Charter Municipal Mortgage Acceptance Company Reports 15.3% Increase In Cash Available For Distribution Per Common Share.Business Editors NEW YORK--(BUSINESS WIRE)--Aug. 8, 2002 Announces The Appointment Of Stuart Rothstein As Chief Financial Officer Charter Municipal Mortgage Acceptance Company ("CharterMac") (AMEX AMEX See: American Stock Exchange :CHC CHC Chicago Cubs CHC Community Health Center CHC Chestnut Hill College (Philadelphia, Pennsylvania) CHC Congressional Hispanic Caucus CHC Community Health Council (UK National Health Service) ) today announced second quarter financial results for the quarter ended June 30, 2002. CharterMac also announced the appointment of Stuart Rothstein as Chief Financial Officer and Executive Vice President of the Company. "We are exceptionally pleased to be able to report another quarter of successful operating and financial results," said Stuart Boesky, CharterMac's President and Chief Executive Officer. "We are also happy to report to our shareholders that CharterMac's total return on a tax-equivalent basis, inclusive of inclusive of prep. Taking into consideration or account; including. dividends, was 16.15% for the six months ended June 30, 2002." Financial Highlights For the three months ended June 30, 2002, CharterMac's Cash Available for Distribution ("CAD") applicable to shareholders, a measure of dividend paying capability, was approximately $15.4 million, an increase of approximately 67.6%, as compared with approximately $9.2 million for the three months ended June 30, 2001. On a 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. per share basis, CAD applicable to shareholders was $0.36 for the three months ended June 30, 2002, as compared to $0.31 for the three months ended June 30, 2001, representing an increase of approximately 15.3%. CharterMac's present quarterly dividend on an annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. basis is $1.24 per share, representing an approximate yield of 7.3% on the $16.99 per share closing price on August 7, 2002. The second quarter per share dividend to common shareholders of $0.31 represents a payout ratio Payout Ratio The percentage of earnings paid out in dividends. It is calculated by dividing dividends per share by earnings per share. Notes: The payout ratio indicates how well earnings support the dividend payments: the lower the ratio, the more secure the dividend. of approximately 86.9% of CAD for the quarter. Assuming the Company's income during the year continues to be approximately 96% exempt from Federal income tax and a shareholder is in a 38.6% tax bracket Tax Bracket The rate at which an individual is taxed due to a particular income level. Notes: Each income class is taxed at a different level. Generally, the more you make the more you are taxed. , the taxable equivalent yield Taxable equivalent yield The return from a higher-paying but taxable investment that would equal the return from a tax-free investment. This depends on the investor's tax bracket. would be approximately 11.7%. For the three months ended June 30, 2002, CharterMac had net income applicable to shareholders of approximately $12.8 million. CharterMac's net income applicable to shareholders for the three months ended June 30, 2002, represents an increase of 77.4% compared to net income applicable to shareholders of approximately $7.2 million for the three months ended June 30, 2001. On a per share basis (basic and diluted), net income applicable to shareholders was $0.30 for the three months ended June 30, 2002, as compared to $0.24 for the three months ended June 30, 2001, representing an increase of 22.1%. For the three months ended June 30, 2002, CharterMac had total revenues of approximately $28.6 million, an increase of 63.6% compared to total revenues of approximately $17.5 million for the three months ended June 30, 2001. Appointment of Chief Financial Officer Effective September 3, 2002, Stuart Rothstein will become the Chief Financial Officer and Executive Vice President of CharterMac. Mr. Rothstein joins CharterMac with almost 11 years of professional experience, including seven years of direct experience with a real estate investment trust ("REIT REIT See: Real Estate Investment Trust REIT See real estate investment trust (REIT). "). Prior to joining CharterMac, Mr. Rothstein was Chief Financial Officer at Spieker Properties, a San Francisco-based office REIT with over $7 billion in real estate assets and $850 million in revenues that was purchased by Equity Office Properties in July 2001. At Spieker Properties, Mr. Rothstein was responsible for developing and implementing all aspects of the company's corporate