Exhibit 99
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| NEWS | |  |
| | | David Bigelow or Lisa Riordan |
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| | | MEDIA CONTACT: (800)796-8448 |
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COUNTRYWIDE REPORTS 2005 SECOND QUARTER RESULTS
– Diluted Earnings Per Share were $0.92 for the Quarter –
– 2005 Guidance Raised to $3.85 to $4.60 From $3.60 to $4.60 per Diluted Share –
CALABASAS, CA (July 26, 2005) – Countrywide Financial Corporation (NYSE: CFC) today announced results for the quarter ended June 30, 2005. Second quarter results include the following:
| | • | | Consolidated net earnings were $566 million, a decline of 28 percent from 2004’s second quarter net earnings of $786 million. |
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| | • | | Earnings per diluted share were $0.92, which compares to last year’s second quarter earnings of $1.29 per diluted share. |
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| | • | | Pre-tax earnings in the Mortgage Banking segment were $526 million as compared to $1.0 billion for the second quarter of 2004. |
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| | • | | Pre-tax earnings in the Banking segment increased 111 percent from last year’s second quarter to $251 million. |
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| | • | | Pre-tax earnings in the Capital Markets segment rose to $105 million, a gain of 17 percent from the same period last year. |
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| | • | | Total loan production volume was $121 billion, up 21 percent from the comparable quarter last year. |
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| | • | | The servicing portfolio has grown by $238 billion, or 33 percent, since June 30, 2004 to a record $964 billion at June 30, 2005. |
Six-month results include the following:
| | • | | Consolidated net earnings declined six percent from the year-ago comparable period to $1.3 billion. |
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| | • | | Earnings per diluted share were $2.05, down six percent from last year’s six-month earnings of $2.19 per diluted share. |
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| | • | | Pre-tax earnings in the Mortgage Banking segment were $1.3 billion, which compares to $1.6 billion for the first six months of 2004. |
Investor Relations
4500 Park Granada · Calabasas, CA 91302 · 818-225-3550http://www.countrywide.com
Countrywide Home Loans, Inc. and Countrywide Bank, a division of Treasury Bank, NA, are Equal Housing Lenders.
ã2002 Countrywide Financial Corporation.
Trade/service marks are the property of Countrywide Financial Corporation and/or its subsidiaries. All rights reserved.
| | • | | Pre-tax earnings in the Banking segment advanced 108 percent from last year’s comparable period to $467 million. |
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| | • | | Pre-tax earnings in the Capital Markets segment were $227 million, which compares to $243 million for the comparable period last year. |
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| | • | | Total loan production volume was $213 billion, up 21 percent from the comparable period last year. |
“Countrywide closed the first half of 2005 with solid operational and financial results,” said Angelo R. Mozilo, Chairman and Chief Executive Officer. “The Company achieved diluted earnings per share of $0.92 for the quarter, driving earnings per share for the first six months to $2.05. Within the Mortgage Banking segment, Production sector pre-tax earnings were $409 million for the second quarter of 2005, which compares to $735 million for the first quarter of 2005. Mortgage Banking loan production volume increased during the second quarter, creating significant economic value. However, not all of this value was realized in the second quarter because of an operational decision to capitalize on higher production volumes. Accordingly, $15.7 billion of loans were funded at Countrywide Bank, which was $7.2 billion more than last quarter, and an additional $1.8 billion in home equity loan volume was retained in the mortgage banking company’s inventory. Had this incremental $9.0 billion in loans been sold into the secondary market, the Company estimates that it would have realized an additional pre-tax gain of $150 million, or approximately $0.15 per diluted share, and would have reported higher Production sector margins.
“Management continually evaluates the benefits of selling or retaining loans. Sales of loans generate current period gains on sale, while the retention of loans is designed to provide a more stable stream of net interest income over the life of such loans as well as a greater base of future earnings. In making the determination of whether to sell or retain loans, management considers, among other factors, earnings growth, current market and economic conditions and capital availability. Management’s decisions in this regard will result in changes, which may be significant, in loan retention levels and the size of the Company’s loan portfolio, as well as current period earnings and Production sector margins. To summarize, management from time to time could forego a portion of gain on sale earnings for the sake of retaining loans and generating future net interest income, which is designed to provide a more stable earnings stream for shareholders.
Investor Relations
4500 Park Granada · Calabasas, CA 91302 · 818-225-3550http://www.countrywide.com
Countrywide Home Loans, Inc. and Countrywide Bank, a division of Treasury Bank, NA, are Equal Housing Lenders.
ã2002 Countrywide Financial Corporation.
Trade/service marks are the property of Countrywide Financial Corporation and/or its subsidiaries. All rights reserved.
2
“Production sector margins decreased from 93 basis points for loans produced in the first quarter of 2005 to 40 basis points in the second quarter as a result of various factors. These include lower pricing margins in prime and nonprime loans; a shift in channel mix toward the lower margin correspondent channel; and, as noted above, the decision to increase loan retention during the second quarter. Also, while the pipeline hedge performed to expectations in the second quarter, margins declined because hedging outperformance in the first quarter was not repeated.
“It should be noted that, while loans may be funded and securitized during a particular quarter, the gain on sale relating to such loans may be recognized in a subsequent quarter. The impact of this phenomenon during the first quarter of 2005 was a net increase in gain on sale of $150 million. The impact of this phenomenon during the second quarter of 2005 was a net increase in gain on sale of $26 million. In addition, as noted above, an estimated $150 million in pre-tax gain would have been reported in the second quarter of 2005 had the discretionarily retained loans been sold.
“In the Loan Servicing sector, pre-tax earnings for the second quarter were $89 million, which compares favorably to $25 million for the second quarter of 2004. Loan Servicing sector quarterly pre-tax earnings were aided by a year-over-year increase in servicing fees of $195 million, or 34 percent, which resulted from the increase in the size of the servicing portfolio. In addition, escrow balance benefits improved by $118 million in the second quarter of 2005 versus the second quarter of 2004 as a result of higher short-term rates. These results were partially offset by the aggregate impact of a $174 million increase in amortization and impairment of mortgage servicing rights (MSRs) and other retained interests, net of the servicing hedge (which includes theta, or hedging cost). Although the second quarter of 2005 was a period of declining long-term interest rates, the Loan Servicing sector performed well, illustrating the effectiveness of our dynamic interest rate risk management strategies.
