Attached files
| file | filename |
|---|---|
| EX-99.2 - EX-99.2 - Ready Capital Corp | ex-99d2.htm |
| 8-K - 8-K - Ready Capital Corp | f8-k.htm |
Exhibit 99.1
SUTHERLAND ASSET MANAGEMENT CORPORATION ANNOUNCES FIRST QUARTER 2017 RESULTS
- Originated Approximately $640 Million of Loans During First Quarter 2017 -
- Declared and Paid First Quarter 2017 Dividend of $0.37 Per Share -
New York, New York, May 9, 2017 / PRNewswire / – Sutherland Asset Management Corporation (“Sutherland” or the “Company”) (NYSE: SLD) today reported financial results for the quarter ended March 31, 2017.
First Quarter Highlights:
|
· |
Net income of $9.6 million, or $0.29 per share of common stock |
|
· |
Core earnings of $10.9 million, or $0.33 per share of common stock |
|
· |
Net Book Value of $16.73 per share of common stock as of March 31, 2017 |
|
· |
Originated $148.4 million of small balance commercial (“SBC”) loans |
|
· |
Originated $28.5 million of loans guaranteed by the U.S. Small Business Administration (the “SBA”) under its Section 7(a) loan program |
|
· |
Originated $461.0 million of residential mortgage loans |
|
· |
Completed a $75.0 million debt offering in February 2017 with the issuance of 7.5% Senior Secured Notes |
Highlight Subsequent to Quarter End
|
· |
The Company and its origination subsidiary, GMFS, LLC (“GMFS”) entered into a definitive agreement to settle all claims with a counterparty relating to asserted claims against GMFS; the financial impact of the settlement is reflected on the Balance Sheet as of March 31, 2017 and the settlement did not result in a charge to our earnings or otherwise adversely impact our results of operations. |
A summary of Sutherland’s operating results for the quarter ended March 31, 2017 is presented below. Sutherland reported U.S. GAAP net income for the three months ended March 31, 2017 of $9.6 million, or $0.29 per share of common stock, and Core Earnings (a non-GAAP financial measure) of $10.9 million, or $0.33 per share of common stock.
The Company issued a full detailed presentation of its first quarter 2017 results, which can be viewed in the investor relations section at www.sutherlandam.com.
Thomas Capasse, Chairman and Chief Executive Officer commented, “Sutherland continues its efforts to accelerate its pace of originations reaching approximately $640 million in our first quarter. While we would have preferred to produce stronger results in the quarter, we are still overcoming the drag on the cash on our balance sheet, which should dissipate in the coming quarters. With a robust pipeline across our core businesses, SBA, SBC and Residential, along with our proven securitization capabilities, Sutherland is positioned to build on our history of success and to grow our platform in efforts to build value for our shareholders.”
Common Dividends
During the first quarter of 2017, the Company’s Board of Directors declared a quarterly cash dividend of $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 stockholders and OP unit holders of record as of March 31, 2017. The dividend was paid on April 13, 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, 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 March 31, 2017:
|
(In Millions) |
|
|
|
|
Net Income |
|
$ |
9.6 |
|
Reconciling items: |
|
|
|
|
Unrealized (gain) loss on mortgage servicing rights |
|
|
1.1 |
|
Merger transaction costs |
|
|
0.1 |
|
Restricted Stock Unit (RSU) grant to Independent Directors(1) |
|
|
0.3 |
|
Total reconciling items |
|
|
1.5 |
|
Income tax adjustments |
|
|
(0.2) |
|
Core earnings |
|
$ |
10.9 |
|
(1) Represents RSU grant for services rendered to date. |
|
|
|
Webcast and Earnings Conference Call
Management will host a webcast and conference call on Wednesday May 10, 2017 at 8:30 am ET to provide a general business update and discuss the financial results for the quarter ended March 31, 2017. The conference call can be accessed by dialing 888-438-5453 (domestic) or 719-457-2628 (international).
The conference call will also be 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. A replay of the call will also be available on the Company’s website approximately two hours after the live call through May 24, 2017. To access the replay, dial 844-512-2921 (domestic) or 412-317-6671 (international). The replay pin number is 5677994.
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 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
Sutherland Asset Management
212-257-4666
SutherlandIR@waterfallam.com
Additional information can be found on the Company’s website at www.sutherlandam.com.
