Aames Investment Corporation Reports First Quarter 2005 Financial 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 financial results for the first quarter of 2005. Total loans held for investment increased to $2.9 billion, the Company 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. a $0.27 per share dividend for the quarter 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 loss per share equaled $0.01. During the quarter, the Company reported a mark-to-market Mark-to-market Adjustment of the book value or collateral value of a security to reflect current market value. derivative derivative: see calculus. derivative In mathematics, a fundamental concept of differential calculus representing the instantaneous rate of change of a function. gain under FASB FASB See: Financial Accounting Standards Board FASB See Financial Accounting Standards Board (FASB). 133 of $9.5 million, or $0.16 per share. Excluding this gain, core diluted loss per share totaled $0.17. First Quarter Highlights --Loans held for investment in the REIT REIT See: Real Estate Investment Trust REIT See real estate investment trust (REIT). portfolio increased by 66% over December December: see month. 31, 2004 to $2.9 billion; --The Company generated a 4.6% net interest margin on average loans; --Total REIT portfolio delinquencies equaled 1.1%; --Total mortgage loan production of $1.4 billion, of which 62% was wholesale and 38% retail. Mr. A. Jay Meyerson Meyerson can refer to:
execute - execution our strategy as a mortgage REIT Mortgage REIT An REIT that invests in loans secured by real estate which derive income from mortgage interest and fees. mortgage REIT . We continued to build a mortgage portfolio through the 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 of loans that meet our 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. standards and our yield requirements. Pursuing a portfolio strategy enables Aames to produce more stable and predictable earnings and a dividend stream that is less sensitive to quarterly changes in production compared to a reliance on one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. gains produced through whole-loan sales" Meyerson continued, "In addition, we have begun to see the benefits from our efficiency initiatives and are making solid progress in achieving our 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. cost cutting goals while maintaining a sound production platform. We continue to review our product offering and pricing to assure that we remain competitive. We will not, however, focus simply on lending volume, but will manage to maximize In a graphical environment, to enlarge a window to the full size of the screen. See Win Maximize windows. the returns on and quality of our loan portfolio." Financial Summary The net loss for the quarter ended March 31, 2005 totaled $766,000, or a diluted loss per share of $0.01. Included in the net loss was a $9.5 million pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern mark-to-market derivative gain, which represents a non-cash market adjustment to the Company's interest rate hedges that reduced interest expense for the quarter. Excluding this gain, the net loss of the quarter totaled $10.3 million, or $0.17 per share. Total operating revenue operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. for the first quarter equaled $42.0 million, with net interest income of $33.4 million after a $6.5 million provision for loan losses, gain on sale of loans of $5.7 million and 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. revenue of $2.9 million. Excluding the FASB 133 hedge related fair value adjustment, core operating revenue equaled $32.4 million, with core net interest income after provision for loan losses of $23.8 million. The net yield on average loans for the quarter was 4.55%. The net gain on sale rate for the first quarter equaled 1.77%. Total non-interest expense equaled $42.0 million, or 3.08% of total loan production. Comparison of the Quarter Ended March 31, 2005 and 2004 Total operating revenue for the first quarter of 2005 decreased by $25.9 million from the first quarter of 2004 while core operating revenue declined by $35.4 million. The decline resulted from the continuing transition to a mortgage REIT, which changed the composition of the Company's earnings from primarily a gain on sale model to an interest income driven loan portfolio model. Gain on sale of loans for the 2005 quarter equaled $5.7 million, compared to $54.6 million in the year ago quarter, as the Company retained the majority of its higher value 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). production in its loan portfolio, and sold approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 24% of its production in the first quarter of 2005, primarily second lien A Second lien financing is a form of financing secured on a second ranking basis by (more or less) the same security, which secures the first ranking financing. The first lien lenders and the second lien lenders agree that, in the event of a security enforcement or bankruptcy, the , fixed rate and Alt-A An Alt-A mortgage is a type of U.S. mortgage that, for various reasons, is considered riskier than "prime" and less risky than "subprime," the riskiest category. Alt-A interest rates, which are determined by credit risk, therefore tend to be between that of prime and subprime home loans. Net interest income after the provision for losses for the March 2005 quarter increased $22.3 million from the 2004 quarter, while