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LOMAS POSTS RECORD CASH FLOW, ADDITIONS TO MORTGAGE PORTFOLIOS IN FOURTH QUARTER AND SECOND HALF

 LOMAS POSTS RECORD CASH FLOW, ADDITIONS TO MORTGAGE PORTFOLIOS IN
 FOURTH QUARTER AND SECOND HALF
 DALLAS, Aug. 20 /PRNewswire/ -- Lomas Financial Corporation (NYSE: LFC) today said that in the six months ended June 30, 1992, operating cash flow from its continuing operations reached a record high, topping $45.8 million, after payment of interest on the company's indebtedness.
 The company said that it also achieved record rates of monthly additions to its direct and master servicing portfolios during the quarter and six months. During the six months, Lomas added more than an aggregate average of $1.2 billion per month to its two portfolios, or a total of $7.6 billion, including $3.8 billion in additions to its direct servicing portfolio. Net of repayments, the company's direct servicing portfolio increased during the period by approximately $65 million and its master servicing portfolio increased by $2.6 billion.
 Over the 12-month period ended June 30, 1992, Lomas said it added more than $13.8 billion in mortgage servicing to its two portfolios, a net gain of $7.8 billion over total repayments during that period. As a result, the company said, the size of its total mortgage servicing portfolios increased 25 percent to $39.4 billion; its direct servicing portfolio increased from $26.9 billion at June 30, 1991, to $29.3 billion at June 30, 1992; and its master servicing portfolio increased from $4.6 billion at June 30, 1991, to $10.1 billion at June 30, 1992.
 Lomas said that the company's primary business, its mortgage banking operations, continued to turn in strong performances during both the quarter and the six-month period. In the quarter, Lomas' mortgage banking operations recorded profits of $8.0 million and had operating cash flow of $23 million, after payment of interest on its outstanding indebtedness. In the six-month period, those operations recorded profits of $14.4 million and had operating cash flow of $47.1 million, after payment of interest on its indebtedness.
 The company said that during the quarter it continued the conversion of its information systems unit's external customer base to its advanced and recently completed mortgage loan servicing system, Excelis, and made expenditures further enhancing the system. As a result, its information systems unit lost $3.0 million in the quarter and $5.8 million in the six months. Lomas said that it expects conversion of the customer base to be complete within 10 months and its information systems unit to be a net cash contributor by the end of calendar 1994.
 The company said that consolidated income from continuing operations, before provision for income taxes, was $3.3 million in the quarter and $7.2 million for the six months. Due to its net operating loss carryforward Lomas did not pay income taxes during either the quarter or the six months. The company's discontinued business, ST Lending, Inc., lost $21.4 million in the quarter and $23.7 million in the six months, primarily as a result of provisions taken during the fourth quarter of $8.4 million to provide for future operating losses and $11.6 million to provide additional portfolio reserves.
 The company believes that these provisions will allow its discontinued operations to break-even in future periods. Principally as a result of ST Lending's incremental loss provision in the amount of $20 million, the company's consolidated net loss, including discontinued operations, for the quarter was $18.2 million, or 91 per share, and $17.7 million, or 88 per share, for the six months. Continuing operations generated net income of $3.2 million, or 16 per share, during the quarter and $6.0 million, or 30 per share, during the six months.
 Lomas said that prior year comparisons are not applicable for either the quarter or the six months, due to the implementation of Fresh Start Reporting, as required by AICPA Statement of Position 90-7, in connection with the Company's emergence from Chapter 11 in January 1992.
 Jess Hay, chairman and chief executive officer of Lomas, said that while he was pleased with the overall performance of the company during the quarter and the six months, he was particularly pleased with its ability to positively respond to the high level of prepayments and refinancings that occurred.
 "Despite record levels of prepayments and refinancings during the past several months, our two mortgage servicing portfolios have continued to grow on a net basis, and the company has been able to accomplish this net growth completely through internally generated cash flow," he said. "Every segment of our mortgage banking business is performing well -- mortgage servicing, master servicing, field services, insurance agency operations and portfolio production."
 Hay said that Lomas Information Systems, the unit responsible for Lomas' new mortgage loan servicing system, is making excellent progress in the conversion of Lomas' external customer base to its new system. "The recent performance of the system, specifically with respect to its ability to increase the productivity of large mortgage servicing operations, such as Lomas', has been particularly encouraging," he said.
 Hay said that subsequent to June 30, several events have occurred which should enhance the long-term prospects of the company. The company expects the $375 million reverse interest rate swap, which it entered into on July 21, 1992, to add approximately $9 million in fiscal 1993 and $10 million annually thereafter through fiscal 1997 to the bottom line of Lomas Mortgage USA (LMUSA), the company's mortgage banking subsidiary. He said the refinancing of LMUSA's $330 million of debt in September 1992 should further enhance that unit's bottom line in both fiscal 1993 and in the years beyond.
