Bingham Financial Services Announces Year Ended December 31, 2000 Results and Annual Shareholder's Meeting.Business Editors BIRMINGHAM, Mich.--(BUSINESS WIRE)--April 2, 2001 Bingham Financial Services 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. (Nasdaq:BFSC BFSC Brake Specific Fuel Consumption (engines) BFSc Bachelor of Fisheries Science BFSC Built From Scratch Clothing (independent garment designers) BFSC Battlefield Functional System Concept ), a specialized spe·cial·ize v. spe·cial·ized, spe·cial·iz·ing, spe·cial·iz·es v.intr. 1. To pursue a special activity, occupation, or field of study. 2. financial services company that provides commercial mortgages and financing for new and previously owned manufactured homes as well as servicing on both commercial mortgage and manufactured home loans, today announced results for its year ended December 31, 2000. Both manufactured home lending and commercial real estate lending originations were strong for the year ended December 31, 2000. Manufactured home originations for the year totaled $162.1 million compared to $65.1 million for the year ended September 30, 1999 an increase of 149.0%. Commercial mortgage loans for the year ended December 31, 2000 increased 95.7% to $514.2 million compared to $262.8 million for the year ended September 30, 1999. "We continue to experience strong growth in our commercial mortgage and manufactured home 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. and servicing businesses, which have continued into the first quarter of 2001," said Ronald Klein Klein , Melanie 1882-1960. Austrian-born British psychoanalyst who first introduced play therapy and was the first to use psychoanalysis to treat young children. , CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Bingham. "We believe our strong loan origination platforms will allow us to take advantage of current market conditions and report a profitable first quarter in 2001." For the year ended December 31, 2000, Bingham reported a net loss of $16.3 million or $6.19 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. share versus net income of $776,000 or $0.36 per diluted share for the year ended September 30, 1999. The loss for the year ended December 31, 2000 included non-recurring charges before federal income tax benefit of $2.1 million related to an unsuccessful merger attempt with Franklin Bank, $796,000 related to the sale of MHFC MHFC Mt. Hope Family Center (Rochester, NY) , Inc., Bingham's previous manufactured home loan origination subsidiary and $403,000 in severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when compensation related to closed offices. The sale of MHFC and the closing of offices were related to the integration of Dynex Financial, Inc., which Bingham acquired in December 1999. Total revenue increased to $25.5 million for the year ended December 31, 2000 compared to $16.3 million in the year ended September 30, 1999, an increase of 56.4%. Interest income was $14.6 million for the year ended December 31, 2000 versus $9.5 million for the year ended September 30, 1999, an increase of 53.7%. The large increase was primarily the result of an increase in average outstanding loan receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed which were $143.9 million for the year ended December 31, 2000 compared to $111.7 million for the year ended September 30, 1999 and a greater concentration of higher yielding manufactured home loans versus commercial real estate loans. Loan servicing Loan servicing is the process by which a mortgage bank or subservicing firm collects the timely payment of interest and principal from borrowers. The level of service varies depending on the type loan and the terms negotiated between the firm and the investor seeking their services. fees also increased significantly to $7.9 million for the year ended December 31, 2000 compared to $500,000 for the year ended September 30, 1999. This was the result of an increase in the total outstanding servicing portfolio balance to $2.4 billion at December 31, 2000 compared to $900.0 million at September 30, 1999, an increase of $1.5 billion, or 166.7%. Interest expense for the year ended December 31, 2000 increased to $14.2 million compared to $6.9 million for the year ended September 30, 1999. The large increase is mainly attributable to an increase in Bingham's average outstanding debt to $146.2 million for the year ended December 31, 2000 from $100.7 million for the year ended September 30, 1999, an increase of $45.5 million, or 45.2%. An approximate 125 basis point increase in the average LIBOR LIBOR See: London Interbank Offered Rate LIBOR See London interbank offered rate (LIBOR). rate in the year ended December 31, 2000 compared to the year ended September 30, 1999 also contributed to the increase in interest expense. Additions to the allowance for loan losses for the year ended December 31, 2000 were approximately $7.7 million compared to $653,000 for the year ended September 30, 1999. The increase to the reserve resulted primarily from losses on non-performing loans A non-performing loan is a loan that is in default or close to being in default. Many loans become non-performing after being in default for 3 months, but this can depend on the contract terms. and charge-offs of $3.9 million on loans originated by MHFC, Inc., which was sold in March, 2000. A decline in recovery rates on the resale resale n. selling again, particularly at retail. In many states a "resale license" or "resale number" is required so that the state can monitor the collection of sales tax on retail sales. RESALE. of repossessions due to an increased supply of new and used manufactured homes in the marketplace also contributed to