core net interest income after the provision for losses for the 2005 quarter increased $12.7 million. Included in net interest income for the first quarter of 2005 was a provision for loan losses of $6.5 million. There was no provision in the March 2004 quarter. Total non interest expense for the first quarter of 2005 declined by $5.1 million compared to the year ago period, driven by lower compensation and production costs from reduced loan volumes as well as lower general and administrative expense due to the Company's efficiency initiatives. Comparison of the Quarter Ended March 31, 2005 and December 31, 2004 Total operating revenue for the first quarter of 2005 increased by $9.0 million over the fourth quarter of 2004, while core operating revenue decreased by $497,000. Core net interest income after provision for losses increased by $1.5 million, with a $6.5 million provision for loan losses in the first quarter of 2005 compared to a $1.2 million provision for loan losses in fourth quarter of 2004. Gain on sale of loans for the quarter decreased by $4.1 million, again due to the Company's focus on building its loans held for investment portfolio. Non-interest expense for the first quarter 2005 decreased by $428,000 compared to core non-interest expense for the fourth quarter of 2004, which excludes $22.0 million of one time charges related to the REIT conversion 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. for that period. Balance Sheet Total loans held for investment as of March 31, 2005 increased to $2.9 billion, compared to $1.7 billion as of December 31, 2004. During the quarter, the Company 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. , and retained an additional $31.2 million of loans held for investment but not yet 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. on its March 31, 2005 balance sheet. As of the close of the first quarter of 2005, Aames also held $383.5 million of loans for sale into the secondary markets, which were comprised primarily of fixed rate, second mortgage and Alt-A loans. Average loans for the first quarter equaled $2.7 billion, including $2.3 billion of loans held for investment and $366.2 million of loans held for sale into the secondary markets. The allowance for loan losses as of March 31, 2005 totaled $8.4 million, or 0.29% of the held for investment portfolio. During the first quarter of 2005, the Company provided $6.5 million for losses. The Company did not experience any charge-offs in its held for investment portfolio in the quarter, due primarily to the early seasoning of its held for investment portfolio. Loan delinquencies in the held for investment portfolio as of March 31 were 1.1%, and were below estimated levels. Total equity as of March 31, 2005 equaled $356.8 million, compared to $357.6 million as of December 31, 2004. The Company continues to build its loans held for investment portfolio with a targeted leverage ratio of approximately 12 to 14 times equity. The actual leverage ratio (total loans held for investment divided by total stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. ) at March 31, 2005 was approximately 8 times equity, and the Company anticipates achieving its target ratio in mid 2005. After reaching this target, the Company will assess the relative benefits in capital and earnings generation from selling the majority of its loan production for cash gains or raising additional capital to fund further portfolio growth. Operating Results Net interest income for the first quarter of 2005 totaled $39.9 million. The core net interest income equaled $30.3 million, or 4.55% of average loans. Management anticipates closing an on-balance sheet securitization of approximately $1.2 billion in the second quarter of 2005 as part its target to increase the loan portfolio to approximately $4.0 billion. Management believes that the net interest income from loans held for investment will represent a majority of revenue as the Company becomes fully levered and that such income will be a more sustainable, stable source of earnings than cash gain on sale. Gain on sale of loans for the March 2005 quarter equaled $5.7 million. During the quarter, Aames sold approximately $320.6 million of loans into the secondary markets for cash gain, receiving an average net premium of 1.77%. As in the fourth quarter of 2004, the Company generated a lower gain on sale rate as it sold lower value fixed rate, second mortgage and Alt-A loans, retaining hybrid loans for its held for investment portfolio. In addition, competitive pricing pressures and increased market interest rates resulted in lower premiums paid for whole-loan sales in the first quarter of 2005. While management anticipates continued pricing pressure on secondary market premiums, the composition of loan sales is expected to generate higher gain on sale margins. Upon achieving its targeted leverage ratio, Aames intends to sell a larger volume of higher value hybrid loans into the secondary market, which it expects will generate higher premiums than the loans that the Company currently sells. Loan servicing income for the first quarter of 2005 totaled $2.9 million, generated primarily by the Company's portfolio of on-balance sheet securitizations. As the Company continues to grow its loan portfolio, the components of servicing fees will move from fees earned on loans serviced for third parties to fees earned on retained loans, including late fees and prepayment penalties Prepayment penalty A fee a borrower pays a lender when the borrower