American Residential Increases Full Year Guidance;
2003 Earnings Per Share Raised to $3.50-$3.75
SAN DIEGO--(BUSINESS WIRE)--July 17, 2003--American Residential
Investment Trust, Inc. (AMEX:INV), the parent company of American
Mortgage Network (AmNet), a wholesale mortgage bank serving mortgage
brokers, announced today that its net income for the full year 2003 is
expected to surpass previous estimates. The Company now anticipates
that:
-- Net income in 2003 will be in the range of $30 to $32 million,
or between $3.50 and $3.75 per diluted share, inclusive of tax
benefits to be recorded in the first and second quarters
totaling $9.1 million, or $1.04 per diluted share.
-- Second quarter net income will be approximately $9.5 million,
or $1.12 per diluted share, including the realization of
deferred tax assets of $2.5 million, or $0.29 per diluted
share.
-- Income before taxes in the second quarter will be $10.6
million, 45% higher than the first quarter, 2003.
-- Book value per share is expected to be approximately $10.29 as
of June 30, 2003.
The Company expects 2003 net income to be between $30 and $32
million, or between $3.50 and $3.75 per diluted share. The 2003 net
income forecast is inclusive of realized deferred tax assets of
approximately $9.1 million, or $1.04 per diluted share. The revised
2003 guidance is based on total loan fundings of $11 to $12 billion,
an assumed effective combined federal and state tax rate of
approximately 31% and anticipated stock option dilution of
approximately 11%. These changes are directly related to the Company's
increased loan volume and profitability. The Company previously
estimated that net income for the year would be between $19.8 and
$21.8 million, or between $2.50 and $2.75 per diluted share, that loan
fundings would be $8 to $9 billion and that its effective tax rate
would be 25%.
Second quarter net income is expected to be $9.5 million,
inclusive of a tax benefit of $2.5 million due to the realization of
deferred tax assets associated with net operating loss carry forwards
in American Residential Investment Trust. The deferred tax asset
realization results from an anticipated increase in profitability from
the Company's mortgage banking subsidiary, AmNet. Earnings per diluted
share in the second quarter are expected to be $1.12, inclusive of
$0.29 per diluted share associated with the tax benefit. Net income in
the quarter ended June 30, 2003 was affected by the impact of a higher
effective tax rate resulting from the expected increase in
profitability. The Company anticipates that second quarter income
before taxes will be approximately $10.6 million, up from $7.3 in the
first quarter, 2003.
Inclusive of the tax benefit totaling $1.04 per diluted share,
earnings per share for the six months ended June 30, 2003 are expected
to be $2.53, after stock option dilution resulting from significant
share price appreciation during the period and a higher effective tax
rate. Cash and cash equivalents are expected to be approximately $29.3
million as of June 30, 2003. Total assets are expected to increase by
approximately $73 million during the second quarter, substantially due
to an increase in mortgage loans held for sale and related
receivables. Second quarter financial results will be issued in late
July or early August.
"Our income before taxes in the second quarter is expected to be
45% higher than in the first quarter of 2003, corresponding to
increased loan fundings," said John M. Robbins, Chief Executive
Officer. "While net income and earnings per share will be impacted by
the effect of a higher estimated tax rate and employee stock option
dilution, we have always believed that stock options help align
compensation with the creation of stockholder value. The Company
continues to take advantage of favorable market conditions and is
aggressively growing market share in key demographic areas."
Robbins added, "Based on higher than expected net income and the
continued strength of the mortgage market, which is now estimated to
be $3.3 trillion in new loan originations for 2003, according to the
Mortgage Bankers Association of America, we are revising our guidance
upward. The housing market is very healthy, driven by low interest
rates, continued appreciation in home prices, strong immigration and
record numbers of first-time homebuyers. Our national expansion is
moving ahead quickly. We expect to achieve $1 to $1.5 billion in
average monthly fundings in 2004, even as the overall mortgage market
returns to more normal conditions."
For the second quarter of 2003, AmNet reported that it funded $3.2
billion in home mortgages compared to $2.1 billion for the first
quarter of the year. In the first two quarters of 2003, AmNet funded
$5.3 billion in home mortgages compared to $954 million for the same
period in 2002. AmNet funded $1.3 billion of mortgages in June,
compared to $878 million in May. AmNet now has a total of $1.3 billion
in warehouse borrowing capacity and is licensed to do business in 46
states.
About American Mortgage Network
Headquartered in San Diego, California, American Mortgage Network
is a wholly owned subsidiary of American Residential Investment Trust,
Inc. AmNet originates loans for the national mortgage broker community
through its network of branches and over the Internet. AmNet has loan
production offices in Orange County, Ontario, Sacramento, and San
Diego, California; Denver, Colorado; New Haven, Connecticut; Tampa,
Florida; Atlanta, Georgia; Chicago, Illinois; Minneapolis, Minnesota;
Cherry Hill, New Jersey; Portland, Oregon; Providence, Rhode Island;
Richmond, Virginia; and Bellevue, Washington. For more information,
please visit www.amnetmortgage.com.
About American Residential Investment Trust
American Residential Investment Trust, Inc. is the parent company
of American Mortgage Network. For more information, please visit
www.amerreit.com.
Forward-Looking Statements
Certain matters discussed in this press release may constitute
forward-looking statements within the meaning of federal securities
laws. Forward-looking statements include statements regarding the
Company's anticipated net income, income before taxes and earnings per
share for the quarter ending June 30, 2003 and for the year ending
December 31, 2003, the Company's expected book value per share at June
30, 2003, the Company's expected loan fundings for 2003, the Company's
anticipated combined federal and state income tax rate and stock
option dilution percentages for 2003, the amount of deferred tax
assets realized by the Company, the Company's earnings per share for
the six months ended June 30, 2003, cash and cash equivalent balances
at June 30, 2003, the change in the Company's assets from the first
quarter to the second quarter of 2003, the anticipated timing of
reporting second quarter 2003 financial results, the estimated 2003
mortgage market of $3.3 trillion and the Company's resulting 2003
production forecast and anticipated average monthly loan fundings in
2004. Actual results and the timing of certain events could differ
materially from those projected in or contemplated by these
forward-looking statements due to a number of factors, including but
not limited to: uncertainty as to the percentage of the pipeline that
will result in mortgage loan fundings; fluctuation in the margins, net
of hedging, of loans in the Company's pipeline; the predictability of
the Company's expenses; the future correlation of volatility in
forward mortgage sale instruments to the Company's loan lock
commitments; general economic conditions; interest rate volatility and
the level of interest rates generally; the availability of financing
for the origination of mortgage loans; the impact of leverage; the
Company's liquidity position; the reliability of forecasting
assumptions, including the anticipated earnings and net operating loss
carry forwards for AmNet, used to estimate the expected effective
combined federal and state income tax rate for 2003; the overall
demand for mortgage loans and other risk factors outlined in American
Residential Investment Trust's SEC reports.
CONTACT: Investor and Analyst Contacts:
American Residential Investment Trust
Judith Berry, 858-909-1200
jberry@amnetmortgage.com
Clay Strittmatter, 858-909-1340
cstrittmatter@amnetmortgage.com
or
FRB Weber Shandwick
Rose Tucker, 310-407-6522
rtucker@webershandwick.com
or
Media Contacts:
American Residential Investment Trust
Kasey Emmel, 858-909-1335
kemmel@amnetmortgage.com
or
Forti Communications Inc.
Corinne Forti, 805-498-0113
cforti@amnetmortgage.com
forticomm@aol.com