the increase in reserves. General and administrative and other 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. totaled approximately $24.9 million for the year ended December 31, 2000. This was an increase of approximately 227.6% over general and administrative expenses of $7.6 million in the year ended September 30, 1999. The largest portion of the increase is directly attributable to personnel costs related to the acquisition of Dynex Financial in December 1999. The acquisition increased the number of Bingham's full-time employees to 218 at December 31, 2000 from 90 at September 30, 1999 and resulted in personnel costs of $17.0 million for the current year as compared to $3.9 million for the year ended September 30, 1999, an increase of 335.9%. "The year ended December 31, 2000 was a difficult one for us due to the turmoil in the manufactured housing Manufactured housing (also known as prefab housing) is a type of housing unit that is largely assembled in factories and then transported to sites of use. In the United States, the term "manufactured home" specifically refers to a house built entirely in a protected industry and the integration of Dynex Financial's manufactured home loan origination platform." Klein said. "We still face several challenges, including the need to obtain additional working capital and funds for operations. We are currently working with our lenders and others to secure those funds," Klein continued. "We believe our hard work has been validated val·i·date tr.v. val·i·dat·ed, val·i·dat·ing, val·i·dates 1. To declare or make legally valid. 2. To mark with an indication of official sanction. 3. by the successful integration of Dynex Financial culminating in our rebranding under the Origen name. Despite the problems facing our industry, we continued to experience increases in loan originations and enjoyed the completion of our first securitization Securitization The process of creating a financial instrument by combining other financial assets and then marketing them to investors. Notes: Mortgage backed securities are a perfect example of securitization. May also be spelled as "securitisation. in the amount of $165.0 million of manufactured home loans in March 2001. The securitization was received very well in the marketplace and is an important step in solidifying so·lid·i·fy v. so·lid·i·fied, so·lid·i·fy·ing, so·lid·i·fies v.tr. 1. To make solid, compact, or hard. 2. To make strong or united. v.intr. our position in the manufactured home industry and will allow us to realize a profitable first quarter in 2001," Klein concluded. Bingham also announced that the annual meeting of shareholders will be held on or about June 15, 2001. All shareholder proposals to be included in the proxy materials Proxy Materials Documents regulated by the Securities & Exchange Commission in which a public company outlines its methods and procedures. These documents are used to inform shareholders and solicit votes for corporate decisions, such as the election of directors and other for the meeting must comply with the rules and regulations promulgated prom·ul·gate tr.v. prom·ul·gat·ed, prom·ul·gat·ing, prom·ul·gates 1. To make known (a decree, for example) by public declaration; announce officially. See Synonyms at announce. 2. under the Securities and Exchange Act of 1934, and must be received by Bingham, at its offices at 260 East Brown Street, Suite 200, Birmingham, Michigan Birmingham is a city in Oakland County of the U.S. state of Michigan. It is a suburb of Detroit. As of the 2000 census, the total population was 19,291. The city hosts a downtown that attracts shoppers from throughout the Metro Detroit area. 48009, no later than May 2, 2001. Proposals should be addressed to Bingham's Secretary. All statements made in this document and in any other communication regarding Bingham that are not statements of historical facts are "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 of 1995, and Bingham intends that such forward-looking statements be subject to the safe harbors Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. created thereby. The words "believe", "expect", "anticipate", and similar expressions are examples of words that identify forward-looking statements, which may include, without limitation, statements regarding Bingham's future financial position, business strategy and expected cost savings or synergies. Each forward-looking statement is subject to risks, uncertainties and other factors that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Important factors that could cause actual results to differ materially from results expressed or implied by any forward-looking statements include the risk from general economic conditions with particular emphasis on certain interest rates, the ability to efficiently integrate acquired businesses, competition and other factors. All subsequent written and oral forward-looking statements relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc Bingham and attributable to Bingham or to persons acting on behalf of any of them are expressly qualified in their entirety The whole, in contradistinction to a moiety or part only. When land is conveyed to Husband and Wife, they do not take by moieties, but both are seised of the entirety. by these risk factors and by the risk factors set forth from time to time in Bingham's SEC filings, which are incorporated by reference, including but not limited to the risk factors set forth in Bingham'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, 2000. Bingham undertakes no obligation to update or revise these forward-looking statements, publicly or otherwise, to reflect new information or future events. Financial tables to follow...
