Anthracite Capital, Inc. Reports 2000 Income of $1.37 Per Share Versus $1.27 for 1999; Record Quarterly Income From Operating Portfolio.Business Editors NEW YORK--(BUSINESS WIRE)--Feb. 12, 2001 Anthracite anthracite (ăn`thrəsīt'): see coal. anthracite or hard coal Coal containing more fixed carbon than any other form of coal and the lowest amount of volatile (quickly evaporating) material, giving it the Capital, Inc. (Anthracite) (NYSE NYSE See: New York Stock Exchange :AHR AHR Aryl Hydrocarbon Receptor AHR American Historical Review (Journal of the American History Association) AHR Anchor AHR airway hyper-responsiveness AHR Assisted Human Reproduction AHR Air-Conditioning Heating Refrigeration ) today reported net income for the year ended December 31, 2000 of $39,319,000 or $1.37 per common share ($1.28 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. ). Anthracite has declared and paid dividends of $1.17 per common share during the same period. For the year ended December 31, 1999 Anthracite reported a net income of $26,673,000 or $1.27 per common share ($1.26 diluted). Based on the $0.30 per common share quarterly dividend that was paid on January 31, 2001 and today's closing price of $9.14, Anthracite's annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. dividend yield is 13.13%. For the quarter ended December 31, 2000, Anthracite reported net income of $11,282,000 or $0.36 per common share ($0.34 diluted) versus net income of $5,920,000 or $0.28 per common share (0.28 diluted) for the quarter ended December 31, 1999, and net income of $11,377,000 or $0.36 per common share ($0.34 diluted) for the quarter ended September 30, 2000. The components of fourth quarter 2000 earnings include $0.35 per share of operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. before other gains and losses versus $0.31 per share for the third quarter of 2000. Total interest income for the fourth quarter 2000 increased 4% over the third quarter of 2000. Interest income for the fourth quarter includes receipt of a prepayment penalty Prepayment penalty A fee a borrower pays a lender when the borrower repays a loan before its scheduled time of maturity. on one of the mezzanine mez·za·nine n. 1. A partial story between two main stories of a building. 2. The lowest balcony in a theater or the first few rows of that balcony. investments of approximately $0.03 per common share. The fourth quarter results represent an annualized net interest margin of 5.55% on the operating portfolio and a weighted average cost of funds Cost of Funds The interest rate paid on an outstanding loan. Notes: Money isn't free! Cost of funds is the cost of borrowing money. See also: Interest Rate Cost of funds Interest rate associated with borrowing money. of 7.12%. Anthracite's annualized return on quarter end common stock equity was 17.16%. Hugh Frater Fra´ter n. 1. (Eccl.) A monk; also, a frater house. Frater house an apartament in a convent used as an eating room; a refectory; - called also a fratery ltname>. , 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. , stated, "This was a good finish to a good year for Anthracite. In the face of dramatically rising short term interest rates we were able to deploy fresh capital to increase earnings and dividends. We increased investments in high yielding commercial real estate loans by over $100 million, and all are performing at or above expectations. Looking forward to 2001 we see a positive market environment for Anthracite. Falling short-term interest rates Short-term interest rates Interest rates on loan contracts-or debt instruments such as Treasury bills, bank certificates of deposit or commerical paper-having maturities of less than one year. Often called money market rates. will reduce Anthracite's cost of borrowing and is positive for earnings. Regarding credit, while the economy is clearly slowing, we are generally not burdened by the excesses of commercial real estate supply that led to inadequate returns for commercial real estate lenders during prior slowdowns. Commercial delinquencies remain extremely low by historical standards and while we fully expect and plan for increases in delinquencies we have not yet observed any meaningful credit deterioration de·te·ri·o·ra·tion n. The process or condition of becoming worse. . The opportunities to deploy well-secured mezzanine capital Mezzanine capital (or mezzanine debt) is a broad financial term that refers to unsecured, high-yield, subordinated debt or preferred stock that represents a claim on a company's assets that is senior only to that of a company's shareholders. at attractive prices remain strong and we will continue to balance this core strategy with investments in liquid investment grade assets." GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). book value at December 31, 2000 was $243,548,000 based upon market prices provided by dealers for securities available for sale. GAAP book value at September 30, 2000 was $244,432,000. The decline in GAAP book value of $884,000 over the quarter was due to changes in credit spreads and the credit downgrade Downgrade A negative change in the rating of a security. Notes: For example, an analyst may downgrade a stock from strong buy to