SUTHERLAND ASSET MANAGEMENT CORPORATION
Unaudited CONSOLIDATED BALANCE SHEETS
|
(In Thousands) |
|
March 31, 2017 |
|
December 31, 2016 |
|
||
|
Assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
40,000 |
|
$ |
59,566 |
|
|
Restricted cash |
|
|
19,772 |
|
|
20,190 |
|
|
Short-term investments |
|
|
239,856 |
|
|
319,984 |
|
|
Loans, held-for-investment (net of allowances for loan losses of $12,610 at March 31, 2017 and $12,721 at December 31, 2016) |
|
|
926,106 |
|
|
929,529 |
|
|
Loans, held at fair value |
|
|
107,691 |
|
|
81,592 |
|
|
Loans, held for sale, at fair value |
|
|
152,231 |
|
|
181,797 |
|
|
Mortgage backed securities, at fair value |
|
|
31,365 |
|
|
32,391 |
|
|
Loans eligible for repurchase from Ginnie Mae |
|
|
117,229 |
|
|
137,986 |
|
|
Derivative instruments, at fair value |
|
|
4,351 |
|
|
5,785 |
|
|
Servicing rights |
|
|
20,372 |
|
|
22,478 |
|
|
Residential mortgage servicing rights, at fair value |
|
|
64,625 |
|
|
61,376 |
|
|
Receivable from third parties |
|
|
111,221 |
|
|
7,220 |
|
|
Other assets |
|
|
60,938 |
|
|
54,277 |
|
|
Assets of consolidated VIEs |
|
|
631,765 |
|
|
691,096 |
|
|
Total Assets |
|
$ |
2,527,522 |
|
$ |
2,605,267 |
|
|
Liabilities: |
|
|
|
|
|
|
|
|
Borrowings under credit facilities |
|
|
266,323 |
|
|
326,610 |
|
|
Promissory note payable |
|
|
7,046 |
|
|
7,378 |
|
|
Securitized debt obligations of consolidated VIEs |
|
|
434,055 |
|
|
492,942 |
|
|
Borrowings under repurchase agreements |
|
|
632,951 |
|
|
600,852 |
|
|
Senior secured note |
|
|
73,390 |
|
|
— |
|
|
Guaranteed loan financing |
|
|
361,916 |
|
|
390,555 |
|
|
Contingent consideration |
|
|
8,841 |
|
|
14,487 |
|
|
Liabilities for loans eligible for repurchase from Ginnie Mae |
|
|
117,229 |
|
|
137,986 |
|
|
Derivative instruments, at fair value |
|
|
619 |
|
|
643 |
|
|
Dividends payable |
|
|
12,162 |
|
|
11,505 |
|
|
Accounts payable and other accrued liabilities |
|
|
63,130 |
|
|
70,207 |
|
|
Total Liabilities |
|
$ |
1,977,662 |
|
$ |
2,053,165 |
|
|
Stockholders’ Equity: |
|
|
|
|
|
|
|
|
Common stock, $0.0001 par value, 500,000,000 shares authorized, 30,549,084 and 30,549,084 shares issued and outstanding, respectively |
|
|
3 |
|
|
3 |
|
|
Additional paid-in capital |
|
|
513,658 |
|
|
513,295 |
|
|
Retained deficit |
|
|
(2,648) |
|
|
(201) |
|
|
Total Sutherland Asset Management Corporation equity |
|
|
511,013 |
|
|
513,097 |
|
|
Non-controlling interests |
|
|
38,847 |
|
|
39,005 |
|
|
Total Stockholders’ Equity |
|
$ |
549,860 |
|
$ |
552,102 |
|
|
Total Liabilities and Stockholders’ Equity |
|
$ |
2,527,522 |
|
$ |
2,605,267 |
|
SUTHERLAND ASSET MANAGEMENT CORPORATION
Unaudited CONSOLIDATED STATEMENTS OF INCOME
|
|
|
Three Months Ended March 31, |
||||
|
(In Thousands, except share data) |
|
2017 |
|
2016 |
||
|
Interest income |
|
|
|
|
|
|
|
Loans, held-for-investment |
|
$ |
30,101 |
|
$ |
32,332 |
|
Loans, held at fair value |
|
|
1,626 |
|
|
3,362 |
|
Loans, held for sale, at fair value |
|
|
1,434 |
|
|
— |
|
Mortgage backed securities, at fair value |
|
|
723 |
|
|
2,173 |
|
Total interest income |
|
|
33,884 |
|
|
37,867 |
|
