ATLANTA, Feb. 26 /PRNewswire-FirstCall/ -- HomeBanc Corp.
(NYSE:HMB) ("HomeBanc," the "Company," "we" or "us") announced
today the Company's consolidated results of operations for the
three months and year ended December 31, 2006. Financial Highlights
-- Estimated Real Estate Investment Trust ("REIT") taxable income
available to holders of common stock of $10.5 million, or $0.18 per
share, for the three months ended December 31, 2006; -- GAAP
consolidated net loss attributable to holders of common stock of
$10.7 million, or $0.19 per share, for the three months ended
December 31, 2006. The Company recorded income tax expense of $4.4
million during the quarter; -- Pre-tax GAAP consolidated net loss
attributable to holders of common stock of $6.3 million, or $0.11
per share, for the three months ended December 31, 2006, of which
$1.3 million, or $0.02 per share (pre-tax), was attributable to
severance costs for the reduction in general and administrative
("G&A") headcount in October 2006; -- Investment portfolio
assets, comprised of mortgage loans held for investment (net) and
securities held to maturity and available for sale of $5.9 billion
at December 31, 2006; -- Mortgage loan origination volume of $1.2
billion for the three months ended December 31, 2006; and -- New
loan application volume of $1.3 billion for the three months ended
December 31, 2006. Kevin D. Race, HomeBanc President and CEO, said,
"Our pre-tax results for the fourth quarter were generally in line
with our expectations. However, while incurring a pre-tax operating
loss of $6.3 million, it was also necessary to record tax expense
as opposed to a tax benefit for the quarter, thus increasing our
GAAP loss. The fourth quarter tax expense is the result of an
increase in the valuation allowance previously established to
reduce the net deferred tax asset at December 31, 2006 to an amount
we currently believe is likely to be realized." Comparison of the
Three Months Ended December 31, 2006 and 2005 -- Total consolidated
revenues of $28.7 million for the fourth quarter of 2006, compared
to $36.4 million for the same quarter of 2005; -- Net interest
income after provision for loan losses decreased 24% to $17.4
million for the three months ended December 31, 2006, compared to
$22.9 million for the same period of 2005, due to an increase in
the percentage of the investment portfolio comprised by
mortgage-backed securities ("MBS"), which generally provide a
narrower net interest margin than mortgage loans held for
investment; -- Net gain on sale of mortgage loans increased by 19%
to $9.3 million, or 90 basis points ("bps"), during the period,
compared to $7.8 million, or 101 bps, on loan sales for the same
period of 2005, due to an increase in volume of mortgage loans sold
to third parties; -- Included in net gain on sale of mortgage loans
during the fourth quarter of 2006, was the sale of $21.5 million of
mortgage loans that were ineligible for normal investor delivery.
Before giving effect to the loss of $1.7 million, or 18 bps, on the
sale of these loans, net gain on sale was $11.0 million or 108 bps;
-- Total expenses decreased 16% from $40.2 million for the quarter
ended December 31, 2005 to $33.8 million for the fourth quarter of
2006; -- Total consolidated GAAP net loss attributable to holders
of common stock was $10.7 million for the quarter ended December
31, 2006, compared to net income of $348,000 for the same period of
2005; and -- Mortgage loan origination volume for the quarter ended
December 31, 2006 was $1.2 billion, a decrease of 17% from $1.5
billion for the same period of 2005. Comparison of the Years Ended
December 31, 2006 and 2005 -- Total consolidated revenues increased
$15.9 million, or 14%, to $132.8 million for the year ended
December 31, 2006, compared to $116.9 million for 2005, due
primarily to the growth in net interest income resulting from our
larger portfolio of mortgage loans held for investment and MBS; --
Net gain on sale of mortgage loans was $42.3 million during 2006,
or 89 bps, compared to $38.3 million, or 142 bps, on loan sales for
2005; -- Total expenses for the year ended December 31, 2006 were
flat compared to 2005; -- Total consolidated GAAP net loss
attributable to holders of common stock for the year ended December
31, 2006 decreased 5% to $11.0 million, or $0.19 per share,
compared to a net loss of $11.6 million, or $0.21 per share, for
2005; and -- Mortgage loan origination volume for the year ended
December 31, 2006 was $5.1 billion, a decrease of 20% from $6.4
billion for 2005. The Company's estimated REIT taxable income
available to holders of common stock for the three months and year
ended December 31, 2006 was $10.5 million and $61.4 million,
respectively. Estimated REIT taxable income available to holders of
common stock, as defined in the following table, is a non-GAAP
financial measure. Because of the REIT tax requirements on
distributions, management believes that estimated REIT taxable
income available to holders of common stock is an additional
meaningful measure to evaluate our performance. The most comparable
GAAP measure is net income (loss) attributable to holders of common
stock, which reflects the impact of dividends on preferred stock.
