Bingham Financial Services Corporation Announces Fourth Quarter and Year End Results.Business Editors BIRMINGHAM, Mich.--(BUSINESS WIRE)--April 1, 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 fourth quarter ended December 31, 2001. 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, Inc. and 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 expects to merge Origen Financial, Inc. into Origen Financial L.L.C. in the second quarter of 2002, after which Origen Financial L.L.C. will continue to operate the business. Bingham reported a net loss of $16.8 million, or $6.62 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 for the quarter ended December 31, 2001, compared to a net loss of $8.0 million, or $3.03 per fully diluted share for the quarter ended December 31, 2000. For the years ended December 31, 2001 and 2000, Bingham reported net losses of $19.7 million or $7.63 per fully diluted share and $16.3 million or $6.19 per fully diluted share, respectively. The net loss for the fourth quarter includes approximately $2.2 million in additions to Bingham's liability for loans sold with 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. and an approximate $8.2 million write down of its retained interest Retained interest (also colloquially known as a payout penalty) is future, currently unpaid, interest that some lenders add to the remaining principal of a loan to determine a payout figure in the event that the loan is terminated before the completion of the original term. in securitized securitized Of, related to, or being debt securities that are secured with assets. For example, mortgage purchase bonds are secured by mortgages that have been purchased with the bond issue's proceeds. loans. There were no increases to the liability for loans sold with recourse and Bingham had no retained interest in securitized loans in the quarter ended December 31, 2000. The net loss for the quarter also includes the establishment of a valuation allowance of approximately $7.7 million on Bingham's deferred tax assets. For the year ended December 31, 2001, additions to the liability for loans sold with recourse were $5.1 million and the write down of the retained interest was approximately $9.5 million. "Fourth quarter results were disappointing as we continued to be affected by the impact of the slowing economy as well as the negative conditions of 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," 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. "Consumer bankruptcies, increased defaults, volatility in the secondary markets, restricted access to capital and other factors led to losses in the industry and have caused numerous manufacturers, retailers and lenders to exit the industry. Many of these same factors have negatively affected our volume and results of operations. Additionally, the continuing glut glut pronounced as rut, slut Vox populi An excess of a service or skilled labor in a particular area. See Physician glut. of repossessed units in the market has led to lower recovery rates and higher losses for existing securitized loan pools, leading to higher funding costs for current securitizations. Taking these factors into account, in the fourth quarter we recognized 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 our retained interest in our March 2001 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. and we established a valuation allowance on our net deferred tax asset." "Nevertheless, we are encouraged by results so far in the first quarter of 2002. The investment of $40 million in Origen as part of our recapitalization has positioned us to be able to better securitize Securitize The practice of a company selling accounts receivables or other debts owed to it. The third party that buys the debt assumes ownership of it and the responsibility for collecting the debts, and keeps the repayments when made. our manufactured home loans, as evidenced by the profitable closing of Origen's second securitization of $135 million of manufactured home loans on March 27, 2002. Additionally, we successfully launched our new mortgage operation center on February 19th, 2002, which has allowed us to take advantage of the trend towards land-home business. Most encouraging has been the continued improved performance in our collection results so far in the first quarter of 2002," Klein concluded. 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 December 31, 2001 totaled $32.5 million compared to $51.0 million for the quarter ended December 31, 2000, a decrease of 36.3%. For the year ended December 31, 2001, manufactured home loan originations were $192.0 million versus $161.2 million for the year ended December 31, 2000, an increase of 19.1%. Total revenue increased to $5.5 million for the three months ended December 31, 2001 compared to $3.4 million for the three months ended December 31, 2000, a n increase of 61.8%. Total revenue for the year ended December 31, 2001 was $29.7 million compared to $25.5 million for the year ended December 31, 2001, an increase of 16.5%. Interest expense for the quarter and year ended December 31, 2001 was $2.0 million and $7.9 million, respectively, compared to $3.2 million and $14.2 million, respectively, for the quarter and year ended December 31, 2000, decreases of 37.5% and 44.4%, respectively. The decrease in interest expense for the year is mainly attributable to the decrease in Bingham's balance of average outstanding debt, and an approximate 230 basis point decrease in the average 30-day LIBOR LIBOR See: London Interbank Offered Rate LIBOR See London interbank offered rate (LIBOR). rate. 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. , 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 QUARTER AND YEAR ENDED DECEMBER 31, 2001 AND 2000
Quarter Ended Year Ended
December 31, December 31,
----------------------- -----------------------
2001 2000 2001 2000
----------- ----------- ----------- -----------
Revenues
Interest income
on loans $ 3,121 $ 2,529 $ 9,493 $ 14,593
Mortgage origination
and servicing fees 2,370 2,484 12,001 10,800
Gain (loss) on sale
and securitization
of loans -- (1,571) 5,186 27
Other income -- -- 2,993 66
----------- ----------- ----------- -----------
Total revenues 5,491 3,442 29,673 25,486
----------- ----------- ----------- -----------
Costs and Expenses
Interest expense 2,020 3,165 7,875 14,202
Provision for credit
losses and recourse
liability 4,993 2,267 8,595 7,671
Write down of
residual interest 8,167 -- 9,523 --
General and
administrative 4,019 8,450 19,408 23,353
Other operating expenses 117 1,671 2,413 4,889
----------- ----------- ----------- -----------
Total costs
and expenses 19,316 15,553 47,814 50,115
----------- ----------- ----------- -----------
Income (loss) before
income tax
expense (benefit)
and allocation of
subsidiary net income
in non-controlling
members' interests (13,825) (12,111) (18,141) (24,629)
Allocation of subsidiary
net income in
non-controlling
members' interests (308) -- (308) --
----------- ----------- ----------- -----------
Income (loss) before
income tax
expense (benefit) (14,133) (12,111) (18,449) (24,629)
Federal income tax
expense (benefit) 2,712 (4,118) 1,245 (8,374)
----------- ----------- ----------- -----------
Net income (loss) $ (16,845) $ (7,993) $ (19,694) $ (16,255)
=========== =========== =========== ===========
Weighted average
common shares
outstanding 2,542,988 2,639,594 2,579,844 2,625,765
=========== =========== =========== ===========
Weighted average
common shares
outstanding,
diluted 2,542,988 2,639,594 2,579,844 2,625,765
=========== =========== =========== ===========
Earnings (loss)
per share:
Basic $ (6.62) $ (3.03) $ (7.63) $ (6.19)
=========== =========== =========== ===========
Diluted $ (6.62) $ (3.03) $ (7.63) $ (6.19)
=========== =========== =========== ===========
Selected Balance Sheet Data
-----------------------------
December 31,
-----------------------------
2001 2000
-------------- --------------
(In thousands, except shares)
Loans receivable, net $ 127,412 $ 98,633
Total assets $ 167,913 $ 147,881
Stockholders' equity (deficit) $ (9,242) $ 10,840
Total outstanding shares 2,542,988 2,631,681
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