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TIS MORTGAGE INVESTMENT COMPANY REPORTS SECOND QUARTER 1992 RESULTS

TIS MORTGAGE INVESTMENT COMPANY REPORTS SECOND QUARTER 1992 RESULTS

SAN FRANCISCO, Aug. 14 /PRNewswire/ -- TIS Mortgage Investment Company (NYSE: TIS), today announced it incurred net losses of $12,753,000, or $1.57 per share, and $11,906,000, or $1.47 per share for the quarter and six months ended June 30, 1992. This compares to net income of $2,391,000, or $.30 per share, and $4,514,000, or $.56 per share for the quarter and six months ended June 30, 1991.
 The losses were due to sizable increases in mortgage prepayments which, under Generally Accepted Accounting Principles (GAAP), required downward adjustments of $1,340,000 in the first quarter and $13,539,000 in the second quarter in the carrying value on some of the company's residual interests. These adjustments reflect reduced estimates of future revenues, but the company does not expect any reduction in its 1992 cash flows. The higher prepayments also produced lower income on the company's remaining residuals. The residuals were written down so that their June 30, 1992 book values equalled the sum of their projected future cash flows based on an assumed continuation of the current high prepayments. The write downs were partially offset by gains of $830,000 and $559,000 on the sale of Principal Only Bonds in the first and second quarters, respectively.
 As announced in May, the company anticipated the potential for write downs in the second quarter. However, at that time it appeared that mortgage rates were increasing from the lows they reached in January. Since then, mortgage rates declined again and are currently at even lower levels than January. This caused the increases in mortgage prepayment speeds, and therefore the write downs, to be more severe than originally anticipated. The high level of prepayments are also having an adverse impact on the taxable income of the company on which dividends are based.
 For 1992 to date, the company has invested over $30,000,000 in mortgage-related assets. Two of these assets are Interest Only Bonds purchased in the second quarter at a total cost of $5,630,000. Since these bonds were purchased in the later part of the quarter, the full positive impact to earnings resulting from their purchase will begin in the third quarter. These bonds were purchased to yield 12 percent to 20 percent assuming current prepayment levels. Further increases in prepayments would cause the yields on these assets to decline. A decline in prepayments would increase the yields on these assets.
 Further declines in mortgage rates which cause prepayments to increase would result in additional write downs. Their size would depend on the magnitude of the increases in prepayments. Once prepayments stabilize or begin to decline, the company's income should begin to recover, in part from decreases in write downs as well as the additional revenue from new assets.
 TIS Mortgage Investment Company is a San Francisco-based REIT which invests in various mortgage-related assets. The company commenced operations in 1988.
 TIS MORTGAGE INVESTMENT COMPANY AND SUBSIDIARIES
 Summary of Financial Results
 (In thousands, except per share data)
 (Unaudited)
 Quarter Ended Quarter Ended
 June 30, 1992 June 30, 1991
 Revenues $ 2,139 $ 19,098
 Net income (12,753) 2,391
 Net income per share (1.57) 0.30
 Dividends declared
 per share 0.23 0.34
 Weighted average shares
 outstanding 8,102 8,100
 Six Months Ended Six Months Ended
 June 30, 1992 June 30, 1991
 Revenues $ 18,251 $ 38,252
 Net income (11,906) 4,514
 Net income per share (1.47) 0.56
 Dividends declared
 per share 0.51 0.66
 Weighted average shares
 outstanding 8,101 8,100
 -0- 8/14/92
 /CONTACT: John E. Castello of TIS Mortgage Investment, 415-393-8000; or Maury Healy of Healy & Co., 415-546-6166, for TIS/
 (TIS) CO: TIS Mortgage Investment Company ST: California IN: FIN SU: ERN


TB -- SF004 -- 0217 08/14/92 17:22 EDT
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Date:Aug 14, 1992
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