UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K/A
(Amendment
No. 1)
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of
Report (Date of earliest event reported): November 21, 2006 (November 8,
2006)
|
OPTEUM
INC.
|
|||
|
(Exact
name of registrant as specified in its charter)
|
|||
|
Maryland
|
001-32171
|
72-1571637
|
|
|
(State
or other jurisdiction of
incorporation)
|
(Commission
File Number)
|
(I.R.S.
Employer Identification No.)
|
|
|
3305
Flamingo Drive, Vero Beach, Florida 32963
|
|||
|
(Address
of principal executive offices)
|
|||
|
(772)
231-1400
|
|||
|
(Registrant’s
telephone number, including area
code)
|
|||
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
[
]
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[
]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[
]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act
(17 CFR 240.14d-2(b))
[
]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act
(17 CFR 240.13e-4(c))
Explanatory
Note: This
Form
8-K/A is being filed to amend Item 4.02. Non-Reliance on Previously Issued
Financial Statements or a Related Audit Report or Completed Interim Review
in
response to a comment letter received from the staff of the Division of
Corporation Finance of the U.S. Securities and Exchange Commission.
ITEM
2.02. RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
On
November 13, 2006, Opteum Inc. (the “Company”) prepared
updated portfolio information as of November 9, 2006. A copy of this information
is attached hereto as Exhibit 99.1 and is incorporated into this Item 2.02
Results of Operations and Financial Condition by reference in its
entirety.
The
Company presently estimates that its Book
Value Per Share as
of
September 30, 2006, will be in the range of $8.35 to $8.45 following the
previously announced restatements of the Company’s financial statements as of,
and for the periods ended, March 31, 2006, and June 30, 2006. Book
Value Per Share is regularly used as a valuation metric by various equity
analysts that follow the Company and may be deemed a non-GAAP financial measure
pursuant to Regulation G. The Company computes “Book Value Per Share” by
dividing total stockholders’ equity by the total number of shares of the
company’s Class A Common Stock outstanding.
On
November 10, 2006, the Company issued the press release attached hereto as
Exhibit 99.2, which press release is incorporated into
this
Item 2.02 Results of Operations and Financial Condition by
reference in its entirety.
On
November 8, 2006, the Company issued the press release attached hereto as
Exhibit 99.3, which press release is incorporated into
this
Item 2.02 Results of Operations and Financial Condition by
reference in its entirety.
The
information furnished under this Item 2.02 Results of Operations and Financial
Condition, including the exhibits related hereto, shall not be deemed “filed”
with the Securities and Exchange Commission for purposes of Section 18 of the
Securities Exchange Act of 1934, as amended, nor shall such information be
incorporated by reference into any registration statement filed by the Company
under the Securities Act of 1933, as amended, regardless of any general
incorporation language in such filing.
ITEM
4.02. NON-RELIANCE ON PREVIOUSLY ISSUED FINANCIAL STATEMENTS OR A RELATED AUDIT
REPORT OR COMPLETED INTERIM REVIEW
On
November 3, 2005, the Company acquired Opteum
Financial Services, LLC (“OFS”). Prior to November 3, 2005, OFS was a
privately-held company that was not subject to the reporting requirements of
the
Securities Exchange Act of 1934, as amended. Following the Company’s acquisition
of OFS, a consulting firm was engaged to review
the adequacy of the design and operation of OFS’ internal controls and
procedures for
purposes of ensuring compliance with the Sarbanes-Oxley Act of 2002. In
connection with such review, the consulting firm identified an accounting policy
used by OFS that was not in accordance with generally accepted accounting
principles (“GAAP”). The accounting policy relates to the manner in which OFS
accounts for interest rate lock commitments (“IRLCs”). Under Statement
of Financial Accounting Standards No. 133 - Accounting
for Derivative Instruments and Hedging Activities
(“SFAS
No. 133”), IRLCs are derivatives that are required to be recorded on the
Company’s consolidated balance sheet at fair value with changes in fair value to
be reflected in the Company’s current period consolidated results of operations.
