Accredited Home Lenders Holding Co
Accredited Home Lenders — Merger or Acquisition (May 2006)
17 slides from Accredited Home Lenders's merger presentation, May 25, 2006
Slide 1: Merger Transaction Investor Presentation
Exhibit 99.2 MERGER TRANSACTION INVESTOR PRESENTATION May 25, 2006
Slide 2: Presentation Topics
PRESENTATION TOPICS Welcome / Introductions Stuart Marvin Executive Vice President – Accredited Transaction Summary James Konrath Chairman & Chief Executive Officer – Accredited Questions and Answers James Konrath Jay Meyerson, Chairman & CEO – Aames Joseph Lydon, President & Chief Operating Officer
Slide 3: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS Certain matters discussed in this presentation, including without limitation the expected benefits of the merger, constitute forward-looking statements within the meaning of the federal securities laws. Actual results and the timing of certain events could differ materiall
Slide 4: Agenda – Accredited/Aames Merger
AGENDA – ACCREDITED/AAMES MERGER Overview Transaction Terms Rationale Expected Results Summary Questions and Answers
Slide 5: Overview
OVERVIEW Accredited Home Lenders Holding Co. Will Acquire Aames Investment Corporation in a Merger Transaction
Slide 6: Overview
OVERVIEW Accredited Market cap of $1.1 billion Based in San Diego, CA Leading non-prime mortgage company Top wholesale channel originator – #10 non-prime wholesale 540% cumulative return since IPO 2,626 employees Aames Market cap of $325mm Based in Los Angeles, CA Leading non-prime residential mortg
Slide 7: Transaction Terms
TRANSACTION TERMS Term Summary Transaction value1 $340 million transaction value $109 million to be paid in cash, less any REIT dividends 0.0700 common shares of Accredited stock for each share of Aames common stock (subject to cash / stock election) Consideration mix 68% stock / 32% cash Tax free t
Slide 8: Rationale
RATIONALE Accredited Strengths 1) Strength in management 2) Strong profitable wholesale channel 3) Profitable retail channel (45 branches) 4) Proven profit culture 5) Low cost leader 6) Excellent credit quality Aames Strengths 1) Tenured management team 2) 50 year old franchise 3) Strong profitable
Slide 9: Leading Origination Platform
LEADING ORIGINATION PLATFORM Total 2005 Originations Wholesale Retail $16.6bn 10% 90% $6.7bn 41% 59% Non-prime # 13 retail # 11 retail # 6 retail rankings: # 10 wholesale # 22 wholesale # 7 wholesale Source for rankings: National Mortgage News
Slide 10: Complementary Credit Characteristics
COMPLEMENTARY CREDIT CHARACTERISTICS Accredited Aames FICOs 636 613 LTV 81.6% 78.4% (1st mortgage only) Average loan size $168,794 $148,871 CA concentration 16% 24% Interest-only 10% 2% Purchase % 41% 36% Refi % 59% 64% 1st quarter 2006 originations
Slide 11: Servicing Scale
SERVICING SCALE Servicing Portfolio $9,604 $5,618 $15,222 Non-prime servicer rankings: # 24 # 29 # 19 Comments Leverage best practices from Accredited Results in servicing efficiencies and reduced cost to service As of March 31, 2006 Source for rankings: National Mortgage News
Slide 12: Synergies
SYNERGIES Costs Leverage scale in wholesale and retail platforms Eliminate redundant overhead Capital Markets Improved execution in whole loan sales Reduction in warehouse funding costs Single-seller asset-backed commercial paper conduit Tighter ABS spreads Management – Combine two strong management
Slide 13: Merger Highlights
MERGER HIGHLIGHTS Leverage remains consistent with Accredited’s historical levels Continued strong liquidity Cash portion of transaction financed with on-balance sheet cash Total financing capacity in excess of $7 billion, including $1 billion single-seller commercial paper conduit On-balance sheet
Slide 14: Financial Impact
FINANCIAL IMPACT Accretive 5 – 10% to 2007 earnings Reduction in cost to originate Reduced cost of funds Better capital markets execution Reduction of administrative overhead First quarter post-closing dilutive impact on EPS of $1.00-$1.30 per share Approximately 4.4 million incremental shares issue
Slide 15: Summary
SUMMARY Strategic consolidation transaction in the sector Accretive in 2007 Exceptional stockholder value creation Significant cost and operational synergies Improved scale in retail, wholesale, and servicing platforms Transaction value $340 million, approximately $109 million in cash Strong balance
Slide 16: Questions & Answers
Coreen QUESTIONS & ANSWERS 15
Slide 17: Additional Information
ADDITIONAL INFORMATION In connection with the pending transaction, Accredited Lenders Holding Co. (“Accredited”) will file with SEC a Registration Statement on Form S-4 containing a Proxy Statement / Prospectus for the stockholders of Aames Investment Corporation (“Aames”). Aames stockholders are ur
Accredited Home Lenders Holding — Merger or Acquisition (May 2006) on 6ix