New Century Financial — Merger or Acquisition (July 2004)
21 slides from New Century Financial's merger presentation, Jul 22, 2004
Slide 1: New Century Financial Corporation
New Century Financial Corporation
Slide 2: Safe Harbor Regarding Forward-Looking Statements
Safe Harbor Regarding Forward-Looking Statements Certain statements contained in this slide presentation may be deemed to be forward-looking statements under federal securities laws, and we intend that such statements be subject to the safe harbor created thereby. The forward-looking statements incl
Slide 3: Company Performance
— Company Performance
Slide 4: Record Production – Record Earnings
Record Production – Record Earnings 2004 2003 Production Volume Second Quarter $12.3 billion $5.8 billion Year $40.0 billion+(e) $27.4 billion Net Earnings Second Quarter $102.4 million $60.8 million Year $400.0 million(e) $245.5 million Earnings Per Share Second Quarter $2.41(1) $1.61 Year $8.25 –
Slide 5: Financial Overview
— Financial Overview
Slide 6: Growing Balance Sheet Assets
Growing Balance Sheet Assets $’s in millions $10,000 $8,000 $6,000 $4,000 $2,000 $0 $491 $1,188 $3,760 $4,746 $5,999 $9,146 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 On-balance Sheet Portfolio
Slide 7: On-Balance Sheet (OBS) Securitizations
On-Balance Sheet (OBS) Securitizations At June 30, 2004 – On-Balance Sheet Securitizations of $7.4 billion* At June 30(a) Avg. – Next 12 Mos.(e) Wtd. average coupon 6.93% 6.99% Pass-thru rate on bonds (1.91%) (2.74%) Annual losses (1.00%) (1.00%) Capitalized costs (0.40%) (0.40%) Servicing fees (0.4
Slide 8: Portfolio Contribution to EPS
Portfolio Contribution to EPS $’s in billions $14.0 $12.0 $10.0 $8.0 $6.0 $4.0 $2.0 $0.0 $1.2 $4.7 $9.1 $12.0 2.3% 10.0% 24.0% 36.0% 40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% 1H03 2003 1H04 2004* Portfolio Balance % Contribution to EPS *Estimated
Slide 9: Loan Performance
Loan Performance 60+ Delinquency by Production Vintage for Loans Securitized by NCEN 60+ Delinquency 16% 14% 12% 10% 8% 6% 4% 2% 0% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
Slide 10: Operations Overview
— Operations Overview
Slide 11: Growing Wholesale Production
Growing Wholesale Production Wholesale Volume by quarter—$’s in millions $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $0 $5,324 $7,991 $7,582 $7,695 $11,086 2Q03 3Q03 4Q03 1Q04 2Q04
Slide 12: Growing Retail Production
Growing Retail Production Retail Volume by quarter—$’s in millions $1,200 $1,000 $800 $600 $400 $200 $0 $479 $649 $670 $741 $1,170 2Q03 3Q03 4Q03 1Q04 2Q04
Slide 13: Growing Purchase Business
Growing Purchase Business Home Purchase Loan Business Purchase Business—in Millions $5,000 $4,000 $3,000 $2,000 $1,000 $0 21% 27% 28% 29% 34% $1,335 $2,298 $2,344 $2,484 $4,219 Percent of Total Volume 50% 40% 30% 20% 10% 2Q03 3Q03 4Q03 1Q04 2Q04 Purchase Volume % of Total Volume
Slide 14: Production Characteristics: Credit Quality Trend
Production Characteristics Credit Quality Trend % of Production 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 39.6% 47.0% 57.0% 80.3% 87.5% 12.7% 8.5% 5.0% 3.6% 2.7% Wtd. Avg. FICO Score 640 630 620 610 600 590 580 570 560 550 2Q00 2Q01 2Q02 2Q03 2Q04 Top 2 Credit Grades Bottom 2 Credit Grades Wtd. Avg. FI
Slide 15: Production Characteristics: Credit Characteristics
Production Characteristics Credit Characteristics – comparing 2Q04 OBS to 2Q04 production On-Balance Sheet Securitizations Production Wtd. avg. FICO score 636 634 Wtd. avg. interest rate – fixed 6.6% 6.9% Wtd. avg. interest rate – ARM 6.6% 6.8% Wtd. avg. LTV 79.8% 77.6% % of top two credit grades 88
Slide 16: Loan Servicing Platform
Loan Servicing Platform Servicer ratings received from Standard & Poor’s and Fitch Rating Services $20.9 billion loan servicing balance as of June 30, 2004 Scalable platform to support growth of production and on-balance sheet portfolio Expect to retain servicing on all on-balance sheet securitizati
Slide 17: 2004 Production Guidance
2004 Production Guidance Targeting 2004 production volume of $40.0 billion+ A 46% increase vs. 2003 Loan Production ($’s in billions) $40.0 $30.0 $20.0 $10.0 $0.0 $8.4 $12.3 Range $10.0—$12.0 Range $10.0—$12.0 $27.4 $40.0+ 1Q04 2Q04 3Q04* 4Q04* 2004* *Estimated based on previously announced guidance
Slide 18: Summary
Summary
Slide 19: Summary
Summary Strong loan volume with improving credit quality and execution Strong growth in EPS and cash flow Increased dividend payout Sets solid base for REIT conversion Increased OBS Asset Portfolio Builds diversified, sustainable earnings trend Increased contribution to EPS Strong loan servicing por
Slide 20: Anticipated REIT Timeline
Anticipated REIT Timeline Anticipate Stockholder Meeting in September Conversion to REIT status by end of 4Q04
Slide 21: New Century Financial Corporation – Proxy Information
New Century Financial Corporation Proxy Information This press release may be deemed to be solicitation material in connection with our previously announced plan to convert to a real estate investment trust (REIT). In connection with the proposed REIT conversion, a preliminary proxy statement/prospe
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