(USOTC:HBTC)
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Harbourton Capital Group, Inc. ("Harbourton" or the
"Company") (OTC:HBTC) today reported a loss of $1.8 million, or $0.36
per common share, for the three months ended June 30, 2006, compared
with net income after tax of $59,459 or $0.01 per common share, for
the comparable period in 2005. The loss for the six months ended June
30, 2006 was $3.7 million or $0.74 per common share, compared with net
income of $578,900 or $0.11 per common share for the comparable 2005
period. There were 5,061,375 shares of common stock outstanding during
the six months ended June 30, 2006 and December 31, 2005. Total
shareholders' equity at June 30, 2006 was $21.2 million, with a
corresponding book value of $4.19 per share, as compared with total
shareholders' equity at December 31, 2005 of $25.0 million, or $4.93
per share.
The Company's results for the quarter were negatively impacted by
Harbourton Mortgage Investment Corporation ("HMIC"), the Company's
wholesale mortgage subsidiary. For the quarter ended June 30, 2006,
HMIC originated $176.1 million of loans, a 37.5% increase as compared
with fundings for the linked quarter of $128.0 million. Sales of loans
during the quarter ended June 30, 2006 were $160.2 million, with an
average gain on sale of 2.11%, as compared with sales in the linked
quarter of $148.8 million, and a comparable gain on sale of 1.84%.
J. Kenneth McLendon, President and CEO stated, "The quarterly
operating results for the Company were again disappointing. However,
management believes the new sales team is making a positive impact as
noted by the 37% increase in loans funded in the quarter, even in
light of the softening real estate market."
He noted, "The Company's acquisition of Molton Allen Williams
Mortgage Company, LLC is on schedule for a late summer closing.
Although there will be a short-term increase in operating expenses to
accomplish merging the operations of both companies, we anticipate a
meaningful decrease in the cost to originate loans as a benefit of the
combination."
Harbourton is a holding company comprising two financial
businesses, mezzanine lending conducted by the HFC subsidiary and
mortgage banking by HMIC. HFC'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
servicing released to investors in the secondary market.
This press release may contain various "forward-looking
statements," within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended, 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 foreclosures
and charge-offs) of the Company, changes in the Company's markets,
changes in the economy (particularly in the markets served by the
Company) and changes in interest rates.
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Selected Financial Data:
(000's except per share data)
June 30, December 31, June 30,
Assets: 2006 2005 2005
------------ ------------ ------------
Cash & Cash Equivalents $1,879.6 $2,043.2 $2,854.4
Loans Receivable, Net 7,865.6 8,574.6 5,454.8
Loans Held for Sale, Net 76,421.0 81,378.0 74,342.5
Investment in Real Estate, Net 7,000.4 12,952.3 15,964.0
Other Assets 8,425.1 7,857.0 9,099.7
------------ ------------ ------------
Total Assets: $101,591.7 $112,805.0 $107,715.4
============ ============ ============
Liabilities:
Notes Payable 4,054.1 7,073.3 7,180.8
Warehouse Line Payable 74,195.8 78,081.2 70,442.3
Accounts Payable 2,133.4 2,697.6 2,426.2
------------ ------------ ------------
Total Liabilities/Other
Liabilities 80,383.3 87,852.2 80,049.4
Shareholders' Equity 21,208.4 24,952.8 27,666.1
------------ ------------ ------------
Total Liabilities &
Shareholders' Equity $101,591.7 $112,805.0 $107,715.4
============ ============ ============
Book Value Per Share $4.19 $4.93 $5.47
Common Shares Outstanding 5,061.4 5,061.4 5,061.4
Three Months Ended Six Months Ended
June 30, June 30,
--------------------- ---------------------
Revenues: 2006 2005 2006 2005
---------- ---------- ---------- ----------
Interest income $1,826.7 $1,763.1 $3,576.1 $3,570.2
Interest expense (1,231.8) (1,069.2) (2,356.5) (1,929.8)
---------- ---------- ---------- ----------
Net interest income
before provision 594.8 693.9 1,219.6 1,640.3
Provision for loss (284.6) (251.3) (521.2) (625.1)
---------- ---------- ---------- ----------
Net interest income after
provision 310.2 442.6 698.6 1,015.2
Fees and other income 2,004.3 3,718.3 3,608.2 7,553.6
---------- ---------- ---------- ----------
Total net revenues $2,314.6 $4,160.8 $4,306.6 $8,568.8
Expenses:
Compensation and benefits 2,891.0 2,822.0 5,597.1 5,579.2
General & administrative 844.0 865.7 1,617.5 1,419.3
Loan Expenses 131.3 67.7 317.0 147.6
Professional fees 113.8 170.4 254.2 250.7
Depreciation 159.0 134.8 318.7 248.6
---------- ---------- ---------- ----------
Total Expenses 4,139.1 4,060.6 8,104.5 7,645.3
---------- ---------- ---------- ----------
Income (loss) before
income tax (1,824.5) 100.2 (3,797.9) 923.5
Income tax (credit) 0 40.7 (51.1) 344.6
---------- ---------- ---------- ----------
Net income (loss) ($1,824.5) $59.5 ($3,746.7) $578.9
========== ========== ========== ==========
Income (loss) per common
share ($0.36) $0.01 ($0.74) $0.11
Weighted average shares
outstanding 5,061.4 5,061.4 5,061.4 5,061.4
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