-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, V9uPlRzGVvkG/xWPtueQY+abPkp6uoUPE9yrQECBr3bmTbz+d7e8qLjhiQffzJSq UMeGhiDhSuaPUbBJh8yc+w== 0000950172-04-000271.txt : 20040204 0000950172-04-000271.hdr.sgml : 20040204 20040204082543 ACCESSION NUMBER: 0000950172-04-000271 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20040204 ITEM INFORMATION: ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040204 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ANTHRACITE CAPITAL INC CENTRAL INDEX KEY: 0001050112 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 133978906 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-13937 FILM NUMBER: 04564723 BUSINESS ADDRESS: STREET 1: 40 EAST 52ND STREET CITY: NEW YORK STATE: NY ZIP: 10022 BUSINESS PHONE: 2127545560 MAIL ADDRESS: STREET 1: 40 EAST 52ND STREET CITY: NEW YORK STATE: NY ZIP: 10022 FORMER COMPANY: FORMER CONFORMED NAME: ANTHRACITE MORTGAGE CAPITAL INC DATE OF NAME CHANGE: 19971121 8-K 1 s444954.txt FORM 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 February 4, 2004 (February 4, 2004) Date of Report (Date of Earliest Event Reported) ANTHRACITE CAPITAL, INC. (Exact name of Registrant as Specified in Charter) Maryland 001-13937 13-397-8906 - ------------------------------ ----------------- ------------------ (State or Other Jurisdiction (Commission (IRS Employer of Incorporation) File Number) Identification No.) 40 East 52nd Street 10022 - -------------------------------------- ------------------------------ (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (212) 409-3333 N/A - ------------------------------------------------------------------------------ (Former Name or Former Address, if Changed Since Last Report) Item 5. Other Events. Anthracite Capital, Inc. (the "Company") reported the following results on February 4, 2004: On February 4, 2004, the Company reported net income for the fourth quarter of 2003 of $0.25 per share versus $0.11 per share for the same period last year. For the full year ended December 31, 2003 the net loss was $0.34 per share versus net income of $1.18 per share for the year ended December 31, 2002. Based on the $0.28 per share dividend declared on December 11, 2003, and the February 3, 2004 closing price of $11.06 per share, Anthracite's annualized dividend yield is 10.1%. The pace of reinvestment achieved during the fourth quarter of 2003 is consistent with the portfolio repositioning plan previously disclosed by the Company in September 2003. The Company sold Residential Mortgage Backed Securities ("RMBS") to reduce interest rate volatility and replaced them with predominantly investment grade commercial mortgage backed securities ("CMBS"). (All numbers are thousands, except per share amounts.) During the fourth quarter of 2003, the Company's commercial real estate assets increased to $1,464,492 representing an 11% increase from the third quarter, and its holdings of RMBS assets after the settlement of $99,551 of RMBS securities sold not yet settled decreased by $220,736 representing a 25% decrease from the third quarter. After the settlement of the sold RMBS, the ratio of commercial real estate assets to the Company's total portfolio, and RMBS to the Company's total portfolio is 68% and 30%, respectively. The Company's considers its total portfolio to be total assets less other assets and receivable for investments sold. The increase in commercial real estate assets of $144,068 is comprised of 73% investment grade CMBS, 23% non-investment grade CMBS, and 4% whole loans. The Company considers CMBS securities where it maintains the right to control the foreclosure/workout process on the underlying loans as controlling class CMBS ("Controlling Class CMBS"). During the twelve months ended December 31, 2003, the Company acquired $140,139 of par of 2003 vintage Controlling Class CMBS. The Company did not acquire new Controlling Class CMBS during the fourth quarter of 2003. The Company's fourth quarter net interest margin was 2.8%. The net interest margin for the same period last year was 3.8%. The decrease in the net interest margin is attributable to the Company's reduction in RMBS assets and a lower debt to capital ratio compared to the twelve months ended December 31, 2002. Aggregate leverage at December 31, 2003 is unchanged from September 30, 2003 at 4.4:1 debt to capital. The Company's exposure to changes in short-term interest rates increased during the fourth quarter; as of December 31, 2003, a 50 basis point change in LIBOR would cause the Company's net income to change by $0.01 per share annually. Investment Activity The Company's primary focus is to invest in a diverse portfolio of commercial real estate loans and securities. The Company will generally control the credit process of its portfolio. Our objective is to maximize the spread between the loss adjusted income and the cost of financing. As of December 31, 2003, the Company has financed 51% of its commercial real estate loans and securities with