.9 million of residual interest write-downs, $31.9 million resulted from the changes made by the Company to its credit loss assumptions used in valuing its residual interests in light of the Company's assessment of higher than expected credit loss and 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. experience of certain loans in the Company's securitized securitized Of, related to, or being debt securities that are secured with assets. For example, mortgage purchase bonds are secured by mortgages that have been purchased with the bond issue's proceeds. trusts. The remaining $3.0 million resulted from the Company's decision to call the mortgage loans in certain securitization trusts. Nonoperating Income nonoperating income Income derived from a source other than a firm's regular activities. For example, a firm may record as nonoperating income the profit gained from the sale of an asset other than inventory. Debt extinguishment The destruction or cancellation of a right, a power, a contract, or an estate. Extinguishment is sometimes confused with merger, though there is a clear distinction between them. income. During the year ended June 30, 2004, the Company did not record any nonoperating income items. During the year ended June 30, 2003, the Company recognized $31.7 million of debt extinguishment income which it classified as nonoperating income. The $31.7 million of debt extinguishment income was comprised of forgiveness Forgiveness Angelica, Suor is forgiven by the Virgin Mary for ill-considered suicide. [Ital. Opera: Puccini, Suor Angelica, Westerman, 364] Bishop of Digne by Specialty A contract under seal. A specialty is a written document that has been sealed and delivered and is given as security for the payment of a specifically indicated debt. Finance Partners, the Company's largest stockholder, of $25.0 million of 5.5% Convertible Subordinated Debentures subordinated debenture An unsecured bond with a claim to assets that is subordinate to all existing and future debt. Thus, in the event that the issuer encounters financial difficulties and must be liquidated, all other claims must be satisfied before due 2012; $4.5 million of debt extinguished ex·tin·guish tr.v. ex·tin·guished, ex·tin·guish·ing, ex·tin·guish·es 1. To put out (a fire, for example); quench. 2. To put an end to (hopes, for example); destroy. See Synonyms at abolish. 3. when the Company exercised the 5.0% optional call on the remaining $4.7 million of the 5.5% Convertible Subordinated Debentures due 2012 held by unrelated parties; and $2.2 million of discount on purchases from unrelated parties of 9.125% Senior Notes. Summary of Results for the Three Months Ended June 30, 2004 The Company reported net income of $24.0 million for the three months ended June 30, 2004, compared to a net income of $10.5 million during the same quarter a year ago. During the three months ended June 30, 2004, basic and diluted net income to common stockholders were $21.1 million and $24.5 million, respectively. Basic and diluted net income per common share during the three months ended June 30, 2004 were $2.94 and $0.24, respectively. In comparison, during the three months ended June 30, 2003, basic and diluted net income to common stockholders were $6.6 million and $10.5 million, respectively, and basic and diluted net income per common share were $1.00 and $0.10, respectively. The sum of net interest income and other income during the three months ended June 30, 2004 was $76.8 million, an increase of $20.2 million over the $56.6 million reported during the three months ended June 30, 2003. Net interest income increased $6.4 million to $12.0 million during the three months ended June 30, 2004 over $5.6 million during the comparable three month period a year ago. Other income, which includes gain on sale of loans, origination fees, net, and loan servicing income, increased $13.8 million to $64.8 million during the three months ended June 30, 2004 over $51.0 million during the comparable three month period in 2003. The $13.8 million increase in other income was due to a $19.0 million increase in gain on sale of loans, partially offset by decreases of $5.1 million and $0.1 million in origination fees and loan servicing income, respectively, over the amounts reported in the comparable period a year ago. The $19.0 million increase in gain on sale of loans is primarily due to the $610.7 million, or 52.7%, increase during the three months ended June 30, 2004 in the total amount of loans sold of $1.8 billion over the $1.2 billion of total loans sold during the three months ended June 30, 2003. The $5.1 million decrease in loan origination fees consists of $8.7 million increase in the deferral of origination fee income during the three months ended June 30, 2004 over the amounts reported during the comparable period a year ago, partially offset by a $3.6 million increase in loan origination fees as a result of the $812.4 million, or 70.4%, increase to $2.0 billion in total loan originations during the three months ended June 30, 2004 from the $1.2 billion of loan originations during the three months ended June 30, 2003. Operating expenses, which includes personnel, production, general and administrative expenses and residual interests write-downs, decreased $3.1 million to $52.4 million during the three months ended June 30, 2004 from the $55.5 million during the comparable three month period during 2003. The $3.1 million decrease in operating expenses was primarily due to decreases of $1.7 million and $3.0 million in general and administrative expense and residual interest write-downs, respectively, partially offset by increases of $0.2 million and $1.8 million in personnel and production expenses, respectively, during the three months ended June 30, 2004 over the amounts reported during the comparable three month period a year ago. The Company did not record any nonoperating income during the three months ended June 30, 2004. Nonoperating income during the three months ended June 30, 2003 was comprised of $4.5 million of debt extinguishment income, all of which related to the Company's 5.0% optional call of $4.7 million of 5.5% Convertible Subordinated Debentures due 2012 held by unrelated parties. Mortgage Loan Production During the Year Ended June 30, 2004 Total mortgage loan production. During the year ended June 30, 2004, the Company's total mortgage loan production increased $2.5 billion, or 57.2%, to $7.0 billion over the $4.4 billion of mortgage loans originated during the year ended June 30, 2003. The increase in the Company's total mortgage loan origination volumes during the year ended June 30, 2004 over those reported during the year ended June 30, 2003 was due (i) to a continuation continuation - continuation passing style of the generally more favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. interest rate environment in place during fiscal 2004, (ii) to the issuance of new uniform 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. guidelines guidelines, n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. throughout the Company designed to improve the Company's competitive position and provide greater consistency Consistency can refer to:
