Attached files
| file | filename |
|---|---|
| EX-99.2 - EX-99.2 - Ready Capital Corp | sld_ex992.htm |
| 8-K - 8-K - Ready Capital Corp | sld_8kearnings-shell.htm |
Exhibit 99.1
SUTHERLAND ASSET MANAGEMENT CORPORATION ANNOUNCES FOURTH QUARTER 2016 RESULTS
- Originated Approximately $521 Million of Loans During Fourth Quarter 2016 -
- Declared and Raised First Quarter 2017 Dividend by 5.7% to $0.37 Per Share -
New York, New York, March 14, 2017 / PRNewswire / – Sutherland Asset Management Corporation (“Sutherland” or the “Company”) (NYSE: SLD) today reported financial results for the quarter ended December 31, 2016.
Fourth Quarter Highlights:
|
· |
Net income of $26.1 million, or $0.83 per share of common stock |
|
· |
Core earnings of $11.1 million, or $0.35 per share of common stock |
|
· |
Net Book Value of $16.80 per share of common stock as of December 31, 2016 |
|
· |
Completed merger with ZAIS Financial Corp. increasing stockholders’ equity to approximately $552 million |
|
· |
Originated $143.6 million of small balance commercial (“SBC”) loans during the quarter |
|
· |
Originated $13.7 million of loans guaranteed by the U.S. Small Business Administration (the “SBA”) under its Section 7(a) loan program during the quarter |
|
· |
Originated $363.6 million of residential mortgage loans during the two months ended December 2016 |
|
· |
Completed securitization of $162.1 million originated SBC loans and sold $133.9 million in senior bonds at a weighted average interest rate of 3.37% |
Highlight Subsequent to Quarter End
|
· |
Completed a $75.0 million debt offering in February 2017 by issuing 7.5% Senior Secured Notes |
A summary of Sutherland’s operating results for the quarter ended December 31, 2016 is presented below. Sutherland reported U.S. GAAP net income attributable to common stockholders for the three months ended December 31, 2016 of $26.1 million, or $0.83 per share of common stock, and Core Earnings (a non-GAAP financial measure) of $11.1 million, or $0.35 per share of common stock.
The Company issued a full detailed presentation of its fourth quarter 2016 results, which can be viewed in the investor relations section at www.sutherlandam.com.
“With the closing of the merger, Sutherland is well-positioned to accelerate growth in the coming years and create meaningful value for our shareholders,” stated Thomas Capasse, Chairman and Chief Executive Officer. “We are proud that our team successfully originated $520 million in new loans in the fourth quarter, indicative of the level of opportunity available in today’s market. Given our strong pipeline and cash flows, the Board had confidence to raise our quarterly dividend by over 5% reflecting our positive outlook for the Company as we enter 2017.”
Common Dividends
During the first quarter of 2017, the Company’s Board of Directors declared a quarterly cash dividend increase of 5.7% to $0.37 per share of common stock and operating partnership unit (“OP unit”) in its operating partnership subsidiary for the quarter ended March 31, 2017 to common shareholders and OP unit holders of record as of March 31, 2017. The dividend is payable on April 14, 2017. The ex-dividend date is March 29, 2017.
During the fourth quarter of 2016, the Company’s Board of Directors declared a quarterly cash dividend of $0.35 per share of common stock and OP unit for the quarter ended December 31, 2016 to common stockholders and OP unit holders of record as of December 30, 2016. The dividend was paid on January 27, 2017.
Use of Non-GAAP Financial Information
In addition to the results presented in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"), this press release includes Core Earnings which is a non-U.S. GAAP financial measure. The Company defines Core Earnings as net income adjusted for unrealized or realized gains (losses) related to mortgage backed securities, unrealized gains (losses) related to residential mortgage servicing rights, bargain purchase gains, losses on discontinued operations and non-recurring expenses.
The Company believes that providing investors with this non-U.S. GAAP financial information, in addition to the related U.S. GAAP measures, gives investors greater transparency into the information used by management in its financial and operational decision-making. However, because Core Earnings is an incomplete measure of the Company's financial performance and involves differences from net income computed in accordance with U.S. GAAP, it should be considered along with, but not as an alternative to, the Company's net income computed in accordance with U.S. GAAP as a measure of the Company's financial performance. In addition, because not all companies use identical calculations, the Company's presentation of Core Earnings may not be comparable to other similarly-titled measures of other companies.
