Anthracite Capital Reports Earnings of $0.28 for the Third Quarter 2004.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- 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. (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 ) (the "Company" or "Anthracite") today reported net income available to common stockholders for the third quarter of 2004 of $0.28 per share versus a net loss to common stockholders of $0.51 per share for the same three-month period last year. For the nine months ended September September: see month. 30, 2004, net income available to common stockholders was $0.41 per share versus a net loss of $0.60 per share for the nine months ended September 30, 2003. Operating Earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before for the third quarter of 2004 were $0.28 per share versus $0.28 per share for the same three-month period last year. Operating Earnings for the nine months ended September 30, 2004 were $0.84 per share versus $1.01 per share for the nine months ended September 30, 2003. Based on the $0.28 per share dividend declared on September 15, 2004, and the November November: see month. 2, 2004 closing price of $11.55, 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 9.7%. (All dollar amounts are in thousands, except per share amounts.) A table is provided below, which reconciles Operating Earnings per share with net income available (loss) to common stockholders per share. Chris CHRIS Chemical Hazards Response Information System (US DoD) CHRIS California Historical Resources Information System CHRIS Computerized Human Resources Information System CHRIS Command Human Resources Intelligence System Milner Milner can refer to: People
A method whereby a company attempts to improve its debt or credit worthiness. Notes: Credit enhancements take many different forms. An example of a credit enhancement would be conversion rights added on to a debt instrument in order to lower the issuing levels we expect to close only two additional transactions in the second half of 2004. We sold over $68,000 of investment grade CMBS CMBS See: Commercial Mortgage Backed Securities and issued $12,850 of secured debt that was retained from our December December: see month. 2002 collateralized debt obligation Collateralized Debt Obligation (CDO) A general inclusive term which covers Collateralized Bond Obligations, Collateralized Loan Obligations, and Collateralized Mortgage Obligations, taking advantage of favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. market conditions. In October October: see month. 2004 we priced another collateralized debt obligation, which is expected to generate approximately $77,000 of reinvestable cash. We expect to deploy these proceeds into the committed CMBS transactions as well as additional commercial loan investments. During the month of October 2004 we have closed on $69,000 of commercial loans. For the remainder of 2004 and into 2005 we will continue to focus on opportunities in the commercial mortgage loan sector and will continue to take an opportunistic opportunistic /op·por·tu·nis·tic/ (op?er-tldbomacn-is´tik) 1. denoting a microorganism which does not ordinarily cause disease but becomes pathogenic under certain circumstances. 2. approach to commercial mortgage-backed securities." Richard Ri·chard , Joseph Henri Maurice Known as "Rocket." 1921-2000. Canadian hockey player. A right wing for the Montreal Canadiens (1942-1960), he led his team to eight Stanley Cup championships and was the first player to score 50 goals in a 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 of the Company, added, "Our tactical investment approach has resulted in a portfolio that has been very well received by rating agencies and collateralized debt obligation investors. Therefore, we have been able to match fund substantially all of our commercial mortgage-backed securities while realizing significant spread tightening on our seasoned bonds. The overall result has been an increase in book value, as adjusted for the expected closing of the October 2004 CDO (Collaborative Data Objects) A programming interface from Microsoft for accessing MAPI-based e-mail, calendaring and scheduling servers. Originally called "OLE Messaging" and "Active Messaging," CDO wraps the Enhanced MAPI library into a COM object that provides the , of $1.98 per share since December 31, 2003." The Company's Operating Earnings for the third quarter of 2004 represent an annualized return on the quarter's average common stock equity of 15.3% as compared with 16.7% for the third quarter of 2003. The decrease in the annualized return on the quarter's average common stock equity was primarily attributable to reduced exposure to residential mortgage-backed securities Residential mortgage-backed securities (RMBS) 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 residential rather than commercial real estate. ("RMBS RMBS Residential Mortgage-Backed Securities RMBS Rambus, Inc. (NASDAQ stock symbol) RMBS Russian Mortgage-Backed Securities "). The net interest margin of 3.1% for the third quarter of 2004 increased from 2.9% for the third quarter of 2003. The Company's debt to capital ratio decreased from 7.5:1 at June June: see month. 30, 2004 to 6.8:1 at September 30, 2004, and non-recourse borrowing decreased slightly from 1.9:1 to 1.8:1. Total interest income from commercial real estate assets before the effect of the consolidation of the commercial mortgage loan pools rose 36% from the quarter ended September 30, 2003; in contrast, total interest income from RMBS declined 66% for the same period. The Company believes interest income before the effect of the consolidation of the commercial mortgage loan pools better reflects interest earned on the Company's commercial real estate assets. The chart below summarizes the Company's interest income from commercial real estate assets before the effect of the consolidation of the commercial mortgage loan pools for the quarters ended September 30, 2004 and 2003, respectively.
