- Earns adjusted net income of $10.6 million or $0.53 per diluted
share NEW YORK, Aug. 10 /PRNewswire-FirstCall/ -- MortgageIT
Holdings, Inc. (NYSE:MHL), a residential mortgage company organized
as a real estate investment trust ("REIT"), today announced
financial results for the second quarter ended June 30, 2005. The
Company reported GAAP net income for the second quarter of 2005 of
$8.4 million, or $0.42 per diluted share. Adjusted net income for
the second quarter of 2005 was $10.6 million, or $0.53 per diluted
share. Net income and adjusted net income per diluted share are
based upon weighted average outstanding shares of 19.9 million.
Loan fundings were a Company record $6.4 billion for the quarter,
up 89% from the year ago period and a 47% increase over the first
quarter of 2005. Purchase money fundings were $3.6 billion in the
quarter, also a Company record, up 137% from the year ago period.
Doug Naidus, Chairman and Chief Executive Officer, commented, 'We
recently completed a well received secondary offering that raised
approximately $150 million of proceeds for the Company. We intend
to use these proceeds to grow our 100% self-originated portfolio
through the end of the year. Our mortgage banking business
continues to perform extremely well. We exceeded the high end of
our second quarter loan production guidance by more than 20%, while
also posting record purchase money volume during the quarter. Our
loan production, up 89% year over year and 47% sequentially quarter
over quarter, outpaced industry growth of (3%) and 30%,
respectively. Looking ahead, we are encouraged by the continuation
of strong trends in loan originations and we expect total loan
fundings for the third quarter to again approximately double when
compared to the year ago period." Financial and Operating
Highlights: Loan Funding For the three months ended For the six
months ended Information June 30, June 30, 2005 2004 2005 2004 Loan
Fundings $6.4 billion $3.4 billion $10.7 billion $5.6 billion %
Refinance 44% 55% 46% 58% % Purchase Money 56% 45% 54% 42% % ARM
loans 54% 39% 53% 35% Loans Sold and Brokered to Third Parties $4.7
billion $2.9 billion $7.9 billion $4.8 billion * Second quarter
loan funding volume was $6.4 billion. This represents an increase
of approximately 89% from the year ago period. Included in the
second quarter volume was $3.6 billion in purchase (non-refinance)
mortgage funding volume representing an increase of approximately
137% from the year ago period. * Second quarter sub-prime volume
was $1.0 billion, at the high end of the Company's prior guidance
of $750 million to $1.0 billion. The Company's recently formed
wholesale sub-prime division had 438 employees located in seven
branches nationwide as of June 30, 2005. * During the second
quarter of 2005, the Company transferred $899 million of
self-originated ARM loans to its investment portfolio. As of June
30, 2005, the Company had an investment portfolio of $3.8 billion,
of which $3.6 billion was securitized. The portfolio had an average
balance of $3.4 billion in the second quarter. * During the second
quarter of 2005, the Company sold $4.1 billion of whole loans to
third parties and brokered $462 million. The Company's third party
gain on sale margin was 114 basis points. Adjusted Financial
Measures Adjusted net income and adjusted earnings per share
(diluted) are non-GAAP financial measures which are reported by the
Company in addition to net income and earnings per share (diluted)
as prepared in accordance with GAAP. As indicated in its first
quarter 2005 release, the Company did not qualify under the
Statement of Financial Accounting Standards No. 133, "Accounting
for Derivative Instruments and Hedging Activities" ("FAS 133") with
respect to certain hedging activities. The non-GAAP financial
measures reported by the Company are presented as if the Company
qualified under FAS 133 in all periods. If the Company qualified
under FAS 133, gains and losses on derivative hedges would have
been deferred and amortized over the hedge period. Since the
Company did not qualify under FAS 133, both realized and unrealized
gains and losses were recognized in GAAP earnings in prior periods.