“The Banking segment continued its robust growth in the second quarter, increasing pre-tax earnings 111 percent to $251 million. The Bank not only leverages the infrastructure of Countrywide Home Loans to grow its asset base, but it provides Countrywide the opportunity to generate a more stable earnings stream through net interest income versus gain on sale. The Capital Markets segment increased its quarterly pre-tax earnings by 17 percent year over year, primarily the result of an increase in profitability at Countrywide Securities Corporation.
Investor Relations
4500 Park Granada · Calabasas, CA 91302 · 818-225-3550http://www.countrywide.com
Countrywide Home Loans, Inc. and Countrywide Bank, a division of Treasury Bank, NA, are Equal Housing Lenders.
ã2002 Countrywide Financial Corporation.
Trade/service marks are the property of Countrywide Financial Corporation and/or its subsidiaries. All rights reserved.
3
“Looking forward, we begin the second half of 2005 with a $77 billion pipeline of mortgage loan applications, which should bode well for third quarter fundings; an assemblage of business units that are synergistically related and strategically positioned for future growth; and the financial strength of a $159 billion consolidated balance sheet, which includes the Bank balance sheet of $65 billion and $3.8 billion in home equity loan inventory in the mortgage banking company.”
Countrywide’s 2005 earnings guidance was raised to $3.85 to $4.60, up from prior guidance of $3.60 to $4.60 per diluted share. Key full-year assumptions behind the guidance include the following:
| | • | | Average 10-year U.S. Treasury yield of between 4.0 percent and 4.5 percent |
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| | • | | Total mortgage market originations of $2.8 trillion to $3.2 trillion |
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| | • | | Mortgage Banking segment pre-tax earnings of $2.3 billion to $2.8 billion |
| | • | | Company-wide loan production market share of 14.0 percent to 15.0 percent(1) |
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| | • | | Company-wide loan origination volume of $390 billion to $480 billion(1) |
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| | • | | Mortgage Banking segment production pre-tax margins of 40 basis points to 55 basis points(2) |
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| | • | | Average loan servicing portfolio of $970 billion to $990 billion(3) |
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| | • | | Loan servicing pre-tax margins of 1 basis point to 6 basis points |
| | • | | Pre-tax earnings from other segments (Banking, Capital Markets, Insurance and Global Operations) 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 pre-tax 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 declared a dividend of $0.15 per share. The payable date on the dividend is August 31, 2005 to stockholders of record on August 15, 2005.
MORTGAGE BANKING
Countrywide’s Mortgage Banking segment, which includes the Loan Production, Loan Servicing, and Loan Closing Services sectors, contributed 56 percent of consolidated pre-tax earnings for the second
Investor Relations
4500 Park Granada · Calabasas, CA 91302 · 818-225-3550http://www.countrywide.com
Countrywide Home Loans, Inc. and Countrywide Bank, a division of Treasury Bank, NA, are Equal Housing Lenders.
ã2002 Countrywide Financial Corporation.
Trade/service marks are the property of Countrywide Financial Corporation and/or its subsidiaries. All rights reserved.
4
quarter and 62 percent for the first half of 2005. Mortgage Banking pre-tax earnings for the second quarter were $526 million, which compares to $1.0 billion for the second quarter of 2004. For the six months, Mortgage Banking pre-tax earnings were $1.3 billion, which compares to $1.6 billion for the same period last year.
Loan Production
The Loan Production sector is comprised of three distribution channels: prime and nonprime consumer-direct lending through Countrywide Home Loans’ 795-branch retail system, call center operations and the Internet; wholesale lending through a network of mortgage brokers; and correspondent lending which buys closed loans from other financial institutions such as independent mortgage companies, commercial banks, savings and loans and credit unions.
The Loan Production sector generated $409 million in pre-tax earnings for the 2005 second quarter, which compares to $970 million for the second quarter of 2004. This resulted primarily from a $336 million decrease in gain on sale revenue. Gain on sale includes the effect of pipeline hedging activities, which reflect the market valuations of hedge positions pertaining to the pipeline of loans in process, but may not be fully offset by the change in value of these items. The table below shows fundings, sales, and revenues by product category for the periods indicated.
Investor Relations
4500 Park Granada · Calabasas, CA 91302 · 818-225-3550http://www.countrywide.com
Countrywide Home Loans, Inc. and Countrywide Bank, a division of Treasury Bank, NA, are Equal Housing Lenders.
ã2002 Countrywide Financial Corporation.
Trade/service marks are the property of Countrywide Financial Corporation and/or its subsidiaries. All rights reserved.
5
| | | | | | | | | | | | | |
| Mortgage Banking Segment* | | Quarter Ended | |
| (dollars in millions) | | June 30, 2005 | | | March 31, 2005 | | | June 30, 2004 | |
Prime | | | | | | | | | | | | |
Production | | $ | 84,610 | | | $ | 63,943 | | | $ | 75,119 | |
Loans sold | | $ | 84,935 | | | $ | 58,921 | | | $ | 74,517 | |
Gain on sale (“GOS”) | | $ | 674 | | | $ | 729 | | | $ | 790 | |
GOS as % of loans sold | | | 0.79 | % | | | 1.24 | % | | | 1.06 | % |
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Nonprime | | | | | | | | | | | | |
Production | | $ | 9,669 | | | $ | 8,187 | | | $ | 8,133 | |
Loans sold | | $ | 11,491 | | | $ | 12,486 | | | $ | 8,784 | |
GOS | | $ | 218 | | | $ | 351 | | | $ | 409 | |
GOS as % of loans sold | | | 1.90 | % | | | 2.82 | % | | | 4.66 | % |
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Home Equity | | | | | | | | | | | | |
Production | | $ | 6,875 | | | $ | 6,619 | | | $ | 5,239 | |
Loans sold | | $ | 3,020 | | | $ | 4,025 | | | $ | 6,110 | |
GOS | | $ | 122 | | | $ | 156 | | | $ | 151 | |
GOS as % of loans sold | | | 4.02 | % | | | 3.89 | % | | | 2.47 | % |
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Total production | | $ | 101,154 | | | $ | 78,749 | | | $ | 88,491 | |
Total loans sold | | $ | 99,446 | | | $ | 75,432 | | | $ | 89,410 | |
Total GOS | | $ | 1,014 | | | $ | 1,237 | | | $ | 1,350 | |
Total GOS as % of loans sold | | | 1.02 | % | | | 1.64 | % | | | 1.51 | % |
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| * | | Numbers may not be exact due to rounding |
Loan Servicing
The Loan Servicing sector reflects the performance of 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 counteract MSR impairment. As of June 30, 2005, the servicing portfolio was $964 billion, compared to a portfolio of $726 billion at June 30, 2004, with the weighted average coupon of 5.9 percent remaining constant from one year ago.
