ATLANTA, May 9 /PRNewswire-FirstCall/ -- HomeBanc Corp. (NYSE:HMB)
("HomeBanc" or the "Company"), today reported the Company's
consolidated results of operations for the three months ended March
31, 2007. Financial Highlights -- GAAP consolidated net loss
attributable to holders of common stock of $23.8 million, or $0.42
per diluted share, for the three months ended March 31, 2007; --
Pre-tax GAAP consolidated loss attributable to holders of common
stock of $18.6 million, or $0.33 per share, for the three months
ended March 31, 2007, of which $9.0 million, or $0.16 per share,
was attributable to one-time costs during the quarter ended March
31, 2007; -- Investment portfolio assets comprised of mortgage
loans held for investment (net) and securities held to maturity and
available for sale of $4.5 billion at March 31, 2007, compared to
$5.9 billion at March 31, 2006; -- Mortgage loans that were 90 days
or more delinquent and nonperforming assets comprised 1.02% and
1.16%, respectively, of the loans held for investment portfolio at
March 31, 2007; -- Mortgage origination volume of $1.1 billion for
the three months ended March 31, 2007; and -- New loan application
volume of $1.3 billion for the three months ended March 31, 2007.
Kevin D. Race, HomeBanc's President and Chief Executive Officer,
said, "While we have continued to focus on the areas of
right-sizing our cost structure and improving the efficiency of our
operations, the market conditions for the first three months of the
year have provided challenges to our plan to return our origination
business to profitability. The disruption of the sub-prime market
has had an effect on all segments of the mortgage market, as is
reflected in our significantly deteriorated gain on sale margins
during the first quarter. Although we expect this pricing pressure
to be temporary in nature and we have been encouraged by the
recovery in gain on sale execution we have experienced to date in
the second quarter, we believe that gain on sale margins may not
completely recover to what we consider to be normal until 2008. On
a positive note, our mortgage investment operations segment
continues to perform well, and our overall credit performance has
been excellent." Comparison of the Three Months Ended March 31,
2007 and 2006 -- Total consolidated revenues were $24.1 million for
the first quarter of 2007, compared to $38.5 million for the same
quarter of 2006; the decrease was primarily due to lower net
interest income as a result of a declining loan portfolio balance
and increased pricing pressures impacting the gain on sale
execution for the sale of mortgage loans; -- Net interest income
after provision for loan losses was $5.6 million for the three
months ended March 31, 2007, compared to $28.8 million for the same
period of 2006; -- Net gain on sale of mortgage loans was $3.8
million during the three months ended March 31, 2007, compared to
$7.1 million on loan sales for the same period of 2006; -- Total
expenses increased 12% from $38.2 million for the quarter ended
March 31, 2006 to $42.7 million for the first quarter of 2007,
primarily the result of $9.0 million of one-time costs; -- Total
consolidated GAAP net loss attributable to holders of common stock
for the quarter ended March 31, 2007 was $23.8 million, compared to
net income of $0.5 million for the same period of 2006; and --
Mortgage loan origination volume for the quarter ended March 31,
2007 was $1.1 billion, a decrease of 13% from $1.2 billion for the
same period of 2006. Revenues Net interest income after provision
for loan losses was $5.6 million for the three months ended March
31, 2007, compared to $28.8 million for the same period of 2006.
The decline is primarily due to one-time losses in 2007 and gains
in 2006 on certain derivative financial instrument activities, a
larger percentage of portfolio assets comprised of mortgage-backed
securities ("MBS") and an overall decline in total investment
portfolio assets. The Company's average loan balance decreased 17%
from $5.8 billion at March 31, 2006 to $4.8 billion at March 31,
2007. The sale of $1.2 billion of securities available for sale
generated $12.5 million in securities gains during the period.