match-funded secured collateralized debt obligation ("CDO") debt to minimize the effect on performance of changes in interest rates. The Company plans to issue additional CDO debt in the first half of 2004. The majority of the Company's commercial real estate investments are in the form of commercial real estate securities. Income from these securities is reported after assuming losses will occur over time. During the fourth quarter of 2003 the Company's loan loss expectations for its commercial real estate securities portfolio did not change. Total expected underlying loan losses remain at 2.06% of original loan balances. None of the Company's underlying loans incurred losses during the fourth quarter. Total losses recognized were 0.41% at the end of the third and fourth quarters. At December 31, 2003, loan delinquencies represented 1.5% of the total unpaid principal balance on the Company's Controlling Class CMBS as compared to 1.4% at the end of the third quarter. The average yield on the Company's commercial real estate securities (primarily investment grade and below investment grade CMBS, investment grade REIT debt, and CMBS IO's) for the fourth quarter of 2003 was 8.0%, while the average loss adjusted yield on only the below investment grade CMBS was 9.7%. The average cost of financing the commercial real estate securities portfolio during the fourth quarter was 5.0% compared to 5.2% for the third quarter. This reduction is due to the increase in investment grade CMBS. The Company anticipates that its cost of borrowing will increase in the event of an additional CDO offering. Included in net income for the fourth quarter are expenses related to hedging the Company's assets which are not financed through its two CDO's. This hedging expense was $5,539 or $0.11 per share for the fourth quarter. A breakdown of the commercial real estate securities portfolio net interest income and realized gains for the quarter and year ended December 31, 2003 is as follows:
For the quarter ended For the year ended December 31, 2003 ---------------------------------------------- Interest Income $26,384 $98,114 Interest Expense* (12,860) (48,567) ---------------------------------------------- Net Interest Income 13,524 49,547 ---------------------------------------------- Realized Gains - 1,161 ============================================== Net Interest Income and Realized Gains from Commercial Real Estate Securities $13,524 $50,708 ============================================== *Including hedges in the Company's CDOs
The average yield on the Company's commercial real estate loan portfolio for the third and fourth quarters of 2003 was 10.4% and 10.7%, respectively. The total cost of borrowing secured by loan assets is 2.9% and 3.0% respectively. The Company has two committed warehouse lines that can be used to finance these assets. The annualized yield on the Company's investment in Carbon Capital, Inc. which constitutes 29% of the Company's commercial real estate loan portfolio for the year ended December 31, 2003, was 15.1%. A breakdown of the commercial real estate loan portfolio net interest income for the quarter and year ended December 31, 2003 is as follows:
For the quarter ended For the year ended December 31, 2003 ----------------------------------------------- Interest Income $ 2,828 $10,196 Interest Expense (163) (526) ----------------------------------------------- Net Interest Income from Commercial Real Estate Loans $ 2,665 $ 9,670 ===============================================
Book Value Net book value per share at the end of the fourth quarter was $6.64. The securities of the Company are marked to market based upon market prices provided by dealers. As the Company's portfolio matures, the net book value of credit sensitive CMBS securities held by the Company is expected to increase towards its original purchase cost, provided that the Company's estimates of expected credit losses are accurate. The unrealized loss on all Controlling Class CMBS at December 31, 2003 was $68,079. This amount reflects the amount of recovery (net of expected underlying loan losses) if the portfolio is held to maturity. Net book value per share increased approximately 1.7% from $6.53 at September 30, 2003 due to tighter credit spreads across the Company's portfolio. Since the securities of the Company are marked to market, there can be fluctuations in book value based solely on quarterly changes in credit spreads and interest rates. To the extent that there is a sustained decline in book value due to changes in credit experience or other permanent factors, such declines would effectively reduce earnings. Forward Looking Statements This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act with respect to future financial or business performance, strategies or expectations. Forward-looking statements are typically identified by words or phrases such as "trend," "opportunity," "pipeline," "believe," "comfortable," "expect," "anticipate," "current," "intention," "estimate," "position," "assume," "potential," "outlook," "continue," "remain," "maintain," "sustain," "seek," "achieve," and similar expressions, or future or conditional verbs such as "will," "would," "should," "could," "may" or similar expressions. Anthracite cautions that forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made, and Anthracite assumes no duty to and does not undertake to update forward-looking statements. Actual results could differ materially from those anticipated in forward-looking statements and future results could differ materially from historical performance. In addition to factors previously disclosed in Anthracite's Securities and Exchange Commission (the "SEC") reports and those identified elsewhere in this press release, the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance: (1) the introduction, withdrawal, success and timing of business initiatives and strategies; (2) changes in political, economic or industry conditions, the interest rate environment or financial and capital markets, which could result in changes in the value of Anthracite's assets; (3) the relative and absolute investment performance and operations of Anthracite's manager; (4) the impact of increased competition; (5) the impact of capital improvement projects; (6) the impact of future acquisitions; (7) the unfavorable resolution of legal proceedings; (8) the extent and timing of any share repurchases; (9) the impact, extent and timing of technological changes and the adequacy of intellectual property protection; (10) the impact of legislative and regulatory actions and reforms and regulatory, supervisory or enforcement actions of government agencies relating to Anthracite, BlackRock or PNC; (11) terrorist activities, which may adversely affect the general economy, real estate, financial and capital markets, specific industries, and Anthracite and BlackRock; and (12) the ability of Anthracite's manager to attract and retain highly talented professionals. The Company is filing the Anthracite Capital, Inc. Consolidated Statements of Financial Condition and Consolidated Statements of Operations as Exhibit 99.1 Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. (c) Exhibits. 99.1 Anthracite Capital, Inc. Consolidated Statements of Financial Condition and Consolidated Statements of Operations. Item 12. Results of Operations and Financial Condition. On February 4, 2004, Anthracite Capital, Inc. issued a press release reporting the Company's earnings for the quarter ended December 31, 2003, which the Company is furnishing under this Item 12 as Exhibit 99.2. Signatures Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. ANTHRACITE CAPITAL, INC. By: /s/ Robert L. Friedberg ----------------------------- Name: Robert L. Friedberg Title: Vice President and Secretary Dated: February 4, 2004 ANTHRACITE CAPITAL, INC. CURRENT REPORT ON FORM 8-K Report Dated February 4, 2004 (February 4, 2004) EXHIBIT INDEX Exhibit No. Description - ---------- ----------- 99.1 Anthracite Capital, Inc. Consolidated Statements of Financial Condition and Consolidated Statements of Operations. 99.2 Press Release issued by Anthracite Capital, Inc., dated February 4, 2004. EX-99 3 ny444949.txt EX. 99.1 EXHIBIT 99.1
Anthracite Capital, Inc. and Subsidiaries Consolidated Statements of Financial Condition (Unaudited) (in thousands, except per share data) - -------------------------------------------------------------------------------------------------------------------------------- December 31, 2003 December 31, 2002 ----------------- ----------------- ASSETS Cash and cash equivalents $ 20,805 $ 24,698 Restricted cash equivalents 12,845 84,485 Residential mortgage backed securities 753,219 1,506,450 --------------- --------------- Cash and RMBS 786,869 1,615,633 Commercial real estate securities 1,366,508 894,345 Commercial real estate loans 97,984 88,926 --------------- --------------- Total Commercial real estate 1,464,492 983,271 Receivable for investments sold 99,056 - Other assets 42,964 40,447 --------------- --------------- Total Assets $2,393,381 $2,639,351 =============== =============== LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Borrowings: Secured by pledge of residential mortgage backed securities $670,874 $1,418,206 Secured by pledge of commercial real estate securities 444,987 42,861 Secured by pledge of commercial real estate loans 22,710 16,004 --------------- --------------- Total short term borrowings 1,138,571 1,477,071 Long term Borrowings: Collateralized debt obligations 684,970 684,590 --------------- --------------- Total borrowings $1,823,541 $2,161,661 Securities sold, not yet settled 99,551 - Payable for investments purchased - 524 Distributions payable 14,749 16,589 Other liabilities 38,110 54,361 --------------- --------------- Total Liabilities $1,975,951 $2,233,135 --------------- --------------- Stockholders' Equity: Common stock, par value $0.001 per share; 400,000 shares authorized; 49,464 shares issued and outstanding in 2003; and 47,398 shares issued and outstanding in 2002 49 47 10% Series B Preferred stock, liquidation preference $43,942 in 2003 and $47,817 in 2002 33,431 36,379 9.375% Series C Preferred stock, liquidation preference $57,500 in 2003 55,435 - Additional paid - in capital 536,333 515,180 Distributions in excess of earnings (101,635) (24,161) Accumulated other comprehensive loss (106,183) (121,229) --------------- --------------- Total Stockholders' Equity 417,430 406,216 --------------- --------------- Total Liabilities and Stockholders' Equity $2,393,381 $2,639,351 =============== ===============
