Dynex Capital, Inc. Reports Third Quarter 2000 Results.Business Editors GLEN ALLEN Glen Allen is the name of several places in the United States of America:
Dynex Capital, Inc. (NYSE NYSE See: New York Stock Exchange : DX) reported today a net loss of $836,000 or $0.35 per common share for the third quarter of 2000, versus net income of $320,000, or a net loss of $0.25 per common share for the third quarter of 1999, and a net loss of $68.7 million or $6.28 per common share for the second quarter 2000. For the third quarter, the Company reported net interest margin on its investment portfolio of $1.3 million, compared to $1.9 million during the second quarter 2000 and $12.3 million during the third quarter of 1999. The decrease in net interest margin for the third quarter 2000 was primarily due to the decrease in the Company's interest earning assets Earning Assets Any income-earning asset owned by a company. Notes: These assets are generally interest-bearing accounts, bonds, and securities available for sale. See also: Asset, Asset Valuation, Earnings, Net Interest Margin , coupled with an increase in the Company's average cost of funds Cost of Funds The interest rate paid on an outstanding loan. Notes: Money isn't free! Cost of funds is the cost of borrowing money. See also: Interest Rate Cost of funds Interest rate associated with borrowing money. . The Company's average interest earning assets for the third quarter 2000 were $3.5 billion, compared to $4.6 billion for the third quarter 1999, and $3.9 billion for the second quarter 2000. The decrease in average assets resulted primarily from the impact of sales of loans and securities in the second quarter, and to a lesser extent from prepayments Prepayments Payments made in excess of scheduled mortgage principal repayments. . In addition, the Company's average cost of funds increased to 7.65% in the third quarter 2000, versus 7.35% in the second quarter 2000 and 6.28% for the third quarter 1999. The increase in the cost of funds had the effect of reducing the Company's interest spread on its assets, which decreased to 0.40% for the quarter compared to 1.32% for the third quarter 1999, and 0.46% for the second quarter 2000. The increase in the Company's cost of funds was partially offset by resets on certain of the Company's underlying ARM assets, which had a weighted average yield of 8.05% in the third quarter versus 7.81% in the second quarter. At September September: see month. 30, 2000, the Company had 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. borrowings of $143 million, comprised primarily of $97 million related to the Company's senior 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. notes due July July: see month. 2002 and $40 million borrowed under short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. repurchase agreements Repurchase agreement An agreement with a commitment by the seller (dealer) to buy a security back from the purchaser (customer) at a specified price at a designated future date. . Additionally, as of September 30, 2000, the Company had short- term credit obligations of $76 million related to letters of credit on multifamily tax-exempt bonds Tax-exempt bond A bond usually issued by municipal, county, or state governments whose interest payments are not subject to federal and, in some cases, state and local income tax. tax-exempt bond See municipal bond. . The bank credit facility relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc these letters of credit expired ex·pire v. ex·pired, ex·pir·ing, ex·pires v.intr. 1. To come to an end; terminate: My membership in the club has expired. 2. as of the end of October. The Company is currently negotiating a ninety-day extension on the bank credit facility and believes it will come to a satisfactory resolution with the lender group on such extension. The Company reported that general and administrative expenses for the third quarter, including general and administrative expenses of the Company's unconsolidated affiliates, decreased to $1.6 million versus $2.3 million for the second quarter 2000, and $2.7 million for the first quarter of 2000. Regarding the results for the third quarter, Thomas (language) Thomas - A language compatible with the language Dylan(TM). Thomas is NOT Dylan(TM). The first public release of a translator to Scheme by Matt Birkholz, Jim Miller, and Ron Weiss, written at Digital Equipment Corporation's Cambridge Research Laboratory runs H. Potts, President of the Company, stated, "We continue to make progress on our primary focus, which is to payoff the remaining bank credit facility. During the third quarter, we repaid $89 million of borrowings under such facility through the sale of various multifamily loans Multifamily loans Loans usually represented by conventional mortgages on multi-family rental apartments. . The bank credit facility still supports our obligations on a pool of tax-exempt bonds relating to ten multifamily properties. We expect construction to be complete on all these properties this quarter, removing one of the major impediments IMPEDIMENTS, contracts. Legal objections to the making of a contract. Impediments which relate to the person are those of minority, want of reason, coverture, and the like; they are sometimes called disabilities. Vide Incapacity. 2. to the sale or 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 this pool. We are hopeful that we will be able to pay off the bank credit facility within the requested ninety day extension time-period." "The loss for the third quarter primarily reflects the $746,000 loss we incurred as a result of the sale of the funding notes and the related auto loans that were acquired from AutoBond Acceptance Corporation. Additionally, the net interest margin on our investment portfolio declined $0.6 million quarter-to- quarter. As our interest earning assets continue to decline, we would expect further erosion of our net interest margin. However, we should also see further declines in our general and administrative expenses." Mr. Potts commented further, "We feel the recently announced merger with California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). Investment Fund, LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control is in the best interests of the Company. We will also be focusing our efforts on facilitating and ensuring a successful completion of the impending im·pend intr.v. im·pend·ed, im·pend·ing, im·pends 1. To be about to occur: Her retirement is impending. 2. merger." On Tuesday, November 14, 2000 at 1:00 p.m. Eastern Standard Time, the Company will hold a conference call to review the third quarter results and the proposed merger transaction with CIF (1) (Common Intermediate Format) A standard video format used in videoconferencing. CIF formats are defined by their resolution, and standards both above and below the original resolution have been established. The original CIF is also known as Full CIF (FCIF). . There will not be a question and answer session following the call. The dial in number is 212/896-6031. The call will be broadcast on the internet at http://www.themeetingson.com , reservation number 16933050. To listen to the call, please go to the website at least fifteen minutes prior to the start of the call to register, download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. , and install any necessary audio software. For those not available to listen to the live broadcast, a replay will be available shortly after the call at the above mentioned website. Dynex Capital, Inc. is a 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. company that elects to be treated as a real estate investment trust (REIT REIT See: Real Estate Investment Trust REIT See real estate investment trust (REIT). ) for federal income tax purposes. Note: This document contains "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 An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. Act of 1995) that inherently involve risks and uncertainties. The Companys actual results could differ materially from those anticipated in these forward-looking statements as a result of unforeseen external factors. As discussed in the Companys filings with the SEC, these factors may include, but are not limited to, changes in general economic conditions, disruptions in the capital markets, the availability of funds from the Company's lenders to finance future loans, fluctuations in interest rates, increases in costs and other general competitive factors.
