Exhibit 99.1
AmNet Mortgage, Inc. Reports Third Quarter Results
SAN DIEGO--(BUSINESS WIRE)--Nov. 15, 2005--AmNet Mortgage, Inc.
(NASDAQ:AMNT), the parent company of American Mortgage Network
(AmNet), a wholesale nationwide mortgage bank, today reported third
quarter results, highlights of which included:
-- Third quarter 2005 consolidated net income was $1.9 million,
or $0.23 per diluted share, compared to a consolidated net
loss of $985 thousand, or $0.13 per diluted share, during the
third quarter of 2004.
-- The Company reported total revenue, net of derivative
financial instruments, of $56.0 million for the third quarter
of 2005. As discussed in the Company's third quarter 10-Q
filed yesterday and second quarter earnings press release,
timing differences routinely occur between the recognition of
hedge gains and losses and associated changes in the fair
value of loans held for sale. The third quarter was impacted
by increases in fair value that were not recognized in the
second quarter of 2005 of approximately $2.3 million on a
pre-tax basis;
-- Mortgage loans funded through AmNet were $4.5 billion in the
third quarter of 2005, an increase of 119%, compared to $2.1
billion in the third quarter of 2004; and
-- Higher margin loans made up 41% of the Company's origination
volume as compared to 32% in the third quarter of 2004.
Consolidated Results
AmNet Mortgage, Inc. reported consolidated pretax income was $3.3
million and consolidated net income of $1.9 million, or $0.23 per
diluted share, for the third quarter of 2005, compared to a
consolidated pretax loss of $1.7 million and a consolidated net loss
of $985 thousand, or $0.13 per diluted share, in the third quarter of
2004. Consolidated net income for the nine months ended September 30,
2005 was $785 thousand or $0.10 per diluted share compared to a
consolidated net loss of $6.5 million or $0.84 per diluted share in
2004.
Because the Company does not employ hedge accounting under FAS
133, positive timing differences between the recognition of hedge
gains and losses and associated increases in the fair value of loans
held for sale at the end of the second quarter had a positive impact
on reported gain on sale revenues in the third quarter. The positive
impact on the third quarter amounted to approximately $2.3 million on
a pre-tax basis.
AmNet funded $4.5 billion in home loans during the third quarter
of 2005, compared to $2.1 billion during the third quarter of 2004, an
increase of 119%. In the third quarter of 2005, higher margin loans,
including Alt-A, subprime, HELOC and second mortgages, made up 41% of
the Company's origination volume as compared to 32% in the third
quarter of 2004. Mortgage loans funded through AmNet were $10.9
billion for the first nine months of 2005, compared to $6.5 billion
for the first nine months of 2004, an increase of 68%.
Proposed Merger with Wachovia Bank, N. A.
Also, during the third quarter, a definitive agreement was signed
on September 13, 2005 under which Wachovia Bank, National Association,
a national banking association organized under the laws of the United
States of America ("Wachovia") will acquire AmNet Mortgage, Inc.
("AmNet") for a purchase price of $10.30 per share in cash. The
approximate total value of the transaction (on a fully diluted basis)
is $83 million. AmNet's Board of Directors, with the unanimous
recommendation of a special committee comprised of independent
directors, has approved the proposed merger and is recommending that
the Company's stockholders vote to approve it. The merger is
conditioned on stockholder approval and other customary conditions
described in the definitive proxy statement dated November 7, 2005
related to the special stockholder meeting scheduled for December 8,
2005.
About AmNet Mortgage, Inc.
AmNet Mortgage Inc. is the parent company of American Mortgage
Network. For more information, please visit www.amnetmortgageinc.com.
About American Mortgage Network
Headquartered in San Diego, California, AmNet is a wholly owned
subsidiary of AmNet Mortgage, Inc. AmNet originates loans for the
national mortgage broker community through its network of branches and
business-to-business over the Internet. AmNet has loan production
offices in Arizona, California, Colorado, Connecticut, Florida,
Georgia, Illinois, Kansas, Minnesota, Nevada, New Hampshire, New
Jersey, New York, North Carolina, Ohio, Oregon, Rhode Island, Utah,
Virginia and Washington. AmNet has a total of $2.2 billion in
warehouse borrowing capacity and is approved to do business in 50
states and the District of Columbia either by license or exemption.
