Here it is from the PR Newswire:
Record Loan Production in Core Retail and Operating Units
LOS ANGELES, Oct. 29 /PRNewswire/ -- Aames Financial Corporation
(NYSE: AAM) today reported record loan production in its core retail and One
Stop Mortgage operating units. In addition, Aames' loan servicing unit
generated record revenues during the fiscal quarter.
Revenue for the quarter was $77.9 million, up from $75.6 million from last
year's first fiscal quarter. Net income for the quarter was $13.1 million,
compared to a net loss of $4.6 for the same period a year ago. Excluding
nonrecurring charges net of taxes of $18.6 million in the prior year's first
quarter, net income amounted to $14.0 million. On a fully diluted per share
basis, net income per share for the quarter totaled $0.40, compared with $0.46
(excluding nonrecurring charges and adjusted for the three-for-two stock split
in the form of a stock dividend effected in February 1997), in the prior-year
period.
Neil B. Kornswiet, Aames president, said, "We are continuing to set new
records in our core loan production units. Total loan production for the
quarter increased 4.4 percent to $523 million, compared to $501 million for
the comparable quarter last year, despite an expected reduction in
correspondent volume. Aames' retail originations for the quarter were $133
million, compared to $101 million for the same quarter last year, an increase
of 32 percent, and origination volume for the One Stop broker network reached
$262 million, compared to $141 million in 1996, an increase of 86 percent.
Kornswiet added, "We are pleased to note that approximately 80 percent of
our loan production volume is now being generated by our core retail and One
Stop broker operating units. Continued geographic expansion in the retail and
broker channels is expected to enhance growth opportunities for the Company."
Kornswiet said that as expected, the previously announced pricing changes
made in the last fiscal year resulted in no large bulk purchases in the
correspondent unit this quarter. Notwithstanding these changes, loan
production for correspondent was $128 million for the quarter, compared to
$259 million for the comparable quarter in 1996.
Cary H. Thompson, Aames' chief executive officer, said, "We view the loan
servicing unit as a significant component of our core business due to its
positive cash flow contribution and its stable revenue stream. The Company
recorded record loan service revenues of $9.8 million in the quarter, an
increase of 109 percent from the $4.7 million in the comparable quarter in
1996. We are continuing to focus our efforts on increasing the loan servicing
portfolio and achieving increasing economies of scale."
Thompson added, "At September 30, 1997, Aames' loan servicing portfolio
increased to $3.4 billion, up 89 percent from $1.8 billion for the same period
last year. Consistent with the Company's strategic plan, the Company's in-
house serviced portfolio increased by both the transfer of loans which had
been subserviced by a third party, and the servicing of
the majority of new production during the period. Future plans call for the
in-house transfer of substantially all of the Company's servicing portfolio by
the end of fiscal 1998."
The carryover of loans held for sale at September 30, 1997 increased 43
percent to $204 million from $143 million at September 30, 1996. The Company
securitized $504 million during the quarter ended September 30, 1997. The
decline from the $243 million carryover at fiscal year end 1997 resulted from
whole loan sales which totaled $39 million during the quarter ended September
30, 1997.
The Company also announced that its board of directors has declared a
regular quarterly cash dividend of $0.033 per share, payable on November 21,
1997, to stockholders of record as of November 10, 1997.
Aames Financial Corporation is a leading home equity lender, and at
September 30, 1997, operated 60 retail offices serving 26 states, including
the District of Columbia. Its wholly-owned subsidiary, One Stop Mortgage,
Inc. operates 40 branches serving 35 states, including the District of
Columbia, at that date.
From time to time the company may publish forward-looking statements
relating to such matters as anticipated financial performance, business
prospects and similar matters. The Private Securities Litigation Reform Act
of 1995 provides a safe harbor for forward-looking statements. In order to
comply with the terms of the safe harbor, the company notes that a variety of
factors could cause the company's actual results and experience to differ
materially from the anticipated results or other expectations expressed in the
company's forward-looking statements. The risks and uncertainties that may
affect the operations, performance and results of the company's business
include the following: negative cash flows and capital needs, delinquencies,
risks of contracted servicing, dependence on funding sources, capitalized
excess servicing receivables, recent addition of wholesale correspondent
program, recent acquisition of One Stop, concentration of wholesale
correspondent program, competition, concentration of operations, timing of
loan sales, economic conditions, contingent risks and government regulation.
For a more complete discussion of these risks and uncertainties, see "Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operation -- Risk Factors" in the company's form 10-K for the fiscal year
ended June 30, 1997.
