Harbourton Capital Group, Inc. Reports Second Quarter 2006 Results
24 August 2006 - 10:30PM
Business Wire
Harbourton Capital Group, Inc. ("Harbourton" or the "Company")
(OTC:HBTC) today reported a loss of $1.8 million, or $0.36 per
common share, for the three months ended June 30, 2006, compared
with net income after tax of $59,459 or $0.01 per common share, for
the comparable period in 2005. The loss for the six months ended
June 30, 2006 was $3.7 million or $0.74 per common share, compared
with net income of $578,900 or $0.11 per common share for the
comparable 2005 period. There were 5,061,375 shares of common stock
outstanding during the six months ended June 30, 2006 and December
31, 2005. Total shareholders' equity at June 30, 2006 was $21.2
million, with a corresponding book value of $4.19 per share, as
compared with total shareholders' equity at December 31, 2005 of
$25.0 million, or $4.93 per share. The Company's results for the
quarter were negatively impacted by Harbourton Mortgage Investment
Corporation ("HMIC"), the Company's wholesale mortgage subsidiary.
For the quarter ended June 30, 2006, HMIC originated $176.1 million
of loans, a 37.5% increase as compared with fundings for the linked
quarter of $128.0 million. Sales of loans during the quarter ended
June 30, 2006 were $160.2 million, with an average gain on sale of
2.11%, as compared with sales in the linked quarter of $148.8
million, and a comparable gain on sale of 1.84%. J. Kenneth
McLendon, President and CEO stated, "The quarterly operating
results for the Company were again disappointing. However,
management believes the new sales team is making a positive impact
as noted by the 37% increase in loans funded in the quarter, even
in light of the softening real estate market." He noted, "The
Company's acquisition of Molton Allen Williams Mortgage Company,
LLC is on schedule for a late summer closing. Although there will
be a short-term increase in operating expenses to accomplish
merging the operations of both companies, we anticipate a
meaningful decrease in the cost to originate loans as a benefit of
the combination." Harbourton is a holding company comprising two
financial businesses, mezzanine lending conducted by the HFC
subsidiary and mortgage banking by HMIC. HFC's primary business is
originating loans to builders and developers of residential
projects. The loans include financing for acquisition, development
and construction of residential single-family homes, townhouses,
and condominiums. HMIC's primary business consists of originating
and purchasing both conforming and non-conforming mortgage loans
and the subsequent sale of these loans servicing released to
investors in the secondary market. This press release may contain
various "forward-looking statements," within the meaning of Section
21E of the Securities Exchange Act of 1934, as amended, that
represent the Company's expectations or beliefs concerning future
events. Such forward-looking statements are about matters that are
inherently subject to risks and uncertainties. Factors that could
cause actual results or performance to differ from the expectations
expressed or implied in such forward-looking statements include
changes in the timing and amount of earning assets which may be
originated by the Company, changes in revenue and expense trends
(including trends affecting foreclosures and charge-offs) of the
Company, changes in the Company's markets, changes in the economy
(particularly in the markets served by the Company) and changes in
interest rates. -0- *T Selected Financial Data: (000's except per
share data) June 30, December 31, June 30, Assets: 2006 2005 2005
------------ ------------ ------------ Cash & Cash Equivalents
$1,879.6 $2,043.2 $2,854.4 Loans Receivable, Net 7,865.6 8,574.6
5,454.8 Loans Held for Sale, Net 76,421.0 81,378.0 74,342.5
Investment in Real Estate, Net 7,000.4 12,952.3 15,964.0 Other
Assets 8,425.1 7,857.0 9,099.7 ------------ ------------
------------ Total Assets: $101,591.7 $112,805.0 $107,715.4
============ ============ ============ Liabilities: Notes Payable
4,054.1 7,073.3 7,180.8 Warehouse Line Payable 74,195.8 78,081.2
70,442.3 Accounts Payable 2,133.4 2,697.6 2,426.2 ------------
------------ ------------ Total Liabilities/Other Liabilities
80,383.3 87,852.2 80,049.4 Shareholders' Equity 21,208.4 24,952.8
27,666.1 ------------ ------------ ------------ Total Liabilities
& Shareholders' Equity $101,591.7 $112,805.0 $107,715.4
============ ============ ============ Book Value Per Share $4.19
$4.93 $5.47 Common Shares Outstanding 5,061.4 5,061.4 5,061.4 Three
Months Ended Six Months Ended June 30, June 30,
--------------------- --------------------- Revenues: 2006 2005
2006 2005 ---------- ---------- ---------- ---------- Interest
income $1,826.7 $1,763.1 $3,576.1 $3,570.2 Interest expense
(1,231.8) (1,069.2) (2,356.5) (1,929.8) ---------- ----------
---------- ---------- Net interest income before provision 594.8
693.9 1,219.6 1,640.3 Provision for loss (284.6) (251.3) (521.2)
(625.1) ---------- ---------- ---------- ---------- Net interest
income after provision 310.2 442.6 698.6 1,015.2 Fees and other
income 2,004.3 3,718.3 3,608.2 7,553.6 ---------- ----------
---------- ---------- Total net revenues $2,314.6 $4,160.8 $4,306.6
$8,568.8 Expenses: Compensation and benefits 2,891.0 2,822.0
5,597.1 5,579.2 General & administrative 844.0 865.7 1,617.5
1,419.3 Loan Expenses 131.3 67.7 317.0 147.6 Professional fees
113.8 170.4 254.2 250.7 Depreciation 159.0 134.8 318.7 248.6
---------- ---------- ---------- ---------- Total Expenses 4,139.1
4,060.6 8,104.5 7,645.3 ---------- ---------- ---------- ----------
Income (loss) before income tax (1,824.5) 100.2 (3,797.9) 923.5
Income tax (credit) 0 40.7 (51.1) 344.6 ---------- ----------
---------- ---------- Net income (loss) ($1,824.5) $59.5 ($3,746.7)
$578.9 ========== ========== ========== ========== Income (loss)
per common share ($0.36) $0.01 ($0.74) $0.11 Weighted average
shares outstanding 5,061.4 5,061.4 5,061.4 5,061.4 *T
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