financial strategy, including executing over $4.0 billion in capital raising transactions, which included public and private debt and equity offerings and structured transactions. Mr. Rothstein's past experience also includes a position as a Manager with Price Waterhouse. Mr. Rothstein graduated from Pennsylvania State University Pennsylvania State University, main campus at University Park, State College; land-grant and state supported; coeducational; chartered 1855, opened 1859 as Farmers' High School. with a Bachelor of Science Noun 1. Bachelor of Science - a bachelor's degree in science BS, SB bachelor's degree, baccalaureate - an academic degree conferred on someone who has successfully completed undergraduate studies degree in Accounting and received his Masters in Business Administration from Stanford Graduate School of Business The Stanford Graduate School of Business (also known as Stanford Business School or Stanford GSB) is one of the professional schools of Stanford University, in Stanford, California. It is one of the leading business schools in the United States. . Mr. Rothstein is a Certified Public Accountant Certified Public Accountant (CPA) An accountant who has met certain standards, including experience, age, and licensing, and passed exams in a particular state. in the State of New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of . On September 3, 2002, Alan Hirmes will step down from his position as interim Chief Financial Officer but will continue in his position of Executive Vice President and Director of the Company. Bond Acquisitions CharterMac had a record level of revenue bond acquisitions during the first six months of 2002. As of June 30, 2002, CharterMac had invested in $202 million of revenue bonds and other investments securing over 3,900 units of multifamily housing. This represents a 132% increase in volume compared to acquisitions as of that date last year. In the second quarter specifically, CharterMac invested in 20 tax-exempt and six taxable revenue bonds totaling approximately $170.6 million. Bond Sale In the second quarter of 2002, the revenue bond secured by Park at Landmark was sold for 104% of its par value. CharterMac received proceeds of approximately $9,933,000, which included the par value of $9,500,000, a premium of $380,000, and accrued interest Accrued Interest The interest that has accumulated on a bond since the last interest payment up to but not including the settlement date. There are two methods for calculating accrued interest: 1) 360-day year method, used for corporate and municipal bonds. of approximately $53,000. Bond Portfolio Overview As of June 30, 2002, CharterMac's revenue bond portfolio was comprised of 170 bonds with a carrying value Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. of approximately $1.3 billion. CharterMac's tax-exempt revenue bonds had a weighted average interest rate of 7.38%, a weighted average maturity of 32 years, and a weighted average pre-payment lockout lockout, intentional closing up of a company, factory, or shop by an employer to prevent employees from working during a strike or labor dispute. The term lockout of 11 years. PW Funding Inc.'s 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 six months ended June 30, 2002, PW Funding Inc. ("PWF PWF Pacific Whale Foundation (Maui, Hawaii) PWF Public Workstation Facility PWF Polarimetric Whitening Filter PWF Pro Wrestling Fan PWF Preserved Wood Foundation PWF Peter Westbrook Foundation PWF Personnel Working File PWF Power Weight Filter "), CharterMac's subsidiary, originated approximately $339 million of loans on behalf of Fannie Mae Fannie Mae: see Federal National Mortgage Association. , Freddie Mac Freddie Mac: see Federal Home Loan Mortgage Corporation. , and the Federal Housing Authority. As of June 30, 2002, PWF serviced a loan portfolio of $3.16 billion. Preferred Equity Offering On June 5, 2002, CharterMac announced that Charter Mac Equity Issuer Trust (the "Issuer"), a consolidated subsidiary of CharterMac, completed a $55 million preferred equity offering to institutional investors Institutional Investor A non-bank person or organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions. . The Issuer sold 60 of its 6.80% Series A-3 Cumulative Preferred Noun 1. cumulative preferred - preferred stock whose dividends if omitted accumulate until paid out cumulative preferred stock preference shares, preferred shares, preferred stock - stock whose holders are guaranteed priority in the payment of dividends but Shares with an aggregate Liquidation The collection of assets belonging to a debtor to be applied to the discharge of his or her outstanding