FMAC Reports Second Quarter Results.LOS LOS Length of stay, see there ANGELES--(BUSINESS WIRE)--Aug. 16, 1999-- Franchise Mortgage Acceptance Company (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : FMAX) announced its results of operations for the second quarter of 1999. FMAC FMAC Find, Meet, Attract, Close FMAC Financial and Management Accounting Committee FMAC Fédération Mondiale des Anciens Combattants (French: World Veterans Federation) FMAC FEMA Map Assistance Center FMAC FPGA Mission Assurance Center reported a net loss of $5.2 million for the second quarter of 1999, as compared to net income of $9.8 million for the second quarter of 1998. This resulted in basic and 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. losses per share of $0.18 for the second quarter of 1999 as compared to net income per share of $0.34 for the second quarter of 1998. The losses are primarily attributable to lower profitability from the sale of loans and an increased provision for losses as compared to the second quarter of 1998. Since the first quarter of 1999, FMAC has been selling its loans to Bay View Bank (Bay View) in anticipation of the merger, for which a Definitive Merger Agreement was signed on March 11, 1999. The transaction is expected to close toward the end of the third quarter of 1999. Revenues for the second quarter of 1999 were $16.9 million, compared to $31.6 million for the second quarter of 1998. In addition to the lower profitability from the sale of loans, FMAC wrote down its equipment loans and leases held for sale by $1.7 million in anticipation of a sale which is expected to close in the third quarter of 1999. The sale of these loans and leases is a part of the 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 of FMAC's equipment finance division. The division's operational unit was sold on April 30, 1999. Servicing income for the second quarter of 1999 was $5.3 million increasing 15% from $4.6 million for the second quarter of 1998, reflecting the increase in FMAC's servicing portfolio to $6.0 billion at June June: see month. 30, 1999, from $4.5 billion at June 30, 1998. Delinquencies, more than 30 days past due were 0.68% of FMAC's $6.0 billion servicing portfolio as of June 30, 1999, as compared to 1.05% of its $5.7 billion portfolio as of March 31, 1999. "Our servicing portfolio continues to grow, providing more than $5 million per quarter in recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. revenues," said Wayne Wayne, city (1990 pop. 19,899), Wayne co., SE Mich., a suburb of Detroit, on the Lower Rouge River; inc. as a village 1869, and with surrounding areas as a city 1960. It has automobile and aircraft industries and other varied manufactures. L. Knyal, president and chief executive officer of FMAC. "Our low 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. ratio demonstrates the continuing quality of our credits." Total expenses for the second quarter of 1999 were $26.6 million, as compared to $14.5 million in the same quarter of 1998. Certain of the expense increases in the second quarter of 1999 were related to activities in anticipation of the merger with Bay View. Increases in professional services (job) professional services - A department of a supplier providing consultancy and programming manpower for the supplier's products. , occupancy and general administrative expenses include expenses of preparing for "Year 2000" risks, which were expanded in anticipation of the Bay View merger; legal and consulting expenses associated with warehouse line renewals and negotiations, sale of the leasing division and divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). of the company's joint ventures and equity holdings in anticipation of the merger; expenses of the company's golf joint venture, which is in the process of being closed in anticipation of the merger; expenses of FMAC Insurance Services, which was not in existence until the end of the second quarter of 1998; and depreciation and office-related expenses associated with the expansion and moving of several large offices in the later half of 1998. The provision for losses of $9.9 million in the second quarter of 1999, as compared to $0.6 million in the second quarter of 1998 represents the most significant portion of the increase in total expenses between the two periods. Of this provision, $2.2 million relates to the remaining delinquent delinquent 1) adj. not paid in full amount or on time. 2) n. short for an underage violator of the law as in juvenile delinquent. DELINQUENT, civil law. He who has been guilty of some crime, offence or failure of duty. equipment loans and leases which could not be sold in the liquidation of the company's equipment financing division. Another $2.3 million relates to the company's golf joint venture, which is only 50% owned. Half a million dollars is attributable to a change in the timing of cash flows of one of the company's residual interests Residual Interest A type of interest payment received by investors in a real estate mortgage investment conduit (REMIC). Notes: Investors receive interest payments after all required regular interest has been paid to investors within higher priority tranches. in a 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. . A portion of the remaining provision relates to five problem loans for which new information reflected a deteriorating de·te·ri·o·rate v. de·te·ri·o·rat·ed, de·te·ri·o·rat·ing, de·te·ri·o·rates v.tr. To diminish or impair in quality, character, or value: valuation during the second quarter of 1999, enabling the company to better estimate the value of the collateral. The remainder of the provision was related to two loans which are not past due, but are experiencing some reduction in their fixed charge coverage ratios. The company considered an allowance to be prudent in these situations. FMAC's net loss for the six months ended June 30, 1999 was $116,000, or $0.0 per share, as compared to net income of $17.1 million, or $0.59 per share, for the same period in 1998. Total revenues were $40.2 million for the six months ended June 30, 1999, down from $53.8 million from the six months ended June 30, 1998. Total expenses were $41.3 million for the six months ended June 30, 1999, up from $24.3 million for the same period in 1998. A significant portion of the increase in expenses between the two six month periods is attributable to FMAC's acquisition of Banker's Mutual on April 1, 1998. FMAC's loan production totaled $909 million for the six months ended June 30, 1999, as compared to $942 million for the six months ended June 30, 1998. The decrease is primarily attributable to lagging Lagging Strategy used by a firm to stall payments, normally in response to exchange rate projections. loan closings in the first half of 1999 resulting from the market anomalies A market anomaly (or inefficiency) is a price and/or return distortion on a financial market. It is usually related to:
Please [ improve this article] or discuss the issue on the talk page. totaled $304 million." On March 11, 1999, FMAC signed a Definitive Merger Agreement with Bay View. Under the terms of the Definitive Merger Agreement, Bay View will acquire all of the common stock of FMAC for consideration valued at approximately $309 million. Each share of FMAC common stock will be exchanged for a combination of cash and Bay View common stock. The transaction is expected to close at the end of the third quarter or the beginning of the fourth quarter of 1999. About FMAC FMAC, founded in 1991, is a specialty commercial finance company engaged in the business of originating and servicing loans to small businesses, with a primary focus on established national and regional franchise concepts and multi-family apartment operators. The Los Angeles-based company has provided more than $6.0 billion in customer financing and has enabled investor participation through 15 securitizations of pooled loans totaling more than $2.4 billion. The company's servicing portfolio is currently $6.2 billion. FMAC has regional offices in Atlanta Atlanta (ətlăn`tə, ăt–), city (1990 pop. 394,017), state capital and seat of Fulton co., NW Ga., on the Chattahoochee R. and Peachtree Creek, near the Appalachian foothills; inc. 1847. , Dallas Dallas, city (1990 pop. 1,006,877), seat of Dallas co., N Tex., on the Trinity River near the junction of its three forks; inc. 1871. The second largest Texas city, after Houston, and the eighth largest U.S. , Denver Denver, city (1990 pop. 467,610), alt. 5,280 ft (1,609 m), state capital, coextensive with Denver co., N central Colo., on a plateau at the foot of the Front Range of the Rocky Mts., along the South Platte River where Cherry Creek meets it; inc. 1861. , 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. , Newport Beach Newport Beach, residential and resort city (1990 pop. 66,643), Orange co., S Calif., on Newport Bay and the Pacific Ocean; inc. 1906. It is a popular seaside resort and yachting center. Manufactures include electrical and medical equipment, computers, boats, and adhesives. and Morristown, N.J., with local offices in several other states across the country. Certain statements contained herein are "forward-looking" statements within the meaning of applicable federal securities laws. These 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. may be identified by reference to a future period(s) or by the use of forward-looking terminology, such as "may," "will," "intend," "should," "expect," "anticipate," "estimate," "continue" or the negatives thereof or other comparable terminology. FMAC's actual results could differ materially from those anticipated in such forward-looking statements due to a variety of factors, including, but not limited to, changes in national, regional or local economic environments, competitive projects and pricing, government fiscal and monetary policies, changes in prevailing interest rates, other investments, as well as the other risks detailed in the company's filings with the Securities and Exchange Commission. -0-
Franchise Mortgage Acceptance Company
Statements of Operations
(Unaudited)
(In thousands, except income per share)
Three Months Six Months
Ended June 30, Ended June 30,
1999 1998 1999 1998
---------- ---------- ---------- ----------
Revenue:
Gain on sale of
loans and leases $ 7,158 $ 22,917 $ 18,368 $ 39,238
Interest income 10,269 14,958 19,255 25,525
Interest expense (6,131) (11,081) (12,468) (17,446)
---------- ---------- ---------- ----------
Net interest
income 4,138 3,877 6,787 8,079
---------- ---------- ---------- ----------
Servicing income 5,286 4,614 11,798 5,868
Trading income (loss) (28) -- 1,613 --
Insurance services
income 193 -- 1,320 --
Other income 139 201 330 579
---------- ---------- ---------- ----------
Total revenue 16,886 31,609 40,216 53,764
---------- ---------- ---------- ----------
Expenses:
Personnel 8,342 8,016 16,797 13,181
Professional services 1,353 929 1,845 1,525
Travel 886 931 1,730 1,498
Business promotion 1,006 1,151 1,851 1,808
Provision for losses 9,947 633 10,209 633
Occupancy 933 663 1,756 1,018
Goodwill amortization 935 702 1,637 817
General and
administrative 3,158 1,509 5,473 3,772
---------- ---------- ---------- ----------
Total expenses 26,560 14,534 41,298 24,252
---------- ---------- ---------- ----------
Income (loss) before
income taxes and
minority interest
in subsidiary (9,674) 17,075 (1,082) 29,512
Minority interest
in subsidiary (956) 110 (889) 110
Income tax expense
(benefit) (3,487) 7,126 (77) 12,349
---------- ---------- ---------- ----------
Net income
(loss) $ (5,231) $ 9,839 $ (116) $ 17,053
========== ========== ========== ==========
Basic income
(loss) per
share $ (0.18) $ 0.34 $ (0.00) $ 0.59
========== ========== ========== ==========
Weighted average
shares
outstanding 28,780 28,716 28,757 28,716
========== ========== ========== ==========
Diluted income
(loss) per
share $ (0.18) $ 0.34 $ (0.00) $ 0.59
========== ========== ========== ==========
Weighted average
shares
outstanding 28,780 29,100 28,757 28,762
========== ========== ========== ==========
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