Slide 1: Fourth Quarter & Full Year 2005 Earnings Call
ECC Capital Corporation www.ecccapital.com Fourth Quarter & Full Year 2005 Earnings Call April 17, 2006
Slide 2: Safe Harbor Statement
Safe Harbor Statement Certain statements contained in this presentation may be deemed to be forward-looking statements under federal securities laws and ECC Capital intends that those forward-looking statements be subject to the safe-harbor created thereby. Statements that are not historical fact ar
Slide 3: Opening Comments
Opening Comments Shabi Asghar President & Co-CEO 3
Slide 4: Overview
Overview 4th Quarter Operating Results Production Volume of $4.2 Billion Cost to Originate of 1.95% Completed 4th Security of $1 Billion REIT Portfolio Size Approximately $4.2 Billion 4th Quarter Loss of $49.8 Million 4
Slide 5: Q4 Operating Challenges
Q4 Operating Challenges Market Conditions Decreased Fourth Quarter Demand for Whole Loans Decreased Fourth Quarter Pricing Credit Tightening by Investor/Loan Buyers Competitive Pressures ECC Challenges Growing into a Down Market Expanded Product Guidelines in a Changing Market High
Slide 6: Reorganization
Reorganization STRATEGIC ACTION Capital Markets Process Improvement Tighter Integration between Secondary and Production Increased Emphasis on Investor Due Diligence Process Improved Management of Inventory Levels First Quarter Origination Strategy Production Mix Targeted to meet Incre
Slide 7: Reorganization (cont'd)
Reorganization (cont’d) STRATEGIC ACTION (cont’d) Decreased Fixed and Variable Costs Significant Headcount Reductions Planned Headcount Reductions to Align Cost Structure with Production Strategy Maximize Productivity Consolidated Processing Centers Focus on Core Wholesale Franchise Sc
Slide 8: Financials
Financials Roque Santi, CFO 8
Slide 9: Consolidated Income Statement
Consolidated Income Statement 3 m o n th s e n d e d Year Ended M a rc h 3 1 , June 30, S e p t. 3 0 , D ecem ber 31, D ecem ber 31, 2005 2005 2005 2005 2005 R evenues ( u n a u d ite d ) T o ta l In te re s t In c o m e $ 2 5 ,5 4 0 $ 6 2 ,5 4 6 $ 1 1 5 ,7 5 2 $ 1 3 8 ,6 1 5 $ 3 4 2 ,4 5 3 T o ta l
Slide 10: Total Cost to Originate
Cost to orginate % 1.50% 1.70% 1.90% 2.10% 2.30% 2.50% 2.70% 2.90% Ja nu ar y Fe br ua ry M ar ch A pr il M ay Ju ne Ju Month ly Cost to Originate A ug us t S ep te m be r O ct ob er N ov em be r D ec em be r Total Cost to Originate 10
Slide 11: Consolidated Balance Sheet
Consolidated Balance Sheet March 31, June 30th, Sept. 30th, December 31, 2005 2005 2005 2005 ASSETS (unaudited) Cash and cash equivalents $ 92,117 $ 22,989 $ 64,419 $ 46,904 Restricted cash 245,940 2,250 14,500 18,600 Other receivables 10,574 10,171 32,583 24,966 Mortgage loans held for sale, net 81
Slide 12: Liquidity
Liquidity Unencumbered cash of approximately $70M – 4/14/06 Significant Portfolio Cash Flow Tax Refund $31.2M De-leveraging Balance Sheet $1 Billion Securitization (Late April) Residual Financing Capability Suspended Dividend 12
Slide 13: Warehouse Facilities
Warehouse Facilities ($ in Millions) Expiration Present Capacity Committed Amount Countrywide 7/19/2006 $500 $500 IXIS/CDC 5/1/2006 $300 $0 Wachovia 5/31/2006 $1,000 $1,000 CSFB 7/12/2006 $700 $500 Bear Stearns 11/27/2006 $500 $0 RMS 7/27/2006 $30 $30 Deutsche Bank 5/15/2006 $400 $250 Totals $3,430
Slide 14: Restructuring Cost Savings
Restructuring Cost Savings Staff reductions from 12/31/05-4/10/06 in excess of 800 Staff reduction salary annualized savings in excess of $40M Executive management annualized compensations cost reductions in excess of $1.2M Facility annualized cost savings in excess of $3.5M 14
Slide 15: First Quarter Indicators
First Quarter Indicators Gain on Sale Improving throughout quarter. Improved Market Pricing Product Viewed More Favorably Opportunity to Improve GOS Cost to Originate Improving with Fixed Cost Reductions. 15
Slide 16: ECC Capital Corporation
ECC CAPITAL CORPORATION y 16 \ © CopyricHt 2005 ECC Carita CorPoraTiON