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NORTH AMERICAN MORTGAGE COMPANY REPORTS THIRD QUARTER EARNINGS OF $13.1 MILLION, UP 48 PERCENT

 SANTA ROSA, Calif., Oct. 20 /PRNewswire/ -- North American Mortgage Company (NYSE: NAC), the nation's sixth largest originator of home loans, announced today that net income for its third quarter ended Sept. 30, 1993, was $13.1 million, a 48 percent increase over net income of $8.8 million for the quarter ended Sept. 30, 1992. Net income per share increased 30 percent to $0.83 per share for the third quarter, from $0.64 for the comparable 1992 period. On a fully diluted basis, net income per share for the third quarter of 1993 was $0.80.
 Total revenues for the quarter were $86.7 million, a 54 percent increase over revenues of $56.3 million for the third quarter of 1992. This significant increase is primarily due to increased loan origination fee income associated with the company's near record loan production for the quarter, larger gains on sales of servicing due to higher volumes of servicing sales, and higher loan administration revenues associated with the company's growing loan servicing portfolio. Total expenses for the quarter were $66.3 million, a 54 percent increase over 1992 third quarter expenses of $43.1 million. This increase was primarily associated with higher personnel and other loan production related costs.
 John F. Farrell, Jr., chairman of the board and chief executive officer, said, "The results for the third quarter are quite impressive. All significant elements of the company's operations are performing at extremely high levels, which is reflected in the increase in our earnings. We are very pleased with the expansion of our loan production network and the growth of our servicing portfolio." Mr. Farrell continued, "We are also continuing to reduce our per loan cost to service through increased efficiencies and our ongoing cost control efforts."
 Based on its strengthened financial position, the company began a $250 million Commercial Paper borrowing program in October. The program received investment grade ratings of P-2 from Moody's Investors Service Inc., A-2 from Standard and Poor's Corp. and F-2 from Fitch Investors Service Inc.
 Terrance G. Hodel, president and chief operating officer commented, "The company is very excited about the start of the program, which will allow us to significantly reduce our short term borrowing costs. The ratings that we received reflect the company's success in building our financial strength for the future." In October, the company also received approval for its shelf registration for $250 million of debt securities.
 Total loan production for the third quarter was $4.5 billion, a 49 percent increase over third quarter 1992 loan production of $3.0 billion. The company continues to benefit from a favorable interest rate environment which has stimulated loan demand, particularly loans related to mortgage refinancing. Loan refinancings represented 69 percent of total loan fundings in the third quarter. On Sept. 30, 1993, the company had an owned loan servicing portfolio of $15.4 billion, a 46 percent increase compared with the portfolio at Sept. 30, 1992. The portfolio had a weighted average coupon of 7.26 percent on Sept. 30, 1993 and a delinquency rate, including foreclosures, of 2.01 percent. In the third quarter, the company sold servicing rights amounting to 39 percent of its loan production, up from 33 percent in the third quarter of 1992.
 For the nine months ended Sept. 30, 1993, net income was $34.5 million, a Company record and a 49 percent increase over the $23.2 million for the 1992 nine month period. Net income per share for the nine months was a record $2.33 per share, a 38 percent increase over 1992 net income per share of $1.69 for the nine month period. On a fully diluted basis, net income per share for the nine month period was $2.26. Total loan production for the nine month period was $11.6 billion, a 42 percent increase over 1992 year to date loan production of $8.1 billion.
 North American Mortgage Company is primarily engaged in the mortgage banking business and, accordingly, originates, acquires, sells and services mortgage loans which are principally first-lien mortgage loans secured by single family residences. The Company is a leading residential lender in California, Texas, Hawaii, Colorado, New Mexico and the Washington D.C. area. Headquartered in Santa Rosa, California, the Company operates 64 production locations (including 12 satellite offices) in seventeen states and the District of Columbia.
 NORTH AMERICAN MORTGAGE COMPANY
 Consolidated Statement of Income
 (Unaudited, in thousands, except per share amounts)
 Periods ended Third Quarter Nine Months
 Sept. 30 1993 1992 1993 1992
 Revenues
 Loan administration fees, net $10,206 $ 5,730 $26,689 $18,458
 Loan origination fees 35,485 22,275 84,348 55,953
 Gain on sales of loans 16,986 10,661 38,152 26,905
 Interest income, net 6,555 5,246 17,688 14,651
 Gain on sales of servicing 15,325 10,749 55,605 30,112
 Other income 2,142 1,678 5,270 4,738
 Total revenues 86,699 56,339 227,752 150,817
 Expenses
 Personnel 44,915 27,980 115,840 74,094
 Other operating expenses 17,507 10,571 46,273 29,978
 Interest expense 1,409 1,103 4,198 2,974
 Depreciation 1,053 641 2,874 1,740
 Amort. of purchased servicing 1,344 2,565 4,027 4,733
 Amort. of intangibles 60 263 640 728
 Total expenses $66,288 $43,123 $173,852 $114,247
 Income before income taxes 20,411 13,216 53,900 36,570
 Income tax expense 7,348 4,419 19,369 13,415
 Net income $13,063 $ 8,797 $34,531 $23,155
 Net income per share $0.83 $0.64 $2.33 $1.69
 Net income per share -
 assuming full dilution $0.80 $0.64 $2.26 $1.69
 Weighted average shares
 outstanding 15,760 13,704 14,789 13,704
 Note: Net income and net income per share for 1992 have been adjusted to give effect to the company's initial public offering and the acquisition of the business of IMCO Realty Services -- a California Limited Partnership, which was completed in July 1992.
 NORTH AMERICAN MORTGAGE COMPANY
 Operating Statistics
 (Unaudited)
 Third Quarter Nine Months
 1993 1992 1993 1992
 Loan Originations $4,496 $3,020 $11,550 $8,112
 (millions)
 Servicing Sales as a
 Percent of Originations 39 33 48 38
 As of Sept. 30 1993 1992
 Owned Servicing $15,414 $10,546
 Portfolio (millions)
 Servicing Portfolio
 No. of Loans 151,739 111,063
 Average Loan Size $101,584 $94,955
 Serviced
 Servicing Delinquency
 Percent (30 days & Over) 1.72 1.94
 Foreclosure Percent 0.29 0.37
 Servicing Portfolio 7.26 8.42
 Weighted Average Coupon
 -0- 10/20/93
 /CONTACT: Martin Hughes, executive vice president of North American Mortgage Company, 707-523-5049; or Andrew Baer or Thomas J. Davies of Kekst and Company, 212-593-2655/
 (NAC)


CO: North American Mortgage Company ST: California IN: FIN SU: ERN

TS -- NY028 -- 4443 10/20/93 09:48 EDT
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Publication:PR Newswire
Date:Oct 20, 1993
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