repays a loan before its scheduled time of maturity. . Non-interest expense for the March 2005 quarter equaled $42.0 million, comprised of $22.3 million of compensation expense, $8.8 million of expenses related to loan production and $10.8 million of general and administrative expenses. Total expenses as a percentage of loan production equaled 3.08%. In response to the margin compression compression, external stress applied to an object or substance, tending to cause a decrease in volume (see pressure). Gases can be compressed easily, solids and liquids to a very small degree if at all. created by the competitive environment and in an effort to maximize the return on its loan portfolio, management initiated a number of cost reduction programs in the first quarter to lower net operating cost as a percentage of loan production. The Company believes that the results of these initiatives will begin to contribute to its financial results in the second half of 2005. Compared to the fourth quarter of 2004, the total dollar volume of 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. , excluding the $22.0 million reorganization charge in the fourth quarter of 2004, decreased by approximately $500,000 during the March 2005 quarter. Core compensation expense decreased by $717,000 with production and core general and administrative expenses up slightly. Core expenses eliminate the impact of one time charges taken in the fourth quarter of 2004 related to the Company's conversion to a REIT and its initial public offering. Loan Production The Company originated $1.4 billion of mortgage loans during the first quarter of 2005, compared to $1.7 billion in the fourth quarter of 2004 and $1.9 billion in the first quarter of 2004. The decreased production resulted from the sustained competitive environment, including aggressive actions by a number of peers on loan coupons COUPONS. Those parts of a commercial instrument which are. to be cut, and which are evidence of something connected with the contract mentioned in the instrument. They are generally attached to certificates of loan, where the interest is payable at particular periods, and, when the and terms, as well as the impact of higher interest rates on origination volumes. In response to the current challenging market environment, the Company has focused more on the quality of and returns generated by its loan portfolio and its overall cost to originate o·rig·i·nate v. 1. To bring into being; create. 2. To come into being; start. loans, rather than simply on absolute volume. The Company remains committed, however, to offering competitive products that meet the borrowing needs of its core customers. Wholesale 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 first quarter equaled $845.1 million, or 62.1% of total production, while retail originations equaled $516.6 million, or 37.9% of total production. For the fourth quarter of 2004, wholesale and retail originations accounted for 66.4% and 33.6% of total production, respectively. Management believes that the value of its retail franchise is maximized in the current lending environment, where direct access to the consumer and ability to achieve better loan pricing will increase the value of loan production. During the first quarter, the Company opened 3 Super Branches and closed 11 traditional retail branches. About Aames Investment Corporation Aames is a mortgage REIT and, through its subsidiary Aames Financial Corporation, originates mortgage loans in 47 states. Aames Financial is a fifty-year old national mortgage banking company focused primarily on originating subprime residential mortgage loans through wholesale and retail channels under the name "Aames Home Loan." To find out more about Aames, please visit www.aames.net. Information Regarding Forward Looking Statements This press release may contain 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. 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. The risks and uncertainties that may cause our performance and results to vary include: (i) changes in overall economic conditions and interest rates; (ii) an inability to originate subprime hybrid/adjustable mortgage loans; (iii) 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; (iv) adverse changes in the securitization and whole loan market for mortgage loans; (v) declines in real estate values; (vi) limited cash flow to fund operations and 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; (vii) concentration of operations in 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). , Florida, New York Florida is the name of some places in the U.S. state of New York:
relating to relate prep → bezüglich +gen, mit Bezug auf +acc the company, see the 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 December 31, 2004 and other filings with the SEC made by the company pursuant to the Securities Exchange Act of 1934. Aames Investment expressly disclaims any obligation to update or revise any forward-looking statements in this press release. Further Information For more information, contact Steven Ste´ven n. 1. Voice; speech; language. Ye have as merry a steven As any angel hath that is in heaven. - Chaucer. 2. An outcry; a loud call; a clamor. To set steven to make an appointment. Canup, Senior Vice President, Corporate Development and Investor Relations Investor relations The process by which the corporation communicates with its investors. , in Aames Investment's Investor Relations Department at (323) 210-5311 or at info@aamescorp.com via email.
