American Business Financial Services, Inc. Reports Fiscal Second Quarter 2004 Results.Business Editors PHILADELPHIA--(BUSINESS WIRE)--Feb. 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 second quarter of fiscal 2004, ended December December: see month. 31, 2003. The Company reported a net loss of $24.8 million, or $8.35 per share, on revenues of $28.6 million for the quarter. This compares to net income of $2.1 million, or $0.69 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 $74.6 million during the second quarter of fiscal 2003. For the six month period ended December 31, 2003, ABFS reported a net loss of $51.1 million, or $17.26 per share, on revenues of $48.8 million, compared to net income of $3.9 million, or $1.30 per diluted share, on revenues of $149.1 million during the first six months of fiscal 2003. 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, "A quarterly loss, which we anticipated, was primarily attributed to a number of factors, including financial and human resource issues, which reduced our ability to originate o·rig·i·nate v. 1. To bring into being; create. 2. To come into being; start. loans and generate revenues. The Company also experienced $12.0 million of pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta non-cash valuation adjustments on our 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. assets charged to the income statement. Additionally, operating expense Operating Expense The essential things that a company must purchase in order to maintain business. Notes: For example, the payment of employees wages are an operating expense. Also known as OPEX. levels that would support greater 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 also contributed to the quarterly loss. However, we believe we have made progress in implementing our adjusted business model during the quarter, and we are optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op about the future, based on the recent expansion of our loan origination capability." ABFS recorded total pre-tax non-cash adjustments on securitization assets of $14.7 million, of which $12.0 million was charged to the income statement and $2.7 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, primarily reflect the impact of higher than anticipated prepayments Prepayments Payments made in excess of scheduled mortgage principal repayments. on 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 experienced in fiscal 2004 due to the continuing low interest rate environment. For the second quarter of fiscal 2004, ABFS reduced the discount rate used to value residual Residual See:Residual value cash flows from 11.0% to 10.0%, which reduced the second quarter adjustment by $8.4 million in total, of which $5.2 million was adjusted through the income statement and $3.2 million was adjusted through other comprehensive income. For the same period in fiscal 2003, the Company recorded total pre-tax valuation adjustments of $16.3 million, of which $10.6 million was charged to the income statement. During the three-month period ended December 31, 2003, ABFS originated $103.1 million in loans, compared to $403.0 million for the same prior year period. For the six-month period ended December 31, 2003, the Company originated $227.1 million in mortgage loans, compared to $773.7 million for the same prior year period. The Company attributed the reduction in 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 volume to the fact that its access to the capital necessary to originate loans was severely limited until it closed two new mortgage loan warehouse facilities in September September: see month. and October October: see month. 2003. Mandia said, "As we disclosed dis·close tr.v. dis·closed, dis·clos·ing, dis·clos·es 1. To expose to view, as by removing a cover; uncover. 