Aames Investment Corporation Announces 2004 Year-End 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. Investment Corporation (NYSE NYSE See: New York Stock Exchange :AIC AIC Association des Infermières Canadiennes. ), a mortgage real estate investment trust, today reported results of operations for the three and six months ended December December: see month. 31, 2004, its new fiscal year end. HIGHLIGHTS --Diluted net loss per share was $0.51 and $0.05 during the three and six months ended December 31, 2004, respectively. --Dividends per share were $0.06 during the three months ended December 31, 2004. --The portfolio of loans held for investment was $1.7 billion at December 31, 2004. --Total mortgage loan production was $1.7 billion and $3.6 billion during the three and six months ended December 31, 2004, respectively. --IPO and corporate 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. into a REIT REIT See: Real Estate Investment Trust REIT See real estate investment trust (REIT). completed during the December 2004 quarter. --$64.0 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 March 2006 fully redeemed re·deem tr.v. re·deemed, re·deem·ing, re·deems 1. To recover ownership of by paying a specified sum. 2. To pay off (a promissory note, for example). 3. on December 30, 2004. Financial Summary During the three months ended December 31, 2004, the Company had a net loss of $31.5 million compared to net income of $17.2 million during the comparable three month period a year ago. The decline in net income was attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to a decline of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $37.0 million in gain on sale of loans due to the Company using its loan production to build a portfolio of loans held for investment rather than disposing of its loan production into the secondary markets in whole loans sales for cash, coupled with the Company incurring in·cur tr.v. in·curred, in·cur·ring, in·curs 1. To acquire or come into (something usually undesirable); sustain: incurred substantial losses during the stock market crash. 2. $22.0 million in noninterest expenses related to the REIT conversion and corporate reorganization. The $22.0 million was comprised of approximately $17.0 million of compensation related charges and $5.0 million of direct expenses related to the reorganization. The decline in net income partially offset by a $11.5 million increase in net interest income after the provision for loan losses which was due primarily to net interest income earned on the portfolio of loans held for investment. The following table summarizes the results of operations of the Company during the three and six months ended December 31, 2004 and 2003 (unaudited, in thousands, except per share data):
Three Months Six Months
Ended Ended
December 31, December 31,
2004 2003 2004 2003
--------- -------- -------- --------
Net interest income after
provision for loan losses $22,302 $10,800 $36,413 $20,136
Noninterest income 10,622 48,953 62,330 106,914
Noninterest expense 64,388 42,356 107,063 99,183
--------- -------- -------- --------
Income (loss) before
provision (benefit) for
income taxes (31,464) 17,397 (8,320) 27,867
Provision (benefit) for income
taxes 38 217 (5,235) (17,976)
--------- -------- -------- --------
Net income (loss) $(31,502) $17,180 $(3,085) $45,843
========= ======== ======== ========
Net income (loss) per share:
Basic $(0.51) $1.90 $(0.05) $5.54
========= ======== ======== ========
Diluted $(0.51) $0.17 $(0.05) $0.45
========= ======== ======== ========
Dividends per share $0.06 - $0.06 -
========= ======== ======== ========
Mr. A. Jay Meyerson Meyerson can refer to:
Portfolio of loans held for investment During the three months ended December 31, 2004, Aames Investment closed a $1.2 billion on-balance sheet 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. . At December 31, 2004, the portfolio of mortgage loans held for investment was $1.7 billion, net of a $1.2 million allowance for loan losses. The composition of the portfolio of loans held for investment was as follows at December 31, 2004 (unaudited, in thousands):
December 31,
2004
-------------
Loans held for investment, net:
Securitized $1,187,435
Not yet securitized 531,261
Add: Net deferred loan origination costs 8,250
Less: Allowance for loans losses (1,200)
-------------
Loans held for investment, net $1,725,746
=============