geographic pertaining to geography. expansion in the wholesale channel. Retail Production. The Company's total retail loan production during the year ended June 30, 2004 was $2.4 billion, up $605.0 million, or 33.7%, over $1.8 billion of total retail loan production reported during the year ended June 30, 2003. Wholesale Production. The Company's total wholesale loan production during the year ended June 30, 2004 was $4.6 billion, an increase of $1.9 billion, or 73.1%, over the $2.7 billion during the year ended June 30, 2003. Mortgage Loan Production During the Three Months Ended June 30, 2004 Total mortgage loan production. During the three months ended June 30, 2004, the Company's total mortgage loan production increased $812.4 million, or 70.4 %, to $2.0 billion over the $1.2 billion of mortgage loans originated during the comparable three month period in 2003. Retail Production. The Company's total retail loan production during the three months ended June 30, 2004 was $645.3 million, up $212.5 million, or 49.1%, over the $432.8 million of total retail loan production reported during the three months ended June 30, 2003. Wholesale Production. The Company's total wholesale loan production during the three months ended June 30, 2004 was $1.3 billion, an increase of $599.8 million, or 83.2%, over the $720.7 million during the three months ended June 30, 2003. Loan Dispositions During the year ended June 30, 2004, the Company sold $6.4 billion of mortgage loans all of which were whole loan sales for cash. During the year ended June 30, 2003, the Company sold total of $4.5 billion of mortgage loans which included loans pooled and sold in securitizations of $315.0 million and whole loan sales for cash of $4.2 billion. The Company sold the residual interests created in its 2003 securitization for $8.7 million in cash to an affiliate Affiliate Relationship between two companies when one company owns substantial interest, but less than a majority of the voting stock of another company, or when two companies are both subsidiaries of a third company. See: Subsidiaries, parent company. . In addition, the Company sold for cash the servicing rights in the securitization to an unaffiliated loan servicing company. All of the Company's whole loan sales were done on a servicing released basis. Loan Servicing At June 30, 2004 and 2003, the Company's total servicing portfolio was $2.3 billion and $1.7 billion, respectively, of which $2.3 billion and $1.7 billion, respectively, or 97.7% and 94.9%, respectively, was serviced in-house. The Company's portfolio of mortgage loans in securitization trusts serviced in-house declined to $229.0 million at June 30, 2004 from $741.0 million at June 30, 2003. In-house servicing at June 30, 2004 and 2003 includes $1.9 billion and $911.0 million of loans serviced on an interim basis. The Company's servicing portfolio at June 30, 2004 included $160.4 million of loans subserviced for others on a 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. basis. Loans serviced on an interim basis include loans held for sale loans and loans sold where servicing has not yet been transferred. The decline in the Company's portfolio of mortgage loans in securitization trusts serviced in-house at June 30, 2004 from a year ago is due to the Company's call, in its role as servicer, of 10 securitization trusts, normal amortization and prepayment Prepayment 1. The payment of a debt obligation prior to its due date. 2. The excess payment over a scheduled debt repayment amount. Notes: 1. Examples include deferred expenses such as rent and early loan repayments. 2. . Borrowings and Revolving Warehouse and Repurchase Facilities The Company reduced its nonrevolving borrowings by $60.2 million during the year ended June 30, 2004 to $78.3 million at June 30, 2004 from $138.5 million at June 30, 2003. During the three months ended June 30, 2004, the Company increased its warehouse funding capacity to $1.9 billion from $1.2 billion at March 31, 2004. Subsequent to June 30, 2004, the Company obtained an additional $500.0 million revolving committed warehouse facility, thereby increasing its total warehouse funding capacity to $2.4 billion. Proposed Reit Transaction -- Additional Information and Where to Find It The Company is continuing to pursue its proposed REIT conversion. On March 24, 2004, Aames Investment Corporation, a wholly-owned subsidiary of the Company, filed registration statements with the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. Securities and Exchange Commission in connection with the Company's proposed merger with Aames Investment and the related initial public offering of Aames Investment. These registration statements have not yet become effective. The securities relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc these registration statements may not be sold nor may offers to buy be accepted prior to the time the registration statements become effective. This press release shall not constitute an offer to sell or the solicitation solicitation In criminal law, the act of asking, inducing, or directing someone to commit a crime. The person soliciting another becomes an accomplice to the crime. The term also refers to the act of obtaining bribes, as well as to the crime of a prostitute who offers sexual of an offer to buy nor shall there be any sale of these securities in any State in which such offer, solicitation or sale would be unlawful Contrary to