2. To make known (something heretofore kept secret). earlier, we fully expected a loss for the quarter, and 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 fourth quarter of fiscal 2004. As we move forward with implementing strategies within our adjusted business model, we anticipate we will attain profitable operations in the future, which will be the basis for improving shareholder value. In fact, we believe we are in a turnaround Turnaround A situation where a company that has had poor performance for an extended period of time experiences a positive reversal. Notes: A speculator may profit from a turnaround if he or she accurately anticipates the improvement of a poorly performing company. mode with regard to origination volume. We have also demonstrated progress during the second quarter of fiscal 2004 in working toward the goals of our adjusted business model." Progress Toward Achieving Goals of Adjusted Business Model -- In September and October 2003, the Company closed two new mortgage loan warehouse facilities totaling $450 million, and expanded its product line to include home equity loans across a wide range of interest rates, as well as adjustable rate Adjustable rate Applies mainly to convertible securities. Refers to interest rate or dividend that is adjusted periodically, usually according to a standard market rate outside the control of the bank or savings institution, such as that prevailing on Treasury bonds or notes. mortgages. -- In October 2003, ABFS closed a $173.5 million private placement mortgage loan securitization with servicing released through JP Morgan Morgan, American family of financiers and philanthropists. Junius Spencer Morgan, 1813–90, b. West Springfield, Mass., prospered at investment banking. Securities, Inc. The securitization signaled ABFS' ability to access the asset-backed securities Asset-backed security A security that is collateralized by loans, leases, receivables, or installment contracts on personal property, not real estate. asset-backed security A debt security collateralized by specific assets. market, consistent with its adjusted business model. -- In December 2003, the Company announced that it entered into a Joint Agreement with the U.S. Attorney's CERTIFICATE, ATTORNEY'S, Practice, English law. By statute 37 Geo. III., c. 90, s. 26, 28, attorneys are required to deliver to the commissioners of stamp duties, a paper or note in writing, containing the name and usual place of residence of such person, and thereupon, on paying certain office in Philadelphia Philadelphia, ancient cities Philadelphia, name of several ancient cities. One was in Lydia, W Asia Minor (now W Turkey). At the foot of Mt. Tmolus and near the location of modern Alaşehir, it was founded in the 2d cent. B.C. , which resulted in modifications to the Company's 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. policy and an $80,000 contribution to one or more Housing and Urban Development (HUD Hud (h  d), a pre-Qur'anic prophet of Islam. Hud unsuccessfully exhorted his South Arabian people, the Ad, to worship the One God. ) approved housingcounseling agencies. -- ABFS increased its stockholders' equity and reduced its outstanding debt by converting $73.6 million of subordinated Subordinated A claim ranked lower in priority than other claims. Common stock claims are always subordinated to debt. debt to 39.1 million shares of Series A convertible preferred stock and $34.5 million of senior collateralized subordinated notes, at December 31, 2003. The exchange offer was extended to February February: see month. 6, 2004, and at the close of the exchange offer, a total of $115.4 million of subordinated debt Subordinated Debt A loan (or security) that ranks below other loans (or securities) with regard to claims on assets or earnings. Also known as "junior security" or "subordinated loan". was exchanged for 61.1 million shares of Series A convertible preferred stock Convertible Preferred Stock Preferred stock that includes an option for the holder to convert the preferred shares into a fixed number of common shares, usually anytime after a predetermined date. Also known as "convertible preferred shares". and $54.3 million of senior collateralized subordinated notes. -- Subsequent to the end of the quarter, ABFS announced that mortgage industry veterans Barry Barry, Welsh Barri, town (1991 pop. 45,053) and port, Vale of Glamorgan, S Wales, on the Bristol Channel. Once a major coal-exporting port, its more diversified export products include cement, flour, and steel products. J. Epstein joined the Company as Managing Director of Wholesale Lending, and Peter J. Levasseur joined the Company as Executive Vice President, 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 BROKERAGE, contracts. The trade or occupation of a broker; the commissions paid to a broker for his services. Services. These hirings support the expansion of the Company's broker origination business, as part of its adjusted business model. In