Fremont General Corporation reported net income of $14,813,000 for the second quarter of 2001. This was comprised of net income from continuing operations of $14,284,000 and an after tax gain on the extinguishment of debt of $529,000.
On a per share basis, the company reports basic and diluted net income per share from continuing operations of $.22 and $.20, respectively, for the quarter ended June 30, 2001, as compared to $.19 and $.17, respectively, for the first quarter of 2001. The extinguishment of debt resulted in an after tax gain of $.01 per share on both a basic and diluted basis for the quarter ended June 30, 2001.
The company’s stockholders’ equity per share was $4.14 at June 30, 2001. During the quarter ended June 30, 2001, the Company extinguished an additional $2.0 million, at par value, of its senior notes outstanding. The Board of Directors of Fremont General Corporation declared payment of a cash dividend of $.02 cents per share on the common stock, payable October 31, 2001 to shareholders of record on September 28, 2001.
FINANCIAL SERVICES OPERATIONS
The company’s nationwide financial services operations, represented primarily by the company’s FDIC-insured industrial bank, Fremont Investment & Loan, reported record pre-tax income of $34,070,000 for the second quarter of 2001, as compared to $23,072,000 for the second quarter of 2000 and $31,004,000 for the first quarter of 2001. This represents an increase in pre-tax income of 48 percent from the second quarter of 2000 and a 10 percent increase from the first quarter of 2001.
Loans receivable, before allowance for loan losses, were approximately $3.70 billion at June 30, 2001, as compared to $3.47 billion at December 31, 2000, an increase of 6.5 percent. Loans receivable are comprised of commercial and residential real estate loans, as well as syndicated commercial loans. Loan originations for these three loan products totaled $1.33 billion during the second quarter of 2001, as compared to $922 million for the second quarter of 2000 and $954 million for the first quarter of 2001. The ratio of net charge-offs to average loans outstanding was 0.33 percent (annualized) during the second quarter of 2001 as compared to 0.17 percent for the year ended December 31, 2000 and 0.28 percent (annualized) for the first quarter of 2001.
Fremont Investment & Loan is “well-capitalized”, as defined by the FDIC, and had $4.06 billion in FDIC-insured deposits at June 30, 2001.
PROPERTY/CASUALTY INSURANCE OPERATIONS
The company’s property and casualty insurance operations, which are primarily workers’ compensation insurance, recorded a pre-tax loss of $122,000 for the second quarter of 2001. The combined ratio was 132.8 percent for the second quarter of 2001.
During the second quarter, the company’s workers’ compensation insurance operations finalized a fronting facility with “A” rated (by A. M. Best) affiliates of Clarendon Insurance Group. The establishment of this fronting facility provides the company’s workers’ compensation insurance operations with the ability to issue new and renewal policies with an “A” rating. As of July 31, 2001, a total of $25.2 million in gross annual premium was in force under the fronting facility.
Fremont General Corporation is a financial services holding company with approximately $8.1 billion in assets, engaged through subsidiaries in select financial services and insurance businesses. The company’s common stock is traded on the New York Stock Exchange under the symbol “FMT”.
Topics Profit Loss Workers' Compensation
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