Management believes that by adjusting net income in this manner,
the non-GAAP measures provide a useful gauge of the Company's
operating performance because adjusted net income highlights that
portion of the Company's reported earnings that is more likely to
be ongoing in nature. Set forth below is information with respect
to our financial results for the three- and six-month periods ended
June 30, 2005, as well as a reconciliation between the non-GAAP and
comparable GAAP financial measures: Segment Financial Results for
the Second Quarter of 2005 Mortgage ($ thousands - except EPS)
Banking Portfolio Consolidated Amount EPS Amount EPS Amount EPS
After tax GAAP earnings prior to elimination 7,667 0.39 5,113 0.25
12,780 0.64 Elimination (1) (5,712) (0.29) 1,352 0.07 (4,360)
(0.22) After tax GAAP earnings net of elimination 1,955 0.10 6,465
0.32 8,420 0.42 Adjustment for after tax impact relating to FAS133
(2) 733 0.04 1,436 0.07 2,169 0.11 Adjusted Earnings 2,688 0.14
7,901 0.39 10,589 0.53 Segment Financial Results for the Six Months
ended June 30 of 2005 Mortgage ($ thousands - except EPS) Banking
Portfolio Consolidated Amount EPS Amount EPS Amount EPS After tax
GAAP earnings prior to elimination 11,617 0.58 20,841 1.05 32,458
1.63 Elimination (1) (10,588) (0.53) 2,278 0.11 (8,310) (0.42)
After tax GAAP earnings net of elimination 1,029 0.05 23,119 1.16
24,148 1.21 Adjustment for after tax impact relating to FAS133 (2)
(629) (0.03) (6,651) (0.33) (7,280) (0.36) Adjusted Earnings 400
0.02 16,468 0.83 16,868 0.85 (1) Eliminates the economic impact of
inter-company loan sales from the mortgage bank to the portfolio.
(2) Adjusts previous gains and losses on derivative hedges reported
by the Company (as a result of not qualifying under FAS 133) and
the corresponding amortization associated with those gains and
losses. Outlook and Guidance * The Company expects to increase the
size of its investment portfolio to $5.0 billion by the end of the
third quarter. The Company intends to grow the portfolio to $6.0 to
$6.3 billion by the end of the year, fully utilizing the net
proceeds from its recent common stock offering. * The Company
expects to pay a third quarter dividend of $0.48 per share. * The
Company expects to report loan funding volume of approximately $7.0
to $7.5 billion in the third quarter of 2005, which would represent
an increase of 125% to 141% over the third quarter of 2004. * The
Company expects to report sub-prime loan funding volume of $1.1
billion to $1.3 billion in the third quarter. Conference Call
Information MortgageIT Holdings, Inc. will hold an investor
conference call to discuss its second quarter financial performance
at 10:00 a.m. Eastern Time, Thursday, August 11, 2005. Interested
parties may listen to the call by dialing 800-370-0898 (U.S.) or
973-935-2101 (International), or by visiting the MortgageIT
Holdings corporate website, http://www.mortgageitholdings.com/, to
listen to a live conference call webcast. A replay of the
conference call will be available through Thursday, August 18,
2005, at midnight ET. The replay can be accessed by dialing
877-519-4471 (U.S.) or 973-341-3080 (International). The pass code
for the replay is 6258265. An archived replay of the webcast will
also be available on the Company's corporate website. About
MortgageIT Holdings, Inc. MortgageIT Holdings, Inc. (NYSE:MHL) is a
self-administered mortgage real estate investment trust ("REIT")
focused on the residential lending market. The Company
self-originates its investment portfolio of high quality adjustable
rate mortgage ("ARM") loans through MortgageIT, Inc., its wholly
owned residential mortgage banking subsidiary. MortgageIT, Inc. is
a full- service residential mortgage banking company that is
licensed to originate loans throughout the United States.
MortgageIT Holdings is organized and conducts its operations to
qualify as a REIT for federal income tax purposes. MortgageIT is
organized and operates as MortgageIT Holdings' taxable REIT
subsidiary. For more information, please visit
http://www.mortgageitholdings.com/. Certain items in this press
release may constitute forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995,
including statements relating to our ability to fund a fully-
leveraged, self- originated loan portfolio, our anticipated loan
funding volume and our ability to pay dividends. These statements
are based on management's current expectations and beliefs and are
subject to a number of trends and uncertainties that could cause
actual results to differ materially from those described in the
forward-looking statements. MortgageIT Holdings can give no
assurance that its expectations will be attained. Factors that
could cause actual results to differ materially from MortgageIT
