ContiFinancial Corporation announces first fiscal quarter 1997 financial results.NEW YORK--(BUSINESS WIRE)--August 1, 1996-- Highlights For The Quarter: Net income increased 123% to $19.4 million. Earnings per common share were $0.44. 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. volume increased 102% to $993.4 million. -0- ContiFinancial Corporation (NYSE-CFN) today announced earnings results for the first quarter ended June June: see month. 30, 1996. Gross income for the first quarter of fiscal 1997 increased 51% to $69.8 million from $46.2 million during the first quarter of fiscal 1996. The Company reported net income of $19.4 million for the first quarter, compared to net income of $8.7 million for the comparable period last year, an increase of 123%. Earnings per common share for the company, which was incorporated in September September: see month. 1995, were $0.44 for the quarter ended June 30, 1996. The weighted average number of common shares outstanding during the first quarter of fiscal 1997 was 44.0 million, while a total of 44.4 million common shares were issued and outstanding at June 30, 1996 (assuming full vesting Vesting The process by which employees accrue non-forfeitable rights over employer contributions that are made to the employee's qualified retirement plan account. Notes: of all restricted stock and options). The strong financial results were driven by expanding securitization volume from both ContiMortgage and strategic alliance clients. 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. volume rose 102% to $993.4 million from $491.0 million in the quarter ended June 30, 1995. The first quarter fiscal 1997 volume was comprised of $693 million of securitizations for ContiMortgage and $300.4 million for ContiFinancial's strategic alliances. Securitization of home equity loans, franchisee loans and equipment leases were closed on behalf of strategic allies during the quarter. As a measure of efficiency, for the first quarter of fiscal 1997, 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. (netting interest expense against interest income) as a percentage of gross income were 34.7%, a decrease from 36.4% in the corresponding quarter of fiscal 1996. ContiMortgage, the Company's largest operating unit operating unit A type of operating company that engages in transactions with outsiders and that is owned by another business. For example, in 1995 the stockholders of Capital Cities/ABC approved a $19 billion merger with the Walt Disney Company, whereupon , increased its 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. volume to $678.1 million for the first quarter of fiscal 1997, a 52% increase, from $447.3 million for the corresponding quarter of fiscal 1996. As anticipated, delinquency delinquency Criminal behaviour carried out by a juvenile. Young males make up the bulk of the delinquent population (about 80% in the U.S.) in all countries in which the behaviour is reported. and default rates increased during the quarter due in part to the effect of the strategic decision in 1995 to increase ContiMortgage's mix of higher yielding, lower loan-to-value B and C grade loans, and additionally due to the transition to significantly upgraded collection systems in the latter part of the quarter. During the first quarter, ContiMortgage significantly improved its collection technology by implementing a predictive dialing system (DAVOX) and a default management system. This technology is expected to improve the efficiency of our collectors and assist in the continued maintenance of low delinquency rates relative to the risk characteristics of our managed portfolio. Delinquency and default rates on ContiMortgage's servicing portfolio at June 30, 1996 were 4.05% and 3.98%, up from 2.51% and 3.54% at March 31, 1996, respectively, but still well below comparable industry averages. Net losses as a percentage of average serviced loans outstanding was 0.05% for the first quarter of fiscal 1997, as compared to 0.03% for the first quarter of fiscal 1996. In its valuation of excess spread 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 from ContiMortgage originated and serviced loans, the Company continued to establish 0.0875% per quarter for estimated credit losses, or 175% of actual losses for the current quarter, and at a rate of 272% of actual losses, when compared to the prior 12 months. Jim Moore Moore, city (1990 pop. 40,761), Cleveland co., central Okla., a suburb of Oklahoma City; inc. 1887. Its manufactures include lightning- and surge-protection equipment, packaging for foods, and auto parts. , President and Chief Executive Officer of ContiFinancial Corporation, said, "We are very pleased with our strong financial results for the first quarter of 1997. The Company continues to build on its core strength as one of the largest and fastest growing non-conforming home equity lenders in the country. We believe that our ContiMortgage subsidiary should continue to benefit from our large and diverse network of loan origination sources as we expand our market into the western half of the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . We have managed our 52% increase in year-over-year 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 volume while maintaining our commitment to credit quality. As a result of our investment in technology, the July July: see month. 