American Home Mortgage Reports Fourth Quarter Results; Achieves Record EPS, Revenues and Loan Production for the Quarter and Year.Business Editors NEW YORK--(BUSINESS WIRE)--Jan. 29, 2002 American Home For the American mortgage lender, see . The American Home is a center of intercultural exchange located in Vladimir, Russia. The home is designed to model a typical American suburban home and its main focus is the ESL school that provides lessons for Russian students. Mortgage Holdings, Inc. (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 : AHMH AHMH American Home Mortgage Holdings, Inc. ), one of the nation's largest independent retail mortgage bankers Mortgage Banker A company, individual or institution that originates, sells and services mortgage loans. Notes: Don't confuse a mortgage banker with a mortgage broker. , reported today record earnings, earnings per share, revenue, and loan production for the fourth quarter of 2001. The company also reported record results in these categories for its fiscal year ended December December: see month. 31, 2001. FINANCIAL HIGHLIGHTS - Fully diluted earnings per share for the fourth quarter was $0.77, an increase of 285.0% over $0.20 for the same period in 2000. For the year ended December 31, 2001, fully diluted earnings per share before the cumulative effect of change in accounting principle was $2.14, an increase of 239.7% over $0.63 for the year 2000. - Total revenue in the fourth quarter rose to $41.7 million, an increase of 104.7% over $20.4 million for the same period in 2000. For the year, revenue totaled $128.1 million, an increase of 119.7% over $58.3 million in the same period in 2000. - Total loan closings in the fourth quarter rose to $2.6 billion, an increase of 173.5% over $962 million during the same period in 2000. For the year, total loan closings were $7.8 billion, an increase of 155.2% over $3.0 billion in the same period in 2000. - Total Internet loan closings in the fourth quarter rose to $484 million, an increase of 218.4% over $152 million for the same period in 2000. For the year, total Internet loan closings were $1.4 billion, an increase of 161.8% over $519 million in the same period in 2000. - Fourth quarter net income rose to $9.6 million, an increase of 433.5% over $1.8 million during the same period in 2000. For the year, net income before the cumulative effect of change in accounting principle totaled $23.3 million, an increase of 332.3% over $5.4 million in the same period in 2000. Michael Michael, archangel Michael (mī`kəl) [Heb.,=who is like God?], archangel prominent in Christian, Jewish, and Muslim traditions. In the Bible and early Jewish literature, Michael is one of the angels of God's presence. Strauss Strauss (strous, Ger. shtrous), family of Viennese musicians. Johann Strauss, 1804–49, learned to play the violin against his parents' wishes. , American Home Mortgage's President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. commented, "The fourth quarter was marked by very high loan production due to low interest rates causing record setting refinance Refinance 1. When a business or person revises their payment schedule for repaying debt. 2. Replacing an older loan with a new loan offering better terms. Notes: When a business refinances they typically extend the maturity date. activity. Revenue and income benefited accordingly, although operating inefficiencies associated with production levels above normal capacity led to extraordinary expenses, including approximately $1.8 million of overtime. Gross margins during the quarter were 1.62% compared to 1.71% during the third quarter. This decrease was primarily caused by no-fee refinance loans in certain regions to meet local competition, and a higher than usual percentage of business produced by our lower-margin broker channel, which is prone to a surge in volume in a refinance environment. The unclosed un·close v. un·closed, un·clos·ing, un·clos·es v.tr. 1. To open. 2. To disclose. v.intr. 1. To be opened. 2. To undergo disclosure. application pipeline at the end of the quarter was $3 billion, the same as at the end of the third quarter. Application activity in the quarter peaked in late October and early November. Application activity returned to more normal levels during late November and December as the extraordinary levels of refinance applications diminished di·min·ish v. di·min·ished, di·min·ish·ing, di·min·ish·es v.tr. 1. a. To make smaller or less or to cause to appear so. b. ." CORPORATE HIGHLIGHTS - MortgageSelect.com entered into a multi-year agreement to become the exclusive provider of mortgage loans on Motley Fool. It also entered into outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. agreements with four new banks: Mesa National of Colorado, Citizen Bank of Tennessee Tennessee, state, United States Tennessee (tĕn`əsē', tĕn'əsē`), state in the south-central United States. , Tipton Bank of Tennessee, and Fordyce Bank & Trust of Arkansas Arkansas, river, United States Arkansas (ärkăn`zəs, är`kənsô'), river, c.1,450 mi (2,330 km) long, rising in the Rocky Mts., central Colo. . - The company finalized See finalization. plans to form a mortgage reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. subsidiary as part of its ongoing strategy to reach the benefits afforded by scale opportunities in the mortgage industry. - The company renegotiated its warehouse facility with UBS UBS Union Bank of Switzerland UBS United Bible Societies UBS United Blood Services UBS United Buying Service UBS Used Bookstore UBS University Business Services UBS Universal Building Society (UK) UBS Ulaanbaatar Broadcasting System Warburg War·burg , Otto Heinrich 1883-1970. German biochemist. He won a 1931 Nobel Prize for research on the respiration of cells. , negotiated a new facility with CDC See Control Data, century date change and Back Orifice. CDC - Control Data Corporation Mortgage Capital Inc., and entered into a financing agreement with Residential Funding Corporation. Together, these providers expand the company's warehouse lines of credit to $675 million and its gestation GESTATION, med. jur. The time during which a female, who has conceived, carries the embryo or foetus in her uterus. By the common consent of mankind, the term of gestation is considered to be ten lunar months, or forty weeks, equal to nine calendar months and a week. facilities to $613 million. - The company's Board of Directors declared a dividend of $0.03 per share for the fourth quarter, marking a total of $0.12 for the year. 2001 was the first year in which American Home Mortgage paid dividends.
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Operating Statistics
4Q'01 4Q'00
------- -------
Total Loan Production $2.6 billion $962 million
Retail E-Commerce Loan Production $484 million $152 million
Loans Sold $2.4 billion $863 million
Principal Amount of
Applications Accepted $4.0 billion $1.5 billion
Principal Amount of End of
Period Application Pipeline $3.0 billion $1.0 billion
Number of Branches 63 47
OUTLOOK FOR Q1 AND FULL YEAR 2002 "2002 will be a pivotal year for American Home Mortgage", continued Michael Strauss. "The first quarter will be marked by relatively high closings, albeit at levels well below the fourth quarter of 2001, due in part to closing the remaining refinance pipeline. It is expected that during the second, third and fourth quarters, loan production will return to normal, non-refinance enhanced levels. We continue to estimate that baseline The horizontal line to which the bottoms of lowercase characters (without descenders) are aligned. See typeface. baseline - released version , non-refinance enhanced loan production will approximate $1.55 billion per quarter. "In the coming months, it is anticipated that the pending acquisition of Valley Bank of 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). will be completed. At such time, the company expects to realize additional net interest income and lower funding costs, lower taxes and lower custodial and other operating costs operating costs npl → gastos mpl operacionales . These benefits are projected to increase earnings by approximately $2 million per quarter after incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. expenses and associated income taxes. "We believe that American Home will resume making accretive acquisitions Accretive Acquisition An acquisition that will increase the acquiring company's EPS. Notes: As they are expected to increase the acquiring company's future earnings, these acquisitions tend to be favorable for the company's market price. of mortgage companies and loan production offices in 2002. No acquisitions were completed in the second half of 2001 because the price expectation of sellers reflected the benefits being realized from refinancing Refinancing An extension and/or increase in amount of existing debt. , and consequently, considered acquisitions did not meet the financial requirements of our acquisition model. Price expectations are becoming more rational as refinance activity subsides to normal levels. While no assurance can be given, we believe it is likely that accretive acquisitions will positively impact our results in 2002, as they did in 2000. "We have projected our results given our estimates of loan production and the benefits of Valley Bank. Based on our estimates, we are providing guidance for the first quarter that loan production is projected to be $1.8 billion and loan sales are projected to be $1.9 billion. We are giving guidance for the year ending December 31, 2002, absent mortgage franchise acquisitions and including consummation CONSUMMATION. The completion of a thing; as the consummation of marriage; (q.v.) the consummation of a contract, and the like. 2. A contract is said to be consummated, when everything to be done in relation to it, has been accomplished. of our acquisition of Valley Bank, that loan production is projected to be $6.7 billion and our earnings are projected to be in the range of $2.25 to $2.35, with approximately $0.37 to $0.42 of those earnings projected to come from the benefits of Valley Bank, primarily during the second half of the year. It is important to note that our projections may vary widely from the actual results we achieve and there is no assurance that our actual loan production and income will not be substantially less than we