Anthracite Capital Reports Operating Earnings of $0.32 Per Share and GAAP Earnings of $0.29 Per Share for the Second Quarter 2006.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 second quarter of 2006 of $0.29 per share versus $0.18 per share for the same three-month period in 2005. For the six months ended June June: see month. 30, 2006, net income available to common stockholders was $0.62 per share compared to net income available to common stockholders of $0.45 per share for the six months ended June 30, 2005. 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 (defined below) for the second quarters of 2006 and 2005 were $0.32 and $0.30 per share, respectively. Operating Earnings were $0.63 per share for the six months ended June 30, 2006 compared to $0.59 per share for the six months ended June 30, 2005. 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
The period beginning at the start of the calendar year up to the current date. investments." Based on the $0.29 per share dividend declared on May 18, 2006, and the August 8, 2006 closing price of $12.54, 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 9.3%. Table 1, provided below, reconciles Operating Earnings per share with 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. net income available to common stockholders per share. All currency amounts discussed herein are in thousands, except share and per share amounts. The Company's Operating Earnings for the second quarter of 2006 represent an annualized return on the quarter's average common stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. of 12.9%, as compared to 13.0% for the second quarter of 2005 and 13.0% for the first quarter of 2006. The Company's debt to capital ratio increased to 6.5:1 at June 30, 2006 from 5.9:1 at December December: see month. 31, 2005, primarily due to the issuance of trust preferred securities and 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 HY3. The Company's recourse The right of an individual who is holding a Commercial Paper, such as a check or promissory note, to receive payment on it from anyone who has signed it if the individual who originally made it is unable, or refuses, to tender payment. debt to capital ratio increased to 2.1:1 at June 30, 2006 from 2.0:1 at December 31, 2005. Investment Activity In the second quarter of 2006, the Company purchased a total of $214,027 of commercial real estate assets, including $118,349 of non-U non-U adj. Chiefly British Not characteristic of the upper class, especially in language usage. [non- + U2. .S. dollar denominated assets. Commercial real estate assets purchased were comprised of $81,692 of 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. ("CMBS CMBS See: Commercial Mortgage Backed Securities "), $43,651 of multifamily agency securities, $75,847 of commercial real estate loans, $7,898 of real estate equity and $4,939 of investment grade REIT REIT See: Real Estate Investment Trust REIT See real estate investment trust (REIT). debt. In addition, the Company purchased $44,542 of investment grade 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. during the quarter. Capital Markets Activity On May 23, 2006, the Company closed its sixth CDO ("HY3") resulting in the issuance of $417,000 of non-recourse debt Non-Recourse Debt A loan that is secured by some sort of collateral, usually property. The issuer can seize the collateral if the borrower defaults. Notes: These types of projects are characterized by high capital expenditures, long loan periods, and uncertain revenue to investors. The debt is secured by a portfolio of CMBS and subordinated commercial real estate loans. This debt, rated AAA AAA: see American Automobile Association. (Triple A) A common single-cell battery used in a myriad of electronic devices of all variety. Like its double A (AA) cousin, it provides 1.5 volts of DC power. When used in series, the voltage is multiplied. through BBB-, was privately placed, and the Company received additional CDO debt rated BB and 100% of the preferred shares Preferred shares Preferred shares give investors a fixed dividend from the company's earnings and entitle them to be paid before common shareholders. See: Preferred stock. issued by the CDO. In accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with the terms of the offering, the Company is expected to contribute to the CDO up to $50,000 of additional CMBS during a ramp-up period ending in October October: see month. 