American Business Financial Services, Inc. Reports Financial Results for the Third Quarter of Fiscal 2004; Company Announces 10% Stock Dividend.To download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. high-resolution high-res·o·lu·tion adj. 1. Relating to an image that has fine detail. 2. a. Of or relating to an output device that produces images that contain a large number of dots per unit of area and are therefore sharp and , print-ready JPEG JPEG in full Joint Photographic Experts Group Standard computer file format for storing graphic images in a compressed form for general use. JPEG images are compressed using a mathematical algorithm. images, click on the thumbnail A miniature representation of a page or image that is used to identify a file by its contents. Clicking the thumbnail opens the file. Thumbnails are an option in file managers, such as Windows Explorer, and they are found in photo editing and graphics program to quickly browse multiple image above. WARNING: these images are very large (800K+) Click here for caption Business Editors MULTIMEDIA AVAILABLE: http://www.businesswire.com/cgi-bin/mmg.cgi?eid=4640283 PHILADELPHIA--(BUSINESS WIRE)--May 13, 2004 American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Business Financial Services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. , Inc. (ABFS ABFS American Business Financial Services, Inc. ABFS ABF Freight Systems, Inc. ABFS Alpaca Breeders Fiber School ABFS Atchafalaya Basin Floodway System (Louisiana) ABFS Advance Benefit Funding Sources ) (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :ABFI) today announced its financial results for the third quarter of fiscal 2004, ended March 31, 2004. The Company reported a net loss attributable to common stock of $33.2 million, or $10.53 per share, on revenues of $23.4 million for the quarter. This compares to net income of $221,000, or $0.06 per 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. share, on revenues of $71.8 million during the same comparable period of fiscal 2003. For the nine month period ended March 31, 2004, ABFS reported a net loss attributable to common stock of $84.3 million, or $27.79 per share, on revenues of $72.2 million, compared to net income of $4.2 million, or $1.36 per diluted share, on revenues of $220.9 million during the first nine months of fiscal 2003. On May 13, 2004, the Company's Board of Directors declared a 10% stock dividend to all shareholders of record as of May 25, 2004, payable on June June: see month. 8, 2004. Under the terms of the stock dividend, ABFS shareholders will receive a dividend of 10 shares for every 100 shares held on the record date. Fractional shares Fractional share Stocks amounting to less than one full share, usually resulting from splits, acquisitions, exchanges, or dividend reinvestment programs. fractional share Less than one share of stock, that is, one-third or one-half a share. created by the stock dividend will be paid in cash based upon the Company's stock on June 8, 2004, as adjusted for the stock dividend. Albert Albert, German churchman Albert, 1490–1545, German churchman, cardinal of the Roman Catholic Church. A member of the house of Brandenburg, he became (1514) Archbishop of Mainz. W. Mandia, Executive Vice President and Chief Financial Officer of ABFS said, "While our financial performance has been impacted through our transition period, we have made considerable progress this quarter in building the infrastructure for our adjusted business model. Since January January: see month. 2004, we have added approximately 129 professionals to our broker 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 channel, bringing the total broker 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. network to a team of 150 professionals nationwide. These efforts are generating traction Traction Definition Traction is the use of a pulling force to treat muscle and skeleton disorders. Purpose Traction is usually applied to the arms and legs, the neck, the backbone, or the pelvis. , and we are on pace to originate o·rig·i·nate v. 1. To bring into being; create. 