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 SECOND QUARTER 2018 RESULTS
- Second Quarter Net Income of $0.48 per share of common stock -
- Second Quarter Core Earnings of $0.47 per share of common stock -
- Added $543.5 Million of SBC Loans During Second Quarter 2018 -
- Declared and Paid Second Quarter Dividend of $0.40 Per Share -
New York, New York, August 7, 2018 / PRNewswire / – Sutherland Asset Management Corporation (“Sutherland” or the “Company”) (NYSE: SLD) today reported financial results for the quarter ended June 30, 2018.
Second Quarter Highlights:
|
· |
Net income of $15.9 million, or $0.48 per share of common stock |
|
· |
Core earnings of $15.8 million, or $0.47 per share of common stock |
|
· |
Return on Equity of 11.2% |
|
· |
Adjusted net book value of $16.95 per share of common stock as of June 30, 2018 |
|
· |
Originated $352.4 million of small balance commercial (“SBC”) loans |
|
· |
Originated $48.3 million of loans guaranteed by the U.S. Small Business Administration (the “SBA”) under its Section 7(a) loan program |
|
· |
Originated $498.6 million of residential mortgage loans |
|
· |
Acquired $131.5 million of SBC loans and $11.3 million of SBA loans |
|
· |
Completed CLO issuance of $278.3 million of originated transitional loans and sold $217.1 million of senior bonds at a floating rate of LIBOR + 121 basis points |
A summary of Sutherland’s operating results for the quarter ended June 30, 2018 is presented below. Sutherland reported U.S. GAAP net income for the three months ended June 30, 2018 of $15.9 million, or $0.48 per share of common stock, and Core Earnings (a non-GAAP financial measure) of $15.8 million, or $0.47 per share of common stock.
Thomas Capasse, Chairman and Chief Executive Officer commented, “We are pleased with our financial results. For the second quarter in a row, we achieved our stated goal of an ROE of at least 10%. This reflects continued progress in steadily growing our earnings from our stable small balance commercial origination franchise, combined with alpha from our acquisition business. The results this quarter, in particular, begin to demonstrate the earnings potential of our diversified platform. Strong loan origination volumes, portfolio performance and favorable pricing on certain investments helped to offset the decline in the joint venture earnings that drove outperformance last quarter. We believe these results support our strategy of having a multi-pronged platform which provides greater earning diversity compared to single-strategy lenders.”
The Company issued a full detailed presentation of its second quarter 2018 results, which can be viewed in the investor relations section at www.sutherlandam.com.
Use of Non-GAAP Financial Information
In addition to the results presented in accordance with 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 certain mortgage backed securities, unrealized gains (losses) related to residential mortgage servicing rights, and one-time non-recurring gains or losses, such as gains or losses on discontinued operations, bargain purchase gains or merger related 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 June 30, 2018:
|
(In Thousands) |
|
|
Three Months Ended June 30, 2018 |
|
Net Income |
|
$ |
15,884 |
|
Reconciling items: |
|
|
|
|
Unrealized loss on mortgage-backed securities |
|
|
86 |
|
Unrealized (gain) on mortgage servicing rights |
|
|
(253) |
|
Total reconciling items |
|
$ |
(167) |
|
Core earnings before income taxes |
|
$ |
15,717 |
|
Income tax adjustments |
|
|
64 |
|
Core earnings |
|
$ |
15,781 |
Webcast and Earnings Conference Call
Management will host a webcast and conference call on Wednesday, August 8, 2018 at 8:30 am ET to provide a general business update and discuss the financial results for the quarter ended June 30, 2018. The conference call can be accessed by dialing 877-407-0792 (domestic) or 201-689-8263 (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 August 22, 2018. To access the replay, dial 844-512-2921 (domestic) or 412-317-6671 (international). The replay pin number is 13681630.
