MuniMae operating income increases 55% in 3Q

Apartment building financier will raise dividend by a penny

October 19, 2001|By William Patalon III | William Patalon III,SUN STAFF

Municipal Mortgage & Equity LLC of Baltimore reported a 55 percent increase in its third-quarter operating income yesterday, and also announced another increase in its quarterly dividend.

Municipal Mortgage, better-known as MuniMae, said that operating income allocated to common shares was $11.18 million in the quarter that ended Sept. 30, a 55 percent increase from the $7.23 million recorded during the corresponding three months of 2000.

Operating net income per common share was 52 cents, a 27 percent rise from the 41 cents per share reported in last year's third quarter.

Actual net income for the quarter was $7.12 million, a slight decrease from the $7.77 million earned during the third quarter of 2000. However, the decrease was due to some new accounting regulations that led to "paper" changes in net income, meaning the alterations didn't actually reduce the company's cash in hand.

"We're very pleased," said Mark K. Joseph, MuniMae's chairman and chief executive officer. "We're on target to meet our overall annualized projections. We're in an environment that economically has been very uncertain. But our sector has held up very well."

MuniMae is a company that provides debt and equity financing to build apartment housing all over the country. In its five years as a public company, assets under management have grown from about $230 million to $2.8 billion, Joseph said.

For this year's third quarter, total income was $32.29 million, a 25 percent increase from the $25.87 million taken in during the corresponding three months of 2000.

During the third quarter, the company participated in four transactions involving tax-exempt bonds - MuniMae's specialty - including the investment of $22.6 million in bonds to finance 201 apartment units in San Jose, Calif. It was also involved in financing apartment projects in Conyers and Lawrenceville, Ga., and in Indianapolis.

The dividend for this year's third quarter was increased to 43 cents from 42 cents a year ago. That's the 19th consecutive quarterly dividend increase, the company said. The dividend is payable Nov. 9 to shareholders of record Oct. 29.

MuniMae provides investors with dividend income that's largely tax-free. The firm is organized as a limited liability company, and can pass-through to investors the income realized from its investments in tax-free bonds. Analysts expect the yearly dividend to be $1.90, of which about 90 percent would be tax free.

Another key financial figure for MuniMae is cash available for distribution, or CAD. During the third quarter, cash available for distribution rose 19 percent to $13.3 million. CAD per common share, however, rose only 3 percent to 47.8 cents per share because of an increase in the total number of shares outstanding.

Shares of MuniMae rose 28 cents to close at $24.50.

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