1996 ContiMortgage delinquency rate improved to 3.28% and the default rate was stable at 4.05%. "Additionally, during the first quarter of fiscal 1997, we entered into a new strategic alliance with a west coast-based home equity lender specializing in retail originations via direct mail and telemarketing telemarketing, the practice of selling goods or services to customers by means of the telephone or of surveying consumer preferences in telephone conversations. . This alliance will help us to expand our geographic presence in important markets in the western United States Noun 1. western United States - the region of the United States lying to the west of the Mississippi River West Santa Fe Trail - a trail that extends from Missouri to New Mexico; an important route for settlers moving west in the 19th century , as well as complimenting ContiMortgage's wholesale loan focus in those markets." In July, ContiFinancial registered with the Securities and Exchange Commission for a $300 million unsecured Unsecured A loan or equity interest that is given without any guarantee of payment, performance, satisfaction or opportunity for return from the recipient. No property, interest or security is used as collateral in either a guarantee or a pledge. senior bond offering to be completed during the second fiscal quarter, which will provide further long term capital for new growth opportunities and will permit a reduction of debt due to Continental Grain. ContiFinancial is a consumer and commercial finance company with headquarters in New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. . The Company is a leading originator Originator A bank, savings and loan, or mortgage banker that initially made a mortgage loan that is part of a pool. Also, an investment bank that has worked with the issuer of a new securities offering from the beginning and is usually appointed manager of the underwriting , purchaser, seller and servicer of home equity loans made to borrowers whose borrowing needs may not be met by traditional financial institutions. In addition, it provides financing, securitization and bond placement services to originators of a broad range of loans, leases and receivables, including adjustable rate mortgages This article is about the US mortgage type. For an international perspective, see Variable rate mortgage. An adjustable rate mortgage (ARM) is a mortgage loan where the interest rate on the note is periodically adjusted based on an index. , sub-prime auto loans, home improvement loans, equipment leases and multi-family and other commercial mortgage loans. -0-
ContiFinancial Corporation
Consolidated Statements of Income
for the three months ended
June 30, 1996, March 31, 1996 and June 30, 1995
(dollars in thousands, except per share data)
(unaudited)
3 months ended 3 months ended 3 months ended
June 30, 1996 March 31, 1996 June 30, 1995
Gross income Gain on sale of receivables $31,166 $45,498 $23,907 Interest 28,515 30,402 17,883 Net servicing income 9,073 9,032 3,414 Other income 1,009 2,025 968 Total gross income 69,763 86,957 46,172 Expenses Compensation and benefits 12,408 19,102 7,840 Interest 19,662 23,515 15,245 Provision for loan losses 219 (82) 148 General and administrative 4,779 7,062 3,257 Total expenses 37,068 49,597 26,490 Income before income taxes and minority interest 32,695 37,360 19,682 Income taxes 13,262 14,407 7,656 Income before minority interest 19,433 22,953 12,026 Minority interest of subsidiary -- -- 3,310 Net income $19,433 $22,953 $8,716 Primary and fully diluted earnings per common share $0.44 Fully diluted weighted average number of shares outstanding 44,043,368 Primary weighted average number of shares outstanding 43,898,281
ContiFinancial Corporation
Selected Consolidated Balance Sheet and Loan Portfolio Data
(dollars in thousands)
(unaudited)
As of
June 30, March 31, June 30,
1996 1996 1995
Balance Sheet
Interest-only and
Residual Certificates $223,802 $293,218 $171,992
Trade receivables, net 418,783 352,325 172,254
Total assets 891,672 892,540 482,007
Total liabilities 575,864 597,721 405,376
Total stockholders' equity $315,808 $294,819 $76,631
As of or for the 3 months ended
June 30, March 31, June 30,
1996 1996 1995
Loan Portfolio
ContiMortgage serviced
loan portfolio $4,256,948 $3,863,575 $2,537,104
Securitizations and sales:
ContiMortgage $692,954 $630,000 $300,000
Strategic alliances 300,475 590,000 191,000
Total securitizations
and sales $993,429 $1,220,000 $491,000
CONTACT: ContiFinancial Corporation Jerome Jerome St. Latin doctor of Church; preeminent biblical scholar. [Christian Hagiog.: Attwater, 185] See : Wisdom Perelson Chief Financial Officer (212) 207-5402 or Edelman Ed·el·man , Gerald Maurice Born 1929. American biochemist. He shared a 1972 Nobel Prize for research on the chemical structure and nature of antibodies. Financial Joseph Kist/Alexandra Magnuson (212) 704-8239 or (212) 704-8172 |
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