First Mortgage Corp. Announces Earnings

Business Wire, Nov 16, 2001

Business Editors

DIAMOND BAR, Calif.--(BUSINESS WIRE)--Nov. 16, 2001

First Mortgage Corp. (OTC:FMOR) reported net income of $777,000, or $0.15 per share, for the quarter ended Sept. 30, 2001, compared to net income of $690,000, or $0.13 per share, for the comparable quarter last year.

The increased earnings were primarily attributable to the easing of mortgage interest rates during the period, which enabled the company to substantially increase loan production and realized higher gain on the sale of mortgages.

All of the production channels are at healthy loan production levels, and the company will continue to seek opportunities to open additional branches. With its financial and operational strengths, the company is poised to take advantage of the present favorable interest rate environment to enhance its future performance.

                         FIRST MORTGAGE CORP.
                            BALANCE SHEETS

                                        Sept. 30, 2001  March 31, 2001
                                         (Unaudited)
ASSETS

Cash                                    $  17,765,000  $  16,202,000
Mortgage loans and mortgage-backed
 securities held for sale                  68,416,000     87,995,000
Other receivables and servicing advances    5,735,000      5,340,000
Capitalized servicing rights, net          12,800,000      9,928,000
Property and equipment, net                   874,000        847,000
Prepaid expenses and other assets             227,000        615,000
Prepaid income taxes                           44,000             --

TOTAL ASSETS                            $ 105,861,000  $ 120,927,000

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES:
   Notes payable, banks                 $  62,975,000  $  83,255,000
   Sight drafts payable                     5,724,000      3,784,000
   Accounts payable and
    accrued liabilities                     2,072,000      1,460,000
   Deferred income taxes                    3,817,000      3,103,000

      Total Liabilities                    74,588,000     91,602,000

STOCKHOLDERS' EQUITY
   Preferred stock, no par value:
      Authorized shares -- 1,000,000
       Issued and outstanding shares
       -- None                                     --             --
   Common stock, no par value:
      Authorized shares -- 10,000,000
       Issued and outstanding shares --
       5,201,002 at Sept. 30, 2001, and
       5,208,502 at March 31, 2001          2,407,000      2,430,000
   Retained earnings                       28,866,000     26,895,000

         Total Stockholders' Equity        31,273,000     29,325,000

TOTAL LIABILITIES AND STOCKHOLDERS'
 EQUITY                                 $ 105,861,000  $ 120,927,000


                         FIRST MORTGAGE CORP.
                    UNAUDITED STATEMENTS OF INCOME

                         Three Months Ended       Six Months Ended
                            September 30,           September 30,
                          2001        2000        2001        2000
REVENUES:
 Loan origination
  income               $1,790,000  $  528,000  $3,430,000  $1,011,000
 Loan servicing income  1,711,000   1,814,000   3,512,000   3,658,000
   Gain on sale of
    mortgage loans      4,941,000   1,901,000   9,553,000   2,522,000
   Interest income      1,146,000   1,238,000   2,698,000   2,501,000
   Other income             4,000       5,000      10,000       8,000

     Total revenues     9,592,000   5,486,000  19,203,000   9,700,000

EXPENSES:
 Compensation
  and benefits          3,711,000   1,820,000   7,031,000   3,450,000
 General and admini-
  strative expenses     1,812,000     950,000   3,874,000   1,892,000
 Amortization of
  capitalized servicing
  rights                2,186,000   1,133,000   3,649,000   2,389,000
 Interest expense         554,000     427,000   1,420,000   1,126,000

     Total expenses     8,263,000   4,330,000  15,974,000   8,857,000

Income before income
 taxes and cumulative
 effect of a change in
 accounting principle   1,329,000   1,156,000   3,229,000     843,000

Income tax expense        552,000     466,000   1,336,000     352,000

Income before cumulative
 effect of a change in
 accounting principle     777,000     690,000   1,893,000     491,000

Cumulative effect of a
 change in accounting
 principle, net of tax         --          --      78,000          --

NET INCOME             $  777,000  $  690,000  $1,971,000  $  491,000

BASIC AND DILUTED
 EARNINGS PER SHARE:
Income before cumulative
 effect of a change in
 accounting principle  $     0.15  $     0.13  $     0.36  $     0.09
Cumulative effect of a
 change in accounting
 principle                     --          --        0.02          --
Net income             $     0.15  $     0.13  $     0.38  $     0.09