The following table reconciles net income computed in accordance with U.S. GAAP to Core Earnings for the three months ended December 31, 2016:
|
(In Millions) |
|
|
|
|
Net Income |
|
$ |
26.1 |
|
Reconciling items: |
|
|
|
|
Unrealized (gain) loss on mortgage-backed securities |
|
|
0.6 |
|
Realized (gain) loss on mortgage-backed securities |
|
|
0.1 |
|
Unrealized (gain) loss on residential mortgage servicing rights |
|
|
(6.9) |
|
Bargain purchase gain |
|
|
(15.2) |
|
Merger transaction costs |
|
|
2.0 |
|
Employee severance |
|
|
0.1 |
|
Loss on discontinued operations |
|
|
3.0 |
|
Total reconciling items |
|
|
(16.3) |
|
Income tax adjustments |
|
|
1.3 |
|
Core earnings |
|
$ |
11.1 |
Webcast and Earnings Conference Call
Management will host a webcast and conference call on Tuesday, March 14, 2017 at 5:00 pm ET to provide a general business update and discuss the financial results for the quarter ended December 31, 2016. The webcast is available in the Investor Relations section of the Company’s website at www.sutherlandam.com. To listen to a live broadcast, go to the site at least 15 minutes prior to the scheduled start time in order to register, download and install any necessary audio software. The conference call can be accessed by dialing (877) 604-9673.
A replay of the call will also be available on the Investor Relations section of the Company’s website at www.sutherlandam.com. A replay of the call will be available approximately two hours after the live call and will be available through March 28, 2017. To access the replay, dial (844) 512-2921. The replay pin number is 6056621.
Safe Harbor Statement
This press release contains statements that constitute "forward-looking statements," as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and such statements are intended to be covered by the safe harbor provided by the same. These statements are based on management's current expectations and beliefs and are subject to a number of trends and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements; the Company can give no assurance that its expectations will be attained. Factors that could cause actual results to differ materially from the Company's expectations include, but are not limited to, applicable regulatory changes; general volatility of the capital markets; changes in the Company’s investment objectives and business strategy; the availability of financing on acceptable terms or at all; the availability, terms and deployment of capital; the availability of suitable investment opportunities; changes in the interest rates or the general economy; increased rates of default and/or decreased recovery rates on investments; changes in interest rates, interest rate spreads, the yield curve or prepayment rates; changes in prepayments of Company’s assets; the degree and nature of competition, including competition for the Company's target assets; and other factors, including those set forth in the Risk Factors section of the Company's Registration Statement on Form S-4, the most recent Annual Report on Form 10-
K filed with the SEC, and other reports filed by the Company with the SEC, copies of which are available on the SEC's website, www.sec.gov. The Company undertakes no obligation to update these statements for revisions or changes after the date of this release, except as required by law.
Contact
Investor Relations:
Bevin Black
BBlack@waterfallam.com
212-257-4629
Additional information can be found on the Company’s website at www.sutherlandam.com.