a related matter, ABFS announced the acquisition of certain assets of Rekaren, Inc., d/b/a We Fund Loans, a West Coast loan broker based in West Hills, 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). . "Going forward, our number one goal is to substantially increase our level of loan originations. However, we believe ABFS made important strides this quarter in continuing our business model transition. We successfully concluded the U.S. Attorney's inquiry into our forbearance practices, improved our balance sheet by increasing stockholders' equity and reducing debt, obtained additional financing to originate loans, bolstered bol·ster n. A long narrow pillow or cushion. tr.v. bol·stered, bol·ster·ing, bol·sters 1. To support or prop up with or as if with a long narrow pillow or cushion. 2. our origination management team, and made an acquisition of a broker operation," Mandia concluded. "It should be noted that these accomplishments do not guarantee an immediate return to profitability but we believe, when taken together, they are indicative indicative: see mood. of a Company that is working hard on behalf of all its stakeholders Stakeholders All parties that have an interest, financial or otherwise, in a firm-stockholders, creditors, bondholders, employees, customers, management, the community, and the government. to once again become a successful and growing business." 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 company operating predominantly pre·dom·i·nant adj. 1. Having greatest ascendancy, importance, influence, authority, or force. See Synonyms at dominant. 2. 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. . The Company primarily originates, sells and services home equity and, subject to market conditions in the secondary loan market, business purpose 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 , and a small processing center in Roseland, New Jersey. 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 Keith may refer to: People with the given name Keith:
Bratz is a 2001 childrens and teens doll franchise produced by MGA Entertainment. , VP--Corporate Communications, 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 reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. changes (legislative 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 Six Months Ended
December 31, December 31,
-------------------- ---------------------
2003 2002 2003 2002
----------- -------- ----------- ---------
(Unaudited) (Unaudited)
REVENUES
Gain on sale of loans:
Securitizations $14,308 $57,879 $15,107 $115,890
Whole loan sales 78 (2) 2,999 33
Interest and fees 2,167 4,595 6,820 8,728
Interest accretion on
interest-only strips 10,228 11,500 21,337 22,247
Servicing income 1,809 644 2,527 2,181
Other income 1 2 2 6
----------- -------- ----------- ---------
Total Revenues 28,591 74,618 48,792 149,085
----------- -------- ----------- ---------
EXPENSES
Interest 16,650 17,150 33,468 34,233
Provision for credit
losses 3,814 1,436 7,970 2,974
Employee related costs 11,799 10,972 25,651 20,547
Sales and marketing 3,093 6,485 5,934 13,173
Trading (gains) and losses 38 1,035 (5,070) 4,475
General and administrative 21,265 23,333 40,480 44,258
Securitization assets
valuation adjustments 11,968 10,568 22,763 22,646
----------- -------- ----------- ---------
Total Expenses 68,627 70,979 131,196 142,306
----------- -------- ----------- ---------
INCOME (LOSS) BEFORE
PROVISION FOR INCOME TAXES
(BENEFIT) (40,036) 3,639 (82,404) 6,779
PROVISION FOR INCOME TAXES
(BENEFIT) (15,214) 1,528 (31,314) 2,847
----------- -------- ----------- ---------
NET INCOME (LOSS) $(24,822) $2,111 $(51,090) $3,932
=========== ======== =========== =========
EARNINGS (LOSS) PER COMMON
SHARE
Basic $(8.35) $0.72 $(17.26) $1.36
=========== ======== =========== =========
Diluted $(8.35) $0.69 $(17.26) $1.30
=========== ======== =========== =========
Average Common Shares
(in thousands):
Basic 2,973 2,932 2,960 2,894
Diluted 2,973 3,044 2,960 3,014
American Business Financial Services, Inc. and Subsidiaries
Consolidated Balance Sheets
(dollar amounts in thousands)
December 31, June 30,
2003 2003
-----------------------
(Unaudited) (Note)
Assets
Cash and cash equivalents $ 29,620 $ 47,475
Loan and lease receivables, net
Available for sale 115,792 271,402
Interest and fees 19,822 15,179
Other 30,636 23,761
Interest-only strips (includes the fair value