"Consistent with our stated strategy, we retained our hybrid hybrid (hī`brĭd), term applied by plant and animal breeders to the offspring of a cross between two different subspecies or species, and by geneticists to the offspring of parents differing in any genetic characteristic (see genetics). loan production in our portfolio of loans held for investment and sold on a whole loan basis for cash our fixed rate, seconds and high FICO FICO See: Financing corporation loan production," Mr. Meyerson added. The initial provision for the allowance for loan losses on the portfolio of loans held for investment of $1.2 million was made during the three months ended December 31, 2004 and at the time the first on-balance sheet securitization was consummated con·sum·mate tr.v. con·sum·mat·ed, con·sum·mat·ing, con·sum·mates 1. a. To bring to completion or fruition; conclude: consummate a business transaction. b. . Loan production Mortgage loan origination 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. volume during the three months ended December 31, 2004 increased $50.0 million over total production during the comparable three month period a year ago, and declined $168.5 million from the $1.9 billion of total production during the September September: see month. 2004 quarter. Retail and wholesale originations during the three months ended December 31, 2004 represented 33.6 % and 66.4%, respectively, of total loan production. Total loan production during the six months ended December 31, 2004 increased $430.7 million, or 13.6%, over total production reported during the comparable six month period a year ago. Mr. Meyerson said, "Our December 2004 quarter loan origination volumes were negatively impacted during the latter part of the quarter by competitive and interest rate pressures in the marketplace. In response to the competitive environment, we are pricing more competitively and are accelerating our initiatives to lower our costs to produce loans." The following table summarizes mortgage loan production volume during the periods presented (unaudited, in thousands):
Three Months Ended Six Months Ended
Dec. 31, Dec. 31,
2004 2003 2004 2003
----------- ----------- ----------- -----------
Mortgage loan
production:
Retail $574,625 $591,861 $1,189,707 $1,168,675
Wholesale 1,134,911 1,067,627 2,397,841 1,988,222
----------- ----------- ----------- -----------
$1,709,536 $1,659,488 $3,587,548 $3,156,897
=========== =========== =========== ===========
Weighted average FICO 610 609 611 613
Weighted average LTV 79% 81% 80% 80%
Production by interest
rate type:
Hybrid 79% 77% 78% 68%
Fixed 21% 23% 22% 32%
Gain on sale Gain on sale of loans declined $37.0 million due primarily to the Company's strategy of building an on-balance sheet portfolio of loans held for investment during the three months ended December 31, 2004. During the three months ended December 31, 2004, $426.7 million of mortgage loans were sold into the secondary markets for cash, whereas during the comparable three-month period in 2003, $1.7 billion of loans were sold on a whole loan basis for cash. Gain on sale of loans is impacted by the timing of loan origination and sales as net loan origination fees and costs related to mortgage loans originated and held for sale are deferred and recognized in gain on sale of loans at the time the mortgage loans are sold. The following table summarizes activities in gain on sale of loans during the periods presented (unaudited, in thousands):
Three Months Six Months
Months Months
Ended Dec. 31, Ended Dec. 31,
2004 2003 2004 2003
------- -------- -------- ---------
Gain on sale of loans $9,437 $56,704 $77,272 $101,122
Loan origination fees and costs,
net 2,297 (3,848) (5,559) 12,592
Provision for representation,
warranty and miscellaneous other
losses (1,213) (5,866) (8,840) (10,577)
Hedge gains (losses) (584) - (3,294) -
Other (134) (214) (319) (400)
------- -------- -------- ---------
Gain on sale of loans $9,803 $46,776 $59,260 $102,737
======= ======== ======== =========
"Our gain on sale was negatively impacted by the difficult competitive environment as well as by the fact that we sold into the secondary markets our lower margin loan product and retained our higher margin hybrid loan product for our portfolio of loans held for investment," explained Ronald J. Nicolas, Jr., Chief Financial Officer. "We anticipate this trend will continue through the first quarter of 2005," he added. Servicing portfolio At December 31, 2004, the Company's total servicing portfolio was $2.8 billion, and consisted of the following (unaudited, in thousands):
December 31,
2004
-------------
Loans:
Held for investment $1,718,696
Interim serviced 771,835
Subserviced for others 129,016
In securitization trusts 224,345
-------------
$2,843,892
=============