For the
quarter ended
September 30,
2004 2003
----------------
Income from:
Commercial real estate securities $32,408 $26,125
Commercial mortgage loan pools 13,715 -
Commercial real estate loans 5,123 2,160
----------------
Total income from commercial real estate assets 51,246 28,285
----------------
Interest expense related to the consolidation of
commercial mortgage loan pools (12,646) -
----------------
Total income from commercial real estate assets before
the effect of the consolidation of commercial
mortgage loan pools $38,600 $28,285
================
The Company's 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. increased to 5.04% at September 30, 2004 from 3.86% at September 30, 2003 due to higher interest costs associated with the Company's collateralized debt obligation ("CDO") that closed in March 2004. For the three months ended September 30, 2004 and 2003, respectively, hedging expenses not related to CDOs decreased to $3,825 ($0.07 per share), from $5,496 ($0.11 per share); however, this is an increase of $677 from $3,148 ($0.06 per share) at June 30, 2004. The Company's estimated exposure to a 50 basis point move in 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. decreased to approximately $0.013 per share annually from approximately $0.026 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. annually at June 30, 2004. The Company's $396,140 RMBS portfolio at September 30, 2004 represents 11% of the Company's portfolio assets. This portfolio is expected to remain between 10% and 15% of the Company's total portfolio assets. Capital Markets Activity/Liquidity In July July: see month. 2004 the Company issued a bond with a par of $12,850 from its December 2002 CDO transaction. Before issuing this security, the Company amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. the indenture An agreement declaring the benefits and obligations of two or more parties, often applicable in the context of Bankruptcy and bond trading. The term indenture primarily describes secured contracts and has several applications in U.S. law. to reduce the coupon from 9.0% to 7.6%. The Company continues to maintain liquidity in its high credit quality commercial real estate assets and RMBS portfolio. As of September 30, 2004, total assets in these portfolios net of borrowings is $64,619. Commercial Real Estate Credit Risk The Company's primary focus is to invest in a diverse portfolio of commercial real estate loans and commercial mortgage-backed securities ("CMBS"). The majority of these investments take the form of CMBS that are collateralized by pools of underlying mortgage loans. The cash flow the Company receives from its CMBS is dependent upon the credit performance of the underlying mortgage loans. The Company assumes a certain amount of losses will occur in the underlying mortgage loan pools and reports income net of these losses. The Company's objective is to maximize the spread between the loss-adjusted income and the cost of financing. Credit performance and the cost of financing the Company's portfolio are the most important factors affecting investment returns. Credit Performance of Controlling-Class CMBS Investments The Company considers CMBS securities where it maintains the right to control the foreclosure/workout process on the underlying loans as controlling class CMBS ("Controlling Class CMBS"). At the end of the third quarter of 2004, the Company's Controlling Class CMBS represent $18,550,866 of original balance of underlying commercial mortgage loans compared to $17,596,422 at the end of the second quarter of 2004. As of September 30, 2004, the current par balance of underlying loans securing the Company's Controlling Class portfolio is $16,696,851. The number of Controlling Class CMBS transactions owned by the Company increased from thirteen to fourteen during the third quarter of 2004. One of the Controlling Class CMBS transactions is not accounted for as available-for-sale securities, but rather as "Commercial Mortgage Loan Pools" as previously disclosed in the Company's 10-Q filed with the Securities and Exchange Commission on August 9, 2004. Delinquencies of 30 days or more as a percent of current loan balances were 1.24% at the end of the third quarter of 2004, compared with 1.22% at the end of the second quarter of 2004. With the disposition of four loans during the third quarter of 2004, the weighted average loss severity experienced for the 1998 and 1999 Controlling Class securities decreased from 32.7% at June 30, 2004 to 31.1% at September 30, 2004. No losses have been realized for those Controlling Class securities with vintages from 2001 through 2004 and the Company does not own any 2000 vintage Controlling Class securities. Overall, credit performance remains consistent with underwritten expectations. Additionally, during the third quarter of 2004 the Company experienced one credit upgrade on one Controlling Class CMBS in the Company's portfolio. Commercial Real Estate Securities The Company sold $58,663 of investment grade CMBS and $9,573 of CMBS interest only securities during the third quarter. Included in the $58,663 of investment grade CMBS is $5,847 of the BBB- rated bond of the Controlling Class CMBS that is classified as commercial mortgage loan pools on the Company's consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge . The average yield on the Company's commercial