Investor Relations
4500 Park Granada · Calabasas, CA 91302 · 818-225-3550http://www.countrywide.com
Countrywide Home Loans, Inc. and Countrywide Bank, a division of Treasury Bank, NA, are Equal Housing Lenders.
ã2002 Countrywide Financial Corporation.
Trade/service marks are the property of Countrywide Financial Corporation and/or its subsidiaries. All rights reserved.
6
For the quarter, the Loan Servicing sector recorded pre-tax earnings of $89 million, which compares to pre-tax earnings of $25 million for the second quarter of 2004. For the six months, pre-tax earnings for the Loan Servicing sector were $106 million, which compares to a pre-tax loss of $133 million for the comparable period last year. The capitalization rate on the MSR portfolio now stands at 110 basis points, which compares to 126 basis points at June 30, 2004, when higher interest rates drove higher MSR valuations. The yield on 10-year U.S. Treasury securities, for example, was 3.94 percent on June 30, 2005, down 68 basis points from 4.62 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 $28 million in the second quarter, which compares to $23 million earned during the second quarter last year. For the six months, pre-tax earnings were $48 million, which compares to $42 million for the six months of 2004. Pre-tax earnings tend to be driven by Company and industry loan production volume.
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 retail deposit franchise. The Bank raises retail deposits through the Internet, call centers and 70 financial centers, most of which are located in existing Countrywide retail lending offices. In turn, the Bank provides Countrywide with an expanded product menu, lower cost funding sources and portfolio lending capability.
At June 30, 2005, total assets at Countrywide Bank reached $65 billion, compared to $27 billion at June 30, 2004, and were comprised of approximately 13 percent cash and investments, 86 percent first lien and home equity mortgage loans and 1 percent other assets. Net interest margin for the quarter was 2.08 percent, as compared to 2.20 percent for the second quarter of 2004. This decline is the result of the increase in the adjustable-rate mortgages within the Bank’s loan portfolio. Some of these products carry low introductory rates and have the effect of reducing current period net interest margins, while future
Investor Relations
4500 Park Granada · Calabasas, CA 91302 · 818-225-3550http://www.countrywide.com
Countrywide Home Loans, Inc. and Countrywide Bank, a division of Treasury Bank, NA, are Equal Housing Lenders.
ã2002 Countrywide Financial Corporation.
Trade/service marks are the property of Countrywide Financial Corporation and/or its subsidiaries. All rights reserved.
7
periods are expected to benefit as interest rates reset; however, future increases in production may result in a similar lag effect. In the second quarter of 2005, the Bank produced $2.5 billion in new retail deposits, as well as continued expansion of commercial and escrow deposit accounts. Countrywide Warehouse Lending had average loans outstanding of $5.3 billion during the quarter, an increase of 41 percent from the second quarter of 2004. Overall, quarterly pre-tax earnings for the Banking segment were $251 million, increasing 111 percent from last year’s $119 million, driven primarily by the increase in average earning assets at the Bank. For the six months, pre-tax earnings advanced 108 percent from last year to $467 million for 2005.
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 second quarter were $178 million, with approximately 41 percent derived from conduit activities, 32 percent from underwriting, 22 percent from securities trading, brokerage and other activities, and 5 percent from commercial real estate activities. This compares to total revenues of $162 million in the second quarter of 2004 with approximately 43 percent derived from conduit activities, 41 percent from underwriting, and 16 percent from securities trading, brokerage and other activities. In total, pre-tax earnings for the Capital Markets segment were $105 million in the second quarter of 2005, a gain of 17 percent from the $90 million in the comparable year-ago period, which primarily stemmed from an increase in broker-dealer earnings. For the six months, pre-tax earnings were $227 million for 2005 and $243 million for 2004, resulting from the year-over-year decrease in MBS related trading volume; reduced net interest spreads resulting from a flattening of the yield curve; and higher expenses from investments in the development of new products and distribution channels.
INSURANCE
Countrywide’s Insurance segment includes Balboa Insurance Group, whose companies are national providers of property, life and casualty insurance; and Balboa Reinsurance Company, a captive mortgage reinsurance company. For the second quarter of 2005, net premiums earned were $172 million for the carrier and $43 million for the reinsurance group, which compares to $149 million and $39 million, respectively, for the comparable year-ago period. For the six months of 2005, net premiums earned were $328 million for the carrier and $87 million for the reinsurance group, which compares to $307 million and $76 million, respectively, for the comparable year-ago period. Pre-tax earnings for the Insurance segment were $58 million for the 2005 second quarter, an increase of 19
Investor Relations
4500 Park Granada · Calabasas, CA 91302 · 818-225-3550http://www.countrywide.com
Countrywide Home Loans, Inc. and Countrywide Bank, a division of Treasury Bank, NA, are Equal Housing Lenders.
ã2002 Countrywide Financial Corporation.
Trade/service marks are the property of Countrywide Financial Corporation and/or its subsidiaries. All rights reserved.
