INVESTOR CONTACT: (818)225-3550
David Bigelow or Lisa Riordan
MEDIA CONTACT: (800)796-8448
COUNTRYWIDE REPORTS 2005 FIRST QUARTER RESULTS
- Diluted Earnings Per Share were $1.13 for the Quarter -
- Board Increases Cash Dividend to $0.15 per Share -
– 2005 Guidance Updated at $3.60 to $4.60 per Diluted Share –
CALABASAS, CA (April 26, 2005) – Countrywide Financial Corporation (NYSE: CFC) today announced results for the quarter ended March 31, 2005. First quarter highlights include the following:
| | • | Consolidated net earnings were $689 million, a gain of 27 percent over 2004’s first quarter net earnings of $543 million. |
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| | • | Earnings per diluted share were $1.13, up 26 percent from last year’s first quarter earnings of $0.90 per diluted share. |
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| | • | Pre-tax earnings in the Mortgage Banking segment advanced to $772 million from $561 million for the first quarter of 2004. |
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| | • | Pre-tax earnings from Diversified Businesses rose 17 percent over last year to $377 million, fueled primarily by further growth of the Banking segment. The increase in Banking segment profitability was driven primarily by continued asset growth. |
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| | • | Total loan production volume was $92 billion for the quarter, up 21 percent from the comparable quarter last year. |
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| | • | The servicing portfolio has grown by $211 billion since March 31, 2004 to a record $893 billion. |
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| | • | Financial results for the first and fourth quarters of 2004 include the effects of the earnings restatement related to timing of gain on sale for certain securities, as previously announced on February 22, 2005. |
“Countrywide opened 2005 with a solid first quarter,” said Angelo R. Mozilo, Chairman and Chief Executive Officer. “The Company achieved diluted earnings per share of $1.13, an increase from both the first quarter of 2004 and last quarter. Countrywide’s heightened profitability was driven primarily by an increased contribution from the Mortgage Banking segment, where pre-tax earnings were up 38
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percent from the same quarter a year ago and 196 percent from last quarter. The Banking and Insurance segments also delivered pre-tax earnings growth compared to both the first and fourth quarters of 2004.
“Within the Mortgage Banking segment, Production sector pre-tax earnings were $735 million, up $217 million from the fourth quarter of 2004. As previously disclosed, Production sector pre-tax earnings for the first quarter of 2005 include $193 million in nonprime fourth quarter 2004 securitizations for which the gain on sale was achieved in the first quarter of 2005. Servicing sector pre-tax earnings were $17 million, up $295 million from a loss of $278 million in the fourth quarter of 2004. Further improvement was limited primarily by lower-of-cost-or-market (LOCOM) accounting, as the market value for mortgage servicing rights (MSRs) increased by $160 million more than the increase in carrying value, which could not be recognized under LOCOM. For the second quarter of 2005, Countrywide has implemented hedge accounting for certain strata of its MSRs, which may remove the LOCOM constraint for those strata. The Servicing sector was also positively affected by continued portfolio growth. At quarter-end, the servicing portfolio reached $893 billion, up $55 billion from December 31, 2004.
“During the quarter, total pre-tax earnings from Diversified Businesses were $377 million, compared to pre-tax earnings of $322 million in the first quarter of 2004. The Banking segment delivered pre-tax earnings of $216 million, up 104 percent from the same quarter a year ago. This improvement was primarily as a result of continued asset growth at Countrywide Bank, whose recent portfolio growth has been fueled by adjustable-rate mortgages with low introductory rates. These products have the effect of reducing current period net interest margins, while future periods are expected to benefit as interest rates reset. Capital Markets segment pre-tax profits declined 20 percent from the first quarter of 2004 primarily as a result of margin compression and lower trading volume from MBS securities.
“Looking forward, Countrywide’s 2005 earnings guidance is updated to $3.60 to $4.60 per diluted share,” Mozilo concluded. Key assumptions behind the guidance include the following:
| | § | Average 10-year U.S. Treasury yield of between 4.0 percent and 5.0 percent |
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| | § | Total mortgage market originations of $2.3 trillion to $2.9 trillion |
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| | § | Mortgage Banking segment pre-tax earnings of $2.0 billion to $2.8 billion |
| | • | Company-wide loan production market share of 14.5 percent to 15.5 percent(1) |
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| | • | Company-wide loan origination volume of $330 billion to $425 billion(1) |
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| | • | Mortgage Banking segment production pre-tax margins of 40 basis points to 70 basis points(2) |
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| | • | Average loan servicing portfolio of $950 billion to $980 billion(3) |
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| | • | Loan servicing pre-tax margins of 1 basis point to 8 basis points |
| | § | Diversified Businesses pre-tax earnings of $1.7 billion to $1.9 billion |
| | (1) | Includes production from the Mortgage Banking and Capital Markets segments and Countrywide Bank |
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| | (2) | Excludes earnings from Capital Markets and Countrywide Bank production |
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| | (3) | Total portfolio, including inventory, Bank portfolio and subservicing; average is computed as an average of the monthly average balances |
The earnings estimates and assumptions and other projections provided in this press release should be considered forward-looking statements and readers are directed to the information contained in the disclaimer provided herein.
