PORTLAND, Ore.--(BUSINESS WIRE)--March 27, 2002--Fog Cutter Capital Group Inc. (Nasdaq:FCCG), an opportunistic investment group specializing in mortgage and real estate related assets, reports a net loss of $17.9 million or $1.71 per share for the year ended December 31, 2001.
The loss was primarily the result of a charge to earnings of approximately $11.4 million, or $1.09 per share, for market valuations and impairments, relating to the Company's mortgage-backed securities portfolio. The Company also recorded a charge to earnings of $2.0 million, or $0.19 per share, as a provision for litigation claims.
The Company is continuing to implement its opportunistic strategy by disposing of its legacy assets in order to create working capital for new investments and to provide distributions to shareholders. As a result of these efforts, the Company has significantly reduced its short-term, mark-to-market-based financing for mortgage-backed securities and believes that the value of its mortgage-backed securities portfolio has stabilized. Barring unforeseen circumstances, the Company does not expect to continue to incur the same high level of losses experienced in the last three years on these assets and believes that it is in a position to begin growing the business again.
Total assets decreased from approximately $150.3 million at December 31, 2000 to approximately $82.1 million at December 31, 2001. During 2001, total liabilities decreased from approximately $94.7 million to approximately $43.3 million. As of December 31, 2001, stockholders' equity totaled $38.8 million or $3.69 per share.
The balance of mortgage-backed securities available for sale decreased from $74.7 million at December 31, 2000 to $51.8 million at December 31, 2001. The decrease in the balance of mortgage-backed securities was primarily due to the restructuring and subsequent sale of $6.6 million of securities, the sale of other securities with a carrying value of $6.9 million, the receipt of principal payments on the securities of $2.1 million and a reduction in market value of $7.3 million.
Borrowings decreased by approximately $51.9 million during the year ended December 31, 2001. These repayments were funded primarily with proceeds from the sale of real estate and mortgage-backed securities, as well as from principal repayments of the Company's loan portfolio.
During 2001, Fog Cutter made total payments to stockholders of $0.6128 per share, including $0.2218 per share paid to stockholders of record as of September 30, 1998, a rights redemption payment of $0.001 per share to stockholders of record as of October 10, 2001 and three payments of $0.13 per share each to stockholders at various record dates in 2001. The Company has determined that all of the distributions to shareholders made during 2001 should be classified as "return of capital" distributions for tax purposes.
The Company declared and paid an additional $0.13 quarterly dividend in March 2002. |