Net interest income after the provision for loan losses Net interest income, after the provision for loan losses, increased $11.5 million and $16.3 million during the three and six months ended December 31, 2004, respectively, over amounts reported during the comparable periods in 2003. The Company began building its portfolio of loans held for investment during the three months ended December 2004. As the portfolio of loans held for investment increases in future quarters, it will contribute to a significant portion of net interest income in those periods. Management believes that net interest income produced by a portfolio of loans held for investment is a more stable, predictable earnings source than noninterest income. Noninterest income Noninterest income declined $38.4 million and $44.6 million during the three and six months ended December 31, 2004, respectively, from the amounts reported during the comparable periods a year ago, due largely to a $37.0 million and a $43.4 million decline, respectively, in the gain on sale of loans sold by the Company. The decline in gain on sale of loans resulted from the Company retaining mortgage loans for its portfolio of loans held for investment as it built its portfolio and selling a smaller portion of its mortgage loans in whole loan sales during the three months ended December 31, 2004. During the three and six months ended December 31, 2003, disposed dis·pose v. dis·posed, dis·pos·ing, dis·pos·es v.tr. 1. To place or set in a particular order; arrange. 2. of all of its loan production for cash gains in whole loan markets. The Company expects that once the portfolio of mortgage loans held for investment is built, it will revert re·vert v. 1. To return to a former condition, practice, subject, or belief. 2. To undergo genetic reversion. back to the practice of selling a substantial portion of its loan production into the secondary markets. Noninterest expense Noninterest expense increased $22.0 million and $7.9 million during the three and six months ended December 31, 2004, respectively, over amounts reported during the comparable three and six months periods in 2003. During the three months ended December 31, 2004, Aames Investment incurred approximately $22.0 million of expenses in connection with its REIT conversion and corporate reorganization. Book value Book value per common share Book Value Per Common Share A measure used by owners of common shares in a firm to determine the level of safety associated with each individual share after all debts are paid accordingly. Formula: was $5.83 as of December 31, 2004. Completion of REIT conversion and corporate reorganization During the December 2004 quarter, Aames Investment completed its initial public offering and also completed its corporate reorganization in which Aames Investment became a REIT and the parent company of the Aames consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: group of companies. Effective with the REIT conversion and corporate reorganization, the Company adopted a new calendar year reporting period which replaced the June June: see month. 30th fiscal year end formerly utilized by Aames Financial prior to the corporate reorganization. The Company's year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. results, therefore, are measured using its consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge at and for the six months ended December 31, 2004. 2005 Annual Meeting of Stockholders The Company will host its 2005 Annual Meeting of Stockholders on Thursday Thursday: see week. , May 5, 2005, at 9:00 a.m., Pacific Time, at The Omni Hotel, 251 S. Olive olive, common name for the Oleaceae, a family of trees and shrubs (including climbing forms) of warm temperate climates and of the Old World tropics, especially Asia and the East Indies. Street, 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). 90012. The Company's board of directors has designated March 31, 2005 as the record date for the determination of stockholders entitled en·ti·tle tr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: to notice of and to vote at the annual meeting. About Aames Investment Aames Investment is a REIT trading on the NYSE under the symbol "AIC," providing first and second mortgage products to sub-prime borrowers nationwide through its operating subsidiary An operating subsidiary is a business term frequently used within the United States railroad industry. In the case of a railroad, it refers to a company that is a subsidiary but operates with its own identity and rolling stock. , Aames Financial, a 50-year old sub-prime 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. . Aames Investment is committed to serving the communities in which it operates with fair and responsible lending practices. Information Regarding 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. Certain