debts. A type of proceeding pursuant to federal Bankruptcy Amount of $30 million and 50 of its 7.20% Series B-2 Subordinate Cumulative Preferred Shares with an aggregate Liquidation Amount of $25 million. The proceeds of the offering are being used primarily to invest in revenue bonds secured by mortgages on multifamily housing properties and other bond-related investments that are expected to produce tax-exempt income Tax-exempt income Dividends and interest not subject to federal and, in some cases, state and local income taxes. , and for general business purposes. Convertible Community Reinvestment Act Community Reinvestment Act (CRA) Enacted by Congress in 1977, the CRA encourages banks to help meet the credit needs of their communities for housing and other purposes, particularly in neighborhoods with low or moderate incomes, while maintaining safe and sound operations. Preferred Share Offering On July 11, 2002, CharterMac announced the offering of 1,376,933 Series A Convertible Community Reinvestment Act Preferred Shares Preferred shares Preferred shares give investors a fixed dividend from the company's earnings and entitle them to be paid before common shareholders. See: Preferred stock. to five financial institutions at a price of $17.43 per share, raising gross proceeds of approximately $24 million. The net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). from the offering are being utilized primarily to acquire additional tax-exempt revenue bonds that will secure multifamily housing properties, and for general business purposes, including reduction of CharterMac's indebtedness. Guaranteed Tax Credit Fund On July 18, 2002, CharterMac announced that it participated in a transaction to guarantee tax benefits to an investor in a partnership designed to generate low-income housing tax credits The Low Income Housing Tax Credit (LIHTC; often pronounced "lye-tech") is a tax credit created under the Tax Reform Act of 1986 (TRA86) that gives incentives for the utilization of private equity in the development of affordable housing aimed at low-income Americans. ("LIHTC LIHTC Low-Income Housing Tax Credit (program) "). CharterMac agreed to back up a "AA-" rated financial institution's obligation to guarantee an agreed upon Adj. 1. agreed upon - constituted or contracted by stipulation or agreement; "stipulatory obligations" stipulatory noncontroversial, uncontroversial - not likely to arouse controversy internal rate of return to the investor in Related Capital Guaranteed Corporate Partners II, L.P. ("RCGCP"), for which CharterMac will receive a guarantee fee totaling approximately $5.9 million. RCGCP is a fund sponsored by Related Capital Company. The investor in RCGCP, a non-affiliated third party, will be allocated tax benefits in return for investing $75.6 million to fund, in part, the development and ownership of 11 multifamily properties. The properties were also financed with $125.3 million of tax-exempt and taxable debt, $70.3 million of which were revenue bonds acquired by CharterMac. Related Capital Company is an affiliate of CharterMac's manager, Related Charter, L.P. The transaction was structured as two separate guarantees, one primarily guaranteeing the IRR IRR In currencies, this is the abbreviation for the Iranian Rial. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. through the lease-up phase of the properties and the other guaranteeing the IRR through the operating phase of the properties. The fee for the first guarantee, in the amount of approximately $3.6 million, was paid in July 2002 at closing. The fee for the second guarantee will be paid in two installments. The first installment, in the amount of approximately $1.7 million, will be paid in October 2003, and the final installment, in the amount of approximately $566,000, will be paid in February 2004. About the Company CharterMac is one of the nation's leading full-service multifamily finance companies, providing capital solutions to developers and owners of multifamily rental housing throughout the country. CharterMac's current revenue bond portfolio includes direct and indirect interests in revenue bonds securing over 27,500 units of multifamily housing properties in 22 states and the District of Columbia District of Columbia, federal district (2000 pop. 572,059, a 5.7% decrease in population since the 1990 census), 69 sq mi (179 sq km), on the east bank of the Potomac River, coextensive with the city of Washington, D.C. (the capital of the United States). . For more information, please visit CharterMac's website at http://www.chartermac.com or contact the Shareholder Services Department directly at (800) 831-4826.
