Second Consecutive Quarterly Earnings Reported by Westmark; Company Earns 10 Cents Per Share from Continuing Operations
November 17, 1997 7:02 AM EST DELRAY BEACH, Fla., Nov. 17 /PRNewswire/ -- Westmark Group Holdings, Inc. (Nasdaq: WGHI) today reported its second consecutive quarterly earnings and operating results for the third quarter ended September 30, 1997.
Westmark booked net income of $12,664 or 1 cent per share, from consolidated operations, a turnaround from a loss of $580,793, or minus 79 cents per share, reported in the third quarter last year.
More pertinently, Westmark reported income from continuing operations of $205,047, or 10 cents per share, which compares favorably to a loss of $607,544, or minus 83 cents per share, for the corresponding period of 1996. Omitting the impact of Westmark's recently discontinued air conditioning
technology subsidiary, income from continuing operations for the year-to-date was $288,159, which represented a noteworthy $1.7 million swing from a loss from operations of $1.4 million in the first nine months of last year.
Historic Results
This marks the second consecutive quarter in which the Company has reported a profit-and only the second time in its history that it has generated positive earnings-as Westmark reported its first-ever net income in the second quarter of this year.
According to Mark D. Schaftlein, President & Chief Executive Officer of Westmark, "Our focus on core mortgage operations, coupled with increased loan production and enhanced efficiencies, has resulted in the improved bottom line these past two quarters."
Improved Operating Results
Indeed, this profitability reflects improved operations. With three months remaining in this year, Westmark has already broken every significant company record for operating results. In only nine months of 1997, Westmark has more than doubled total mortgage loan production and loan sales compared to the full year 1996, heretofore the best year in Company history. Meanwhile, Westmark has more than tripled revenues in the quarter compared to the same period last year.
Loan sales to investors equaled $31.1 million, up 180% from $11.1 million in the same period of 1996. Year-to-date sales were $79.8 million, a 183% rise over $28.2 million for the first nine months of last year.
As a result of these increased sales, revenues derived primarily from the sale of these loans were $2.33 million-more than triple the $726,745 reported for the third quarter of 1996. Year-to-date revenues were $5.33 million more than double the $2.04 million generated in the first nine months of 1996.
$200 Million Run Rates
For the quarter, Westmark produced more than $33.57 million in sub-prime loans, a 182% increase from $11.9 million in loans funded in the third quarter of last year.
For the year-to-date, $82.9 million in loans were funded, a 228% increase over the $23.5 million for the first nine months of last year, and more than doubled the total loans produced in all 12 months of 1996.
In addition, having recently reported a record $16.8 million in loan production for the month of October, this puts Westmark at a current annualized run-rate in excess of $200 million in loan production.
Schaftlein said these operating results reflect Westmark's successful transition from conventional mortgage lending to the more lucrative business of providing credit to consumers who might not qualify for conforming loans under traditional banking guidelines due to their sub-prime-rated credit histories.
Prior to its reorganization, Westmark had produced zero ($0) in sub-prime mortgage loans in 1994. However, since that time, growth has been rapid, as the Company produced $21 million in loans in 1995, $36 million in 1996, and the Company recently reached the $100 million level in October of 1997.
Approximately 65% of those loans are made to borrowers with "A-minus" rated credit histories, another 30% go to "B"; and & "C" credits, and the remaining 5% are made to borrowers with a "D" credit rating.
All loans are sold by Westmark on cash basis, and revenues are recognized only when cash is received.
Westmark Group Holdings, Inc. is a financial services holding company that is primarily engaged, through its wholly owned subsidiary, Westmark Mortgage Corporation, in the origination and/or purchase of highly profitable, non-conventional, sub-prime credit-rated residential mortgage loans secured by a first or second lien on the borrower's primary place of residence. These loans are then re-sold in bulk pools by Westmark on a service-released basis to institutional investors in the secondary market.
Stock of Westmark is publicly traded on The Nasdaq Stock Market under the symbol "WGHI." |
