Saxon Capital Group Inc. · OTC:SCGX
Saxon Capital — Investor Presentation (May 2006)
21 slides from Saxon Capital's investor presentation, May 18, 2006
Slide 1: Saxon Capital, Inc. May 2006
Saxon Capital, Inc. May 2006
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS Statements in this presentation other than statements of historical fact, are “forward-looking statements” that are based on current expectations and assumptions. These expectations and assumptions are subject to risks and uncertainty, which could affect Saxon’s future pla
Slide 3: Information & Where to Find It
INFORMATION & WHERE TO FIND IT q Reg AB static pool data can be found at www.saxonmortgage.com/staticpool . q Corporate presentations, company financials, corporate SEC filings and other useful links can be found at www.saxonmortgage.com ( click on the Investor Relations link). q Underwriting guidel
Slide 4: Saxon Companies
SAXON COMPANIES A nationally recognized wholesale and correspondent mortgage lending company Name under which Saxon Mortgage, Inc. conducts retail lending business, through a network of regional lending centers and centralized lending platforms. A premier mortgage servicing company Saxon Capital Hol
Slide 5: Saxon Strategy
SAXON STRATEGY as of q Saxon is building a high-quality non-conforming mortgage loan portfolio • Portfolio accounting (no on-balance-sheet residual valuation) • Generally hold and securitize 100% of 1 st lien production • Holder of the first loss/residual risk (below BBB– credit risk) • Proactively
Slide 6: Saxon Strategy Con't: Net Cost to Produce by Channel
3/31/2006 Wholesale 2.21% Retail 2.45% Correspondent 2.83% SAXON STRATEGY Con’t Net Cost to Produce by Channel* Three Months Ended 2.27% 2.99% 2.46% 3.97% 2.64% 3.11% Total 2.46% 2.45% 3.27% *A Reg G reconciliation of total net cost to produce can be found as Exhibit A to this presentation. q Improv
Slide 7: Diluted EPS
Dikted EPS fatum on Eauty foot ma 20% 228 eae 10% sro #008) jos orp zm 28mg 192008 = eT ea wot 60) asasrotansae taro 8.05 gnsae sairose sewn tases tease teres - = qo ee awe Saxon Capital, Inc.”
Slide 8: Condensed Consolidated Balance Sheet
CONDENSED CONSOLIDATED BALANCE SHEET as of
Slide 9: Portfolio Summary
PORTFOLIO SUMMARY Servicing Portfolio as of $20.3 billion = 76% $6.5 billion = 24%
Slide 10: Quarterly Production Statistics
QUARTERLY PRODUCTION STATISTICS as of
Slide 11: SAST Collateral Summary
SAST COLLATERAL SUMMARY* *At settlement
Slide 12: Weighted Average Credit Score
WTD Avg Credit Score > 650 601-650 551-600 526-550 < 525 Other 608 614 622 618 605 593 580 19.56% 24.98% 31.11% 44.32% 29.19% 17.94% BAe 34.07% 33.90% 30.94% 20.56% 24.56% 18.48% 33.65% 28.02% 23.35% 23.22% 29.28% 35.65% 40.93% 746% 7.22% 7.84% 7.35% 11.08% 16.60% Pxmely 5.21% 5.74% 640% 4.16% 5.89%
Slide 13: Static Pool Delinquency
STATIC POOL DELINQUENCEY as of Outstanding Portfolio Balance by Year: 1996 – 2000 = 6.5% 2003 = 10.4% 2001 = 3.1% 2004 = 26.0% 2002 = 5.3% 2005 = 38.1% 2006 = 10.6%
Slide 14: Static Pool Losses by Funded Year
STATIC POOL LOSSES BY FUNDED YEAR as of
Slide 15: Historical Loss Severity
HISTORICAL LOSS SEVERITY as of Divestiture from Dominion
Slide 16: Underwriting
UNDERWRITING q Underwriting • operations centers – VA, TX, CA • Automated U/W system • Automated review for borrower fraud using Appintell’s DISSCO system • Automated review of property valuation using Appintell’s VALVERIFY system • Automated review of appraisers against bad appraiser list • Full fi
Slide 17: Quality Control
QUALITY CONTROL q Post Funding Quality Control • Adversely selects 10+% of closed loans submitted for purchase based upon LTV ratio, seller, geographic location, product and collateral • Use a statistically based software, Cogent, which allows an adverse selection while maintaining a statistical sam
Slide 18: Conduit Program (Non-SAST)
CONDUIT PROGRAM (NON-SAST) q Sellers • Minimum tangible net worth of $1,000,000 • Minimum of (3) years experience in mortgage origination • $100MM in originations in prior 12 Months • Warehouse lines of at least $10MM q Pools: • Minimum Pool size of $10MM • Target $20MM to $100MM • Program provides
Slide 19: Conduit Process – Mitigating Risk
CONDUIT PROCESS – MITIGATING RISK q Full analysis of seller guidelines prior to bid for risk-based pricing and sampling q Exclusion of high cost loans, LTV’s over 100%, negative amortization loans etc. q Contract underwriting on loan pool through adverse selection modeling q Fraud Prevention: • 100%
Slide 20: Summary
Strong Management Existing Portfolio Servicing Platform Discipline SUMMARY • SAX has a culture of discipline in growth, credit, and servicing. • Creating assets for our balance sheet and managing a REIT require similar discipline. • SAX has a servicing platform that is highly rated and scalable. • S
Slide 21: Exhibit A: Regulation G Reconciliation – Total Net Cost to Produce
EXHIBIT A Regulation G Reconciliation – Total Net Cost to Produce Management believes net cost to produce is beneficial to investors because it provides a measurement of efficiency in the origination process. Total net cost to produce is total production expenses, which include payroll and related e