Novation Holdings Inc. · OTC:NOHO
Novation — NovaStar Financial — Q3 2005 Earnings Presentation
21 slides from Novation's earnings presentation, Nov 8, 2005
Slide 1: NovaStar Financial 2005 Third Quarter Earnings Conference Call
NovaStar Financial (NYSE-NFI) www.novastarmortgage.com 2005 Third Quarter Earnings Conference Call November 8, 2005
Slide 2: Safe Harbor Statement
Safe Harbor Statement Certain matters discussed in this presentation may 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 l
Slide 3: Opening Comments
Opening Comments Scott Hartman, CEO
Slide 4: Summary of Key Performance Metrics
Summary of Key Performance Metrics (in thousands, except per share data) (Unaudited) Earnings (GAAP) Net Income available to common EPS available to common (diluted) Retum on average equity Retum on average common equity REIT Taxable Income & Dividends Est. REIT taxable income Est. REIT taxable inco
Slide 5: Summary of Key Performance Metrics
Summary of Key Performance Metrics (In thousands, except per share data) (Unaudited) Mortgage Banking - Lending & Originations Noncanforming loan production Cast of wholesale production* Portfolio Management — Asset Performance Portfolio loans under management. Portfolio net interest income Portfoli
Slide 6: Mortgage Banking
Mortgage Banking
Slide 7: Production
Production Production up 14% Yr/Yr, up 18% Sequentially
Slide 8: Production: Credit Characteristics
Production Credit Characteristics
Slide 9: Spreads
Spreads 7.8 % 1.9 % 7.6 %* 4.3 % 586 bps 326 bps *Excluding MTA
Slide 10: Mortgage Banking Segment Financials
Mortgage Banking Segment Financials
Slide 11: Mortgage Banking Environment
Mortgage Banking Environment Origination activity has moderated since August peak Spreads on newly originated loans are relatively thin Whole-loan pricing has weakened substantially, more in line with current spreads Cost containment measures continue to be a primary focus
Slide 12: Portfolio Management
Portfolio Management
Slide 13: Portfolio Rollforward
Portfolio Rollforward In $000's Assets Underlying Portfolio - Q2'05 $13,607,366 Loan Originations 2,779,316 Portfolio run-off (principle paydown, loss) (1,802,567) Whole Loan Sales (490,067, Assets Underlying Portfolio - Q3 '05 $14,094,048
Slide 14: Net Interest Income and ROA by quarter
i 2 z F 2 3 Sep-03 Dec-03 MarO4 Jun-O4 Sep04 Dec-04 Mar-0S Jun-05 Sep-05 aaNet Interest Income ——=ROA 3.00% 2.60% 41.00% 0.60% 0.00%
Slide 15: Portfolio Net Interest Income
Portfolio Net Interest Income
Slide 16: Portfolio Segment Financials
Portfolio Segment Financials
Slide 17: Portfolio trends
Portfolio trends Better credit from strength of housing market Faster prepayments – borrowers looking to monetize increase in home value Spreads on investing in loans have tightened Lower ROE’s on retained securities Hold/sell asset decision becoming increasingly important
Slide 18: Dividend Carry-over Analysis
Dividend Carry-over Analysis (In millions) Estimated 2004 REIT taxable income through Sept. 30, 2005 $ 229 Less: 2005 dividend declarations applied to 2005 taxable income (32) Estimated 2005 REIT taxable income remaining to be distributed $ 197
Slide 19: Questions
Questions
Slide 20: Appendix
Appendix
Slide 21: Cost of Wholesale Production
Cost of Wholesale Production