Novation Holdings Inc. · OTC:NOHO
Novation — NovaStar Financial — Q2 2006 Earnings Presentation
22 slides from Novation's earnings presentation, Aug 4, 2006
Slide 1: NovaStar Financial 2006 Second Quarter Earnings Conference Call
NovaStar Financial (NYSE-NFI) www.novastarmortgage.com 2006 Second Quarter Earnings Conference Call August 4, 2006
Slide 2: Safe Harbor Statement
Safe Harbor Statement Certain matters discussed in this release constitute forward-looking statements within the meaning of the federal securities laws. Forward-looking statements are those that predict or describe future events and that do not relate solely to historical matters. Forward-looking st
Slide 3: Opening Comments & Credit Discussion
Opening Comments & Credit Discussion Scott Hartman, CEO
Slide 4: Annual HPA
PP DP GD GH HM GS HS HK HF HS GS GS o¢ &¢ & & & S&F F&F SF FF SF > Annual HPA
Slide 5: Loss by funding year: loans, balance, LTV, loss severity
Funded #of Principal WA Actual Loss Date Loans Balance AvgBal LTV Loss Severity 97-98 2073 $205,462,587 $99,114 81% $87,039,809 42% 2000 585, $65,239,331 $111,520 85% $23,175,831 36% 2001 900 $104,104,247 $115,671 86% $36,441 388 35% 2002 754 $101,506,320 $134,624 86% $31,923,793 31% 2003 713 $92,07
Slide 6: HPA Effect on Loss
HPA Effect on Loss Assumptions
Slide 7: Estimated LTV (MI % Loans with LTV<=60%)
Estimated LTV (MI % Loans with LTV<=60%)* *See appendix to this presentation for disclaimer
Slide 8: Estimated LTV (No MI)
Estimated LTV (No MI)* *See appendix to this presentation for disclaimer
Slide 9: MI & LTV<=60
MI & LTV<=60 DMI @LTV==60
Slide 10: Results of Operations
Results of Operations Greg Metz, CFO
Slide 11: Summary of Key Performance Metrics
Summary of Key Performance Metrics (In thousands, except per share data) (Unaudited) Earnings (GAAP) Net Income avaitable to common EPS available to common (diluted) Retum onaverage equity Retum on average common equity REIT Taxable Income & Dividends Est. REIT taxable income available to common Est
Slide 12: Dividends
Dividends Intend to declare both the third and fourth quarter dividends prior to our 2005 federal tax filing deadline of September 15, 2006 The third quarter dividend will be paid in November, as is typical The fourth quarter dividend will be paid in December and is anticipated to conclude a 100% pa
Slide 13: Production
Production (o00's) 4,200,000 4,100,000 4,000,000 900,000 800,000 700,000 600,000 00,000 400,000 A a's Z as ra - Jan Feb Ma Am May Jun dul Aug Sep Oct Nov Der —— 2004 —s— 2006 e206
Slide 14: WAC vs 2-yr Swap
WAC vs 2-yr Swap 349bps 346bps
Slide 15: NovaStar portfolio FICO and LTV
NovaSp FICO. 632 632 635: 628 625 Q2'05 Q3 05 Q4 05 Qi ‘06 Q2'06 LTV 82.3 82.4 81.6 309 81.3 Q2'05 3 05 405 Q1 06 2 '06
Slide 16: Wholesale COP
Wholesale COP* *See appendix to this presentation for cost of wholesale production – G&A expense reconciliation
Slide 17: Portfolio Net Interest Income
Portfolio Net Interest Income
Slide 18: Loan Portfolio Net Interest Income and ROA
NOVASTAR: 2.00% & 600 10% ® 1.60% g § 500 1.40% £ . 2 400 1208 = 1.00% 3 300 © 2 0.80% 2 3S 200 0.60% g c 5 io 0.40% s 0.20% Ss 0.00% SF oH FP oP gO oF go? o 30 9 at at ut Ger got gk ps0? Loan Portfolio Net Interest Income —_ROA
Slide 19: Questions
Questions
Slide 20: Appendix
Appendix
Slide 21: Cost of Wholesale Production
Cost of Wholesale Production
Slide 22: Estimated LTV Disclaimer
Estimated LTV Disclaimer The information contained herein regarding estimated LTV is provided for informational purposes only to assist in the understanding of certain characteristics of our loan portfolio and are not a projection of future performance, financial position or cash flows. The informat