or unauthorized by law; illegal. When applied to promises, agreements, or contracts, the term denotes that such agreements have no legal effect. The law disapproves of such conduct because it is immoral or contrary to public policy. prior to registration or qualification under the securities laws of any such State. In connection with Aames Investment's proposed merger with the Company, Aames Investment filed a preliminary registration statement on Form S-4, including the preliminary joint proxy See proxy server. (networking) proxy - A process that accepts requests for some service and passes them on to the real server. A proxy may run on dedicated hardware or may be purely software. statement/prospectus constituting a part thereof, with the SEC. Aames Investment will file a final registration statement, including a definitive joint proxy statement/prospectus constituting a part thereof, and other documents with the SEC. Shareholders of the Company are encouraged to read the registration statement and any other relevant documents filed with the SEC, including the joint proxy statement/prospectus that will be part of the registration statement, because they will contain important information about the proposed merger. The final joint proxy statement Proxy Statement A document containing the information that a company is required by the SEC to provide to shareholders so they can make informed decisions about matters that will be brought up at an annual stockholder meeting. prospectus A document, notice, circular, advertisement, letter, or communication in written form or by radio or television that offers any security for sale, or confirms the sale of any security. will be mailed to shareholders of the Company. Investors and security holders are able to obtain the documents free of charge at the SEC's web site, www.sec.gov See .gov and GovNet. (networking) gov - The top-level domain for US government bodies. . After the registration statement containing the joint proxy statement/prospectus is declared de·clare v. de·clared, de·clar·ing, de·clares v.tr. 1. To make known formally or officially. See Synonyms at announce. 2. To state emphatically or authoritatively; affirm. 3. effective by the SEC, the joint proxy statement/prospectus and other documents will be available free of charge by directing a request to John F. Madden mad·den v. mad·dened, mad·den·ing, mad·dens v.tr. 1. To make angry; irritate. 2. To drive insane. v.intr. To become infuriated. , Jr., Secretary, Aames Financial Corporation, 350 South Grand Avenue, 43rd Floor, Los Angeles, California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). 90071, or emailing Aames Financial's Investor Relations Investor relations The process by which the corporation communicates with its investors. Department at info@aamescorp.com. Participants in Solicitation The Company, Aames Investment, their directors, and certain of their executive officers may be considered participants in the solicitation of proxies in connection with the proposed reorganization The process of carrying out, through agreements and legal proceedings, a business plan for winding up the affairs of, or foreclosing a mortgage upon, the property of a corporation that has become insolvent. and information about such registrants' interest therein, including by way of security holdings or otherwise, may be found in the Company's proxy statement for the Company's 2003 annual meeting of stockholders and in the registration statement on Form S-4 filed by Aames Investment, including the definitive proxy statement/prospectus constituting a part thereof that will be sent to the Company's stockholders. At June 30, 2004, Aames Financial Corporation operated 99 retail branches, including the National Loan Centers, and five regional wholesale operations centers The facility or location on an installation, base, or facility used by the commander to command, control, and coordinate all crisis activities. See also base defense operations center; command center. throughout the United States. For more information, contact either Mr. Ronald J. Nicolas or Jon JON Jonah JON Jesus of Nazareth JON Job Order Number JON Johnston Island, US, Outlying Islands (Airport Code) D. Van Deuren in the Company's Investor Relations Department at 323-210-5311 or at info@aamesfinancial.com via email. Additional information may also be obtained by visiting www.aames.net, the Company's website. Forward Looking Statements From time to time the Company may publish 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. relating to such matters as anticipated financial performance, business prospects and similar matters. The Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 provides a safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. for forward-looking statements. In order to comply with the terms of the safe harbor, the Company notes that a variety of factors could cause the Company's actual results and experience to differ materially from the anticipated results or other expectations expressed in the Company's forward-looking statements. The risks and uncertainties that may affect the operations, performance and results of the Company's business include the following: increases in mortgage lending interest rates; adverse changes in the secondary market for mortgage loans; decline in real estate values; decreases in earnings from the Company calling securitization trusts; limited cash flow to fund operations; dependence on short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. financing facilities; obligations to repurchase mortgage loans and indemnify To compensate for loss or damage; to provide security for financial reimbursement to an individual in case of a specified loss incurred by the person. Insurance companies indemnify their policyholders against damage caused by such things as fire, theft, and flooding, which investors; concentration of operations in California, Florida, New York Florida is the name of some places in the U.S. state of New York:
A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial of Financial Condition and Results of Operations -- Risk Factors" in the Company's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended June 30, 2003 and subsequent filings by the Company with the United States Securities and Exchange Commission.