real estate securities (primarily investment grade and below investment grade CMBS, investment grade REIT REIT See: Real Estate Investment Trust REIT See real estate investment trust (REIT). debt, and CMBS interest only securities) for the third quarter of 2004 was 8.3%, while the average loss adjusted yield on only the below investment grade CMBS was 9.4%. The average yield on the Company's commercial real estate securities (primarily investment grade and below investment grade CMBS, investment grade REIT debt, and CMBS interest only securities) for the third quarter of 2003 was 8.5%, while the average loss adjusted yield on only the below investment grade CMBS was 9.9%. The average cost of financing the commercial real estate securities portfolio during the third quarter of 2004 was 5.1% compared to 5.2% for the third quarter of 2003. Net interest income and realized gains Realized Gain A gain resulting from selling an asset at a price higher than the original purchase price. Notes: There may be tax consequences for a realized profit. from the commercial real estate securities portfolio for the quarters ended September 30, 2004 and 2003, respectively, is as follows:
For the quarter ended
September 30,
2004 2003
-----------------------------
Interest Income $32,408 $26,125
Interest Expense(*) (18,107) (12,540)
-----------------------------
Net Interest Income 14,301 13,585
-----------------------------
Realized Gains 1,586 1,161
-----------------------------
Net Interest Income and Realized Gains
from Commercial Real Estate Securities $15,887 $14,746
=============================
(*)Including hedges in the Company's CDOs.
Commercial Real Estate Loans The Company acquired $118,403 of new commercial loans during the quarter at an average yield of 8.8% and none of the existing assets matured or were sold. The average yield on the Company's commercial real estate loan portfolio for the quarter ended September 30, 2004 was 12.2% compared with 10.4% for the quarter ended September 30, 2003. For the three months ended September 30, 2004 and 2003, respectively, the total cost of borrowings secured by loan assets was 3.3% and 2.8%. The Company has two committed warehouse lines that can be used to finance these commercial loan assets. The Company's investment in Carbon Capital, Inc. ("Carbon Capital") is included in commercial real estate loans. The annualized yield on the Company's investment in Carbon Capital was 17.1% for the quarter ended September 30, 2004. The Company's investment in Carbon Capital as of September 30, 2004 was $44,664. Net interest income from the commercial real estate loan portfolio for the quarters ended September 30, 2004 and 2003, respectively, is as follows:
For the quarter ended
September 30,
2004 2003
------------------------
Interest Income $5,123 $2,160
Interest Expense (424) (136)
------------------------
Net Interest Income from
Commercial Real Estate Loans $4,699 $2,024
========================
Book Value Net book value per share at the end of the third quarter of 2004 was $7.72. This is an increase of approximately 12.2% from $6.88 at June 30, 2004 due primarily to lower interest rates and tighter credit spreads. During the quarter, Ten-Year Treasury interest rates decreased by 46 basis points and credit spreads decreased by approximately 40 basis points. As the Company's portfolio matures, unrealized losses 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 credit sensitive CMBS securities are expected to decline provided that the Company's credit loss estimates and actual experience are comparable. The unrealized loss on all Controlling Class CMBS at September 30, 2004 was $35,609. Subsequent Event On October 21, 2004, the Company priced a CDO secured by a portfolio of below investment grade CMBS ("Collateral collateral (kəlăt`ərəl), something of value given or pledged as security for payment of a loan. Collateral consists usually of financial instruments, such as stocks, bonds, and negotiable paper, rather than physical goods, although "). The transaction will be accounted for as a sale under relevant accounting guidelines guidelines, n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. . The Company will receive total consideration of $158,032 consisting of net cash of $121,479 and CDO securities with a fair market value of $36,553 in exchange for the Collateral. The Collateral was carried at a fair market value of $109,933 on the Company's September 30, 2004 consolidated statement of financial condition based on price quotes received from third parties. The difference between total consideration received and the carrying value Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. of the Collateral will increase book value by $48,099, or $0.90 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. common share in the fourth quarter of 2004. The following table illustrates the pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma impact of this transaction on September 30, 2004 reported book value per share:
Book value at September 30, 2004 $7.72 $411,101
Realized and unrealized gains 0.31 16,636
Increase in other comprehensive income 0.59 31,463
----------------------
Net increase in book value 0.90 48,099
----------------------
Pro Forma book value at September 30, 2004(*) $8.62 $459,200
======================
(*)Assumes no other changes occur in the market or the Company's
portfolio.
