American Residential Investment Trust, Inc. Reports First Quarter Results.Business Editors SAN DIEGO--(BUSINESS WIRE)--May 2, 2002 American Residential Investment Trust, Inc. (NYSE NYSE See: New York Stock Exchange : INV INV abbr. in vitro fertilization ): -- Reports first quarter net loss of $0.24 per diluted share in line with estimates. -- Secures $150 million loan funding facility with UBS Warburg and adds $35 million to JPMorgan Chase Bank warehouse line through U.S. Bank. -- Funds $368.9 million in home loans through American Mortgage Network in the first quarter. -- Receives legal settlement of $6.1 million (net of legal fees) in April, which will restore $0.77 in book value per share. American Residential Investment Trust, Inc. (NYSE: INV) today announced that for the first quarter ended March 31, 2002, its net operating loss 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. was $1.9 million, or $0.24 per diluted share, compared to a net loss of $1.7 million, or $0.21 per diluted share, for the first quarter of 2001. The net loss in the first quarter of 2002 was due to the expansion of the Company's new mortgage banking subsidiary, American Mortgage Network (AmNet). The Company's total mortgage assets were $529 million at March 31, 2002 compared to $784 million at March 31, 2001. The book value per share was $7.17 at March 31, 2002, prior to recording income from a legal settlement. In commenting on first quarter results, John M. Robbins, Jr., Chief Executive Officer, said, "We are very excited about the progress we've made in the first quarter. Our momentum is clearly accelerating as recently opened regional centers begin to ramp up Ramp Up To increase a company's operations in anticipation of increased demand. Notes: A company might 'ramp up' operations if they just signed a contract creating substantially more demand for their product. See also: Demand, Economies of Scale originations. First quarter loan volumes were on target and we anticipate increased production as our regional centers continue to mature. We are entering the second quarter with solid growth prospects and expect to fund $500 million monthly in closed mortgages by the end of this year." AmNet funded $368.9 million in mortgages during the first quarter of 2002 primarily through its operations in California, Oregon and Washington. AmNet has regional centers in Ontario, California Ontario is a city located in San Bernardino County, California, United States. As of the 2000 Census, the city had a total population of 170,373. It is the home of LA/Ontario International Airport and the huge Ontario Mills shopping mall (the largest in Southern California and one ; Sacramento, California “Sacramento” redirects here. For other uses, see Sacramento (disambiguation). Sacramento is the capital of the State of California and the county seat of Sacramento County. ; San Diego, California “San Diego” redirects here. For other uses, see San Diego (disambiguation). San Diego is a coastal Southern California city located in the southwestern corner of the continental United States. As of 2006, the city has a population of 1,256,951. ; New Haven New Haven, city (1990 pop. 130,474), New Haven co., S Conn., a port of entry where the Quinnipiac and other small rivers enter Long Island Sound; inc. 1784. Firearms and ammunition, clocks and watches, tools, rubber and paper products, and textiles are among the many , Connecticut; Tampa, Florida “Tampa” redirects here. For other uses, see Tampa (disambiguation). Tampa is a United States city in Hillsborough County, on the west coast of Florida. It serves as the county seat for Hillsborough County.GR6. ; Atlanta, Georgia; and Portland, Oregon. Satellite offices are located in Mission Viejo, California “Mission Viejo” redirects here. For other uses, see Mission Viejo (disambiguation). Mission Viejo (anglicized pronunciation IPA: /ˈmɪʃənviːˈeɪhoʊ/ and Kirkland, Washington Kirkland is a city in King County, Washington, United States. It is a suburb of Seattle located on the Eastside (of Lake Washington). As of April 1, 2005, the city had an estimated population of 45,740, making Kirkland the eighth largest city in King County and the eighteenth . Robbins added, "Even though new and existing home sales Existing Home Sales An economic indicator of both the number and prices of existing single family houses, condos and co-op sales over a one-month period. Released monthly by the U.S. declined in March, it was simply a return to a more sustainable pace after months of record growth. The housing and mortgage markets will continue to be a stabilizing force as the economy recovers. Because AmNet has a combination of established regional centers and new locations with the right demographics, we are confident that our market share will increase even in a rising interest rate environment. A wide product array, customized proprietary technology and a growing cadre (company) CADRE - The US software engineering vendor which merged with Bachman Information Systems to form Cayenne Software in July 1996. of account executives who have long-standing relationships with mortgage brokers will help sustain our growth through changing market cycles." To finance expected growth in 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, the Company recently secured a $150 million loan funding 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 Real Estate Securities Inc. The Company also announced