AAMES FINANCIAL CORPORATION and SUBSIDIARIES
Condensed consolidated financial statements
(In thousands, except per share data)
CONDENSED CONSOLIDATED BALANCE SHEETS Year Ended June 30,
------------------
2004 2003
-------- --------
Cash and cash equivalents $22,867 $23,860
Loans held for sale, at lower of cost or
market 1,012,165 406,877
Advances and other receivables 23,767 41,315
Residual interests, at estimated fair value 44,120 129,232
Other assets 48,253 26,604
-------- --------
Total assets $1,151,172 $627,888
-------- --------
Borrowings $78,283 $138,512
Revolving warehouse and repurchase facilities 886,433 343,675
Accrued dividends on convertible preferred
stock - 51,232
Other liabilities 55,845 41,495
-------- --------
1,020,561 574,914
Stockholders' equity 130,611 52,974
-------- --------
Total liabilities and stockholders' equity $1,151,172 $627,888
CONDENSED CONSOLIDATED INCOME STATEMENTS
Year Ended June 30, Three Months
Ended June 30,
------------------------- ----------------
2004 2003 2002 2004 2003
------- ------- ------- ------- -------
Net interest income:
Interest income $69,446 $69,186 $83,161 $19,229 $13,273
Interest expense 26,227 35,119 41,895 7,244 7,711
------- ------- ------- -----------------
Net interest income 43,219 34,067 41,266 11,985 5,562
Other income:
Gain on sale of loans 208,447 135,573 95,530 55,354 36,357
Origination fees, net 53,354 53,198 55,986 7,938 13,073
Loan servicing 7,829 8,896 12,462 1,497 1,560
------- ------- ------- ------- -------
Total other income 269,630 197,667 163,978 64,789 50,990
------- ------- ------- ------- -------
Net interest income and
other income 312,849 231,734 205,244 76,774 56,552
Operating expenses:
Personnel 160,169 131,608 114,800 32,600 32,827
Production 35,113 25,849 21,322 9,006 7,202
General and
administrative 44,527 43,738 34,489 10,792 12,503
Write-down of residual
interests - 34,923 27,000 - 3,000
------- ------- ------- ------- -------
Total operating
expenses 239,809 236,118 197,611 52,398 55,532
Nonoperating income:
Debt extinguishment
income -- related parties - 24,970 - - -
Debt extinguishment
income -- others - 6,741 - - 4,536
------- ------- ------- ----------------
Total nonoperating
income - 31,711 - - 4,536
------- ------- ------- ----------------
Income before income taxes 73,040 27,327 7,633 24,376 5,556
Provision (benefit) for
income taxes (17,674) (1,839) 3,087 395 (4,925)
------- ------- ------- ----------------
Net income $90,714 $29,166 $4,546 $23,981 $10,481
------- ------- ------- ----------------
Net income (loss) to
common shareholders:
Basic $77,660 $15,697 $(9,242) $21,112 $6,639
------- ------- ------- ----------------
Diluted $92,804 $29,166 $(9,242) $24,503 $10,481
------- ------- ------- ----------------
Net income (loss) per
common share:
Basic $11.02 $2.39 $(1.45) $2.94 $1.00
------- ------- ------- ----------------
Diluted $0.89 $0.30 $(1.45) $0.24 $0.10
------- ------- ------- ----------------
Weighted average number
of common shares
outstanding:
Basic 7,049 6,558 6,394 7,170 6,641
------- ------- ------- ----------------
Diluted 104,364 96,053 6,394 104,071 101,386
------- ------- ------- ----------------
AAMES FINANCIAL CORPORATION and SUBSIDIARIES
Supplemental Information
The following table sets forth information regarding basic and diluted
net income (loss) per common share for the years ended June 30, 2004,
2003 and 2002 and for the three months ended June 30, 2004 and 2003
(amounts in thousands, except per share data):
Year Ended Ended June 30, Three Months
Ended June 30,
------------------------ ---------------
2004 2003 2002 2004 2003
------ ------ ------ ------ ------
Basic net income (loss)