AAMES INVESTMENT CORPORATION and SUBSIDIARIES
Condensed financial statements
(In thousands)
CONDENSED BALANCE SHEETS
-------------------------
March 31, December 31,
2005 2004
------------ -----------
(unaudited)
Cash and cash equivalents 128,366 $37,780
Loans held for sale, at lower of cost or
market 383,478 484,963
Loans held for investment, net 2,862,407 1,725,046
Advances and other receivables 24,579 22,740
Residual interests, at estimated fair value 18,862 39,082
Derivative instruments, at estimated fair
value 51,970 31,947
Prepaid and other assets 58,449 59,317
-------------- -----------
Total assets $3,528,111 $2,400,875
-------------- -----------
Financings on loans held for investment $2,258,106 $1,157,470
Revolving warehouse and repurchase
facilities 854,383 809,213
Other borrowings - 7,680
Other liabilities 58,814 68,886
-------------- -----------
3,171,303 2,043,249
Stockholders' equity 356,808 357,626
-------------- -----------
Total liabilities and stockholders'
equity $3,528,111 $2,400,875
-------------- -----------
Shares outstanding 61,421,757 61,360,271
-------------- -----------
AAMES INVESTMENT CORPORATION and SUBSIDIARIES
Condensed financial statements
(In thousands, except per share data)
Three Months Ended
March 31,
--------------------
2005 2004
--------------------
(Unaudited)
Interest income $51,768 $17,678
Interest expense 11,916 6,579
----------- --------
Net interest income 39,852 11,099
Provision for losses on loans held for investment 6,500 -
----------- --------
Net interest income after provision for
losses 33,352 11,099
Noninterest income:
Gain on sale of loans 5,683 54,599
Loan servicing 2,924 2,155
----------- --------
Total noninterest income 8,607 56,754
----------- --------
Net interest income and noninterest income 41,959 67,853
Noninterest expense:
Personnel 22,347 25,348
Production 8,800 10,333
General and administrative 10,813 11,375
----------- --------
Total noninterest expense 41,960 47,056
----------- --------
Income (loss) before income taxes (1) 20,797
Provision (benefit) for income taxes 765 (93)
--------------------
Net income (loss) $(766) $20,890
--------------------
Net income (loss) to common stockholders:
Basic $(766) $18,021
--------------------
Diluted $(766) $21,412
--------------------
Net income (loss) per common share:
Basic $(0.01) $2.53
--------------------
Diluted $(0.01) $0.20
--------------------
Weighted average number of
common shares outstanding:
Basic 61,420 7,120
--------------------
Diluted 61,420 104,800
--------------------
Mark to market on interest rate cap agreements
designed to hedge interest rate risk on
financings
of loans held for investments $9,532 $-
Income (loss) before income taxes, excluding mark
to market adjustment (9,533) 20,797
Provision (benefit) for income taxes 765 (93)
--------------------
Net income (loss) to common stockholders,
excluding mark to market adjustment $(10,298) $20,890
--------------------
Diluted net income (loss) per common share,
excluding mark to market adjustment $(0.17) $0.20
AAMES INVESTMENT CORPORATION and SUBSIDIARIES
Other financial data (Unaudited)
(In thousands)
Condensed Statement of Cash
Flow Information
Three Months Ended March 31,
------------------------------
2005 2004
------------ ----------
Net cash provided by (used in):
Operating activities $101,221 $(82,947)
Investing activities (1,144,929) (930)
Financing activities 1,134,294 89,337
------------ ----------
Net increase (decrease) in cash and cash
equivalents 90,586 5,460
Cash and cash equivalents, beginning of period 37,780 11,611
------------ ----------
Cash and cash equivalents, end of period $128,366 $17,071
------------ ----------
