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Harbourton Financial Corporation Reports Fourth Quarter Earnings of $320,842 and Year to Date Earnings of $1,710,280
MCLEAN, Va., Mar 12, 2004 (BUSINESS WIRE) -- Harbourton Financial Corporation ("Harbourton" or the "Company") (HBTN) today reported net income after tax of $320,842, or $0.02 per common share, for the three months ended December 31, 2003, compared with earnings of $4,630,000, (including tax benefit of $2,832,700) or $0.30 per common share, for the comparable period in 2002. Net income after tax for the twelve months ended December 31, 2003 was $1,710,280, or $0.11 per common share, as compared with $5,803,020 or $0.38 per common share, for the respective period in 2002. The 2002 year included a tax benefit of $3,041,600. Pre-tax income for the twelve months ended December 31, 2003 of $2,765,801 increased slightly, as compared with $2,761,388 for the year ended December 31, 2002. The results for the quarter and twelve months ended December 31, 2003 include income tax provisions of $191,000 and $1,055,600, respectively, as compared with net tax benefits of $2,832,700 and $3,041,600, respectively, in the corresponding periods of 2002. Although the Company records a tax provision in the financial results, it will not be required to pay Federal or Virginia corporate income taxes until its remaining deferred tax asset of approximately $5.1 million is depleted.
Total shareholders' equity at December 31, 2003 increased by $1.8 million, or 8.1%, to $23.4 million, with a corresponding primary book value of $1.54 per share, as compared with total shareholders' equity of $21.6 million at December 31, 2002, equating to $1.42 primary book value per share. There were 15,184,164 primary shares of common stock outstanding during the three and twelve months ended December 31, 2003 and 2002.
Harbourton's mezzanine loan portfolio continued to perform well leading to consistent returns for the Company during the year. The real estate markets in which the Company has development and building projects enjoyed another year of solid growth in both unit sales and valuations. Harbourton's mezzanine loan portfolio increased to $15.9 million at December 31, 2003, compared to $13.3 million at December 31, 2002. The Company's wholly owned subsidiary, Harbourton Mortgage Investment Corporation ("HMIC") produced an after tax profit of $181,148 for 2003, as a result of significant growth in the volume of loans funded and sold during the period. During the year ended December 31, 2003, HMIC funded $248.1 million of loans and recorded sales of $233.8 million, as compared to fundings of $86.7 million and sales of $70.4 million during the prior year ended December 31, 2002. HMIC purchases residential mortgage loans, principally in California and the adjoining states, for re-sale on a servicing released basis in the secondary market.
J. Kenneth McLendon, President and CEO, noted: "The Company's solid performance during 2003, which marked the Company's third consecutive year of increased operating earnings, reflects the continued strong housing market, management's successful efforts to build a mezzanine loan portfolio that provides excellent yield while controlling credit risk, and the positive results from the mortgage banking subsidiary." He further stated: "The core business operations of the Company and the mortgage-banking subsidiary should continue to benefit from the strong housing demand in the markets we serve, even as mortgage interest rates moderate from historic lows."
The Company's primary business is originating loans to builders and developers of residential projects. The loans include financing for acquisition, development and construction of residential single family homes, townhouses, and condominiums. HMIC's primary business consists of originating and purchasing both conforming and non-conforming mortgage loans and the subsequent sale of these loans to investors in the secondary market.
This press release may contain various "forward-looking statements," that represent the Company's expectations or beliefs concerning future events. Such forward-looking statements are about matters that are inherently subject to risks and uncertainties. Factors that could cause actual results or performance to differ from the expectations expressed or implied in such forward-looking statements include changes in the timing and amount of earning assets which may be originated by the Company, changes in revenue and expense trends (including trends affecting charge-offs) of the Company, changes in the Company's markets and changes in the economy (particularly in the markets served by the Company).
HARBOURTON FINANCIAL CORPORATION
REPORTS FOURTH QUARTER AND YEAR TO DATE EARNINGS
March 12, 2004
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SOURCE: Harbourton Financial Corporation
Harbourton Financial Corporation
David W. Campbell, 703-883-9753 ext. 18
or
J. Kenneth McLendon, 703-883-9753 ext. 13
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