Shearson Financial Network, Inc. announced today that it has posted an operating profit for the second quarter ending September 30, 2007 of $490,680. The Company posted a net income loss for the quarter of $723,824 of which $939,055 was attributed to losses on the sale of mortgage loans from its discontinued wholesale mortgage banking unit. For the nine month period ending September 30, 2007 the company posted an operating profit of $161,841 and a net loss of $1,182,908 after accounting for loan losses on sale, interest expense and debt discount expense of $1,296,046. Third Quarter Results Net revenues from origination and/or sale of loans decreased 76.7% or $3.7 million to $1.1 million for the quarter ended September 30, 2007 from $4.8 million for the quarter ended September 30, 2006. The decrease is due to the elimination of the wholesale and mortgage banking revenue. Total operating expenses decreased $3.1 million or 83% to $632,000 for the quarter ended September 30, 2007, from $3,755,000 for the quarter ended September 30, 2006. The decrease is related to a reduction in professional fees of $1.5 million, decrease in wages of $852,000, and a decrease in depreciation of $24,597 or 16%, and a decrease in SGA of $751,000. The decrease in expenses is attributable to the elimination of the personnel and operational overhead associated with the previous mortgage banking and wholesale lending divisions, which were eliminated. Income from operations increased $1 million, to $491,000 for the quarter ended September 30, 2007 as compared to a loss from operations of $528,000 for the quarter ended September 30, 2006. The increase is attributable to the decrease in revenues, offset by an additional $1 million decrease in expenses. Nine Month Results Net revenues from origination and/or sale of loans decreased 40.2% or $2.6 million to $3.9 million for the nine months ended September 30, 2007 from $6.6 million for the nine months ended September 30, 2006. The decrease in revenues can be attributed to the elimination of the wholesale and mortgage banking revenue. Total operating expenses decreased $4.5 million or 58.1% to $3.3 million for the nine months ended September 30, 2007 as compared to $7.8 million for the nine months ended September 30, 2006. The decrease is related to a reduction in wages of $1.2 million or 45.6%, a decrease in professional fees of $2.7 million or 83.3% and a decrease in depreciation of $39,234 or 8.5%, decrease in SGA of $602,000 or 40.7%. The decrease is attributable to the elimination of the personnel and operational overhead associated with the previous mortgage banking and wholesale lending divisions, which were eliminated. Income from operations increased $3.6 million or 105%, to an income of operations of $161,841 for the nine months ended September 30, 2007 as compared to a loss from operations of $3.4 million for the nine months ended September 30, 2006. The increase is attributable to the decrease in revenues offset by a larger decrease in expenses. Shearson Home Loans, the Company's mortgage brokerage subsidiary, posted its 19th consecutive quarter with an operating profit and closed the nine month period ending September 30, 2007 with net income results of $943,402. "These have been trying times in our industry over the last twelve months," stated Michael Barron, Chairman & CEO. "Shearson has had to make substantial changes to our core business structure to remain competitive and profitable in our mortgage division during these trying times." He continued, "Our strategy has been and will continue to be prudent fundamental mortgage brokerage and acquisition of brokerage companies."
Posts: 1442 | From: Lugano - Switzerland | Registered: Sep 2003
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On April 8, 2008, the board of directors of Shearson Financial Network, Inc. (SHSN.OB) and its wholly owned subsidiaries (the Company) has authorized the filing of a voluntary petition for business reorganization and relief under Chapter 11 of the U.S. Bankruptcy Code.
Posts: 1442 | From: Lugano - Switzerland | Registered: Sep 2003
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