OFS’ accounting policy resulted in a
misapplication of
SFAS No.
133.
On
Tuesday, November 7, 2006, in connection with the preparation of the Company’s
Quarterly Report on Form 10-Q for the period ended September 30, 2006, the
Company’s Chief Executive Officer, Chief Financial Officer and Audit Committee
of the Board of Directors conditionally concluded that the Company’s
consolidated financial statements as of, and for the periods ended, March 31,
2006, and June 30, 2006, may require restatement as a result of the
misapplication of SFAS No. 133 by the Company’s subsidiary, OFS, during those
periods.
On
Wednesday, November 8, 2006, following verification that the Company’s
consolidated results of operations were materially overstated for the period
ended March 31, 2006, and were materially understated for the period ended
June
30, 2006, the Company’s Chief Executive Officer and Chief Financial Officer
determined that the Company would be unable to file its Quarterly Report on
Form
10-Q for the period ended September 30, 2006, prior to the required due date
of
Thursday, November 9, 2006, because the Company’s consolidated financial
statements contained in its Quarterly Reports on Form 10-Q for the periods
ended
March 31, 2006, and June 30, 2006, require restatement, and such restatements
could not be completed by November 9, 2006, without unreasonable effort or
expense.
The
Company concluded that, as a result of the misapplication of SFAS No. 133 by
OFS
for the period November 3, 2005, through December 31, 2005, the Company’s
consolidated income before income taxes as previously reported on the Company’s
consolidated statement of operations for the year ended December 31, 2005,
was
overstated by approximately $0.5 million. The Company’s consolidated statement
of operations for the year ended December 31, 2005, as previously reported
in
the Company’s Form 10-K/A reflects income before income taxes of $20.1 million.
Had the misapplication of SFAS No. 133 by OFS not occurred, the Company’s
consolidated statement of operations for such period would have reflected
consolidated income before income taxes of $19.6 million. Thus, the
approximately $0.5 million impact of the misapplication of SFAS No. 133 by
OFS
for the period November 3, 2005, through December 31, 2005, represents
approximately 2.5% of the Company’s consolidated income before income taxes for
the year ended December 31, 2005.
Notwithstanding
the foregoing, the Company concluded that its consolidated financial statements
as of, and for the year ended, December 31, 2005, present fairly, in all
material respects, the consolidated financial position of the Company as of
December 31, 2005, and the results of the Company’s operations and cash flows
for the year ended December 31, 2005, and do not require restatement.
Accordingly, the Company has determined to account for the impact of the
misapplication of SFAS No. 133 by OFS for the period November 3, 2005, through
December 31, 2005, in its restated consolidated financial statements as of,
and
for the period ended, March 31, 2006, and believes that doing so will be
immaterial to such consolidated financial statements.
Additionally,
the Company announced on Wednesday, November 8, 2006, that the Company’s
previously filed consolidated financial statements as of, and for the periods
ended, March 31, 2006, and June 30, 2006, should no longer be relied upon.
The
Company’s Chief
Executive Officer, Chief Financial Officer and Audit Committee of the Board
of
Directors discussed the foregoing matters with representatives of the Company’s
independent registered public accounting firm.
ITEM
8.01. OTHER EVENTS.
On
November 13, 2006, the Company filed a Form 12b-25 with the Securities and
Exchange Commission (the “Commission”) to notify the Commission of its inability
to file its Quarterly Report on Form 10-Q for the period ended September 30,
2006, by the required due date of November 9, 2006, or within the prescribed
five calendar day period permitted under Rule 12b-25(b). The Form 12b-25 is
accessible on the Company’s website at www.opteum.com
under
the “Investor Information” tab and on the Commission’s website at www.sec.gov.
ITEM
9.01. FINANCIAL STATEMENTS AND EXHIBITS
(d)
Exhibits:
Exhibit
No. Description
99.1 Updated
Portfolio Information of Opteum Inc. as of November 9, 2006
99.2 Press
Release of Opteum Inc. dated November 10, 2006
99.3 Press
Release of Opteum Inc. dated November 8, 2006
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant
has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
OPTEUM
INC.
