Bingham Financial Services Corporation Announces First Quarter Results.Business Editors BIRMINGHAM, Mich.--(BUSINESS WIRE)--May 15, 2002 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. Corporation (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 ) today announced results for its first quarter ended March 31, 2002. Bingham is 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 financing for new and previously owned manufactured homes as well as servicing on manufactured home loans through its Origen Financial L.L.C. subsidiaries. As part of its recapitalization Recapitalization Restructuring a company's debt and equity mixture often with the aim of making a company's capital structure more stable. Notes: Companies often want to diversify their debt-to-equity ratio to improve liquidity. of its operating subsidiaries An operating subsidiary is a business term frequently used within the United States railroad industry. In the case of a railroad, it refers to a company that is a subsidiary but operates with its own identity and rolling stock. , Bingham merged Origen Financial, Inc. into Origen Financial L.L.C. in April 2002, after which Origen Financial L.L.C. continues to operate the business. Bingham reported pre-tax income prior to the allocation The apportionment or designation of an item for a specific purpose or to a particular place. In the law of trusts, the allocation of cash dividends earned by a stock that makes up the principal of a trust for a beneficiary usually means that the dividends will be treated as of income to non-controlling members' interests of $179,000 for the quarter ended March 31, 2002, compared to pre-tax income of $1.3 million for the quarter ended March 31, 2001. Net income for the quarter ended March 31, 2002 after the allocation of income to the non-controlling members' interests was $10,000 or $0.004 per fully 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 compared to $865,000 or $0.33 per fully diluted share for the quarter ended March 31, 2001. The pre-tax income for the quarter ended March 31, 2002 includes a $2.7 million gain on the 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. of $135.0 million of manufactured home loans compared to a pre-tax gain of $3.8 million on the securitization of $140.1 million of manufactured home loans in the quarter ended March 31, 2001. Manufactured home loan originations 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. for the quarter ended March 31, 2002 totaled $25.1 million compared to $56.4 million for the quarter ended March 31, 2001 a decrease of 55.5%. "We are pleased with our first quarter results," stated Ronald A. 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. , President and Chief Executive Officer of Bingham. "Significantly, we completed Origen's second securitization of $135 million of manufactured home loans, in which 18 investors participated. Our volume was disappointing as we saw a decline in credit worthy borrowers, however, we are encouraged by the continued improved performance in our collection results in the first quarter. While the industry continues to experience difficulties, Origen continues to move ahead with new initiatives, most notably the opening of our new mortgage origination Origination The process through which a mortgage lender creates a mortgage secured by some amount of the mortgagor's real property. Notes: Also known as loan origination, everyone must go through the origination process when securing a mortgage for a piece of real center in February 2002. The new mortgage origination center allows us to take advantage of the current trend towards land-home business." "Going forward, we anticipate operating losses operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. over the next two quarters as we re-build our manufactured home loan portfolio for an anticipated fourth quarter securitization. Also, as we have previously reported, we continue to look for additional sources of capital to allow us to continue to grow our business," Klein concluded. Total revenue was $7.8 million for the three months ended March 31, 2002 compared to $11.0 million for the three months ended March 31, 2001, a decrease of 29.1%. The decrease in revenue is primarily related to decreases in loan origination and servicing fees related to our commercial mortgage loan subsidiary, which assets were sold in June 2001. The decrease in revenue was also a result of an approximate $1.1 million decrease in the gain on sale of loans recorded on the securitization completed in the quarter ended March 31, 2002 compared to the securitization completed in the quarter ended March 31, 2001. Interest income on loans was $3.1 million for the quarter ended March 31, 2002 compared to $3.5 million for the quarter ended March 31, 2001, a decrease of 11.4%. The decrease is primarily the result of a decrease in the average yield on the loan receivable portfolio, which was 10.85% for the quarter ended March 31, 2002 versus 11.54% for the quarter ended March 31, 2001. Interest expense for the quarter ended March 31, 2002 was $1.4 million, compared to $2.9 million for the quarter ended March 