-----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, DL4TWLr/Lq40MfnM2jT3M4ARviZTN9BQ+y7fUE7EaglUEwR1l0mUf9rpuQTSCS14 kFwGZewRe8qKhfgZzpbCQA== 0000038984-04-000005.txt : 20040225 0000038984-04-000005.hdr.sgml : 20040225 20040225120016 ACCESSION NUMBER: 0000038984-04-000005 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040225 ITEM INFORMATION: FILED AS OF DATE: 20040225 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FREMONT GENERAL CORP CENTRAL INDEX KEY: 0000038984 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 952815260 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-08007 FILM NUMBER: 04626655 BUSINESS ADDRESS: STREET 1: 2020 SANTA MONICA BLVD STREET 2: STE 600 CITY: SANTA MONICA STATE: CA ZIP: 90404 BUSINESS PHONE: 3103155500 MAIL ADDRESS: STREET 1: 2020 SANTA MONICA BLVD CITY: SANTA MONICA STATE: CA ZIP: 90404 8-K 1 form8k02252004.txt CURRENT REPORT - FEBRUARY 25, 2004 ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): FEBRUARY 25, 2004 FREMONT GENERAL CORPORATION (Exact Name of Registrant as Specified in Its Charter) NEVADA (State or Other Jurisdiction of Incorporation) 1-8007 95-2815260 (Commission File Number) (I.R.S. Employer Identification No.) 2020 SANTA MONICA BOULEVARD - SUITE 600 SANTA MONICA, CA 90404 (Address of Principal Executive Offices) (Zip Code) (310) 315-5500 (Registrant's Telephone Number, Including Area Code) N/A (Former Name or Former Address, if Changes Since Last Report) ================================================================================ ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION On February 25, 2004, Fremont General Corporation issued a news release to report its results of operations and financial condition at, and for the three months and year ended, December 31, 2003. The information set forth in the attached Exhibit 99.1 is incorporated in the Item by reference and is being furnished and shall not be deemed "filed" for the purposes of the Securities Exchange Act of 1934, as amended. 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 thereunto duly authorized. FREMONT GENERAL CORPORATION Date: February 25, 2004 BY: /s/ Patrick E. Lamb -------------------------------- Patrick E. Lamb, Senior Vice President, Controller and Chief Accounting Officer 3 EX-99 3 ex99102252004.txt EX-99.1 Q4 2004 EARNINGS NEWS RELEASE Exhibit 99.1 FREMONT GENERAL NEWS RELEASE - -------------------------------------------------------------------------------- 2020 Santa Monica Boulevard Santa Monica, CA 90404 Tel (310) 315-5500 Fax (310)315-5599 FREMONT GENERAL REPORTS A 113% INCREASE IN QUARTERLY NET INCOME FROM CONTINUING OPERATIONS (SANTA MONICA, CALIFORNIA) - February 25, 2004 - Fremont General Corporation (the "Company") reported net income from continuing operations of $68,097,000 for the fourth quarter of 2003. This represents an increase of 113%, as compared to net income from continuing operations of $31,986,000 for the fourth quarter of 2002. Net income from continuing operations for all of 2003 was $211,953,000, as compared to $104,077,000 for all of 2002. Diluted net income per share from continuing operations was $0.94 for the fourth quarter of 2003, as compared to $0.47 per share for the fourth quarter of 2002. Diluted net income per share from continuing operations was $2.98 for all of 2003, as compared to $1.55 per share for all of 2002. The Company has adjusted its method for calculating diluted net income per share by applying the treasury stock method to its unvested restricted shares. This method, which was not previously applied, increases the Company's diluted net income per share for the years ended December 31, 2002 and 2003 from $1.43 and $2.81 to $1.55 and $2.98, respectively. There is no change in reported revenue, net income, basic net income per share or cash flow. The Company's stockholders' equity per share was $8.74 at December 31, 2003 and the holding company had approximately $144 million in cash and cash equivalents as of December 31, 2003. The Company's Board of Directors declared a quarterly cash dividend of $0.05 per share on its common stock, payable April 30, 2004 to shareholders of record on March 31, 2004. The declaration of the quarterly dividend represents the 109th consecutive quarterly cash dividend to be paid by the Company. The Company's nationwide industrial bank, Fremont Investment & Loan, reported record pre-tax income of $135,139,000 for the fourth quarter of 2003, as compared to $70,043,000 for the fourth quarter of 2002. Pre-tax income for Fremont Investment & Loan for the year 2003 totaled $429,114,000 as compared to $234,371,000 for all of 2002. As of December 31, 2003, Fremont Investment & Loan, with approximately $9.3 billion in assets, had over $6.6 billion in FDIC-insured deposits and is categorized as "well capitalized" with a total Risk-Based Capital ratio of 13.87%. RESIDENTIAL REAL ESTATE LENDING Residential real estate loan originations totaled $4.58 billion during the fourth quarter of 2003, up from $2.32 billion during the fourth quarter of 2002. The following tables highlight the Company's loan originations by period indicated:
4TH QUARTER YEAR ENDED ----------------------------- ----------------------------- 2003 2002 2003 2002 ------------ ----------- ------------ ----------- - ----------------------------------------------- LOAN ORIGINATION VOLUME (IN $000'S): - ----------------------------------------------- First Mortgage ........................... $ 4,373,575 $ 2,216,850 $ 13,110,123 $ 6,584,663 Second Mortgage .......................... 202,366 106,456 629,617 350,709 ----------- ----------- ------------ ----------- $ 4,575,941 $ 2,323,306 $ 13,739,740 $ 6,935,372 =========== =========== ============ ===========
4TH QUARTER YEAR ENDED ----------------------- ------------------------ 2003 2002 2003 2002 -------- --------- --------- --------- - ------------------------------------------------------ FIRST MORTGAGES - ORIGINATION - ------------------------------------------------------ TYPE OF PRODUCT: Adjustable Rate (2/28) ................ 76.1% 74.3% 73.2% 83.3% Fixed ................................. 20.0% 24.8% 24.2% 14.5% Other ................................. 3.9% 0.9% 2.6% 2.2% -------- --------- --------- --------- 100.0% 100.0% 100.0% 100.0% ======== ========= ========= ========= PURPOSE: Refinance ............................. 58.6% 62.6% 60.4% 58.8% Purchase .............................. 41.4% 37.4% 39.6% 41.2% -------- --------- --------- --------- 100.0% 100.0% 100.0% 100.0% ======== ========= ========= ========= Average Loan Size .......................... $ 204,468 $ 189,038 $ 198,218 $ 173,975 Average FICO Score ......................... 622 618 623 611 - ------------------------------------------------------ FIRST & SECOND MORTGAGES - ORIGINATION - ------------------------------------------------------ GEOGRAPHIC DISPERSION: California ........................... 39.0% 48.2% 42.3% 43.8% New York ............................. 11.3% 7.1% 9.5% 6.8% Florida .............................. 7.7% 9.5% 8.5% 9.8% Illinois ............................. 5.7% 4.8% 5.2% 4.8% All other states ..................... 36.3% 30.4% 34.5% 34.8% -------- --------- --------- --------- 100.0% 100.0% 100.0% 100.0% ======== ========= ========= =========
The gain on the sale of residential real estate loans during the fourth quarter of 2003 totaled $96.0 million on whole loan sales and securitizations of $3.77 billion, as compared to a gain of $61.2 million on net whole loan sales of $1.87 billion during the fourth quarter of 2002. The Company increased the level of loans held for investment (portfolio) to $797.7 million as of December 31, 2003, up from $396.8 million at December 31, 2002. Loans held for sale increased Page 2 of 9 to $3.65 billion at December 31, 2003, up from $1.67 billion at December 31, 2002. In addition, the Company has put in place three separate warehouse lines of credit, totaling $1.5 billion, to facilitate the funding needs of the growth in residential real estate loan origination volume. The Company's residential loan servicing platform was servicing approximately $9.5 billion in loans outstanding as of December 31, 2003. This amount was comprised of the Company's loans held for investment, loans securitized, loans held for sale and interim servicing for loans sold to third parties. COMMERCIAL REAL ESTATE LENDING Commercial real estate loans receivable, before the allowance for loan losses, totaled approximately $4.02 billion at December 31, 2003, as compared to $3.73 billion at December 31, 2002. Loan commitments increased to $722.3 million during the fourth quarter of 2003, up from $453.7 million during the fourth quarter of 2002. The following tables highlight the commercial real estate loan production and portfolio as indicated:
4TH QUARTER YEAR ENDED ------------------------ ----------------------------- (IN 000'S) 2003 2002 2003 2002 --------- --------- ----------- ----------- Loan commitments originated ................. $ 722,264 $ 453,743 $ 2,616,412 $ 1,328,391