November
21, 2006
By:
/s/
Jeffrey J. Zimmer
Jeffrey
J. Zimmer
Chairman, President and Chief Executive Officer
EXHIBIT
INDEX
|
Exhibit
No.
|
||
|
99.1
|
Updated
Portfolio Information of Opteum Inc. as of November 9,
2006
|
|
|
99.2
|
Press
Release of Opteum Inc. dated November 10, 2006
|
|
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99.3
|
Press
Release of Opteum Inc. dated November 8,
2006
|
Exhibit
99.1
UNAUDITED
as of 11/9/2006
Opteum
Inc. - Asset Information
This
Table Reflects All Transactions. Prices Used Are Internally
Generated.
Valuation
|
Asset
Category
|
|
Market
Value
|
|
As
a Percentage of Mortgage Assets
|
|
As
a Percentage of Mortgage Assets, Cash and P&I
Receivable
|
|
Adjustable
Rate Mortgage Backed Securities (1)
|
$
|
1,987,160,999
|
68.72%
|
64.94%
|
||
|
Hybrid
Adjustable Rate Mortgage Backed Securities
|
268,110,377
|
9.27%
|
8.76%
|
|||
|
Fixed
Rate Mortgage Backed Securities
|
475,561,399
|
16.44%
|
15.54%
|
|||
|
Fixed
Rate Agency Debt
|
68,973,625
|
2.39%
|
2.25%
|
|||
|
Fixed
Rate CMO
|
50,979,300
|
1.76%
|
1.67%
|
|||
|
Balloon
Maturity Mortgage Backed Securities
|
41,106,964
|
1.42%
|
1.34%
|
|||
|
Total:
Mortgage Assets (2)
|
$
|
2,891,892,664
|
100.00%
|
|
||
|
|
|
|||||
|
Total
Cash and Net Short-Term Receivables
|
$
|
103,569,421
|
3.38%
|
|||
|
Cash
out on Margin (Encumbered Cash)
|
0
|
0.00%
|
||||
|
Long-Term
Note Receivable From Opteum Financial Services
|
65,000,000
|
2.12%
|
||||
|
Total:
All Assets*
|
$
|
3,060,462,085
|
|
|
|
100.00%
|
Note:
The Value of Securities in the Box is $28,715,325
|
(1)
|
Adjustable
Rate MBS are those that reset coupons within one year’s
time.
|
|
(2)
|
This
includes forward settling purchases. There are no forward settling
sales
as of 11/9/2006
|
|
*
|
The
information contained herein EXCLUDES all Opteum Financial Services
LLC’s
assets.
|
Characteristics
|
Asset
Category
|
Weighted
Average
Coupon
|
|
Weighted
Average Lifetime Cap
|
|
Weighted
Average Periodic Cap
Per
Year (3)
|
|
Weighted
Average Coupon Reset
(in
Months)
|
|
Longest
Maturity
|
|
Weighted
Average Maturity
(in
Months)
|
|
|
Adjustable
Rate Mortgage Backed Securities (3)
|
5.09%
|
10.29%
|
1.85%
|
4.27
|
1-Apr-44
|
325
|
||||||
|
Hybrid
Adjustable Rate Mortgage Backed Securities
|
4.87%
|
10.04%
|
1.33%
|
15.23
|
1-Nov-35
|
329
|
||||||
|
Fixed
Rate Mortgage Backed Securities
|
6.90%
|
n/a
|
n/a
|
n/a
|
1-Apr-36
|
270
|
||||||
|
Fixed
Rate Agency Debt
|
4.00%
|
n/a
|
n/a
|
n/a
|
25-Feb-10
|
40
|
||||||
|
Fixed
Rate CMO
|
5.64%
|
n/a
|
n/a
|
n/a
|
25-Jul-34
|
324
|
||||||
|