Countrywide’s Board of Directors approved an increase in the dividend to $0.15 per share, up $0.01 from last quarter. The payable date on the dividend will be May 31, 2005 to stockholders of record on May 12, 2005.
MORTGAGE BANKING
Countrywide’s Mortgage Banking segment, which includes Loan Production, Loan Servicing, and Loan Closing Services, contributed 67 percent of consolidated pre-tax earnings for the first quarter. Mortgage Banking pre-tax earnings for the first quarter were $772 million, which compares to $561 million for the first quarter of 2004.
Loan Production
The Loan Production sector is comprised of three distribution channels: prime and nonprime consumer-direct lending through Countrywide Home Loans’ 760-branch retail system, call center operations and the Internet; wholesale lending through a network of approximately 37,000 mortgage brokers; and correspondent lending which buys loans from approximately 2,100 other financial institutions such as independent mortgage companies, commercial banks, savings and loans and credit unions.
The Loan Production sector generated $735 million in pre-tax earnings for the 2005 first quarter, which compares to $517 million last quarter and $701 million for the first quarter of 2004. Compared to last
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quarter, gain on sale of loans and securities increased to $1.24 billion, from $1.15 billion. The table below shows fundings, sales, and revenues by product category for the quarter.
| | | | | | | | | |
| Mortgage Banking Segment | | Quarter Ended | |
| (dollars in millions) | | Mar. 31, 2005 | | | Dec. 31, 2004 | |
Prime | | | | | | | | |
Production | | $ | 63,591 | | | $ | 67,144 | |
Loans sold | | $ | 58,921 | | | $ | 67,743 | |
Gain on sale (“GOS”) | | $ | 729 | | | $ | 609 | |
GOS as % of loans sold | | | 1.24 | % | | | 0.90 | % |
| | | | | | | |
Nonprime | | | | | | | | |
Production | | $ | 8,187 | | | $ | 9,711 | |
Loans sold | | $ | 12,486 | | | $ | 8,878 | |
GOS | | $ | 352 | | | $ | 322 | |
GOS as % of loans sold | | | 2.82 | % | | | 3.63 | % |
| | | | | | | |
Home Equity | | | | | | | | |
Production | | $ | 6,971 | | | $ | 7,963 | |
Loans sold | | $ | 4,025 | | | $ | 7,112 | |
GOS | | $ | 156 | | | $ | 222 | |
GOS as % of loans sold | | | 3.89 | % | | | 3.12 | % |
| | | | | | | |
Total production | | $ | 78,749 | | | $ | 84,818 | |
Total loans sold | | $ | 75,432 | | | $ | 83,733 | |
Total GOS | | $ | 1,237 | | | $ | 1,153 | |
Total GOS as % of loans sold | | | 1.64 | % | | | 1.38 | % |
| | | | | | | |
Loan Servicing
The Loan Servicing sector reflects the performance of the MSRs and other retained interests associated with Countrywide’s owned-servicing portfolio. Since the MSRs generally perform best in higher interest rate environments, management expects that earnings from these assets will, over the long term, act as a natural counter-balance against Loan Production earnings, which typically perform best in lower interest rate environments. Generally, in declining interest rate environments, Loan Production operations provide substantial incremental earnings to offset the effect of faster amortization and impairment of MSRs. Countrywide also manages a financial hedge within the Loan Servicing sector to further mitigate MSR impairment. As of March 31, 2005, the servicing portfolio was $893 billion, with a weighted average coupon of 5.9 percent, compared to a portfolio of $683 billion and a weighted average coupon of 6.0 percent one year ago.
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For the quarter, the Loan Servicing sector recorded pre-tax earnings of $17 million, which compares to a pre-tax loss of $158 million for the first quarter of 2004. The capitalization rate on the MSR portfolio now stands at 122 basis points, which compares to 103 basis points at March 31, 2004, when substantially lower interest rates drove lower MSR valuations. The yield on 10-year U.S. Treasury securities, for example, was 4.50 percent on March 31, 2005, up 64 basis points from 3.86 percent one year earlier.
Loan Closing Services
Loan Closing Services are offered through Countrywide’s LandSafe companies, which primarily provide credit reports, appraisals and flood determinations. The LandSafe companies’ pre-tax earnings were $20 million in the first quarter, which compares to $19 million earned during the first quarter last year. Pre-tax earnings tend to be driven by industry and Company loan production volume.
