Approved Financial Corp. Reports Operating and Financial Results for 2001.Business Editors VIRGINIA BEACH Virginia Beach, resort city (1990 pop. 393,069), independent and in no county, SE Va., on the Atlantic coast; inc. 1906. In 1963, Princess Anne co. and the former small town of Virginia Beach were merged, giving the present city an area of 302 sq mi (782 sq km). , Va.--(BUSINESS WIRE)--April 5, 2002 Approved Financial Corp. (OTCBB OTCBB See OTC Bulletin Board (OTCBB). :APFN APFN American Patriot Friends Network ) Approved Financial Corp. reported a net loss of $2.6 million or $.48 per share for the year ended December December: see month. 31, 2001 compared to a net loss of $3.3 million or $.60 for the same period in the year 2000. Charges of $2.9 million are included in the reported after tax loss of $2.6 million, which are related to a $1.9 million increase in the valuation allowance for the deferred tax asset and a $1.0 million charge for elimination of goodwill from prior acquisitions and a loss on disposition Act of disposing; transferring to the care or possession of another. The parting with, alienation of, or giving up of property. The final settlement of a matter and, with reference to decisions announced by a court, a judge's ruling is commonly referred to as disposition, regardless of of premises premises n. 1) in real estate, land and the improvements on it, a building, store, shop, apartment, or other designated structure. The exact premises may be important in determining if an outbuilding (shed, cabana, detached garage) is insured or whether a person and equipment associated with the sale of the office building that served as corporate headquarters before 1999. Excluding the charges to income related to elimination of goodwill and loss on disposition of premises and equipment for the periods, the pretax loss pretax loss A loss reported before tax benefits are considered. was $0.15 million for the twelve months ended December 31, 2001 compared to a pretax loss of $4.7 million for the twelve month period ended December 31, 2000. The $1.9 million charge related to an increase in the valuation allowance for the deferred tax asset is included in the reported net loss for the three months ended December 31, 2001 of $2.3 million or $0.41 per share compared to a net loss of $1.2 million or $0.22 per share for the three months ended December 31, 2000. The pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern net loss was $.6 million for the three months ended December 31, 2001 compared to a pretax net loss of $2.0 million for same period in 2000. Approved Financial Corp. is a Virginia Virginia, state, United States Virginia, state of the south-central United States. It is bordered by the Atlantic Ocean (E), North Carolina and Tennessee (S), Kentucky and West Virginia (W), and Maryland and the District of Columbia (N and NE). corporation and through its wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. , Approved Federal Savings Bank Noun 1. federal savings bank - a federally chartered savings bank FSB savings bank - a thrift institution in the northeastern United States; since deregulation in the 1980s they offer services competitive with many commercial banks , primarily operates in the business of originating, servicing and selling residential mortgage loans secured by first and subordinated Subordinated A claim ranked lower in priority than other claims. Common stock claims are always subordinated to debt. liens on residential properties. The Company sources mortgage loans through a network of mortgage brokers and an internal sales staff that originates mortgages directly with borrowers. This press release is not a comprehensive disclosure of our current or future operations. We recommend that investors refer to the Form 10K as filed with the Securities and Exchange Commission ("SEC") on April 3, 2002 for the year ended December 31, 2001 and other SEC filings. Links to our current and historical SEC filings and Press Releases are available at http://www.businesswire.com/cnn/apfn.shtml. Copies of our SEC filings are available by mail upon request to: Approved Financial Corp. 1716 Corporate Landing Parkway, Virginia Beach, Va. 23454. Attention: Accounting Department/Investor Relations MORTGAGE LOAN ORIGINATION The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. VOLUME The following table shows the loan originations in dollars and units for our wholesale (sourced by referral from mortgage brokers) and retail divisions for the three and twelve months ended December 31, 2001 and 2000. The retail originations include loans that are funded through other lenders ("brokered loans"). Brokered loans consist primarily of non-conforming mortgages A non-conforming mortgage is a term in the United States for a residential mortgage that does not conform to the loan purchasing guidelines set by the Federal National Mortgage Association /Federal Home Loan Mortgage Corporation (Fannie Mae and Freddie Mac). that do not meet our 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. criteria criteria (krītēr´ē  ),n. . All loans are residential mortgages.