2. To come into being; start. close to $500 million of new loans during our fourth quarter ending June 30, 2004, which would be a company record. Our new business model, focused more on whole loan sales, will make us less dependent on the 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. market going forward, leading to more stable core operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before and improved cash flow." During the third quarter, ABFS recorded total pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta non-cash adjustments on securitization assets of $23.2 million, of which $15.1 million was charged to the income statement and $8.1 million was charged to other comprehensive income, a component of 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. . These write-downs of interest-only strips Interest-only strip (IO) A security based solely on the interest payments from a pool of mortgages, Treasury bonds, or other bonds. Once the principal on the mortgages or bonds has been repaid, interest payments stop, and the value of the IO falls to zero. and servicing rights, referred to as the Company's securitization assets, continue to primarily reflect higher than expected prepayments Prepayments Payments made in excess of scheduled mortgage principal repayments. as market anticipation of higher interest rates accelerated refinancing Refinancing An extension and/or increase in amount of existing debt. activity. For the same period in fiscal 2003, the Company recorded total pre-tax valuation adjustments of $16.9 million, of which $10.7 million was charged to the income statement. Loan Originations During the three-month period ended March 31, 2004, ABFS loan originations totaled $241.4 million, compared to $403.7 million for the prior year period. For the nine-month period ended March 31, 2004, the Company originated $468.6 million in mortgage loans, compared to $1.2 billion for the same prior year period. Mandia said, "Last October October: see month. , as we were initially employing our warehouse facilities, our monthly origination volume was less than $28.0 million. Last month (April), subsequent to the quarter end, we originated approximately $140.0 million in loans, the fifth highest monthly total in Company history. We believe this more than five-fold Adj. 1. five-fold - having five units or components fivefold, quintuple multiple - having or involving or consisting of more than one part or entity or individual; "multiple birth"; "multiple ownership"; "made multiple copies of the speech"; "his multiple increase in loan originations validates our adjusted business model, and sets us on a path toward future profitability." Key ABFS accomplishments in implementing the Company's adjusted business strategy during the quarter include: -- In January 2004 The Company announced that Peter Levasseur joined ABFS as Executive Vice President of Upland Upland, city (1990 pop. 63,374), San Bernardino co., S Calif., in a citrus-fruit region at the foot of the San Gabriel Mts.; inc. 1906. Citrus fruits and grapes are packed and processed in the city. Paint, orchard heaters, auto parts, and feed products are also made. Mortgage Brokerage Services giving the Company a second brokerage office in Southern California Southern California, also colloquially known as SoCal, is the southern portion of the U.S. state of California. Centered on the cities of Los Angeles and San Diego, Southern California is home to nearly 24 million people and is the nation's second most populated region, , home to three of the top ten housing markets in the country, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. the National Association of Realtors. -- In March 2004, the Company announced the hiring of another veteran in the mortgage industry, William Winters
Vice President of American Business Mortgage Services, Inc. Winters and his staff of 40 mortgage professionals, based in Edgewater Edgewater is a common name used throughout the world as a place name. It is often found in English-speaking countries such as Australia, Canada, United Kingdom and United States. , Maryland Maryland (mâr`ələnd), one of the Middle Atlantic states of the United States. It is bounded by Delaware and the Atlantic Ocean (E), the District of Columbia (S), Virginia and West Virginia (S, W), and Pennsylvania (N). , is responsible for helping the Company grow its broker business. -- Also in March 2004, ABFS introduced UplandBroker.com, a new Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the tool that is one of the most innovative and interactive loan structuring web sites for brokers in the industry. -- Subsequent to the fiscal third quarter, in May 2004, the Company completed a $276 million mortgage loan sale with a leader in the acquisition and servicing of blemished blem·ish tr.v. blem·ished, blem·ish·ing, blem·ish·es To mar or impair by a flaw. n. An imperfection that mars or impairs; a flaw or defect. credit residential mortgages. $224 million of the total sale was completed in March. All sales were on a servicing-released basis. As ABFS grows its loan origination volume, whole loan sales will be a fundamental component. This will allow ABFS to offer a broader mortgage product line, capture strategic efficiencies and improve its cash flow position. Mandia continued, "While