THORNBURG MORTGAGE DECLARES $0.23 DIVIDEND; REPORTS RESULTS FOR 1999 AND FOURTH QUARTER
SANTA FE, N.M.--(BUSINESS WIRE)--Jan. 25, 2000--
-- Q4 EPS of $0.24 vs. year-ago ($0.08)
-- FY '99 net income of $0.88; 17% year-over-year growth
-- Q4 prepayments decline to 16% CPR
-- Acquired First Arizona Savings to facilitate retail origination
Thornburg Mortgage Inc. (NYSE: TMA) Tuesday reported net income
for the year ended Dec. 31, 1999 of $25,584,000, or $0.88 per common
share, compared to the $22,695,000, or $0.75 per common share reported
for the year ended Dec. 31, 1998.
Taxable earnings for the year totaled $0.99 per share as compared
to $0.84 per share for 1998. The company had 21,490,000 average common
shares outstanding in 1999 and 21,488,000 average common shares
outstanding in 1998.
Net income for the fourth quarter totaled $6,797,000, or $0.24
per share, compared to net income of $45,000 for the fourth quarter of
1998, which, after payment of the dividend on the company's Series A
Convertible Preferred Stock, resulted in a net loss of $0.08 per
common share for the fourth quarter of 1998.
Taxable earnings for the fourth quarter of 1999 totaled $0.27 per
share compared to $0.03 per share in the fourth quarter of 1998. For
the fourth quarter ended Dec. 31, 1999, the company had 21,490,000
weighted average common shares outstanding, the same as the previous
quarter.
Simultaneous with the earnings announcement, the company's board
of directors declared a fourth quarter 1999 dividend of $0.23 per
common share, payable on Feb. 17, 2000 to shareholders of record on
Feb. 3, 2000.
Commenting on the operating results for the fourth quarter and
the year just ended, Larry Goldstone, president and chief operating
officer of Thornburg Mortgage Inc. said, "While earnings showed
improvement over the course of 1999, that trend did not continue in
the fourth quarter. This was due principally to expensive year-end
financing costs related to Y2K concerns.
"On November 26th, one-month LIBOR -- a benchmark for our
financing costs -- increased by 0.87%. This temporary increase in
LIBOR modestly affected our fourth quarter results, and will likely
have a slight impact on first quarter 2000 results as well."
"Looking ahead to 2000, we are optimistic about our business
prospects. Interest rates have moved higher which should increase our
portfolio yields as well as better position our correspondent
adjustable-rate mortgage (ARM) loan programs as an attractive,
lower-cost mortgage financing alternative.
"Additionally, mortgage refinance activity has declined markedly,
reducing our premium amortization expense. These events bode well for
earnings and dividends in the year ahead."
Goldstone continued, "We are excited about our plans to launch a
nationwide mortgage origination program, which is scheduled to begin
after the close of our First Arizona Savings acquisition. With First
Arizona's federal charter, Thornburg will have the ability to
originate loans and create a unique proprietary retail direct lending
business via the Internet and telemarketing.
"Our focus will remain on qualified high credit quality borrowers
- including those who are interested in innovative and attractive ARM
loan products at favorable terms."
"In addition, we've taken several key initiatives to enhance our
correspondent lending program. These include retaining a nationwide
account manager and contracting with a private label subservicer which
will allow us to acquire loans and service them ourselves," Goldstone
concluded.
Total assets for the quarter ended Dec. 31, 1999 were
$4.4 billion, a decline from $4.5 billion at Sept. 30, 1999. Asset
quality remains excellent, with 95% of the company's assets rated AA,
AAA or guaranteed by an agency of the federal government.
At the end of the fourth quarter, the company's book value was
$11.40 per common share, which excludes $0.48 per share of unrealized
gains on hedging instruments used to fund the company's hybrid ARM
portfolio.
The company's ARM portfolio yield increased to an average of
6.26% for the fourth quarter from 5.97% in the third quarter, in
response to rising market rates and a continued decline in prepayment
rates. The portfolio prepayment rate averaged a 16% Constant
Prepayment Rate (CPR) for the fourth quarter, down from 22% CPR in the
previous quarter.
The company's cost of funds increased during the quarter, to an
average of 5.95% from 5.61% in the previous quarter, mostly due to
higher financing rates over year-end.
As a result, the company's portfolio margin declined slightly
from 0.82% in the third quarter to 0.81% in the fourth quarter, and
net interest income declined to $9.0 million in the fourth quarter
from $9.3 million in the previous quarter. |
