This should be a breakout day for RCCK:
Friday July 9, 8:00 am Eastern Time
Company Press Release
SOURCE: Rock Financial Corporation
Rock Financial Further Completes Transition from Brick and Mortar Home Lender To Online-Based Operation
- Company Closes and Consolidates Twelve of Remaining Fifteen Branch Offices - - Reports 152% Quarter on Quarter Increase in Closed Loan Internet Revenue - - Launches $20 Million National Marketing Campaign for RockLoans.com -
BINGHAM FARMS, Mich., July 9 /PRNewswire/ -- To further strengthen its position as a leading online direct mortgage originator, Rock Financial Corporation (Nasdaq: RCCK - news) announced a significant consolidation of its branch network. The company also announced overall production numbers, which include a substantial increase in its second quarter Internet loan closings, and the launch of a multi-million dollar marketing campaign for RockLoans.com.
Rock Focuses on the Web: Consolidates its Brick and Mortar Business
In a strategic move announced today, Rock Financial will close and consolidate twelve of its remaining fifteen traditional branch operations.
''With this move, our transformation from a branch-based business to one focused on the Internet and our call center is nearly complete,'' said Gilbert. ''We are increasing the company's focus on our mission of becoming a market leader in online mortgage origination in this country.''
The employees affected by the branch office closures will be reassigned to the remaining branches, the Michigan National Joint Venture, or the company's Web/Call Center facility, or will be leaving the organization.
Rock Financial expects to take a one-time charge of $3.5 - 4.5 million in the third quarter of 1999 related to the branch closings. The company believes it will offset any loss of revenues from the branch consolidation with reduced operating expenses over the next twelve months. By unifying operations, Rock will leverage its current infrastructure and thereby reduce operating costs long term. The charge is in addition to the $1.5 - 2 million non-recurring charge, previously announced that the company will take in relation to its move into a 110,000 square foot state-of-the-art Web/Call Center and corporate headquarters later this fall. The new facility will house a 50,000 square feet, 400-plus seat Web/Call Center that will be the primary source of loan production for the company.
RockLoans.com and Joint Venture Report Increase in Production
RockLoans.com, which has quickly positioned itself as one of the nation's fastest growing online direct mortgage lenders, closed $54 million in loan production in the quarter ended June 30, 1999. This is up 86% over the $29 million the company closed during the first quarter of 1999 following the launch of RockLoans.com on a limited basis in January 1999. More significantly, the company's revenues associated with its Internet closings increased from $635,000 associated with first quarter closings to $1.6 million associated with second quarter closings or a 152% quarter on quarter increase. (The actual revenue on loans closed is booked at the time of sale of the loans, which typically lags the closings by a seven to thirty day period.)
''Our second quarter results indicate a significant increase in production and associated revenue from the Internet-specific production. It's important to note RockLoans.com averaged associated revenue of approximately $3,100, or nearly 300 basis points, per loan closed,'' said Daniel Gilbert, Chairman and CEO of Rock Financial. The company anticipates the average per loan revenue will vary depending on a variety of factors, including the mix of products.
''Rock is a direct lender with a wide variety of product lines, including conventional, sub-prime and FHA loans, making us unlike most mortgage companies on the Web today,'' added Gilbert. ''We process, underwrite and close the loans ourselves, and although the costs associated with this end-to-end process are somewhat higher, our revenues are also higher.''
Rock also announced closed production of $57 million in the second quarter in its joint venture with Michigan National Bank.''
Quarter Ending Quarter Ending
June 30, 1999 June 30, 1998
Volume Closed % Volume Closed %
(in millions) of total (in millions) of total
Web/Call/JV* $169.1 32% $44.9 9%
Branch $355.5 68% $467.1 91%
TOTALS $524.6 100% $512.0 100%
Six Months Ending Six Months Ending
June 30, 1999 June 30, 1998
Volume Closed % Volume Closed %
(in millions) of total (in millions) of total
Web/Call/JV $291.5 27% $68.2 7%
Branch $807.3 73% $924.9 93%
TOTALS $1,098.8 100% $993.1 100%
* RockLoans.com was launched on a limited basis in January 1999. The
Joint Venture with Michigan National was launched in April 1999.
Company Launches National Advertising Campaign
Rock Financial also launched a national television, radio and print campaign earlier this week and plans to spend up to $20 million to market RockLoans.com over the next 12 months.
''We are excited about the national rollout of RockLoans.com,'' said Sonny Spearman, Vice President of Marketing for Rock. ''We were able to achieve growing Internet closing numbers in the first and second quarters with limited regional advertising. We believe our national direct marketing and brand building efforts should have a positive impact on our Internet loan production.''
In addition, Rock is aggressively aligning itself with other leading Internet companies to harness strategic marketing opportunities on the Web, including previously announced agreements with broadcast.com and iClick.
About Rock Financial and RockLoans.com
Rock Financial Corporation, founded in 1985 by chairman and CEO Daniel Gilbert, is one of the country's largest independent mortgage banks with 15 years of expertise providing residential home mortgages directly to thousands of homeowners. The company, with more than 600 employees nationwide, generated revenue of almost $90 million in 1998, and closed over $2.3 billion in residential loans last year. With its attention squarely focused on providing superior customer service, Rock embraces technology to make the loan application process streamlined and efficient. In January of 1999, the company launched RockLoans.com, which quickly positioned itself as one of the fastest growing online direct mortgage lenders in the nation. RockLoans.com works directly with borrowers -- bypassing the middleman generally associated with the online mortgage application process. Its mortgage programs are competitively priced, quickly processed, and tailored to fit each customer's unique needs.
Most recently, Rock Financial entered into a joint venture with Michigan National Bank. The partnership provides Rock Financial mortgage services to Michigan National's 450,000 customers through 192 financial service centers, over the phone and online. Combining a progressive Web initiative, cutting-edge technology and strategic partnerships, Rock's innovative loan programs provide competitive rates and world-class customer service. For additional information about Rock Financial and RockLoans.com, visit rockloans.com or call 1-888-220-ROCK.
''Safe Harbor'' Statement under the Private Securities Litigation Reform Act of 1995: Certain statements contained in this press release, which are not historical fact, may be deemed to be ''forward-looking'' statements under federal securities laws that involve risk and uncertainties. There are many important factors that could cause Rock Financial Corporation's actual results to differ materially from those indicated in the forward-looking statements. Such factors include, but are not limited to, general economic conditions, including interest rate risk, future residential real estate values, regulatory changes (legislative or otherwise) affecting the real estate market and mortgage lending activities, competition, demand for Rock Financial Corporation services, availability of funding, loan prepayment rates, delinquency and default rates, changes in factors influencing the loan securitization market and other risks identified in Rock Financial Corporation's Securities and Exchange Commission filings.
Information on Rock Financial Corporation is now available through an automated, fax-on-demand service. If you would like information about Rock Financial Corporation faxed to you, dial 1-800-PRO-INFO (1-800-770-4636) and enter the company ticker ''RCCK'' when prompted. You will then be asked to enter the 10-digit number of the facsimile machine you wish to have the information sent to. |