DYNEX CAPITAL, INC.
Consolidated Balance Sheets
(Thousands except share data)
September 30, December 31,
2000 1999
------------ -------------
ASSETS
Investments:
Collateral for collateralized
bonds $ 3,252,173 $ 3,700,714
Securities 10,542 129,331
Other investments 36,643 48,927
Loans held for sale 12,575 232,384
Investments in and advances to
Dynex Holding, Inc. 1,178 4,814
Cash, including restricted 28,690 54,433
Other assets 21,672 21,913
----------- ------------
$ 3,363,473 $ 4,192,516
=========== ============
LIABILITIES AND SHAREHOLDERS'
EQUITY
LIABILITIES:
Non-recourse debt $ 3,030,461 $ 3,282,378
Recourse debt 143,403 537,098
Other liabilities 17,592 47,968
------------ ------------
3,191,456 3,867,444
------------ ------------
SHAREHOLDERS' EQUITY:
Preferred stock 127,407 127,407
Common stock 114 114
Additional paid-in capital 351,999 351,995
Accumulated other comprehensive
loss (121,331) (48,507)
Accumulated deficit (186,172) (105,937)
------------ ------------
172,017 325,072
------------ ------------
$ 3,363,473 $ 4,192,516
============ ============
DYNEX CAPITAL, INC.
Consolidated Statements of Operations
(Thousands except for share data)
Quarter Ended Nine Months Ended
September September September September
30, 30, 30, 30,
2000 1999 2000 1999
--------- --------- --------- ---------
Interest income:
Collateral for
collateralized bonds $ 68,300 $ 69,535 $ 206,923 $ 212,073
Securities 301 3,901 3,303 11,497
Other investments 1,180 913 4,216 2,283
Loans held for sale 704 8,316 10,570 21,005
Other - 3,672 - 10,561
--------- ---------- --------- ---------
70,485 86,337 225,012 257,419
--------- ---------- --------- ---------
Interest and related
expense:
Non-recourse debt
59,881 50,717 176,577 157,880
Recourse debt 3,492 16,986 18,785 46,011
Other 590 3,058 4,417 4,579
--------- ---------- --------- ---------
63,963 70,761 199,779 208,470
--------- ---------- --------- ---------
Net interest margin
before provision for
losses 6,522 15,576 25,233 48,949
Provision for losses (5,270) (3,302) (16,101) (10,868)
--------- ---------- ---------- ----------
Net interest margin 1,252 12,274 9,132 38,081
Gain (loss) on sale of
investments (551) 1,616 (63,345) 50
Impairment charge/
writedowns (6) (8,964) (22,122) (13,865)
Equity in net (loss)
earnings of Dynex
Holding, Inc. (262) 1,675 1,778 1,596
Other income (expense) 304 (29) 841 2,291
--------- ----------- ---------- ----------
737 6,572 (73,716) 28,153
General and
administrative expenses (1,363) (1,955) (5,941) (5,924)
Net administrative fees
and expenses to Dynex
Holding, Inc. (210) (4,297) (578) (15,587)
--------- ---------- ---------- ----------
(Loss) income before
extraordinary item (836) 320 (80,235) 6,642
Extraordinary item - loss
from extinguishment of
debt - - - (489)
--------- ---------- ---------- ----------
Net (loss) income (836) 320 (80,235) 6,153
Provision for dividends
on preferred stock (3,227) (3,228) (9,683) (9,682)
--------- ---------- ---------- ----------
Net loss available to
common shareholders $ (4,063) $ (2,908) $ (89,918) $ (3,529)
========= ========== ========== ==========
Per common share before
extraordinary item:
Basic $ (0.35) $ (0.25) $ (7.86) $ (0.26)
Diluted $ (0.35) $ (0.25) $ (7.86) $ (0.26)
Per common share after
extraordinary item:
Basic $ (0.35) $ (0.25) $ (7.86) $ (0.31)
Diluted $ (0.35) $ (0.25) $ (7.86) $ (0.31)
Weighted average number
of common shares
outstanding:
Basic 11,446,010 11,477,271 11,444,911 11,497,479
Diluted 11,446,010 11,477,271 11,444,991 11,497,479
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