items in this press release may constitute forward-looking statements within the meaning of 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, including statements relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc our ability to ramp up Ramp Up To increase a company's operations in anticipation of increased demand. Notes: A company might 'ramp up' operations if they just signed a contract creating substantially more demand for their product. See also: Demand, Economies of Scale our loan portfolio and our ability to pay dividends. These statements are based on management's current expectations and beliefs and are subject to a number of trends and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Aames Investment can give no assurance that its expectations will be attained at·tain v. at·tained, at·tain·ing, at·tains v.tr. 1. To gain as an objective; achieve: attain a diploma by hard work. 2. . Such forward-looking statements speak only as of the date of this press release. Aames Investment expressly disclaims any obligation to release publicly any updates or revisions ReVisions is a 2004 anthology of alternate history short-stories. It is edited by Julie E. Czerneda and Isaac Szpindel. Contents Title Author The Resonance of Light James Alan Gardner Out of China Julie E. to any forward-looking statements contained herein to reflect any change in the its expectations with regard thereto there·to adv. 1. To that, this, or it. 2. Archaic In addition to that; furthermore. thereto Adverb Formal 1. to that or it 2. or change in events, conditions or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or on which any statement is based. In addition, Aames Investment notes that a variety of factors could cause its actual results and experiences to differ materially from the anticipated results or other expectations expressed in the forward-looking statements. The risks and uncertainties that may affect the operations, performance and results of Aames Investment's business include the following: inability to originate o·rig·i·nate v. 1. To bring into being; create. 2. To come into being; start. subprime hybrid/adjustable mortgage loans; increased 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. rates in our portfolio; increases in mortgage lending interest rates; adverse changes in the securitization and whole loan market for mortgage loans; decline in real estate values; decreases in earnings from the Aames Investment 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 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. 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:
See 10-Q. for the quarter ended September 30, 2004 and other filings with the SEC made by the company pursuant to the Securities Exchange Act of 1934. Financial Tables and Supplementary Information Follow
AAMES INVESTMENT CORPORATION and SUBSIDIARIES
Condensed financial statements
(In thousands)
CONDENSED BALANCE
SHEETS
-----------------------
December 31, June 30,
2004 2004
----------- -----------
(Unaudited)
Cash and cash equivalents $37,780 $22,867
Loans held for sale, at lower of cost or
market 484,263 1,012,165
Loans held for investment, net 1,725,746 -
Advances and other receivables 22,740 17,451
Residual interests, at estimated fair value 39,082 44,120
Derivative instruments, at estimated fair
value 31,947 6,316
Prepaid and other assets 58,822 48,253
----------- -----------
Total assets $2,400,380 $1,151,172
----------- -----------
Financing on loans held for investment $1,157,470 $-
Revolving warehouse and repurchase facilities 809,213 886,433
Other borrowings 7,680 78,283
Other liabilities 68,391 55,845
----------- -----------
2,042,754 1,020,561
Stockholders' equity 357,626 130,611
----------- -----------
Total liabilities and stockholders' equity $2,400,380 $1,151,172
----------- -----------
Shares outstanding at December 31, 2004 61,360,271
-----------
Leverage ratios
1) Total leverage ratio:
Total borrowings $1,974,363
Stockholders' Equity $357,626
Ratio 5.5 to 1.0
2) Adjusted leverage ratio:
Total borrowings, less financings on
loans held for investment $816,893
Stockholders' Equity $357,626
Ratio 2.8 to 1.0
AAMES INVESTMENT CORPORATION and SUBSIDIARIES
Condensed financial statements
(In thousands, except per share data)
CONDENSED CONSOLIDATED INCOME STATEMENTS
-----------------------------------------
Three Months Ended Six Months Ended
December 31, December 31,
-------------------- --------------------
2004 2003 2004 2003
----------- -------- ----------- --------
(Unaudited) (Unaudited)
Interest income $31,894 $17,317 $56,103 $32,596
Interest expense 8,392 6,517 18,490 12,460
----------- -------- ----------- --------