2006. The additional CMBS will be contributed at face value. The debt issuance match funded existing Company assets that were contributed to the CDO at closing as well as the assets to be purchased during the ramp-up period, with long-term liabilities Long-Term Liabilities Recorded on the balance sheet, a company's liabilities for leases, bond repayments and other items due in more than one year. Notes: A company's long-term liabilities are accounted for by its debt obligations to other parties which last longer than . The Company accounts for this transaction as a financing. All debt placed has legal final maturity of May 2051 but an assumed weighted average life of 8.1 years. Including interest rate hedges, this debt had a 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 approximately 6.3% for the second quarter of 2006 after issuance expenses. The Company used the net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). of the offering to pay down existing debt on the CDO collateral. At June 30, 2006, approximately 83% of the Company's subordinated CMBS is match funded in CDOs. As a result of the HY3 transaction, the Company has additional proceeds and capacity in its existing debt facilities to execute its commercial real estate strategies including investments in commercial real estate equity and subordinated CMBS. Second Quarter Financial Highlights --Income from commercial real estate assets increased $18,613, or 34%, from the quarter ended June 30, 2005 and $5,405, or 8%, from the quarter ended March 31, 2006 as a result of continued portfolio growth. --Income from the Company's investment in 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. Diamond Property Fund ("BlackRock Diamond") was $6,155 for the quarter ended June 30, 2006, consisting of $282 of current income and $5,873 of 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. on the underlying portfolio assets. For the six months ended June 30, 2006, the Company recorded $11,697 of income, consisting of $652 of current income and $11,045 of unrealized gains on the underlying portfolio assets. --During the quarter, stockholders approved the 2006 Stock Award and Incentive Plan, which authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: the issuance of shares of common stock to further align align (  līn),v to move the teeth into their proper positions to conform to the line of occlusion. the interests of the Company's management and stockholders. As a result, the Company recorded an expense of $856 for the second quarter related to the previously approved stock based incentive fee where one-half of one percent of common shares outstanding as of December 31, 2006 will be paid to BlackRock Financial Management, Inc. (the "Manager"). --A multi-family property in Texas which was acquired through 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. in the first quarter of 2006 was sold during the second quarter of 2006, resulting in a gain of $1,366. --At June 30, 2006, the Company's portfolio had six CMBS that required an impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. of $4,653, of which $4,226 was attributed to higher prepayment Prepayment 1. The payment of a debt obligation prior to its due date. 2. The excess payment over a scheduled debt repayment amount. Notes: 1. Examples include deferred expenses such as rent and early loan repayments. 2. rates on a pool of Small Business Administration commercial mortgages. The updated yields in the second quarter 2006 that resulted in impairment charges are not related to an increase in losses but rather accelerated prepayments Prepayments Payments made in excess of scheduled mortgage principal repayments. and changes in the timing of expected credit losses. --The Company's weighted average cost of funds increased to 6.11% at June 30, 2006 from 5.31% at June 30, 2005 which is primarily attributable to the issuance of $175,000 of trust preferred securities, CDO HY3, and increases 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. partially offset by the Company's interest rate hedging program. --The Company's estimated exposure at June 30, 2006 to a 50 basis point move in short-term interest rates decreased to $0.004 per share annually from $0.011 at March 31, 2006. Commercial Real Estate Securities During the second quarter of 2006, the Company purchased $130,282 of commercial real estate securities, including $42,502 of non-U.S. dollar denominated assets. Commercial real estate securities purchased were comprised of $81,692 of CMBS, $43,651 of multifamily agency securities and $4,939 of investment grade REIT debt. The average yields on the Company's commercial real estate securities for the quarters ended June 30, 2006 and 2005 were as follows:
For the quarters ended
June 30,
2006 2005
----------------------
Investment grade commercial real estate
securities 5.8% 6.5%
Non-investment grade CMBS securities 10.0% 10.6%
All commercial real estate securities 7.9% 8.5%
Commercial Real Estate Loans During the quarter ended June 30, 2006, the Company purchased a British pound denominated commercial real estate loan with a cost of GBP GBP In currencies, this is the abbreviation for the British Pound. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 14,361 ($25,699) and a principal balance of GBP 14,889 and three Euro denominated commercial real estate loans for a total cost of EUR EUR In currencies, this is the abbreviation for the Euro. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 39,186 ($50,148) and with a principal balance totaling EUR 39,586. During the quarter ended June 30, 2006, the Company experienced repayments in the aggregate amount of $12,752. This activity increases 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 Company's total commercial real estate loans exclusive of the Company's investments in Carbon Capital, Inc. ("Carbon I") and Carbon Capital II, Inc. ("Carbon II", and collectively with Carbon Capital I, the "Carbon Capital Funds") to $435,713 at June 30, 2006 from $361,723 at March 31, 2006. The average yields on the Company's commercial real estate loans for the quarters ended June 30, 2006 and 2005 were as follows:
For the quarters ended
June 30,
2006 2005
----------------------
Fixed-rate commercial real estate loans 9.1% 9.5%
Floating-rate commercial real estate loans 8.1% 8.1%
All commercial real estate loans 8.5% 8.7%
Also included in commercial real estate loans are the Company's investments in the Carbon Capital Funds. The annualized yield on the Carbon Capital Funds was 23.7% for the quarter ended June 30, 2006 as compared with 18.8% for the quarter ended June 30, 2005. The increase in the annualized yield is primarily attributable to prepayment penalties Prepayment penalty A fee a borrower pays a lender when the borrower repays a loan before its scheduled time of maturity. received on underlying assets in Carbon II. For the quarter ended June 30, 2006, Carbon II acquired $143,541 of commercial mortgage loans and received repayments of $34,567. As loans are repaid, Carbon II has redeployed capital into acquisitions of additional loans for the portfolio. The Carbon I investment period has expired ex·pire v. ex·pired, ex·pir·ing, ex·pires v.intr. 1. To come to an end; terminate: My membership in the club has expired. 2. and as repayments continue to occur, capital will be returned to investors. The Company's investments in the Carbon Capital Funds are as follows:
June 30, 2006 December 31, 2005
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Carbon I $ 3,265 $18,458
Carbon II 63,874 41,185
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$67,139 $59,643
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Commercial Real Estate Credit Risk At June 30, 2006, all commercial real estate loans owned directly by the Company were performing in line with expectations. The Company's investment in Carbon II includes a $28,300 mezzanine loan A mezzanine loan is a relatively large loan, typically unsecured (ie., not backed by a pledging of assets) or with a deeply subordinated security structure (e.g., third lien on the property but non-recourse vis-a-vis the borrower). which defaulted during July 2006. The underlying property is a hotel located in the South Beach area of Miami, Florida “Miami” redirects here. For the Native American tribe, see Miami tribe. Miami is a major city in southeastern Florida, in the United States. It is the county seat of Miami-Dade County. Miami is a gamma world city with an estimated population of 404,048. . Based on the credit analysis performed by Carbon II, a loan loss reserve is not necessary at this time. To the extent a loan loss reserve becomes necessary, the Company would 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. 26% of the reserve, which represents the Company's pro rata [Latin, Proportionately.] A phrase that describes a division made according to a certain rate, percentage, or share. In a Bankruptcy case, when the debtor is insolvent, creditors generally agree to accept a pro rata share of what is owed to them. share of Carbon II. All other commercial real estate loans in the Carbon Capital Funds are performing as expected. 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"). The Company acquired one Controlling Class CMBS transaction during the second quarter of 2006 and owned 25 Controlling Class CMBS transactions at June 30, 2006. At June 30, 2006, the current principal balance of the loans underlying the Company's 25 Controlling Class CMBS was $35,224,119. Delinquencies of 30 days or more on these loans as a percent of current loan balances were 0.34% at the end of the second quarter of 2006, compared with 0.51% at the end of the first quarter of 2006. During the three months ended June 30, 2006, two of the Company's Controlling Class CMBS were upgraded by at least one rating agency. Additionally, at least one rating agency upgraded 23 of the Company's non-Controlling Class commercial real estate securities during the three months ended June 30, 2006. None of the Company's commercial real estate assets were downgraded during the three months ended June 30, 2006. Commercial Real Estate As previously announced, the Company invests in BlackRock Diamond. BlackRock Diamond is an open-end fund Open-End Fund A mutual fund that continues to sell shares to investors, and will buy back shares when investors wish to sell. Notes: Open-end funds have no limit to the number of shares they can issue. The majority of mutual funds are open end. that applies value-added strategies to a portfolio of commercial real estate properties. For the quarter ended June 30, 2006, the Company recorded $6,155 of income, consisting of $282 of current income and $5,873 of unrealized gains on the underlying portfolio assets. For the six months