Dynex Capital, Inc. Revises 1998 Results.GLEN ALLEN Glen Allen is the name of several places in the United States of America:
See: New York Stock Exchange :DX) reported today that it will record charges, which aggregate $17.6 million, retroactive Having reference to things that happened in the past, prior to the occurrence of the act in question. A retroactive or retrospective law is one that takes away or impairs vested rights acquired under existing laws, creates new obligations, imposes new duties, or attaches a to the fourth quarter of 1998. The Company previously reported its fourth quarter 1998 results on February February: see month. 4, 1999. On a revised basis the Company will report net income of $19.6 million, or $0.14 per common share for the full year 1998, and a net loss of $16.9 million, or $0.44 per common share for the fourth quarter 1998. These charges are the result of the Company's continuing analysis of the findings of the compliance reviews conducted by the Company and its third party consultants during January January: see month. and February 1999 in regard to compliance by AutoBond Acceptance Corporation (AMEX AMEX See: American Stock Exchange :ABD ABD n. A candidate for a doctorate who has completed all the requirements for the degree, such as courses and examinations, with the exception of the dissertation. [a(ll) b(ut) d(issertation).] ) to the underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. criteria criteria (krītēr´ē  ),n. and servicing procedures previously agreed to by the Company and AutoBond. The Company has determined that the automobile automobile, self-propelled vehicle used for travel on land. The term is commonly applied to a four-wheeled vehicle designed to carry two to six passengers and a limited amount of cargo, as contrasted with a truck, which is designed primarily for the transportation of contracts originated by AutoBond which secure funding notes purchased by the Company from an affiliate of AutoBond are of lower credit quality and have higher 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. rates than previously believed by the Company. As a result, after consultation with its audit firm, the Company will record 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. charge of $17.6 million which includes the funding notes, the 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. convertible note acquired from AutoBond in June June: see month. 1998 and certain capital securities of AutoBond. The Company also announced the issuance of $1.4 billion of bonds collateralized primarily by 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 loans and single-family sin·gle-fam·i·ly adj. Relating to or being a dwelling designed for one family only: a single-family home; single-family occupancy. ARM securities previously issued by the Company. The bonds were issued by Merit Securities Corporation, one of the Company's limited purpose finance subsidiaries. Lehman Brothers Lehman Brothers Holdings Inc. (NYSE: LEH), founded in 1850, is a diversified, global financial services firm. It is a participant in investment banking, equity and fixed income sales, research and trading, investment management, private equity, and private banking. and Greenwich Greenwich, borough, Greater London, England Greenwich (grĭn`īj, grĕn`–), outer borough (1991 pop. 200,800) of Greater London, SE England, on the Thames River. Manufactures include telephone equipment and underwater cable. Capital were the underwriters/placement agents. 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, stated, "As we had previously indicated, the completion of this 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. further enhances the Company's goal of providing matched-term, non-recourse funding of its investments, while reducing the Company's 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. We expect recourse borrowings to be less than $800 million at the end of the first quarter. This securitization also reduces our borrowing costs on the related collateral collateral (kəlăt`ərəl), something of value given or pledged as security for payment of a loan. Collateral consists usually of financial instruments, such as stocks, bonds, and negotiable paper, rather than physical goods, although , which should benefit our net interest margin going forward." 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. The Company's primary production operations include the 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 of mortgage loans secured by multifamily and commercial real estate properties and the origination of loans secured by manufactured homes. The Company's strategy is to create investments from its production operations at a lower effective cost than if assets were purchased in the market, and as a result, steadily increase its net interest margin income and earnings per share over time. 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 Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of unforeseen external factors. As discussed in the Company's 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. -0-
DYNEX CAPITAL, INC.
Consolidated Balance Sheets
(Thousands except share data)
December 31, December 31,
1998 1997
ASSETS
Investments:
Collateral for collateralized
bonds $4,293,528 $4,375,561
Securities 217,612 515,501
Other investments 56,743 85,989
Loans held for securitization 388,782 233,958
Investments in and advances to Dynex
Holding, Inc. 169,384 119,356
Other assets 52,753 36,993
---------- -----------
$5,178,802 $5,367,358
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
Non-recourse debt $3,665,316 $3,632,079
Recourse debt 1,032,733 1,133,536
Other liabilities 24,721 21,341
Dividends payable 3,228 19,493
----------- -----------
4,725,998 4,806,449
SHAREHOLDERS' EQUITY:
Preferred stock 127,407 130,482
Common stock 460 451
Additional paid-in capital 352,382 342,570
Accumulated other comprehensive
income (3,097) 79,441
(Accumulated deficit) retained
earnings (24,348) 7,965
----------- -----------
452,804 560,909
----------- -----------
$5,178,802 $5,367,358
DYNEX CAPITAL, INC.