Interest expense |
|
|
|
|
|
|
|
Securitized debt obligations of consolidated VIEs |
|
|
(5,122) |
|
|
(4,541) |
|
Borrowings under repurchase agreements |
|
|
(4,221) |
|
|
(3,859) |
|
Guaranteed loan financing |
|
|
(3,264) |
|
|
(3,949) |
|
Borrowings under credit facilities |
|
|
(2,976) |
|
|
(1,952) |
|
Senior secured note |
|
|
(790) |
|
|
— |
|
Promissory note payable |
|
|
(68) |
|
|
— |
|
Total interest expense |
|
|
(16,441) |
|
|
(14,301) |
|
Net interest income before provision for loan losses |
|
|
17,443 |
|
|
23,566 |
|
Provision for loan losses |
|
|
(1,232) |
|
|
(2,184) |
|
Net interest income after provision for loan losses |
|
|
16,211 |
|
|
21,382 |
|
Other income (expense) |
|
|
|
|
|
|
|
Other income |
|
|
2,702 |
|
|
2,308 |
|
Servicing income, net of amortization and impairment of $2,765 and $1,212 respectively |
|
|
4,442 |
|
|
1,413 |
|
Employee compensation and benefits |
|
|
(13,464) |
|
|
(5,070) |
|
Allocated employee compensation and benefits from related party |
|
|
(1,012) |
|
|
(900) |
|
Professional fees |
|
|
(2,159) |
|
|
(1,776) |
|
Management fees – related party |
|
|
(1,977) |
|
|
(1,838) |
|
Loan servicing expense |
|
|
(1,513) |
|
|
(876) |
|
Other operating expenses |
|
|
(12,508) |
|
|
(3,863) |
|
Total other income (expense) |
|
|
(25,489) |
|
|
(10,602) |
|
Net realized gain on financial instruments |
|
|
20,261 |
|
|
191 |
|
Net unrealized loss on financial instruments |
|
|
(392) |
|
|
(336) |
|
Income from continued operations before income tax provisions |
|
|
10,591 |
|
|
10,635 |
|
Provision for income taxes |
|
|
(1,034) |
|
|
(1,171) |
|
Net income from continuing operations |
|
|
9,557 |
|
|
9,464 |
|
Discontinued operations |
|
|
|
|
|
|
|
Loss from discontinued operations (including loss on disposal of $267 in in the three months ended March 31, 2016) |
|
|
— |
|
|
(576) |
|
Income tax benefit |
|
|
— |
|
|
225 |
|
Loss from discontinued operations |
|
|
— |
|
|
(351) |
|
Net income |
|
|
9,557 |
|
|
9,113 |
|
Less: Net income attributable to non-controlling interest |
|
|
701 |
|
|
737 |
|
Net income attributable to Sutherland Asset Management Corporation |
|
$ |
8,856 |
|
$ |
8,376 |
|
Basic and diluted earnings (loss) per share: |
|
|
|
|
|
|
|
Continuing operations |
|
$ |
0.29 |
|
$ |
0.34 |
|
Discontinued operations |
|
$ |
— |
|
$ |
(0.01) |
|
Basic and diluted weighted-average shares outstanding |
|
|
30,549,806 |
|
|
25,764,953 |
|
Dividends declared per share of common stock |
|
$ |
0.37 |
|
$ |
— |
SUTHERLAND ASSET MANAGEMENT CORPORATION
Unaudited SEGMENT REPORTING
fOR THE THREE MONTHS ENDED March 31, 2017
|
|
|
|
|
SBC |
|
SBA Originations, |
|
Residential |
|
|
|
|||||
|
|
|
Loan |
|
Conventional |
|
Acquisitions, |
|
Mortgage |
|
|
|
|||||
|
(In Thousands) |
|
Acquisitions |
|
Originations |
|
and Servicing |
|
Banking |
|
Consolidated |
|
|||||
|
Interest income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans, held-for-investment |
|
$ |
18,567 |
|
$ |
1,191 |
|
$ |
10,143 |
|
$ |
200 |
|
$ |
30,101 |
|
|
Loans, held at fair value |
|
|
264 |
|
|
1,362 |
|
|
— |
|
|
— |
|
|
1,626 |
|
|
Loans, held for sale, at fair value |