DIVERSIFIED BUSINESSES
Diversified Businesses include the operations of Banking, Capital Markets, Insurance and Global Operations, and accounted for 33 percent of consolidated pre-tax earnings for the first quarter of 2005. Pre-tax earnings from Diversified Businesses were $377 million, up 17 percent from the first quarter of 2004.
Banking
The Banking segment includes the activities of Countrywide Bank and Countrywide Warehouse Lending, a provider of mortgage inventory financing to independent mortgage bankers. The Bank continues to leverage its relationship with the Mortgage Banking segment by originating high-quality mortgage assets through existing production distribution channels. Asset growth is in turn funded by the Bank’s overall low-cost liability base, where growth is driven by the continued expansion of its core deposit franchise. The Bank raises retail deposits through the Internet, call centers and 65 financial centers, most of which are located in existing Countrywide retail mortgage offices.
At March 31, 2005, total assets at Countrywide Bank reached $51 billion, compared to $24 billion at March 31, 2004, and were comprised of approximately 16 percent cash and investments, 83 percent first lien and home equity mortgage loans and 1 percent other assets. In the first quarter of 2005, the Bank produced $2 billion in new retail consumer deposits, as well as continued expansion of commercial and escrow deposit accounts. Net interest margin for the quarter was 2.27 percent, as compared to 2.29
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percent for the first quarter of 2004. Countrywide Warehouse Lending had average loans outstanding of $4.3 billion during the quarter, an increase of 54 percent from the first quarter of 2004. Overall, quarterly pre-tax earnings for the Banking segment were $216 million, increasing 104 percent from last year’s $106 million, driven primarily by the increase in average earning assets at the Bank.
Capital Markets
The Capital Markets segment includes a registered securities broker-dealer, a distressed-asset manager and a commercial real estate finance group. Total revenues for Capital Markets in the first quarter were $204 million, with approximately 47 percent derived from conduit activities, 25 percent from underwriting, 14 percent from commercial real estate and 14 percent from securities trading, brokerage and other activities. This compares to total revenues of $223 million in the first quarter of 2004 with approximately 48 percent derived from conduit activities, 28 percent from underwriting, and 24 percent from securities trading, brokerage and other activities. In total, pre-tax earnings for the Capital Markets segment were $122 million in the first quarter of 2005, compared to $153 million in the comparable year-ago period, led primarily by margin compression and lower trading volume from MBS securities.
Insurance
Countrywide’s Insurance segment includes Balboa Life and Casualty Group, whose companies are national providers of property, life and casualty insurance; and Balboa Reinsurance Company, a captive mortgage reinsurance company. For the first quarter of 2005, net premiums earned were $156 million at Balboa Life & Casualty and $44 million at Balboa Reinsurance, which compares to $158 million and $37 million, respectively, for the comparable year-ago period. Pre-tax earnings for the Insurance segment were $55 million for the 2005 first quarter, which compares to $52 million for the first quarter of 2004.
Global Operations
The principal component of the Global Operations segment is Global Home Loans, the Company’s U.K. joint venture, organized to process loan originations and service loans on behalf of third parties. Today, Global Home Loans services over one million loans in the U.K. with outstanding balances of $115 billion. Other companies included in the Global Operations segment engage in technology services and property valuation. Pre-tax earnings for the first quarter were $4 million, which compares to $12 million for the first quarter of 2004. This decline resulted primarily from lower levels of new loan processing volumes.
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Conference Call
Countrywide will host a live conference call to discuss quarterly results today at 11:00 am Eastern. The dial-in number for the live conference call is (888) 428-4473 (U.S.) or (612) 288-0318 (International). The management discussion will be available for replay through midnight on Tuesday, May 10, 2005. The replay dial-in numbers and access code are (800) 475-6701 (U.S.) / (320) 365-3844 (International) and 776023, respectively.
An accompanying slide presentation will be available on Countrywide’s website (www.countrywide.com), by clicking on “Investor Relations” on the website home page and clicking on the supporting slideshow text link for the 2005 first quarter earnings teleconference. Management strongly recommends that participants have access to this presentation while listening to the management discussion.