Anthracite Capital, Inc. Consolidated Statements of Operations (Unaudited) (in thousands, except per share data) - ---------------------------------------------------------------------------------------------------------------------------------- For the Three Months Ended For the Year Ended December 31, December 31, --------------------------------------------------------------------------- 2003 2002 2003 2002 --------------------------------------------------------------------------- Income: Commercial real estate securities $26,384 $21,782 $98,114 $72,205 Commercial real estate loans 2,828 3,481 10,196 16,243 Residential mortgage backed securities 8,878 17,070 54,504 72,524 Cash and cash equivalents 126 276 964 1,473 -------- -------- -------- -------- Total income 38,216 42,609 163,778 162,445 -------- -------- -------- -------- Expenses: Interest expense: Collateralized debt obligations 11,138 8,158 44,226 17,626 Commercial real estate securities 1,722 1,255 4,341 5,686 Commercial real estate loans 163 364 526 1,832 Residential mortgage backed securities 2,512 6,094 16,072 25,009 Hedging Expense 5,539 3,308 18,790 14,758 General and administrative 572 549 2,296 2,323 Incentive fee - - - 9,332 Management fee 2,070 2,460 9,411 3,195 -------- -------- -------- -------- Total expenses 23,716 22,188 95,662 79,761 -------- -------- -------- -------- Other gain (loss): Realized loss (8,354) 8,455 (41,633) (26,265) Unrealized gain (loss) 7,858 (12,083) (3,405) 8,401 Foreign currency (loss) - (432) - (812) Hedge Ineffectiveness 881 110 706 236 Incentive fee attributable to other gains - - - (343) Loss on impairment of asset - (10,273) (32,426) (10,273) -------- -------- -------- -------- Total other gain (loss) 385 (14,223) (76,758) (29,056) -------- -------- -------- -------- Income before cumulative transition adjustment 14,885 6,198 (8,642) 53,628 Cumulative transition adjustment - SFAS 142 - - - 6,327 Net Income (Loss) 14,885 6,198 (8,642) 59,955 -------- -------- -------- -------- Dividends on preferred stock 2,446 1,195 7,744 5,162 -------- -------- -------- -------- Net Income (Loss) available to Common Stockholders 12,439 5,003 (16,386) 54,793 ======== ======== ======== ======== Net Income (Loss) per share, basic Income before cumulative transition adjustment $0.25 $0.11 $(0.34) $ 1.04 Cumulative transition adjustment - - - 0.14 -------- -------- -------- -------- Net Income $0.25 $0.11 $(0.34) $ 1.18 ======== ======== ======== ======== Net Income (Loss) per share, diluted Income before cumulative transition adjustment $0.25 $0.11 $(0.34) $ 1.04 Cumulative transition adjustment - - - 0.14 -------- -------- -------- -------- Net Income $0.25 $0.11 $(0.34) $ 1.18 ======== ======== ======== ======== Weighted average number of shares outstanding: Basic 49,107 47,256 48,246 46,411 Diluted 49,118 47,284 48,246 46,452
EX-99 4 s444948.txt EX. 99.2 EXHIBIT 99.2 Contact: Brian Beades 212-754-5596 ahr-info@blackrock.com Anthracite Capital, Inc. Reports Fourth Quarter Earnings; Portfolio Repositioning on Track; Commercial Real Estate Assets Increase to 61%; Dividend Yield is 10.1% New York, NY - February 4, 2004 - Anthracite Capital, Inc. (the "Company" or "Anthracite") (NYSE: AHR) today reported net income for the fourth quarter of 2003 of $0.25 per share versus $0.11 per share for the same period last year. Fourth quarter earnings from the Company's portfolio ("Operating Earnings") were $0.25 per share versus $0.41 per share for the same three-month period last year. For the full year ended December 31, 2003 the net loss was $0.34 per share versus net income of $1.18 per share for the year ended December 31, 2002. Operating Earnings for the full year ended December 31, 2003 were $1.25 per share versus $1.67 per share for the year ended December 31, 2002. Based on the $0.28 per share dividend declared on December 11, 2003, and the February 3, 2004 closing price of $11.06 per share, Anthracite's annualized dividend yield is 10.1%. The pace of reinvestment achieved during the fourth quarter of 2003 is consistent with the portfolio repositioning plan previously disclosed by the Company in September 2003. The Company sold Residential Mortgage Backed Securities ("RMBS") to reduce interest rate volatility and replaced them with predominantly investment grade commercial mortgage backed securities ("CMBS"). The