Metropolitan Mortgage & Securities Co., the big Spokane-based financial-services company, has reported record net income of $16.3 million for its most recent fiscal year, an increase of nearly 60 percent over the previous year.


The company also showed sharp improvements in two other key performance indicatorsreturn on average assets and return on average stockholders equityfor the fiscal year ended Sept. 30, 1999, according to its recently released annual report.


Its rise in net income was due largely, however, to a reduction of $17.9 million in income taxes and income allocated to minority stockholders, according to Metropolitans latest annual report submitted to the U.S. Securities and Exchange Commission.


The companys net income last year actually was insufficient, by more than $800,000, to cover its fixed costs including preferred-stock dividend requirements, for the first time in five years, the report says.


We did some strategic planning to better manage our cash tax payments over time, and thats what thats all about, says Metropolitan spokesman Erik Skaggs.


Nationally the mortgage industry has been down considerably. Metro fared very well because we have a whole new management team that has put together new strategies, and because the company is continuing to diversify into new markets, he says.


Metropolitans core business is buying real estate mortgages at a discount from mortgage holders who want to liquidate their positions. The company often holds the mortgages it buys and derives income from them over time as mortgagees make their payments.


In recent years, the company has diversified into buying other types of cash-flow instruments, including lottery winnings, structured settlements, and annuities. It also began originating residential loans through relationships with other lenders and loan brokers throughout the Western U.S. In addition, Metropolitan sells securities, manages a commercial real estate portfolio, and operates an insurance subsidiary. As of last Sept. 30, the company says, it had 635 full-time equivalent employees.


Metropolitan says it had total assets of $1.23 billion at the end of its 1999 fiscal year, virtually unchanged from a year earlier but below the $1.28 billion peak at the end of its 1996 fiscal year.


Despite the market changes affecting it, the company continued to show mostly positive year-to-year numbers. For example, record production activity caused its proceeds from the sale of receivables to soar to $643 million in its latest fiscal year, up from $229 million in the previous year, and its stockholders equity climbed to $72 million from $59 million the previous year.


C. Paul Sandifur Jr., the companys president and CEO, says in his annual report message that the company is exploring new market opportunities, and the rest of an astronomy-themed report distributed to shareholders reinforces that message. It says Metropolitan will look to expand its equipment-leasing activities, after entering that market last year, and will seek to augment its traditional distribution channels via e-commerce and direct-marketing activities.


Using various lead sources, the company will methodically canvass the nation for seller-financed mortgage contracts with our optimum property profile. This, plus aggressive acquisition of new mortgage banking licenses and the addition of new account executives will expand our operations significantly in fiscal year 2000, the report says.


Metropolitan Mortgage is part of an umbrella group, called the Metropolitan Financial Group, that also includes Metwest Mortgage Services Inc., Western United Life Assurance Co., Summit Securities Inc., Metropolitan Investment Securities Inc., Old Standard Life Insurance Co., Old West Annuity & Life Insurance Company, and Summit Property Development Inc. The group announced earlier this week that it has launched a new integrated Internet site, at www.metropolitanfinancialgroup.com, through which it is offering a wide array of financial services.