SUTHERLAND ASSET MANAGEMENT CORPORATION
Unaudited CONSOLIDATED BALANCE SHEETS
|
(In Thousands) |
|
December 31, 2016 |
|
December 31, 2015 |
|
||
|
Assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
59,566 |
|
$ |
41,569 |
|
|
Restricted cash |
|
|
20,190 |
|
|
14,757 |
|
|
Short-term investments |
|
|
319,984 |
|
|
249,989 |
|
|
Loans, held-for-investment (net of allowances for loan losses of $12,721 at December 31, 2016 and $12,255 at December 31, 2015) |
|
|
929,529 |
|
|
927,218 |
|
|
Loans, held at fair value |
|
|
81,592 |
|
|
155,134 |
|
|
Loans, held for sale, at fair value |
|
|
181,797 |
|
|
— |
|
|
Mortgage backed securities, at fair value |
|
|
32,391 |
|
|
213,504 |
|
|
Loans eligible for repurchase from Ginnie Mae |
|
|
137,986 |
|
|
— |
|
|
Real estate acquired in settlement of loans |
|
|
3,933 |
|
|
8,224 |
|
|
Derivative instruments, at fair value |
|
|
5,785 |
|
|
723 |
|
|
Servicing rights |
|
|
22,478 |
|
|
27,250 |
|
|
Residential mortgage servicing rights, at fair value |
|
|
61,376 |
|
|
— |
|
|
Intangible assets |
|
|
3,636 |
|
|
1,000 |
|
|
Other assets |
|
|
53,928 |
|
|
30,045 |
|
|
Assets of consolidated VIEs |
|
|
691,096 |
|
|
649,043 |
|
|
Assets of discontinued operations held for sale |
|
|
— |
|
|
11,325 |
|
|
Total Assets |
|
$ |
2,605,267 |
|
$ |
2,329,781 |
|
|
Liabilities: |
|
|
|
|
|
|
|
|
Borrowings under credit facilities |
|
|
326,610 |
|
|
175,306 |
|
|
Promissory note payable |
|
|
7,378 |
|
|
— |
|
|
Securitized debt obligations of consolidated VIEs |
|
|
492,942 |
|
|
461,522 |
|
|
Borrowings under repurchase agreements |
|
|
600,852 |
|
|
644,137 |
|
|
Guaranteed loan financing |
|
|
390,555 |
|
|
499,187 |
|
|
Contingent consideration |
|
|
14,487 |
|
|
— |
|
|
Liabilities for loans eligible for repurchase from Ginnie Mae |
|
|
137,986 |
|
|
— |
|
|
Derivative instruments, at fair value |
|
|
643 |
|
|
1,499 |
|
|
Dividends payable |
|
|
11,505 |
|
|
13,366 |
|
|
Accounts payable and other accrued liabilities |
|
|
70,207 |
|
|
47,665 |
|
|
Liabilities of discontinued operations held for sale |
|
|
— |
|
|
6,886 |
|
|
Total Liabilities |
|
$ |
2,053,165 |
|
$ |
1,849,568 |
|
|
Stockholders’ Equity |
|
|
|
|
|
|
|
|
Common stock, $0.0001 par value, 500,000,000 shares authorized, 30,549,084 and 25,739,847 shares issued and outstanding, respectively |
|
|
3 |
|
|
2 |
|
|
Preferred stock, $1,000 par value, 125 shares authorized, 125 shares issued and outstanding as of December 31, 2015 |
|
|
— |
|
|
125 |
|
|
Additional paid-in capital |
|
|
513,295 |
|
|
447,093 |
|
|
Retained deficit |
|
|
(201) |
|
|
(5,899) |
|
|
Total Sutherland Asset Management Corporation equity |
|
|
513,097 |
|
|
441,321 |
|
|
Non-controlling interests |
|
|
39,005 |
|
|
38,892 |
|
|
Total Stockholders’ Equity |
|
$ |
552,102 |
|
$ |
480,213 |
|
|
Total Liabilities and Stockholders’ Equity |
|
$ |
2,605,267 |
|
$ |
2,329,781 |
|
SUTHERLAND ASSET MANAGEMENT CORPORATION
Unaudited CONSOLIDATED STATEMENTS OF INCOME
|
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
||
|
(In Thousands, except share data) |
|
2016 |
|
2016 |
|
||
|
Interest income |
|
|
|
|
|
|
|
|
Loans, held-for-investment |
|
$ |
26,931 |
|
$ |
117,049 |
|
|
Loans, held at fair value |
|
|
3,321 |
|
|
13,457 |
|
|
Loans, held for sale, at fair value |
|
|