Company expects Operating Earnings to rise when its capital is fully redeployed into higher yielding non-investment grade commercial real estate assets. The Company considers its Operating Earnings to be net interest income after operating expenses and preferred dividends but before realized and unrealized gains and losses. The Company believes Operating Earnings better reflect the recurring long-term earnings of the Company. Operating Earnings can and will fluctuate over time based on changes in asset levels, funding rates, available reinvestment rates and expected losses on credit sensitive positions. A table is provided at the end of this news release which reconciles Operating Earnings per share with net income (loss) per share. (All numbers are thousands, except per share amounts.) During the fourth quarter of 2003, the Company's commercial real estate assets increased to $1,464,492 representing an 11% increase from the third quarter, and its holdings of RMBS assets after the settlement of $99,551 of RMBS securities sold not yet settled decreased by $220,736 representing a 25% decrease from the third quarter. After the settlement of the sold RMBS, the ratio of commercial real estate assets to the Company's total portfolio, and RMBS to the Company's total portfolio is 68% and 30%, respectively. The Company's considers its total portfolio to be total assets less other assets and receivable for investments sold. The increase in commercial real estate assets of $144,068 is comprised of 73% investment grade CMBS, 23% non-investment grade CMBS, and 4% whole loans. The Company considers CMBS securities where it maintains the right to control the foreclosure/workout process on the underlying loans as controlling class CMBS ("Controlling Class CMBS"). During the twelve months ended December 31, 2003, the Company acquired $140,139 of par of 2003 vintage Controlling Class CMBS. The Company did not acquire new Controlling Class CMBS during the fourth quarter of 2003. Hugh Frater, President and Chief Executive Officer of the Company, stated, "We have made significant progress in reducing the risk of the RMBS portfolio in favor of commercial real estate securities and loans. Our credit performance remains consistent with our expectations. We still have further work to do in re-positioning the portfolio into high yield commercial real estate assets, but the reduction in volatility accomplished during the fourth quarter is an important first step." Chris Milner, Chief Investment Officer of the Company, also stated, "Our increased focus on commercial real estate opportunities resulted in a significant increase in assets acquired. We have committed to invest over $50,000 in CMBS which we expect to close within the next sixty days in addition to a significant pipeline of other high yielding opportunities. We continue to apply a disciplined approach to credit underwriting which we expect to result in consistent performance over the long term." The Company's Operating Earnings for the fourth quarter of 2003 represent an annualized return on the quarter's average common stock equity ("Annualized ROE") of 15.0% and a net interest margin of 2.8%. Annualized ROE based upon Operating Earnings for the same period last year was 20.6% and the net interest margin was 3.8%. The decrease in the net interest margin is attributable to the Company's reduction in RMBS assets and a lower debt to capital ratio compared to the twelve months ended December 31, 2002. Aggregate leverage at December 31, 2003 is unchanged from September 30, 2003 at 4.4:1 debt to capital. The Company's exposure to changes in short-term interest rates increased during the fourth quarter; as of December 31, 2003, a 50 basis point change in LIBOR would cause the Company's net income to change by $0.01 per share annually. Investment Activity The Company's primary focus is to invest in a diverse portfolio of commercial real estate loans and securities. The Company will generally control the credit process of its portfolio. Our objective is to maximize the spread between the loss adjusted income and the cost of financing. As of December 31, 2003, the Company has financed 51% of its commercial real estate loans and securities with match-funded secured collateralized debt obligation ("CDO") debt to minimize the effect on performance of changes in interest rates. The Company plans to issue additional CDO debt in the first half of 2004. The majority of the Company's commercial real estate investments are in the form of commercial real estate securities. Income from these securities is reported after assuming losses will occur over time. During the fourth quarter of 2003 the Company's loan loss expectations for its commercial real estate securities portfolio did not change. Total expected underlying loan losses remain at 2.06% of original loan balances. None of the Company's underlying loans incurred losses during the fourth quarter. Total losses recognized were 0.41% at the end of the