Balloon
Maturity Mortgage Backed Securities
|
4.02%
|
n/a
|
n/a
|
n/a
|
1-Feb-11
|
38
|
||||||
|
Total:
Mortgage Assets
|
|
5.33%
|
|
10.26%
|
|
1.80%
|
|
5.57
|
|
1-Apr-44
|
|
306
|
(3)
24.3% ($483.6 million) of The Adjustable Rate Mortgage Portfolio Have No
Periodic Caps. These assets are excluded from the weighted average periodic
cap
per year calculation
|
Agency
|
Market
Value
|
As
a Percentage of Mortgage Assets
|
Pool
Status
|
Market
Value
|
As
a Percentage of Mortgage Assets
|
|||||||
|
Fannie
Mae
|
$
|
1,941,194,311
|
67.12%
|
Whole
Pool
|
$
|
1,837,661,645
|
63.55%
|
|||||
|
Freddie
Mac
|
513,282,375
|
17.75%
|
Non
Whole Pool
|
1,054,231,019
|
36.45%
|
|||||||
|
Ginnie
Mae
|
437,415,978
|
15.13%
|
|
|
|
|||||||
|
Total
Portfolio
|
$
|
2,891,892,664
|
|
100.00%
|
|
|
|
Total
Portfolio
|
$
|
2,891,892,664
|
|
100.00%
|
Prepayment
Speeds
|
Asset
Category
|
Weighted
Average One Month Prepayment Speeds (CPR)
|
|
Weighted
Average Three Month Prepayment Speeds (CPR)
|
|
|
Adjustable
Rate Mortgage Backed Securities
|
29.40%
|
33.01%
|
||
|
Hybrid
Adjustable Rate Mortgage Backed Securities
|
27.95%
|
25.72%
|
||
|
Fixed
Rate Mortgage Backed Securities
|
14.53%
|
18.40%
|
||
|
Fixed
Rate Agency Debt
|
21.52%
|
12.59%
|
||
|
Fixed
Rate CMO
|
19.18%
|
19.06%
|
||
|
Balloon
Maturity Mortgage Backed Securities
|
10.33%
|
13.58%
|
||
|
Total:
Mortgage Assets
|
26.26%
|
|
29.11%
|
On
November 7, 2006 Prepayment Speeds were released for paydowns occurring in
October 2006 (August - October for three month speeds). The numbers above
reflect that data.
Portfolio
Price and Duration
|
Weighted
Average Purchase Price
|
$
|
102.34
|
|
Weighted
Average Current Price
|
$
|
100.81
|
|
Modeled
Effective Duration
|
1.051
|
|
Internally
Generated Market Value
|
%
of Asset Class
|
%
of Total Mortgage Assets
|
||||
|
Adjustable
Rate Mortgages
|
||||||
|
One
Month LIBOR
|
$
|
20,516,946
|
1.03%
|
0.70%
|
||
|
Moving
Treasury
Average
|
42,732,722
|
2.15%
|
1.48%
|
|||
|
Cost
Of
Funds
Index
|
344,908,068
|
17.36%
|
11.93%
|
|||
|
Six
Month LIBOR
|
126,282,228
|
6.35%
|
4.37%
|
|||
|
Six
Month CD Rate
|
2,008,693
|
0.10%
|
0.07%
|
|||
|
One
Year LIBOR
|
593,436,570
|
29.86%
|
20.52%
|
|||
|
Conventional
One Year CMT
|
574,842,710
|
28.93%
|
19.88%
|
|||
|
FHA
and VA One Year CMT
|
277,318,523
|
13.96%
|
9.59%
|
|||
|
Other
|
5,114,539
|
0.26%
|
0.18%
|
|||
|
Total
ARMs
|
$
|
1,987,160,999
|
100.00%
|
68.72%
|
||
|
Hybrid
ARMs
|
||||||
|
Generic
Fannie or Freddie Hybrid ARMs
|
||||||
|
13
- 18 Months to First Reset
|
$
|
87,287,790
|
32.56%
