Franklin Credit Management Reports 51% First Quarter Earnings
Increase NEW YORK, May 16 /PRNewswire-FirstCall/ -- Franklin Credit
Management Corporation (OTC:FCSC) (BULLETIN BOARD: FCSC) , a
specialty consumer finance company primarily engaged in the
acquisition, origination, servicing and resolution of performing
and nonperforming residential mortgage loans, today announced
increased revenues and earnings for the first quarter of 2005. For
the first quarter ended March 31, 2005, total revenues increased
85% to $27.9 million, compared with $15.1 million for the same
quarter in 2004. Net income increased 51% to $3.1 million, or $0.45
per diluted share, compared with $2.0 million, or $0.30 per diluted
share, for the three months ended March 31, 2004. Total assets
increased $104.6 million, or 11.7%, during the first quarter of
2005, to end the quarter at $996.1 million. Total shareholders'
equity approximated $32.6 million at March 31, 2005, an increase of
10.5% since December 31, 2004. "We are pleased to report
substantially higher revenues and earnings for this first quarter
of 2005," commented Jeffrey Johnson, chief executive officer of
Franklin Credit Management Corporation. "Large portfolio
acquisitions during the second half of 2004, principally related to
two large bulk purchases of performing and nonperforming mortgage
loans, and increased originations of non-prime mortgage loans
through our Tribeca mortgage subsidiary during the latter half of
2004 and in the first quarter of 2005, accounted for an 85%
increase in net interest income in this quarter, when compared with
the first quarter in 2004." About Franklin Credit Management
Corporation We are a specialty consumer finance company primarily
engaged in two related lines of business, the acquisition,
servicing and resolution of performing, reperforming and
nonperforming residential mortgage loans and the origination of
non-prime mortgage loans for our portfolio and for sale into the
secondary market. We focus on acquiring and originating loans that
involve an elevated credit risk as a result of the nature or
absence of income documentation, limited credit histories, high
levels of consumer debt or past credit difficulties. We typically
purchase loan portfolios at a discount and originate loans with
interest rates and fees calculated to provide us with a rate of
return adjusted to reflect the elevated credit risk inherent in
these types of loans. We originate non-prime loans through our
wholly-owned subsidiary, Tribeca Lending Corp. We generally hold
for investment the loans we acquire and a significant portion of
the loans we originate. The Company conducts its business from its
executive and main office in New York City and through its website
http://www.franklincredit.com/. Its common stock trades on the OTC
Bulletin Board under the symbol "FCSC". Statements contained herein
that are not historical fact may be forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, that are subject to a variety of risks and uncertainties.
There are a number of important factors that could cause actual
results to differ materially from those projected or suggested in
forward-looking statements made by the Company. These factors
include, but are not limited to: (i) unanticipated changes in the
U.S. economy, including changes in business conditions such as
interest rates, and changes in the level of growth in the finance
and housing markets; (ii) the status of relations between the
Company and its sole lender and the lender's willingness to extend
additional credit to the Company; (iii) the availability for
purchases of additional loans; (iv) the availability of sub-prime
borrowers for the origination of additional loans; and (v) other
risks detailed from time to time in the Company's SEC reports.
Additional factors that would cause actual results to differ
materially from those projected or suggested or suggested in any
forward-looking statements are contained in the Company's filings
with the Securities and Exchange Commission, including, but not
limited to, those factors discussed under the captions "Real Estate
Risk" and "Interest Rate Risk" in the Company's Annual Report on
Form 10-K and Quarterly Reports on Form 10-Q, which the Company
urges investors to consider. The Company undertakes no obligation
to publicly release the revisions to such forward-looking
statements that may be made to reflect events or circumstances
after the date hereof or to reflect the occurrences of
unanticipated events, except as other wise required by securities
and other applicable laws. Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as
of the date hereof. Contact: Paul Colasono, CFO Franklin Credit
Management Corporation (212) 925-8745 ext. 169 FRANKLIN CREDIT
MANAGEMENT CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
(Unaudited) ASSETS March 31, 2005 December 31, 2004 CASH AND CASH
EQUIVALENTS $24,333,579 $19,519,659 RESTRICTED CASH 143,831 128,612
NOTES RECEIVABLE: Principal 837,706,645 811,885,856 Purchase
discount (29,388,621) (32,293,669) Allowance for loan losses
(83,919,665) (89,628,299) Net notes receivable 724,398,359
689,963,888 ORIGINATED LOANS HELD FOR SALE 17,666,811 16,851,041
ORIGINATED LOANS HELD FOR INVESTMENT 171,237,420 110,496,274
ACCRUED INTEREST RECEIVABLE 9,949,260 8,506,252 OTHER REAL ESTATE
OWNED 21,492,219 20,626,156 OTHER RECEIVABLES 7,102,014 5,366,500
DEFERRED TAX ASSET 301,073 583,644 OTHER ASSETS 9,422,222
10,577,344 BUILDING, FURNITURE AND EQUIPMENT - Net 1,336,823
1,290,442 DEFERRED FINANCING COSTS - Net 8,726,573 7,600,942 TOTAL
ASSETS $996,110,184 $891,510,754 LIABILITIES AND STOCKHOLDERS'
EQUITY LIABILITIES: ACCOUNTS PAYABLE AND ACCRUED EXPENSES
$11,971,286 $11,572,764 FINANCING AGREEMENTS 31,518,801 39,540,205
NOTES PAYABLE 916,186,427 807,718,038 INCOME TAX LIABILITY CURRENT
-- DEFERRED 3,783,964 3,123,865 TOTAL LIABILITIES 963,460,478
861,954,872 COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY
Preferred stock, $.01 par value per share; authorized 3,000,000;
issued-none Common stock, $.01 par value, 22,000,000 authorized
shares; issued and outstanding: 6,082,295 in 2005 and 6,062,295 in
2004 60,823 60,623 Additional paid-in capital 7,377,578 7,354,778
Retained earnings 25,211,305 22,140,481 TOTAL STOCKHOLDERS' EQUITY
32,649,706 29,555,882 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$996,110,184 $891,510,754 See notes to consolidated financial
statements. FRANKLIN CREDIT MANAGEMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three months ended
March 31, 2005 2004 REVENUES: Interest income $22,877,198
$10,636,341 Purchase discount earned 2,251,481 1,341,397 Gain on
sale of notes receivable -- 844,902 Gain on sale of originated
loans held for sale 663,704 892,955 Gain on sale of other real
estate owned 255,981 231,246 Prepayment penalties and other income
1,842,916 1,112,924 Total revenues 27,891,280 15,059,765 OPERATING
EXPENSES: Interest expense 13,018,345 5,313,075 Collection, general
and administrative 7,089,544 4,446,182 Provision for loan losses
1,198,218 895,876 Amortization of deferred financing costs 692,987
592,901 Depreciation 205,474 113,382 Total operating expenses
22,204,568 11,361,416 INCOME BEFORE PROVISION FOR INCOME TAXES
5,686,712 3,698,349 PROVISION FOR INCOME TAXES 2,615,888 1,665,000
NET INCOME $3,070,824 $2,033,349 NET INCOME PER COMMON SHARE: Basic
$0.51 $0.34 Diluted $0.45 $0.30 WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING: Basic 6,072,295 5,916,527 Diluted 6,870,616
6,690,627 DATASOURCE: Franklin Credit Management Corporation
CONTACT: Paul Colasono, CFO of Franklin Credit Management
Corporation, +1-212-925-8745, ext. 169, Web site:
http://www.franklincredit.com/
Copyright