- -------------------------------------------------------------------------------- PORTFOLIO - -------------------------------------------------------------------------------- (IN 000'S) DECEMBER 31, ---------------------------- 2003 2002 ----------- ----------- Loan Types: Bridge ........................................ $ 1,659,847 $ 1,712,085 Permanent ..................................... 1,281,877 1,393,427 Construction .................................. 804,793 328,974 Single Tenant Credit .......................... 268,506 296,787 ----------- ----------- Total Loans Receivable ........................ $ 4,015,023 $ 3,731,273 =========== =========== Geographic: California .................................... 38.9% 47.6% New York ...................................... 12.7% 6.8% Illinois ...................................... 8.4% 4.5% Texas ......................................... 5.8% 6.2% Florida ....................................... 5.5% 4.1% District of Columbia .......................... 5.0% 6.7% All other states .............................. 23.7% 24.1% ----------- ----------- Total Loans Receivable ........................ 100.0% 100.0% =========== =========== Non-performing loans and REO ("NPA") ............... $ 95,379 $ 80,629 NPA as a % of loans receivable and REO ............. 2.36% 2.15%
Page 3 of 9 Non-performing commercial real estate assets totaled $95.4 million at December 31, 2003, up from $80.6 million as of December 31, 2002. Net loan charge-offs for the commercial real estate portfolio decreased during the fourth quarter of 2003 to $11.7 million from $11.9 million during the fourth quarter of 2002. The net charge-off ratio for the year ending December 31, 2003 for the commercial real estate loan portfolio was 1.17%, as compared with a ratio of 0.87% for all of 2002. NET INTEREST INCOME AND ASSET QUALITY o Net interest income for financial services increased to $118.4 million during the fourth quarter of 2003, as compared to $76.9 million during the fourth quarter of 2002. The net interest margin, as a percentage of interest-earning assets, increased to 5.42% during the fourth quarter of 2003, as compared to 5.11% during the fourth quarter of 2002. o Non-performing assets (non-accrual loans and foreclosed real estate) increased to $118.7 million as of December 31, 2003 from $107.3 million at December 31, 2002. Accruing loans past due 90 days or more were $38.4 million at December 31, 2003. o Total net loan charge-offs decreased during the fourth quarter of 2003 to $11.8 million from $14.4 million during the fourth quarter of 2002. The $11.8 million was essentially all attributable to net charge-offs in the commercial real estate loan portfolio, which is reflective of the economic conditions present in many of the markets that we serve, but is within management's expectations during the current phase of the economic cycle for this lending operation. o The allowance for loan losses, as of December 31, 2003, was 4.46% of total loans receivable and 192.0% of the total non-performing assets in the portfolio. Fremont General Corporation is an industrial bank holding company and its common stock is traded on the New York Stock Exchange under the symbol "FMT". Fremont Investment & Loan provides nationwide commercial and residential real estate lending through its 14 regional offices (nine commercial and five residential) and does so primarily on a first mortgage or first trust deed basis. As of December 31, 2003, Fremont Investment & Loan had commercial real estate loans in its portfolio located in 41 states and during the fourth quarter of 2003, it originated residential real estate loans in 45 states. This news release may contain "forward-looking statements" which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements and the Company's currently reported results are based on the Company's current expectations and beliefs concerning future developments and their potential effects on the Company. These statements and the Company's reported results are not guarantees of future performance and there can be no assurance that actual developments will be those anticipated by the Company. Actual results may differ materially and adversely from the Company's projected or reported results as a result of significant risks, uncertainties and assumptions that are difficult to predict, including: (i) changes in the interest rate environment, (ii) changes in general and specific economic conditions and trends, (iii) changes in asset and loan valuations and the costs of originating loans, (iv) changes in the volume of loans originated, loans sold, the pricing of existing and future loans, and the premiums realized upon the sale of such loans, (v) access to the necessary capital resources to fund loan originations Page 4 of 9 and the condition of the whole loan sale and securitization markets, (vi) the impact of changes in the commercial and residential real estate markets, (vii) the effect of litigation, state and federal legislation and regulations, and regulatory actions, (viii) the collectibility, and timing thereof, of loan balances, and