|
3.01%
|
||
|
19
- 24 Months to First Reset
|
38,357,723
|
14.31%
|
1.33%
|
|||
|
Total
|
$
|
125,645,513
|
46.87%
|
4.34%
|
||
|
Agency
Alt-A Hybrid ARMs
|
||||||
|
13
- 18 Months to First Reset
|
$
|
6,203,684
|
2.31%
|
0.22%
|
||
|
25
- 36 Months to First Reset
|
10,538,260
|
3.93%
|
0.36%
|
|||
|
Total
|
$
|
16,741,944
|
6.24%
|
0.58%
|
||
|
GNMA
Hybrid ARMs
|
||||||
|
13
- 24 Months to First Reset
|
$
|
125,722,920
|
46.89%
|
4.35%
|
||
|
Total
|
$
|
125,722,920
|
46.89%
|
4.35%
|
||
|
|
|
|
|
|||
|
Total
Hybrid ARMs
|
$
|
268,110,377
|
100.00%
|
9.27%
|
||
|
Balloons
|
||||||
|
<
= 4.0 Years to Balloon Date
|
$
|
16,745,020
|
40.74%
|
0.58%
|
||
|
4.01
- 5.0 Years to Balloon Date
|
15,352,943
|
37.35%
|
0.53%
|
|||
|
5.01
- 5.5 Years to Balloon Date
|
9,009,001
|
21.91%
|
0.31%
|
|||
|
Total
Balloons
|
$
|
41,106,964
|
100.00%
|
1.42%
|
|
Internally
Generated Market Value
|
%
of Asset Class
|
%
of Total Mortgage Assets
|
||||
|
Fixed
Rate Agency Debt
|
||||||
|
4.5yr
Stated Final Maturity
|
$
|
68,973,625
|
100.00%
|
2.39%
|
||
|
Total
Fixed Rate Agency Debt
|
$
|
68,973,625
|
100.00%
|
2.39%
|
||
|
Fixed
Rate CMOs
|
||||||
|
Fixed
Rate CMOs
|
$
|
50,979,300
|
100.00%
|
1.76%
|
||
|
Total
Fixed Rate CMOs
|
$
|
50,979,300
|
100.00%
|
1.76%
|
||
|
Fixed
Rate Assets
|
||||||
|
10yr
Other (Seasoned, Low Avg Bal, Low FICO, etc.)
|
$
|
1,580,534
|
0.34%
|
0.06%
|
||
|
15yr
$85,000 Maximum Loan Size
|
60,422,565
|
12.71%
|
2.09%
|
|||
|
15yr
$110,000 Maximum Loan Size
|
4,046,080
|
0.85%
|
0.14%
|
|||
|
15yr
100% Investor Property
|
582,473
|
0.12%
|
0.02%
|
|||
|
15yr
100% FNMA Expanded Approval Level 3
|
646,328
|
0.14%
|
0.02%
|
|||
|
15yr
100% Alt-A
|
32,165,636
|
6.76%
|
1.11%
|
|||
|
15yr
Geography Specific (NY, FL, VT, TX)
|
1,560,068
|
0.33%
|
0.05%
|
|||
|
15yr
Other (Seasoned, Low Avg Bal, Low FICO, etc.)
|
19,989,915
|
4.20%
|
0.69%
|
|||
|
20yr
Other (Seasoned, Low Avg Bal, Low FICO, etc.)
|
961,776
|
0.20%
|
0.03%
|
|||
|
20yr
100% Alt-A
|
656,520
|
0.14%
|
0.02%
|
|||
|
30yr
$85,000 Maximum Loan Size
|
167,380,332
|
35.20%
|
5.79%
|
|||
|
30yr
$110,000 Maximum Loan Size
|
32,673,948
|
6.87%
|
1.13%
|
|||
|
30yr
100% Investor Property
|
5,492,131
|
1.15%
|
0.19%
|
|||
|
30yr
100% FNMA Expanded Approval Level 3
|
35,287,957
|
7.42%
|
1.22%
|
|||
|
30yr
100% Alt-A
|
26,828,142
|
5.64%
|
0.93%
|
|||
|
30yr
Geography Specific (NY, FL, VT, TX)
|
3,719,100
|
0.78%
|
0.13%
|
|||
|
30yr
100% GNMA Builder Buydown Program
|
3,886,146
|
0.82%
|
0.13%
|
|||
|
30yr
Other (Seasoned, Low Avg Bal, Low FICO, etc.)