These gains were primarily offset by derivative financial
instrument losses of $7.0 million recorded in interest expense
related to the associated debt on the securities sold. The
Company's net gain on sale of mortgage loans for the three months
ended March 31, 2007 was $3.8 million, compared to $7.1 million for
the same period of 2006. The Company sold $1.1 billion of loans
during the three months ended March 31, 2007, compared to $942
million during the same period of 2006. Origination Volume
HomeBanc's total loan originations in the first quarter of 2007,
when compared to the same period of 2006, declined 13%. The
Company's purchase money mortgage originations also decreased 13%
in the first quarter of 2007 when compared to the first quarter of
2006. The decline in both total originations and purchase money
originations is due primarily to the difficult market conditions
faced by our Florida operations, which comprised 44% of HomeBanc's
total originations for the three months ended March 31, 2007. Our
Florida mortgage loan volume for the first quarter of 2007
reflected a 25% decrease from our volume for the same period in
2006. The Florida Association of Realtors indicated a 27% decrease
in existing home sales during the first quarter of 2007 compared to
the same period of 2006. Investment Portfolio The total investment
portfolio was comprised of average loans held for investment of
$4.3 billion and average MBS available for sale and held to
maturity of $1.1 billion for the quarter ended March 31, 2007,
compared to an average balance of loans held for investment of $5.4
billion and $0.4 billion in MBS held in the portfolio for the
quarter ended March 31, 2006. Approximately $1.2 billion of MBS,
classified as available for sale, were sold by the end of the March
31, 2007 quarter. The loans held for investment portfolio, based on
unpaid principal balance, had total delinquencies of 3.19% and 90
days or more delinquencies of 1.02% at period end and had
charge-offs of $784,000 for the first quarter of 2007. Loan
Servicing As of March 31, 2007, the Company serviced mortgage
loans, excluding loans held for sale, having an aggregate unpaid
principal balance of $8.6 billion. Of the 42,269 mortgage loans
serviced by the Company at March 31, 2007, 21,574 loans were owned
by the Company, and 20,695 loans were serviced for third party
investors. The loan servicing portfolio carried a weighted-average
annual servicing fee of 0.335% at March 31, 2007. The total
mortgage loans serviced by the Company, on a unit basis, had a
90-day or greater delinquency rate of 0.91% at March 31, 2007.
Operating Highlights As of and for the Three Months Ended ($ in
millions) March 31, % Loan Originations: 2007 2006 Change Total
originations $1,069 $1,235 (13)% Purchase 820 948 (14) Refinance
249 287 (13) ARM 515 823 (37) Fixed 554 412 34 Loans sold to third
parties 1,097 942 16 Loan applications 1,311 1,606 (18) Total SMAs
- period end 139 218 (36) Realtors 96 112 (14) Builders 43 106 (59)
Total SMA locations - period end 169 243 (30) Realtors 126 137 (8)
Builders 43 106 (59) ($ in millions) As of Loans Held for
Investment: March 31, 2007 March 31, 2006 Loans held for
investment, net $4,184 $5,292 Securities available for sale 88 443
Securities held to maturity 183 211 Total portfolio $4,455 $5,946
Portfolio composition 1-month interest-only ARMs 3.7% 5.6% 6-month
interest-only ARMs 8.1 13.0 3-year fixed interest-only ARMs 11.1
11.5 5-year fixed interest-only ARMs 53.4 48.3 7-year fixed
interest-only ARMs 18.6 16.0 10-year fixed interest-only ARMs 1.0
0.7 All other mortgage loans 4.1 4.9 Total 100.0% 100.0% Average
decision FICO score 725 not reported Average loan-to-value (LTV)(1)
80.0% not reported Average exposure combined loan-to- value
(e-CLTV)(2) 83.0% not reported Geographic concentration (total
portfolio) Florida 52% 53% Georgia 42 41 North Carolina 5 5 Other 1
1 ($ in millions) As of March 31, March 31, % Loan Servicing: 2007
2006 Change Total servicing portfolio (excluding loans held for
sale) $8,583 $6,687 28% Loans serviced for third parties 4,395
1,391 216 Loans serviced for mortgage investment operations segment
4,188 5,292 (21) Real estate owned (all business segments) 7.4 3.1
Weighted-average service fee - securitized 0.280% 0.289%
Weighted-average service fee - third parties 0.389 0.384
Weighted-average service fee - all loans 0.335 0.307 Mortgage
investment operations segment delinquency of 90 days or more - per
unit basis 1.08 0.46 Mortgage investment operations segment
delinquency of 90 days or more - unpaid principal balance basis
1.02 0.36 (1) Calculation of LTV limited to first-lien transactions
on all loan originations (2) Calculation of e-CLTV equals the
origination CLTV if both first- and second-lien transactions or
only the second-lien transaction held for investment by the
Company; and equals the origination LTV if only the first-lien
transaction is held for investment by the Company Important Note:
Certain data in this press release have been rounded for
presentation purposes. Calculations appearing herein are based on
the actual underlying data and may vary from the calculations that
would result from use of the rounded data. Delinquency data is
reported using the MBA method. Conference Call HomeBanc Corp. will
host a conference call on Thursday, May 10, 2007 at 9:00 a.m.
Eastern time, to discuss first quarter results. The conference call
dial-in number is 800-949-8987 in the United States and Canada and
706-634-0965 from international locations. The conference ID number
is 5856142. You may also listen to the call on
http://www.earnings.com/ and on the HomeBanc Corp. website at
http://www.homebanc.com/. PowerPoint slides to accompany the
conference call will be available on the Company's website under
Investor Relations - Financial/Statistical Information and also on
the Company's website under Investor Relations - Webcast Live link.