About Countrywide
Founded in 1969, Countrywide Financial Corporation is a member of the S&P 500, Forbes 2000 and Fortune 500. Through its family of companies, Countrywide provides mortgage banking and diversified financial services. Mortgage banking businesses include loan production and loan servicing principally through Countrywide Home Loans, Inc., which originates, purchases, securitizes, sells, and services prime and nonprime loans. Also included in Countrywide’s mortgage banking segment is the LandSafe group of companies which provide loan closing services. Diversified financial services encompass banking, capital markets, insurance, and global operations, largely through the activities of Countrywide Bank, a division of Treasury Bank, N.A., a bank offering depository and home loan products; Countrywide Capital Markets, a mortgage-related investment banker; Balboa Life and Casualty Group, whose companies are national providers of property, life and casualty insurance; Balboa Reinsurance, a captive mortgage reinsurance company; and Global Home Loans, a U.K. mortgage banking joint venture in which Countrywide holds a majority interest. For more information about the Company, visit Countrywide’s website at www.countrywide.com.
This Press Release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, regarding management’s beliefs, estimates, projections, and assumptions with respect to, among other things, the Company’s future operations, business plans and strategies, as well as industry and market conditions, all of which are subject to change. Actual results and operations for any future period may vary materially from those projected herein and from past results discussed herein. Factors which could cause actual results to differ materially from historical results or those anticipated include, but are not limited to: competitive and general economic conditions in each of our business segments; general economic conditions in the United States and abroad; loss of investment grade rating that may result in an increase in the cost of debt or loss of access to corporate debt markets; reduction in government support of homeownership; the level and volatility of interest rates; changes in interest rate paths; the legal, regulatory and legislative environments in the markets in which the Company operates; and other risks detailed in documents filed by the Company with the Securities and Exchange Commission from time to time. Words like “believe,” “expect,” “anticipate,” “promise,” “plan,” and other expressions or words of similar meanings, as well as future or conditional verbs such as “will,” “would,” “should,” “could,” or “may” are generally intended to identify forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements.
(tables follow)
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8-8-8
COUNTRYWIDE FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
| | | | | | | | | | | | | |
| | | Quarters Ended | | | | |
| | | March 31, | | | % | |
| (In thousands, except per share data) | | 2005 | | | 2004 | | | Change | |
| | | (unaudited) | | | | | |
Revenues | | | | | | | | | | | | |
| Gain on sale of loans and securities | | $ | 1,361,788 | | | $ | 1,117,390 | | | | 22 | % |
| |
| Interest income | | | 1,480,781 | | | | 1,049,750 | | | | 41 | % |
| Interest expense | | | (995,937 | ) | | | (517,555 | ) | | | 92 | % |
| | | | | | | | | | | |
| Net interest income | | | 484,844 | | | | 532,195 | | | | (9 | %) |
| Provision for loan losses | | | (19,622 | ) | | | (20,781 | ) | | | (6 | %) |
| | | | | | | | | | | |
| Net interest income after provision for loan losses | | | 465,222 | | | | 511,414 | | | | (9 | %) |
| | | | | | | | | | | |
| |
| Loan servicing fees and other income from retained interests | | | 972,358 | | | | 756,781 | | | | 28 | % |
| Amortization of mortgage servicing rights | | | (472,187 | ) | | | (413,682 | ) | | | 14 | % |
| Recovery (impairment) of retained interests | | | 315,364 | | | | (995,645 | ) | | | N/M | |
| Servicing hedge (losses) gains | | | (552,292 | ) | | | 672,796 | | | | N/M | |
| | | | | | | | | | | |
| Net loan servicing fees and other income (loss) from retained interests | | | 263,243 | | | | 20,250 | | | | N/M | |