Three Months Twelve months
Ended Ended
Unaudited December 31, December 31,
(dollars in millions) 2001 2000 2001 2000
------------- -------------
Dollar Volume of Loans Originated:
Broker (wholesale) $ 67.2 $ 35.6 $269.9 $135.0
Retail funded through other lenders 1.3 10.8 16.9 47.6
Retail funded in-house
non-conforming 0.5 7.0 10.7 47.9
Retail funded in-house conforming
and government 10.6 11.7 79.8 46.7
------ ------ ------ ------
Total $ 79.6 $ 65.1 $377.3 $277.2
====== ====== ====== ======
Number of Loans Originated:
Broker (wholesale) 634 462 2,574 1,846
Retail funded through other lenders 9 136 148 682
Retail funded in-house
non-conforming 5 96 161 714
Retail funded in-house conforming
and government 60 109 575 448
------ ------ ------ ------
Total 708 803 3,458 3,690
====== ====== ====== ======
STATISTICS ON RESIDENTIAL MORTGAGE LOANS FUNDED IN-HOUSE
Unaudited Twelve Months Ended December 31, 2001
Weighted Weighted
Credit % of Volume Average Average
Classification Funded WAC LTV FICO
A 89 % 8.73 % 84 % 675
B 9 % 10.21 % 83 % 591
C 2 % 10.57 % 82 % 561
Refinance 72 %
Purchase 28 %
First Lien 89 %
Subordinate Lien 11 %
Owner Occupied 98%
Non Owner Occupied 2 %
Fixed 78 %
ARM 22 %
With Prepayment Penalty 78 %
Without Prepayment Penalty 22 %
APPROVED FINANCIAL CORP.
CONSOLIDATED BALANCE SHEETS
December 31, 2001 and December 31, 2000
(Dollars in thousands, except per share amounts)
ASSETS 2001 2000
---- ----
Cash $11,627 $ 7,597
Mortgage loans held for sale, net 47,886 22,438
Mortgage loans held for yield, net 10,348 14,274
Real estate owned, net 589 1,151
Investments 1,056 2,847
Deferred tax asset, net 1,607 3,504
Income tax receivable 194 --
Premises and equipment, net 3,793 5,408
Goodwill, net 71 983
Loan Sale Receivable -- --
Other assets 1,354 1,617
------- -------
Total assets $78,525 $59,819
======= =======
LIABILITIES AND EQUITY
Liabilities:
Revolving warehouse loan $ 3,280 $ 1,694
FHLB bank advances and line of
credit -- 3,000
Mortgage notes payable 1,745 2,529
Notes payable-related parties 2,499 2,818
Certificate of indebtedness 2,063 2,043
Certificates of deposits 59,903 34,432
Money market account 2,232 3,926
Accrued and other liabilities 1,420 1,366
------- -------
Total liabilities 73,142 51,808
------- -------
Commitments and contingencies
Shareholders' equity:
Preferred stock series A, $10 par
value; 1 1
Noncumulative, voting:
Authorized shares - 100
Issued and outstanding shares - 90
Common stock, par value - $1 5,482 5,482
Authorized shares - 40,000,000
Issued and outstanding
shares - 5,482,114
Accumulated other comprehensive
loss -- (12)
Additional capital 552 552
Retained earnings (652) 1,988
------- -------
Total equity 5,383 8,011
------- -------
Total liabilities and equity $78,525 $59,819
======= =======
Notes to these financial statements as filed on SEC Form 10K on
April 3, 2002 are an integral part of these consolidated financial
statements.
APPROVED FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND
COMPREHENSIVE INCOME (LOSS)
for the three months ended December 31, 2001 and 2000
(In thousands, except per share amounts)
Unaudited
2001 2000
---- ----
Revenue:
Gain on sale of loans $ 2,290 $ 2,262
Interest income 1,223 1,136
Broker fee income 51 507
Other fees and income 448 410
------- -------
4,012 4,315
------- -------
Expenses:
Compensation and related 1,687 2,492
General and administrative 1,266 2,105
Loss on sale of premises and equipment -- 22
Write down of goodwill -- --
Write down of fixed assets -- --
Advertising expense 43 --
Loan production expense 324 244
Interest expense 851 892
Unrealized loss on loans held for sale 256 --
Provision for loan and foreclosed
property losses 158 547
------- -------
4,585 6,302
------- -------
Income (loss) before income taxes (573) (1,987)
Provision for (benefit from) income
taxes 1,678 (775)
------- -------
Net income (loss) (2,251) (1,212)
Other comprehensive income, net of tax:
Unrealized gain on securities:
Unrealized holding gain during
period -- 7
------- -------
Comprehensive income (loss) $(2,251) $(1,205)
======= =======
Net income (loss) per share:
Basic and Diluted $ (0.41) $ (0.22)
======= =======
Weighted average shares outstanding:
Basic and Diluted 5,482 5,482
======= =======
Notes to these financial statements as filed on SEC Form 10K on
April 3, 2002 are an integral part of these consolidated financial
statements.
