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ASSET INVESTORS CORP. REPORTS 1992 EARNINGS

 DENVER, April 5 /PRNewswire/ -- Asset Investors Corp. (NYSE: AIC) today announced that its REIT income for 1992 is estimated to be $13,700,000 or 98 cents per share as compared to $37,728,000 or $2.70 per share for 1991. REIT income for the fourth quarter of 1992 is estimated to be $800,000 or 6 cents per share. REIT income was reduced by $2,500,000 or 18 cents per share in the fourth quarter of 1992 due to revised reports recently received by the company from one of its outside servicers. The reduction is attributable approximately equally to each of the first three quarters of 1992. REIT income for the fourth quarter of 1991 was $10,528,000 or 75 cents per share. In 1992, the company's excess inclusion income was estimated to be $39,700,000 or $2.84 per share substantially higher than previously believed. Excess inclusion income in 1991 was $27,110,000 or $1.94 per share.
 To maintain its status as a REIT, the company is required to distribute dividends to its stockholders equal to at least 95 percent of the greater of the company's (i) REIT income or (ii) excess inclusion income. Excess inclusion income results from many of the company's CMO ownership interests and cannot be reduced by losses from the company's other CMO ownership interests or operating expenses.
 As a result, the company expects to make substantial additional dividend distributions to stockholders in respect of 1992 of approximately $27,400,000 or $1.96 per share by December 1993 to satisfy this requirement. As previously announced, the specific form and timing of these dividend distributions has not yet been determined, but it is currently expected that all or a significant portion of these distributions will be securities. Because of the distribution requirements relating to excess inclusion income, which in 1992 exceeded the company's REIT income, these distributions will reduce the amounts available for future acquisitions of assets and will likely substantially reduce the size of the company and its income in the future.
 If prepayments continue at their current rate or increase, the company may in the future be required to make additional distributions in excess of the cash it actually receives. As a result of this and other changes in the environment in which the company operates, the company intends to restructure its business and focus in the future on other permissible REIT activities which do not generate excess inclusion income, including the acquisition of ownership interests in securitization of commercial real estate.
 Spencer I. Browne, president and chief executive officer of asset investors, stated, "The unpredicted and unprecedented high level of prepayments on the mortgage loans underlying the company's GNMA, FHLMC and FNMA-guaranteed mortgage certificates, as homeowners nationwide refinanced their mortgages, was the primary reason for the decrease in our REIT income in 1992 as compared to 1991."
 During 1992, mortgage interest rates, which are influenced by long-term U.S. Treasury rates, fell to their lowest levels in over 19 years as the Federal Reserve Board cut the discount rate two times to 3.0 percent, decreasing this key index by 150 basis points or 33 percent in nine months. The average mortgage interest rate was 7.9 percent in 1992 as compared to 9.1 percent and 9.8 percent during 1991 and 1990, respectively.
 Mr. Browne added that "mortgage rates have continued to fall and the Mortgage Bankers refinancing index recently has risen to a new record of 1465. We believe that mortgage prepayment levels will remain high in 1993 which will continue to adversely affect the company."
 Prepayments adversely affect the company by reducing the amount of its interest earning assets. In addition, prepayments generally are used first to repay the company's CMO bonds with the shorter maturities and lower interest cost. As a result, prepayments permanently reduce the positive spread (and Asset Investors' future REIT income) between the company's fixed-rate guaranteed mortgage certificates and the weighted-average interest cost of its remaining CMO bonds.
 On Dec. 28, 1992, the company paid a fourth quarter dividend of 10 cents per share to stockholders of record on Dec. 21, 1992, bringing the company's dividend payments for 1992 to an aggregate of $16,503,000 or $1.18 per share as compared with dividends in 1991 of $37,713,000 or $2.70 per share. Aggregate dividends paid since the company's inception increased to $159,918,000 or $12.63 per share.