| | | | | | | | | | | |
| |
| Net insurance premiums earned | | | 199,518 | | | | 195,383 | | | | 2 | % |
| Commissions and other income | | | 115,114 | | | | 120,781 | | | | (5 | %) |
| | | | | | | | | | | |
| Total revenues | | | 2,404,885 | | | | 1,965,218 | | | | 22 | % |
| | | | | | | | | | | |
| |
Expenses | | | | | | | | | | | | |
| Compensation | | | 786,479 | | | | 680,664 | | | | 16 | % |
| Occupancy and other office | | | 200,271 | | | | 167,871 | | | | 19 | % |
| Insurance claims | | | 75,935 | | | | 84,675 | | | | (10 | %) |
| Advertising and promotion | | | 55,179 | | | | 32,137 | | | | 72 | % |
| Other operating | | | 138,024 | | | | 117,188 | | | | 18 | % |
| | | | | | | | | | | |
| Total expenses | | | 1,255,888 | | | | 1,082,535 | | | | 16 | % |
| | | | | | | | | | | |
| |
Earnings before income taxes | | | 1,148,997 | | | | 882,683 | | | | 30 | % |
| Provision for income taxes | | | 460,145 | | | | 339,494 | | | | 36 | % |
| | | | | | | | | | | |
NET EARNINGS | | $ | 688,852 | | | $ | 543,189 | | | | 27 | % |
| | | | | | | | | | | |
| |
| Earnings per Share: | | | | | | | | | | | | |
| Basic | | $ | 1.18 | | | $ | 0.98 | | | | 20 | % |
| Diluted | | $ | 1.13 | | | $ | 0.90 | | | | 26 | % |
| Weighted Average Shares Outstanding: | | | | | | | | | | | | |
| Basic | | | 583,201 | | | | 555,968 | | | | 5 | % |
| Diluted | | | 610,676 | | | | 606,627 | | | | 1 | % |
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9-9-9
COUNTRYWIDE FINANCIAL CORPORATION
CONSOLIDATED BALANCE SHEETS
| | | | | | | | | | | | | |
| | | March 31, | | | December 31, | | | % | |
| (In thousands, except share data) | | 2005 | | | 2004 | | | Change | |
| | | | (unaudited) | | | (audited) | |
Assets | | | | | | | | | | | | |
| Cash | | $ | 766,049 | | | $ | 753,417 | | | | 2 | % |
| Mortgage loans and mortgage-backed securities held for sale | | | 29,935,131 | | | | 37,350,149 | | | | (20 | %) |
| Trading securities owned, at market value | | | 8,743,946 | | | | 10,558,387 | | | | (17 | %) |
| Trading securities pledged as collateral, at market value | | | 824,030 | | | | 1,303,007 | | | | (37 | %) |
| Securities purchased under agreements to resell and securities borrowed | | | 21,083,634 | | | | 13,231,448 | | | | 59 | % |
| Loans held for investment, net | | | 47,698,472 | | | | 39,660,086 | | | | 20 | % |
| Investments in other financial instruments | | | 11,689,423 | | | | 10,091,057 | | | | 16 | % |
| Mortgage servicing rights, net | | | 9,746,957 | | | | 8,729,929 | | | | 12 | % |
| Premises and equipment, net | | | 1,093,265 | | | | 985,350 | | | | 11 | % |
| Other assets | | | 5,452,134 | | | | 5,832,875 | | | | (7 | %) |
| | | | | | | | | | | |
| Total assets | | $ | 137,033,041 | | | $ | 128,495,705 | | | | 7 | % |
| | | | | | | | | | | |
| |
Liabilities | | | | | | | | | | | | |
| Notes payable | | $ | 57,698,487 | | | $ | 66,613,671 | | | | (13 | %) |
| Securities sold under agreements to repurchase | | | 30,848,012 | | | | 20,465,123 | | | | 51 | % |
| Deposit liabilities | | | 25,679,739 | | | | 20,013,208 | | | | 28 | % |
| Accounts payable and accrued liabilities | | | 8,886,722 | | | | 8,507,384 | | | | 4 | % |
| Income taxes payable | | | 2,968,034 | | | | 2,586,243 | | | | 15 | % |
| | | | | | | | | | | |
| Total liabilities | | | 126,080,994 | | | | 118,185,629 | | | | 7 | % |
| | | | | | | | | | | |
| |
| Commitments and contingencies | | | — | | | | — | | | | — | |
| |
Shareholders’ Equity | | | | | | | | | | | | |
| Preferred stock — authorized, 1,500,000 shares of $0.05 par value; none issued and outstanding | | | — | | | | — | | | | — | |
| Common stock — authorized, 1,000,000,000 shares of $0.05 par value; issued, 586,298,219 shares and 581,706,836 shares at March 31, 2005 and December 31, 2004, respectively; outstanding, 586,211,811 shares and 581,648,881 shares at March 31, 2005 and December 31, 2004, respectively | | | 29,315 | | | | 29,085 | | | | 1 | % |
| Additional paid-in capital | | | 2,651,297 | | | | 2,570,402 | | | | 3 | % |
| Accumulated other comprehensive income | | | 72,672 | | | | 118,943 | | | | (39 | %) |
| Retained earnings | | | 8,198,763 | | | | 7,591,646 | | | | 8 | % |
| | | | | | | | | | | |