third and fourth quarters. At December 31, 2003, loan delinquencies represented 1.5% of the total unpaid principal balance on the Company's Controlling Class CMBS as compared to 1.4% at the end of the third quarter. The average yield on the Company's commercial real estate securities (primarily investment grade and below investment grade CMBS, investment grade REIT debt, and CMBS IO's) for the fourth quarter of 2003 was 8.0%, while the average loss adjusted yield on only the below investment grade CMBS was 9.7%. The average cost of financing the commercial real estate securities portfolio during the fourth quarter was 5.0% compared to 5.2% for the third quarter. This reduction is due to the increase in investment grade CMBS. The Company anticipates that its cost of borrowing will increase in the event of an additional CDO offering. Included in net income for the fourth quarter are expenses related to hedging the Company's assets which are not financed through its two CDO's. This hedging expense was $5,539 or $0.11 per share for the fourth quarter. A breakdown of the commercial real estate securities portfolio net interest income and realized gains for the quarter and year ended December 31, 2003 is as follows:
For the quarter ended For the year ended December 31, 2003 ---------------------------------------------- Interest Income $26,384 $98,114 Interest Expense* (12,860) (48,567) ---------------------------------------------- Net Interest Income 13,524 49,547 ---------------------------------------------- Realized Gains - 1,161 ---------------------------------------------- Net Interest Income and Realized Gains from Commercial Real Estate Securities $13,524 $50,708 ============================================== *Including hedges in the Company's CDOs
The average yield on the Company's commercial real estate loan portfolio for the third and fourth quarters of 2003 was 10.4% and 10.7%, respectively. The total cost of borrowing secured by loan assets is 2.9% and 3.0% respectively. The Company has two committed warehouse lines that can be used to finance these assets. The annualized yield on the Company's investment in Carbon Capital, Inc. which constitutes 29% of the Company's commercial real estate loan portfolio for the year ended December 31, 2003, was 15.1%. A breakdown of the commercial real estate loan portfolio net interest income for the quarter and year ended December 31, 2003 is as follows:
For the quarter ended For the year ended December 31, 2003 ----------------------------------------------- Interest Income $ 2,828 $10,196 Interest Expense (163) (526) ----------------------------------------------- Net Interest Income from Commercial Real Estate Loans $ 2,665 $ 9,670 ===============================================
Book Value Net book value per share at the end of the fourth quarter was $6.64. The securities of the Company are marked to market based upon market prices provided by dealers. As the Company's portfolio matures, the net book value of credit sensitive CMBS securities held by the Company is expected to increase towards its original purchase cost, provided that the Company's estimates of expected credit losses are accurate. The unrealized loss on all Controlling Class CMBS at December 31, 2003 was $68,079. This amount reflects the amount of recovery (net of expected underlying loan losses) if the portfolio is held to maturity. Net book value per share increased approximately 1.7% from $6.53 at September 30, 2003 due to tighter credit spreads across the Company's portfolio. Since the securities of the Company are marked to market, there can be fluctuations in book value based solely on quarterly changes in credit spreads and interest rates. To the extent that there is a sustained decline in book value due to changes in credit experience or other permanent factors, such declines would effectively reduce earnings. GAAP Reconciliation The table below reconciles net income (loss) per common share with Operating Earnings per common share: Three Months Ended Year Ended -------------------------------------------------- 12/31/03 12/31/02 12/31/03 12/31/02 -------------------------------------------------- Operating Earnings per share $0.25 $0.41 $1.25 $1.67 Realized gain (loss) (0.17) 0.18 (0.86) (0.57) Unrealized gain (loss)* 0.16 (0.25) (0.07) 0.18 Foreign currency gain/(loss) & hedge ineffectiveness 0.01 (0.01) 0.01 (0.02) Loss on impairment of asset - (0.22) (0.67) (0.22) Cumulative transition adjustment - SFAS 142 - - - 0.14 -------------------------------------------------- Net Income (loss) per share $0.25 $0.11 $(0.34) $1.18 *Includes hedges