|
77,681,748
|
16.33%
|
2.69%
|
|||
|
Total
Fixed Rate Collateral
|
$
|
475,561,399
|
100.00%
|
16.44%
|
||
|
Total
(All Mortgage Assets)
|
$
|
2,891,892,664
|
100.00%
|
|||
|
Total
Cash and Short-Term Receivables
|
103,569,421
|
|||||
|
Long-term
Receivables From OFS
|
65,000,000
|
|||||
|
Total
Assets and Cash
|
$
|
3,060,462,085
|
||||
|
|
||||||
|
Total
Forward Settling Purchases
|
$
|
0
|
|
Repurchase
Counterparties
|
Dollar
Amount of Borrowings
|
Weighted
Average Maturity in Days
|
Longest
Maturity
|
||||
|
|
|||||||
|
Deutsche
Bank (1)
|
$
|
845,375,000
|
146
|
31-May-07
|
|||
|
JP
Morgan Secs
|
686,874,489
|
25
|
23-Jan-07
|
||||
|
WAMU
|
465,505,000
|
42
|
28-Dec-06
|
||||
|
Countrywide
Secs
|
371,710,000
|
86
|
8-May-07
|
||||
|
Nomura
|
297,420,000
|
140
|
8-May-07
|
||||
|
Merrill
Lynch
|
59,495,000
|
11
|
20-Nov-06
|
||||
|
BNP
Paribas
|
52,625,000
|
59
|
8-Jan-07
|
||||
|
Lehman
Bros
|
29,657,000
|
7
|
16-Nov-06
|
||||
|
RBS
Greenwich Capital
|
29,651,000
|
39
|
12-Jan-07
|
||||
|
UBS
Securities
|
21,514,650
|
74
|
22-Jan-07
|
||||
|
Total
|
$
|
2,859,827,139
|
84
|
31-May-07
|
|||
|
(1)
Includes $507 Million floating rate repo obligations
|
|||||||
Exhibit
99.2
[LOGO]
OPTEUM
INC. TO FILE FORM 12b-25;
ESTIMATES
YEAR-TO-DATE NET LOSS THROUGH SEPTEMBER 30
AT
APPROXIMATELY $15-16 MILLION
VERO
BEACH, FL (November
10, 2006)—
Opteum
Inc. (NYSE:OPX) (“Opteum” or the “Company”), a real estate investment trust
(“REIT”) that operates an integrated mortgage-related securities investment
portfolio and mortgage origination platform, today announced that it intends
to
file a Form 12b-25 Notification of Late Filing to the Securities and Exchange
Commission on Monday, November 13, 2006. The Company also announced that it
presently believes that it will report a consolidated net loss for both the
three and nine month periods ended September 30, 2006, and that its consolidated
loss before income taxes for the nine month period ended September 30, 2006,
will be greater by less than $1 million as a result of the previously announced
restatements of its consolidated financial statements as of, and for the periods
ended, March 31, 2006, and June 30, 2006. Because other adjustments to the
Company’s consolidated financial statements will be made in connection with
these restatements, including required adjustments to the Company’s income tax
benefit, as well as other additional adjustments that, in and of themselves,
are
immaterial to the Company’s consolidated results of operations and financial
position, the Company presently estimates that its consolidated net loss for
the
nine month period ended September 30, 2006, will be approximately $15 million
to
$16 million.