ended June 30, 2006, the Company recorded $11,697 of income, consisting of $652 of current income and $11,045 of unrealized gains on the underlying portfolio assets. To date, the Company has invested an aggregate of $86,272, which represents a 25.5% interest in BlackRock Diamond, and has remaining capital commitments totaling $13,728. At June 30, 2006, BlackRock Diamond's portfolio consists of nineteen assets with a total market value of approximately $460,400. BlackRock Diamond is managed by a subsidiary of Anthracite's Manager and all financial information was reported by BlackRock Diamond. As previously reported, the Company purchased a defaulted loan from a Controlling Class CMBS trust during the first quarter of 2006. The loan was secured by a first mortgage on a multi-family property in Texas. Subsequent to the loan purchase, the Company foreclosed on the loan and acquired title to the property in the process. The Company sold the property during the second quarter of 2006 and recorded a gain of $1,366. The sale was recorded as a gain on sale of discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. . Summary of Commercial Real Estate Assets A summary of the Company's commercial real estate assets with estimated fair values in local currencies at June 30, 2006 is as follows:
Commercial Commercial Commercial
Real Estate Real Estate Real Estate
Securities Loans Equity
----------------------------------------------
USD $2,182,518 $293,445 $96,962
GBP GBP 21,122 GBP 50,355 -
EURO EUR 52,259 EUR 91,022 -
Indian Rupees - - Rs 179,669
----------------------------------------------
Total USD
Equivalent $2,288,346 $502,852 $100,812
----------------------------------------------
Total Total
Commercial Commercial Commercial
Mortgage Real Estate Real Estate
Loan Pools Assets Assets (USD)
----------------------------------------------
USD $1,281,946 $3,854,871 $3,854,871
GBP - GBP 71,477 $132,143
EURO - EUR 143,281 $183,092
Indian Rupees - Rs 179,669 $3,850
----------------------------------------------
Total USD
Equivalent $1,281,946 $4,173,956 $4,173,956
----------------------------------------------
The Company has an investment in a commercial real estate development fund located in India. Total capital committed is $11,000, of which $3,850 has been drawn. The entity conducts its operations in the local currency, Indian Rupees Noun 1. Indian rupee - the basic unit of money in India; equal to 100 paise rupee Indian monetary unit - monetary unit in India paisa - a fractional monetary unit in Bangladesh and India and Nepal and Pakistan . The Company has foreign currency rate exposure related to its non-U.S. dollar denominated assets. The Company's primary currency exposures are to the Euro and British pound. Changes in currency rates can adversely impact the estimated fair value and earnings of the Company's non-U.S. holdings. The Company mitigates this impact by utilizing local currency-denominated financing on its foreign investments and foreign currency forward commitments to hedge the net exposure. Foreign currency gains were $271 and $315 for the three and six months ended June 30, 2006, respectively. Book Value Net book value per share at June 30, 2006 was $9.86. This is a decrease of 0.2% from $9.88 at March 31, 2006, and an increase of 7.4% from $9.18 at June 30, 2005. This represents a total return including dividends paid of 2.2% and 18.6%, respectively, for the three and twelve months ended June 30, 2006. The negative affects of higher interest rates was substantially offset by tighter credit spreads and the positive impact of the Company's hedging activity. The Company calculates book value per share based on a liquidation value Liquidation value Net amount that could be realized by selling the assets of a firm after paying the debt. calculation. Below is a calculation of book value per share for the quarters ended June 30, 2006, March 31, 2006, December 31, 2005 and June 30, 2005.
6/30/06 3/31/06 12/31/2005 6/30/05
---------------------------------------------
Total Stockholders'
Equity $620,446 $621,012 $598,018 $546,868
Less: Series C Preferred
Stock Liquidation Value (57,500) (57,500) (57,500) (57,500)
---------------------------------------------
Common Equity $562,946 $563,512 $540,518 $489,368
Shares Outstanding 57,096,618 57,053,435 56,338,540 53,305,202
Book Value Per Share $9.86 $9.88 $9.59 $9.18
=============================================
Reconciliation of Operating Earnings to Diluted Net Income Available to Common Stockholders Per Share (Table 1) 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 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 exchange impact and loss on impairment of assets. The Company believes Operating Earnings to be an effective indicator of the Company's profitability and financial performance over time. 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 diluted Operating Earnings per common share with diluted net income available to common stockholders per common share:
Three Months Ended Six Months Ended
June 30, June 30,
----------------------------------------------------------------------