any adverse development of, and the variability in determining, the allowance for loan losses, (ix) the ability to utilize the net tax operating loss carryforwards currently held, and (x) other events and factors beyond our control. For a more detailed discussion of risks and uncertainties, see the Company's public filings with the Securities and Exchange Commission. The Company undertakes no obligation to publicly update any forward-looking statements. - -------------------------------------------------------------------------------- o Fremont General will host an investor conference call to discuss the Company's results. The call will begin at 1:00 p.m. (ET) on February 25, 2004. o The call will be webcast live on the Internet at http://www.fulldisclosure.com. Go to the web site at least 15 minutes before the event to download and install any necessary audio software. The webcast will be archived until February 25, 2005. o To listen to the live call by telephone, dial 706/634-1256 ten minutes before the start time. The telephone replay will be archived until March 24th at 706/645-9291 - use Conference ID 5228043. o The Company's periodic reports as filed with the Securities and Exchange Commission can be accessed at http://www.sec.gov. CONTACT: Investor Relations 310/315-5500 Page 5 of 9 FREMONT GENERAL CORPORATION (THOUSANDS OF DOLLARS, EXCEPT PER SHARE DATA) SELECTED FINANCIAL DATA
THREE MONTHS ENDED YEAR ENDED DECEMBER 31ST DECEMBER 31ST ------------------------ ----------------------- 2003 2002 2003 2002 --------- --------- --------- -------- CONSOLIDATED STATEMENTS OF OPERATIONS: Pre-tax income: Financial services ............................................... $ 135,139 $ 70,043 $ 429,114 $ 234,371 Corporate and other interest expense ............................. (15,901) (15,349) (64,993) (57,481) --------- --------- --------- --------- Total pre-tax income from continuing operations .................... 119,238 54,694 364,121 176,890 Provision for income taxes ......................................... (51,141) (22,708) (152,168) (72,813) --------- --------- --------- --------- Net income from continuing operations .............................. 68,097 31,986 211,953 104,077 Discontinued insurance operations .................................. - (77,762) 44,308 (77,762) --------- --------- --------- --------- Net income (loss) .................................................. $ 68,097 $ (45,776) $ 256,261 $ 26,315 ========= ========= ========= ========= PER SHARE DATA: BASIC: Net income from continuing operations ........................... $ 0.97 $ 0.47 $ 3.03 $ 1.55 Discontinued insurance operations ............................... - (1.15) 0.63 (1.16) --------- --------- -------- --------- Net income (loss) ............................................... $ 0.97 $ (0.68) $ 3.66 $ 0.39 ========= ========= ======== ========= DILUTED: Net income from continuing operations ........................... $ 0.94 $ 0.47 $ 2.98 $ 1.55 Discontinued insurance operations ............................... - (1.15) 0.62 (1.16) --------- --------- -------- --------- Net income (loss) ............................................... $ 0.94 $ (0.68) $ 3.60 $ 0.39 ========= ========= ======== ========= WEIGHTED AVERAGE SHARES OUTSTANDING: Basic ........................................................... 70,376 67,684 69,993 67,009 Diluted ......................................................... 72,656 67,873 71,260 66,888 CASH DIVIDENDS DECLARED PER COMMON SHARE ......................... $ 0.05 $ 0.02 $ 0.17 $ 0.08 STOCKHOLDERS' EQUITY PER SHARE AT PERIOD-END ..................... $ 8.74 $ 5.29 SHARES OUTSTANDING AT PERIOD-END ................................. 75,990 75,397
DILUTED NET INCOME PER SHARE ("EPS") FROM CONTINUING OPERATIONS BY INDICATED QUARTER AND YEAR-TO-DATE: 2003 -------------------------------------------------- 1ST 2ND 3RD 4TH YTD ------ ------ ------ ------ ------ Diluted EPS (as previously calculated) ............................. $ 0.56 $ 0.62 $ 0.73 $ 0.90 $ 2.81 Diluted EPS as adjusted for treasury stock method .................. $ 0.60 $ 0.66 $ 0.77 $ 0.94 $ 2.98 2002 -------------------------------------------------- 1ST 2ND 3RD 4TH YTD ------ ------ ------ ------ ------ Diluted EPS (as previously calculated) ............................. $ 0.25 $ 0.33 $ 0.41 $ 0.43 $ 1.43 Diluted EPS as adjusted for treasury stock method .................. $ 0.27 $ 0.35 $ 0.45 $ 0.47 $ 1.55
Page 6 of 9 FREMONT GENERAL CORPORATION (THOUSANDS OF DOLLARS) SELECTED FINANCIAL DATA