per common share:
Net income $90,714 $29,166 $4,546 $23,981 $10,481
Less: Accrued dividends
on Series B, C and D
Convertible Preferred
Stock (13,054) (13,469) (13,788) (2,869) (3,842)
------ ------ ------ ------ ------
Basic net income (loss)
to common stockholders $77,660 $15,697 $(9,242) $21,112 $6,639
------ ------ ------ ------ ------
Basic weighted average
number of common
shares outstanding 7,049 6,558 6,394 7,170 6,641
------ ------ ------ ------ ------
Basic net income (loss)
per common share $11.02 $2.39 $(1.45) $2.94 $1.00
------ ------ ------ ------ ------
Diluted net income (loss)
per common share:
Basic net income (loss)
to common stockholders $77,660 $15,697 $(9,242) $21,112 $6,639
Plus: Accrued dividends
on Series B, C and D
Convertible Preferred
Stock 13,054 13,469 - 2,869 3,842
Interest on
5.5%
Convertible
Preferred
Debt 2,090 - - 522 -
------ ------ ------ ------ ------
Diluted net income
(loss) to common
stockholders $92,804 $29,166 $(9,242) $24,503 $10,481
------ ------ ------ ------ ------
Basic weighted average
number of common
shares outstanding 7,049 6,558 6,394 7,170 6,641
Plus incremental shares
from assumed:
Conversion of
Series B, C and D
Convertible
Preferred Stock 85,439 85,547 - 85,055 85,532
Conversion of
Convertible
Preferred Debt 824 - - 824 -
Exercise of
Warrants 3,495 1,288 - 3,522 2,787
Exercise of Common
Stock options 7,557 2,660 - 7,500 6,426
------ ------ ------ ------ ------
Diluted weighted average
number of common shares
outstanding 104,364 96,053 6,394 104,071 101,386
------ ------ ------ ------ ------
Diluted net income
(loss) per common share $0.89 $0.30 $(1.45) $0.24 $0.10
------ ------ ------ ------ ------
AAMES FINANCIAL CORPORATION and SUBSIDIARIES
Supplemental Information
MORTGAGE LOAN PRODUCTION:
------------------------
(In thousands) Year ended June 30, Three Months Ended
June 30,
---------------------- ----------------------
2004 2003 2004 2003
---------- ---------- ---------- ----------
Wholesale $4,588,501 $2,650,733 $1,320,578 $720,731
Retail 2,400,493 1,795,447 645,291 432,762
---------- ---------- ---------- ----------
Total mortgage
loan production $6,988,994 $4,446,180 $1,965,869 $1,153,493
---------- ---------- ---------- ----------
(1) Includes the purchase of closed loans on a flow basis from
correspondents of $4.2 million and $19.3 million during the
years ended June 30, 2004 and 2003, respectively, and $0.0
million and $8.9 million during the three months ended June 30,
2003 and 2002, respectively.
SECURITIZATIONS AND WHOLE LOAN SALES:
------------------------------------
(In thousands) Year ended June 30, Three Months Ended
June 30,
---------------------- ----------------------
2004 2003 2004 2003
---------- ---------- ---------- ----------
Loan securitizations $- $314,958 $- $-
Whole loan sales 6,433,871 4,188,678 1,769,638 1,158,909
---------- ---------- ---------- ----------
$6,433,871 $4,503,636 $1,769,638 $1,158,909
---------- ---------- ---------- ----------
LOAN SERVICING: June 30,
-------------- ----------------------------------
(Dollars in thousands) 2004 2003 2002
---------- ---------- ----------
Mortgage loans serviced:
Loans serviced on an interim
basis $2,058,000 $911,000 $991,000
Loans in securitization trusts 229,000 741,000 1,192,000
---------- ---------- ----------
Serviced in-house 2,287,000 1,652,000 2,183,000
Loans serviced by others 54,000 88,000 125,000
---------- ---------- ----------
Total servicing portfolio $2,341,000 $1,740,000 $2,308,000
---------- ---------- ----------
Percentage serviced in-house 97.7% 94.9% 94.6%
---------- ---------- ----------
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