8
percent from the second quarter of 2004. The increase in second quarter 2005 pre-tax earnings was primarily the result of increased net earned premiums at the carrier and the reinsurance group as well as gains on sales of investments. For the six months of 2005, pre-tax earnings were $112 million, up 12 percent from the six months 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 $109 billion. Other companies included in the Global Operations segment engage in technology services and property valuation. Pre-tax earnings for the second quarter were $5 million, which compares to $10 million for the second quarter of 2004. For the six months of 2005, pre-tax earnings were $9 million, which compares to $21 million for the comparable year-ago period. This decline resulted primarily from lower levels of new loan processing volumes.
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 (800) 230-1093 (U.S.) or (612) 288-0340 (International). The management discussion will be available for replay through midnight on Tuesday, August 9, 2005. The replay dial-in numbers and access code are (800) 475-6701 (U.S.) / (320) 365-3844 (International) and 787541, 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 second 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 Insurance 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; changes in general business, economic, market and political conditions in the United States and abroad from those expected; loss of investment grade rating that may result in an increase in the cost of debt or loss of access to corporate debt
Investor Relations
4500 Park Granada · Calabasas, CA 91302 · 818-225-3550http://www.countrywide.com
Countrywide Home Loans, Inc. and Countrywide Bank, a division of Treasury Bank, NA, are Equal Housing Lenders.
ã2002 Countrywide Financial Corporation.
Trade/service marks are the property of Countrywide Financial Corporation and/or its subsidiaries. All rights reserved.
9
markets; reduction in government support of homeownership; the level and volatility of interest rates; changes in interest rate paths; changes in generally accepted accounting principles or in the legal, regulatory and legislative environments in the markets in which the Company operates; the ability of management to effectively implement the Company’s strategies; and other risks noted 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)
Investor Relations
4500 Park Granada · Calabasas, CA 91302 · 818-225-3550http://www.countrywide.com
Countrywide Home Loans, Inc. and Countrywide Bank, a division of Treasury Bank, NA, are Equal Housing Lenders.
ã2002 Countrywide Financial Corporation.
Trade/service marks are the property of Countrywide Financial Corporation and/or its subsidiaries. All rights reserved.
10
COUNTRYWIDE FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Quarter Ended | | | | | | | Six Months Ended | | | | |
| | | June 30, | | | % | | | June 30, | | | % | |
| (In thousands, except per share data) | | 2005 | | | 2004 | | | Change | | | 2005 | | | 2004 | | | Change | |
| |
| | | (unaudited) | | | | | | | (unaudited) | | | | | |
Revenues | | | | | | | | | | | | | | | | | | | | | | | | |
| Gain on sale of loans and securities | | $ | 1,145,409 | | | $ | 1,418,869 | | | | (19 | %) | | $ | 2,507,160 | | | $ | 2,538,890 | | | | (1 | %) |
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| Interest income | | | 1,761,784 | | | | 1,074,326 | | | | 64 | % | | | 3,242,565 | | | | 2,124,076 | | | | 53 | % |
| Interest expense | | | (1,229,234 | ) | | | (575,778 | ) | | | 113 | % | | | (2,225,171 | ) | | | (1,093,333 | ) | | | 104 | % |
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| Net interest income | | | 532,550 | | | | 498,548 | | | | 7 | % | | | 1,017,394 | | | | 1,030,743 | | | | (1 | %) |
| Provision for loan losses | | | (17,101 | ) | | | (19,747 | ) | | | (13 | %) | | | (36,723 | ) | | | (40,528 | ) | | | (9 | %) |
| | | | | | | | | | | | | | | | | | | | | |
| Net interest income after provision for loan losses | | | 515,449 | | | | 478,801 | | | | 8 | % | | | 980,671 | | | | 990,215 | | | | (1 | %) |
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| Loan servicing fees and other income from retained interests | | | 1,019,149 | | | | 802,632 | | | | 27 | % | | | 1,991,507 | | | | 1,559,413 | | | | 28 | % |
| Amortization of mortgage servicing rights | | | (482,373 | ) | | | (569,977 | ) | | | (15 | %) | | | (954,560 | ) | | | (983,659 | ) | | | (3 | %) |
| (Impairment) recovery of retained interests | | | (1,378,969 | ) | | | 1,179,127 | | | | N/M | | | | (1,063,605 | ) | | | 183,482 | | | | N/M | |
| Servicing hedge gains (losses) | | | 1,147,158 | | | | (1,149,451 | ) | | | N/M | | | | 594,866 | | | | (476,655 | ) | | | N/M | |
| | | | | | | | | | | | | | | | | | | | | |
| Net loan servicing fees and other income from retained interests | | | 304,965 | | | | 262,331 | | | | 16 | % | | | 568,208 | | | | 282,581 | | | | 101 | % |
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| Net insurance premiums earned | | | 215,478 | | | | 187,252 | | | | 15 | % | | | 414,996 | | | | 382,635 | | | | 8 | % |
| Commissions and other income | | | 126,642 | | | | 127,493 | | | | (1 | %) | | | 241,793 | | | | 245,643 | | | | (2 | %) |
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| Total revenues | | | 2,307,943 | | | | 2,474,746 | | | | (7 | %) | | | 4,712,828 | | | | 4,439,964 | | | | 6 | % |
