|
Special Reports
Return of Subprime
Nonconforming Trio Profitable in 3Q '03
NEW YORK -- The third quarter was very good for three of the nation's significant
players in the nonconforming mortgage business. New Century Financial Corp., Irvine, Calif., reported record net
earnings of $69.4 million or $1.75 per share, compared with $51.5 million or $1.30 per share for the third quarter
one year ago.
Delta Financial Corp., Woodbury, N.Y., had net income of $41.6 million or $2.24
per share, aided by a $30.5 million or $1.64 per share income tax benefit. Without the benefit, the company earned
$10.9 million or $0.59 per share vs. $4.5 million or $0.26 for the third quarter of 2002.
Kansas City, Mo.-based NovaStar had third-quarter net profits of $24.3 million
or $2.11 per share, almost double the $12.2 million or $1.14 per share posted for the same period last year.
All three companies boosted their full-year 2003 earnings guidance. New Century
had record origination volume in the third quarter of $8.6 billion. Noted its chief financial officer Edward Gotschall,
"The sale of these loans in the fourth quarter will enable us to meet or exceed $6.25 per share for fiscal
2003." New Century now targets EPS for 2004 of $7 or higher.
Separately, New Century received a "BB-" long-term counterparty credit
rating from Standard & Poor's. It also received an unsecured debt rating of "B+."
Robert K. Cole, chairman and chief executive of New Century, commented, "These
ratings reflect the significant improvement that the company has made over the last several years in increasing
its capital base, cash flow and liquidity.
"We believe that strategic initiatives recently implemented to strengthen
our balance sheet, diversify our revenues and deliver a consistent and growing earnings trend that will likely
contribute to future upgrades by S&P in our credit ratings."
Delta, without taking the income tax benefit into account, said its EPS for 2003
will be in the range of $2.05 to $2.15, up from the previously announced $1.75 per share. This increase reflects
better-than-anticipated loan originations in the second half of this year, plus takes into account compression
of its net interest margin due to volatility, interest rates and spreads.
The company set a quarterly record for production in the third quarter of $524.8
million, up from $214.4 million for the third quarter of 2002 and $348.2 million for the second quarter of this
year. NovaStar now projects its EPS for this year to be in the range of $8 to $8.40, up from the previously announced
$7.75 to $8.25. Furthermore, it expects next year's earnings to be ahead of this year's by between 5% and 10%.
Total production at the company was $1.8 billion, up from $647 million in the
third quarter 2002 and $1.5 million in the second quarter 2003.
Lance Anderson, president of NovaStar, said, "At the beginning of the year,
we expected to produce $4 billion to $6 billion in loans during 2003. Given our first three quarters of production
and our current monthly run-rate, we expect to be in the upper end of our initial range."
In other news, NovaStar priced a public offering of 610,000 shares of its common
stock at $77 per share. Net proceeds are estimated to be just under $45 million.
|