we anticipate 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. operating losses operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. through the first quarter of fiscal 2005, with the progress we believe we have made toward our business model transition, we can now see a path to profitability by the quarter ended December 31, 2004. We are also encouraged that ABFS was able to generate operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. of $13.0 million during the quarter ($163 million for the first nine months), reflecting the benefits of our revised business model. Again, we believe we are continuing to make real progress in implementing our adjusted business model, and we continue our optimism for our future prospects, based on our month-by-month growth in loan origination volume, which is the foundation of our adjusted business model." American Business Financial Services, Inc. is a diversified financial The diversified financial services segment includes a range of consumer and commercially-oriented companies offering a wide variety of products and services, including various lending products (such as home equity loans and credit cards), insurance, and securities and investment services organization operating mainly in the eastern and central portions of 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. . Recent expansion has positioned the Company to increase its operations in the western portion of the United States, especially 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). . Through its principal direct and indirect subsidiaries, the Company currently originates, sells and services home equity loans through a combination of channels, including a national processing center located at its centralized cen·tral·ize v. cen·tral·ized, cen·tral·iz·ing, cen·tral·iz·es v.tr. 1. To draw into or toward a center; consolidate. 2. operating office in Philadelphia, Pennsylvania Pennsylvania (pĕnsəlvā`nyə), one of the Middle Atlantic states of the United States. It is bordered by New Jersey, across the Delaware River (E), Delaware (SE), Maryland (S), West Virginia (SW), Ohio (W), and Lake Erie and New York . The Company also processes and purchases home equity loans from other financial institutions through its Bank Alliance Services program. For further information, contact Albert W. Mandia, Executive Vice President and Chief Financial Officer, 215-940-4504, or Keith Bratz, VP--Corporate Communications, 215-940-4525. Certain statements contained in this press release, which are not historical fact, may be deemed to be forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. under federal securities laws. There are many important factors that could cause American Business Financial Services, Inc. and its subsidiaries' actual results to differ materially from those indicated in the forward-looking statements. Such factors include, but are not limited to, general economic conditions, including interest rate risk, future residential real estate values, regulatory changes (legislative or otherwise) affecting the mortgage lending and real estate industries, regulatory investigations of lending practices, lending to credit-impaired borrowers, competition, demand for the Company's products, relationships with brokers, ability to obtain financing, loan 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. rates, 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. and default rates, access to securitization markets, changes in factors influencing or interruptions in securitization and whole loan sale markets, ability to successfully implement changes in business strategy, amount of debt outstanding, restrictive covenants Restrictive covenants Provisions that place constraints on the operations of borrowers, such as restrictions on working capital, fixed assets, future borrowing, and payment of dividends. in debt instruments and other risks identified in American Business Financial Services, Inc.'s Securities and Exchange Commission filings.
AMERICAN BUSINESS FINANCIAL SERVICES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(dollar amounts in thousands, except per share data)
Three Months Ended Nine Months Ended
March 31, March 31,
------------------- -------------------
2004 2003 2004 2003
--------- --------- --------- ---------
(Unaudited) (Unaudited)
REVENUES
Gain on sale of loans:
Securitizations $- $54,504 $15,107 $170,394
Whole loan sales 7,208 (4) 10,207 29
Interest and fees 4,870 4,665 11,690 13,393
Interest accretion on
interest-only strips 9,605 12,114 30,942 34,361
Servicing income 1,283 486 3,810 2,667
Other income 478 1 480 7
--------- --------- --------- ---------
Total Revenues 23,444 71,766 72,236 220,851