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Expenses | | | | | | | | | | | | | | | | | | | | | | | | |
| Compensation | | | 850,143 | | | | 770,090 | | | | 10 | % | | | 1,636,622 | | | | 1,450,754 | | | | 13 | % |
| Occupancy and other office | | | 225,137 | | | | 150,848 | | | | 49 | % | | | 413,793 | | | | 298,873 | | | | 38 | % |
| Insurance claims | | | 88,786 | | | | 83,752 | | | | 6 | % | | | 164,721 | | | | 168,427 | | | | (2 | %) |
| Advertising and promotion | | | 53,615 | | | | 41,658 | | | | 29 | % | | | 108,794 | | | | 73,795 | | | | 47 | % |
| Other operating | | | 155,381 | | | | 143,922 | | | | 8 | % | | | 305,020 | | | | 280,956 | | | | 9 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Total expenses | | | 1,373,062 | | | | 1,190,270 | | | | 15 | % | | | 2,628,950 | | | | 2,272,805 | | | | 16 | % |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Earnings before income taxes | | | 934,881 | | | | 1,284,476 | | | | (27 | %) | | | 2,083,878 | | | | 2,167,159 | | | | (4 | %) |
| Provision for income taxes | | | 368,423 | | | | 497,997 | | | | (26 | %) | | | 828,568 | | | | 837,491 | | | | (1 | %) |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
NET EARNINGS | | $ | 566,458 | | | $ | 786,479 | | | | (28 | %) | | $ | 1,255,310 | | | $ | 1,329,668 | | | | (6 | %) |
| | | | | | | | | | | | | | | | | | | | | |
| |
| Earnings per Share: | | | | | | | | | | | | | | | | | | | | | | | | |
| Basic | | $ | 0.96 | | | $ | 1.41 | | | | (32 | %) | | $ | 2.14 | | | $ | 2.38 | | | | (10 | %) |
| Diluted | | $ | 0.92 | | | $ | 1.29 | | | | (29 | %) | | $ | 2.05 | | | $ | 2.19 | | | | (6 | %) |
| |
| Weighted Average Shares Outstanding: | | | | | | | | | | | | | | | | | | | | | | | | |
| Basic | | | 588,538 | | | | 559,766 | | | | 5 | % | | | 585,884 | | | | 557,866 | | | | 5 | % |
| Diluted | | | 614,988 | | | | 611,337 | | | | 1 | % | | | 613,467 | | | | 609,006 | | | | 1 | % |
(more)
COUNTRYWIDE FINANCIAL CORPORATION
CONSOLIDATED BALANCE SHEETS
| | | | | | | | | | | | | |
| | | June 30, | | | December 31, | | | % | |
| (In thousands, except share data) | | 2005 | | | 2004 | | | Change | |
| |
| | | (unaudited) | | | (audited) | | | | | |
Assets | | | | | | | | | | | | |
| Cash | | $ | 916,571 | | | $ | 751,237 | | | | 22 | % |
| Mortgage loans and mortgage-backed securities held for sale | | | 30,179,419 | | | | 37,350,149 | | | | (19 | %) |
| Trading securities owned, at market value | | | 13,169,526 | | | | 10,558,387 | | | | 25 | % |
| Trading securities pledged as collateral, at market value | | | 1,369,509 | | | | 1,303,007 | | | | 5 | % |
| Securities purchased under agreements to resell and securities borrowed | | | 21,751,208 | | | | 13,231,448 | | | | 64 | % |
| Loans held for investment, net | | | 62,528,327 | | | | 39,661,191 | | | | 58 | % |
| Investments in other financial instruments | | | 11,927,779 | | | | 10,091,057 | | | | 18 | % |
| Mortgage servicing rights, net | | | 9,367,666 | | | | 8,729,929 | | | | 7 | % |
| Premises and equipment, net | | | 1,155,712 | | | | 985,350 | | | | 17 | % |
| Other assets | | | 6,252,104 | | | | 5,833,950 | | | | 7 | % |
| | | | | | | | | | | |
| Total assets | | $ | 158,617,821 | | | $ | 128,495,705 | | | | 23 | % |
| | | | | | | | | | | |
| | | | | | | | | | | | | |
Liabilities | | | | | | | | | | | | |
| Notes payable | | $ | 63,957,263 | | | $ | 66,613,671 | | | | (4 | %) |
| Securities sold under agreements to repurchase and federal funds purchased | | | 39,540,571 | | | | 20,465,123 | | | | 93 | % |
| Deposit liabilities | | | 30,613,784 | | | | 20,013,208 | | | | 53 | % |
| Accounts payable and accrued liabilities | | | 9,573,861 | | | | 8,507,384 | | | | 13 | % |
| Income taxes payable | | | 3,276,708 | | | | 2,586,243 | | | | 27 | % |
| | | | | | | | | | | |
| Total liabilities | | | 146,962,187 | | | | 118,185,629 | | | | 24 | % |
| | | | | | | | | | | |
| 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, 593,157,719 shares and 581,706,836 shares at June 30, 2005 and December 31, 2004, respectively; outstanding, 593,030,375 shares and 581,648,881 shares at June 30, 2005 and December 31, 2004, respectively | | | 29,658 | | | | 29,085 | | | | 2 | % |
| Additional paid-in capital | | | 2,806,092 | | | | 2,570,402 | | | | 9 | % |
| Accumulated other comprehensive income | | | 142,964 | | | | 118,943 | | | | 20 | % |
| Retained earnings | | | 8,676,920 | | | | 7,591,646 | | | | 14 | % |
| | | | | | | | | | | |
| | | | | | | | | | | | | |
| Total shareholders’ equity | | | 11,655,634 | | | | 10,310,076 | | | | 13 | % |
| | | | | | | | | | | |
| Total liabilities and shareholders’ equity | | $ | 158,617,821 | | | $ | 128,495,705 | | | | 23 | % |
| | | | | | | | | | | |
(more)
COUNTRYWIDE FINANCIAL CORPORATION
LOANS HELD FOR INVESTMENT, NET AND OTHER ASSETS
| | | | | | | | | | | | | |
| | | June 30, | | | December 31, | | | % | |
| (In thousands) | | 2005 | | | 2004 | | | Change | |
| |
| | | (unaudited) | | | (audited) | | | | | |
Loans Held for Investment, Net | | | | | | | | | | | | |
| Mortgage loans | | $ | 56,196,962 | | | $ | 34,195,735 | | | | 64 | % |
| Warehouse lending advances secured by mortgage loans | | | 4,372,064 | | | | 3,681,830 | | | | 19 | % |
| Defaulted FHA-insured and VA-guaranteed loans repurchased from securities | | | 1,282,079 | | | | 1,518,642 | | | | (16 | %) |