The recognition of this gain increases the likelihood that the Company will incur To become subject to and liable for; to have liabilities imposed by act or operation of law. Expenses are incurred, for example, when the legal obligation to pay them arises. An individual incurs a liability when a money judgment is rendered against him or her by a court. incentive fee expense commencing in the fourth quarter of 2004. Incentive fees are computed using net income based on a rolling four-quarter period (see further discussion in the Company's 10-Q filed with the Securities and Exchange Commission on May 10, 2004.) Any recognition of such expense in the fourth quarter of 2004 is not expected to have a material impact on reported earnings. Reconciliation of Operating Earnings to Net Income Available (Loss) to Common Stockholders The Company considers its Operating Earnings to be net interest income after 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. and preferred dividends preferred dividend n. a payment of a corporation's profits to holders of preferred shares of stock. (See: preferred stock) but before 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. and losses, hedge ineffectiveness in·ef·fec·tive adj. 1. Not producing an intended effect; ineffectual: an ineffective plea. 2. Inadequate; incompetent: an ineffective teacher. , foreign currency loss, and the one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. charge from the redemption of the Company's Series B Preferred Stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. . The Company believes Operating Earnings better reflect the 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 of the Company. Operating Earnings can and will fluctuate over time based on changes in asset levels, funding rates, available reinvestment rates Reinvestment Rate The rate at which cash flows from fixed-income securities may be reinvested. Notes: Because of the additional interest income, bondholders can make larger investment returns if they reinvest received coupon payments. and expected losses on credit sensitive positions. The table below reconciles net income (loss) per common share with Operating Earnings per common share:
Three Months Nine Months
Ended Ended
--------------------------------
9/30/04 9/30/03 9/30/04 9/30/03
--------------------------------
Operating Earnings per share $0.28 $0.28 $0.84 $1.01
Realized loss - (0.47) (0.17) (0.70)
Unrealized gain (loss)(*) 0.01 (0.21) (0.03) (0.23)
Foreign currency loss & hedge
ineffectiveness (0.01) - (0.02) -
Cost to retire preferred stock in
excess of carrying value - (0.21) -
Loss on impairment of asset - (0.11) - (0.68)
--------------------------------
Net Income available (loss) to common
stockholders per share $0.28 $(0.51) $0.41 $(0.60)
(*)Includes hedges
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. If you are a participant in the Company's Dividend Reinvestment Reinvestment Using dividends, interest and capital gains earned in an investment or mutual fund to purchase additional shares or units, rather than receiving the distributions in cash. 1. In terms of stocks, it is the reinvestment of dividends to purchase additional shares. and Stock Purchase Plan (the "Plan"), please note that the dividend reinvestment portion of the Plan has been reinstated for all dividend payments made after August 2, 2004, and for all future dividend payment dates, with a discount of 2%. The optional cash purchase portion of the Plan remains suspended sus·pend v. sus·pend·ed, sus·pend·ing, sus·pends v.tr. 1. To bar for a period from a privilege, office, or position, usually as a punishment: suspend a student from school. ; however, it may be resumed at any time. The Company appreciates your continued support. To request a prospectus and receive enrollment materials or to ask questions about the Plan, interested investors and stockholders may contact the Company's transfer agent, 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 Stock Transfer & Trust Company, at 1-877-248-6416, or Investor Relations Investor relations The process by which the corporation communicates with its investors. , Anthracite Capital, Inc., at 212-409-3333. The Company's website address is www.anthracitecapital.com. About Anthracite Anthracite Capital, Inc. is a specialty finance company focused on investments in high yield commercial real estate loans and related securities. Anthracite is externally managed by BlackRock BlackRock Inc. (NYSE: BLK) is a major American investment management firm. As of September 30, 2007, BlackRock’s assets under management totaled $1.3 trillion[2] across fixed income, liquidity, equity, alternative investment and real estate strategies. Financial Management, Inc., which is a subsidiary of BlackRock, Inc. ("BlackRock") (NYSE:BLK BLK Black BLK Blank BLK Block BLK Bulk BLK Blocked Shot (basketball) BLK Blocked Kick (football) BLK Blackpool, England, United Kingdom - Blackpool (Airport Code) ), one of the largest publicly traded investment management firms in 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. with approximately $323.5 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. as of September 30, 2004. BlackRock is a member of The PNC Financial Services PNC Financial Services (NYSE: PNC) is a U.S.