Net interest income 23,502 10,800 37,613 20,136
Provision for losses on
loans held for investment 1,200 - 1,200 -
----------- -------- ----------- --------
Net interest income
after provision for
losses 22,302 10,800 36,413 20,136
Noninterest income:
Gain on sale of loans 9,803 46,776 59,260 102,737
Loan servicing 819 2,177 3,070 4,177
----------- -------- ----------- --------
Total noninterest income 10,622 48,953 62,330 106,914
----------- -------- ----------- --------
Net interest income and
noninterest income 32,924 59,753 98,743 127,050
Noninterest expense:
Personnel 40,064 23,020 62,660 61,049
Production 8,605 8,347 17,165 15,774
General and administrative 15,719 10,989 27,238 22,360
----------- -------- ----------- --------
Total noninterest
expense 64,388 42,356 107,063 99,183
----------- -------- ----------- --------
Income (loss) before income
taxes (31,464) 17,397 (8,320) 27,867
Provision (benefit) for
income taxes 38 217 (5,235) (17,976)
----------- -------- ----------- --------
Net income (loss) $(31,502) $17,180 $(3,085) $45,843
----------- -------- ----------- --------
Net income (loss) to common
stockholders:
Basic $(31,502) $13,342 $(3,085) $38,527
----------- -------- ----------- --------
Diluted $(31,502) $17,702 $(3,085) $46,888
----------- -------- ----------- --------
Net income (loss) per common
share:
Basic $(0.51) $1.90 $(0.05) $5.54
----------- -------- ----------- --------
Diluted $(0.51) $0.17 $(0.05) $0.45
----------- -------- ----------- --------
Weighted average number of
common shares outstanding:
Basic 61,335 7,030 61,322 6,954
----------- -------- ----------- --------
Diluted 61,335 104,642 61,322 104,387
----------- -------- ----------- --------
Dividends per common share $0.06 $- $0.06 $-
----------- -------- ----------- --------
AAMES INVESTMENT CORPORATION and SUBSIDIARIES
Other financial data (Unaudited)
(In thousands)
Condensed Statement of
Cash Flow Information
Six Months Ended
December 31,
-----------------------
2004 2003
----------- -----------
Net cash provided by (used in):
Operating activities $500,344 $(159,635)
Investing activities (1,728,958) (2,159)
Financing activities 1,243,527 149,545
----------- -----------
Net increase (decrease) in cash and cash
equivalents 14,913 (12,249)
Cash and cash equivalents, beginning of period 22,867 23,860
----------- -----------
Cash and cash equivalents, end of period $37,780 $11,611
----------- -----------
At At
December 31, June 30,
2004 2004
----------- -----------
Revolving warehouse and repurchase facilities:
Committed facilities $2,450,000 $1,800,000
Uncommitted facilities 100,000 100,000
----------- -----------
Total warehouse and repurchase facilities $2,550,000 $1,900,000
----------- -----------
Amount utilized $809,213 $886,433
----------- -----------
Available borrowing capacity $1,740,787 $1,013,567
----------- -----------
Liquidity:
Cash and cash equivalents $37,780 $22,867
Plus: Unencumbered mortgage collateral 210,017 128,781
Less: Margin and ineligible mortgage
collateral (22,771) (26,575)
----------- -----------
$225,026 $125,073
----------- -----------
AAMES INVESTMENT CORPORATION and SUBSIDIARIES
Supplemental Information
The following table sets forth information regarding basic and diluted
net income (loss) per common share for the periods presented (amounts
in thousands, except per share data):
Three Months Ended Six Months Ended
December 31, December 31,
-------------------- ---------------------
2004 2003 2004 2003
----------- -------- ----------- ---------
(Unaudited) (Unaudited)
Basic net income (loss) per
common share:
Net income (loss) $(31,502) $17,180 $(3,085) $45,843
Less: Accrued dividends
on Series B, C and D
Convertible Preferred
Stock - (3,838) - (7,316)
----------- -------- ----------- ---------
Basic net income (loss)
to common stockholders $(31,502) $13,342 $(3,085) $38,527
----------- -------- ----------- ---------
Basic weighted average
number of common shares
outstanding 61,335 7,030 61,322 6,954
----------- -------- ----------- ---------
Basic net income (loss)
per common share $(0.51) $1.90 $(0.05) $5.54
----------- -------- ----------- ---------
Diluted net income (loss)
per common share:
Basic net income (loss)
to common stockholders $(31,502) $13,342 $(3,085) $38,527
Plus:
Accrued dividends
on Series B, C and D
Convertible Preferred
Stock - 3,838 - 7,316
Interest on 5.5%
Convertible Preferred
Debt - 522 - 1,045
----------- -------- ----------- ---------
Diluted net income (loss)
to common stockholders $(31,502) $17,702 $(3,085) $46,888
----------- -------- ----------- ---------
Basic weighted average
number of common shares
outstanding 61,335 7,030 61,322 6,954
Plus incremental shares
from assumed:
Conversion of Series B,
C and D Convertible
Preferred Stock - 85,136 - 85,439
Conversion of
Convertible Preferred
Debt - 824 - 824
Exercise of Warrants - 3,515 - 3,365
Exercise of Common
Stock options - 8,137 - 7,805
----------- -------- ----------- ---------
Diluted weighted average
number of common shares
outstanding 61,335 104,642 61,322 104,387
----------- -------- ----------- ---------
Diluted net income (loss)
per common share $(0.51) $0.17 $(0.05) $0.45
----------- -------- ----------- ---------
The following table summarizes the components of gain on sale of
loans during the three and six months ended December 31, 2004 and
2003 (in thousands):
Three Months Ended Six Months Ended
December 31, December 31,
-------------------- ---------------------
2004 2003 2004 2003
----------- -------- ----------- ---------
(Unaudited) (Unaudited)
Gain on sale of loans $9,437 $56,704 $77,272 $101,122
Loan origination fees and
costs, net 2,297 (3,848) (5,559) 12,592
Provision for
representation, warranty
and other losses (1,213) (5,866) (8,840) (10,577)
Hedge gains (losses) (584) - (3,294) -
Other (134) (214) (319) (400)
----------- -------- ----------- ---------
Gain on sale of loans $9,803 $46,776 $59,260 $102,737
----------- -------- ----------- ---------
AAMES INVESTMENT CORPORATION and SUBSIDIARIES
Supplemental Information
LOAN PRODUCTION:
----------------
(In thousands)
--------------
Three Months Ended Six Months Ended
--------------------------------- -----------------------
December September December December 31,
31, 30, 31, -----------------------
2004 2004 2003 2004 2003
---------- ----------- ---------- ----------- -----------
(Unaudited) (Unaudited)
RETAIL
PRODUCTION
Total dollar
amount $574,625 $615,082 $591,861 $1,189,707 $1,168,675
Number of
loans 4,431 4,893 4,670 9,324 9,077
Average loan
amount $129,683 $125,706 $126,737 $127,596 $128,751
Average
initial LTV 75.82% 76.46% 77.90% 76.15% 76.56%
Weighted
average
interest
rate 7.36% 7.58% 7.46% 7.47% 7.27%
WHOLESALE
PRODUCTION
Total dollar
amount $1,134,911 $1,262,930 $1,067,627 $2,397,841 $1,988,222
Number of
loans 7,841 8,722 7,443 16,563 13,977
Average loan
amount $144,741 $144,798 $143,440 $144,771 $142,250
Average
initial LTV 81.19% 81.17% 81.84% 81.18% 82.00%
Weighted
average
interest
rate 7.46% 7.57% 7.66% 7.52% 7.69%
TOTAL
PRODUCTION
Total dollar
amount $1,709,536 $1,878,012 $1,659,488 $3,587,548 $3,156,897
Number of
loans 12,272 13,615 12,113 25,887 23,054
Average loan
amount $139,304 $137,937 $137,001 $138,585 $136,935
Average
initial LTV 79.38% 79.62% 80.43% 79.51% 79.99%
Weighted
average
interest
rate 7.43% 7.57% 7.59% 7.50% 7.53%
Total
production
by loan
purpose:
-------------
Cash-out
refinance $1,019,184 $1,085,506 $1,002,351 $2,104,690 $1,907,737
Purchase
money 636,727 717,421 551,392 1,354,148 994,513
Rate/term
refinance 53,625 75,085 105,745 128,710 254,647
---------- ----------- ---------- ----------- -----------
Total $1,709,536 $1,878,012 $1,659,488 $3,587,548 $3,156,897
---------- ----------- ---------- ----------- -----------
Total
production
by property
type:
-------------
Single
family $1,510,414 $1,645,745 $1,459,567 $3,156,159 $2,789,292
Multi-family 111,321 122,449 109,299 233,770 198,728
Condominiums 87,801 109,738 90,622 197,539 168,767
All other - 80 - 80 110
---------- ----------- ---------- ----------- -----------
Total $1,709,536 $1,878,012 $1,659,488 $3,587,548 $3,156,897
---------- ----------- ---------- ----------- -----------
Total
production
by
state/region
produced:
-------------
California $523,701 $585,136 $591,232 $1,108,837 $1,182,972
Florida 345,652 364,978 259,904 710,630 526,703
New York 103,796 130,896 107,909 234,692 171,029
Texas 129,580 132,928 119,183 262,508 219,096
Other Western
states 184,519 174,704 191,483 359,223 335,406
Other
Midwestern
states 140,750 166,340 154,384 307,090 280,019
Other
Northeastern
states 161,678 194,429 139,594 356,107 259,839
Other
Southeastern
states 119,860 128,601 95,799 248,461 181,833
---------- ----------- ---------- ----------- -----------
Total $1,709,536 $1,878,012 $1,659,488 $3,587,548 $3,156,897
---------- ----------- ---------- ----------- -----------
AAMES INVESTMENT CORPORATION and SUBSIDIARIES
Supplemental Information
Production by interest rate type:
Three Months Ended Dec. 31.
--------------------------------------
2004 2003
------------------- ------------------
$ % $ %
----------- ------- ----------- ------
Hybrid:
Traditional $1,252,756 73.3% $1,277,334 77.0%
Interest only 91,203 5.3% - -
Fixed rate 365,577 21.4% 382,154 23.0%
----------- ------- ----------- ------
$1,709,536 100.0% $1,659,488 100.0%
----------- ------- ----------- ------
Six Months Ended Dec. 31.