Estimated REIT taxable income available to holders of common stock
should not be considered as a substitute for any measures derived
in accordance with GAAP and may not be comparable to other
similarly titled measures of other companies. The Company has
historically used estimated REIT taxable income available to
holders of common stock as a basis for establishing the amount of
dividends payable to holders of its common stock. The principal
differences between net income (loss) attributable to holders of
common stock and estimated REIT taxable income available to holders
of common stock in the periods are intercompany gains or losses on
the sale of loans from our taxable REIT subsidiary ("TRS") to
HomeBanc that are excluded under GAAP in the Company's consolidated
financial statements, amortization of those gains or losses, and
the creation of mortgage servicing rights, which give rise to
income under Statement of Financial Accounting Standards ("SFAS")
No. 140 but are excluded from income for income tax purposes. The
following table presents a reconciliation of loss before income
taxes to net loss attributable to holders of common stock and to
estimated REIT taxable income available to holders of common stock
for the three months and year ended December 31, 2006: Three Months
Ended Year Ended ($ in thousands) December 31, 2006 December 31,
2006 Loss before income taxes $(5,030) $(6,413) Income tax expense
4,442 337 Net (loss) before cumulative effect of change in
accounting principle (9,472) (6,750) Preferred stock dividend
(1,250) (4,486) Cumulative effect of change in accounting
principle, net - 270 Net loss attributable to holders of common
stock (10,722) (10,966) Taxable loss of REIT subsidiaries 26,244
102,291 Book/tax differences(1) (9,441) (30,280) Income tax expense
4,442 337 Estimated REIT taxable income available to holders of
common stock(2) $10,523 $61,382 (1) Consists of various
transactions and balances that are treated differently for GAAP and
income tax purposes, including both permanent and temporary
differences. Common differences include intercompany gains or
losses on the sale of loans from our TRS to HomeBanc Corp., which
are excluded from income under SFAS No. 65, as amended, but are
included in income for income tax purposes; the amortization of
these intercompany gains or losses; and the creation of mortgage
servicing rights, which give rise to income under SFAS No. 140 but
are excluded from income for income tax purposes. (2) We define
estimated REIT taxable income available to holders of common stock
to be estimated REIT taxable income calculated under the Internal
Revenue Code of 1986, as amended, for purposes of the REIT
distribution requirement, less dividends applicable to preferred
stock. A REIT is required to distribute at least 90% of its REIT
taxable income, which, in general, includes all dividends received
from TRSs (generally, calculated without regard to the dividends
paid deduction for distributions paid to REIT shareholders, and
earnings retained by TRSs), plus 90% of net after-tax income from
foreclosure property. Revenues Net interest income after provision
for loan losses was $17.4 million for the three months ended
December 31, 2006, compared to $22.9 million for the same period of
2005. The decline in net interest income is primarily due to the
addition of MBS to the investment portfolio in 2006, which
typically generate a lower net interest margin than mortgage loans
held for investment. The Company's portfolio of loans held for
investment and securities available for sale and held to maturity
was $5.9 billion at December 31, 2006, up from $5.6 billion at
December 31, 2005, which was driven by the addition of MBS. The
Company's net gain on sale of mortgage loans for the three months
ended December 31, 2006 was $9.3 million, including the sale of
$21.5 million of loans ineligible for investor delivery, compared
to $7.8 million for the same period of 2005. The Company sold $1.0
billion of loans during the three months ended December 31, 2006,
compared to $0.8 billion during the corresponding 2005 period. Race
commented, "It is no secret that 2006 was a difficult year for
residential mortgage originators as evidenced by the 17% decline in
total mortgage originations from 2005 to 2006 as reported by the
Mortgage Bankers Association ("MBA") in its February 12, 2007
Mortgage Finance Forecast. The same was true for HomeBanc with
originations declining by 20% in 2006 from 2005. "As a result,
early in 2006, we made the decision to sell the majority of our
loan originations to improve GAAP earnings at a time when gain on
sale margins were compressed, thus limiting the benefit from the
increased sale of mortgage loans. Additionally, in order to augment
asset growth, we increased the amount of MBS in our investment
portfolio, which earn a lower net interest margin than our mortgage
loans. On the expense front, we reduced expenses related to our
strategic marketing alliances ("SMAs") by 21%, from $19 million in
2005 to $15 million in 2006. We reduced non-sales headcount by 18%
during 2006 and have instituted a number of cost reduction efforts,
which we believe will enable us to operate more efficiently in 2007
and future periods. We expect to provide additional details
regarding efficiency, profitability, growth and capital for our
2007 strategic plans during our upcoming conference call."