-based financial services corporation, with assets of $92.0 billion. PNC operations include a regional banking franchise operating primarily in eight states and the District of Columbia, specialized financial businesses serving Group, Inc. ("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 ") (NYSE:PNC), 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 organization. Through its affiliates, PNC originates commercial, multifamily and residential real estate loans, and services $92.6 million in commercial mortgage loans for third parties through its Midland Loan Services, Inc. subsidiary as of September 30, 2004. Forward Looking Statements This press release may contain 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 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 with respect to future financial or business performance, strategies or expectations. Forward-looking statements are typically identified by words or phrases such as "trend," "potential," "opportunity," "pipeline," "believe," "comfortable," "expect," "anticipate," "current," "intention," "estimate," "position," "assume," potential," "outlook," "continue," "remain," "maintain," "sustain," "seek," "achieve," and similar expressions, or future or conditional verbs such as "will," "would," "should," "could," "may" or similar expressions. Anthracite cautions that forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made, and Anthracite assumes no duty to and does not undertake to update forward-looking statements. Actual results could differ materially from those anticipated in forward-looking statements and future results could differ materially from historical performance. In addition to factors previously disclosed in Anthracite's Securities and Exchange Commission (the "SEC") reports and those identified elsewhere in this press release, the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance: (1) the introduction, withdrawal, success and timing of business initiatives and strategies; (2) changes in political, economic or industry conditions, the interest rate environment or financial and capital markets, which could result in changes in the value of Anthracite's assets; (3) the relative and absolute investment performance and operations of Anthracite's manager; (4) the impact of increased competition; (5) the impact of capital improvement projects; (6) the impact of future acquisitions; (7) the unfavorable resolution of legal proceedings All actions that are authorized or sanctioned by law and instituted in a court or a tribunal for the acquisition of rights or the enforcement of remedies. ; (8) the extent and timing of any share repurchases Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. ; (9) the impact, extent and timing of technological changes and the adequacy of intellectual property protection; (10) the impact of legislative and 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. actions and reforms and regulatory, supervisory or enforcement actions of government agencies relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc Anthracite, BlackRock or PNC; (11) terrorist activities, which may adversely affect the general economy, real estate, financial and capital markets, specific industries, and Anthracite and BlackRock; (12) the ability of Anthracite's manager to attract and retain highly talented professionals; (13) fluctuations in foreign currency exchange rates; and (14) the impact of changes to tax legislation and, generally, the tax position of the Company. Anthracite's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 2003 and Anthracite's subsequent reports filed with the SEC, accessible on the SEC's website at www.sec.gov See .gov and GovNet. (networking) gov - The top-level domain for US government bodies. , identify additional factors that can affect forward-looking statements. To learn more about Anthracite, visit our website at www.anthracitecapital.com.
Anthracite Capital, Inc. and Subsidiaries
Consolidated Statements of Financial Condition (Unaudited)
(in thousands, except per share data)
September 30, 2004 December 31, 2003
--------------------- --------------------
ASSETS
Cash and cash equivalents $15,263 $20,805
Restricted cash equivalents 27,043 12,845
Residential mortgage-backed
securities 396,140 726,717
---------- ---------
Cash and RMBS 438,446 760,367
Commercial mortgage loan
pools 1,316,600 -
Commercial real estate
securities 1,626,136 1,393,010