|
|
421 |
|
|
183 |
|
|
— |
|
|
830 |
|
|
1,434 |
|
|
Mortgage backed securities, at fair value |
|
|
723 |
|
|
— |
|
|
— |
|
|
— |
|
|
723 |
|
|
Total interest income |
|
$ |
19,975 |
|
|
2,736 |
|
$ |
10,143 |
|
$ |
1,030 |
|
$ |
33,884 |
|
|
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securitized debt obligations of consolidated VIEs |
|
|
(4,824) |
|
|
— |
|
|
(298) |
|
|
— |
|
|
(5,122) |
|
|
Borrowings under repurchase agreements |
|
|
(3,016) |
|
|
(1,205) |
|
|
— |
|
|
— |
|
|
(4,221) |
|
|
Guaranteed loan financing |
|
|
— |
|
|
— |
|
|
(3,264) |
|
|
— |
|
|
(3,264) |
|
|
Borrowings under credit facilities |
|
|
(1,676) |
|
|
(189) |
|
|
(425) |
|
|
(686) |
|
|
(2,976) |
|
|
Senior secured note |
|
|
— |
|
|
(790) |
|
|
— |
|
|
— |
|
|
(790) |
|
|
Promissory note payable |
|
|
(68) |
|
|
— |
|
|
— |
|
|
— |
|
|
(68) |
|
|
Total interest expense |
|
$ |
(9,584) |
|
$ |
(2,184) |
|
$ |
(3,987) |
|
$ |
(686) |
|
$ |
(16,441) |
|
|
Net interest income before provision for loan losses |
|
$ |
10,391 |
|
$ |
552 |
|
$ |
6,156 |
|
$ |
344 |
|
$ |
17,443 |
|
|
Provision for loan losses |
|
|
(622) |
|
|
(96) |
|
|
(514) |
|
|
— |
|
|
(1,232) |
|
|
Net interest income after provision for loan losses |
|
$ |
9,769 |
|
$ |
456 |
|
$ |
5,642 |
|
$ |
344 |
|
$ |
16,211 |
|
|
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income |
|
$ |
134 |
|
$ |
554 |
|
$ |
133 |
|
$ |
1,881 |
|
$ |
2,702 |
|
|
Servicing income |
|
|
6 |
|
|
(503) |
|
|
797 |
|
|
4,142 |
|
|
4,442 |
|
|
Employee compensation and benefits |
|
|
(621) |
|
|
(2,026) |
|
|
(2,199) |
|
|
(8,618) |
|
|
(13,464) |
|
|
Allocated employee compensation and benefits from related party |
|
|
(584) |
|
|
(142) |
|
|
(162) |
|
|
(124) |
|
|
(1,012) |
|
|
Professional fees |
|
|
(1,044) |
|
|
(328) |
|
|
(487) |
|
|
(300) |
|
|
(2,159) |
|
|
Management fees – related party |
|
|
(1,140) |
|
|
(277) |
|
|
(317) |
|
|
(243) |
|
|
(1,977) |
|
|
Loan servicing expense |
|
|
(900) |
|
|
(247) |
|
|
1,108 |
|
|
(1,474) |
|
|
(1,513) |
|
|
Other operating expenses |
|
|
(1,593) |
|
|
(1,804) |
|
|
(885) |
|
|
(8,226) |
|
|
(12,508) |
|
|
Total other income (expense) |
|
$ |
(5,742) |
|
$ |
(4,773) |
|
$ |
(2,012) |
|
$ |
(12,962) |
|
$ |
(25,489) |
|
|
Net realized gain on financial instruments |
|
|
592 |
|
|
1,320 |
|
|
1,054 |
|
|
17,295 |
|
|
20,261 |
|
|
Net unrealized gain (loss) on financial instruments |
|
|
605 |
|
|
1,018 |
|
|
211 |
|
|
(2,226) |
|
|
(392) |
|
|
Net income before income tax provisions |
|
$ |
5,224 |
|
$ |
(1,979) |
|
$ |
4,895 |
|
$ |
2,451 |
|
$ |
10,591 |
|
|
Provision for income taxes |
|
|
103 |
|
|
260 |
|
|
(907) |
|
|
(490) |
|
|
(1,034) |
|
|
Net income |
|
$ |
5,327 |
|
$ |
(1,719) |
|
$ |
3,988 |
|
$ |
1,961 |
|
$ |
9,557 |
|
|
Less: Net income attributable to non-controlling interests |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
701 |
|
|
Net income attributable to Sutherland Asset Management Corporation |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
8,856 |
|
|
Total Assets |
|
$ |
1,459,837 |
|
$ |
213,937 |
|
$ |
543,666 |
|
$ |
310,082 |
|
$ |
2,527,522 |
|