Anthracite Capital, Inc. Reports Income Before Non-Recurring Losses of $0.32 Per Share for the Fourth Quarter of 1998 and $0.89 Per Share From the Date of Its IPO to December 31, 1998.NEW YORK--(BUSINESS WIRE)--Feb. 23, 1999-- December 31, 1998 Book Value of $9.15 Per Share. Net Income After Previously Disclosed Non-Recurring Losses of $(0.67) Per Share for the Fourth Quarter of 1998 and $(0.07) Per Share From the Date of Its IPO (Initial Public Offering) The first time a company offers shares of stock to the public. While not a computer term per se, many founders, employees and insiders of computer companies have found this acronym more exciting than any tech term they ever heard. to December 31, 1998 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 balance sheet data as of and results for the quarter ended December 31, 1998. Earnings before non-recurring losses for the fourth quarter of 1998 were $0.32 per basic and 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. common share and $0.89 per basic and diluted common share for the period from the original IPO date of March 24th to December 31, 1998. "We are pleased with the greatly improved market sentiment Market Sentiment The feeling or tone of a market (i.e. crowd psychology). It is shown by the activity and price movement of the securities. Notes: For example, rising prices would indicate a bullish market sentiment. and liquidity for commercial mortgage backed securities and other 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. real estate credit," said 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. of Anthracite. "We believe that there are compelling investment opportunities in the sector and will participate in these as our financial flexibility continues to improve. Based on our current financial structure and prevailing market conditions, our portfolio produces a strong level of recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. earnings for shareholders and we will look to augment aug·ment v. aug·ment·ed, aug·ment·ing, aug·ments v.tr. 1. To make (something already developed or well under way) greater, as in size, extent, or quantity: our portfolio during 1999. Our core strategies remain underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. and 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 of high yield mezzanine debt backed by commercial real estate in the form of whole loans and securities. These core strategies will continue to be balanced by holdings of liquid investment grade securities," said Mr. Frater. The components of fourth quarter earnings include $0.32 per basic and diluted common share of net investment income before realized losses Realized Loss A loss recognized when assets are sold for a price lower than the original purchase price. Notes: A portion of the realized loss may be applied against a capital gain or realized profit to reduce taxes. and $(0.99) per basic and diluted common share of realized losses incurred in connection with portfolio de-leveraging and unwinding a hedge position, resulting in a GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). net loss for the quarter of $(0.67) per basic and diluted common share. These previously disclosed losses were realized in the fourth quarter as Anthracite reduced its debt-to-capital ratios in response to highly unsettled market conditions. From March 24, to December 31, 1998, GAAP earnings before realized losses were $0.89 per basic and diluted common share and the GAAP loss after realized losses was $(0.07) per basic and diluted common share. Taxable income Under the federal tax law, gross income reduced by adjustments and allowable deductions. It is the income against which tax rates are applied to compute an individual or entity's tax liability. The essence of taxable income is the accrual of some gain, profit, or benefit to a taxpayer. for the fourth quarter of 1998 was $0.11 per basic and diluted common share, which includes the loss from unwinding the hedge position. The restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). of the portfolio caused the company to recognize a tax basis capital loss of $(0.80) per basic and diluted common share. This loss will be carried forward and will be available to offset future tax basis capital gains. The difference between GAAP income before realized losses and tax basis income is largely due to two factors. First, GAAP income takes into account estimated credit losses on the portfolio whereas taxable income does not take such losses into account until they occur. Second, although the loss recognized from unwinding the hedge is a non-recurring event, it qualifies as a deduction deduction, in logic, form of inference such that the conclusion must be true if the premises are true. For example, if we know that all men have two legs and that John is a man, it is then logical to deduce that John has two legs. from taxable income. The company paid a fourth quarter dividend of $0.29 per share on January 15, 1999, which Anthracite believes is representative of its current level of recurring earnings. Because the ex-dividend Ex-Dividend The trading of shares when a declared dividend belongs to the seller rather than the buyer. Notes: A stock trades ex-dividend on or after the ex-dividend date (ex-date). and record date for this dividend was in January 1999, shareholders will be required to include this payment in taxable income in 1999, not in 1998. This is consistent with maintaining the company's tax status as a REIT REIT See: Real Estate Investment Trust REIT See real estate investment trust (REIT). and retaining capital where possible. Future dividend distributions may be affected by a number of factors, including cash available for distribution, amount and cost of borrowings and hedging transactions, the annual distribution requirements