| | | | | | | | | | | |
| | | | 61,851,105 | | | | 39,396,207 | | | | 57 | % |
| Purchase premium/discount and deferred loan origination costs | | | 833,184 | | | | 390,030 | | | | 114 | % |
| Allowance for loan losses | | | (155,962 | ) | | | (125,046 | ) | | | 25 | % |
| | | | | | | | | | | |
| Total loans held for investment, net | �� | $ | 62,528,327 | | | $ | 39,661,191 | | | | 58 | % |
| | | | | | | | | | | |
| | | | | | | | | | | | | |
Other Assets | | | | | | | | | | | | |
| Investments in Federal Reserve Bank and Federal Home Loan Bank stock | | $ | 1,196,024 | | | $ | 795,894 | | | | 50 | % |
| Reimbursable servicing advances | | | 938,694 | | | | 1,355,584 | | | | (31 | %) |
| Interest receivable | | | 668,707 | | | | 426,962 | | | | 57 | % |
| Receivables from custodial accounts | | | 649,808 | | | | 391,898 | | | | 66 | % |
| Securities broker-dealer receivables | | | 443,619 | | | | 818,299 | | | | (46 | %) |
| Capitalized software, net | | | 317,745 | | | | 286,504 | | | | 11 | % |
| Federal funds sold | | | 257,000 | | | | 225,000 | | | | 14 | % |
| Derivative margin accounts | | | 243,845 | | | | 99,795 | | | | 144 | % |
| Cash surrender value of assets held in trust for deferred compensation plan | | | 211,510 | | | | 184,569 | | | | 15 | % |
| Prepaid expenses | | | 196,180 | | | | 212,310 | | | | (8 | %) |
| Restricted cash | | | 182,460 | | | | 200,142 | | | | (9 | %) |
| Receivables from sale of securities | | | 167,447 | | | | 143,874 | | | | 16 | % |
| Other assets | | | 779,065 | | | | 693,119 | | | | 12 | % |
| | | | | | | | | | | |
| Total other assets | | $ | 6,252,104 | | | $ | 5,833,950 | | | | 7 | % |
| | | | | | | | | | | |
(more)
COUNTRYWIDE FINANCIAL CORPORATION
INVESTMENTS IN OTHER FINANCIAL INSTRUMENTS
| | | | | | | | | | | | | |
| | | June 30, | | | December 31, | | | % | |
| (In thousands) | | 2005 | | | 2004 | | | Change | |
| |
| | | (unaudited) | | | (audited) | | | | | |
Investments in Other Financial Instruments | | | | | | | | | | | | |
| Available-for-sale securities: | | | | | | | | | | | | |
| Mortgage-backed securities | | $ | 7,241,213 | | | $ | 6,009,819 | | | | 20 | % |
| Municipal bonds | | | 318,484 | | | | 208,239 | | | | 53 | % |
| Obligations of U.S. Government-sponsored enterprises | | | 302,986 | | | | 279,991 | | | | 8 | % |
| U.S. Treasury securities | | | 101,058 | | | | 66,030 | | | | 53 | % |
| Other | | | 2,344 | | | | 3,685 | | | | (36 | %) |
| | | | | | | | | | | |
| Subtotal | | | 7,966,085 | | | | 6,567,764 | | | | 21 | % |
| | | | | | | | | | | |
| Other interests retained in securitization classified as available-for-sale securities: | | | | | | | | | | | | |
| Nonconforming interest-only and principal-only securities | | | 242,838 | | | | 191,502 | | | | 27 | % |
| Nonprime residual securities | | | 242,461 | | | | 237,695 | | | | 2 | % |
| Prime home equity line of credit transferor’s interest | | | 235,097 | | | | 273,639 | | | | (14 | %) |
| Prime home equity residual securities | | | 159,824 | | | | 275,598 | | | | (42 | %) |
| Prepayment penalty bonds | | | 101,642 | | | | 61,483 | | | | 65 | % |
| Prime home equity interest-only securities | | | 20,691 | | | | 27,950 | | | | (26 | %) |
| Nonprime interest-only securities | | | 20,309 | | | | 84,834 | | | | (76 | %) |
| Nonconforming residual securities | | | 5,840 | | | | 11,462 | | | | (49 | %) |
| Subordinated mortgage-backed pass-through securities | | | 2,278 | | | | 2,306 | | | | (1 | %) |
| | | | | | | | | | | |
| Total other interests retained in securitization classified as available-for-sale securities | | | 1,030,980 | | | | 1,166,469 | | | | (12 | %) |
| | | | | | | | | | | |
| Total available-for-sale securities | | | 8,997,065 | | | | 7,734,233 | | | | 16 | % |
| | | | | | | | | | | |
| Other interests retained in securitization classified as trading securities: | | | | | | | | | | | | |
| Prime home equity residual securities | | | 510,547 | | | | 533,554 | | | | (4 | %) |
| Nonprime residual securities | | | 420,920 | | | | 187,926 | | | | 124 | % |
| Prime home equity line of credit transferor’s interest | | | 178,242 | | | | — | | | | N/M | |
| Nonconforming residual securities | | | 16,574 | | | | 20,555 | | | | (19 | %) |
| | | | | | | | | | | |
| Total other interests retained in securitization classified as trading securities | | | 1,126,283 | | | | 742,035 | | | | 52 | % |
| | | | | | | | | | | |
| Servicing hedge derivative instruments | | | 1,569,387 | | | | 1,024,977 | | | | 53 | % |
| Debt hedge instruments | | | 235,044 | | | | 589,812 | | | | (60 | %) |
| | | | | | | | | | | |
| Total investments in other financial instruments | | $ | 11,927,779 | | | $ | 10,091,057 | | | | 18 | % |
| | | | | | | | | �� | | |
(more)
COUNTRYWIDE FINANCIAL CORPORATION
SELECTED OPERATING DATA
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Quarter Ended | | | | | | | Six Months Ended | | | | |
| | | June 30, | | | % | | | June 30, | | | % | |
| (Dollar amounts in millions) | | 2005 | | | 2004 | | | Change | | | 2005 | | | 2004 | | | Change | |
| |
Volume of loans produced | | $ | 121,079 | | | $ | 99,663 | | | | 21 | % | | $ | 213,103 | | | $ | 175,867 | | | | 21 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Number of loans produced | | | 668,106 | | | | 619,849 | | | | 8 | % | | | 1,206,445 | | | | 1,118,850 | | | | 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 | | | 5,600,967 | | | | 4,163,548 | | | | 35 | % | | | 10,608,134 | | | | 7,958,532 | | | | 33 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Capital Markets | | | | | | | | | | | | | | | | | | | | | | | | |