--------- --------- --------- ---------
EXPENSES
Interest 16,901 16,824 50,369 51,057
Provision for credit losses 4,876 1,718 12,846 4,692
Employee related costs 11,175 9,418 36,826 29,965
Sales and marketing 4,590 6,963 10,524 20,136
Trading (gains) and losses (1,745) 782 (6,815) 5,257
General and administrative 23,256 25,375 63,736 69,633
Securitization assets
valuation adjustments 15,085 10,657 37,848 33,303
--------- --------- --------- ---------
Total Expenses 74,138 71,737 205,334 214,043
--------- --------- --------- ---------
INCOME (LOSS) BEFORE PROVISION
FOR INCOME TAXES (BENEFIT) (50,694) 29 (133,098) 6,808
PROVISION FOR INCOME TAXES
(BENEFIT) (19,263) (192) (50,577) 2,655
--------- --------- --------- ---------
INCOME (LOSS) BEFORE DIVIDENDS
ON PREFERRED STOCK (31,431) 221 (82,521) 4,153
DIVIDENDS ON PREFERRED STOCK 1,751 - 1,751 -
--------- --------- --------- ---------
NET INCOME (LOSS) ATTRIBUTABLE
TO COMMON STOCK $(33,182) $221 $(84,272) $4,153
========= ========= ========= =========
EARNINGS (LOSS) PER COMMON
SHARE
Basic $(10.53) $0.07 $(27.79) $1.43
========= ========= ========= =========
Diluted $(10.53) $0.06 $(27.79) $1.36
========= ========= ========= =========
Average Common Shares (in
thousands):
Basic 3,182 2,941 3,033 2,909
Diluted 3,182 3,103 3,033 3,043
American Business Financial Services, Inc. and Subsidiaries
Consolidated Balance Sheets
(dollar amounts in thousands)
March 31, June 30,
2004 2003
------------ ------------
Assets (Unaudited) (Note)
Cash and cash equivalents (includes
restricted cash of $15,197 at March 31,
2004 and $16,988 at June 30, 2003) $ 31,375 $ 47,475
Loan and lease receivables, net
Available for sale 121,518 271,402
Interest and fees 20,655 15,179
Other 36,362 23,761
Interest-only strips (includes the fair
value of over-collateralization related
cash flows of $239,567 at March 31, 2004
and $279,245 at June 30, 2003) 496,709 598,278
Servicing rights 82,823 119,291
Receivable for sold loans - 26,734
Prepaid expenses 15,438 3,477
Property and equipment, net 26,180 23,302
Deferred income tax asset 38,581 -
Other assets 28,578 30,452
------------ ------------
Total assets $ 898,219 $ 1,159,351
============ ============
Liabilities and Stockholders' Equity
Liabilities
Subordinated debentures $ 585,797 $ 719,540
Senior collateralized subordinated notes 55,420 -
Warehouse lines and other notes payable 86,644 212,916
Accrued interest payable 37,571 45,448
Accounts payable and other accrued expenses 32,687 30,352
Deferred income tax liability - 17,036
Other liabilities 89,936 91,990
------------ ------------
Total liabilities 888,055 1,117,282
------------ ------------
Stockholders' Equity
Preferred stock, par value $.001,
liquidation preference of $1.00 per share
plus accrued and unpaid dividends to the
date of liquidation, authorized shares,
203,000,000 at March 31, 2004 and
3,000,000 at June 30, 2003; Issued:
61,807,088 shares of Series A at March 31,
2004 62 -
Common stock, par value $.001, authorized
shares, 209,000,000 at March 31, 2004 and
9,000,000 at June 30, 2003; Issued:
3,653,165 shares at March 31, 2004 and June
30, 2003 (including treasury shares of
506,273 at March 31, 2004 and 706,273 at
June 30, 2003) 4 4
Additional paid-in capital 84,035 23,985
Accumulated other comprehensive income 5,017 14,540
Unearned compensation (760) -
Retained earnings (deficit) (71,168) 13,104
Treasury stock, at cost (6,426) (8,964)
------------ ------------
10,764 42,669
Note receivable (600) (600)
------------ ------------
Total stockholders' equity 10,164 42,069
------------ ------------
Total liabilities and stockholders' equity $ 898,219 $ 1,159,351
============ ============
Note: The balance sheet at June 30, 2003 has been derived from
the audited financial statements at that date.
AMERICAN BUSINESS FINANCIAL SERVICES, INC. Total Portfolio Quality (for the last three fiscal quarters) The following table provides data concerning delinquency experience, real estate owned Real Estate Owned Property owned by a lender - usually a bank - after an unsuccessful sale at a foreclosure auction. This is common because most of the properties up for sale at these auctions are worth less than the total amount owed to the bank: the minimum bid in most and loss experience for the total loan and lease portfolio in which we have interests, either because the loans and leases are on our balance sheet or sold into securitizations in which we have retained interests Retained interest (also colloquially known as a payout penalty) is future, currently unpaid, interest that some lenders add to the remaining principal of a loan to determine a payout figure in the event that the loan is terminated before the completion of the original term. . The total