The
Company’s results of operations for both the
three
and nine month periods ended September 30, 2006, were negatively affected by
changes in various
market interest rates, including short-term rates, due primarily to the monetary
policy actions
of
the Federal Reserve during these periods. The Company’s financing is based on
short-term rates, which increased
during
these periods faster than the yields on the Company’s portfolio of mortgage
backed securities. The
increase in short-term borrowing rates also had a negative impact on the net
interest spread earned by OFS on its mortgage loans held for sale due to
increases in the funding costs associated with warehouse lines of credit used
to
fund its mortgage loan originations.
Further,
the continuing downward trend in the residential housing market is likely to
continue to pressure OFS’ mortgage origination levels. As a result, OFS is
likely to continue to experience downward pressure on sales margins brought
about by increasing competitive pressure. Any decline in mortgage originations
due to a cooling of the housing market may be partially offset by appreciation
in the value of OFS’ originated mortgage servicing rights and retained interests
in securitizations, which are generally positively affected by declining
mortgage prepayment rates.
The
Company currently expects to file its Quarterly Report on Form 10-Q for the
period ended September 30, 2006, simultaneously with, or within a reasonable
period of time following, the filing of amendments to the Company’s Quarterly
Reports on Form 10-Q for the periods ended March 31, 2006, and June 30, 2006.
While there can be no reasonable assurance given as to the actual dates of
filing, the Company currently anticipates making these filings on or before
December 31, 2006, subject to the prior completion by Ernst & Young LLP of
required procedures for such interim quarterly filings.
For
further information and ongoing updates, please refer to the Company’s filings
that will be made with the Securities and Exchange Commission. These filings
will be available on the Company’s website at www.opteum.com
under
the “Investor Information” page and will also be available at www.sec.gov.
About
Opteum
Opteum
Inc. is a REIT, which operates an integrated mortgage-related investment
portfolio and mortgage origination platform. The REIT invests primarily in,
but
is not limited to, residential mortgage-related securities issued by the Federal
National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage
Corporation (Freddie Mac) and the Government National Mortgage Association
(Ginnie Mae). It attempts to earn returns on the spread between the yield on
its
assets and its costs, including the interest expense on the funds it borrows.
Opteum's mortgage origination platform, Opteum Financial Services, LLC,
originates, buys, sells, and services residential mortgages from offices
throughout the United States and operates as a taxable REIT subsidiary.
Statements
herein relating to matters that are not historical facts are forward-looking
statements as defined in the Private Securities Litigation Reform Act of 1995.
The reader is cautioned that such forward-looking statements are based on
information available at the time and on management's good faith belief with
respect to future events, and are subject to risks and uncertainties that could
cause actual performance or results to differ materially from those expressed
in
such forward-looking statements. Important factors that could cause such
differences are described in Opteum Inc.'s filings with the Securities and
Exchange Commission, including Opteum Inc.'s most recent Annual Report on Form
10-K or Quarterly Report on Form 10-Q. Opteum Inc. assumes no obligation to
update forward-looking statements to reflect subsequent results, changes in
assumptions or changes in other factors affecting forward-looking statements.
Contact:
Opteum
Inc.
Chief
Financial Officer
Robert
E.
Cauley, 772-231-1400
www.opteum.com
Exhibit
99.3
[LOGO]
OPTEUM
INC. TO DELAY FILING THIRD QUARTER FORM 10-Q;
RESTATE
FIRST AND SECOND QUARTER FINANCIAL STATEMENTS;
POSTPONE
THIRD QUARTER EARNINGS CALL
PREVIOUSLY
REPORTED YEAR-TO-DATE PRE-TAX RESULTS ESTIMATED TO BE REDUCED BY LESS THAN
$1
MILLION AFTER RESTATEMENT
VERO
BEACH, FL (November 8, 2006)—
Opteum
Inc. (NYSE:OPX) (“Opteum” or the “Company”), a real estate investment trust
(“REIT”) that operates an integrated mortgage-related securities investment
portfolio and mortgage origination platform, today announced that its Quarterly
Report on Form 10-Q for the quarter ended September 30, 2006, will be delayed
and that it will restate its consolidated financial statements for the quarters
ended March 31, 2006, and June 30, 2006, due primarily to the application of
an
accounting policy by the Company’s subsidiary, Opteum Financial Services, LLC
(“OFS”), that was not in accordance with U.S. generally accepted accounting
principles (“GAAP”).