Investment Portfolio The total investment portfolio was comprised
of average loans of $5.4 billion and average MBS available for sale
and held to maturity of $1.0 billion for the year ended December
31, 2006, compared to an average balance of loans of $4.6 billion
and zero in MBS held in the portfolio for the year ended December
31, 2005. The net interest margin was 1.35% for the year ended
December 31, 2006 and was 1.48% for the same period of 2005. As a
result of this change in portfolio composition, we have experienced
downward pressure on our net interest margin. The following table
presents the Company's net interest margin for the years ended
December 31, 2006 and 2005: Estimated Average Revenue/ Annualized $
in thousands Balance (Expense) Rate/Yield Year ended December 31,
2006 Mortgage loans $5,442,777 $326,034 5.99 % Mortgage-backed
securities 1,014,239 63,368 6.25 Borrowings to finance mortgage
loans 5,342,439 (287,971) (5.39) Mortgage-backed security
repurchase agreements 930,721 (53,395) (5.74) Obligations related
to trust preferred securities 103,857 (9,626) (9.27) Impact of
derivative financial instruments 48,635 0.78 Net interest margin
$87,045 1.35 % Year ended December 31, 2005 Mortgage loans
$4,630,304 $248,908 5.38 % Mortgage-backed securities --- --- ---
Borrowings to finance mortgage loans 4,418,761 (177,279) (4.01)
Mortgage-backed security repurchase agreements --- --- ---
Obligations related to trust preferred securities 27,756 (1,944)
(7.00) Impact of derivative financial instruments (996) (0.02) Net
interest margin $68,689 1.48 % Loan Servicing At December 31, 2006,
the Company serviced $8.0 billion of unpaid principal balance of
loans, excluding loans held for sale, related to 39,355 mortgage
loans, of which 22,617 loans were owned by the Company and 16,738
loans were serviced for third-party investors. The loan servicing
portfolio carried a weighted-average annual servicing fee of 0.327%
at December 31, 2006. The mortgage loans held for investment by the
Company, on a unit basis, had a 90-day or greater delinquency rate
of 0.98% at December 31, 2006. The mortgage loans held for
investment by the Company, on an unpaid principal balance basis,
had a 90-day or greater delinquency rate of 0.88%, inclusive of
loans in the foreclosure process and delinquent bankruptcy loans,
at December 31, 2006. Operating Highlights As of and for the Three
Months Ended ($ in millions) December 31, % 2006 2005 Change Loan
Originations: Total originations $1,207 $1,456 (17)% Purchase 898
1,069 (16) Refinance 309 387 (20) ARM 691 1,017 (32) Fixed 516 439
18 Loans sold to third parties 1,038 775 34 Loan applications 1,306
1,471 (11) Total SMAs - period end 181 229 (21) Realtors 111 116
(4) Builders 70 113 (38) Total SMA locations - period end 210 270
(22) Realtors 140 157 (11) Builders 70 113 (38) ($ in millions) As
of December 31, December 31, 2006 2005 Loans Held for Investment:
Loans held for investment, net $4,373 $5,449 Securities available
for sale 1,366 111 Securities held to maturity 188 68 Total
portfolio $5,927 $5,628 Portfolio composition 1-month interest-only
ARMs 3.8 % 6.3 % 6-month interest-only ARMs 8.9 14.8 3-year fixed
interest-only ARMs 11.0 11.3 5-year fixed interest-only ARMs 52.8
47.5 7-year fixed interest-only ARMs 18.1 14.2 10-year fixed
interest-only ARMs 0.9 0.5 All other mortgage loans 4.3 5.2 Total
99.8 % 99.8 % Average decision FICO score 725 730 Average
loan-to-value (LTV) 77.5 % 79.9 % Average combined loan-to-value
(CLTV) 82.0 % 93.1 % Geographic concentration (total portfolio)
Florida 52 % 53 % Georgia 42 41 North Carolina 5 5 Other 1 1 ($ in
millions) As of December 31, December 31, % 2006 2005 Change Loan
Servicing: Total servicing portfolio (excluding loans held for sale
at TRS) $7,981 $6,463 23 % Loans serviced for third parties 3,604
1,010 257 Loans serviced for REIT 4,377 5,453 (20) Real estate
owned (REIT and TRS) 6.3 2.0 Weighted-average service fee -
securitized 0.281 % 0.294 % Weighted-average service fee - third
parties 0.386 0.358 Weighted-average service fee - all loans 0.327
0.305 REIT portfolio delinquency of 90 days or more - per unit
basis 0.98 0.27 REIT portfolio delinquency of 90 days or more -