AAMES INVESTMENT CORPORATION and SUBSIDIARIES
Supplemental Information
LOAN PRODUCTION:
(In thousands)
Three Months Ended
-----------------------------------
March 31, December 31,
2005 2004 2004
----------------------- -----------
(Unaudited)
RETAIL PRODUCTION
Total dollar amount $516,558 $586,527 $574,625
Number of loans 3,718 4,677 4,431
Average loan amount $138,934 $125,407 $129,683
Average initial LTV 75.88% 77.85% 75.82%
Weighted average interest rate 7.53% 7.26% 7.36%
WHOLESALE PRODUCTION
Total dollar amount $845,058 $1,279,701 $1,134,911
Number of loans 6,028 8,630 7,841
Average loan amount $140,189 $148,285 $144,741
Average initial LTV 81.25% 81.68% 81.19%
Weighted average interest rate 7.60% 7.17% 7.46%
TOTAL PRODUCTION
Total dollar amount $1,361,616 $1,866,228 $1,709,536
Number of loans 9,746 13,307 12,272
Average loan amount $139,710 $140,244 $139,304
Average initial LTV 79.21% 80.47% 79.38%
Weighted average interest rate 7.57% 7.20% 7.43%
Total production by loan purpose:
----------------------------------
Cash-out refinance $799,342 $1,146,498 $1,019,194
Purchase money 519,656 616,352 636,722
Rate/term refinance 42,618 103,378 53,620
----------- ----------- -----------
Total $1,361,616 $1,866,228 $1,709,536
----------- ----------- -----------
Total production by property type:
----------------------------------
Single family $1,194,927 $1,630,242 $1,510,413
Multi-family 94,399 136,211 111,322
Condominiums 72,290 99,775 87,801
----------- ----------- -----------
Total $1,361,616 $1,866,228 $1,709,536
----------- ----------- -----------
Total production by state/region
produced:
----------------------------------
California $372,922 $617,210 $523,701
Florida 296,851 364,132 345,653
New York 93,558 151,579 103,796
Texas 111,392 119,119 129,579
Other Western states 139,291 193,433 184,520
Other Midwestern states 95,226 168,125 140,751
Other Northeastern states 145,853 139,870 161,677
Other Southeastern states 106,523 112,760 119,859
----------- ----------- -----------
Total $1,361,616 $1,866,228 $1,709,536
----------- ----------- -----------
AAMES INVESTMENT CORPORATION and SUBSIDIARIES
Supplemental Information
Production by interest rate type:
Three Months Ended
-------------------------------------------------
March 31, 2005 March 31, 2004 December 31, 2004
--------------- --------------- -----------------
Hybrid:
Traditional $947,520 $1,396,112 $1,252,757
Interest only 148,807 - 91,203
Fixed rate 265,289 470,116 365,576
--------------- --------------- -----------------
$1,361,616 $1,866,228 $1,709,536
--------------- --------------- -----------------
Loan production by credit grade during the three months ended
March 31, 2005 (in thousands):
Average Weighted Weighted
Credit Dollar Amount % of Credit Average Average
Grade of Loans Total Score Interest LTV
Rate
----------- -------------- ---------- ------------- --------- --------
A + $1,045,216 77% 627 7.4% 80%
A 135,323 10% 584 7.6% 77%
A - 57,664 4% 557 8.0% 75%
B 76,578 6% 559 8.4% 76%
C 37,533 3% 552 9.0% 70%
C- 9,302 NM 550 10.4% 64%
-------------- ---------- ------------- --------- --------
Total $1,361,616 100% 610 7.6% 79%
-------------- ---------- ------------- --------- --------
Loan production by credit grade during the three months ended
March 31, 2004 (in thousands):
Average Weighted Weighted
Credit Dollar Amount % of Credit Average Average
Grade of Loans Total Score Interest LTV
Rate
------------ ------------- ----------- ------------- -------- --------
A + $1,341,449 72% 625 7.0% 82%
A 242,310 13% 591 7.2% 80%
A - 105,960 6% 562 7.6% 78%
B 118,208 6% 562 8.0% 77%
C 47,070 4% 554 8.6% 71%
C- 11,063 1% 540 9.8% 67%
D 168 NM 503 6.7% 71%