Although
the Company’s review of the full legal, accounting and tax impact of this
accounting policy is ongoing, the Company presently believes that, once
restated, its consolidated results of operations before income taxes for the
six
month period ended June 30, 2006, will be reduced by less than $1 million
from the Company’s year-to-date consolidated results of operations before income
taxes previously reported. The Company presently anticipates an offsetting
increase to the Company’s consolidated results of operations before income taxes
for the quarterly period ended September 30, 2006.
The
previous accounting policy relates to the manner in which OFS accounts for
changes in the fair value of interest rate lock commitments (“IRLCs”). Under
Statement
of Financial Accounting Standards No. 133 - Accounting
for Derivative Instruments and Hedging Activities
(“SFAS
No. 133”),
IRLCs
are to be recorded on the Company’s consolidated balance sheet at fair value
with changes in fair value to be reflected in the Company’s current period
results of operations. OFS’ prior accounting policy resulted in a misapplication
of SFAS No. 133, thereby generating non-cash, short-term timing differences
that
overstated earnings in the first quarter of 2006 and understated earnings in
the
second quarter of 2006. Proper application of SFAS No. 133 would not, however,
have changed the amount of dividends declared by the Company year-to-date.
Further, the Company’s dividend policy of declaring dividends based on REIT
taxable income remains unchanged.
In
light
of the foregoing, the Company’s consolidated financial statements, including the
Company’s consolidated balance sheet, statement of operations, statement of
stockholders’ equity, statement of cash flows and the notes thereto, as of, and
for the periods ended, March 31, 2006, and June 30, 2006, should no longer
be
relied upon.
For
further information and ongoing updates, please refer to the Company’s filings
that will be made with the Securities and Exchange Commission. These filings
will be available on the Company’s website at www.opteum.com
under
the “Investor Information” page and will also be available at www.sec.gov.
The
Company’s third quarter earnings conference call and Web simulcast, originally
scheduled for 9:00 a.m. E.T. on November 9, 2006, has been postponed to an
as
yet undetermined date, which will follow the Company’s filing of its Quarterly
Report on Form 10-Q for the period ended September 30, 2006.
About
Opteum
Opteum
Inc. is a REIT, which operates an integrated mortgage-related investment
portfolio and mortgage origination platform. The REIT invests primarily in,
but
is not limited to, residential mortgage-related securities issued by the Federal
National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage
Corporation (Freddie Mac) and the Government National Mortgage Association
(Ginnie Mae). It attempts to earn returns on the spread between the yield on
its
assets and its costs, including the interest expense on the funds it borrows.
Opteum's mortgage origination platform, Opteum Financial Services, LLC,
originates, buys, sells, and services residential mortgages from offices
throughout the United States and operates as a taxable REIT subsidiary.
Statements
herein relating to matters that are not historical facts are forward-looking
statements as defined in the Private Securities Litigation Reform Act of 1995.
The reader is cautioned that such forward-looking statements are based on
information available at the time and on management's good faith belief with
respect to future events, and are subject to risks and uncertainties that could
cause actual performance or results to differ materially from those expressed
in
such forward-looking statements. Important factors that could cause such
differences are described in Opteum Inc.'s filings with the Securities and
Exchange Commission, including Opteum Inc.'s most recent Annual Report on Form
10-K or Quarterly Report on Form 10-Q. Opteum Inc. assumes no obligation to
update forward-looking statements to reflect subsequent results, changes in
assumptions or changes in other factors affecting forward-looking statements.
Contact:
Opteum
Inc.
Chief
Financial Officer
Robert
E.
Cauley, 772-231-1400
www.opteum.com