portfolio is divided into the portion of the portfolio managed by us and the portion of the portfolio serviced by others. See Attachment A for a reconciliation of total portfolio and REO reo Noun NZ a language [Maori] measures to our balance sheet. Previously delinquent delinquent 1) adj. not paid in full amount or on time. 2) n. short for an underage violator of the law as in juvenile delinquent. DELINQUENT, civil law. He who has been guilty of some crime, offence or failure of duty. loans managed by us subject to deferment deferment Delaying of an obligation. See Default, Medical student debt. Cf Forbearance. and forbearance Refraining from doing something that one has a legal right to do. Giving of further time for repayment of an obligation or agreement; not to enforce claim at its due date. A delay in enforcing a legal right. arrangements are not included in this table if borrowers are current on principal and interest payments as required under the terms of the original note (exclusive of delinquent payments advanced or fees paid by us on the borrower's behalf as part of the deferment or forbearance arrangement) (dollars in thousands):
March 31, December 31, September 30,
2004 2003 2003
----------------- ----------------- -----------------
Delinquency by
Type Amount % Amount % Amount %
-------------- ---------- ------ ---------- ------ ---------- ------
Managed by
ABFS:
Business
Purpose
Loans
Total managed
portfolio $ 278,608 $ 307,807 $ 364,970
========== ========== ==========
Period of
delinquency:
31-60 days $ 4,864 1.75% $ 6,640 2.16% $ 5,761 1.57%
61-90 days 5,798 2.08 7,109 2.31 6,129 1.68
Over 90 days 52,434 18.82 47,449 15.41 42,831 11.74
---------- ------ ---------- ------ ---------- ------
Total
delinquencies $ 63,096 22.65% $ 61,198 19.88% $ 54,721 14.99%
========== ====== ========== ====== ========== ======
REO $ 4,411 $ 1,879 $ 4,491
========== ========== ==========
Home Equity
Loans
Total managed
portfolio $1,914,165 $2,179,052 $2,601,125
========== ========== ==========
Period of
delinquency:
31-60 days $ 36,885 1.93% $ 53,522 2.46% $ 53,514 2.06%
61-90 days 21,964 1.15 31,668 1.45 36,729 1.41
Over 90 days 121,999 6.37 125,212 5.75 122,997 4.73
---------- ------ ---------- ------ ---------- ------
Total
delinquencies $ 180,848 9.45% $ 210,402 9.66% $ 213,240 8.20%
========== ====== ========== ====== ========== ======
REO $ 21,778 $ 22,359 $ 21,561
========== ========== ==========
Equipment
Leases
Total managed
portfolio $ - $ 3,669 $ 5,705
========== ========== ==========
Period of
delinquency:
31-60 days $ - -% $ 419 11.42% $ 248 4.34%
61-90 days - - 93 2.54 40 0.70
Over 90 days - - 127 3.46 200 3.51
---------- ------ ---------- ------ ---------- ------
Total
delinquencies $ - -% $ 639 17.42% $ 488 8.55%
========== ====== ========== ====== ========== ======
Total Managed
by ABFS
Total managed
portfolio $2,192,773 $2,490,528 $2,971,800
========== ========== ==========
Period of
delinquency:
31-60 days $ 41,749 1.90% $ 60,581 2.43% $ 59,523 2.00%
61-90 days 27,762 1.27 38,870 1.56 42,898 1.44
Over 90 days 174,433 7.95 172,788 6.94 166,028 5.59
---------- ------ ---------- ------ ---------- ------
Total
delinquencies $ 243,944 11.12% $ 272,239 10.93% $ 268,449 9.03%
========== ====== ========== ====== ========== ======
REO $ 26,189 1.19% $ 24,238 0.97% $ 26,052 0.88%
========== ====== ========== ====== ========== ======
Serviced by
Others:
Total
portfolio
serviced by
others $ 156,644 $ 167,582 $ -
========== ========== ==========
Period of
delinquency:
31-60 days $ 8,649 5.52% $ 10,112 6.04% $ - -%
61-90 days 3,529 2.25 3,198 1.91 - -
Over 90 days 5,804 3.71 1,984 1.18 - -
---------- ------ ---------- ------ ---------- ------
Total
delinquencies $ 17,982 11.48% $ 15,294 9.13% $ - -%
========== ====== ========== ====== ========== ======
Total
portfolio $2,349,417 $2,658,110 $2,971,800
========== ========== ==========
Period of
delinquency:
31-60 days $ 50,398 2.15% $ 70,693 2.66% $ 59,523 2.00%
61-90 days 31,291 1.33 42,068 1.58 42,898 1.44
Over 90 days 180,237 7.67 174,772 6.58 166,028 5.59
---------- ------ ---------- ------ ---------- ------
Total
delinquencies $ 261,926 11.15% $ 287,533 10.82% $ 268,449 9.03%
========== ====== ========== ====== ========== ======
REO $ 26,189 1.11% $ 24,238 0.91% $ 26,052 0.88%
========== ====== ========== ====== ========== ======
Losses
experienced
during the
period (a)(b):
Loans $ 10,923 1.71% $ 12,375 1.77% $ 8,100 0.97%
====== ====== ======
Leases - -% (41) (3.49)% 1 0.06%
---------- ====== ---------- ====== ---------- ======
Total
Losses $ 10,923 1.71% $ 12,334 1.76% $ 8,101 0.97%
========== ====== ========== ====== ========== ======
(a) Percentage based on annualized losses and average total portfolio.