THREE MONTHS ENDED YEAR ENDED DECEMBER 31ST DECEMBER 31ST --------------------------- ---------------------------- 2003 2002 2003 2002 ----------- ----------- ------------ ----------- FINANCIAL SERVICES Interest and fee income on loans ................................. $ 159,188 $ 115,745 $ 539,588 $ 433,366 Interest income on investment securities ......................... 1,144 772 4,344 3,486 ----------- ----------- ------------ ----------- Total interest income .......................................... 160,332 116,517 543,932 436,852 Interest expense ................................................. 41,898 39,577 155,398 158,465 ----------- ----------- ------------ ----------- Net interest income ............................................ 118,434 76,940 388,534 278,387 Provision for loan losses ........................................ 18,326 37,930 98,262 108,118 ----------- ----------- ------------ ----------- Net interest income after provision for loan losses ............ 100,108 39,010 290,272 170,269 Gain on: Sales and securitizations of residential real estate loans ..... 96,039 61,166 307,644 185,036 Sale of residual interests in securitizations .................. - - 17,503 - Non-interest income .............................................. 8,755 3,041 23,138 10,099 Net loan servicing income ........................................ 3,615 1,993 9,684 6,727 Non-interest expense ............................................. (73,378) (35,167) (219,127) (137,760) ----------- ----------- ------------ ----------- Pre-tax income ................................................... $ 135,139 $ 70,043 $ 429,114 $ 234,371 =========== =========== ============ =========== Average net interest-earning assets (NEA) ........................ $ 8,670,526 $ 5,983,860 $ 7,275,274 $ 5,465,607 As a percentage of NEA: Total interest income ......................................... 7.34% 7.73% 7.48% 7.99% Interest expense .............................................. 1.92% 2.62% 2.14% 2.90% ----------- ----------- ------------ ----------- Net interest income ........................................... 5.42% 5.11% 5.34% 5.09% =========== =========== ============ =========== Ratio of net charge-offs to average loans receivable ............. 0.98% 1.35% 1.04% 1.18% Sales and securitizations of residential real estate loans ....... $ 3,774,880 $ 1,871,508 $ 11,088,317 $ 5,689,554 Net premium recognized on loan sales and securitizations ......... $ 144,272 $ 92,510 $ 457,562 $ 265,428 Less: Direct costs of loan originations (1) ..................... (49,335) (25,975) (145,346) (73,376) Adjustments to carrying value of loans held for sale ............. 1,102 (5,369) (4,572) (7,016) ----------- ----------- ------------ ----------- Gain on sale (GAAP) ......................................... $ 96,039 $ 61,166 $ 307,644 $ 185,036 Less: Origination expenses during the period (2) ................ (23,993) (14,319) (84,079) (42,040) ----------- ----------- ------------ ----------- Net operating gain on sale (3) ............................. $ 72,046 $ 46,847 $ 223,565 $ 142,996 =========== =========== ============ =========== Net premium recognized on loan sales and securitizations ......... 3.82% 4.94% 4.13% 4.66% Less: Direct costs of loan originations .......................... -1.31% -1.38% -1.31% -1.29% Adjustments to carrying value of loans held for sale ............. 0.03% -0.29% -0.04% -0.12% ----------- ----------- ------------ ----------- Gain on sale (GAAP) ......................................... 2.54% 3.27% 2.78% 3.25% Less: Origination expenses during the period ..................... -0.63% -0.77% -0.76% -0.74% ----------- ----------- ------------ ----------- Net operating gain on sale .................................. 1.91% 2.50% 2.02% 2.51% =========== =========== ============ =========== (1) Direct costs are costs directly incurred with the origination of the loans and which are deferred and recognized when the loans are sold. (2) Origination expenses represent indirect expenses related to the origination of residential real estate loans during the period indicated and which are not deferred. These expenses are included in non-interest expense in the consolidated statement of operations. (3) Net operating gain on sale is a supplemental measurement that management utilizes in evaluating its residential real estate lending operations; however, it is only a supplement to, and not a substitute for, the information presented in the consolidated statement of operations as prepared in accordance with GAAP. Furthermore, our definition of the indirect origination expenses may not be comparable to similarly titled measures reported by other companies. The net operating gain on sale amount does not include net interest income on residential real estate loans held for sale or any fair value adjustments on the Company's residual interests in securitized loans.
