DEL MAR, Calif., Dec. 14 /PRNewswire/ -- American Residential Investment
Trust, Inc. (NYSE: INV) today announced that its Board of Directors has
declared a dividend of $0.20 per share of common stock for the fourth quarter
of 2000. The fourth quarter dividend will have a record date of January 3,
2001 and will be paid on January 31, 2001.
American Residential also announced that the Board of Directors has
authorized the Company to repurchase up to $1 million of its common stock.
Stock repurchases will be made from time to time through open market or
negotiated block transactions at the discretion of American Residential's
management. The timing and extent of the repurchases will depend on market
conditions and corporate requirements. The repurchases will be made using the
Company's cash resources.
John M. Robbins, Jr., Chairman and Chief Executive Officer, stated, "We
believe that the value of the Company's net assets is significantly higher
than the recent stock price trading range. A stock repurchase program is
especially compelling because the Company's shares are trading at a
substantial discount to our book value."
Mr. Robbins, commenting on the Company's dividend policy, noted, "Going
forward, as we build our direct origination business, we need to maintain a
strong capital structure by basing future dividends on earnings. While we
understand the importance of dividends to our stockholders, it is not in the
Company's best long-term interests to continue paying dividends that exceed
earnings. We expect operating results for the fourth quarter to be a $0.05 to
$0.10 per share loss. As we go into 2001, we do not expect to maintain the
level of dividends we paid in 2000."
In April 2000, the Company announced that it would implement a plan to
become a mortgage originator. At that time, American Residential stated that
short-term operating income would suffer as the size of the portfolio
decreased and no bulk loan purchases were made to replenish the portfolio.
While this was a difficult decision for the Company, changes in the mortgage
marketplace could not be ignored. A bulk purchase strategy is currently not
viable because of the price-to-value relationship on loans.
Significant progress has been made on the Company's origination
initiative, including the signing of a three-year exclusive correspondent
agreement with a company that offers technology and fulfillment services to
banks and credit unions that want to take their mortgage processes online. In
addition, approval by Fannie Mae as a seller/servicer was received and
licenses were secured to originate loans in several states.
Robbins further commented, "A substantial portion of the Company's cash
reserves are being allocated to build and support our origination strategies,
which we believe will generate new assets for portfolio investment and provide
new sources of revenue. Not only can we add loans to our portfolio at a lower
cost than bulk purchases, but we can also engage in activities, such as
origination and servicing, which have potentially higher profit margins."
American Residential Investment Trust, Inc. is a real estate investment
trust (REIT) that invests primarily in non-conforming, residential mortgage
assets. For more information on American Residential, please visit the
Company's web site at http://www.amerreit.com.
Certain matters discussed in this press release may constitute forward-
looking statements within the meaning of federal securities laws. Forward-
looking statements include statements regarding common stock repurchases, the
Company's net asset value, the Company's investment in and development of a
direct origination business, the Company's capital base, future dividends,
earnings, operating results, the allocation of cash reserves, the generation
of portfolio assets, new revenue sources, the cost of originated loans and
profit margins. Actual results and the timing of certain events could differ
materially from those projected in, or contemplated by, these forward-looking
statements due to a number of factors, including, but not limited to, general
economic conditions; stock market prices; mortgage loan prepayment rates;
credit losses; overall interest rates; the shape of the yield curve; the
availability of suitable mortgage assets; the availability of financing for
the origination, acquisition or securitization of mortgage assets; the impact
of leverage; the Company's ability to successfully implement a residential
mortgage direct origination business; and other risk factors outlined in the
Company's SEC reports.
SOURCE American Residential Investment Trust, Inc.
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Related links:
http://www.amerreit.com
CONTACT:
Judith Berry, 858-350-5012, or Clay
Strittmatter, 858-350-5006, both of American Residential
Investment Trust, Inc.; or Corinne Forti of Forti Communications,
Inc., 805-498-0113
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