Dividend Reinvestment Plan Anthracite has a dividend reinvestment plan that provides current owners of its common stock with a simple, economical and convenient method of increasing their investment. Even if you are not a current owner of Anthracite common stock, the Company's transfer agent can issue registered stock directly to you without commission or markup. This transaction can be done regardless of whether or not shares are held in street name. To take advantage of this program, stockholders must submit a signed Request for Waiver to the Company. A printable version of the form is available on the Company's website or investors can call or email the Company to obtain the Waiver and instructions via fax. To request a prospectus and receive enrollment materials or to ask questions about the plan, interested investors and stockholders may contact the Company's transfer agent, American Stock Transfer & Trust Company, at 1-877-248-6416, or Investor Relations, Anthracite Capital, Inc., at 212-409-3333. The Company's website address is www.anthracitecapital.com. The Company is currently offering a 2% discount to the trailing 12-business day average provided the stock price remains above threshold levels established by the Company at the time. About Anthracite Anthracite Capital, Inc. is a specialty finance company focused on investments in high yield real estate loans and related securities. Anthracite is externally managed by BlackRock Financial Management, Inc., which is a subsidiary of BlackRock, Inc. ("BlackRock") (NYSE:BLK), one of the largest publicly traded investment management firms in the United States with $309,400,000 in global assets under management as of December 31, 2003. BlackRock is a member of The PNC Financial Services Group, Inc. ("PNC") (NYSE:PNC), a diversified financial services organization. Through its affiliates, PNC originates commercial, multifamily and residential real estate loans, and services $83,300,000 in commercial mortgage loans for third parties through its Midland Loan Services, Inc. subsidiary as of December 31, 2003. Forward Looking Statements This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act with respect to future financial or business performance, strategies or expectations. Forward-looking statements are typically identified by words or phrases such as "trend," "opportunity," "pipeline," "believe," "comfortable," "expect," "anticipate," "current," "intention," "estimate," "position," "assume," "potential," "outlook," "continue," "remain," "maintain," "sustain," "seek," "achieve," and similar expressions, or future or conditional verbs such as "will," "would," "should," "could," "may" or similar expressions. Anthracite cautions that forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made, and Anthracite assumes no duty to and does not undertake to update forward-looking statements. Actual results could differ materially from those anticipated in forward-looking statements and future results could differ materially from historical performance. In addition to factors previously disclosed in Anthracite's Securities and Exchange Commission (the "SEC") reports and those identified elsewhere in this press release, the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance: (1) the introduction, withdrawal, success and timing of business initiatives and strategies; (2) changes in political, economic or industry conditions, the interest rate environment or financial and capital markets, which could result in changes in the value of Anthracite's assets; (3) the relative and absolute investment performance and operations of Anthracite's manager; (4) the impact of increased competition; (5) the impact of capital improvement projects; (6) the impact of future acquisitions; (7) the unfavorable resolution of legal proceedings; (8) the extent and timing of any share repurchases; (9) the impact, extent and timing of technological changes and the adequacy of intellectual property protection; (10) the impact of legislative and regulatory actions and reforms and regulatory, supervisory or enforcement actions of government agencies relating to Anthracite, BlackRock or PNC; (11) terrorist activities, which may adversely affect the general economy, real estate, financial and capital markets, specific industries, and Anthracite and BlackRock; and (12) the ability of Anthracite's manager to attract and retain highly talented professionals. Anthracite's Annual Report on Form 10-K for the year ended December 31, 2002 and Anthracite's subsequent reports filed with the SEC, accessible on the SEC's website at www.sec.gov and on Anthracite's website www.anthracitecapital.com, identify additional factors that can affect forward-looking statements. To learn more about Anthracite Capital, Inc., visit our website at: www.anthracitecapital.com