that U.S. Bank joined the JPMorgan Chase JPMorgan Chase (NYSE: JPM TYO: 8634 ) is one of the oldest financial services firms in the world. The company, headquartered in New York City, is one of the leaders in investment banking, financial services, asset and wealth management and private equity. With assets of $1. Bank warehouse line, bringing the total capacity of the JPMorgan Chase warehouse line to $110 million and total borrowing capacity to $260 million. The Company also successfully settled litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. on mutually agreeable terms for $6.1 million (net of certain legal fees) which was paid to the Company in early April. The settlement will serve to restore $0.77 per share to the Company's book value. Completion of binding arbitration with Long Beach Mortgage Company is expected by the end of May. In that arbitration, the Company seeks to recover a portion of its loan losses on 218 loans, which the Company believes did not meet certain representations and warranties under a loan purchase agreement dating back to 1997. Income related to these events will be booked in the second quarter of 2002. Relative to the earnings guidance issued on January 8, 2002, the Company now expects positive net earnings for 2002 due to the aforementioned litigation-related income. The Company had anticipated an overall net operating loss for 2002 of approximately $0.50 per share inclusive of inclusive of prep. Taking into consideration or account; including. startup 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. associated with AmNet as well as the continued decline in spread income from its mortgage portfolio. In its upcoming proxy to stockholders, the Company will ask for stockholder approval to terminate its REIT REIT See: Real Estate Investment Trust REIT See real estate investment trust (REIT). status. About American Residential Investment Trust, Inc. American Residential Investment Trust, Inc. is a real estate investment trust (REIT) that has traditionally invested in subprime residential mortgage assets. For more information on American Residential, please visit www.amerreit.com. About American Mortgage Network American Mortgage Network is a wholly owned taxable REIT subsidiary of American Residential Investment Trust, Inc. AmNet originates loans for the national mortgage broker community through its network of regional centers. For more information on American Mortgage Network, please visit www.amnetmortgage.com. Certain matters discussed in this press release may constitute 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. within the meaning of federal securities laws. Forward-looking statements include statements regarding the Company's anticipated loan volumes, the effect of the housing and mortgage markets on the national economy, growth in market share and the sustainability of such growth, the anticipated completion of binding arbitration proceedings and future earnings. Actual results and the timing of certain events could differ materially from those projected in or contemplated by these forward-looking statements due to a number of factors, including but not limited to: lack of Company experience in opening regional offices and generating mortgage loans; general economic conditions; mortgage loan prepayment rates; credit losses; overall interest rates; the shape of the yield curve; the availability of financing for the origination of mortgage assets; the impact of leverage; the Company's liquidity position; volatility in the value of mortgages held for sale or the commitments made to fund mortgages and other risk factors outlined in American Residential Investment Trust's SEC reports.
AMERICAN RESIDENTIAL INVESTMENT TRUST, INC.
Three Three Three
Months Months Months
Ended Ended Ended
3/31/02 3/31/01 12/31/01
--------- --------- ---------
Income Statement
Interest income $8,560 $18,077 $10,696
Interest expense (3,133) (14,249) (4,399)
Gross interest spread on
mortgage portfolio 5,427 3,828 6,297
Net interest income on
loan warehouse 766 -- 54
Other interest income 30 188 136
Premium amortization (3,100) (2,476) (4,048)
Net interest income before
provision for loan losses 3,123 1,540 2,439
Provision for loan losses and
net (loss) / gain on sale-REO (2,188) (1,893) (1,695)
Gain / (loss) on derivatives, net 304 -- (54)
Net gain / (loss) on sale of
mortgage assets (including fees) 1,552 -- (10)
Unrealized loss on interest rate
cap agreements -- (9) --
Prepayment penalty income 340 821 464
Other operating income 102 162 106
Management fees -- (766) (316)
Loan, general &
administrative expenses (5,140) (449) (4,178)
Adoption of SFAS 133 accounting
change -- (1,106) --
Purchase of HAMCO management
contract -- -- (10,000)
Net Loss $(1,907) $(1,700) $(13,244)
Per Share Data
Weighted average common and common
equivalent shares outstanding 7,918,805 8,053,872 7,959,900
Loss per share -- basic and diluted $(0.24) $(0.21) $(1.66)
Common dividend declared for the
period $-- $-- $--
Balance Sheet Data
Total mortgage assets $529,342 $784,481 $501,055
Total assets 550,295 806,154 519,724
Short-term debt 120,544 3,988 35,265
Long-term debt, net 369,101 724,829 422,349
Total stockholders' equity $56,519 $74,769 $58,627
Asset to equity ratio 9.7:1 10.8:1 8.9:1
Total mortgage loans funded in
period ($ millions) $368.9 $-- $43.3
($ in thousands, except per share data and as noted)
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