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 Corporation
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) |
|
June 30, 2018 |
|
December 31, 2017 |
||
|
Assets |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
105,833 |
|
$ |
63,425 |
|
Restricted cash |
|
|
15,108 |
|
|
11,666 |
|
Loans, net (including $34,354 and $188,150 held at fair value) |
|
|
1,035,330 |
|
|
1,017,920 |
|
Loans, held for sale, at fair value |
|
|
188,752 |
|
|
216,022 |
|
Mortgage backed securities, at fair value |
|
|
50,070 |
|
|
39,922 |
|
Loans eligible for repurchase from Ginnie Mae |
|
|
79,623 |
|
|
95,158 |
|
Investment in unconsolidated joint venture |
|
|
41,598 |
|
|
55,369 |
|
Derivative instruments |
|
|
4,758 |
|
|
4,725 |
|
Servicing rights (including $85,554 and $72,295 held at fair value) |
|
|
111,274 |
|
|
94,038 |
|
Receivable from third parties |
|
|
980 |
|
|
6,756 |
|
Other assets |
|
|
56,948 |
|
|
56,840 |
|
Assets of consolidated VIEs |
|
|
1,122,706 |
|
|
861,662 |
|
Total Assets |
|
$ |
2,812,980 |
|
$ |
2,523,503 |
|
Liabilities |
|
|
|
|
|
|
|
Secured borrowings |
|
|
678,858 |
|
|
631,286 |
|
Promissory note |
|
|
5,524 |
|
|
6,107 |
|
Securitized debt obligations of consolidated VIEs, net |
|
|
795,503 |
|
|
598,148 |
|
Convertible notes, net |
|
|
109,484 |
|
|
108,991 |
|
Senior secured notes, net |
|
|
178,718 |
|
|
138,078 |
|
Corporate debt, net |
|
|
48,172 |
|
|
— |
|
Guaranteed loan financing |
|
|
263,920 |
|
|
293,045 |
|
Contingent consideration |
|
|
1,686 |
|
|
10,016 |
|
Liabilities for loans eligible for repurchase from Ginnie Mae |
|
|
79,623 |
|
|
95,158 |
|
Derivative instruments |
|
|
935 |
|
|
282 |
|
Dividends payable |
|
|
13,340 |
|
|
12,289 |
|
Accounts payable and other accrued liabilities |
|
|
72,659 |
|
|
74,636 |
|
Total Liabilities |
|
$ |
2,248,422 |
|
$ |
1,968,036 |
|
Stockholders’ Equity |
|
|
|
|
|
|
|
Common stock, $0.0001 par value, 500,000,000 shares authorized, 32,051,989 and 31,996,440 shares issued and outstanding, respectively |
|
|
3 |
|
|
3 |
|
Additional paid-in capital |
|
|
539,457 |
|
|
539,455 |
|
Retained earnings (deficit) |
|
|
5,870 |
|
|
(3,385) |
|
Total Sutherland Asset Management Corporation equity |
|
|
545,330 |
|
|
536,073 |
|
Non-controlling interests |
|
|
19,228 |
|
|
19,394 |
|
Total Stockholders’ Equity |
|
$ |
564,558 |
|
$ |
555,467 |
|
Total Liabilities and Stockholders’ Equity |
|
$ |
2,812,980 |
|
$ |
2,523,503 |
SUTHERLAND ASSET MANAGEMENT CORPORATION
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
||||||||
|
(In Thousands, except share data) |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
||||
|
Interest income |
|
$ |
41,858 |
|
$ |
33,248 |
|
$ |
79,007 |
|
$ |
67,130 |
|
|
Interest expense |
|
|
(26,407) |
|
|
(17,230) |
|
|
(49,071) |
|
|
(33,673) |
|
|
Net interest income before provision for loan losses |
|
$ |
15,451 |
|
$ |
16,018 |
|
$ |
29,936 |
|
$ |
33,457 |
|
|
Provision for loan losses |
|
|
397 |
|
|
(159) |