------------- ----------- ------------- -------- --------
Total $1,866,228 100% 609 7.2% 80%
------------- ----------- ------------- -------- --------
AAMES INVESTMENT CORPORATION and SUBSIDIARIES
Supplemental Information
Loan production by credit score range during the three months ended
March 31, 2005 (in thousands):
Weighted Weighted
Credit Score Dollar Amount % of Average Average
Range of Loans Total Interest Rate LTV
-------------- ------------- -------- --------------- ---------------
Above 700 $88,485 6% 7.0% 79%
661-700 176,452 13% 7.0% 79%
621-660 371,222 27% 7.3% 81%
581-620 329,911 27% 7.4% 80%
541-580 230,475 17% 8.1% 79%
540 and below 163,907 12% 8.6% 74%
Not available 1,164 NM 8.2% 84%
------------- -------- --------------- ---------------
Total $1,361,616 100% 7.6% 79%
------------- -------- --------------- ---------------
Loan production by credit score range during the three months ended
March 31, 2004 (in thousands):
Weighted Weighted
Credit Score Dollar Amount % of Average Average
Range of Loans Total Interest Rate LTV
-------------- ------------- --------- -------------- --------------
Above 700 $122,334 7% 6.6% 79%
661-700 239,961 13% 6.8% 82%
621-660 466,311 25% 7.0% 81%
581-620 424,989 23% 7.1% 81%
541-580 363,860 19% 7.6% 81%
540 and below 246,350 13% 8.1% 76%
Not available 2,423 NM 7.6% 81%
------------- --------- -------------- --------------
Total $1,866,228 100% 7.6% 80%
------------- --------- -------------- --------------
AAMES INVESTMENT CORPORATION and SUBSIDIARIES
Supplemental Information
LOAN SERVICING
(Dollars in thousands)
March 31, December 31,
2005 2004 2004
------------ ----------- ---------------
(Unaudited)
Mortgage loans serviced:
Loans held for investment $2,858,192 $- $1,718,696
Loans serviced on an interim
basis 625,211 2,074,602 771,830
Loan subserviced for others
on a long-term basis 119,908 - 129,016
Loans in securitization
trusts 106,522 260,743 224,345
------------ ----------- ---------------
Serviced in-house 3,709,833 2,335,345 2,843,887
Loans serviced by others - 59,727
------------ ----------- ---------------
Total servicing portfolio $3,709,833 $2,395,072 $2,843,887
------------ ----------- ---------------
Percentage serviced in-house 100.0% 97.5% 100.0%
------------ ----------- ---------------
At or During the Three Months Ended
March 31, December 31,
-------------------
2005 2004 2004
----------- ----------- -----------
(Unaudited)
Percentage of dollar amount of
delinquent loans serviced
(period end):
One month 0.5% 0.4% 0.3%
Two months 0.3% 0.2% 0.2%
Three or more months:
Not foreclosed 1.4% 2.5% 1.8%
Foreclosed 0.2% 0.3% 0.2%
----------- ----------- -----------
Total 2.4% 3.4% 2.5%
----------- ----------- -----------
Percentage of dollar amount of
delinquent loans in:
Loans held for investment (1) 1.1% - 0.2%
Loans serviced on an interim
basis (2) 4.2% 0.7% 1.5%
Loans subserviced for others
on a long-term basis 5.5% 1.7% 4.8%
Loans in off-balance
securitization trusts
serviced:
In-house 23.2% 15.8% 22.5%
By others - 39.8% -
Percentage of dollar amount of
loans foreclosed during the
period to
servicing portfolio 0.1% 0.2% 0.1%
Number of loans foreclosed during
the period 42 61 68
Principal amount of foreclosed
loans during the period $2,351 $4,659 $3,585
Number of loans liquidated during
the period 69 125 163
Net losses on liquidations during
the period $2,104 $4,518 $6,778
Percentage of annualized losses to
servicing portfolio 0.3% 0.6% 0.5%
Servicing portfolio at period end $3,710,000 $2,395,000 $2,844,000
(1) REIT portfolio of loans held for investment
(2) Loans held for sale and loan sold to third parties with pending
transfer of servicing
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