The Internet broadcast will be archived on both websites until May
23, 2007. A digital recording of the conference call will be
available for replay two hours after the call's completion and will
be available through May 23, 2007. To access this recording, dial
800-642-1687 and conference ID 5856142. An archive version of this
Webcast will be available approximately twenty-four hours after the
conclusion of the live call at mms://winaudio.mshow.com.331207.asf.
Series A Preferred Dividend HomeBanc also announced the regular
quarterly dividend of $0.625 per share on its 10% Series A
Cumulative Redeemable Preferred Stock for the quarter ending June
30, 2007. This dividend is payable on July 2, 2007 to Series A
preferred shareholders of record as of June 15, 2007. About our
Company HomeBanc Corp. is the parent company of HomeBanc Mortgage
Corporation, a mortgage banking company that focuses on originating
purchase money residential mortgage loans in the Southeast United
States. HomeBanc is headquartered in Atlanta, Georgia, and has
offices in Georgia, Florida, North Carolina and Tennessee. For more
information about HomeBanc Corp., HomeBanc Mortgage or the
Company's mortgage products, contact HomeBanc at
http://www.homebanc.com/. Cautionary Notice Regarding
Forward-Looking Statements This press release may include
forward-looking statements within the meaning and subject to the
protection of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934. Such forward- looking
statements include among others, statements regarding: our ability
to operate more efficiently in 2007 and future periods; market
conditions in 2007; the effect of the disruption of the sub-prime
market on the mortgage industry generally; any recovery in our gain
on sale execution and our ability to return our mortgage
origination business to profitability in 2007 and beyond; the
performance of our mortgage investment operations segment during
2007; and our credit performance during 2007. Such forward-looking
statements are based on information presently available to the
Company's management and are subject to various risks and
uncertainties, including, without limitation: the continued
deterioration of mortgage market conditions in 2007; the failure of
our strategies and plans designed to improve the profitability of
our mortgage origination business, including, without limitation,
those strategies and plans related to improving the efficiency of
the infrastructure, origination process and other aspects of our
mortgage origination business, as well as those strategies and
plans related to maintaining and increasing the level of our
mortgage loan origination volume; the failure of our strategies and
plans designed to position us to grow our business in future
periods; our inability to effectively restructure our field
operations, and to realize the anticipated benefits of that
restructuring, including, without limitation, as a result of any
increases in the salaries that we pay to our field employees and
the increase of any other costs associated with our field
operations; our inability to successfully implement our strategy of
reducing the costs related to our SMAs while increasing
productivity; our inability to open new stores on a timely and
effective basis, if at all, and to operate those stores on a
profitable basis; our inability to open new stores in 2007, whether
as a result of market conditions, the lack of qualified personnel
to staff those stores on terms that are attractive to us, the
financial performance and liquidity of our company, or otherwise;
risks related to our consideration of various strategic
alternatives, including without limitation, potentially changing
our operating model; our ability to successfully apply our business
strategy, including, without limitation, our recent changes to that
strategy; risks related to recent changes in our executive
management team; risks of changes in interest rates and the yield
curve on our mortgage loan production, our product mix, our
interest sensitive assets and liabilities, and our net interest
margin; unanticipated changes in the market for mortgage loans, or
the further deterioration of economic and real estate market
conditions in our markets, generally and in particular in our
Florida markets; mortgage loan prepayment assumptions and estimated
lives of loans and the estimates used to value our mortgage
servicing rights; interest rate risks and credit risks of
customers; loan loss experience and the rate of loan charge-offs;
loss experience arising from alleged breaches of representations
and warranties provided to buyers of mortgage loans sold; the
failure of assumptions underlying the establishment of reserves for
loan and contingency losses and other estimates including estimates
about loan prepayment rates and the estimates used to value our
mortgage servicing rights, and the estimates and assumptions
utilized in our hedging strategy; risks in our ability to retain
experienced loan officers; risks of maintaining securities held
available for sale whose value must be marked to market in our
periodic financial statements; pricing pressure that could
negatively impact gain on sale relative to the amount of loans
sold; and the other risks and factors described in the Company's
SEC reports and filings, including, without limitation, under the
captions "Special Cautionary Notice Regarding Forward- Looking
Statements" and "Risk Factors." You should not place undue reliance
on forward-looking statements, since the statements speak only as
of the date that they are made. The Company has no obligation and
does not undertake to publicly update, revise or correct any of the
forward-looking statements after the date of this press release, or
after the respective dates on which such statements otherwise are
made, whether as a result of new information, future events or
otherwise. This press release should be read in conjunction with
the Company's financial statements and the footnotes thereto filed
with the SEC including, without limitation, the financial
statements and footnotes set forth in the Company's Quarterly
Report on Form 10-Q for the period ended March 31, 2007, which we
expect will be filed with the SEC by May 10, 2007. HomeBanc Corp.