--------------------------------------
2004 2003
------------------- ------------------
$ % $ %
----------- ------- ----------- ------
Hybrid:
Traditional $2,598,326 72.4% $2,148,156 68.0%
Interest only 180,870 5.0% - -
Fixed rate 808,352 22.5% 1,008,741 32.0%
----------- ------- ----------- ------
$3,587,548 100.0% $3,156,897 100.0%
----------- ------- ----------- ------
Loan production by credit grade during the three months ended December
31, 2004 (in thousands):
Average Weighted Weighted
Credit Dollar Amount % of Credit Average Average
Grade of Loans Total Score Interest Rate LTV
------------- ------------- ------ ---------- -------------- ---------
A + $1,284,602 75% 624 7.3% 80%
A 188,489 11% 587 7.5% 79%
A - 77,074 5% 557 7.9% 77%
B 104,362 6% 556 8.1% 75%
C 44,769 3% 548 8.8% 71%
C- 10,240 NM 538 10.0% 65%
------------- ------ ---------- -------------- ---------
Total $1,709,536 100% 610 7.4% 79%
------------- ------ ---------- -------------- ---------
Loan production by credit grade during the three months ended December
31, 2003 (in thousands):
Average Weighted Weighted
Credit Dollar Amount % of Credit Average Average
Grade of Loans Total Score Interest Rate LTV
------------- ------------- ------ ---------- -------------- ---------
A + $1,094,729 66% 627 7.4% 82%
A 267,861 16% 595 7.5% 80%
A - 105,945 6% 567 7.9% 79%
B 119,771 7% 553 8.2% 76%
C 54,264 4% 547 9.0% 71%
C- 16,686 1% 539 10.0% 69%
D 232 NM 505 8.5% 76%
------------- ------ ---------- -------------- ---------
Total $1,659,488 100% 609 7.6% 81%
------------- ------ ---------- -------------- ---------
Loan production by credit grade during the six months ended December
31, 2004 (in thousands):
Average Weighted Weighted
Credit Dollar Amount % of Credit Average Average
Grade of Loans Total Score Interest Rate LTV
------------- ------------- ------ ---------- -------------- ---------
A + $2,660,434 74% 624 7.4% 81%
A 410,211 11% 588 7.5% 79%
A - 172,076 5% 559 8.0% 77%
B 218,169 6% 559 8.2% 75%
C 101,717 3% 549 8.8% 70%
C- 24,941 1% 540 10.0% 64%
------------- ------ ---------- -------------- ---------
Total $3,587,548 100% 611 7.5% 80%
------------- ------ ---------- -------------- ---------
Note: Prior to October 1, 2003, the Company's underwriting guidelines
were different from the Super Aim Guidelines implemented at that time.
Therefore, loan production by credit grade during the six months ended
December 31, 2003 is not meaningful when compared to the presentation
during the six months ended December 31, 2004.
AAMES INVESTMENT CORPORATION and SUBSIDIARIES
Supplemental Information
Loan production by credit score range during the three months ended
December 31, 2004 (in thousands):
Weighted Weighted
Credit Score Dollar Amount % of Average Average
Range of Loans Total Interest Rate LTV
----------------- ------------- ---------- ------------- -------------
540 and below $232,776 14% 8.2% 74%
541 - 580 299,508 17% 7.8% 80%
581 - 620 406,028 24% 7.3% 80%
621 - 660 456,889 27% 7.2% 81%
661 - 700 210,214 12% 7.0% 80%
Above 700 102,301 6% 7.0% 79%
Not available 1,820 NM 7.6% 80%
------------- ---------- ------------- -------------
Total $1,709,536 100% 7.4% 79%
------------- ---------- ------------- -------------
Loan production by credit score range during the three months ended
December 31, 2003 (in thousands):
Weighted Weighted
Credit Score Dollar Amount % of Average Average
Range of Loans Total Interest Rate LTV
----------------- ------------- ---------- ------------- -------------
540 and below $225,262 13% 8.4% 75%
541 - 580 297,691 18% 8.0% 81%
581 - 620 382,378 23% 7.5% 82%
621 - 660 426,156 26% 7.4% 82%
661 - 700 208,000 13% 7.1% 81%
Above 700 113,845 7% 7.1% 80%
Not available 6,156 NM 9.4% 91%
------------- ---------- ------------- -------------
Total $1,659,488 99% 7.6% 80%
------------- ---------- ------------- -------------