| Total shareholders’ equity | | | 10,952,047 | | | | 10,310,076 | | | | 6 | % |
| | | | | | | | | | | |
| Total liabilities and shareholders’ equity | | $ | 137,033,041 | | | $ | 128,495,705 | | | | 7 | % |
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10-10-10
COUNTRYWIDE FINANCIAL CORPORATION
LOANS HELD FOR INVESTMENT, NET AND OTHER ASSETS
| | | | | | | | | | | | | |
| | | March 31, | | | December 31, | | | % | |
| (In thousands) | | 2005 | | | 2004 | | | Change | |
| | | (unaudited) | | | (audited) | | | | | |
Loans Held for Investment, Net | | | | | | | | | | | | |
| Mortgage loans | | $ | 42,225,880 | | | $ | 34,194,630 | | | | 23 | % |
| Warehouse lending advances secured by mortgage loans | | | 3,501,843 | | | | 3,681,830 | | | | (5 | %) |
| Defaulted FHA-insured and VA-guaranteed loans repurchased from securities | | | 1,547,777 | | | | 1,518,642 | | | | 2 | % |
| | | | | | | | | | | |
| | | | 47,275,500 | | | | 39,395,102 | | | | 20 | % |
| Deferred loan origination costs | | | 557,888 | | | | 390,030 | | | | 43 | % |
| Allowance for loan losses | | | (134,916 | ) | | | (125,046 | ) | | | 8 | % |
| | | | | | | | | | | |
| Total loans held for investment, net | | $ | 47,698,472 | | | $ | 39,660,086 | | | | 20 | % |
| | | | | | | | | | | |
| |
Other Assets | | | | | | | | | | | | |
| Reimbursable servicing advances | | $ | 1,015,776 | | | $ | 1,355,584 | | | | (25 | %) |
| Investments in Federal Reserve Bank and Federal Home Loan Bank stock | | | 904,194 | | | | 795,894 | | | | 14 | % |
| Interest receivable | | | 491,624 | | | | 426,962 | | | | 15 | % |
| Receivables from custodial accounts | | | 434,329 | | | | 391,898 | | | | 11 | % |
| Securities broker-dealer receivables | | | 392,440 | | | | 818,299 | | | | (52 | %) |
| Capitalized software, net | | | 295,060 | | | | 286,504 | | | | 3 | % |
| Federal funds sold | | | 290,000 | | | | 225,000 | | | | 29 | % |
| Prepaid expenses | | | 204,024 | | | | 212,310 | | | | (4 | %) |
| Cash surrender value of assets held in trust for deferred compensation plan | | | 190,917 | | | | 184,569 | | | | 3 | % |
| Restricted cash | | | 166,023 | | | | 175,177 | | | | (5 | %) |
| Receivables from sale of securities | | | 125,536 | | | | 143,874 | | | | (13 | %) |
| Derivative margin accounts | | | 114,641 | | | | 99,795 | | | | 15 | % |
| Other assets | | | 827,570 | | | | 717,009 | | | | 15 | % |
| | | | | | | | | | | |
| Total other assets | | $ | 5,452,134 | | | $ | 5,832,875 | | | | (7 | %) |
| | | | | | | | | | | |
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11-11-11
COUNTRYWIDE FINANCIAL CORPORATION
INVESTMENTS IN OTHER FINANCIAL INSTRUMENTS
| | | | | | | | | | | | | |
| | | March 31, | | | December 31, | | | % | |
| (In thousands) | | 2005 | | | 2004 | | | Change | |
| | | (unaudited) | | | (audited) | | | | | |
Investments in Other Financial Instruments | | | | | | | | | | | | |
| Available-for-sale securities: | | | | | | | | | | | | |
| Mortgage-backed securities | | $ | 7,559,654 | | | $ | 6,009,819 | | | | 26 | % |
| Obligations of U.S. Government-sponsored enterprises | | | 268,611 | | | | 279,991 | | | | (4 | %) |
| Municipal bonds | | | 266,114 | | | | 208,239 | | | | 28 | % |
| U.S. Treasury securities | | | 72,618 | | | | 66,030 | | | | 10 | % |
| Other | | | 64 | | | | 3,685 | | | | (98 | %) |
| | | | | | | | | | | |
| Subtotal | | | 8,167,061 | | | | 6,567,764 | | | | 24 | % |
| | | | | | | | | | | |
| |
| Other interests retained in securitization classified as available-for-sale securities: | | | | | | | | | | | | |
| Prime home equity line of credit transferor’s interest | | | 395,766 | | | | 273,639 | | | | 45 | % |
| Prime home equity residual securities | | | 232,843 | | | | 275,598 | | | | (16 | %) |
| Nonconforming interest-only and principal-only securities | | | 221,272 | | | | 191,502 | | | | 16 | % |
| Nonprime residual securities | | | 174,928 | | | | 237,695 | | | | (26 | %) |
| Prepayment penalty bonds | | | 87,682 | | | | 61,483 | | | | 43 | % |
| Nonprime interest-only securities | | | 49,246 | | | | 84,834 | | | | (42 | %) |
| Prime home equity interest-only securities | | | 24,467 | | | | 27,950 | | | | (12 | %) |
| Nonconforming residual securities | | | 8,696 | | | | 11,462 | | | | (24 | %) |
