ASSET INVESTORS CORP. REPORTS FIRST QUARTER EARNINGS
ASSET INVESTORS CORP. REPORTS FIRST QUARTER EARNINGS DENVER, Colo., May 13 /PRNewswire/ -- Asset Investors Corp.
(NYSE: AIC) today announced that its income as determined under the Internal Revenue Code (REIT income) for the three months ended March 31, 1992, is estimated to be $6,000,000, or 43 cents per share, as compared to REIT income of $8,500,000, or 61 cents per share, for the first quarter of 1991.
Spencer I. Browne, president and chief executive officer of Asset Investors, stated, "The decrease in REIT income primarily was a result of a substantial increase in mortgage prepayments which reduced the company's income from its portfolio of CMO residual interests." The higher level of mortgage prepayments resulted from lower mortgage interest rates which declined sharply during the fourth quarter of 1991 and reached a low in January of 1992. Subsequently, mortgage interest rates have gradually increased; however, they remain substantially lower than mortgage interest rates during the same period of 1991. There are certain indications that mortgage prepayments have peaked; however, the company anticipates that the level of mortgage prepayments will remain high through the second quarter of 1992. If prepayments remain at their current high levels or increase further, the company's income in the second half of 1992 will be affected adversely. The company's REIT income during the first quarter of 1992 favorably was affected by lower short-term interest rates, specifically, the average London Interbank Offered Rate (LIBOR), the "benchmark" for the determination of interest expense on Asset Investors' variable-rate CMO debt. REIT income also was impacted positively by additions to the company's portfolio of CMO residual interests during the last three quarters of 1991 and in 1992. During the first quarter of 1992, the company used substantially all of its excess cash flow not needed to pay dividends or operating expenses to acquire approximately $8,900,000 in new residual interests and has committed to acquire an additional $13,400,000 in residual interests during the second and third quarters of 1992. On March 31, 1992, the company paid a first quarter dividend of 50 cents per share as compared to 55 cents per share for the same period in 1991. Approximately 7 cents per share of the 1992 dividend was paid from the company's prior year's undistributed REIT income. At March 31, 1992, $3,400,000, or 24 cents per share, of the prior year's REIT income remains undistributed. Book income as determined under generally accepted accounting principles (GAAP) for the quarter ended March 31, 1992 was $4,737,000, or 34 cents per share, as compared to $7,972,000, or 57 cents per share, for the three months ended March 31, 1991. Earnings reported under GAAP were lower than REIT income primarily because of dissimilar accounting methods used to compute earnings on non-equity CMO residuals. Asset Investors Corp. is a real estate investment trust that generates income primarily from a portfolio of ownership interests in issuances 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) (Unaudited) Three months ended March 31 1992 1991 ESTIMATED REIT INCOME REIT income $ 6,000 $ 8,500 REIT income per share .43 .61 BOOK INCOME Revenues 118,069 138,144 Book income 4,737 7,972 Book income per share .34 .57 DIVIDENDS Dividends paid per share .50 .55 Weighted-average shares outstanding 13,986 13,908 For additional information on Asset Investors Corp., by fAX, No Cost -- Dial 1-800-PRO-INFO, Code no. 016. -0- 5/13/92 /CONTACT: Spencer I. Browne or Michael H. Feinstein of Asset Investors, 303-793-2703; or Gary Strong, 312-266-7800, or Kathy Phelan, 212-661-8030, both of Financial Relations Board/ (AIC) CO: Asset Investors Corp. ST: Colorado IN: FIN SU: ERN
TQ -- NY065 -- 9731 05/13/92 13:18 EDT
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|Date:||May 13, 1992|
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