under REIT tax provisions and such other factors as Anthracite's board of directors deems relevant. Book Value Per Share Using Dealer Quotes Book value per share at December 31, 1998 was $9.15 based upon market prices provided by dealers for investments available for sale and held for trading. The decline in book value per share of $(1.93) from September 30, 1998 resulted primarily from an unrealized decline in the market value of Anthracite's portfolio. Increased Liquidity and Reduction in Borrowings Although a loss was recorded for the fourth quarter, Anthracite made significant changes in its balance sheet to strengthen its liquidity position. During the quarter, the company sold approximately $679 million in market value of assets. The proceeds from these sales were applied to reduce amounts borrowed under Anthracite's existing reverse repurchase agreements Reverse Repurchase Agreement The purchase of securities with the agreement to sell them at a higher price at a specific future date. For the party selling the security (and agreeing to repurchase it in the future) it is a repo for the party on the other end of the and to increase its cash position. As a result of these transactions, Anthracite's aggregate debt to equity ratio The debt to equity ratio (D/E) is a financial ratio indicating the relative proportion of equity and debt used to finance a company's assets. It is equal to total debt divided by shareholders' equity. for at-risk assets declined during the quarter from approximately 4.2 to 1 at September 30, 1998 to approximately 2.0 to 1 at December 31, 1998, where it currently remains. At December 31, 1998, Anthracite had approximately $60 million in market value of cash and liquid non-core investments in excess of its outstanding borrowings. Included in the balance sheet at December 31, 1998 are net Treasury and agency securities positions with a market value of approximately $36 million which reflect short-term strategies which Anthracite employs from time to time to generate taxable gains Taxable Gain The portion of a sale that is liable to taxation. Notes: When redistributing mutual fund shares that have increased in value, returns may be subject to taxation. See also: Capital gain, Income Tax . Such gains are offset against the $(0.80) per share tax basis capital loss carryforward Loss Carryforward An accounting technique with which a company applies net operating losses of the current year to future year's profits in order to reduce tax liability. Notes: and retained as capital. Realized and unrealized gains Unrealized Gain A profit that results from holding on to an asset rather than cashing it in and using the funds. Notes: Let's say you own a stock that has doubled, but you haven't sold it yet. This is said to be an unrealized gain. or losses on these short-term strategies are reflected in the income statement during the period in which they occur. Underlying Asset Quality Remains Strong The collateral underlying Anthracite's subordinate commercial mortgage-backed securities Commercial mortgage-backed securities (CMBS) are a type of bond commonly issued in American security markets. They are a type of Mortgage-backed security which are backed by mortgages on commercial rather than residential real estate. positions comprises 1,500 loans on 1,739 separate properties. As of December 31, 1998, there were two loans that were 30 days 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. , both of which have subsequently been transferred to special servicing and foreclosure foreclosure Legal proceeding by which a borrower's rights to a mortgaged property may be extinguished if the borrower fails to live up to the obligations agreed to in the loan contract. actions initiated. At this time, there are no other known delinquent assets in the portfolio. Based on current information, there are no losses expected in excess of Anthracite's original loss projections made at the time of acquisition of these assets. These loss estimates are reflected in GAAP net interest income on a level yield basis. 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 established a dividend reinvestment plan that provides current share owners of Anthracite common stock with a simple, economical and convenient method of increasing their investment in Anthracite. Anthracite is currently offering a discount of 3 percent from the market price on the purchase of shares through the plan. The discount is subject to change from time to time at Anthracite's discretion and can range from 0 percent to 5 percent. 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 1-800-524-4458 or Investor Relations, Anthracite Capital, Inc. at 212-409-3333. Anthracite's results for the fourth quarter and since inception, and its financial position as of December 31, 1998 can be summarized as follows (unaudited, dollars in thousands, except per share data): -0-
Per Basic and Diluted
Amount Common Share(1)
Operating Results for the Quarter
Ended December 31, 1998:
Financial statement (GAAP) basis:
Income from operating portfolio $6,380 $0.32
Loss on sale of securities
available for sale $(19,803) $(0.99)
Net loss $(13,396) $(0.67)
Tax basis net income $2,292 $0.11
Funds from operations (FFO) $(13,396) $(0.67)
Dividends declared $5,796 (2) $0.29 (2)
Operating Results for the Period
from March 24, 1998 (Inception)
to December 31, 1998: GAAP basis:
Income from operating portfolio $18,397 $0.89
Loss on sale of securities
available for sale $(19,781) $(0.96)
Net loss $(1,389) $(0.07)
Tax basis net income $15,532 $0.75
FFO $(1,389) $(0.07)
Dividends declared $18,759 (2) $0.92 (2)
(1) Per share amounts are based on basic weighted average common
shares outstanding and per diluted share amounts are based on
diluted weighted average common shares outstanding, including
common stock equivalents.