Anthracite Capital, Inc. and Subsidiaries Consolidated Statements of Financial Condition (Unaudited) (in thousands, except per share data) - -------------------------------------------------------------------------------------------------------------------------------- December 31, 2003 December 31, 2002 ----------------- ----------------- ASSETS Cash and cash equivalents $ 20,805 $ 24,698 Restricted cash equivalents 12,845 84,485 Residential mortgage backed securities 753,219 1,506,450 --------------- --------------- Cash and RMBS 786,869 1,615,633 Commercial real estate securities 1,366,508 894,345 Commercial real estate loans 97,984 88,926 --------------- --------------- Total Commercial real estate 1,464,492 983,271 Receivable for investments sold 99,056 - Other assets 42,964 40,447 --------------- --------------- Total Assets $2,393,381 $2,639,351 =============== =============== LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Borrowings: Secured by pledge of residential mortgage backed securities $670,874 $1,418,206 Secured by pledge of commercial real estate securities 444,987 42,861 Secured by pledge of commercial real estate loans 22,710 16,004 --------------- --------------- Total short term borrowings 1,138,571 1,477,071 Long term Borrowings: Collateralized debt obligations 684,970 684,590 --------------- --------------- Total borrowings $1,823,541 $2,161,661 Securities sold, not yet settled 99,551 - Payable for investments purchased - 524 Distributions payable 14,749 16,589 Other liabilities 38,110 54,361 --------------- --------------- Total Liabilities $1,975,951 $2,233,135 --------------- --------------- Stockholders' Equity: Common stock, par value $0.001 per share; 400,000 shares authorized; 49,464 shares issued and outstanding in 2003; and 47,398 shares issued and outstanding in 2002 49 47 10% Series B Preferred stock, liquidation preference $43,942 in 2003 and $47,817 in 2002 33,431 36,379 9.375% Series C Preferred stock, liquidation preference $57,500 in 2003 55,435 - Additional paid - in capital 536,333 515,180 Distributions in excess of earnings (101,635) (24,161) Accumulated other comprehensive loss (106,183) (121,229) --------------- --------------- Total Stockholders' Equity 417,430 406,216 --------------- --------------- Total Liabilities and Stockholders' Equity $2,393,381 $2,639,351 =============== ===============
Anthracite Capital, Inc. Consolidated Statements of Operations (Unaudited) (in thousands, except per share data) - ---------------------------------------------------------------------------------------------------------------------------------- For the Three Months Ended For the Year Ended December 31, December 31, --------------------------------------------------------------------------- 2003 2002 2003 2002 --------------------------------------------------------------------------- Operating Portfolio Income: Commercial real estate securities $26,384 $21,782 $98,114 $72,205 Commercial real estate loans 2,828 3,481 10,196 16,243 Residential mortgage backed securities 8,878 17,070 54,504 72,524 Cash and cash equivalents 126 276 964 1,473 -------- -------- -------- -------- Total income 38,216 42,609 163,778 162,445 -------- -------- -------- -------- Expenses: Interest expense: Collateralized debt obligations 11,138 8,158 44,226 17,626 Commercial real estate securities 1,722 1,255 4,341 5,686 Commercial real estate loans 163 364 526 1,832 Residential mortgage backed securities 2,512 6,094 16,072 25,009 Hedging Expense 5,539 3,308 18,790 14,758 General and administrative 572 549 2,296 2,323 Incentive fee - - - 9,332 Management fee 2,070 2,460 9,411 3,195 -------- -------- -------- -------- Total expenses 23,716 22,188 95,662 79,761 -------- -------- -------- -------- Operating Earnings 14,500 20,421 68,116 82,684 -------- -------- -------- -------- Other gain (loss): Realized loss (8,354) 8,455 (41,633) (26,265) Unrealized gain (loss) 7,858 (12,083) (3,405) 8,401 Foreign currency (loss) - (432) - (812) Hedge Ineffectiveness 881 110 706 236 Incentive fee attributable to other gains - - - (343) Loss on impairment of asset - (10,273) (32,426) (10,273) -------- -------- -------- -------- Total other gain (loss) 385 (14,223) (76,758) (29,056) -------- -------- -------- -------- Income before cumulative transition adjustment 14,885 6,198 (8,642) 53,628 Cumulative transition adjustment - SFAS 142 - - - 6,327 Net Income (Loss) 14,885 6,198 (8,642) 59,955 -------- -------- -------- -------- Dividends on preferred stock 2,446 1,195 7,744 5,162 -------- -------- -------- -------- Net Income (Loss) available to Common Stockholders 12,439 5,003 (16,386) 54,793 ======== ======== ======== ======== Operating Earnings available to Common Stockholders per share: Basic $0.25 $0.41 $1.25 $1.67 Diluted $0.25 $0.41 $1.25 $1.67 Net Income (Loss) per share, basic Income before cumulative transition adjustment $0.25 $0.11 $(0.34) $ 1.04 Cumulative transition adjustment - - - 0.14 -------- -------- -------- -------- Net Income $0.25 $0.11 $(0.34) $ 1.18 ======== ======== ======== ======== Net Income (Loss) per share, diluted Income before cumulative transition adjustment $0.25 $0.11 $(0.34) $ 1.04 Cumulative transition adjustment - - - 0.14 -------- -------- -------- -------- Net Income $0.25 $0.11 $(0.34) $ 1.18 ======== ======== ======== ======== Weighted average number of shares outstanding: Basic 49,107 47,256 48,246 46,411 Diluted 49,118 47,284 48,246 46,452
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