unpaid principal balance basis 0.88 0.17 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. 2007 Strategic Plans Race stated, "While we
expect market conditions in 2007 to be flat as compared to 2006, we
are moving forward with strategies which we expect will enable us
to return our mortgage origination business to profitability. Our
focus is to improve operating efficiencies and profitability while
laying the groundwork for growth and maintaining book value in the
long-term. "As an example, we have already begun the process in
2007 of right-sizing our mortgage origination business by
restructuring sales and operations in the field. We consolidated
our production operations centers from 10 centers to five in
Georgia, and from nine centers to seven in Florida. This
restructuring of our field operations provides estimated annual
savings of approximately $3.8 million for 2007, while streamlining
processes for decision makers in the field. We do not expect these
changes to affect the level of customer service that our customers
expect. "Our 2007 plans also focus on increasing the productivity
and reducing the costs of our SMAs. Our intent is to reduce the
overall cost without diminishing the origination opportunities of
these relationships. We expect to reduce SMA marketing costs 33%
from $15.0 million in 2006 to approximately $10.0 million in 2007."
The Company believes that continued geographic growth supports one
element of its long-term growth plans, and accordingly, expects to
open a new store in Nashville, Tennessee in April 2007. Based upon
the investment required to enter a new market and our historical
performance in new markets, we expect the Nashville store to
operate on a break-even basis by the end of 2007 and be accretive
to operations in 2008. We expect to announce two additional new
store openings later in 2007. The Company also announced that it
has sold substantially all of its MBS portfolio, which generated
approximately $70 million of net proceeds. As a result of that
sale, the Company's investment portfolio was reduced by 22%, from
approximately $5.9 billion at December 31, 2006 to $4.6 billion,
and is now comprised almost entirely of mortgage loans. The Company
presently expects that its board of directors will authorize a
share repurchase program, pursuant to which the Company may, but
would not be obligated to, repurchase up to $16.5 million of its
common stock. At $3.44 per share, which was the closing stock price
for our stock on February 22, 2007, this would equate to a
repurchase of approximately 4.8 million shares, or 8% of our
outstanding common stock. Mr. Race said, "We believe the discount
implied in our current stock price relative to book value, as well
as the estimated fair value of our assets, makes a share repurchase
program accretive to book value." If executed, the share repurchase
program will be funded by a portion of the net proceeds from the
sale of the Company's MBS portfolio. The Company expects to use the
remainder of the net proceeds from the sale of the MBS portfolio
for liquidity, other general corporate purposes and for capital
management purposes. In late 2006, we announced our intention not
to operate our public company as a REIT beginning in 2007, and we
presently are considering and evaluating the most appropriate means
of implementing this change in our operating model, including
potential changes in our corporate structure. Conference Call The
Company will host a conference call at 9:00 a.m., Eastern Time on
February 27, 2007. 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 call ID number is 7846956.
You may also listen to the conference call under the investor
relations section of the HomeBanc 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 the "Investor Relations - Webcast
Live" link. The Internet broadcast will be archived until March 13,
2007. A digital recording of the conference call will be available
for replay two hours after the call's completion and will be
available for replay through March 13, 2007. To access this
recording, dial 800-642-1687 or 706-645-9291 and enter conference
call ID 7846956. 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 March 31, 2007. This dividend is payable on April 2, 2007 to
Series A preferred shareholders of record as of March 15, 2007.