2006 2005 2006 2005
--------------------------------------
Operating earnings per share $0.32 $0.30 $0.63 $0.59
Net realized and unrealized
gain 0.02 (0.02) 0.04 (0.05)
Net foreign currency gain
(loss) and hedge
ineffectiveness 0.01 (0.04) 0.02 (0.03)
Loss on impairment of assets (0.08)(0.06) (0.09) (0.06)
Income from discontinued
operations 0.02 - 0.02 -
--------------------------------------
Diluted net income available
to common stockholders
per share $0.29 $0.18 $0.62 $0.45
======================================
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 As previously announced, if you are a participant in the Company's Dividend Reinvestment and Stock Purchase Plan (the "Plan"), please note that the Plan has been 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. for all investments after February 24, 2006, and for all future investment dates. The Plan will remain in place and may be resumed by the Company at any time. During the six months ended June 30, 2006, the Company issued 590,216 shares under the Plan at a collective weighted-average issuance price of $10.62 per share. The optional cash portion of the Plan allowed participants to invest up to $20,000 per month at a 2% discount. The optional cash portion of the Plan represents 575,312 of the shares that were issued during the quarter under the Plan. The remaining 14,904 shares issued under the Plan during the quarter are attributable to the dividend reinvestment portion of the Plan. 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 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 212-810-3333. 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 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 $464.1 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. at June 30, 2006. BlackRock Realty realty n. a short form of "real estate." (See: real estate) REALTY. An abstract of real, as distinguished from personalty. Realty relates to lands and tenements, rents or other hereditaments. Vide Real Property. Advisors, Inc., another subsidiary of BlackRock, provides real estate equity and other real estate-related products and services in a variety of strategies to meet the needs of institutional investors Institutional Investor A non-bank person or organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions. . 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 $173.7 billion in commercial mortgage loans for third parties through its Midland Loan Services, Inc. subsidiary at June 30, 2006. 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. This press release, and other statements that Anthracite may make, may contain forward-looking statements 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 Anthracite's 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," "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 SEC reports and those identified elsewhere in this communication, 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 or divestitures; (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 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 and international hostilities, which may adversely affect the general economy, domestic and global financial and capital markets, specific industries, and Anthracite; (12) the ability of BlackRock to attract and retain highly talented professionals; (13) fluctuations in foreign currency exchange rates; (14) the impact of changes to tax legislation and, generally, the tax position of the Company; (15) the ability of BlackRock to successfully integrate the business of Merrill Lynch Merrill Lynch & Co., Inc. (NYSE: MER TYO: 8675 ), through its subsidiaries and affiliates, provides capital markets services, investment banking and advisory services, wealth management, asset management, insurance, banking and related products and services on a global basis. Investment Managers (MLIM MLIM Merrill Lynch Investment Managers (UK) ) with its existing business following the closing of its pending transaction with Merrill Lynch; (16) the ability of BlackRock to effectively manage the former MLIM assets along with its historical assets under management; and (17) the ability of BlackRock to complete the transaction with Merrill Lynch. 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, 2005 and Anthracite's subsequent reports filed with the SEC, accessible on the SEC's website at www.sec.gov, identify additional factors that can affect forward-looking statements. To learn more about Anthracite, visit our website at www.anthracitecapital.com. The information contained on the Company's website is not a part of this press release.
Anthracite Capital, Inc. and Subsidiaries
Consolidated Statements of Financial Condition (Unaudited)
(in thousands)
June 30, 2006 December 31, 2005
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ASSETS
Cash and cash equivalents $31,211 $40,556
Restricted cash equivalents 53,647 1,246
Residential mortgage-backed
securities ("RMBS") 301,952 259,026
Commercial mortgage loan
pools 1,281,946 1,292,407
Commercial real estate