BINGHAM FINANCIAL SERVICES CORPORATION
FINANCIAL RESULTS
FOR THE YEAR AND PERIOD ENDED DECEMBER 31, 2000 AND 1999
AND THE YEAR ENDED SEPTEMBER 30, 1999
Three Months
Year Ended Ended Year Ended
December 31, December 31, September 30,
REVENUES 2000 1999 1999
----------- ----------- -----------
Interest income on loans $ 14,593 $ 4,069 $ 9,477
Mortgage origination and
servicing fees 10,800 1,319 2,069
Gain on sale of loans 27 1,603 4,399
Other income 66 75 332
----------- ----------- -----------
Total revenues 25,486 7,066 16,277
----------- ----------- -----------
COSTS AND EXPENSES
Interest expense 14,202 2,832 6,856
Provision for credit
losses 7,671 362 653
General and
administrative 23,353 2,352 5,215
Unrealized loss on
interest rate swaps 1,300 -- --
Acquisition costs 2,071 -- --
Other operating expenses 1,518 944 2,336
----------- ----------- -----------
Total costs and
expenses 50,115 6,490 15,060
----------- ----------- -----------
Income (loss) before
income tax expense
(benefit) (24,629) 576 1,217
Federal income tax
expense (benefit) (8,374) 198 441
----------- ----------- -----------
Income (loss) before
cumulative effect of
change in accounting
principle (16,255) 378 776
Cumulative effect of
change in accounting
principle, net of tax -- (563) --
----------- ----------- -----------
Net income (loss) $ (16,255) $ (185) $ 776
=========== =========== ===========
Weighted average common
shares outstanding 2,625,765 2,539,716 1,966,288
=========== =========== ===========
Weighted average common
shares outstanding,
diluted 2,625,765 2,539,716 2,145,939
=========== =========== ===========
Earnings (loss) per
share before cumulative
effect of change in
accounting principle:
Basic $ (6.19) $ 0.15 $ 0.39
=========== =========== ===========
Diluted $ (6.19) $ 0.15 $ 0.36
=========== =========== ===========
Cumulative effect of
change in accounting
principle:
Basic $ -- $ (0.22) $ --
=========== =========== ===========
Diluted $ -- $ (0.22) $ --
=========== =========== ===========
Earnings (loss) per share:
Basic $ (6.19) $ (0.07) $ 0.39
=========== =========== ===========
Diluted $ (6.19) $ (0.07) $ 0.36
=========== =========== ===========
Selected Balance Sheet Data
--------------------------------
December 31,
--------------------------------
2000 1999
---------- ----------
Loans receivable, net $ 98,633 $ 140,881
Total assets $ 147,881 $ 162,873
Stockholders' equity $ 10,840 $ 26,139
Total outstanding shares 2,631,681 2,539,716
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