Consolidated Statements of Operations
(Thousands except share data)
Quarter ended December 31,
1998 1997
Interest income:
Collateral for collateralized bonds $ 74,942 $ 58,234
Securities 4,248 20,105
Other investments 1,254 1,556
Loans held for securitization 12,229 8,176
Advances to Dynex Holding, Inc. 3,202 2,137
95,875 90,208
Interest and related expense:
Non-recourse debt 53,331 43,576
Recourse debt 23,264 23,038
Other 677 415
Advances from Dynex Holding, Inc. - -
77,272 67,029
Net interest margin before provision
for losses 18,603 23,179
Provision for losses (1,037) (1,714)
Net interest margin 17,566 21,465
Permanent impairment on Autobond Assets (17,632) -
Equity in net earnings (loss) of
Dynex Holding, Inc. (332) 872
(Loss)/gain on sale of investments and
trading activities (9,016) 3,198
Other income 1,189 268
Net revenue (8,225) 25,803
General and administrative expenses (2,798) (2,622)
Administrative fees and expenses to
Dynex Holding, Inc., net (5,632) (5,389)
Income before extraordinary item (16,655) 17,792
Extraordinary item - loss from
extinguishment of debt (284) -
Net income after extraordinary item (16,939) 17,792
Dividends on preferred stock (3,228) (3,689)
Net income available to common shareholders $ (20,167) $ 14,103
Per common share before extraordinary item:
Basic $ (0.43) $ 0.32
Diluted $ (0.43) $ 0.32
Per common share after extraordinary item:
Basic $ (0.44) $ 0.32
Diluted $ (0.44) $ 0.32
Weighted average number of common
shares outstanding:
Basic 45,993,484 44,607,883
Diluted 45,993,484 44,607,883
DYNEX CAPITAL, INC.
Consolidated Statements of Operations
(Thousands except share data)
Year Ended December 31,
1998 1997
---------- ----------
Interest income:
Collateral for collateralized bonds $303,994 $208,946
Securities 40,411 79,714
Other investments 5,679 4,909
Loans held for securitization 44,450 34,099
Advances to Dynex Holding, Inc. 10,979 5,891
---------- ----------
405,513 333,559
---------- ----------
Interest and related expense:
Non-recourse debt 231,242 152,678
Recourse debt 99,119 90,777
Other 2,193 1,717
Advances from Dynex Holding, Inc. -- --
---------- ----------
332,554 245,172
---------- ----------
Net interest margin before
provision for losses 72,959 88,387
Provision for losses (6,421) (4,933)
---------- ----------
Net interest margin 66,538 83,454
Permanent impairment on Autobond
Assets (17,632) --
Equity in net earnings (loss) of
Dynex Holding, Inc. 2,456 (1,109)
(Loss)/gain on sale of investments
and trading activities (2,714) 11,584
Other income 2,852 1,716
---------- ----------
Net revenue 51,500 95,645
General and administrative
expenses (8,973) (9,531)
Administrative fees and expenses
to Dynex Holding, Inc., net (22,379) (12,116)
---------- ----------
Income before extraordinary item 20,148 73,998
Extraordinary item - loss from
extinguishment of debt (571) --
---------- ----------
Net income after extraordinary item 19,577 73,998
Dividends on preferred stock (13,019) (14,820)
---------- ----------
Net income available to common
shareholders $ 6,558 $ 59,178
========== ==========
Per common share before
extraordinary item:
Basic $ 0.16 $ 1.38
Diluted $ 0.16 $ 1.37
Per common share after
extraordinary item:
Basic $ 0.14 $ 1.38
Diluted $ 0.14 $ 1.37
Weighted average number of
common shares outstanding:
Basic 45,746,394 43,031,381
Diluted 45,746,394 50,123,739
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