For more information, please visit www.amnetmortgage.com.
Forward-Looking Statement
Certain matters discussed in this press release may constitute
forward-looking statements within the meaning of federal securities
laws. Actual results and the timing of certain events could differ
materially from those projected in or contemplated by any
forward-looking statements due to a number of other factors, including
but not limited to: the level of interest rates generally; economic
conditions generally; the size of the national mortgage market; the
stability of the entire mortgage secondary market; the future
correlation of volatility in forward mortgage sale instruments to the
Company's loan lock commitments; interest rate volatility; the ability
to retain and renew warehouse lending facilities for the funding of
all of the Company's mortgage loans; the Company's liquidity position;
the availability of qualified mortgage professionals; the Company's
ability to attract and retain qualified mortgage professionals; and
other risk factors outlined in the Company's SEC reports.
Caution Required by Certain Securities and Exchange Commission
Rules
In connection with the proposed merger, AmNet Mortgage, Inc. has
filed a definitive proxy statement and other relevant documents
concerning the transaction with the Securities and Exchange
Commission. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE
DEFINITIVE PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER. Investors and
security holders can obtain a free copy of the definitive proxy
statement and other documents filed by AmNet Mortgage, Inc. with the
Securities and Exchange Commission at the Securities and Exchange
Commission's web site at http://www.sec.gov. Free copies of the
definitive proxy statement and other documents filed by AmNet
Mortgage, Inc. with the Securities and Exchange Commission may also be
obtained from AmNet Mortgage, Inc. by directing a request to Investor
Relations, AmNet Mortgage 10421 Wateridge Circle, Suite 250 San Diego,
CA, 92121. (email address: IR@amnetmortgageinc.com).
AmNet Mortgage, Inc. and its directors and its executive officers
may be deemed, under Securities and Exchange Commission rules, to be
soliciting proxies from AmNet Mortgage, Inc.'s stockholders in favor
of the proposed merger. Information regarding the identity of these
persons is set forth in a Schedule 14A filed by AmNet Mortgage with
the Securities and Exchange Commission on July 6, 2005 relating to
AmNet Mortgage, Inc.'s 2005 annual meeting of stockholders and a Form
10-K/A filed by AmNet Mortgage, Inc. with the Securities and Exchange
Commission on July 6, 2005 both of which are available free of charge
from the Securities and Exchange Commission or from AmNet Mortgage,
Inc. as indicated above. Information regarding the interests of these
persons in the solicitation is specifically set forth in the proxy
statement concerning the proposed merger that has been filed by AmNet
Mortgage, Inc. with the Securities and Exchange Commission, which is
available, free of charge from the Securities and Exchange Commission
or from AmNet Mortgage, Inc. as indicated above.
AMNET MORTGAGE, INC.