 Additionally, Hay added that during July ST Lending, Inc. made a $20.6 million principal payment on its non-recourse indebtedness and deposited $14 million in a Liquidity Trust Support Account which serves as credit support for the company's outstanding $140 million principal amount of senior convertible notes. He also reiterated that ST Lending is a single-purpose subsidiary, and that neither the company nor any other Lomas subsidiary provides credit support or any other subsidy of any kind to ST Lending. And, as a final comment, Hay mentioned that on July 2, 1992, the company completed the sale of its remaining preferred and common equity interests in First USA. This sale increased the company's liquidity and cash reserves by an approximate $23 million which was not reflected in the company's June 30, 1992 financial statements.
 Lomas Financial Corporation is one of the country's largest participants in mortgage banking, and its businesses include mortgage and servicing portfolio production; mortgage loan servicing; master servicing; fund and asset management; insurance agency operations; property inspection, preservation and other field operations; and data processing and related information and communication services.
 Attachments:
 (A) Lomas Financial Corporation Summary of Continuing
 Operations for the Six Months and Year Ended June 30, 1992;
 and
 (B) Lomas Financial Corporation Operating Results by Division
 for the Quarter, Six Months and Year Ended June 30, 1992.
 ATTACHMENT (A)
 LOMAS FINANCIAL CORPORATION
 SUMMARY OF CONTINUING OPERATIONS
 SIX MONTHS AND YEAR ENDED JUNE 30, 1992
 During the first six months following confirmation of Lomas' Plan of Reorganization, the company's continuing operations produced pretax income for the period of $7.2 million. The total derived from the following sources (in thousands, except per share data):
 Six Months Ended
 Year Ended
 June 30, 1992 December 31, 1991 June 30, 1992
 Mortgage banking $14,411 $ 11,530 $ 25,941
 Information systems (5,810) (12,253) (18,063)
 Other 8,631 7,901 16,532
 17,232 7,178 24,410
 Corporate items
 G&A expense (3,866) (3,422) (7,288)
 Interest income
 (expense) (6,164) 9,386 3,222
 Pretax income 7,202 13,142 20,344
 Tax equivalent provision (1,246) -- (1,246)
 Net income from
 continuing operations $ 5,956 $ 13,142 $ 19,098
 Earnings per share:
 Pretax $.36 $.65 $1.01
 Net income $.30 $.65 $.95
 ATTACHMENT (B)
 LOMAS FINANCIAL CORPORATION
 OPERATING RESULTS BY DIVISION
 QUARTER, SIX MONTHS AND YEAR ENDED JUNE 30, 1992
 (in thousands, except per share amounts)
 Quarter Six Months Six Months Combined
 Ended Ended Ended Year Ended
 June 30, June 30, Dec. 31, June 30,
 1992 1992 1991 1992
 Continuing operations:
 Mortgage banking $ 7,969 $ 14,411 $ 11,530 $ 25,941
 Information systems (3,045) (5,810) (12,253) (18,063)
 Other 3,296 8,631 7,901 16,532
 Operating profit 8,220 17,232 7,178 24,410
 General and
 administrative (1,807) (3,866) (3,422) (7,288)
 Corporate interest (3,137) (6,164) 9,386 3,222
 Operating profit
 from continuing
 operations before
 reorganization item 3,276 7,202 13,142 20,344
 Reorganization item-net -- -- (26,863) (26,863)
 Income (loss) from
 continuing
 operations before
 federal income tax
 equivalent provision 3,276 7,202 (13,721) (6,519)
 Federal income tax
 equivalent provision (76) (1,246) -- (1,246)
 Income (loss) from
 continuing operations3,200 5,956 (13,721) (7,765)
 Income (loss) from
 discontinued
 operations (21,406) (23,678) (9,142) (32,820)
 Net income (loss)$(18,206) $(17,722) $(22,863) $(40,585)
 Earnings (loss) per share:
 Income from continuing
 operations $.16 $.30 (A) (A)
 Net income (loss) $(.91) $(.88)
 Average shares
 outstanding 20,108 20,108 (A) (A)
 (A) Per share amounts are not meaningful.
 -0- 8/20/92
 /CONTACT: Robert E. Byerley Jr., 214-879-5588, Gary White, 214-879-5540, or Jess Hay, 214-879-5500, all of Lomas Financial Corporation/
 (LFC) CO: Lomas Financial Corporation ST: Texas IN: FIN SU: ERN


PS -- NY022 -- 1652 08/20/92 10:55 EDT
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Date:Aug 20, 1992
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