APPROVED FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF LOSS AND
COMPREHENSIVE INCOME (LOSS)
for the twelve months ended December 31, 2001 and 2000
(In thousands, except per share amounts)
Unaudited
2001 2000
---- ----
Revenue:
Gain on sale of loans $13,831 $10,971
Interest income 5,428 5,191
Broker fee income 649 2,399
Other fees and income 2,031 2,081
------- -------
21,939 20,642
------- -------
Expenses:
Compensation and related 9,462 11,477
General and administrative 5,872 7,779
Write down of goodwill 845 --
Loss on sale of premises and equipment 162 42
Advertising expense -- --
Loan production expense 1,792 1,151
Interest expense 3,853 3,852
Unrealized loss on loans held for sale -- --
Provision for loan and foreclosed
property losses 1,110 1,089
------- -------
23,096 25,390
------- -------
Loss before income taxes (1,157) (4,748)
Provision for (Benefit from)
income taxes 1,483 (1,456)
------- -------
Net loss (2,640) (3,292)
Other comprehensive income, net of tax:
Unrealized gain on securities:
Unrealized holding gain (loss)
during period 12 4
------- -------
Comprehensive loss $(2,628) $(3,288)
======= =======
Net loss per share:
Basic and Diluted $ (0.48) $ (0.60)
======= =======
Weighted average shares outstanding:
Basic and Diluted 5,482 5,482
======= =======
Notes to these financial statements as filed on SEC Form 10K on
April 3, 2002 are an integral part of these consolidated financial
statements.
APPROVED FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
for the twelve months ended December 31, 2001 and 2000
(In thousands)
Unaudited
2001 2000
---- ----
Operating activities
Net income (loss) $ (2,640) $ (3,292)
Adjustments to reconcile net loss to net
cash (used in) provided by operating
activities:
Depreciation of premises and equipment 796 643
Amortization of goodwill 67 137
Provision for loan losses 91 639
Provision for losses on real estate owned 237 (341)
Unrealized loss on loans held for sale 782
Deferred tax benefit (expense) 1,897 (1,337)
Proceeds from sale and prepayments of
loans 350,404 268,185
Originations of loans, net (360,340) (229,490)
Loss on sale/disposal of fixed assets 162 42
Loss on write down of goodwill 845 --
Loss on Real Estate Owned -- 792
Gain/Loss on Sale of Securities 6 --
Gain on sale of loans (13,831) (10,971)
Changes in assets and liabilities:
Loan sale receivable 4 (2)
Income tax receivable (194) --
Other assets 263 118
Accrued and other liabilities 54 (1,060)
Income tax payable -- 5,153
Loan proceeds payable -- --
------- -------
Net cash (used in) provided by
operating activities (21,397) 29,216
Cash flows from investing activities:
Sales of securities -- 240
Sales of ARM fund shares 2,310 --
Purchase of premises and equipment (105) (253)
Sales of premises and equipment 762 246
Sales of real estate owned 1,748 2,777
Real estate owned capital improvements (55) (408)
Purchases of ARM fund shares (46) (150)
Purchases of FHLB stock (467) (297)
------- -------
Net cash provided by investing activities 4,147 2,155
APPROVED FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS, continued for the twelve
months ended December 31, 2001 and 2000 (In thousands)
Unaudited
2001 2000
---- ----
Cash flows from financing activities:
Borrowings - warehouse $ 39,247 $ 54,289
Repayments of borrowings - warehouse (37,661) (70,060)
FHLB and LOC advances (repayments), net (3,000) (1,648)
Principal payments on mortgage notes payable (784) 188
Net increase (decrease) in:
Notes payable (319) (174)
Certificates of indebtedness 20 (44)
Certificates of deposit 25,471 (20,907)
FDIC-insured money market account (1,694) 3,926
-------- --------
Net cash provided by (used in)
financing activities 21,280 (34,430)
-------- --------
Net increase (decrease) in cash 4,030 (3,059)
Cash at beginning of period 7,597 10,656
-------- --------
Cash at end of period $ 11,627 $ 7,597
======== ========
Supplemental cash flow information:
Cash paid for interest $ 3,853 $ 3,960
Cash paid for taxes $ 41 --
Supplemental non-cash information:
Loan balances transferred to real
estate Owned $ 1,370 $ 2,232
Notes to these financial statements as filed on SEC Form 10K on April 3, 2002 are an integral part of these 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 . |
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