 The company acquired 29 CMO ownership interests and CMO classes for $84,212,000 during 1992. These new acquisitions are substantially less adversely affected by high rates of prepayment.
 The company incurred a book loss computed in accordance with generally accepted accounting principles (GAAP) of $32,122,000 or $2.30 per share in 1992 as compared to book income of $29,173,000 or $2.09 per share in 1991. The 1992 book loss substantially resulted from the provision for reserves and write-downs on the company's CMO ownership interests for GAAP purposes totalling $35,916,000 or $2.57 per share, net of minority interest. The noncash reserves and write-downs resulted from lower projected future excess cash flows from the company's portfolio of CMO ownership interests. The provision for reserves and write-downs have no effect on the determination of REIT income, excess inclusion income or the company's dividend distribution requirements. If prepayments continue to increase, additional reserves and write-downs may be required.
 Asset Investors Corp. is a real estate investment trust which generates income from a portfolio of ownership interests in the issuance of collateralized mortgage obligations (CMOs) and other mortgage-related assets.
 ASSET INVESTORS CORP. AND SUBSIDIARIES
 Summary of Financial Results
 (In thousands, except per share data)
 Periods ended Three months Year
 Dec. 31 1992 1991 1992 1991
 Estimated REIT Income
 REIT income $ 800(A) $ 10,528 $ 13,700(A) $37,728
 REIT income per share .06(A) .75 .96(A) 2.70
 Estimated Excess Inclusion Income
 Excess Inclusion income $ 39,700 $ 27,110
 Excess Inclusion income
 per share 2.84 1.94
 GAAP Income
 Revenues, before
 write-downs(B) $ 86,992 $125,725 $408,327 $529,467
 Net income, before
 provision for reserves
 and write-downs 877 7,287 3,794 30,773
 Provision for reserves
 and write-down (1,365) (1,100) (35,916) (1,600)
 Net (loss) income (488) 6,187 (32,122) 29,173
 Net (loss) income
 per share (.04) .44 (2.30) 2.09
 Dividends
 Dividends paid
 per share $ .10 $ .80 $ 1.18 $ 2.70
 Shares Outstanding
 Weighted-average
 shares outstanding 13,986 13,986 13,986 13,953
 (A) -- REIT income was reduced by $2,500,000 or 18 cents per share in the fourth quarter of 1992 due to revised reports recently received by the company from one of its outside servicers. The reduction is attributable approximately equally to each of the first three quarters of 1992.
 (B) -- CMO subsidiaries are accounted for under the Consolidation Method (which records the gross amount of the mortgage collateral, CMO bonds, interest income and interest expense in the Consolidated Financial Statements). Conversely, CMO residuals are accounted for under the Prospective Method (which, unlike the Consolidation Method, requires the carrying amount of, and the earnings and cash flows from, CMO residuals to be recorded as a single-line item on each of the respective Consolidated Financial Statements). Based on the criteria established under GAAP, all CMO ownership interests acquired by the company during the past four years were classified, for accounting purposes, as CMO residuals or CMO classes. Because the company has not acquired any CMO subsidiaries since July 1988, revenues and expenses from CMO subsidiaries have declined during each subsequent period. The decline results from mortgage loan repayments during these periods which decreased the principal balance of the related mortgage collateral and CMO bonds and, as a result, reduced interest income and interest expense. Unless the company acquires additional CMO subsidiaries, revenues and expenses from CMO subsidiaries are expected to continue to decline.
 -0- 4/5/93
 /NOTE TO EDITORS: For additional information on Asset Investors Corp. by fax at no cost, dial 1-800-PRO-INFO, code no. 016/
 /CONTACT: Spencer I. Browne, president & CEO, or Michael H. Feinstein, executive vice president of Asset Investors Corp., 303-793-2703; or Gary Strong, 312-266-7800, or Regina Ryan, 212-661-8030, both of Financial Relations Board, for Asset Investors Corp./
 (AIC)


CO: Asset Investors Corp. ST: Colorado IN: SU: ERN

TS -- NY041 -- 3052 04/05/93 12:54 EDT
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Date:Apr 5, 1993
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