1,627 |
|
|
1,627 |
|
|
Mortgage backed securities, at fair value |
|
|
862 |
|
|
4,890 |
|
|
Total interest income |
|
|
32,741 |
|
|
137,023 |
|
|
Interest expense |
|
|
|
|
|
|
|
|
Borrowings under credit facilities |
|
|
(3,098) |
|
|
(9,495) |
|
|
Promissory note payable |
|
|
(79) |
|
|
(164) |
|
|
Securitized debt obligations of consolidated VIEs |
|
|
(4,445) |
|
|
(17,619) |
|
|
Borrowings under repurchase agreements |
|
|
(4,658) |
|
|
(16,344) |
|
|
Guaranteed loan financing |
|
|
(3,270) |
|
|
(13,971) |
|
|
Exchangeable senior notes |
|
|
(179) |
|
|
(179) |
|
|
Total interest expense |
|
|
(15,729) |
|
|
(57,772) |
|
|
Net interest income before provision for loan losses |
|
|
17,012 |
|
|
79,251 |
|
|
Provision for loan losses |
|
|
(3,130) |
|
|
(7,819) |
|
|
Net interest income after provision for loan losses |
|
|
13,882 |
|
|
71,432 |
|
|
Other income (expense) |
|
|
|
|
|
|
|
|
Other income |
|
|
5,230 |
|
|
10,565 |
|
|
Servicing income, net of amortization and impairment |
|
|
4,238 |
|
|
8,658 |
|
|
Gain on bargain purchase |
|
|
15,218 |
|
|
15,218 |
|
|
Employee compensation and benefits |
|
|
(10,660) |
|
|
(24,665) |
|
|
Allocated employee compensation and benefits from related party |
|
|
(968) |
|
|
(3,668) |
|
|
Professional fees |
|
|
(4,847) |
|
|
(13,420) |
|
|
Management fees – related party |
|
|
(1,968) |
|
|
(7,432) |
|
|
Loan servicing expense |
|
|
(722) |
|
|
(4,611) |
|
|
Other operating expenses |
|
|
(6,754) |
|
|
(17,939) |
|
|
Total other income (expense) |
|
|
(1,233) |
|
|
(37,294) |
|
|
Net realized gain on financial instruments |
|
|
12,276 |
|
|
15,996 |
|
|
Net unrealized gain on financial instruments |
|
|
9,281 |
|
|
15,081 |
|
|
Net income from continued operations before income tax provisions |
|
|
34,206 |
|
|
65,215 |
|
|
Provision for income taxes |
|
|
(6,325) |
|
|
(9,651) |
|
|
Net income from continuing operations |
|
|
27,881 |
|
|
55,564 |
|
|
Discontinued operations |
|
|
|
|
|
|
|
|
Loss from discontinued operations (including loss on disposal of $2,695) |
|
|
(2,962) |
|
|
(3,538) |
|
|
Income tax benefit |
|
|
1,155 |
|
|
1,380 |
|
|
Income (loss) from discontinued operations |
|
|
(1,807) |
|
|
(2,158) |
|
|
Net income |
|
|
26,074 |
|
|
53,406 |
|
|
Less: Net income attributable to non-controlling interest |
|
|
2,020 |
|
|
4,237 |
|
|
Net income attributable to Sutherland Asset Management Corporation |
|
$ |
24,054 |
|
$ |
49,169 |
|
|
Earnings (loss) per share: |
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
0.89 |
|
$ |
1.93 |
|
|
Discontinued operations |
|
$ |
(0.06) |
|
$ |
(0.08) |
|
|
Basic and diluted weighted-average shares outstanding |
|
|
28,963,695 |
|
|
26,647,981 |
|
SUTHERLAND ASSET MANAGEMENT CORPORATION
Unaudited SEGMENT REPORTING
fOR THE THREE MONTHS ENDED DECEMBER 31, 2016
|
|
|
|
|
SBC |
|
SBA Originations, |
|
Residential |
|
|
|
|||||
|
|
|
Loan |
|
Conventional |
|
Acquisitions, |
|
Mortgage |
|
|
|
|||||
|
(In Thousands) |
|
Acquisitions |
|
Originations |
|
and Servicing |
|
Banking |
|
Consolidated |
|
|||||
|
Interest income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans, held-for-investment |
|
$ |
16,298 |
|
|
205 |
|
|
10,428 |
|
|
— |
|
$ |
26,931 |
|
|
Loans, held at fair value |
|
|
424 |
|
|
2,897 |
|
|
— |
|
|
— |
|
|
3,321 |
|
