Franklin Credit Management Corp.
(OTC:FCSC) (BULLETIN BOARD: FCSC) , a specialty financial services company that
acquires, manages and sells subprime residential mortgage assets, today
announced the purchase of a mixed pool of performing, subperforming, and
nonperforming mortgage loans (and related servicing rights) with a face value
totaling approximately $310 million. The loans, which are secured by
single-family residences, were purchased from Bank One, N.A., and include
$246.0 million face amount of first mortgage loans and $64.5 million face
amount of second mortgage loans. The purchase price was $275.1 million.
"We are pleased to announce the successful closing on our purchase of this
large portfolio of loans," commented Thomas J. Axon, Chairman of Franklin
Credit Management Corp. "On a pro forma basis, the purchase expands our Net
Notes Receivable portfolio by more than 42%, to approximately $654 million as
of March 31, 2004. We expect the acquisition to be accretive to net income and
earnings per share, as it will allow us to expand our operating platform and
leverage SG&A expenses across a larger revenue base."
In its Form 8-K filing with the SEC relating to the transaction, the Company
provided unaudited pro forma information that gives effect to the acquisition
of certain assets from Bank One, N.A., as if the transactions had occurred as
of January 1, 2003. According to the 8-K filing, revenues would have
approximated $83.4 million and the Company would have earned net income after
taxes of $10.6 million, or $1.62 per diluted share, on a pro forma basis, for
the year ended December 31, 2003. These pro forma results compare with actual
reported revenues of $57.6 million and reported net income after taxes of $6.7
million, or $1.02 per diluted share, for the year ended December 31, 2003.
The 8-K filing also provided unaudited pro forma operating information for the
quarter ended March 31, 2004. Pro forma revenues would have approximated $22.0
million and the Company would have earned net income after taxes of $3.3
million, or $0.49 per diluted share, for the three months ended March 31, 2004.
These pro forma results compare with actual reported revenues of $15.1 million
and reported net income after taxes of $2.0 million, or $0.30 per diluted
share, for the quarter ended March 31, 2004.
About Franklin Credit Management Corp.
Franklin Credit Management Corporation ("FCMC", and together with its
wholly-owned subsidiaries, the "Company") is a specialty consumer finance and
asset management company primarily engaged in the acquisition, origination,
servicing and resolution of performing, sub-performing and non-performing
residential mortgage loans and residential real estate. The Company acquires
these mortgages from a variety of mortgage bankers, banks, and other specialty
finance companies. These loans are generally purchased in pools at discounts
from their aggregate contractual balances, from sellers in the financial
services industry. Real estate is acquired in foreclosure or otherwise and is
also generally acquired at a discount relative to the appraised value of the
asset. 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 Senior Debt
Lender and the Senior Debt Lender's willingness to extend additional credit to
the Company; (iii) the availability for purchases of additional loans; (iv) the
status of relations between the Company and its sources for loan purchases; (v)
unanticipated difficulties in collections under loans in the Company's
portfolio; and (vi)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 caption "Real Estate 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. The
Company undertakes no obligation to release publicly the results on any events
or circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
For further information, please contact:
Alan Joseph, CFO of Franklin Credit Management Corp. at 212-925-8745
(Ext. 169)
DATASOURCE: Franklin Credit Management Corp.
CONTACT: Alan Joseph, CFO of Franklin Credit Management Corp.,
+1-212-925-8745, ext. 169,
Web site: http://www.franklincredit.com/