31, 2001, a decrease of 51.7%. The decrease is primarily a result of the decrease in the average LIBOR LIBOR See: London Interbank Offered Rate LIBOR See London interbank offered rate (LIBOR). rate of approximately 392 basis points for the three months ended March 31, 2002 as compared to the three months ended March 31, 2001. Bingham's current financing sources are primarily variable rate facilities that use the 30-day LIBOR rate as an index. General and administrative expenses totaled approximately $4.7 million for the quarter ended March 31, 2002 compared to $5.0 million for the quarter ended March 31, 2001, a decrease of 6.0%. Personnel costs, the largest component of general and administrative expenses, decreased to $3.4 million for the quarter ended March 31, 2002 versus $3.9 million for the quarter ended March 31, 2001, a 12.8% decrease. The decrease is principally due to a decrease in staff and incentive commissions related to lower loan originations. Bingham also announced today that it received a Nasdaq Staff Determination, dated May 14, 2002, indicating that Bingham is not in compliance with the minimum equity and net tangible assets Net Tangible Assets Calculated as the total assets of a company, minus any intangible assets such as goodwill, patents and trademarks, less all liabilities and the par value of preferred stock. Also known as "net asset value" or "book value". standards set forth in Marketplace Rule 4310(c)(2)(B) and that its securities may therefore be subject to delisting Delisting When the stock of a company is removed from a stock exchange. Notes: Reasons for delisting include violating regulations and/or failure to meet financial specifications set out by the stock exchange. from the Nasdaq SmallCap Market. If Bingham is delisted from the Nasdaq SmallCap Market, Bingham expects that its stock will trade in the over-the-counter market over-the-counter market Trading in stocks and bonds that does not take place on stock exchanges. Such trading occurs most often in the U.S., where requirements for listing stocks on the exchanges are strict. and be quoted on the OTC Bulletin Board OTC Bulletin Board An electronic quotation listing of the bid and asked prices of OTC stocks that do not meet the requirements to be listed on the NASDAQ stock-listing system. . Bingham is evaluating its options with respect to the Staff Determination. 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 statement. Important factors that could cause actual results to differ materially from the results expressed or implied by any forward-looking statements include general economic conditions and economic conditions in the manufactured home lending industry and the asset backed securitization markets, with particular emphasis on certain interest rates, competition and other factors, as well as Bingham's access to capital and other factors directly affecting Bingham. 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 the factors set forth under "Factors That May Affect Future Results" and in "Management's Discussion and Analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial of Financial Condition and Results of Operations" in Bingham's most recent 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. , as 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. , which is incorporated by reference in this press release. 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 THREE MONTHS ENDED MARCH 31, 2002 AND 2001
Three Months Ended March 31,
----------------------------
2002 2001
----------- -----------
REVENUES (In thousands, except
per share data)
Interest income on loans $ 3,135 $ 3,513
Loan servicing fees 1,965 2,651
Mortgage origination fees -- 570
Gain on sale and securitization
of loans 2,677 3,922
Other income 33 311
----------- -----------
Total revenues 7,810 10,967
----------- -----------
COSTS AND EXPENSES
Interest expense 1,409 2,914
Provision for credit losses
and recourse liability 1,108 790
General and administrative 4,702 5,025
Loss on interest rate swap -- 510
Other operating expenses 412 417
----------- -----------
Total costs and expenses 7,631 9,656
----------- -----------
Income before income tax
expense and allocation of
subsidiary net income in
non-controlling members' interests 179 1,311
Allocation of subsidiary net income
in non-controlling members'
interests (164) --
----------- -----------
Income before income tax expense 15 1,311
Federal income tax expense 5 446
----------- -----------
Net income $ 10 $ 865
=========== ===========
Weighted average common shares
outstanding,
Basic 2,497,803 2,626,293
=========== ===========
Diluted 2,497,803 2,626,293
=========== ===========
Earnings per share,
Basic $ 0.00 $ 0.33
=========== ===========
Diluted $ 0.00 $ 0.33
=========== ===========
Selected Balance Sheet Data
---------------------------
March 31,
---------------------------
2002 2001
------------- ------------
(In thousands, except shares)
Loans receivable, net $ 16,152 $ 28,395
Total assets $ 61,521 $ 77,606
Stockholders' equity (deficit) $ (9,458) $ 11,651
Total outstanding shares 2,476,321 2,623,462
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