securities 2,288,346 2,005,383
Commercial real estate
loans 502,852 425,453
Commercial real estate 100,812 51,003
----------- -----------
Total commercial real
estate 4,173,956 3,774,246
Interest rate swap
agreements, at fair value 68,631 31,172
Receivable for investments
sold 21,372 -
Other assets 53,973 58,013
----------- -----------
Total Assets $4,704,742 $4,164,259
=========== ===========
LIABILITIES AND
STOCKHOLDERS' EQUITY
Liabilities:
Short term borrowings:
Secured by pledge of
RMBS $291,238 $249,122
Secured by pledge of
commercial real estate
securities 686,685 616,661
Secured by pledge of
commercial mortgage
loan pools 6,326 5,977
Secured by pledge of
commercial real estate
loans 119,259 229,556
---------- ----------
Total short term
borrowings 1,103,508 1,101,316
Long term borrowings:
Collateralized debt
obligations 1,483,078 1,066,930
Secured by pledge of
commercial mortgage
loan pools 1,261,989 1,272,931
Junior subordinated
notes to subsidiary
trust issuing preferred
securities 180,477 77,380
---------- ----------
Total long term
borrowings 2,925,544 2,417,241
----------- -----------
Total borrowings 4,029,052 3,518,557
Payable for investments
purchased 11,996 -
Distributions payable 17,456 16,673
Interest rate swap
agreements, at fair value 67 8,907
Other liabilities 25,725 22,104
----------- -----------
Total Liabilities 4,084,296 3,566,341
----------- -----------
Stockholders' Equity:
Common Stock, par value $0.001 per
share; 400,000 shares authorized;
57,097 shares issued and outstanding
in 2006; and 57 56
56,339 shares issued and outstanding
in 2005
9.375% Series C Preferred
Stock, liquidation
preference $57,500 55,435 55,435
Additional paid-in capital 620,419 612,368
Distributions in excess of
earnings (127,424) (130,038)
Accumulated other
comprehensive income 71,959 60,197
----------- -----------
Total Stockholders'
Equity 620,446 598,018
----------- -----------
Total Liabilities and
Stockholders' Equity $4,704,742 $4,164,259
=========== ===========
Anthracite Capital, Inc. and Subsidiaries
Consolidated Statements of Operations (Unaudited)
(in thousands, except per share data)
For the Three For the Six
Months Ended Months Ended
June 30, June 30,
---------------------------------
2006 2005 2006 2005
---------------------------------
Operating Portfolio
Income:
Commercial real estate securities $41,847 $33,602 $79,638 $66,233
Commercial mortgage loan pools 13,287 13,605 26,513 27,157
Commercial real estate loans 12,492 7,961 24,308 16,200
Commercial real estate 6,155 - 11,697 -
RMBS 3,080 2,691 6,110 5,571
Cash and cash equivalents 580 266 918 502
---------------- ----------------
Total Income 77,441 58,125 149,184 115,663
---------------- ----------------
Expenses:
Interest expense:
Short-term borrowings 16,687 8,674 32,806 17,024
Collateralized debt obligations 18,580 16,018 34,714 31,765
Commercial mortgage loan pools 12,612 12,745 25,278 25,525
Junior subordinated notes 3,439 - 5,659 -
General and administrative expense 1,135 938 2,238 1,758
Management fee 3,109 2,661 6,160 5,240
Incentive fee 1,538 - 2,708 -
Incentive fee - stock based 856 - 856 -
---------------- ----------------
Total Expenses 57,956 41,036 110,419 81,312
---------------- ----------------
Income from the Operating Portfolio 19,485 17,089 38,765 34,351
---------------- ----------------
Other income (loss):
Net realized and unrealized gain
(loss) 1,272 (1,259) 2,255 (2,739)
Foreign currency gain (loss) 271 (176) 315 (344)
Hedge ineffectiveness (40) (1,533) 575 (1,272)
Loss on impairment of assets (4,653) (3,072) (5,434) (3,231)
---------------- ----------------
Total other loss (3,150) (6,040) (2,289) (7,586)
---------------- ----------------
Income from Continuing Operations 16,335 11,049 36,476 26,765
---------------- ----------------
Income from Discontinued Operations 1,366 - 1,366 -
---------------- ----------------
Net Income 17,701 11,049 37,842 26,765
Dividends on preferred stock 1,348 1,348 2,696 2,696
---------------- ----------------
Net Income available to Common
Stockholders $16,353 $9,701 $35,146 $24,069
================ ================
Operating Earnings:
Income from the operating
portfolio $19,485 $17,089 $38,765 $34,351
Dividends on preferred stock (1,348) (1,348) (2,695) (2,696)
---------------- ----------------
Net Operating Earnings $18,137 $15,741 $36,070 $31,655
================ ================
Operating Earnings available to Common
Stockholders per share:
Basic $0.32 $0.30 $0.63 $0.59
Diluted $0.32 $0.30 $0.63 $0.59
Net Income available to Common
Stockholders per share:
Basic $0.29 $0.18 $0.62 $0.45
Diluted $0.29 $0.18 $0.62 $0.45
Income from continuing operations
per share of common stock, after
preferred dividends
Basic $0.26 $0.18 $0.60 $0.45
Diluted $0.26 $0.18 $0.60 $0.45
Income from discontinued operations
per share of common stock
Basic $0.03 - $0.02 -
Diluted $0.03 - $0.02 -
Weighted average number of shares
outstanding:
Basic 57,066 53,302 56,870 53,298
Diluted 57,355 53,311 57,016 53,307
Dividend declared per share of Common
Stock $0.29 $0.28 $0.57 $0.56
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