Page 7 of 9 FREMONT GENERAL CORPORATION (THOUSANDS OF DOLLARS) SELECTED FINANCIAL DATA
FINANCIAL SERVICES (CONTINUED) DEC 31 SEPT 30 DEC 31 2003 2003 2002 ----------- ----------- ----------- Loans receivable (portfolio) ............................................... $ 4,791,010 $ 4,645,112 $ 4,137,885 Allowance for loan losses .................................................. 213,591 207,038 161,190 Allowance for loan losses to loans receivable .............................. 4.46% 4.46% 3.90% Allowance for loan losses to NPA (excludes HFS) ............................ 192.0% 155.4% 164.8% Residential real estate loans held for sale (HFS) .......................... $ 3,650,167 $ 3,093,788 $ 1,673,145 Non-performing assets (NPA): Loans receivable related: Non-accrual loans: Commercial real estate ........................................... $ 71,758 $ 81,845 $ 70,031 Residential real estate .......................................... 8,482 7,246 5,600 Syndicated commercial loans ...................................... 6,752 6,854 11,239 ----------- ------------ ----------- 86,992 95,945 86,870 Foreclosed real estate (REO): Commercial real estate ........................................... 23,621 36,426 10,598 Residential real estate .......................................... 643 856 315 ----------- ------------ ----------- 24,264 37,282 10,913 ----------- ------------ ----------- Total NPA - Loans receivable ........................................ 111,256 133,227 97,783 HFS related: Non-accrual loans .................................................... 6,253 5,957 6,709 Foreclosed real estate (REO) ......................................... 1,202 971 2,850 ----------- ------------ ----------- Total NPA - HFS ...................................................... 7,455 6,928 9,559 ----------- ------------ ----------- Total NPA ............................................................... $ 118,711 $ 140,155 $ 107,342 ============ ============ =========== Accruing loans past due 90 days or more .................................... $ 38,381 $ 6,163 $ - NPA to loans receivable, loans HFS and REO ................................. 1.40% 1.80% 1.84% NPA (excluding loans HFS) to loans receivable and REO ...................... 2.31% 2.85% 2.36% o Loans receivable do not include loans designated as held for sale and are stated before the allowance for loan losses. o The average NEA includes loan receivables and loans designated as held for sale (including loans on non-accrual status), and investment securities. o Average loans receivable for calculating the net charge-off ratio do not include loans designated as held for sale. o The ratio of net charge-offs to average loans receivable is an annualized ratio. o Accruing loans past due 90 days or more may include loans that are contractually past maturity but continue to make interest payments. o Loans held for sale are residential real estate loans valued at the lower of cost or market.
Page 8 of 9 FREMONT GENERAL CORPORATION (THOUSANDS OF DOLLARS) SUMMARY BALANCE SHEET
CONSOLIDATED BALANCE SHEETS: DECEMBER 31 2003 2002 ----------- ----------- ASSETS Cash and cash equivalents .................................................. $ 835,651 $ 236,376 Investment securities ...................................................... 114,545 383,232 Loans held for sale - net .................................................. 3,650,167 1,673,145 Loans receivable - net ..................................................... 4,577,419 3,976,695 Mortgage servicing rights .................................................. 6,898 - Residual interests in securitized loans .................................... 6,530 22,749 Accrued interest receivable ................................................ 38,663 28,529 Deferred income taxes ...................................................... 193,304 302,268 Other assets ............................................................... 90,990 48,794 ----------- ----------- TOTAL ASSETS ........................................................... $ 9,514,167 $ 6,671,788 =========== =========== LIABILITIES Deposits: Savings accounts ......................................................... $ 1,244,083 $ 848,567 Money market deposit accounts ............................................ 412,524 254,857 Certificates of deposit .................................................. 4,976,559 3,442,299 ----------- ----------- 6,633,166 4,545,723 Warehouse lines of credit - - Federal Home Loan Bank ..................................................... 1,650,000 1,175,000 Senior Notes due 2004 ...................................................... 22,377 71,560 Senior Notes due 2009 ...................................................... 188,987 188,658 Liquid Yield Option Notes due 2013 ......................................... 654 3,089 Mandatorily redeemable preferred securities of subsidiary trust ("Preferred Securities") ................................ 100,000 100,000 Other liabilities .......................................................... 254,683 114,227 Liability to discontinued insurance operations ............................. - 74,514 ----------- ----------- TOTAL LIABILITIES ...................................................... 8,849,867 6,272,771 STOCKHOLDERS' EQUITY Common stock ............................................................... 75,990 75,397 Additional paid-in capital ................................................. 296,000 288,508 Retained earnings .......................................................... 328,044 84,591 Deferred compensation ...................................................... (35,889) (49,542) Accumulated other comprehensive income ..................................... 155 63 ----------- ----------- TOTAL STOCKHOLDERS' EQUITY ............................................. 664,300 399,017 ----------- ----------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ............................. $ 9,514,167 $ 6,671,788 =========== ===========
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