CHARTER MUNICIPAL MORTGAGE ACCEPTANCE COMPANY
(Unaudited)
(Dollars in thousands except per share amount)
Three Months Three Months
Ended 6/30/02 Ended 6/30/01
------------- -------------
Consolidated Statements of Income
---------------------------------
Total Revenues $ 28,623 $ 17,491
Interest Expense (3,014) (3,890)
Recurring Fees Relating to the Private
Label Tender Option Program (751) (570)
Bond Servicing Fees (878) (595)
General and Administrative (5,953) (729)
Amortization (1,760) (203)
Other Expenses (1,610) -----
Gain on Repayment of Revenue Bonds
and Sale of Loans 3,543 -----
Loss on Impairment of Bonds ----- (400)
Income Allocated to Preferred
Shareholders of Subsidiary (4,053) (2,962)
------------- -------------
Net Income $ 14,147 $ 8,142
============= =============
Net Income
Applicable to Shareholders $ 12,778 $ 7,203
Per Share (diluted) $ 0.2963 $ 0.2428
Cash Available for Distribution (A) $ 16,622 $ 10,047
Cash Available for Distribution
Applicable to Shareholders $ 15,382 $ 9,180
Per Share (diluted) $ 0.3568 $ 0.3095
Weighted Average Shares Outstanding
(diluted) 43,107,175 29,664,418
Three Months Three Months
Ended 6/30/02 Ended 6/30/01
------------- -------------
Cash Available for Distribution (A)
-----------------------------------
Sources of Cash
Revenue Bonds $ 22,025 $ 16,361
Temporary Investments 575 391
Promissory Notes 160 233
Equity in income of ARCap 563 -----
Other Income 1,897 506
Mortgage Servicing Fees 2,009 -----
Mortgage Banking Fees 1,394 -----
PW Funding Gains on Sale of Loans 1,090 -----
Net Amortization (Accretion) Included
in Income 1,558 1,301
------------- -------------
Total Sources of Cash $ 31,271 $ 18,792
------------- -------------
Uses of Cash
Total Expenses $ 13,966 $ 6,387
Plus: Income Allocated to Preferred
Shareholders of Subsidiaries 4,053 2,962
Less:
Amortization Included in Expenses (1,760) (203)
Loss on Impairment of Bonds ----- (400)
Provision for FNMA DUS Losses (202) -----
Provision for Taxes (1,457) -----
Minority Interest Expense 49 -----
------------- -------------
Total Uses of Cash $ 14,649 $ 8,746
------------- -------------
Cash Available for Distribution $ 16,622 $ 10,046
Less: Distributions to Manager (1,240) (866)
------------- -------------
Cash Available for Distributions to
Common and CRA Shareholders (CAD) $ 15,382 $ 9,180
============= =============
Three Months Three Months
Ended 6/30/02 Ended 6/30/01
------------- -------------
Reconciliation of Net Income to Cash Available for Distribution (CAD)
---------------------------------------------------------------------
Net Income $ 12,778 $ 7,203
Amortization and Accretion Included
in Income 1,003 892
Straight-Lining of Effective Yield on Bonds 310 216
Non-cash Gain on Repayment of Bonds
and Sale of Loans (2,453) -----
Miscellaneous Other Adjustments 398 193
Provision for Income Taxes 1,457 -----
Amortization 1,760 203
Loss on Impairment of Bonds ----- 400
Net Income Allocated to Manager 129 73
------------- -------------
CAD (A) $ 15,382 $ 9,180
============= =============
Weighted Average Shares Outstanding:
Diluted 43,107,175 29,664,418
CAD per Diluted Share $ 0.3568 $ 0.3095
============= =============
(A) CharterMac uses CAD as the primary measure of its dividend paying
ability. The difference between CAD and net income results from
variations between generally accepted accounting principles
("GAAP") and cash received. One difference between CAD and GAAP
is the amortization of bond and loan origination costs, costs
relating to the Private Label Tender Option Program, costs
relating to the issuance of preferred stock of subsidiary and
other intangible assets. These amounts have been excluded from
CAD due to their noncash nature. Another difference is the
noncash gain or loss associated with bond impairments, repayments
and sales for GAAP purposes, which are not included in the
calculation of CAD.
CAD should not be considered an alternative to net income as a
measure of the Company's financial performance or to cash flow
from operating activities (computed in accordance with GAAP) as a
measure of the Company's liquidity, nor is it necessarily
indicative of sufficient cash flow to fund all of the Company's
needs.
The enclosed en·close also in·close tr.v. en·closed, en·clos·ing, en·clos·es 1. To surround on all sides; close in. 2. To fence in so as to prevent common use: enclosed the pasture. materials contain 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 "safe harbor 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. " provisions 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. These statements are based on management's current expectations and beliefs and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Such forward-looking statements speak only as of the date of this press release. You should review the risk factors contained in the prospectus supplement issued in connection with the offering described in this press release for a discussion of the risks related to the ownership of CharterMac's common shares. CharterMac expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in CharterMac's expectations with regard thereto there·to adv. 1. To that, this, or it. 2. Archaic In addition to that; furthermore. thereto Adverb Formal 1. to that or it 2. or change in events, conditions or circumstances on which any such statement is based. |
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