|
Loans, held for sale, at fair value |
|
|
299 |
|
|
619 |
|
|
— |
|
|
709 |
|
|
1,627 |
|
|
Mortgage backed securities, at fair value |
|
|
862 |
|
|
— |
|
|
— |
|
|
— |
|
|
862 |
|
|
Total interest income |
|
|
17,883 |
|
|
3,721 |
|
|
10,428 |
|
|
709 |
|
|
32,741 |
|
|
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowings under credit facilities |
|
|
(1,901) |
|
|
(129) |
|
|
(511) |
|
|
(557) |
|
|
(3,098) |
|
|
Promissory note payable |
|
|
(79) |
|
|
— |
|
|
— |
|
|
— |
|
|
(79) |
|
|
Securitized debt obligations |
|
|
(4,139) |
|
|
— |
|
|
(306) |
|
|
— |
|
|
(4,445) |
|
|
Borrowings under repurchase agreements |
|
|
(2,817) |
|
|
(1,841) |
|
|
— |
|
|
— |
|
|
(4,658) |
|
|
Guaranteed loan financing |
|
|
— |
|
|
— |
|
|
(3,270) |
|
|
— |
|
|
(3,270) |
|
|
Exchangeable senior notes |
|
|
(179) |
|
|
— |
|
|
— |
|
|
— |
|
|
(179) |
|
|
Total interest expense |
|
|
(9,115) |
|
|
(1,970) |
|
|
(4,087) |
|
|
(557) |
|
|
(15,729) |
|
|
Net interest income before provision for loan losses |
|
|
8,768 |
|
|
1,751 |
|
|
6,341 |
|
|
152 |
|
|
17,012 |
|
|
Provision for loan losses |
|
|
(3,114) |
|
|
(21) |
|
|
5 |
|
|
— |
|
|
(3,130) |
|
|
Net interest income after provision for loan losses |
|
|
5,654 |
|
|
1,730 |
|
|
6,346 |
|
|
152 |
|
|
13,882 |
|
|
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income |
|
|
2,637 |
|
|
903 |
|
|
275 |
|
|
1,415 |
|
|
5,230 |
|
|
Servicing income |
|
|
6 |
|
|
149 |
|
|
1,547 |
|
|
2,536 |
|
|
4,238 |
|
|
Gain on bargain purchase |
|
|
15,218 |
|
|
— |
|
|
— |
|
|
— |
|
|
15,218 |
|
|
Employee compensation and benefits |
|
|
(242) |
|
|
(2,554) |
|
|
(2,286) |
|
|
(5,578) |
|
|
(10,660) |
|
|
Allocated employee compensation and benefits from related party |
|
|
(46) |
|
|
(615) |
|
|
(307) |
|
|
— |
|
|
(968) |
|
|
Professional fees |
|
|
(4,026) |
|
|
(429) |
|
|
(751) |
|
|
359 |
|
|
(4,847) |
|
|
Management fees – related party |
|
|
(1,292) |
|
|
(255) |
|
|
(284) |
|
|
(137) |
|
|
(1,968) |
|
|
Loan servicing expense |
|
|
461 |
|
|
(231) |
|
|
47 |
|
|
(999) |
|
|
(722) |
|
|
Other operating expenses |
|
|
(2,608) |
|
|
(1,736) |
|
|
(739) |
|
|
(1,671) |
|
|
(6,754) |
|
|
Total other income (expense) |
|
|
10,108 |
|
|
(4,768) |
|
|
(2,498) |
|
|
(4,075) |
|
|
(1,233) |
|
|
Net realized gain on financial instruments |
|
|
950 |
|
|
1,067 |
|
|
1,177 |
|
|
9,082 |
|
|
12,276 |
|
|
Net unrealized gain on financial instruments |
|
|
179 |
|
|
5,041 |
|
|
— |
|
|
4,061 |
|
|
9,281 |
|
|
Net income before income tax provisions |
|
|
16,891 |
|
|
3,070 |
|
|
5,025 |
|
|
9,220 |
|
|
34,206 |
|
|
Provision for income taxes |
|
|
111 |
|
|
(901) |
|
|
(1,979) |
|
|
(3,556) |
|
|
(6,325) |
|
|
Net income |
|
$ |
17,002 |
|
$ |
2,169 |
|
$ |
3,046 |
|
$ |
5,664 |
|
$ |
27,881 |
|
|
Loss from discontinued operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,807) |
|
|
Net income |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
26,074 |
|
|
Less: Net income attributable to non-controlling interests |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,020 |
|
|
Net income attributable to Sutherland Asset Management Corporation |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
24,054 |
|
|
Total Assets |
|
$ |
1,484,772 |
|
$ |
170,161 |
|
$ |
597,193 |
|
$ |
353,141 |
|
$ |
2,605,267 |
|