of over-collateralization related cash flows
of $251,445 at December 31, 2003 and $279,245
at June 30, 2003) 533,677 598,278
Servicing rights 94,086 119,291
Receivable for sold loans - 26,734
Prepaid expenses 17,147 3,477
Property and equipment, net 26,974 23,302
Deferred income tax asset 16,442 -
Other assets 27,210 30,452
-----------------------
Total assets $ 911,406 $1,159,351
=======================
Liabilities and Stockholders' Equity
Liabilities
Subordinated debt 629,674 719,540
Senior collateralized subordinated notes $ 34,459 $ -
Warehouse lines and other notes payable 87,940 212,916
Accrued interest payable 39,323 45,448
Accounts payable and other accrued expenses 28,567 30,352
Deferred income tax liability - 17,036
Other liabilities 65,837 91,990
-----------------------
Total liabilities 885,800 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
December 31, 2003 and 3,000,000 at June 30,
2003; Issued: 39,095,109 shares of Series A at
December 31, 2003 39 -
Common stock, par value $.001, authorized
shares, 209,000,000 at December 31, 2003 and
9,000,000 at June 30, 2003; Issued: 3,653,165
shares at December 31, 2003 and June 30, 2003
(including treasury shares of 506,273 at
December 31, 2003 and 706,273 at June 30,
2003) 4 4
Additional paid-in capital 61,150 23,985
Accumulated other comprehensive income 10,285 14,540
Unearned compensation (860) -
Retained earnings (deficit) (37,986) 13,104
Treasury stock, at cost (6,426) (8,964)
-----------------------
26,206 42,669
Note receivable (600) (600)
-----------------------
Total stockholders' equity 25,606 42,069
-----------------------
Total liabilities and stockholders' equity $ 911,406 $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 and loss experience for the loan and
lease portfolio in which we have interests, divided into the portfolio
managed by us and the portfolio serviced by others. See Attachment A
for a reconciliation of total portfolio and REO measures to our
balance sheet. Previously delinquent loans managed by us subject to
deferment and forbearance 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):
December 31, September 30,
2003 2003
-------------------- ---------------------
Delinquency by Type Amount % Amount %
------------------------- ------------- ------ ------------- ------
Managed by ABFS:
Business Purpose Loans
Total managed portfolio $ 307,807 $ 364,970
============ =============
Period of delinquency:
31-60 days $ 6,640 2.16 % $ 5,761 1.57 %
61-90 days 7,109 2.31 6,129 1.68
Over 90 days 47,449 15.41 42,831 11.74
------------ ------- ------------- -------
Total delinquencies $ 61,198 19.88 % $ 54,721 14.99 %
============ ======= ============= =======
REO $ 1,879 $ 4,491
============ =============
Home Equity Loans
Total managed portfolio $ 2,179,052 $ 2,601,125
============ =============
Period of delinquency:
31-60 days $ 53,522 2.46 % $ 53,514 2.06 %
61-90 days 31,668 1.45 36,729 1.41
Over 90 days 125,212 5.75 122,997 4.73
------------ ------- ------------- -------
Total delinquencies $ 210,402 9.66 % $ 213,240 8.20 %
============ ======= ============= =======
REO $ 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 $ 2,490,528 $ 2,971,800
============ =============
Period of delinquency:
31-60 days $ 60,581 2.43 % $ 59,523 2.00 %
61-90 days 38,870 1.56 42,898 1.44
Over 90 days 172,788 6.94 166,028 5.59
------------ ------- ------------- -------
Total delinquencies $ 272,239 10.93 % $ 268,449 9.03 %
============ ======= ============= =======
REO $ 24,238 0.97 % $ 26,052 0.88 %
============ ======= ============= =======
Serviced by Others:
Total portfolio serviced
by others $ 167,58295 $ -
============ =============
Period of delinquency:
31-60 days $ 10,112 6.04 % $ - - %
61-90 days 3,198 1.91 - -
Over 90 days 1,984 1.18 - -
------------ ------- ------------- -------
Total delinquencies $ 15,294 9.13 % $ - - %
============ ======= ============= =======
June 30,
2003
-----------------------
Delinquency by Type Amount %
------------------------ --------------- -------
Managed by ABFS:
Business Purpose Loans
Total managed portfolio $ 393,098
==============
Period of delinquency:
31-60 days $ 4,849 1.23 %
61-90 days 4,623 1.18
Over 90 days 38,466 9.79
-------------- --------
Total delinquencies $ 47,938 12.20 %
============== ========
REO $ 5,744
==============
Home Equity Loans
Total managed portfolio $ 3,249,501
==============
Period of delinquency:
31-60 days $ 48,332 1.49 %
