MuniMae share earns $1.60 in 1998, an increase of 7%; Income was $27.4 million, from $18.8 million in '97; Earnings


Municipal Mortgage & Equity LLC, a Baltimore-based company that invests in tax-free bonds secured by apartment housing, yesterday reported a 7 percent increase in its annual earnings per share, and boosted the largely tax-free dividend on its common stock for the eighth consecutive quarter.

For 1998, Municipal Mortgage, better-known as MuniMae, said it earned $1.60 per diluted share, up 7 percent from the $1.50 recorded in 1997. The year-end number was in line with analysts' forecasts. Actual net income rose to $27.4 million in 1998 from $18.8 million in 1997.

However, the company did not break out its fourth-quarter profit figure in the earnings report it circulated to investors and could therefore not do so for The Sun, contending that would qualify as "selective disclosure," and could run afoul of securities laws. The company said reporting year-end numbers only is common practice for real estate investment trusts, which are a distant cousin to MuniMae.

In its report, instead of quarterly net income, MuniMae reported a figure known as "cash available for distribution," which, because of its complex structure, the company feels is a better gauge of its performance. That figure is essentially a measure of its dividend-paying ability.

Cash available for distribution to its stock totaled $8.43 million in the fourth quarter, a 98 percent increase from the last three months of 1997. For all of 1998, that figure totaled $26.6 million, a 60 percent jump from 1997.

"We had an excellent year," said Mark K. Joseph, MuniMae's chairman and chief executive officer. "I'm very pleased with our performance."

The board of directors also boosted the quarterly dividend, payable in February, from 38.5 cents per share to 39 cents per share. For the year, MuniMae paid dividends of $1.53 per share, a 7 percent increase over the $1.43 per share paid in 1997.

With yesterday's announced increase, MuniMae shares now have an annualized dividend payout of $1.56 per share. The payout is an important feature of the company's stock. The reason: Because most of its revenue emanates from tax-free bonds, and because of a corporate structure that allows the company to "pass through" that income to stockholders, the individual investor can enjoy the tax-free feature.

At $1.56 per share, based on Wednesday's closing price of $19.6875, MuniMae shares had an annualized dividend yield of 7.9 percent. Since about 82 percent of that dividend will be tax free, an investor in the 39.6 percent tax bracket would have to find a taxable investment yielding 12.2 percent to keep the same amount of money in his or her pocket, the company calculated.

Total assets rose 48 percent last year to reach $359 million.

MuniMae shares yesterday rose 31.25 cents to close at $20.

Pub Date: 2/05/99

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