Asset Investors Corporation Reports 1995 Third Quarter Earnings; Higher Earnings From Ongoing Operations.

DENVER--(BUSINESS WIRE)--Nov. 6, 1995--Asset Investors Corporation (NYSE: AIC) today announced that the company earned $2,526,000 from ongoing operations in the three months ended September 30, 1995 compared with $568,000 for the same period in 1994.

For the nine months ended September 30, 1995, Asset Investors' earned $5,285,000 from ongoing operations compared with $649,000 for the same period in 1994. The primary reason for the increase was the acquisition of $37,101,000 ($127,540,000 principal amount) in high-yield bonds backed by home mortgage loans since September 1994.

Commenting on Asset Investors' continued strong 1995 performance, Spencer I. Browne, President and Chief Executive Officer, stated, "With the $17,200,000 in net proceeds from Asset Investors' successful December 1994 Rights Offering invested as of June 30, 1995, the full benefit of these acquisitions was reflected in our results for the third quarter of 1995.

"We anticipate our fourth quarter earnings from ongoing operations will improve as the company continues to acquire high-yield bonds backed by home mortgage loans assuming, among other things, no significant increase in anticipated credit losses or operating expenses."

As of September 30, 1995, the company owned $50,546,000 ($169,295,000 principal amount) in high-yield bonds backed by home mortgage loans and $20,439,000 in high-yield bonds backed by mortgage loans on multi-family properties through its ownership of 27 percent of the shares of Commercial Assets, Inc. (ASE: CAX). These assets generated revenues from ongoing operations of $3,164,000 in the third quarter of 1995.

This represents a 200 percent increase over the $1,045,000 in revenues from ongoing operations in the same period of 1994 and a 30 percent increase over the $2,429,000 in revenues from ongoing operations in the second quarter of 1995. "Timing was a key element in the success of our innovative new strategy," Browne continued. "We were able to capture a significant share of the market for high-yield bonds backed by home mortgage loans by redirecting our focus, in early 1994, toward credit-sensitive assets that should benefit from a strengthening economy and away from `derivative' assets.

"Furthermore, our experienced, multi-disciplined team of experts in mortgage-backed securities are able to spot acquisition opportunities and obtain superior prices through careful due diligence and the use of sophisticated mortgage data services. We believe that our customized loan portfolio monitoring systems, aggressive follow-up procedures and strong internal controls will maximize Asset Investors' return on investment."

For the three and nine months ended September 30, 1995, earnings from the company's liquidating operations (i.e., its remaining derivative CMO Ownership Interests) were $189,000 and $3,307,000, respectively, compared with $776,000 and $9,040,000, respectively, for the same periods in 1994.

The company does not intend to acquire additional CMO Ownership Interests in the future. As a result, earnings and cash flow from these assets will continue to decline and ultimately cease. Earnings from liquidating operations for the nine months ended September 30, 1995 and 1994 included one-time gains of $2,167,000 and $8,496,000, respectively, primarily from the exercise of call rights on certain of the company's CMO Ownership Interests.

The combination of earnings from ongoing operations and liquidating operations produced net income computed in accordance with generally accepted accounting principles (GAAP) for the three and nine months ended September 30, 1995 of $2,715,000 and $8,592,000, respectively, compared with $1,344,000 and $9,689,000, respectively, for the same periods in 1994.

1995 Dividend Rate Increases 32 Percent Over 1994

On September 29, 1995, Asset Investors announced an increase in its regular quarterly dividend to nine cents per share, representing the third dividend increase in two years. The third quarter 1995 dividend totaled $2,186,000, or nine cents per share, compared with $988,000, or seven cents per share, for the same period in 1994. The dividend was paid on October 16, 1995 to shareowners of record on October 9, 1995.

The cash flow from the assets the company acquired with the proceeds of the Rights Offering and disposition of CMO Ownership Interests was a significant factor in enabling Asset Investors to increase 1995 distributions to shareowners by over 125 percent to $6,065,000, or 25 cents per share, compared with $2,679,000, or 19 cents per share, in the first three quarters of 1994.

The substantial increase in Asset Investors' 1995 distributions to shareowners reflects a 32 percent increase in the dividend rate and a 71 percent increase in the number of shares outstanding following the sale of approximately 10,100,000 shares of common stock in the Rights Offering.

Highest REIT Results in Ten Quarters

Superior returns from Asset Investors' high-yield bonds backed by home mortgage loans and shares of Commercial Assets common stock resulted in the company's highest REIT results (computed in accordance with the Internal Revenue Code) in ten quarters. For the three months ended September 30, 1995, the company's estimated REIT income was $3,800,000 compared with an estimated REIT loss of $1,700,000 for the same period of 1994. For the nine months ended September 30, 1995, the company's estimated REIT income was $3,100,000 compared with an estimated REIT loss of $22,300,000 for the same period of 1994.