| Subordinated mortgage-backed pass-through securities | | | 2,261 | | | | 2,306 | | | | (2 | %) |
| | | | | | | | | | | |
| Total other interests retained in securitization classified as available-for-sale securities | | | 1,197,161 | | | | 1,166,469 | | | | 3 | % |
| | | | | | | | | | | |
| |
| Total available-for-sale securities | | | 9,364,222 | | | | 7,734,233 | | | | 21 | % |
| | | | | | | | | | | |
| |
| Other interests retained in securitization classified as trading securities: | | | | | | | | | | | | |
| Prime home equity residual securities | | | 631,427 | | | | 533,554 | | | | 18 | % |
| Nonprime residual securities | | | 295,994 | | | | 187,926 | | | | 58 | % |
| Nonconforming residual securities | | | 14,669 | | | | 20,555 | | | | (29 | %) |
| | | | | | | | | | | |
| Total other interests retained in securitization classified as trading securities | | | 942,090 | | | | 742,035 | | | | 27 | % |
| | | | | | | | | | | |
| |
| Servicing hedge derivative instruments | | | 961,610 | | | | 1,024,977 | | | | (6 | %) |
| Debt hedge instruments — Interest rate and foreign currency swaps | | | 421,501 | | | | 589,812 | | | | (29 | %) |
| | | | | | | | | | | |
| Total investments in other financial instruments | | $ | 11,689,423 | | | $ | 10,091,057 | | | | 16 | % |
| | | | | | | | | | | |
(more)
12-12-12
COUNTRYWIDE FINANCIAL CORPORATION
SELECTED OPERATING DATA
(Unaudited)
| | | | | | | | | | | | | |
| | | Quarters Ended | | | | |
| | | March 31, | | | % | |
| (Dollar amounts in millions) | | 2005 | | | 2004 | | | Change | |
Volume of loans produced | | $ | 92,024 | | | $ | 76,204 | | | | 21 | % |
| |
Number of loans produced | | | 538,339 | | | | 499,001 | | | | 8 | % |
| |
Loan closing services (units): | | | | | | | | | | | | |
| Number of credit reports, flood determinations, appraisals, automated property valuation services, title reports, default title orders, other title and escrow services, and home inspections | | | 5,007,167 | | | | 3,794,984 | | | | 32 | % |
| |
Capital Markets | | | | | | | | | | | | |
Securities trading volume (1) | | $ | 828,621 | | | $ | 690,438 | | | | 20 | % |
| |
Insurance | | | | | | | | | | | | |
| Net premiums earned: | | | | | | | | | | | | |
| Carrier | | $ | 155.8 | | | $ | 158.1 | | | | (1 | %) |
| Reinsurance | | | 43.7 | | | | 37.2 | | | | 17 | % |
| | | | | | | | | | | |
| Total net premiums earned | | $ | 199.5 | | | $ | 195.3 | | | | 2 | % |
| | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | March 31, | | | % | |
| | | 2005 | | | 2004 | | | Change | |
Mortgage loan pipeline | | | | | | | | | | | | |
| (loans-in-process) | | $ | 58,803 | | | $ | 57,422 | | | | 2 | % |
| |
Loan servicing portfolio(2) | | $ | 893,405 | | | $ | 682,848 | | | | 31 | % |
| |
Number of loans serviced(2) | | | 6,517,536 | | | | 5,313,058 | | | | 23 | % |
| |
MSR portfolio(3) | | $ | 798,518 | | | $ | 616,888 | | | | 29 | % |
| |
Assets held by Countrywide Bank (in billions) | | $ | 51.1 | | | $ | 23.7 | | | | 116 | % |
| |
Global Operations | | | | | | | | | | | | |
| Global Home Loans subservicing volume (in billions) | | $ | 115 | | | $ | 111 | | | | 4 | % |
| (1) | | Includes trades with Mortgage Banking Division. |
| |
| (2) | | Includes loans held for sale, loans held for investment and loans serviced under subservicing agreements for others. |
| |
| (3) | | Represents loan servicing portfolio reduced by loans held for sale, loans held for investment and subservicing. |
(more)
13-13-13
COUNTRYWIDE FINANCIAL CORPORATION
QUARTERLY SEGMENT ANALYSIS
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Quarter Ended March 31, 2005 | |
| | | Mortgage Banking | | | Diversified Businesses | | | | |
| | | Loan | | | Loan | | | Closing | | | | | | | | | | | Capital | | | | | | | Global | | | | | | | | | | |
| (In thousands) | | Production | | | Servicing | | | Services | | | Total | | | Banking | | | Markets | | | Insurance | | | Operations | | | Other | | | Total | | | Grand Total | |
Revenues | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Gain on sale of loans and securities | | $ | 1,237,230 | | | $ | 15,566 | | | $ | — | | | $ | 1,252,796 | | | $ | — | | | $ | 117,848 | | | $ | — | | | $ | — | | | $ | (8,856 | ) | | $ | 108,992 | | | $ | 1,361,788 | |