buy, or a bond rating agency may downgrade a bond from AAA to AA. of one tranche Tranche One of several related securities offered at the same time. Tranches from the same offering usually have different risk, reward, and/or maturity characteristics. tranche A class of bonds. of Anthracite's commercial mortgage backed securities investments. The Company's investment securities portfolio is principally priced off of the 10-year U.S. Treasury U.S. Treasury Created in 1798, the United States Department of the Treasury is the government (Cabinet) department responsible for issuing all Treasury bonds, notes and bills. Some of the government branches operating under the U.S. Treasury umbrella include the IRS, U.S. note, and is hedged with various swap contracts. The ten-year treasury yielded 5.12% at December 31, 2000 down from 5.80% at September 30, 2000. The bulk of Anthracite's securities portfolio is classified as available for sale and, therefore, GAAP book value will change in response to changes in market prices for the assets it holds. As the available for sale portfolio matures, the GAAP book value of credit sensitive CMBS CMBS See: Commercial Mortgage Backed Securities securities held by the Company will increase towards its original purchase cost provided that the Company's estimates of expected credit losses are reasonably accurate. The unrealized loss Unrealized Loss A loss that results from holding onto an asset rather than cashing it in and officially taking the loss. Notes: Let's say you own a stock that is down 50%, but you haven't sold it to realize the loss yet. This is said to be an unrealized loss. on these securities at December 31, 2000 was $87,000,000. This amount reflects the amount of recovery net of expected losses if the portfolio is held to maturity. GAAP book value per common share Book Value Per Common Share A measure used by owners of common shares in a firm to determine the level of safety associated with each individual share after all debts are paid accordingly. Formula: declined approximately 0.4% from $8.01 at September 30, 2000 to $7.98 at December 31, 2000. These figures are net of the unrealized loss on the CMBS portfolio of $87,000,000 which is expected to be recovered as the portfolio matures. Since December 31, 2000, Anthracite's stock price has increased by 17.94% without adjustment for dividends. Dividend Reinvestment Plan Dividend Reinvestment Plan (DRP) Plan which provides for automatic reinvestment of shareholder dividends in more shares of a company's stock, often without commissions. Some plans provide for the purchase of additional shares at a discount to market price. Anthracite has a dividend reinvestment plan that provides current owners of its common stock with a simple, economical and convenient method of increasing their investment. For the fourth quarter dividend Anthracite used amounts invested through the plan to purchase shares on the open market. At such time as the company elects to issue stock directly, participants in the plan will be able to acquire fully registered stock directly from the company without commission. Anthracite is currently considering using the direct issuance feature if its share price remains above $8.00. To request a prospectus and receive enrollment materials or to ask questions about the plan, interested investors and shareholders may contact Investor Relations Investor relations The process by which the corporation communicates with its investors. , The Bank of New York The Bank of New York, abbrieviated to BNY, was a global financial services company that existed until its merger with the Mellon Financial Corporation on July 2, 2007.[1] The bank now continues under the new name of The Bank of New York Mellon Corporation. (the Plan Administrator), at 800/524-4458 or Investor Relations, Anthracite Capital, Inc. at 212/409-3333. Anthracite is a specialty finance company that is externally managed by BlackRock, Inc., a New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. based investment manager with over $200 billion in global assets under management Assets Under Management (AUM) is a term used by financial services companies in the mutual fund and money management or investment management business to gauge how much money they are managing. . The company's principal business objective is to generate net income for distribution to stockholders from the spread between the interest income on its mortgage-backed securities Mortgage-backed securities (MSBs) Securities backed by a pool of mortgage loans. and loan investments and the costs of financing these investments. 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 the federal securities laws. Anthracite's actual results could differ materially from those anticipated in such forward-looking statements as a result of certain factors, including those detailed from time to time in Anthracite's reports and filings with the Securities and Exchange Commission. For further information, please contact Hugh Frater, President and Chief Executive Officer at 212/754-5535 or Richard Shea, Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. and Chief Financial Officer at 212/754-5579, or visit Anthracite's website at www.anthracitecapital.com.