Expanding Operations and Superior Total Returns

To continue to expand the company's operations and increase shareowner value, Asset Investors intends to acquire additional high-yield bonds backed by home mortgage loans. During the three and nine months ended September 30, 1995, Asset Investors' ongoing operations generated $1,682,000 and $3,851,000, respectively, in available cash flow (net of dividends of $2,186,000 and $6,065,000, respectively, and expenses).

In closing, Browne stated, "It has been one of Asset Investors' long-standing goals to generate superior total returns for our shareowners. On October 24, 1995, Asset Investors' stock price reached a 52-week high of $3.00 per share. Those shareowners who participated in the December 1994 Rights Offering have received a 73 percent total return so far this year, based on a 58 percent increase in share price and 28 cents per share in dividends. We are pleased that the implementation of our innovative new strategy has produced superior returns in such a short period of time and look forward to its continued success."

Asset Investors Corporation is a real estate investment trust (REIT) that generates income from its ownership interests in residential mortgage loan securitizations and from its ownership of shares of Commercial Assets, Inc. (ASE: CAX). -0-

         ASSET INVESTORS CORPORATION AND SUBSIDIARIES
                Summary of Financial Results
           (In thousands, except per share data)

                               Three Months Ended   Nine Months Ended
                                  September 30,       September 30,
                                 1995      1994      1995      1994

GAAP Income

Revenues                        $ 3,392   $ 2,657  $ 11,589  $13,798

Earnings from
ongoing operations              $ 2,526   $   568  $  5,285  $   649

Earnings from liquidating
operations (a)                      189       776     3,307    9,040

Net income                      $ 2,715   $ 1,344  $  8,592  $ 9,689

Net income per share (b)        $   .11   $   .10  $    .35  $   .69

Estimated REIT Income (Loss) (c)

REIT income (loss) from ongoing
operations                      $ 3,900   $   914  $  8,800   $ ( 22)
REIT loss from liquidating
operations                        (100)   (2,614)   (5,700)  (22,278)
Total REIT income (loss)        $ 3,800  $(1,700)  $  3,100 $(22,300)

Total REIT income (loss)
per share (b)                   $   .15   $ (.12)  $    .13   $ (1.5)

Dividends (d)

Dividends per share             $   .09   $   .07  $    .25   $  .19

Shares Outstanding

Weighted-average shares
outstanding (b)                  24,294    14,111    24,260   14,097

-0- (a) CMO Ownership Interests are accounted for by netting the revenues and expenses from CMO Ownership Interests into a single-line item which is included in the revenues section of Statement of Operations. Prior to June 30, 1995, certain CMO Ownership Interests were accounted for under the Consolidation Method which recorded the gross amount of the mortgage collateral, CMO bonds, interest income and interest expense in the Consolidated Financial Statements.

(b) In December 1994, the company successfully completed a Rights Offering of 10,053,794 shares of common stock that increase the number of shares outstanding from 14,158,208 to 24,212,002.

(c) The estimated REIT income for the three and nine months ended September 30, 1995 does not include $2,741,000 and $19,622,000, respectively, of net capital losses and for the three and nine months ended September 30, 1994 is net of $981,000 and $8,603,000, respectively, of capital loss carryovers which were used to offset capital gains of the same amount. The company has a capital loss carryover of approximately $30,600,000 which expires beginning in 1998.

The estimated REIT loss from liquidating operations incurred during the nine months ended September 30, 1995 and 1994 included $4,500,000 and $1,500,000, respectively, of interest expense related to the write off of unamortized discount from CMO bonds redeemed during the periods from the exercise of call rights. REIT results from liquidating operations will continue to have less of an impact on the company's REIT results now that CMO Ownership Interests comprise four percent of the company's net assets.

(d) The third quarter 1995 dividend was paid on October 16, 1995, and the third quarter 1994 dividend was paid on October 14, 1994. Since its inception, the company has distributed dividends to its shareowners totaling $227,049,000, or $17.20 per share.

For Additional Information on Asset Investors Corporation by Fax at No Cost, Dial 1-800/PRO-INFO, Code No. 016.

CONTACT: Asset Investors Corp.

Spencer I. Browne, 303/793-2703

or

Financial Relations Board

Athan Demakos, 312/266-7800 (General)

Claire Baldikoski, 312/266-7800 (Analyst)