61-90 days 24,158 0.74
Over 90 days 108,243 3.33
-------------- --------
Total delinquencies $ 180,733 5.56 %
============== ========
REO $ 22,256
==============
Equipment Leases
Total managed portfolio $ 8,475
==============
Period of delinquency:
31-60 days $ 162 1.91 %
61-90 days 83 0.98
Over 90 days 154 1.82
-------------- --------
Total delinquencies $ 399 4.71 %
============== ========
Total Managed by ABFS
Total managed portfolio $ 3,651,074
==============
Period of delinquency:
31-60 days $ 53,343 1.46 %
61-90 days 28,864 0.79
Over 90 days 146,863 4.02
-------------- --------
Total delinquencies $ 229,070 6.27 %
============== ========
REO $ 28,000 0.77 %
============== ========
Serviced by Others:
Total portfolio serviced by others $ -
==============
Period of delinquency:
31-60 days $ - - %
61-90 days - -
Over 90 days - -
-------------- --------
Total delinquencies $ - - %
============== ========
Total Portfolio Quality
(for the last three fiscal quarters - continued)
December 31, September 30,
2003 2003
---------------------- -------------------
Amount % Amount %
------------- -------- ------------ ------
Total portfolio $ 2,658,110 $ 2,971,800
============= ============
Period of delinquency:
31-60 days $ 70,693 2.66 % $ 59,523 2.00 %
61-90 days 42,068 1.58 42,898 1.44
Over 90 days 174,772 6.58 166,028 5.59
------------- -------- ------------ ------
Total delinquencies $ 287,533 10.82 % $ 268,449 9.03 %
============= ======== ============ ======
REO $ 24,238 0.91 % $ 26,052 0.88 %
============= ======== ============ ======
Losses experienced during
the period (a)(b) :
Loans $ 12,375 1.77 % $ 8,100 0.97 %
======== ======
Leases (41) (3.49 )% 1 0.06 %
------------- ======== ------------ ======
Total Losses $ 12,334 1.76 % $ 8,101 0.97 %
============= ======== ============ ======
June 30,
2003
------------------------
Amount %
-------------- --------
Total portfolio $ 3,651,074
==============
Period of delinquency:
31-60 days $ 53,343 1.46 %
61-90 days 28,864 0.79
Over 90 days 146,863 4.02
-------------- ---------
Total delinquencies $ 229,070 6.27 %
============== =========
REO $ 28,000 0.77 %
============== =========
Losses experienced during the period (a)(b) :
Loans $ 7,390 0.83 %
=========
Leases 55 2.14 %
-------------- =========
Total Losses $ 7,445 0.84 %
============== =========
(a) Percentage based on annualized losses and average managed
portfolio.
(b) 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 were $4.2 million ($0.9 million from
charge-offs through the provision for loan losses and $3.3 million
for write downs of real estate owned) and losses absorbed by loan
securitization trusts were $3.3 million for the three months ended
June 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.
AMERICAN BUSINESS FINANCIAL SERVICES, INC. AND
SUBSIDIARIES
LOAN ORIGINATIONS
(in thousands)
Three Months Ended Six Months Ended
December 31, December 31,
------------------- -------------------
2003 2002 2003 2002
--------- --------- --------- ---------
Business purpose loans $- $32,187 $- $61,050
Home equity loans 103,084 370,764 227,136 712,617
--------- --------- --------- ---------
Total Company $103,084 $402,951 $227,136 $773,667
========= ========= ========= =========
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 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 with 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. Pursuant to the
requirements of Regulation G, we have provided in this addendum 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 loans and leases
both managed by us serviced by others. Reconciliation of total
portfolio and REO measures follows (Dollars in thousands):
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%
----------- ---------
Total Portfolio $ 2,971,800 $ 268,449 9.03%
=========== =========
On-balance sheet REO $ 4,566
Securitized REO 21,486
-----------
Total REO $ 26,052
===========
June 30, 2003: Delinquencies
----------------------------------------------------------------------
Amount %
----------------
On-balance sheet loan and lease
receivables $ 265,764 $ 5,412 2.04%
Securitized loan and lease receivables
3,385,310 223,658 6.61%
------------ ---------
Total Portfolio $ 3,651,074 $ 229,070 6.27%
============ =========
On-balance sheet REO $ 4,776
Securitized REO 23,224
------------
Total REO $ 28,000
============
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