Anthracite Capital, Inc.
Statements of Financial Condition
(in thousands, except per share data)
December 31, 2000 December 31, 1999
----------------- -----------------
ASSETS
Cash and cash equivalents $ 47,313 $ 22,265
Securities available for
sale, at fair value
Subordinated commercial
mortgage-backed
securities (CMBS) $ 288,386 $ 272,733
Investment grade
securities 389,436 304,462
--------- ---------
Total securities
available for sale 677,822 577,195
Securities held for
trading, at fair value 54,043 --
Mortgage loan pools,
available for sale,
at fair value 71,535 --
Commercial mortgage
loans, net 153,187 69,611
Investments in real
estate joint ventures 10,354 --
Other assets 19,090 10,591
---------- ----------
Total Assets $1,033,344 $ 679,662
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Borrowings:
Secured by pledge of
subordinated CMBS $ 161,608 $ 162,738
Secured by pledge of
other securities
available for sale
and cash equivalents 356,491 272,289
Secured by mortgage
loan pools 67,367 --
Secured by pledge of
securities held for
trading 55,212 --
Secured by pledge of
commercial mortgage
loans 78,664 36,506
--------- ---------
Total borrowings $ 719,342 $ 471,533
Distributions payable 9,741 6,079
Other liabilities 30,309 3,767
---------- ----------
Total Liabilities 759,392 481,379
---------- ----------
Redeemable Convertible
Preferred Stock 30,404 30,022
---------- ----------
Stockholders' Equity:
Common stock, par value
$0.001 per share;
400,000 shares authorized;
25,136 shares issued and
outstanding in 2000; and
20,961 shares issued and
outstanding in 1999 25 22
10% Series B preferred
stock, liquidation
preference $56,025 43,004 --
Additional paid-in
capital 315,533 287,485
Distributions in excess
of earnings (13,444) (18,107)
Accumulated other
comprehensive loss (101,570) (101,139)
---------- ----------
Total Stockholders'
Equity 243,548 168,261
---------- ----------
Total Liabilities and
Stockholders' Equity $1,033,344 $ 679,662
========== ==========
Anthracite Capital, Inc.
Statements of Operations
(in thousands, except per share data)
For the Three For the
Months Ended Year Ended
Dec. 31, 2000 Dec. 31, 2000
------------- -------------
Operating Portfolio
Income:
Securities available for sale $ 20,025 $ 75,138
Commercial mortgage loans 5,830 14,355
Mortgage loan pools 1,460 6,481
Earnings from real estate joint ventures 323 348
Cash and cash equivalents 404 1,313
-------- --------
Total income 28,042 97,635
-------- --------
Expenses:
Interest 13,784 51,112
Management fee 2,400 7,450
Other expenses/income net 862 2,277
-------- --------
Total expenses 17,046 60,839
-------- --------
Income from operating portfolio 10,996 36,796
-------- --------
Other Gains (Losses)
Gain on sale of securities available for sale 1,512 3,212
Loss on securities held for trading (1,166) (647)
Foreign currency loss (60) (42)
-------- --------
Net Income 11,282 39,319
-------- --------
Dividends and accretion on preferred stock 2,317 7,065
-------- --------
Net Income Available to Common Shareholders $ 8,965 $ 32,254
-------- --------
Income before other gains (losses) per share:
Basic $ 0.35 $ 1.26
Diluted $ 0.33 $ 1.19
Net income per share:
Basic $ 0.36 $ 1.37
Diluted $ 0.34 $ 1.28
Weighted average number of shares outstanding:
Basic 25,136 23,587
Diluted 29,218 27,668
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