Commercial real estate loans 247,330 97,984
----------- -----------
Total commercial real
estate 3,190,066 1,490,994
Receivable for investments
sold 37,031 99,056
Other assets 53,931 48,429
----------- -----------
Total Assets $3,719,474 $2,398,846
=========== ===========
LIABILITIES AND
STOCKHOLDERS' EQUITY
Liabilities:
Short term borrowings:
Secured by pledge of
residential mortgage-
backed securities $371,036 $670,874
Secured by pledge of
commercial real estate
securities 341,765 444,987
Secured by pledge of
commercial mortgage
loan pools 8,552 -
Secured by pledge of
commercial real estate
loans 89,053 22,710
Secured by pledge of
other assets 8,025
---------- ---------
Total short term
borrowings 818,431 1,138,571
Long term borrowings:
Collateralized debt
obligations 1,068,156 684,970
Secured by pledge of
commercial mortgage
loan pools 1,298,985 -
---------- ---------
Total long term
borrowings 2,367,141 684,970
----------- -----------
Total borrowings 3,185,572 $1,823,541
Securities sold, not yet
settled - 99,551
Payable for investments
purchased 15,671 -
Distributions payable 15,806 14,749
Other liabilities 35,889 43,575
----------- -----------
Total Liabilities $3,252,938 $1,981,416
----------- -----------
Stockholders' Equity:
Common Stock, par value $0.001 per
share; 400,000 shares authorized;
53,241 shares issued
and outstanding in
2004; and
49,464 shares issued
and outstanding in
2003 $53 $49
10% Series B Preferred
Stock, liquidation
preference $43,942 in
2003 - 33,431
9.375% Series C Preferred
Stock, liquidation
preference
$57,500 in 2004 and
2003 55,435 55,435
Additional paid-in capital 578,599 536,333
Distributions in excess of
earnings (124,103) (101,635)
Accumulated other
comprehensive loss (43,448) (106,183)
----------- -----------
Total Stockholders'
Equity 466,536 417,430
----------- -----------
Total Liabilities and
Stockholders' Equity $3,719,474 $2,398,846
=========== ===========
Anthracite Capital, Inc.
Consolidated Statements of Operations (Unaudited)
(in thousands, except per share data)
For the Three For the Nine
Months Ended Months Ended
September 30, September 30,
----------------------------------
2004 2003 2004 2003
----------------------------------
Operating Portfolio
Income:
Commercial real estate securities $32,408 $26,125 $92,072 $71,730
Commercial mortgage loan pools 13,715 - 26,066 -
Commercial real estate loans 5,123 2,160 12,337 7,368
Residential mortgage-backed
securities 3,941 11,591 15,731 45,626
Cash and cash equivalents 165 453 356 838
Other 742 - 742 -
----------------- ----------------
Total income 56,094 40,329 147,304 125,562
----------------- ----------------
Expenses:
Interest expense:
Collateralized debt obligations 16,162 11,098 43,007 33,088
Commercial real estate
securities 1,945 1,442 5,086 2,619
Commercial mortgage loan pools 12,706 - 24,678 -
Commercial real estate loans 424 136 718 363
Residential mortgage-backed
securities 1,673 3,508 5,159 13,560
Hedging expense 3,825 5,496 11,604 13,251
General and administrative 886 551 2,120 1,724
Management fee 2,212 2,115 6,505 7,341
----------------- ----------------
Total expenses 39,833 24,346 98,877 71,946
----------------- ----------------
Income from the Operating Portfolio 16,261 15,983 48,427 53,616
----------------- ----------------
Other gain (loss):
Realized gain (loss) 54 (22,820) (8,540)(33,279)
Unrealized gain (loss) 923 (10,038) (1,736)(11,263)
Foreign currency loss (113) - (126) -
Hedge ineffectiveness (624) 66 (1,130) (175)
Loss on impairment of assets - (5,412) - (32,426)
----------------- ----------------
Total other gain (loss) 240 (38,204) (11,532)(77,143)
----------------- ----------------
Net income (loss) 16,501 (22,221) 36,895 (23,527)
----------------- ----------------
Dividends on preferred stock 1,348 2,491 5,568 5,298
Cost to retire preferred stock in
excess of carrying value - - 10,508 -
================= ================
Net income (loss) available to
Common Stockholders $15,153 $(24,712) $20,819 (28,825)
================= ================
Operating Earnings:
Income from the operating
portfolio $16,261 $15,983 $48,427 $53,616
Dividends on preferred stock (1,348) (2,491) (5,568) (5,298)
----------------- ----------------
Net operating earnings $14,913 $13,492 $42,859 $48,318
================= ================
Operating Earnings available to
Common Stockholders per share:
Basic $0.28 $0.28 $0.84 $1.01
Diluted $0.28 $0.28 $0.84 $1.01
Net Income (Loss) available to
Common Stockholders per share,
basic $0.28 $(0.51) $0.41 $(0.60)
================= ================
Net Income (Loss) available to
Common Stockholders per share,
diluted $0.28 $(0.51) $0.41 $(0.60)
================= ================
Weighted average number of shares
outstanding:
Basic 53,212 48,405 51,258 47,956
Diluted 53,221 48,421 51,267 47,972
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