Loan production by credit score range during the six months ended
December 31, 2004 (in thousands):
Weighted Weighted
Credit Score Dollar Amount % of Average Average
Range of Loans Total Interest Rate LTV
----------------- ------------- ---------- ------------- -------------
540 and below $470,431 13% 8.4% 74%
541 - 580 651,915 18% 7.8% 80%
581 - 620 860,504 24% 7.3% 80%
621 - 660 954,240 27% 7.3% 81%
661 - 700 434,801 12% 7.1% 81%
Above 700 212,504 6% 7.0% 79%
Not available 3,153 NM 7.9% 79%
------------- ---------- ------------- -------------
Total $3,587,548 100% 7.5% 80%
------------- ---------- ------------- -------------
Loan production by credit score range during the six months ended
December 31, 2003 (in thousands):
Weighted Weighted
Credit Score Dollar Amount % of Average Average
Range of Loans Total Interest Rate LTV
----------------- ------------- ---------- ------------- -------------
540 and below $406,234 13% 8.4% 75%
541 - 580 551,302 17% 8.0% 81%
581 - 620 712,781 23% 7.5% 81%
621 - 660 798,133 25% 7.4% 81%
661 - 700 429,278 14% 7.0% 80%
Above 700 250,462 8% 6.8% 77%
Not available 8,707 NM 9.4% 88%
------------- ---------- ------------- -------------
Total $3,156,897 100% 7.5% 80%
------------- ---------- ------------- -------------
AAMES INVESTMENT CORPORATION and SUBSIDIARIES
Supplemental Information
LOAN SERVICING
(Dollars in thousands)
December December June 30,
31, 31,
2004 2003 2004
----------- ----------- -----------
(Unaudited)
Mortgage loans serviced:
Loans held for investment $1,718,696 $- $-
Loans serviced on an interim
basis 771,835 1,975,192 1,897,464
Loan subserviced for others on a
long-term basis 129,016 - 160,371
Loans in securitization trusts 224,345 290,485 229,308
----------- ----------- -----------
Serviced in-house 2,843,892 2,265,677 2,287,143
Loans serviced by others - 68,228 53,885
----------- ----------- -----------
Total servicing portfolio $2,843,892 $2,333,905 $2,341,028
----------- ----------- -----------
Percentage serviced in-house 100.0% 97.1% 97.7%
----------- ----------- -----------
At or During the Six
Months Ended
December 31,
-----------------------
2004 2003
----------- -----------
(Unaudited)
Percentage of dollar amount of delinquent loans
serviced (period end)
One month 0.3% 0.4%
Two months 0.2% 0.3%
Three or more months:
Not foreclosed 1.8% 2.8%
Foreclosed 0.2% 0.3%
----------- -----------
Total 2.5% 3.8%
----------- -----------
Percentage of dollar amount of delinquent loans
in:
Loans held for investment 0.2% -
Loans serviced on an interim basis 1.5% 0.8%
Loans serviced for others 4.8% -
Loans in securitization trusts 22.5% 20.4%
Percentage of dollar amount of loans foreclosed
during the period to servicing portfolio 0.1% 0.3%
Number of loans foreclosed during the period 68 91
Principal amount of foreclosed loans during the
period $3,585 $5,524
Number of loans liquidated during the period 163 269
Net losses on liquidations during the period $6,778 $10,180
Percentage of annualized losses to servicing
portfolio 0.5% 1.0%
Servicing portfolio at period end $2,843,892 $2,333,905
AAMES INVESTMENT CORPORATION and SUBSIDIARIES
Supplemental Information
SECONDARY MARKET TRANSACTIONS
(In thousands)
Three Months Ended Six Months Ended
December 31, December 31,
----------------------- -----------------------
2004 2003 2004 2003
----------- ----------- ----------- -----------
(Unaudited) (Unaudited)
Whole loan sales $426,737 $1,714,640 $2,391,671 $2,900,797
Off-balance sheet
securitizations - - - -
----------- ----------- ----------- -----------
Total sales 426,737 1,714,640 2,391,671 $2,900,797
On-balance sheet
securitization 1,200,007 - 1,200,007 -
----------- ----------- ----------- -----------
Total secondary market
transactions $1,626,744 $1,714,640 $3,591,678 $2,900,797
----------- ----------- ----------- -----------
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