(2) Because the ex-dividend and record date for the dividend of
$5,796, or $0.29 per share, declared on December 10, 1998 was in
January 1999, for tax purposes dividends paid in 1998 were
$12,963, or $0.63 per share.
Summary of Financial Position as of December 31, 1998:
Cash and cash equivalents $4,330
Securities held for trading, net $36,192
Securities available for sale:
Subordinated CMBS $273,018
Other securities $192,050
Commercial mortgage loan, net $35,581
Other assets $5,851
Total assets $547,022
Liabilities $364,094
Total stockholders' equity $182,928
Total liabilities and stockholders' equity $547,022
-0- Anthracite is a specialty finance company taxed as a REIT and 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 $132 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. . BlackRock's parent, PNC PNC Purdue University North Central (Westville, Indiana) PnC Point 'n Click PNC Police National Computer PNC People's National Congress (Guyana) PNC People's National Congress Bank N.A. in Pittsburgh, originates commercial, multifamily and residential real estate loans and services over $40 billion in commercial mortgage loans for third parties through its Midland Loan Services subsidiary. Set forth below are Anthracite's unaudited statement unaudited statement A financial statement prepared by an auditor but not in accordance with generally accepted auditing standards. Unaudited statements are prepared to less rigorous standards than audited statements. Compare audited statement. of financial condition as of December 31, 1998 and unaudited statements of operations for the quarter ended December 31, 1998 and for the period March 24, 1998 (Inception) to December 31, 1998. -0-
Anthracite Capital, Inc.
Statement of Financial Condition
December 31, 1998 (Unaudited)
(in thousands, except per share data)
Assets
Cash and cash equivalents $ 4,330
Securities held for trading, at market value:
Treasury securities $ 166,835
Short-term borrowings secured
by such Treasury securities (133,163)
Treasury and agency
securities sold short (275,085)
Repurchase agreements relating
to such short sales 276,617
Other 988
---------
Securities held for trading, net 36,192
Securities available for sale,
at market value:
Subordinated commercial
mortgage-backed securities (CMBS) 273,018
Other securities 192,050
Commercial mortgage loan, net 35,581
Other assets 5,851
=========
Total Assets $ 547,022
=========
Liabilities and Stockholders' Equity
Liabilities:
Short-term borrowings:
Secured by pledge of subordinated CMBS $ 160,924
Secured by pledge of other securities 168,963
Secured by pledge of commercial mortgage loan 23,014
Distributions payable 5,796
Other liabilities 5,397
---------
Total Liabilities 364,094
---------
Stockholders' Equity:
Common stock, par value $0.001 per share;
400,000 shares authorized; 21
21,365 shares issued and outstanding
Additional paid-in capital 296,920
Accumulated other comprehensive income (loss) (78,022)
Distributions in excess of earnings (20,148)
Treasury shares, at cost (1,380 shares) (15,843)
---------
Total Stockholders' Equity 182,928
=========
Total Liabilities and Stockholders' Equity $ 547,022
=========
Anthracite Capital, Inc.
Statements of Operations (Unaudited)
(in thousands, except per share data)
For the Period
March 24, 1998
For the Three (Commencement of
Months Ended Operations) Through
December 31, 1998 December 31, 1998
Operating Portfolio
Interest Income:
Securities available
for sale $ 12,954 $ 43,163
Commercial mortgage loan 1,049 1,457
Cash and cash equivalents 1,710 1,926
-------- --------
Total interest income 15,713 46,546
-------- --------
Expenses:
Interest 7,388 23,478
1,230 3,474
Management fee
Other expenses 715 1,197
-------- --------
Total expenses 9,333 28,149
-------- --------
Income from operating portfolio 6,380 18,397
-------- --------
Trading Strategies
Interest income 227 227
(1,392) (1,392)
Interest expense
Gain on securities
held for trading 1,107 1,107
-------- --------
Loss from trading
strategies (58) (58)
-------- --------
Other Gains (Losses)
(19,803) (19,781)
Loss on sale of securities
available for sale
Foreign currency gain 85 53
======== ========
Net Loss $(13,396) $ (1,389)
======== ========
Income from operating
portfolio per share:
Basic $ 0.32 $ 0.89
Diluted $ 0.32 $ 0.89
Loss on sale of securities
available for sale per share:
Basic $ (0.99) $ (0.96)
Diluted $ (0.99) $ (0.96)
Net loss per share:
Basic $ (0.67) $ (0.07)
Diluted $ (0.67) $ (0.07)
Weighted average number
of shares outstanding:
Basic 19,985 20,658
Diluted 19,985 20,658
-0- 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 ahr.blackrock.com. |
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