|
|
229 |
|
|
(1,391) |
|
|
Net interest income after provision for loan losses |
|
$ |
15,848 |
|
$ |
15,859 |
|
$ |
30,165 |
|
$ |
32,066 |
|
|
Non-interest income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gains on residential mortgage banking activities, net of variable loan expenses |
|
|
9,762 |
|
|
10,985 |
|
|
21,496 |
|
|
21,495 |
|
|
Other income |
|
|
1,826 |
|
|
1,588 |
|
|
3,160 |
|
|
2,429 |
|
|
Income on unconsolidated joint venture |
|
|
1,503 |
|
|
— |
|
|
7,243 |
|
|
— |
|
|
Servicing income, net of amortization and impairment of $1,229 and $2,580 for the three and six months ended June 30, 2018, and $1,511 and $4,276 for the three and six months ended June 30, 2017, respectively |
|
|
6,627 |
|
|
5,631 |
|
|
13,037 |
|
|
10,074 |
|
|
Total non-interest income |
|
$ |
19,718 |
|
$ |
18,204 |
|
|
44,936 |
|
|
33,998 |
|
|
Non-interest expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee compensation and benefits |
|
|
(14,272) |
|
|
(13,451) |
|
|
(29,592) |
|
|
(26,915) |
|
|
Allocated employee compensation and benefits from related party |
|
|
(1,200) |
|
|
(1,008) |
|
|
(2,400) |
|
|
(2,020) |
|
|
Professional fees |
|
|
(2,401) |
|
|
(2,023) |
|
|
(5,049) |
|
|
(4,182) |
|
|
Management fees – related party |
|
|
(2,036) |
|
|
(2,007) |
|
|
(4,049) |
|
|
(3,984) |
|
|
Incentive fees – related party |
|
|
(269) |
|
|
— |
|
|
(676) |
|
|
— |
|
|
Loan servicing expense |
|
|
(3,000) |
|
|
(2,611) |
|
|
(7,093) |
|
|
(4,126) |
|
|
Other operating expenses |
|
|
(8,916) |
|
|
(6,206) |
|
|
(16,927) |
|
|
(11,736) |
|
|
Total non-interest expense |
|
$ |
(32,094) |
|
$ |
(27,306) |
|
$ |
(65,786) |
|
$ |
(52,963) |
|
|
Net realized gain on financial instruments |
|
|
8,620 |
|
|
4,491 |
|
|
20,851 |
|
|
7,456 |
|
|
Net unrealized gain on financial instruments |
|
|
4,457 |
|
|
974 |
|
|
7,464 |
|
|
2,257 |
|
|
Income before provision for income taxes |
|
$ |
16,549 |
|
$ |
12,222 |
|
$ |
37,630 |
|
$ |
22,814 |
|
|
Provision for income taxes |
|
|
(665) |
|
|
(1,069) |
|
|
(3,228) |
|
|
(2,104) |
|
|
Net income |
|
$ |
15,884 |
|
$ |
11,153 |
|
$ |
34,402 |
|
$ |
20,710 |
|
|
Less: Net income attributable to non-controlling interest |
|
|
588 |
|
|
657 |
|
|
1,252 |
|
|
1,358 |
|
|
Net income attributable to Sutherland Asset Management Corporation |
|
$ |
15,296 |
|
$ |
10,496 |
|
$ |
33,150 |
|
$ |
19,352 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share - basic |
|
$ |
0.48 |
|
$ |
0.34 |
|
$ |
1.03 |
|
$ |
0.63 |
|
|
Earnings per common share - diluted |
|
$ |
0.48 |
|
$ |
0.34 |
|
$ |
1.03 |
|
$ |
0.63 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
32,073,717 |
|
|
30,768,900 |
|
|
32,055,110 |
|
|
30,659,958 |
|
|
Diluted |
|
|
32,092,750 |
|
|
30,769,332 |
|
|
32,069,499 |
|
|
30,660,175 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared per share of common stock |
|
$ |
0.40 |
|
$ |
0.37 |
|
$ |
0.77 |
|
$ |
0.74 |
|
SUTHERLAND ASSET MANAGEMENT CORPORATION