(unaudited)
Three Three Nine Nine
Months Months Months Months
Ended Ended Ended Ended
9/30/2005 9/30/2004 9/30/2005 9/30/2004
Income Statement --------- --------- --------- ---------
- ----------------
Revenues
Gain on sales of
loans $ 30,070 $ 24,198 $ 80,978 $ 42,037
---------- ---------- ---------- ----------
Derivative financial
instruments:
Forward sales of
mortgage backed
securities (MBS)
and options on MBS 9,610 (7,793) 1,245 (2,423)
Market adjustment
on loan commitment
pipeline (6,197) (3,753) (4,558) (520)
---------- ---------- ---------- ----------
Total derivative
financial
instruments 3,413 (11,546) (3,313) (2,943)
---------- ---------- ---------- ----------
Gain on sales of
loans, net of
derivative
financial
instruments 33,483 12,652 77,665 39,094
Interest on mortgage
assets 22,397 8,227 47,837 24,437
Other income 147 281 599 1,010
---------- ---------- ---------- ----------
Total revenue,
net of
derivative
financial
instruments 56,027 21,160 126,101 64,541
---------- ---------- ---------- ----------
Expenses
Employee compensation
and benefits 24,387 12,752 62,917 38,994
Interest expense 18,702 4,420 37,450 12,414
Valuation
adjustment-bond
collateral held for
sale - (437) - (406)
Operating expenses 9,637 6,093 24,339 24,318
---------- ---------- ---------- ----------
Total expenses 52,726 22,828 124,706 75,320
---------- ---------- ---------- ----------
Income (loss) before
income taxes $ 3,301 $ (1,668) $ 1,395 $ (10,779)
Provision for income
tax expense (benefit) 1,451 (683) 610 (4,328)
Consolidated
Net Income
(loss) $ 1,850 $ (985) $ 785 $ (6,451)
Per Share Data
- --------------
Weighted average
common shares
outstanding 7,209,984 7,364,244 7,334,206 7,716,079
Consolidated income
(loss) per share
basic $ 0.26 $ (0.13) $ 0.11 $ (0.84)
Consolidated income
(loss) per share
diluted $ 0.23 $ (0.13) $ 0.10 $ (0.84)
Loan Origination and
Sale Data
- --------------------
Total mortgage loans
funded in period ($
millions) $ 4,542 $ 2,075 $ 10,944 $ 6,512
Number of loans funded 23,227 12,164 56,802 37,400
Total mortgage loans
sold in period ($
millions) $ 4,154 $ 2,147 $ 10,282 $ 6,399
Percentage of mortgage
loans funded in
period by type
(based on $ funded):
Conventional
conforming 36.8% 45.7% 36.6% 52.9%
Alt-A 32.0% 27.4% 31.6% 15.8%
Jumbo/Non conforming 19.5% 15.5% 20.3% 18.3%
Government 2.9% 6.9% 3.6% 10.0%
Second/HELOC 5.6% 4.0% 5.5% 2.7%
Subprime 3.2% 0.5% 2.4% 0.2%
100.0% 100.0% 100.0% 100.0%
Balance Sheet Data
- ------------------
Cash and cash
equivalents $ 21,663 $ 46,133 $ 21,663 $ 46,133
Restricted cash 3,100 2,100 3,100 2,100
Bond collateral,
mortgage loans, net,
held for sale (lower
of cost or market) - - - -
Bond collateral
mortgage loans and
real estate owned,
net of reserves, held
for investment 11,105 17,197 11,105 17,197
Mortgage loans held
for sale, net,
pledged (lower of
cost or market) - 394,368 - 394,368
Accounts receivable-
mortgage loans
sold/funded 30,369 8,855 30,369 8,855
Total assets 822,141 484,451 822,141 484,451
Short-term debt 710,951 380,751 710,951 380,751
Short-term debt
related to bond
collateral held for
sale - - - -
Long-term debt, net 9,317 15,869 9,317 15,869
Total stockholders'
equity $ 78,631 $ 77,049 $ 78,631 $ 77,049
Book value per
outstanding share
basic $ 10.51 $ 10.54 $ 10.51 $ 10.54
Book value per
outstanding share
diluted $ 9.35 $ 9.61 $ 9.35 $ 9.61
Debt to equity ratio 9.2:1 5.1:1 9.2:1 5.1:1
($ in thousands, except per share data and as noted)
CONTACT: Investor and Analyst Relations Contacts:
AmNet Mortgage, Inc.
Judith Berry, 858-909-1230
jberry@amnetmortgage.com
or
Clay Strittmatter, 858-909-1340
cstrittmatter@amnetmortgage.com
or
Media Relations Contacts:
AmNet Mortgage, Inc.
Kasey Emmel, 858-909-1335
kemmel@amnetmortgage.com
or
Forti Communications Inc.
Corinne Forti, 805-498-0113
cforti@amnetmortgage.com
forticomm@aol.com