Printer Friendly

ASSET INVESTORS REPORTS SECOND QUARTER EARNINGS

 ASSET INVESTORS REPORTS SECOND QUARTER EARNINGS
 DENVER, Aug. 14 /PRNewswire/ -- Asset Investors Corp. (NYSE: AIC)


today announced its income as determined under the Internal Revenue Code (REIT income) for the three months ended June 30, 1992, is estimated to be $2,700,000, or 19 cents per share, as compared to $9,100,000, or 65 cents per share, for the same period of 1991. The company's estimated REIT income for the six months ended June 30, 1992, is $8,700,000, or 62 cents per share, as compared to $17,600,000, or $1.26 per share, for the same period of 1991.
 Spencer I. Browne, president and chief executive officer of Asset Investors, stated, "The decrease in REIT income during the three and six months ended June 30, 1992, resulted from the effects of significantly higher levels of mortgage collateral repayments which were over 3-1/2 times faster than during the same periods in 1991." Separately, Browne noted, "The company defeased its Series E CMO Bonds, thereby recognizing a net gain of $1,435,000, or 10 cents per share, in the second quarter of 1992."
 After the Federal Reserve Board's July 2, 1992, decrease in the discount rate by 50 basis points (.50 percent) to 3.0 percent, applications for mortgage loan refinancings increased significantly from the levels in the second quarter. Accordingly, the company anticipates that the level of mortgage collateral repayments will remain high in the third and fourth quarters of 1992. As a result, the company expects that its earnings and dividends in the second half of 1992 will be substantially lower than they were in the comparable period in 1991.
 Although REIT income adversely was affected by fast mortgage repayments, the company's cash flow available for, among other things, new acquisitions and the repayment of debt increased to $25,691,000 for the first six months of 1992 as compared to $14,282,000 for the same period of 1991. The company used $20,924,000 to acquire 11 CMO residual interests during the first half of 1992 as compared to acquiring eight CMO residuals and one CMO class for $15,255,000 during the same period of 1991. The company has committed to acquire nine additional CMO residuals through September 1992 for a total of $39,000,000 and with an expected initial rate of return of 42.4 percent per annum. Browne added, "Since Jan. 1, 1992, the company has acquired or committed to acquire nearly $60 million in new CMO residual interests and related mortgage-derivative assets. This, based on the $255,933,000 carrying amount of the company's CMO ownership interests at Dec. 31, 1991, represents a 23 percent increase in the company's portfolio since Jan. 1, 1992." The company has not acquired any "interest-only" certificates since its inception.
 On June 30, 1992, the company paid a second quarter dividend of 40 cents per share as compared to 65 cents per share for the same period of 1991. Dividends paid during the first six months of 1992 totaled 90 cents per share as compared to $1.20 per share in dividends paid during the comparable period in 1991. Approximately 28 cents per share of the 1992 dividends were paid from the company's prior year's undistributed REIT income. At June 30, 1992, the company's undistributed REIT income was estimated to be $500,000, or 3 cents per share.
 The company incurred a book loss computed in accordance with generally accepted accounting principles (GAAP) for the three and six months ended June 30, 1992 of $4,971,000, or 36 cents per share, and $234,000, or 2 cents per share, respectively. These losses substantially were due to write-downs to the carrying amount of 12 CMO residual interests for GAAP accounting of $3,657,000 (26 cents per share) and $4,017,000 (29 cents per share) during the three and six months ended June 30, 1992, respectively. These non-cash write-downs resulted from lower projected excess cash flows using the Prospective Method of Accounting adopted by the company for its CMO residuals. These write-downs do not affect the company's REIT income. The company's book income was $7,611,000, or 55 cents per share, and $15,583,000, or $1.12 per share, for the three and six months ended June 30, 1991, respectively. The difference between GAAP income and REIT income is due to differences in the calculation of income as determined under the code and book income as determined in accordance with GAAP from CMO residuals.
 The company generally distributes 100 percent of its REIT income to stockholders in cash dividends. As a real estate investment trust (REIT), the company is able to utilize the highly advantageous treatment of REITs under the code which permits the company's REIT income to be distributed to stockholders without taxation at the corporate level. REIT income is used to determine cash dividends paid to stockholders and is not affected by the rules used to determine book income.
 Asset Investors Corp. is a real estate investment trust that generates income from a portfolio of ownership interests in the issuances of collateralized mortgage obligations (CMOs) and other mortgage-related assets.
 ASSET INVESTORS CORP. AND SUBSIDIARIES
 (Unaudited, in thousands, except per share data)
 Periods ended Three Months Six Months
 June 30 1992 1991 1992 1991
 Estimated REIT Income
 REIT income $2,700 $9,100 $ 8,700 $17,600
 REIT income per share 0.19 0.65 0.62 1.26
 GAAP Income
 Revenues(A) 103,902 134,549 221,971 272,693
 Net (loss) income
 before CMO:
 Residual write-down (1,314) 7,611 3,783 15,583
 CMO Residual write-down (3,657) -- (4,017) --
 Net (loss) income (4,971) 7,611 (234) 15,583
 Net (loss) inc. per share (0.36) 0.55 (0.02) 1.12
 Dividends
 Dividends paid per share 0.40 0.65 0.90 1.20
 Weighted-average
 shares outstanding 13,986 13,944 13,986 13,926
 (A) -- 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 condensed consolidated financial statements). Conversely, CMO residuals are accounted for under the prospective method (which nets all balance sheet, income statement and cash flow information into a single-line presentation on each of the respective condensed 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. 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.
 For additional information on Asset Investors Corporation by fax, no cost, 1-800-PRO-INFO, CODE No. 016.
 -0- 8/14/92
 /CONTACT: Spencer Browne, CEO, or Michael H. Feinstein, executive vice president ,of Asset Investors, 303-793-2703, or Gary Strong, 312-266-7800, or Regina Ryan, 212-661-8030, both of at Financial Relation Board for Asset Investors Corp./
 (AIC) CO: Asset Investors Corp. ST: Colorado IN: FIN SU: ERN


TS -- NY031 -- 0028 08/14/92 12:57 EDT
COPYRIGHT 1992 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Aug 14, 1992
Words:1235
Previous Article:RUBIDELL RECREATION REPORTS THIRD CONSECUTIVE PROFITABLE QUARTER
Next Article:FIDELITY MEDICAL RESTATES PRIOR FINANCIAL RESULTS AND REPORTS SECOND AND THIRD FISCAL QUARTERS
Topics:


Related Articles
ASSET INVESTORS CORP. REPORTS FIRST QUARTER EARNINGS
AMERIBANC INVESTORS GROUP REPORTS NET INCOME OF $5.0 MILLION FOR SECOND QUARTER OF 1992
THOMSON ADVISORY GROUP REPORTS SECOND QUARTER EARNINGS AND DISTRIBUTION
ASSET INVESTORS REPORTS SECOND QUARTER EARNINGS
AIM 85 REPORTS SECOND QUARTER EARNINGS OF 27 CENTS PER UNIT
AIM 84 REPORTS SECOND QUARTER NET EARNINGS OF 9 CENTS PER UNIT
AIM 84 REPORTS SECOND QUARTER NET EARNINGS OF 9 CENTS PER UNIT
Commercial Federal Bank Announces Second Quarter Earnings
Commercial Federal Bank Announces Second Quarter Earnings
Impac Mortgage Holdings, Inc. Reports a 32% Increase in Second Quarter Earnings Per Share to $0.58 for the Second Quarter 2003 As Compared to $0.44...

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters