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Countrywide Credit Industries, Inc. Reports Record First Quarter Earnings, Earnings Achievements in Core Mortgage and Diversified Businesses, And Declares Cash Dividend

CALABASAS, CA (April 23, 2002) -- Countrywide Credit Industries, Inc. (CCR) , a diversified financial services provider, announced today that unaudited net earnings for the first calendar quarter ended March 31, 2002 were $168 million, a 61 percent increase compared to net earnings of $104 million for last year's comparable quarter ended February 28, 2001. Diluted earnings per share for the first quarter were $1.32, a 55 percent increase compared to $0.85 for the quarter ended February 2001.

Countrywide's Board of Directors declared a cash dividend of $0.10 per common share for the first quarter, payable May 31, 2002 to shareholders of record on May 14, 2002. A non-recurring dividend of $0.03 has been declared for the month of December 2001, payable May 31, 2002 for shareholders of record on May 14, 2002. This supplemental dividend has been declared to adjust investor dividend proceeds for the impact of the recent change in reporting from a February 28th to a December 31st fiscal year end which was effective on January 1, 2002.

"Countrywide's outstanding quarterly earnings are attributed to the exceptional performance of Countrywide's core mortgage banking business and the emerging contributions of our diversified businesses," said Angelo R. Mozilo, Chairman, Chief Executive Officer and President. "Core mortgage banking pre-tax earnings were $192 million during the first quarter. Pre-tax earnings from diversified businesses reached a record $75 million, or 28 percent of total earnings, in the first quarter ended March 31, 2002. Total pre-tax earnings for the quarter were $266 million. Diluted earnings per share increased 55 percent from the comparable quarter ended February 28, 2001 to $1.32.

"Fueled in part by record purchase production volumes, total loan fundings for the quarter surpassed $44 billion, an 85 percent increase over the first calendar quarter of 2001," Mozilo continued. "The stellar loan funding performance can be attributed to the benefits of industry consolidation and the strategic implementation of a sales force concentrated on growing purchase market share. Our focus on the purchase market is intended to further insulate production performance from interest rate volatility. Countrywide purchase volumes over the past ten years have grown at a compounded annual growth rate of 29 percent versus the industry growth rate of 9 percent. Our purchase market share now stands at 8.2 percent as of March 31, 2002, versus 5.7 percent for the same period last year. Record funding volumes and strong production margins generated unsurpassed production sector pre-tax earnings of $448 million, nearly five times the earnings of $91 million for this sector in the quarter ended February 28, 2001.

"Countrywide has strategically balanced the counter-cyclical nature of its mortgage production and servicing businesses to mitigate the impact of interest rate changes on core mortgage banking earnings performance. Production operations outperform in a low interest rate environment and servicing operations outperform in a higher interest rate environment. During this past quarter, the mortgage production sector has benefited from low interest rates to post exceptional earnings and, as expected, servicing sector earnings performance has been suppressed by high mortgage servicing rights amortization and hedge expenses. The servicing portfolio has continued its uninterrupted growth and now stands at $355 billion at March 31, 2002. Today, the servicing sector is optimally positioned to provide a strong foundation for future earnings performance based upon its significant size and the enhanced cash flows and strong earnings profile associated with higher interest rates. Countrywide now has a relationship with over 3.4 million customers that can be leveraged to support our synergistic diversification initiatives.

"The emerging significance of Countrywide's diversified businesses is evident in the $75 million or 28 percent contribution to total pre-tax earnings of $266 million for the quarter ended March 31, 2002. Diversification initiatives including capital markets, insurance, banking and global, provide less mortgage interest rate sensitive sources of revenues to increase shareholder value. Diversified businesses are designed to synergistically leverage our core competencies in providing products and technological solutions to our 3.4 million servicing customers, business partners and third parties as well as the in-sourcing of services for improved costs and efficiencies. Most prominent among our diversification businesses is our capital markets group, which contributed $40 million, or 15 percent, of total pre-tax earnings for the quarter ended March 31, 2002. The insurance group delivered pre-tax earnings of $26 million during the quarter while banking pre-tax earnings reached $10 million.

"This quarter's superb earnings performance was achieved as we emerged from a historically low interest rate environment, clearly demonstrating the effectiveness of the operational enhancements made to the core mortgage banking segment as well as the maturing of our diversification initiatives," Mozilo added.

"We remain very optimistic about the growth prospects for the company in the future. The company is better positioned today than at any time in its history to perform in all interest rate environments. For our second quarter ending June 30, 2002, we expect the company will report diluted earnings per share within a range of $1.33 to $1.37. This estimated range is a forward-looking statement as described in the disclaimer below."

Mortgage Banking
Countrywide's mortgage banking segment (production, servicing, and closing services) contributed pre-tax earnings of $192 million for the first quarter. The production sector is comprised of four distribution channels: Consumer-direct lending through Countrywide's 385-branch retail system, telemarketing operations and the Internet; loans sourced through a network of over 18,000 mortgage brokers; correspondent lending which buys loans from other financial institutions such as banks, savings and loans, credit unions and insurance companies; and Full Spectrum Lending, Inc., a consumer-direct sub-prime lender with 49 branches. The production sector contributed $448 million in pre-tax earnings for the quarter ended March 31, 2002. Production earnings were fueled by record loan funding performance and strong margins. Total loan fundings for the first quarter were $44 billion, up 115 percent from the $20 billion reported in the comparable quarter ended February 28, 2001. Record loan fundings were driven in part by outstanding purchase loan funding performance. Purchase fundings totaled $18 billion in the first quarter compared to $11 billion in the quarter ended February 28, 2001.

The servicing sector includes activities related to the mortgage servicing rights (MSRs) associated with Countrywide's own portfolio and sub-servicing for other domestic financial institutions. Since the MSRs perform optimally in higher interest rate environments, earnings from these assets act as a natural counterbalance against production earnings, which typically outperform in lower rate environments. For the first quarter ended March 31, 2002, the pre-tax loss from servicing was $271 million, reflecting costs associated with amortization and hedging of the MSRs. The servicing hedge, which is designed to protect the MSRs from prepayments associated with low interest rates, operated as expected during this quarter. Total amortization and impairment net of the servicing hedge totaled $576 million during the quarter. It is for periods of low rates and high production, such as those experienced in this past quarter, that the macro-hedge strategy was designed. In low rate environments, production operations provide extraordinary earnings to reduce the burden of net MSR amortization and impairment on net earnings. As demonstrated this quarter, robust production activities replace loans paying off from the servicing portfolio with production fundings exceeding loan prepayments in the servicing portfolio by over $20 billion. Based upon the exceptional servicing replenishment capabilities, the servicing portfolio reached a new record of $355 billion at March 31, 2002, up 20 percent from the level of $296 billion at March 31, 2001. The portfolio now exceeds 3.4 million customers with a weighted average mortgage rate of 7.3 percent, providing a solid foundation for future sector performance and opportunities for our diversification initiatives.

The closing services component of the mortgage banking segment is comprised of Countrywide's LandSafe companies, which provide credit reports, appraisals, title reports and flood determinations to Countrywide's production sector as well as to third parties. LandSafe companies continue to deliver earnings growth with pre-tax earnings reaching $14.4 million in the first quarter, an increase of 25 percent from the $11.5 million reported for the quarter ended February 28, 2001. Strong performance in all LandSafe product lines galvanized this growth, most notably the 54 percent increase in credit report volume over the calendar quarter ended March 31, 2001. LandSafe is strategically focused on providing services to external business partners to augment their net earnings from unrelated sources.


Capital Markets
Capital Markets activities include a securities broker-dealer, a broker of mortgage servicing rights, and a distressed-asset manager. The primary earnings performance within the Capital Markets group was contributed by the broker-dealer, Countrywide Securities Corporation. The key performance metric for the broker dealer is securities trading volume, which exceeded $400 billion for the quarter ended March 31, 2002, a 75 percent increase over trading volume for the comparable quarter ended February 28, 2001. Driven by an expanded product line and customer base, Countrywide Securities Corporation is now approaching a top ten market share in MBS trading volume. Pre-tax earnings for the entire capital markets segment for the first quarter were $40 million, a stellar two and a half times the pre-tax earnings for the quarter ended February 28, 2001 of $16 million.

Countrywide's insurance segment includes Balboa Life and Casualty, a national provider of property, life and liability insurance; Second Charter Reinsurance Company, a captive mortgage reinsurance company; and Countrywide Insurance Services, Inc., a national insurance agency offering a full menu of insurance products. The amount of carrier net written premiums, levels of reinsurance activity and agency policies-in-force primarily drive the performance of this group. For the quarter ended March 31, 2002, pre-tax earnings grew to $26 million, a 9 percent increase over the quarter ended February 28, 2001.

Banking represents a compelling diversification initiative in terms of growth potential and synergistic opportunities within the organization. This segment includes Treasury Bank, N.A., as well as a separate mortgage warehouse lending division. Treasury Bank, acquired in May 2001, is expected to enhance top-of-mind awareness and retention of mortgage customers and portfolio lending capabilities, diversify funding sources, and enable in-sourcing of certain bank-related services. A major performance driver for the bank will be the size, composition, and quality of the bank's assets. At quarter end, the bank's total assets approximated $3 billion, compared to $840 million at December 31, 2001. For the quarter ended March 31, 2001, pre-tax earnings for the banking segment were $10 million.

The principal component of global operations is Global Home Loans, the company's European mortgage banking joint venture, organized to originate and service loans on behalf of third parties. Today, Global Home Loans services in excess of 760,000 loans with outstanding balances in excess of $42 billion. Other companies included in global operations engage in consulting services, property valuation, broker-dealer services, and technology services. Global earnings performance during the quarter reflect the costs associated with building a strong foundation from which to grow earnings in the future.

                       Countrywide Credit Industries, Inc.


Three Months Ended Three Months Ended
March 31, 2002 February 28, 2001 % Change
(Amounts in thousands,
except per-share data)
Loan origination fees $237,353 $124,675 90%
Gain on sale of loans, net of
commitment fees 397,756 177,825 124%

Interest earned 520,448 376,670 38%
Interest charges (317,612) (376,413) (16%)
Net interest earned 202,836 257 N/M
Loan servicing fees 438,653 330,716 33%
Amortization & impairment/
recovery of mortgage servicing
rights, net of servicing
hedge (576,411) (203,303) 184%
Net loan servicing fees (137,758) 127,413 (208%)
Net insurance premiums earned 116,320 74,472 56%
Commissions and other revenue 98,850 48,455 104%
Total revenues 915,357 553,097 65%

Salaries and related expenses 391,429 224,581 74%
Occupancy and other office
expenses 94,447 67,284 40%
Marketing expenses 18,133 14,247 27%
Insurance net losses 51,257 28,566 79%
Other operating expenses 93,997 55,151 70%
Total expenses 649,263 389,829 67%

Earnings before income taxes 266,094 163,268 63%
Provision for income taxes 98,535 59,022 67%

NET EARNINGS $167,559 $104,246 61%

Earnings per Share
Basic $1.36 $0.89 53%
Diluted $1.32 $0.85 55%

Weighted Average Shares Outstanding
Basic 122,839 116,683 5%
Diluted 126,641 122,238 4%

(Dollar amounts in thousands)

Three Months Ended March 31, 2002

Mortgage Banking
Production Servicing Closing Services Total

Loan origination fees $237,353 $-- $-- $237,353
Gain on sale of loans,
net of commitment fees 380,973 -- -- 380,973
Net interest earned 164,883 (49,197) (136) 115,550
Net loan servicing fees (1) -- (147,317) -- (147,317)
Net insurance premiums
earned (2) -- -- -- --
Commissions, fees &
other (3) 3,218 33,549 35,227 71,994
Total revenues 786,427 (162,965) 35,091 658,553
Expenses 338,076 108,257 20,693 467,026

Earnings before income
taxes $448,351 $(271,222) $14,398 $191,527

Diversified Businesses
Insurance Capital Markets Global Banking

Loan origination fees $-- $-- $-- $--
Gain on sale of loans, net of
commitment fees -- 16,455 328 --
Net interest earned 7,447 65,573 69 12,023
Net loan servicing fees (1) -- 288 9,271 --
Net insurance premiums
earned (2) 116,320 -- -- --
Commissions, fees & other (3) 17,520 2,313 10,497 4,167
Total revenues 141,287 84,629 20,165 16,190
Expenses 115,142 45,096 20,097 5,969

Earnings before income taxes $26,145 $39,533 $68 $10,221

Other Total Grand Total

Loan origination fees $-- $-- $237,353
Gain on sale of loans, net of commitment fees -- 16,783 397,756
Net interest earned 2,174 87,286 202,836
Net loan servicing fees (1) -- 9,559 (137,758)
Net insurance premiums earned (2) -- 116,320 116,320
Commissions, fees & other (3) (7,641) 26,856 98,850
Total revenues (5,467) 256,804 915,357
Expenses (4,067) 182,237 649,263

Earnings before income taxes $(1,400) $74,567 $266,094

Three Months Ended February 28, 2001

Mortgage Banking
(Dollar amounts in thousands) Closing
Production Servicing Services Total

Loan origination fees $124,683 $-- $-- $124,683
Gain on sale of loans, net of
commitment fees 148,276 -- -- 148,276
Net interest earned 24,216 (44,378) 874 (19,288)
Net loan servicing fees (1) -- 127,382 -- 127,382
Net insurance premiums earned (2) -- -- -- --
Commissions, fees & other (3) (57) 11,986 23,946 35,875
Total revenues 297,118 94,990 24,820 416,928
Expenses 206,108 72,931 13,289 292,328

Earnings before income taxes $91,010 $22,059 $11,531 $124,600

Diversified Businesses
Insurance Capital Markets Global Banking

Loan origination fees $-- $(8) $-- $--
Gain on sale of loans, net of
commitment fees -- 29,549 -- --
Net interest earned 6,617 11,275 26 1,005
Net loan servicing fees (1) -- 31 -- --
Net insurance premiums
earned (2) 74,472 -- -- --
Commissions, fees & other (3) 14,006 (261) 1,359 179
Total revenues 95,095 40,586 1,385 1,184
Expenses 71,194 24,570 512 853

Earnings before income taxes $23,901 $16,016 $873 $331

Other Total Grand Total

Loan origination fees $- $(8) $124,675
Gain on sale of loans, net of commitment fees - 29,549 177,825
Net interest earned 622 19,545 257
Net loan servicing fees (1) - 31 127,413
Net insurance premiums earned (2) - 74,472 74,472
Commissions, fees & other (3) (2,703) 12,580 48,455
Total revenues (2,081) 136,169 553,097
Expenses 372 97,501 389,829

Earnings before income taxes $(2,453) $38,668 $163,268

(1) Consists primarily of fees earned for servicing mortgage loans,
related ancillary fees and income on residual interests, net of
amortization and impairment/recovery of MSRs and net servicing hedge.
(2) Consists of insurance premiums earned.
(3) Consists primarily of revenues from ancillary products and services,
including title, escrow, appraisal, credit reporting and home
inspection services, and insurance agency commissions.


March 31, December 31,
(Dollar amounts in thousands, except share data) 2002 2001

Cash $2,112,941 $ 495,414
Mortgage loans and mortgage-backed securities
held for sale 7,010,400 10,369,374
Trading securities, at market value 5,826,796 5,941,992
Securities purchased under agreements to resell 4,291,750 4,319,120
Mortgage servicing rights, net 6,666,206 6,116,082
Investments in other financial instruments 9,088,958 3,438,865
Property, equipment and leasehold improvements,
net 458,641 447,022
Other assets 7,158,710 6,088,935

Total assets $42,614,402 $37,216,804

Liabilities and Shareholders' Equity
Notes payable $17,573,739 $16,549,999
Securities sold under agreements to repurchase 10,529,090 9,452,852
Drafts payable issued in connection with
mortgage loan closings 1,037,352 1,283,947
Accounts payable, accrued liabilities and other 4,916,858 2,851,630
Bank deposit liability 2,231,749 675,480
Income taxes payable 1,623,777 1,815,254
Total liabilities 37,912,565 32,629,162

Commitments and contingencies -- --

Company-obligated mandatorily redeemable capital
trust pass-through securities of subsidiary
trusts holding solely Company guaranteed related
subordinated debt 500,000 500,000

Shareholders' equity
Preferred stock - authorized, 1,500,000 shares
of $0.05 par value; issued and outstanding, none -- --
Common stock - authorized, 240,000,000 shares
of $0.05 par value; issued and outstanding,
123,074,777 shares at March 31, 2002 and
122,705,532 shares at December 31, 2001 6,154 6,135
Additional paid-in capital 1,520,593 1,506,853
Accumulated other comprehensive income (4,717) 49,467
Retained earnings 2,679,807 2,525,187
Total shareholders' equity 4,201,837 4,087,642
Total liabilities and shareholders' equity $42,614,402 $37,216,804

(Dollar amounts in thousands)

March 31, December 31, % Change
2002 2001
Investments in financial instruments:

Home equity line of credit senior
security $2,583,909 $-- N/M

Servicing Hedge:
Principal-only securities 3,294,873 840,062 292%
Derivative instruments 115,105 256,129 (55%)
Total servicing hedge instruments 3,409,978 1,096,191 211%

Other interests retained in securitization:
Sub-prime AAA interest-only security 499,736 493,009 1%
Interest-only and principal-only
securities 232,008 220,852 5%
Home equity line of credit residuals 245,345 150,802 63%
Home equity line of credit transferor's
interest 134,726 139,468 (3%)
Sub-prime residuals 83,517 122,000 (32%)
Other 50,707 58,461 (13%)
Total other interests retained in
securitization 1,246,039 1,184,592 5%

Insurance and banking segment investments:
Mortgage-backed securities 220,012 578,737 (62%)
Collateralized mortgage obligations 1,297,012 300,219 332%
U.S. Treasury securities and obligations
of U.S. Government corporations and
agencies 88,659 165,192 (46%)
Corporate securities 239,189 99,595 140%
Other 4,160 14,339 (71%)
Total insurance and banking segment
investments 1,849,032 1,158,082 60%

Total investments in financial
instruments $9,088,958 $3,438,865 164%

Other assets:
Defaulted FHA-insured and
VA-guaranteed loans repurchased $1,942,176 $1,726,569 12%
Mortgage loans held for investments 1,613,240 719,302 124%
Warehouse lending advances secured
by mortgage loans 948,627 1,410,845 (33%)
Total loans 4,504,043 3,856,716 17%

Receivables from sale of securities 485,407 -- N/M
Reimbursable servicing advances 496,541 472,864 5%
Securities broker-dealer receivables 411,409 590,813 (30%)
Derivative margin accounts 168,402 83,660 101%
Capitalized software 166,052 162,370 2%
Prepaid expenses 154,725 171,878 (10%)
Interest receivable 102,013 115,501 (12%)
Other assets 670,118 635,133 6%

Total other assets $7,158,710 $6,088,935 18%

(Dollar amounts in millions)

Three Months Ended Three Months Ended
March 31, 2002 February 28, 2001 % Change

Volume of loans produced $44,033 $20,471 115%

Number of loans produced 339,413 169,936 100%

Volume of e-commerce loans
produced $20,588 $8,679 137%

Loan closing services: credit
reports, flood determinations,
appraisals, automated property
valuation services, title
reports, default title orders,
other title and escrow services
and home inspections 1,888,843 1,057,179 79%

Insurance agency
policies-in-force 587,151 514,454 14%

Insurance carrier net written
premium $123 $75 64%

Capital markets securities
trading volume $433,290 $248,217 75%

March 31, 2002 February 28, 2001 % Change

Pipeline of loans-in-process $21,389 $15,423 39%
Loan servicing portfolio * $355,020 $293,600 21%
Number of loans serviced * 3,351,071 2,947,927 14%

*Includes warehoused loans and loans under subservicing agreements.

Countrywide Credit Industries

About Countrywide:
Founded in 1969, Countrywide Credit Industries, Inc. is a member of the S&P 500, Forbes 500 and Fortune 500. The company provides mortgage banking and diversified financial services in domestic and international markets. Mortgage banking businesses include loan production and servicing primarily through Countrywide Home Loans, Inc., which originates, purchases, securitizes, sells, and services prime-quality loans. Also included in Countrywide's mortgage banking segment is the LandSafe group of companies that provide loan closing services. Diversified financial services encompass insurance, capital markets, global, and banking, largely through the activities of Balboa Life and Casualty, a national provider of property, liability, and life insurance; Second Charter, a captive mortgage reinsurance company; Countrywide Capital Markets, a mortgage-related investment banker; Treasury Bank, N.A., a banking entity offering customers CDs, money market accounts, and home loan products; and Global Home Loans, a European mortgage banking joint venture in which Countrywide holds a majority interest.

This Press Release may contain forward-looking statements. These discussions include forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, regarding management's beliefs, estimates, projections, and assumptions with respect to future operations. Actual results and operations for any future period may vary materially from those projected herein and from past results discussed herein. Factors which could cause actual results to differ materially from historical results or those anticipated include, but are not limited to: loss of investment grade rating; severe real estate recession; significant reduction in government support of homeownership; loss of access to debt and equity markets; the level of, and direction of changes in interest rates; competitive and general economic conditions in each of our business segments; general economic conditions in the United States and abroad and in the domestic and international areas in which we do business; the availability of secondary markets for the Company's mortgage loan products; ineffectiveness of our hedging activities; the legal, regulatory and legislative environments in the markets in which the company operates; performance of the Company's securities, financial instruments and markets as a whole in response to world events; loss in the value of unhedged assets; other risks detailed in documents filed by Countrywide with the Securities and Exchange Commission from time to time.

Words like "believe", "expect", "should", "may", "could", "anticipated", "promising" and other expressions that indicate future events and trends identify forward-looking statements. The company undertakes no obligation to publicly update or revise any forward-looking statements.

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