Dividend Reinvestment and Stock Purchase Plan The Company maintains
a Dividend Reinvestment and Stock Purchase Plan (the "Plan"). If we
execute our proposed share repurchase program, then we anticipate
that, effective as of March 1, 2007, we will not accept any new
enrollments or cash payments to purchase shares through the Plan
until further notice, nor would the Plan reinvest any future
dividends that you may receive in new shares of our common stock.
To the extent that any future dividends are declared on our common
stock, you would receive a check for dividends paid on those
shares, notwithstanding the reinvestment or other elections that
you have made under the Plan. Shares of our common stock purchased
through the Plan would continue to be held in safekeeping by the
Plan administrator, Computershare Trust Company, N.A., unless you
deliver instructions to the contrary. If you have questions
regarding the Plan or your shares held in the Plan, please contact
Computershare at 800-697-8199 (toll free) or via Internet at
http://www.computershare.com/. HomeBanc is the parent holding
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 and North Carolina. For more information about HomeBanc or
its mortgage products, visit HomeBanc on the Internet 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: the
reduction in our deferred tax assets and our estimate of the amount
of our net deferred tax asset that we may be able to realize; our
ability to operate more efficiently in 2007 and future periods;
market conditions in 2007; our current strategies enabling us to
return our mortgage origination business to profitability; our
laying the groundwork for growth and maintenance of book value in
the long-term; expected savings from the restructuring of our field
operations; our ability to maintain our high level customer
service; the reduction in costs, and increase in productivity, of
our SMAs, as well as our projected SMA costs in 2007; our continued
ability to grow our business, including, without limitation,
through geographic growth and the opening of new stores; new store
openings in 2007, and the timing of operating those stores on a
break-even and accretive basis; our share repurchase program and
the effects of that program, including, without limitation, that
the program would be accretive to our book value; our net proceeds
and liquidity resulting from the sale our MBS portfolio, including,
without limitation, our anticipated uses of that liquidity; and our
intention not to operate our public company as a REIT beginning in
2007, as well as our ability to identify and pursue the most
appropriate means of implementing this change in our operating
model, including through changes in our corporate structure. 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 failure
of our assumptions and estimates related to our valuation allowance
on our deferred tax asset and our ability to realize the benefits
or our net deferred tax assets, which assumptions and estimates are
inherently subjective and subject to change; our inability to
successfully implement the cost reduction measures and other
streamlining and efficiency measures that we have identified, and
our inability to effectively operate our business after taking such
measures; 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 and to maintain and improve our book
value in the long-term; 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 continue to meet our high customer
service standards, and to maintain positive customer relationships
generally, including, without limitation, after implementing our
cost reduction measures and other strategic plans; 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; our inability to adopt, implement or execute
a share repurchase program on a timely and effective basis, if at
all; failures in our assumptions underlying the value of our
business and our common stock, and, accordingly, the anticipated
accretive value of our proposed share repurchase program; our
inability to apply the net proceeds from the sale of our MBS
portfolio in the manner that we anticipate, whether as a result of
market conditions, relationships with third parties, unanticipated
uses of capital, or otherwise; risks related to our present
intention to elect not to operate our public company as a REIT in
2007, including, without limitation, our ability to obtain all
required approvals and consents, and pay all expenses, to implement
this change in our operating model; our ability to achieve the
benefits we anticipate from our election not to operate as a REIT
in 2007; our ability to successfully apply our business strategy,
including, without limitation, our recent changes to that strategy;
risks related to our ability to maintain investor confidence and
market credibility as we revise our business strategy and operating
model; 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 inherent in the application of our accounting
policies as described in the footnotes to financial statements
included in our filings with the SEC; 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, except as may be
required by law. 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 Annual Report
on Form 10-K for the period ended December 31, 2006, which we
expect will be filed with the SEC by March 16, 2007. HomeBanc Corp.
