Server: Netscape-Communications/1.1 Date: Thursday, 18-Dec-97 08:24:31 GMT Last-modified: Friday, 12-Dec-97 20:46:00 GMT Content-length: 8039 Content-type: text/html Aames Financial Corporation / News Release 10/29/97



October 29, 1997
AAMES FINANCIAL CORPORATION REPORTS FIRST QUARTER RESULTS AND DECLARES REGULAR QUARTERLY CASH DIVIDEND; RECORD LOAN PRODUCTION IN CORE RETAIL AND OPERATING UNITS

Consolidated Statements of Income
Consolidated Balance Sheets
Quarterly Financial Statistics


Contact:
David Sklar
Executive Vice President, Finance
Aames Financial Corporation
213/210-5311

Jeffrey Lloyd/Steven Hawkins
Sitrick And Company
(310) 788-2850

Los Angeles, California - October 29, 1997 - Aames Financial Corporation (NYSE: AAM) today reported record loan production in its core retail and One Stop Mortgage operating units. In addition, Aames' loan servicing unit generated record revenues during the fiscal quarter.

Revenue for the quarter was $77.9 million, up from $75.6 million from last year's first fiscal quarter. Net income for the quarter was $13.1 million, compared to a net loss of $4.6 for the same period a year ago. Excluding nonrecurring charges net of taxes of $18.6 million in the prior year's first quarter, net income amounted to $14.0 million. On a fully diluted per share basis, net income per share for the quarter totaled $0.40, compared with $0.46 (excluding nonrecurring charges and adjusted for the three-for-two stock split in the form of a stock dividend effected in February 1997), in the prior-year period.

Neil B. Kornswiet, Aames president, said, "We are continuing to set new records in our core loan production units. Total loan production for the quarter increased 4.4 percent to $523 million, compared to $501 million for the comparable quarter last year, despite an expected reduction in correspondent volume. Aames' retail originations for the quarter were $133 million, compared to $101 million for the same quarter last year, an increase of 32 percent, and origination volume for the One Stop broker network reached $262 million, compared to $141 million in 1996, an increase of 86 percent."

Kornswiet added, "We are pleased to note that approximately 80 percent of our loan production volume is now being generated by our core retail and One Stop broker operating units. Continued geographic expansion in the retail and broker channels is expected to enhance growth opportunities for the Company."

Kornswiet said that as expected, the previously announced pricing changes made in the last fiscal year resulted in no large bulk purchases in the correspondent unit this quarter. Notwithstanding these changes, loan production for correspondent was $128 million for the quarter, compared to $259 million for the comparable quarter in 1996.

Cary H. Thompson, Aames' chief executive officer, said, "We view the loan servicing unit as a significant component of our core business due to its positive cash flow contribution and its stable revenue stream. The Company recorded record loan service revenues of $9.8 million in the quarter, an increase of 109 percent from the $4.7 million in the comparable quarter in 1996. We are continuing to focus our efforts on increasing the loan servicing portfolio and achieving increasing economies of scale."

Thompson added, "At September 30, 1997, Aames' loan servicing portfolio increased to $3.4 billion, up 89 percent from $1.8 billion for the same period last year. Consistent with the Company's strategic plan, the Company's in-house serviced portfolio increased by both the transfer of loans which had been subserviced by a third party, and the servicing of the majority of new production during the period. Future plans call for the in-house transfer of substantially all of the Company's servicing portfolio by the end of fiscal 1998."

The carryover of loans held for sale at September 30, 1997 increased 43 percent to $204 million from $143 million at September 30, 1996. The Company securitized $504 million during the quarter ended September 30, 1997. The decline from the $243 million carryover at fiscal year end 1997 resulted from whole loan sales which totaled $39 million during the quarter ended September 30, 1997.

The Company also announced that its board of directors has declared a regular quarterly cash dividend of $0.033 per share, payable on November 21, 1997, to stockholders of record as of November 10, 1997.

Aames Financial Corporation is a leading home equity lender, and at September 30, 1997, operated 60 retail offices serving 26 states, including the District of Columbia. Its wholly-owned subsidiary, One Stop Mortgage, Inc., operates 40 branches serving 35 states, including the District of Columbia, at that date.

SOURCE: Aames Financial Corporation


 
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