Securities trading volume(1) | | $ | 887,494 | | | $ | 881,577 | | | | 1 | % | | $ | 1,716,115 | | | $ | 1,572,015 | | | | 9 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Insurance | | | | | | | | | | | | | | | | | | | | | | | | |
| Net premiums earned: | | | | | | | | | | | | | | | | | | | | | | | | |
| Carrier | | $ | 172.4 | | | $ | 148.7 | | | | 16 | % | | $ | 328.2 | | | $ | 306.8 | | | | 7 | % |
| Reinsurance | | | 43.1 | | | | 38.6 | | | | 12 | % | | | 86.8 | | | | 75.8 | | | | 15 | % |
| | | | | | | | | | | | | | | | | | | | | |
| Total net premiums earned | | $ | 215.5 | | | $ | 187.3 | | | | 15 | % | | $ | 415.0 | | | $ | 382.6 | | | | 8 | % |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | June 30, | | | % | |
| | | 2005 | | | 2004 | | | Change | |
| | | |
Mortgage loan pipeline | | | | | | | | | | | | |
| (loans-in-process) | | $ | 77,009 | | | $ | 47,317 | | | | 63 | % |
| | | | | | | | | | | | | |
Loan servicing portfolio (2) | | $ | 964,444 | | | $ | 726,227 | | | | 33 | % |
| | | | | | | | | | | | | |
Number of loans serviced (2) | | | 6,843,218 | | | | 5,547,050 | | | | 23 | % |
| | | | | | | | | | | | | |
MSR portfolio(3) | | $ | 849,079 | | | $ | 655,527 | | | | 30 | % |
| | | | | | | | | | | | | |
Assets held by Countrywide Bank | | | | | | | | | | | | |
| (in billions) | | $ | 65.5 | | | $ | 27.2 | | | | 141 | % |
| | | | | | | | | | | | | |
Global Operations | | | | | | | | | | | | |
| Global Home Loans subservicing volume (in billions) | | $ | 109 | | | $ | 110 | | | | (1 | %) |
| | |
| (1) | | Includes trades with Mortgage Banking Segment. |
| |
| (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)
COUNTRYWIDE FINANCIAL CORPORATION
QUARTERLY SEGMENT ANALYSIS
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Quarter Ended June 30, 2005 | |
| | | Mortgage Banking | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | Loan | | | Closing | | | | | | | | | | | Capital | | | | | | | Global | | | | | | | |
| (In thousands) | | Loan Production | | | Servicing | | | Services | | | Total | | | Banking | | | Markets | | | Insurance | | | Operations | | | Other | | | Grand Total | |
Revenues | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Gain on sale of loans and securities | | $ | 1,013,619 | | | $ | 7,337 | | | $ | — | | | $ | 1,020,956 | | | $ | (771 | ) | | $ | 105,547 | | | $ | — | | | $ | — | | | $ | 19,677 | | | $ | 1,145,409 | |
| Net interest income after provision for loan losses | | | 155,688 | | | | (7,224 | ) | | | 786 | | | | 149,250 | | | | 289,112 | | | | 63,224 | | | | 11,044 | | | | 962 | | | | 1,857 | | | | 515,449 | |
Net loan servicing fees(1) | | | — | | | | 280,739 | | | | — | | | | 280,739 | | | | — | | | | 1,135 | | | | 2,977 | | | | 27,203 | | | | (7,089 | ) | | | 304,965 | |
| Net insurance premiums earned | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 215,478 | | | | — | | | | — | | | | 215,478 | |
Commissions, fees and other income(2) | | | 67,938 | | | | (5,446 | ) | | | 68,447 | | | | 130,939 | | | | 56,685 | | | | 8,208 | | | | 19,473 | | | | 28,038 | | | | (116,701 | ) | | | 126,642 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total revenues | | | 1,237,245 | | | | 275,406 | | | | 69,233 | | | | 1,581,884 | | | | 345,026 | | | | 178,114 | | | | 248,972 | | | | 56,203 | | | | (102,256 | ) | | | 2,307,943 | |
Expenses | | | 828,110 | | | | 186,303 | | | | 41,022 | | | | 1,055,435 | | | | 93,865 | | | | 73,263 | | | | 191,264 | | | | 50,882 | | | | (91,647 | ) | | | 1,373,062 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Earnings before income taxes | | $ | 409,135 | | | $ | 89,103 | | | $ | 28,211 | | | $ | 526,449 | | | $ | 251,161 | | | $ | 104,851 | | | $ | 57,708 | | | $ | 5,321 | | | $ | (10,609 | ) | | $ | 934,881 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Quarter Ended June 30, 2004 | |
| | | Mortgage Banking | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | Loan | | | Closing | | | | | | | | | | | Capital | | | | | | | Global | | | | | | | |
| (In thousands) | | Loan Production | | | Servicing | | | Services | | | Total | | | Banking | | | Markets | | | Insurance | | | Operations | | | Other | | | Grand Total | |
Revenues | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Gain on sale of loans and securities | | $ | 1,349,957 | | | $ | 18,574 | | | $ | — | | | $ | 1,368,531 | | | $ | (104 | ) | | $ | 43,635 | | | $ | — | | | $ | — | | | $ | 6,807 | | | $ | 1,418,869 | |
| Net interest income after provision for loan losses | | | 314,370 | | | | (103,797 | ) | | | 262 | | | | 210,835 | | | | 145,162 | | | | 112,260 | | | | 10,309 | | | | 483 | | | | (248 | ) | | | 478,801 | |
Net loan servicing fees(1) | | | — | | | | 239,327 | | | | — | | | | 239,327 | | | | — | | | | 689 | | | | — | | | | 26,287 | | | | (3,972 | ) | | | 262,331 | |
| Net insurance premiums earned | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 187,252 | | | | — | | | | — | | | | 187,252 | |
Commissions, fees and other income(2) | | | 29,633 | | | | 15,263 | | | | 54,824 | | | | 99,720 | | | | 23,633 | | | | 5,101 | | | | 16,014 | | | | 26,833 | | | | (43,808 | ) | | | 127,493 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total revenues | | | 1,693,960 | | | | 169,367 | | | | 55,086 | | | | 1,918,413 | | | | 168,691 | | | | 161,685 | | | | 213,575 | | | | 53,603 | | | | (41,221 | ) | | | 2,474,746 | |