and Subsidiaries Condensed Consolidated Statement of Operations
(Unaudited) Three Months Ended March 31, 2007 2006 (Dollars in
thousands, except per share data) Revenues: Net interest income:
Interest income: Mortgage loans, including fees $73,305 $85,027
Securities available for sale 13,826 2,812 Securities held to
maturity 2,771 2,547 Total interest income 89,902 90,386 Total
interest expense (83,974) (61,508) Net interest income 5,928 28,878
Provision for loan losses 341 39 Net interest income after
provision for loan losses 5,587 28,839 Net gain on sale of mortgage
loans 3,793 7,051 Net gain on sale of securities available for sale
12,474 - Mortgage servicing income, net 663 960 Other revenue 1,610
1,622 Total revenues 24,127 38,472 Expenses: Salaries and associate
benefits, net 24,810 18,823 Marketing and promotions 4,022 6,602
Occupancy and equipment 4,085 4,147 Depreciation and amortization
2,044 2,233 Minority interest 61 52 Other operating expense 7,728
6,325 Total expenses 42,750 38,182 (Loss) income before income
taxes (18,623) 290 Income tax expense (benefit) 3,948 (696) (Loss)
income before cumulative effect of change in accounting principle
(22,571) 986 Cumulative effect of change in accounting principle,
net of taxes of $0 and $171, respectively - 270 Net (loss) income
$(22,571) $1,256 Net (loss) income attributable to holders of
common stock $(23,821) $520 (Loss) earnings per share of common
stock outstanding: (Loss) income before cumulative effect of change
in accounting principle Basic and diluted $(0.42) $0.00 Cumulative
effect of change in accounting principle Basic and diluted $- $0.00
Net (loss) income Basic and diluted $(0.42) $0.01 Dividends
declared per share of common stock outstanding $- $- Weighted
average shares of common stock outstanding: Basic 56,365,803
56,335,272 Diluted 56,365,803 57,520,873 HomeBanc Corp. and
Subsidiaries Condensed Consolidated Balance Sheet (Unaudited) March
31, December 31, 2007 2006 (Dollars in thousands, except per share
data) Assets Cash $11,241 $20,987 Restricted cash 79,794 128,033
Mortgage loans held for sale, net 383,532 379,299 Mortgage loans
held for investment, net of allowance of $3,596 and $4,040,
respectively 4,183,798 4,372,998 Mortgage servicing rights 54,831
43,908 Receivable from custodian 58,779 77,612 Trading securities
41,325 4,824 Securities available for sale 87,958 1,366,426
Securities held to maturity (fair value of $182,255 and $187,014,
respectively) 183,362 188,193 Accrued interest receivable 16,998
22,387 Premises and equipment, net 45,325 45,406 Goodwill, net
39,995 39,995 Deferred tax asset, net 18,269 23,225 Other assets
264,588 109,371 Total assets $5,469,795 $6,822,664 Liabilities and
shareholders' equity Warehouse lines of credit $437,371 $404,765
Repurchase agreements 400,522 1,527,470 Loan funding payable 88,684
63,855 Accrued interest payable 7,670 9,144 Other liabilities
65,788 94,832 Collateralized debt obligations 4,075,193 4,277,026
Junior subordinated debentures representing obligations for trust
preferred securities 175,260 175,260 Total liabilities 5,250,488
6,552,352 Minority interest 135 42 Shareholders' equity: Preferred
stock - par value $.01; 25,000,000 shares authorized; 2,000,000
shares issued and outstanding at March 31, 2007 and December 31,
2006. 47,992 47,992 Common stock - par value $.01; 150,000,000
shares authorized; 57,081,946 and 56,898,898 shares issued at March
31, 2007 and December 31, 2006, respectively 570 568 Additional
paid-in capital 278,712 277,800 Accumulated deficit (87,644)
(64,065) Treasury stock, at cost; 3,697,952 and 82,184 shares at
March 31, 2007 and December 31, 2006, respectively (10,581) (673)
Accumulated other comprehensive (loss) income (9,877) 8,648 Total
shareholders' equity 219,172 270,270 Total liabilities and
shareholders' equity $5,469,795 $6,822,664 DATASOURCE: HomeBanc
Corp. CONTACT: Investor, Carol Knies, +1-404-459-7653, or , or
Media, Mark Scott, +1-404-459-7452, or , both of HomeBanc Corp. Web
site: http://www.homebanc.com/
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