and Subsidiaries Condensed Consolidated Statement of Operations
(Unaudited) Three Months Ended Years Ended December 31, December
31, 2006 2005 2006 2005 (Dollars in thousands, except per share
data) Revenues: Net interest income: Interest income: Mortgage
loans, including fees $76,095 $80,197 $326,034 $248,428 Securities
available for sale 21,351 165 51,715 165 Securities held to
maturity 2,923 315 11,653 315 Total interest income 100,369 80,677
389,402 248,908 Total interest expense (83,851) (58,670) (302,357)
(180,219) Net interest income 16,518 22,007 87,045 68,689 Provision
for loan losses (855) (863) 1,811 949 Net interest income after
provision for loan losses 17,373 22,870 85,234 67,740 Net gain on
sale of mortgage loans 9,338 7,817 42,332 38,262 Mortgage servicing
income, net 409 378 268 57 Other revenue 1,629 5,339 5,006 10,811
Total revenues 28,749 36,404 132,840 116,870 Expenses: Salaries and
associate benefits, net 17,203 16,676 67,205 62,925 Marketing and
promotions 4,426 8,133 22,393 27,998 Occupancy and equipment
expense 4,010 4,070 16,162 15,302 Depreciation and amortization
2,001 2,562 8,455 8,570 Minority interest 59 115 202 312 Other
operating expense 6,080 8,640 24,836 25,261 Total expenses 33,779
40,196 139,253 140,368 Loss before income taxes (5,030) (3,792)
(6,413) (23,498) Income tax expense (benefit) 4,442 (4,140) 337
(11,863) (Loss) income before cumulative effect of change in
accounting principle (9,472) 348 (6,750) (11,635) Cumulative effect
of change in accounting principle, net of taxes of $171 - - 270 -
Net (loss) income $(9,472) $348 $(6,480) $(11,635) Net (loss)
income attributable to holders of common stock $(10,722) $348
$(10,996) $(11,635) (Loss) income per share of common stock
outstanding: (Loss) income before cumulative effect of change in
accounting principle Basic and diluted $(0.19) $0.01 $(0.20)
$(0.21) Cumulative effect of change in accounting principle Basic
and diluted $ - $ - $0.00 $ - Net (loss) income Basic and diluted
$(0.19) $0.01 $(0.19) $(0.21) Dividends declared per share of
common stock outstanding $0.46 $0.53 $0.98 $0.95 Weighted average
shares of common stock outstanding: Basic 56,672,794 56,623,420
56,461,759 55,347,812 Diluted 56,672,794 57,683,220 56,461,759
55,347,812 HomeBanc Corp. and Subsidiaries Condensed Consolidated
Balance Sheet (Unaudited) December 31, 2006 2005 (Dollars in
thousands, except per share data) Assets Cash $20,987 $41,505
Restricted cash 128,033 15,744 Mortgage loans held for sale, net
379,299 195,231 Mortgage loans held for investment, net of
allowance of $4,040 and $3,691, respectively 4,372,998 5,449,376
Mortgage servicing rights, net 43,908 10,088 Receivable from
custodian 77,612 128,641 Trading securities 4,824 - Securities
available for sale 1,366,426 111,256 Securities held to maturity
(fair value of $187,014 and $68,628, respectively) 188,193 68,425
Accrued interest receivable 22,387 18,284 Premises and equipment,
net 45,406 41,672 Goodwill, net 39,995 39,995 Deferred tax asset,
net 23,225 23,762 Other assets 109,371 108,733 Total assets
$6,822,664 $6,252,712 Liabilities and shareholders' equity
Warehouse lines of credit $404,765 $344,269 Aggregation credit
facilities - 118,685 Repurchase agreements 1,527,470 215,927 Loan
funding payable 63,855 69,405 Accrued interest payable 9,144 6,039
Other liabilities 94,832 103,479 Collateralized debt obligations
4,277,026 5,026,598 Junior subordinated debentures representing
obligations for trust preferred securities 175,260 51,547 Total
liabilities 6,552,352 5,935,949 Minority interest 42 62
Shareholders' equity: Preferred stock - par value $.01; 25,000,000
shares authorized; 2,000,000 and 0 shares issued and outstanding at
December 31, 2006 and 2005, respectively 47,992 - Common stock -
par value $.01; 150,000,000 shares authorized; 56,898,898 and
56,628,969 shares issued and outstanding at December 31, 2006 and
2005, respectively 568 566 Additional paid-in capital 277,800
336,225 Accumulated deficit (64,065) (57,585) Treasury stock, at
cost (82,184 and 6,647 shares at December 31, 2006 and 2005,
respectively) (673) (69) Unearned compensation - (1,546)
Accumulated other comprehensive income 8,648 39,110 Total
shareholders' equity 270,270 316,701 Total liabilities and
shareholders' equity $6,822,664 $6,252,712 DATASOURCE: HomeBanc
Corp. CONTACT: Investor Contact, Carol Knies, +1-404-459-7653, or ;
Media Contact, Mark Scott, +1-404-459-7452, or , both of HomeBanc
Corp. Web site: http://www.homebanc.com/
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