(b) Losses recorded on our books were $7.6 million ($5.7 million from
charge-offs through the provision for loan losses and $1.9 million
for write downs of real estate owned) and losses absorbed by loan
securitization trusts were $3.3 million for the three months ended
March 31, 2004. Losses recorded on our books were $7.7 million
($6.1 million from charge-offs through the provision for loan
losses and $1.6 million for write downs of real estate owned) and
losses absorbed by loan securitization trusts were $4.6 million
for the three months ended December 31, 2003. Losses recorded on
our books were $3.5 million ($1.5 million from charge-offs through
the provision for loan losses and $2.0 million for write downs of
real estate owned) and losses absorbed by loan securitization
trusts were $4.6 million for the three months ended September 30,
2003. Losses recorded on our books include losses for loans we
hold as available for sale or real estate owned and loans
repurchased from securitization trusts.
Attachment A American Business Financial Services, Inc Reconciliation of Non-GAAP Financial Measures The earnings release contains non-GAAP financial measures. For purposes of the Securities and Exchange Commission Regulation G, a non-GAAP financial measure is a numerical numerical expressed in numbers, i.e. Arabic numerals of 0 to 9 inclusive. numerical nomenclature a numerical code is used to indicate the words, or other alphabetical signals, intended. measure of a registrant's historical or future financial performance, financial position or cash flow that excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). in the statement of income, balance sheet or statement of cash flows (or equivalent statement) of the Company; or includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented. In this regard, GAAP refers to accounting principles generally accepted in the United States of America UNITED STATES OF AMERICA. The name of this country. The United States, now thirty-one in number, are Alabama, Arkansas, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, New Hampshire, . Pursuant to the requirements of Regulation G, we have provided in this addendum addendum n. an addition to a completed written document. Most commonly this is a proposed change or explanation (such as a list of goods to be included) in a contract, or some point that has been subject of negotiation after the contract was originally proposed by a reconciliation of the non-GAAP financial measures to the most directly comparable GAAP financial measure. We present total portfolio and total real estate owned, referred to as REO, information. The total portfolio measure includes loans and leases recorded on our balance sheet and 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. loans and leases both managed by us and serviced by others. Reconciliation of total portfolio and REO measures follows (Dollars in thousands):
March 31, 2004: Delinquencies
--------------------------------------------------------------
Amount %
-------------------
On-balance sheet loan
receivables $ 120,561 $ 5,565 4.62%
Securitized loan
receivables 2,228,856 256,361 11.50%
----------- -----------
Total Portfolio $ 2,349,417 $ 261,926 11.15%
=========== ===========
On-balance sheet REO $ 2,508
Securitized REO 23,681
-----------
Total REO $ 26,189
===========
December 31, 2003: Delinquencies
--------------------------------------------------------------
Amount %
-------------------
On-balance sheet loan and
lease receivables $ 116,673 $ 7,213 6.18%
Securitized loan and lease
Receivables 2,541,437 280,320 11.03%
----------- -----------
Total Portfolio $ 2,658,110 $ 287,533 10.82%
=========== ===========
On-balance sheet REO $ 3,077
Securitized REO 21,161
-----------
Total REO $ 24,238
===========
September 30, 2003: Delinquencies
--------------------------------------------------------------
Amount %
-------------------
On-balance sheet loan and
lease receivables $ 164,108 $ 11,825 7.21%
Securitized loan and lease
receivables 2,807,692 256,624 9.14%
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Total Portfolio $ 2,971,800 $ 268,449 9.03%
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On-balance sheet REO $ 4,566
Securitized REO 21,486
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Total REO $ 26,052
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