UNAUDITED SEGMENT REPORTING
fOR THE three MONTHS ENDED June 30, 2018
|
|
|
|
|
|
|
SBA Originations, |
|
Residential |
|
|
|
|
||||||
|
|
|
Loan |
|
SBC |
|
Acquisitions, |
|
Mortgage |
|
Corporate- |
|
|
||||||
|
(In Thousands) |
|
Acquisitions |
|
Originations |
|
and Servicing |
|
Banking |
|
Other |
|
Consolidated |
||||||
|
Interest income |
|
$ |
12,970 |
|
$ |
18,891 |
|
$ |
8,998 |
|
$ |
999 |
|
$ |
— |
|
$ |
41,858 |
|
Interest expense |
|
|
(6,277) |
|
|
(15,320) |
|
|
(3,972) |
|
|
(838) |
|
|
— |
|
|
(26,407) |
|
Net interest income before provision for loan losses |
|
$ |
6,693 |
|
$ |
3,571 |
|
$ |
5,026 |
|
$ |
161 |
|
$ |
— |
|
$ |
15,451 |
|
Provision for loan losses |
|
|
80 |
|
|
73 |
|
|
244 |
|
|
— |
|
|
— |
|
|
397 |
|
Net interest income after provision for loan losses |
|
$ |
6,773 |
|
$ |
3,644 |
|
$ |
5,270 |
|
$ |
161 |
|
$ |
— |
|
$ |
15,848 |
|
Non-interest income (expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gains on residential mortgage banking activities, net of variable loan expenses |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
9,762 |
|
$ |
— |
|
$ |
9,762 |
|
Other income (loss) |
|
|
111 |
|
|
1,356 |
|
|
291 |
|
|
68 |
|
|
— |
|
|
1,826 |
|
Income from unconsolidated joint venture |
|
|
1,503 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
1,503 |
|
Servicing income |
|
|
5 |
|
|
330 |
|
|
1,464 |
|
|
4,828 |
|
|
— |
|
|
6,627 |
|
Total non-interest income |
|
$ |
1,619 |
|
$ |
1,686 |
|
$ |
1,755 |
|
$ |
14,658 |
|
$ |
— |
|
$ |
19,718 |
|
Employee compensation and benefits |
|
|
(141) |
|
|
(2,285) |
|
|
(3,138) |
|
|
(8,535) |
|
|
(173) |
|
|
(14,272) |
|
Allocated employee compensation and benefits from related party |
|
|
(120) |
|
|
— |
|
|
— |
|
|
— |
|
|
(1,080) |
|
|
(1,200) |
|
Professional fees |
|
|
(150) |
|
|
(325) |
|
|
(524) |
|
|
(115) |
|
|
(1,287) |
|
|
(2,401) |
|
Management fees – related party |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(2,036) |
|
|
(2,036) |
|
Incentive fees – related party |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(269) |
|
|
(269) |
|
Loan servicing expense |
|
|
(764) |
|
|
(886) |
|
|
211 |
|
|
(1,561) |
|
|
— |
|
|
(3,000) |
|
Other operating expenses |
|
|
(1,998) |
|
|
(3,287) |
|
|
(970) |
|
|
(1,981) |
|
|
(680) |
|
|
(8,916) |
|
Total non-interest income (expense) |
|
$ |
(3,173) |
|
$ |
(6,783) |
|
$ |
(4,421) |
|
$ |
(12,192) |
|
$ |
(5,525) |
|
$ |
(32,094) |
|
Net realized (loss) gain on financial instruments |
|
|
(52) |
|
|
3,532 |
|
|
5,140 |
|
|
— |
|
|
— |
|
|
8,620 |
|
Net unrealized gain (loss) on financial instruments |
|
|
848 |
|
|
4,130 |
|
|
(819) |
|
|
298 |
|
|
— |
|
|
4,457 |
|
Net income (loss) before provision for income taxes |
|
$ |
6,015 |
|
$ |
6,209 |
|
$ |
6,925 |
|
$ |
2,925 |
|
$ |
(5,525) |
|
$ |
16,549 |
|
Total Assets |
|
$ |
707,943 |
|
$ |
1,296,872 |
|
$ |
489,938 |
|
$ |
298,027 |
|
$ |
20,200 |
|
$ |
2,812,980 |
SUTHERLAND ASSET MANAGEMENT CORPORATION
UNAUDITED SEGMENT REPORTING