| Net interest income after provision for loan losses | | | 176,331 | | | | (61,708 | ) | | | 662 | | | | 115,285 | | | | 254,805 | | | | 77,663 | | | | 12,079 | | | | 871 | | | | 4,519 | | | | 349,937 | | | | 465,222 | |
Net loan servicing fees (1) | | | — | | | | 236,600 | | | | — | | | | 236,600 | | | | — | | | | 1,046 | | | | 2,904 | | | | 28,527 | | | | (5,834 | ) | | | 26,643 | | | | 263,243 | |
| Net insurance premiums earned | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 199,518 | | | | — | | | | — | | | | 199,518 | | | | 199,518 | |
Commissions, fees and other income (2) | | | 37,985 | | | | (973 | ) | | | 59,930 | | | | 96,942 | | | | 41,493 | | | | 7,352 | | | | 8,968 | | | | 25,716 | | | | (65,357 | ) | | | 18,172 | | | | 115,114 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total revenues | | | 1,451,546 | | | | 189,485 | | | | 60,592 | | | | 1,701,623 | | | | 296,298 | | | | 203,909 | | | | 223,469 | | | | 55,114 | | | | (75,528 | ) | | | 703,262 | | | | 2,404,885 | |
Expenses | | | 716,889 | | | | 172,296 | | | | 40,807 | | | | 929,992 | | | | 80,358 | | | | 81,862 | | | | 168,892 | | | | 51,075 | | | | (56,291 | ) | | | 325,896 | | | | 1,255,888 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Earnings before income taxes | | $ | 734,657 | | | $ | 17,189 | | | $ | 19,785 | | | $ | 771,631 | | | $ | 215,940 | | | $ | 122,047 | | | $ | 54,577 | | | $ | 4,039 | | | $ | (19,237 | ) | | $ | 377,366 | | | $ | 1,148,997 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Quarter Ended March 31, 2004 | |
| | | Mortgage Banking | | | Diversified Businesses | | | | |
| | | Loan | | | Loan | | | Closing | | | | | | | | | | | Capital | | | | | | | Global | | | | | | | | | | |
| (In thousands) | | Production | | | Servicing | | | Services | | | Total | | | Banking | | | Markets | | | Insurance | | | Operations | | | Other | | | Total | | | Grand Total | |
Revenues | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Gain on sale of loans and securities | | $ | 956,914 | | | $ | 81,950 | | | $ | — | | | $ | 1,038,864 | | | $ | — | | | $ | 73,166 | | | $ | — | | | $ | — | | | $ | 5,360 | | | $ | 78,526 | | | $ | 1,117,390 | |
| Net interest income after provision for loan losses | | | 350,534 | | | | (110,807 | ) | | | 224 | | | | 239,951 | | | | 118,066 | | | | 142,484 | | | | 10,783 | | | | 480 | | | | (350 | ) | | | 271,463 | | | | 511,414 | |
Net loan servicing fees (1) | | | — | | | | (3,893 | ) | | | — | | | | (3,893 | ) | | | — | | | | 720 | | | | — | | | | 26,690 | | | | (3,267 | ) | | | 24,143 | | | | 20,250 | |
| Net insurance premiums earned | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 195,383 | | | | — | | | | — | | | | 195,383 | | | | 195,383 | |
Commissions, fees and other income (2) | | | 13,418 | | | | 15,441 | | | | 49,156 | | | | 78,015 | | | | 22,864 | | | | 7,026 | | | | 16,299 | | | | 30,642 | | | | (34,065 | ) | | | 42,766 | | | | 120,781 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total revenues | | | 1,320,866 | | | | (17,309 | ) | | | 49,380 | | | | 1,352,937 | | | | 140,930 | | | | 223,396 | | | | 222,465 | | | | 57,812 | | | | (32,322 | ) | | | 612,281 | | | | 1,965,218 | |
Expenses | | | 620,256 | | | | 140,910 | | | | 30,848 | | | | 792,014 | | | | 35,322 | | | | 70,245 | | | | 170,470 | | | | 46,081 | | | | (31,597 | ) | | | 290,521 | | | | 1,082,535 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Earnings before income taxes | | $ | 700,610 | | | $ | (158,219 | ) | | $ | 18,532 | | | $ | 560,923 | | | $ | 105,608 | | | $ | 153,151 | | | $ | 51,995 | | | $ | 11,731 | | | $ | (725 | ) | | $ | 321,760 | | | $ | 882,683 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (1) | | Consists primarily of fees earned for servicing mortgage loans, related ancillary fees and income on retained interests, net of amortization of mortgage servicing rights, recovery (impairment) of retained interests and servicing hedge gains (losses). |
| |
| (2) | | Consists primarily of revenues from ancillary products and services, including title, escrow, appraisal, credit reporting and home inspection services and insurance agency commissions. |
