SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
20549
FORM 10-Q
| x |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Quarterly Period Ended September 30, 2002
OR
| o |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Transition Period from ____________ to ______________
Commission File Number: 000-33485
SAXON CAPITAL, INC.
(Exact name of Registrant as specified in its Charter)
| DELAWARE |
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54-2036076 |
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| 4951 LAKE BROOK DRIVE, SUITE 300 | ||
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| 23060 | ||
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| (804) 967-7400 | ||
Indicate by check mark whether the Registrant (1) has filed all documents and reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:
| Yes |
x |
No |
o |
As of November 7, 2002, there were 28,120,304 shares of our common stock, par value $0.01 per share, outstanding.
This document is available on Saxon Capital Inc.’s web site at www.saxoncapitalinc.com.
SAXON CAPITAL, INC.
Table of Contents
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| PART I - Financial Information |
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Item 1. |
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Unaudited Condensed Consolidated Balance Sheets at September 30, 2002 and December 31, 2001 |
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Notes to Unaudited Condensed Consolidated Financial Statements |
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. |
63 | ||
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Item 4. |
66 | ||
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| PART II – Other Information |
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Item 1. |
66 | ||
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Item 2. |
66 | ||
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Item 3. |
67 | ||
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Item 4. |
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Item 5. |
67 | ||
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Item 6. |
67 | ||
2
Saxon Capital, Inc.
Condensed Consolidated Balance Sheets
(Dollars in thousands, except for share data)
(unaudited)
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September 30, |
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December 31, |
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| Assets: |
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| Cash |
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$ |
5,592 |
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$ |
5,629 |
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| Accrued interest receivable on unsecuritized mortgage loans |
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2,726 |
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1,958 |
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| Mortgage loan portfolio: |
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| Mortgage loans held prior to securitization |
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605,542 |
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370,038 |
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| Securitized mortgage loans |
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2,602,472 |
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1,371,816 |
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Gross mortgage loan portfolio |
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3,208,014 |
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1,741,854 |
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| Loan loss reserve |
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(42,806 |
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(21,327 |
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Net mortgage loan portfolio |
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3,165,208 |
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1,720,527 |
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| Servicing related advances, net |
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36,793 |
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104,796 |
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| Securitized servicing related advances |
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73,835 |
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— |
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Total servicing related advances |
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110,628 |
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104,796 |
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| Mortgage servicing rights, net |
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24,905 |
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33,847 |
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| Deferred tax asset |
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8,868 |
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11,772 |
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| Other assets |
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34,868 |
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20,820 |
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| Total assets |
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$ |
3,352,795 |
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$ |
1,899,349 |
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| Liabilities and Stockholders’ Equity: |
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| Liabilities: |
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| Accrued interest payable |
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$ |
532 |
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$ |
289 |
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| Mortgage loan warehouse financing |
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477,252 |
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283,370 |
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| Securitization financing on mortgage loans |
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2,502,902 |
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1,329,568 |
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| Securitization financing on servicing related advances |
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65,176 |
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— |
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| Note payable |
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25,000 |
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25,000 |
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| Other liabilities |
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14,167 |
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9,124 |
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| Total liabilities |
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3,085,029 |
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1,647,351 |
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| Commitments and contingencies |
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— |
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— |
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| Stockholders’ Equity: |
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| Common stock, $0.01 par value per share, 100,000,000 shares authorized; 28,120,304 and 28,050,100 shares issued and outstanding, respectively |
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281 |
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281 |
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| Additional paid-in capital |
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258,206 |
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258,004 |
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| Retained earnings (accumulated deficit) |
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9,279 |
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(6,287 |
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| Total stockholders’ equity |
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267,766 |
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251,998 |
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| Total liabilities and stockholders’ equity |
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$ |
3,352,795 |
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$ |
1,899,349 |
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The accompanying notes are an integral part of these financial statements.
3
Condensed Consolidated Statements of Operations
(Dollars in thousands, except for share data)
(unaudited)
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Saxon Capital, Inc. |
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SCI Services, |
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Saxon Capital, Inc. |
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SCI Services, |
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Three |
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For the |
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For the |
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Nine |
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For the |
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For the |
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2002 |
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2001 |
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2001 |
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2002 |
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2001 |
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2001 |
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| Revenues: |
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Interest income |
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$ |
59,145 |
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$ |
18,437 |
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$ |
912 |
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$ |
150,234 |
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$ |
18,437 |
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$ |
15,331 |
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Interest expense |
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(24,665 |
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(9,353 |
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(562 |
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(61,286 |
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(9,353 |
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(11,524 |
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Net interest income |
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34,480 |
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9,084 |
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350 |
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88,948 |
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9,084 |
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3,807 |
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Provision for mortgage loan losses |
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(6,124 |
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(5,430 |
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(678 |
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(21,205 |
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(5,430 |
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(8,423 |
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Net interest income after provision for mortgage loan losses |
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28,356 |
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3,654 |
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(328 |
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67,743 |
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3,654 |
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(4,616 |
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Gain on sale of mortgage loans |
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133 |
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— |
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(846 |
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365 |
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— |
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32,892 |
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Servicing income, net of amortization |
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9,073 |
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5,532 |
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(115 |
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24,260 |
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5,532 |
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16,670 |
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Total net revenues |
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37,562 |
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9,186 |
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(1,289 |
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92,368 |
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9,186 |
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44,946 |
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| Expenses: |
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Payroll and related expenses |
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13,366 |
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8,312 |
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2,148 |
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37,519 |
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8,312 |
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25,220 |
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General and administrative expenses |
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9,580 |
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6,576 |
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1,192 |
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27,232 |
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6,576 |
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16,684 |
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Depreciation and amortization |
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531 |
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919 |
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67 |
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1,215 |
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919 |
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3,736 |
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Impairment of assets, net |
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— |
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— |
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(326 |
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— |
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— |
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52,264 |
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Other expense (income) |
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— |
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1,474 |
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89 |
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795 |
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1,474 |
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(1,842 |
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Total expenses |
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23,477 |
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17,281 |
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3,170 |
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66,761 |
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17,281 |
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96,062 |
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Income (loss) before taxes |
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14,085 |
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(8,095 |
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(4,459 |
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25,607 |
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(8,095 |
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(51,116 |
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Income tax expense (benefit) |
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5,561 |
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(3,156 |
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(2,488 |
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10,041 |
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(3,156 |
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(21,609 |
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Net Income (Loss) |
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$ |
8,524 |
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$ |
(4,939 |
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$ |
(1,971 |
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$ |
15,566 |
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$ |
(4,939 |
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$ |
(29,507 |
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| Earnings Per Common Share:(1) |
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Average common shares – basic |
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28,101,450 |
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28,050,100 |
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28,050,100 |
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28,087,203 |
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28,050,100 |
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28,050,100 |
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Average common shares – diluted |
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29,154,612 |
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28,050,100 |
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28,050,100 |
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