Expenses | | | 724,135 | | | | 144,174 | | | | 32,017 | | | | 900,326 | | | | 49,608 | | | | 72,054 | | | | 165,038 | | | | 43,920 | | | | (40,676 | ) | | | 1,190,270 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Earnings before income taxes | | $ | 969,825 | | | $ | 25,193 | | | $ | 23,069 | | | $ | 1,018,087 | | | $ | 119,083 | | | $ | 89,631 | | | $ | 48,537 | | | $ | 9,683 | | | $ | (545 | ) | | $ | 1,284,476 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
| (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. |
(more)
COUNTRYWIDE FINANCIAL CORPORATION
YEAR-TO-DATE SEGMENT ANALYSIS
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Six Months Ended June 30, 2005 | |
| | | Mortgage Banking | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | Loan | | | Closing | | | | | | | | | | | Capital | | | | | | | Global | | | | | | | |
| (In thousands) | | Loan Production | | | Servicing | | | Services | | | Total | | | Banking | | | Markets | | | Insurance | | | Operations | | | Other | | | Grand Total | |
Revenues | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Gain on sale of loans and securities | | $ | 2,250,849 | | | $ | 22,903 | | | $ | — | | | $ | 2,273,752 | | | $ | (808 | ) | | $ | 223,395 | | | $ | — | | | $ | — | | | $ | 10,821 | | | $ | 2,507,160 | |
| Net interest income after provision for loan losses | | | 332,019 | | | | (68,932 | ) | | | 1,448 | | | | 264,535 | | | | 543,917 | | | | 140,887 | | | | 23,123 | | | | 1,833 | | | | 6,376 | | | | 980,671 | |
Net loan servicing fees(1) | | | — | | | | 517,339 | | | | — | | | | 517,339 | | | | — | | | | 2,181 | | | | 5,881 | | | | 55,730 | | | | (12,923 | ) | | | 568,208 | |
| Net insurance premiums earned | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 414,996 | | | | — | | | | — | | | | 414,996 | |
Commissions, fees and other income(2) | | | 105,923 | | | | (6,419 | ) | | | 128,377 | | | | 227,881 | | | | 98,215 | | | | 15,560 | | | | 28,441 | | | | 53,754 | | | | (182,058 | ) | | | 241,793 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total revenues | | | 2,688,791 | | | | 464,891 | | | | 129,825 | | | | 3,283,507 | | | | 641,324 | | | | 382,023 | | | | 472,441 | | | | 111,317 | | | | (177,784 | ) | | | 4,712,828 | |
Expenses | | | 1,544,999 | | | | 358,599 | | | | 81,829 | | | | 1,985,427 | | | | 174,223 | | | | 155,125 | | | | 360,156 | | | | 101,957 | | | | (147,938 | ) | | | 2,628,950 | |
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| Earnings before income taxes | | $ | 1,143,792 | | | $ | 106,292 | | | $ | 47,996 | | | $ | 1,298,080 | | | $ | 467,101 | | | $ | 226,898 | | | $ | 112,285 | | | $ | 9,360 | | | $ | (29,846 | ) | | $ | 2,083,878 | |
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| | | Six Months Ended June 30, 2004 | |
| | | Mortgage Banking | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | Loan | | | Closing | | | | | | | | | | | Capital | | | | | | | Global | | | | | | | |
| (In thousands) | | Loan Production | | | Servicing | | | Services | | | Total | | | Banking | | | Markets | | | Insurance | | | Operations | | | Other | | | Grand Total | |
Revenues | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Gain on sale of loans and securities | | $ | 2,306,871 | | | $ | 100,524 | | | $ | — | | | $ | 2,407,395 | | | $ | 2,527 | | | $ | 116,801 | | | $ | — | | | $ | — | | | $ | 12,167 | | | $ | 2,538,890 | |
| Net interest income after provision for loan losses | | | 664,904 | | | | (214,604 | ) | | | 486 | | | | 450,786 | | | | 263,228 | | | | 254,744 | | | | 21,092 | | | | 963 | | | | (598 | ) | | | 990,215 | |
Net loan servicing fees(1) | | | — | | | | 235,434 | | | | — | | | | 235,434 | | | | — | | | | 1,409 | | | | — | | | | 52,977 | | | | (7,239 | ) | | | 282,581 | |
| Net insurance premiums earned | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 382,635 | | | | — | | | | — | | | | 382,635 | |
Commissions, fees and other income(2) | | | 43,051 | | | | 30,704 | | | | 103,980 | | | | 177,735 | | | | 43,866 | | | | 12,127 | | | | 32,313 | | | | 57,475 | | | | (77,873 | ) | | | 245,643 | |
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| Total revenues | | | 3,014,826 | | | | 152,058 | | | | 104,466 | | | | 3,271,350 | | | | 309,621 | | | | 385,081 | | | | 436,040 | | | | 111,415 | | | | (73,543 | ) | | | 4,439,964 | |
Expenses | | | 1,344,391 | | | | 285,084 | | | | 62,865 | | | | 1,692,340 | | | | 84,930 | | | | 142,299 | | | | 335,508 | | | | 90,001 | | | | (72,273 | ) | | | 2,272,805 | |
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| Earnings before income taxes | | $ | 1,670,435 | | | $ | (133,026 | ) | | $ | 41,601 | | | $ | 1,579,010 | | | $ | 224,691 | | | $ | 242,782 | | | $ | 100,532 | | | $ | 21,414 | | | $ | (1,270 | ) | | $ | 2,167,159 | |
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| (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). |
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| (2) | | Consists primarily of revenues from ancillary products and services, including title, escrow, appraisal, credit reporting and home inspection services and insurance agency commissions. |
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