Aames Reports Record FY Earnings

Aames Financial Corp., Los Angeles, has reported record earnings of $40.3 million ($1.23 per share) for the fiscal year ended June 30, up 136% from the previous year's $17.1 million ($0.60 per share).Revenues for the year totaled a record $325 million, up 19% from $273 million the year before. Net income for the quarter ended June 30 was $9.8 million, compared with a net loss of $14.1 million a year earlier (mainly attributable to a revaluation of the company's interest-only strip), Aames said. Cary Thompson, the company's chief executive officer, said Aames took advantage of positive market conditions for subprime loans in the past quarter by selling $697 million in loans, of which $625 million were securitized. The quarter's gain on sale totaled $63.3 million. Mr. Thompson said the company's loan servicing portfolio had grown to $4.1 billion as of June 30, up 28% from $3.2 billion a year earlier. "More important to Aames is that loans serviced in house increased to $3.9 billion from $1.5 billion, a 162 percent increase year-over-year," he said. "By calendar year end we plan to eliminate our use of third-party servicers and by fiscal year end we expect to begin subservicing for others."