fOR THE six MONTHS ENDED June 30, 2018
|
|
|
|
|
|
|
SBA Originations, |
|
Residential |
|
|
|
|
||||||
|
|
|
Loan |
|
SBC |
|
Acquisitions, |
|
Mortgage |
|
Corporate- |
|
|
||||||
|
(In Thousands) |
|
Acquisitions |
|
Originations |
|
and Servicing |
|
Banking |
|
Other |
|
Consolidated |
||||||
|
Interest income |
|
$ |
22,655 |
|
$ |
36,751 |
|
$ |
17,713 |
|
$ |
1,888 |
|
$ |
— |
|
$ |
79,007 |
|
Interest expense |
|
|
(12,106) |
|
|
(27,790) |
|
|
(7,592) |
|
|
(1,583) |
|
|
— |
|
|
(49,071) |
|
Net interest income before provision for loan losses |
|
$ |
10,549 |
|
$ |
8,961 |
|
$ |
10,121 |
|
$ |
305 |
|
$ |
— |
|
$ |
29,936 |
|
Provision for loan losses |
|
|
(192) |
|
|
109 |
|
|
312 |
|
|
— |
|
|
— |
|
|
229 |
|
Net interest income after provision for loan losses |
|
$ |
10,357 |
|
$ |
9,070 |
|
$ |
10,433 |
|
$ |
305 |
|
$ |
— |
|
$ |
30,165 |
|
Non-interest income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gains on residential mortgage banking activities, net of variable loan expenses |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
21,496 |
|
$ |
— |
|
$ |
21,496 |
|
Other income |
|
|
268 |
|
|
2,615 |
|
|
168 |
|
|
109 |
|
|
— |
|
|
3,160 |
|
Income from unconsolidated joint venture |
|
|
7,243 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
7,243 |
|
Servicing income |
|
|
10 |
|
|
582 |
|
|
2,716 |
|
|
9,729 |
|
|
— |
|
|
13,037 |
|
Total non-interest income |
|
$ |
7,521 |
|
$ |
3,197 |
|
$ |
2,884 |
|
$ |
31,334 |
|
$ |
— |
|
$ |
44,936 |
|
Non-interest expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee compensation and benefits |
|
|
(313) |
|
|
(4,922) |
|
|
(6,393) |
|
|
(17,650) |
|
|
(314) |
|
|
(29,592) |
|
Allocated employee compensation and benefits from related party |
|
|
(240) |
|
|
— |
|
|
— |
|
|
— |
|
|
(2,160) |
|
|
(2,400) |
|
Professional fees |
|
|
(467) |
|
|
(714) |
|
|
(1,003) |
|
|
(224) |
|
|
(2,641) |
|
|
(5,049) |
|
Management fees – related party |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(4,049) |
|
|
(4,049) |
|
Incentive fees – related party |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(676) |
|
|
(676) |
|
Loan servicing expense |
|
|
(1,565) |
|
|
(1,525) |
|
|
287 |
|
|
(4,290) |
|
|
— |
|
|
(7,093) |
|
Other operating expenses |
|
|
(2,816) |
|
|
(5,967) |
|
|
(2,080) |
|
|
(4,681) |
|
|
(1,383) |
|
|
(16,927) |
|
Total non-interest expense |
|
$ |
(5,401) |
|
$ |
(13,128) |
|
$ |
(9,189) |
|
$ |
(26,845) |
|
$ |
(11,223) |
|
$ |
(65,786) |
|
Net realized gain on financial instruments |
|
|
94 |
|
|
12,231 |
|
|
8,526 |
|
|
— |
|
|
— |
|
|
20,851 |
|
Net unrealized gain (loss) on financial instruments |
|
|
801 |
|
|
1,763 |
|
|
(286) |
|
|
5,186 |
|
|
— |
|
|
7,464 |
|
Income before provision for income taxes |
|
$ |
13,372 |
|
$ |
13,133 |
|
$ |
12,368 |
|
$ |
9,980 |
|
$ |
(11,223) |
|
$ |
37,630 |
|
Total Assets |
|
$ |
707,943 |
|
$ |
1,296,872 |
|
$ |
489,938 |
|
$ |
298,027 |
|
$ |
20,200 |
|
$ |
2,812,980 |