THORNBURG MORTGAGE REPORTS FIRST QUARTER E.P.S. OF $0.27; MAINTAINS DIVIDEND
SANTA FE, N.M.--(BUSINESS WIRE)--April 17, 2000--
-- Q1 EPS of $0.27 vs. year-ago $0.14 - a 93% increase
-- Q1 dividend maintained at $0.23 per share
-- Retail loan origination objective on schedule
-- Gradually rising interest rates helping earnings
-- Asset quality remains excellent - 95% AA rated or better
Thornburg Mortgage, Inc. (NYSE: TMA) today reported a 93 percent
increase in net income for the quarter ended March 31, 2000 of
$7,513,000, or $0.27 per common share. These results compare to net
income of $4,599,000, or $0.14 per common share for the quarter ended
March 31, 1999, and $6,797,000, or $0.24 per share for the quarter
ended December 31, 1999. The company had 21,490,000 average common
shares outstanding at March 31, 2000 and at March 31, 1999. Taxable
income for the quarter totaled $0.29 per common share as compared to
$0.16 per common share in the same quarter a year ago.
Simultaneous with the earnings announcement, the company's board
of directors declared a first quarter dividend of $0.23 per common
share, payable on May 17, 2000 to shareholders of record on May 4,
2000.
Larry A. Goldstone, president and chief operating officer of the
company, commented, "We attribute the continued earnings growth to our
focus on high quality adjustable-rate mortgage ("ARM") securities and
loans and the benefit such a portfolio provides in a gradually rising
interest rate environment. However, the board of directors decided to
maintain the dividend amount at the current level because of
short-term uncertainty regarding the potential magnitude of future
Federal Reserve policy."
Mr. Goldstone reported that the company's plan to market
high-quality ARM loans directly to consumers nationwide is on
schedule. During the quarter, the company filed its application with
the Office of Thrift Supervision seeking approval for its acquisition
of First Arizona Savings. If approved, the acquisition would provide
the lending license required to originate high-quality ARM loans
nationwide at competitive rates by telephone and the Internet. Also
during the quarter, the company reached an agreement with a
well-regarded, third party provider of mortgage loan servicing to
service the loans originated or acquired through its expanding
correspondent lending business. "As we move further along in our plan
to develop a fully integrated loan origination capability, our
strategy is to avoid fixed costs by outsourcing loan processing and
servicing to variable cost providers," Mr. Goldstone explained.
Mr. Goldstone concluded, "The company's earnings quality for the
quarter was excellent. Operating results continued to show improvement
compared to the prior quarter, and marked improvement over the same
quarter in 1999." Net interest income improved to $9,317,000 in the
first quarter of 2000 compared to $9,045,000 in the December 1999
quarter. The company's ARM portfolio yield continued to increase, to
an average of 6.50% for the first quarter of 2000 from 6.26% in the
fourth quarter of 1999, in response to rising market rates and a
continued decline in prepayment rates. The portfolio prepayment rate
averaged 15% Constant Prepayment Rate (CPR) for the first quarter,
down slightly from 16% CPR in the previous quarter, and down
significantly from 29% CPR in the first quarter of 1999.
The company's cost of funds increased during the quarter, to an
average of 6.20% from 5.95% in the previous quarter, mostly due to
higher financing rates as interest rates rise.
Despite the increase in funding costs, the company's portfolio
margin increased slightly to 0.83% in the first quarter from 0.81% in
the fourth quarter.
Total assets for the quarter ended March 31, 2000 increased to
$4.5 billion from $4.4 billion at December 31, 1999. During the
quarter, the company acquired approximately $405 million of new
assets, of which $132 million were whole loan assets that were
securitized for the portfolio. 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 first quarter, the
company's book value was $10.60 per common share, reflecting an
increase in the unrealized market value adjustment on the portfolio
due to continued rising interest rates.
Thornburg Mortgage, Inc. is a mortgage portfolio lending
institution that invests in a portfolio of highly-rated ARM securities
and high-quality ARM loans. Like most lending institutions, the
company generates income both from its direct investment in these
assets and the difference between the yield on its assets and the cost
of its borrowings. Thornburg Mortgage's objective is to grow earnings
per share by expanding its presence in the high credit quality ARM
securities and loan markets. As a real estate investment trust, the
company distributes the majority of its income to shareholders in the
form of dividends. The company had 21,490,000 shares outstanding as of
March 31, 2000. |