AAMES FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended
September 30,
1996 1997
Revenue:
Gain on sale of loans $56,199,000 $44,721,000
Net unrealized gain on valuation
of interest-only strips -- 5,029,000
Commissions 7,747,000 5,855,000
Loan service 4,660,000 9,782,000
Fees and other 7,035,000 12,525,000
Total revenue 75,641,000 77,912,000
Expenses:
Compensation and related expenses 19,324,000 21,759,000
Sales and advertising costs 7,474,000 5,797,000
General and administrative expenses 7,562,000 8,085,000
Interest expense 7,444,000 10,098,000
Provision for loan losses 9,782,000 8,570,000
Nonrecurring charges 28,108,000 --
Total expenses 79,694,000 54,309,000
Income before income taxes (4,053,000) 23,603,000
Provision for income taxes 571,000 10,522,000
Net income ($4,624,000) $13,081,000
Net income per share
Primary ($0.17) $0.45
Fully diluted ($0.11) $0.40
Dividends $0.03 $0.03
Weighted average number
of shares outstanding
Primary 26,229,000 29,226,000
Fully Diluted 32,389,500 35,333,000
AAMES FINANCIAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
June 30, September 30,
1997 1997
ASSETS
Cash and cash equivalents $26,902,000 $6,650,000
Loans held for sale, at
lower of cost or market 242,987,000 203,716,000
Accounts receivable 59,180,000 61,486,000
Interest-only strips, at
fair market value 270,422,000 294,115,000
Mortgage servicing rights 21,641,000 24,588,000
Residual assets 112,827,000 131,324,000
Equipment and improvements, net 12,685,000 12,767,000
Prepaid and other 14,949,000 16,151,000
Total assets $761,593,000 $750,797,000
LIABILITIES AND STOCKHOLDERS' EQUITY
Borrowings $286,990,000 $286,990,000
Revolving warehouse facilities 137,500,000 104,500,000
Accounts payable and accrued expenses29,297,000 29,931,000
Income taxes payable 39,452,000 48,795,000
Total liabilities 493,239,000 470,216,000
Stockholders' equity:
Preferred Stock, par value $.001 per
share, 1,000,000 shares authorized;
none outstanding
Common Stock, par value $.001 per share
50,000,000 shares authorized;
27,758,800 and 27,773,600 shares
outstanding 28,000 28,000
Additional paid-in capital 209,358,000 209,420,000
Retained earnings 58,968,000 71,133,000
Total stockholders' equity 268,354,000 280,581,000
Total liabilities and
stockholders' equity $761,593,000 $750,797,000
AAMES FINANCIAL CORPORATION
QUARTERLY FINANCIAL STATISTICS
QTR ENDED QTR ENDED,
Sep-96 Sep-97
ORIGINATION VOLUME:
CORRESPONDENT 259,013,000 127,759,000
BROKER NETWORK 140,916,000 261,834,000
RETAIL 101,390,000 133,546,000
TOTAL 501,319,000 523,139,000
RETAIL WTD AVG COMM RATE 5.79% 4.57%
SERVICING PORTFOLIO: 1,773,000,000 3,402,000,000
LOAN SALES:
WHOLE LOANS SOLD 7,532,000 39,033,000
SECURITIZATIONS 527,000,000 504,136,000
SERVICING SPREAD 4.39% 4.18%
COMPONENTS OF REVENUE:
GAIN ON SALE OF LOANS $56,199,000 $44,721,000
NET UNREALIZED GAIN (LOSS) ON VALUATION
OF INTEREST ONLY STRIPS -- 5,029,000
COMMISSIONS:
RETAIL 5,355,000 4,954,000
BROKER NETWORK 1,898,000 538,000
OTHER 494,000 363,000
LOAN SERVICE:
SERVICING SPREAD 3,007,000 6,170,000
PREPAYMENT FEES 1,034,000 2,355,000
LATE CHGS & OTHER SERV FEES 619,000 1,257,000
FEES & OTHER:
CLOSING 847,000 587,000
APPRAISAL 470,000 501,000
UNDERWRITING 615,000 246,000
INTEREST INCOME 4,893,000 11,031,000
OTHER 210,000 160,000
TOTAL REVENUE $75,641,000 $77,912,000
SOURCE Aames Financial Corporation
CONTACT: David Sklar of Aames Financial Corporation,
213-210-5311; or Jeffrey Lloyd or Steven Hawkins, both of Sitrick
And Company, 310-788-2850 |