Holdings' expectations include, but are not limited to,
MortgageIT's continued ability to originate new loans, including
loans that we deem suitable for our securitization portfolio;
changes in the capital markets, including changes in interest rates
and/or credit spreads; and other risks detailed in MortgageIT
Holdings' Annual Report on Form 10-K that was filed with the
Securities and Exchange Commission ("SEC") on March 31, 2005 and
from time to time in MortgageIT Holdings' other SEC reports. Such
forward-looking statements speak only as of the date of this press
release. MortgageIT Holdings expressly disclaims any obligation to
release publicly any updates or revisions to any forward-looking
statements contained herein to reflect any change in the Company's
expectations with regard thereto or change in events, conditions or
circumstances on which any statement is based. MortgageIT Holdings,
Inc. and Subsidiaries CONSOLIDATED BALANCE SHEETS (Dollars in
thousands) June 30, December 31, 2005 2004 (Unaudited) ASSETS Cash
and cash equivalents $27,153 $70,224 Restricted cash 2,336 1,679
Marketable securities held to maturity 3,686 7,546 Portfolio ARM
Loans ARM loans collateralizing debt obligations, net 3,634,194
1,432,692 ARM loans held for securitization, net 171,409 1,166,961
Total Portfolio ARM Loans 3,805,603 2,599,653 Mortgage loans held
for sale 2,385,430 784,592 Hedging instruments 35,186 19,526 Due
from underwriters 126,169 -- Accounts receivable, net of allowance
51,322 28,731 Prepaids and other assets 8,765 7,803 Goodwill 11,639
11,639 Property and equipment, net 6,303 5,567 Total assets
$6,463,592 $3,536,960 LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities: Collateralized debt obligations, net $3,451,002
$1,328,096 Warehouse lines payable 2,428,044 1,869,385 Repurchase
agreements 82,149 67,674 Hedging instruments 2,837 1,145 Trust
preferred securities, net 77,324 -- Notes payable and other debt
15,000 15,000 Accounts payable, accrued expenses and other
liabilities 93,361 63,993 Total liabilities 6,149,717 3,345,293
STOCKHOLDERS' EQUITY: Common stock, $.01 par value: 125,000,000
shares authorized; 27,300,680 and 19,405,706 issued and outstanding
273 194 Additional paid-in capital 366,406 238,405 Unearned
compensation -- restricted stock (7,213) (6,196) Accumulated other
comprehensive (loss) (10,760) (387) Accumulated deficit (34,831)
(40,349) Total stockholders' equity 313,875 191,667 Total
liabilities and stockholders' equity $6,463,592 $3,536,960
MortgageIT Holdings, Inc. and Subsidiaries CONSOLIDATED STATEMENTS
OF OPERATIONS (Unaudited) (Dollars and shares in thousands, except
per share data) Three months ended Six months ended June 30, June
30, 2005 2004 2005 2004 (As restated) (As restated) Revenues: Gain
on sale of mortgage loans $46,985 $20,875 $79,092 $35,229 Brokerage
revenues 6,275 11,844 12,673 20,589 Interest income 67,900 6,291
121,652 11,608 Interest expense (49,255) (2,455) (80,741) (5,001)
Net interest income 18,645 3,836 40,911 6,607 Realized and
unrealized gain on hedging instruments 820 -- 9,742 -- Other 243 17
506 24 Total revenues 72,968 36,572 142,924 62,449 Operating
expenses: Compensation and employee benefits 32,225 19,899 60,014
36,430 Processing expenses 13,687 6,341 24,050 9,787 General and
administrative expenses 6,187 2,486 13,005 4,803 Rent 2,282 1,858
4,557 3,672 Marketing, loan acquisition and business development
1,025 1,175 1,920 2,225 Professional fees 2,517 472 4,827 1,059
Depreciation and amortization 841 644 1,637 1,270 Total operating
expenses 58,764 32,875 110,010 59,246 Income before income taxes
14,204 3,697 32,914 3,203 Income taxes 5,784 1,669 8,766 1,446 Net
income 8,420 2,028 24,148 1,757 Dividends on convertible redeemable
preferred stock -- 1,699 -- 3,360 Net income (loss) attributable to
common stockholders $8,420 $329 $24,148 $(1,603) Per share data:
Basic $0.43 $0.64 $1.24 $(3.09) Diluted $0.42 $0.41 $1.21 $(3.09)
Weighted average number of shares -- basic (1) 19,486 518 19,446
518 Weighted average number of shares -- diluted (1) 19,905 4,917
19,900 518 (1) Reflects, on a retroactive basis, for all periods
presented, the exchange of approximately 12.80 shares of
MortgageIT, Inc. common stock for each share of MortgageIT
Holdings, Inc. common stock and the retention and retirement of
common shares pursuant to the reorganization of MortgageIT, Inc. on
August 4, 2004. DATASOURCE: MortgageIT Holdings, Inc. CONTACT:
Investors - Sean McGrath of MortgageIT Holdings, Inc.,
+1-212-651-4637; Media - Ted Stacer of MortgageIT Holdings, Inc.,
+1-212-651-7653; Joe LoBello of Brainerd Communicators, Inc. for
MortgageIT Holdings, Inc., +1-212-986-6667 Web site:
http://www.mortgageitholdings.com/
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