project. Moreover, there is no assurance that we will realize income and not losses, and that the projections herein should be considered "forward looking statements." "I want to thank the entire staff at American Home Mortgage for their extraordinary performance during the fourth quarter. Our financial results were made possible by their hard work and dedication, even at the height of the holiday season." ABOUT AMERICAN HOME MORTGAGE American Home Mortgage Holdings is a leading independent retail originator Originator A bank, savings and loan, or mortgage banker that initially made a mortgage loan that is part of a pool. Also, an investment bank that has worked with the issuer of a new securities offering from the beginning and is usually appointed manager of the underwriting of residential mortgage loans both online and offline. Its online operation, MortgageSelect.com is a leader in online closed loan volume, and has outperformed its online competitors in terms of profitability. Offline, the company has grown organically and by acquisition. For additional information please visit the company's Website at www.mortgageselect.com. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Statement under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995: This news release contains statements about future events and expectations, which are "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. ." Any statement in this release that is not a statement of historical fact, including, but not limited to earnings guidance and forecasts, and projections of financial results, may be deemed to be a forward-looking statement. Such forward-looking statements involve know and unknown risks, uncertainties and other factors which may cause the company's actual results to be materially different from any future results, performance or achievements expresses or implied by such forward-looking statements. Specific factors that might cause such a difference include, but are not limited to: the potential fluctuations in the company's operating results; the company's potential need for additional capital, the direction of interest rates and their subsequent effect on the company's business, federal and state regulation of mortgage banking; the company's competition; the company's ability to attract and retain skilled personnel; and those risks and uncertainties discussed in filings made by the company with the Securities and Exchange Commission, including those risks and uncertainties contained under the heading "Risk Factors" in the company's Registration Statement on Form S-1 as filed with the Securities and Exchange Commission.
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AMERICAN HOME MORTGAGE HOLDINGS, INC
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands except per share data)
(Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
------------- ------------
2001 2000 2001 2000
---- ---- ---- ----
Gain on sale of
mortgage loans $ 38,722 $ 19,449 $ 118,551 $ 52,731
Interest income - net 2,826 659 9,098 3,271
Other 107 244 403 2,278
------ ------ -------- ------
41,655 20,352 128,052 58,280
------ ------ -------- ------
Salaries, commissions
and benefits, net 16,477 10,338 55,778 27,894
Occupancy and equipment 2,168 1,606 8,250 5,584
Marketing and promotion 1,627 1,334 6,313 4,058
Data processing and
communications 1,443 995 4,442 2,826
Provision for loss 168 29 352 127
Other 4,180 2,807 13,359 8,133
-------- ------- -------- --------
26,063 17,109 88,494 48,622
-------- ------- -------- --------
Net income before
income taxes 15,592 3,243 39,558 9,658
Income taxes 5,996 1,444 16,253 4,267
-------- ------- --------- --------
Net income before income
taxes and cumulative
effect of change in
accounting principle 9,596 1,799 23,305 5,391
Cumulative effect of change
in accounting principle
net of income taxes - - 2,143 -
------ ------ ------ --------
Net income $ 9,596 $ 1,799 $ 25,448 $ 5,391
========= ========== ========= ==========
Per share data:
Basic before cumulative
effect of change in
accounting principle $ 0.80 $ 0.20 $ 2.25 $ 0.63
Basic after cumulative
effect of change in
accounting principle $ 0.80 $ 0.20 $ 2.45 $ 0.63
Diluted before cumulative
effect of change in
accounting principle $ 0.77 $ 0.20 $ 2.14 $ 0.63
Diluted after cumulative
effect of change in
accounting principle $ 0.77 $ 0.20 $ 2.34 $ 0.63
Weighted average number
of shares - basic 11,944,516 8,955,001 10,373,858 8,579,859
Weighted average number
of shares - diluted 12,537,910 8,955,001 10,883,403 8,579,859
AMERICAN HOME MORTGAGE HOLDINGS, INC
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
December 31 December 31,
2001 2000
----------- ------------
Assets
Cash and cash equivalents $ 26,393 $ 6,005
Mortgage loans held
for sale - net 419,240 143,967
Other assets 57,992 33,560
----------- ------------
Total assets $ 503,625 $ 183,532
=========== =============
Liabilities
Warehouse lines of credit $ 351,454 $ 130,484
Other liabilities 74,993 26,437
Stockholders' equity 77,178 26,611
------------ ---------------
Total liabilities
and stockholders' equity $ 503,625 $ 183,532
============= ================
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