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Altisource Residential Corporation Reports Second Quarter 2015 Results

CHRISTIANSTED, U.S. Virgin Islands, Aug. 10, 2015 (GLOBE NEWSWIRE) -- Altisource Residential Corporation (“Residential” or the “Company”) (NYSE:RESI) today announced financial and operating results for the second quarter of 2015.

Second Quarter 2015 Highlights:

  • Estimated taxable income for the second quarter of 2015 increased by 42% to $37.7 million, from $26.5 million for the second quarter of 2014.
  • Declared and paid a $0.55 per share dividend.
  • Agreed to purchase up to 1,325 single-family rental homes from Invitation Homes for an aggregate purchase price of $112.6 million. Transaction expected to close in August 2015.
  • Completed a third non-performing loan securitization in June 2015.
  • Transferred servicing of 4,342 loans with an aggregate UPB of $1.2 billion to our two new mortgage servicers.
  • Sold 189 re-performing mortgage loans for total proceeds of $34.6 million.
  • Asset management fees reduced to $5.2 million in the second quarter of 2015 from $15.5 million in the second quarter of 2014.
  • Initiated a program to acquire rental properties on a one-by-one basis using a proprietary valuation model. Expect to commence purchases in the third quarter of 2015.

“In the second quarter of 2015, we took crucial steps to diversify Residential’s acquisition strategies to anticipate and respond to changing market conditions and grow our single-family rental portfolio,” said Chief Executive Officer George G. Ellison. “I believe these critical achievements position Residential to be one of the preeminent single-family rental players in the industry. We are also undertaking grass root efforts to offer quality, affordable rental homes to working class families while offering incentives and beneficial programs for our renters to improve their credit ratings and provide with them opportunities to improve their living situations.”

Second Quarter 2015 Financial Results

Net income totaled $13.1 million, or $0.23 per diluted share, for the second quarter of 2015 compared to net income of $67.8 million, or $1.18 per diluted share, for the second quarter of 2014. Net income for the six months ended June 30, 2015 totaled $25.5 million, or $0.44 per diluted share, compared to net income of $109.7 million, or $1.97 per diluted share, for the six months ended June 30, 2014.

Webcast and conference call

The Company will host a webcast and conference call on Monday, August 10, 2015, at 8:30 a.m. Eastern Time to discuss its financial results for the second quarter of 2015. The conference call will be webcast live over the internet from the Company’s website at www.altisourceresi.com and can be accessed by clicking on the “Shareholders” link.

About Residential

Residential is focused on providing quality, affordable rental homes to families throughout the United States. Additional information is available at www.altisourceresi.com.

Forward-looking statements

This press release contains forward-looking statements that involve a number of risks and uncertainties. Those forward-looking statements include all statements that are not historical fact, including statements about management’s beliefs and expectations. Forward-looking statements are based on management’s beliefs as well as assumptions made by and information currently available to management. Because such statements are based on expectations as to future economic performance and are not statements of historical fact, actual results may differ materially from those projected. Residential undertakes no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise. The risks and uncertainties to which forward-looking statements are subject include, but are not limited to: Residential’s ability to implement its business plan; Residential’s ability to leverage strategic relationships on an efficient and cost-effective basis; its ability to compete; general economic and market conditions; governmental regulations, taxes and policies; availability of adequate and timely sources of liquidity and financing and other risks and uncertainties detailed in the “Forward-Looking Statements,” “Risk Factors” and other sections of Residential’s Annual Report on Form 10-K, its quarterly reports on Form 10-Q and its other filings with the Securities and Exchange Commission.

Altisource Residential Corporation
Consolidated Statements of Operations
(In thousands, except share and per share amounts)
(Unaudited)
Three months
ended June 30, 2015
Three months
ended June 30, 2014
Six months
ended June 30, 2015
Six months
ended June 30, 2014
Revenues:
Rental revenues$2,140 $181 $3,540 $250
Net unrealized gain on mortgage loans42,209 105,042 103,343 170,172
Net realized gain on mortgage loans19,272 10,819 34,654 20,140
Net realized gain on re-performing mortgage loans254 405
Net realized gain on real estate12,404 1,234 23,012 1,234
Interest income240 81 480 189
Total revenues76,519 117,357 165,434 191,985
Expenses:
Residential property operating expenses16,857 3,253 29,316 4,303
Real estate depreciation and amortization1,344 103 2,342 151
Real estate selling costs and impairment8,839 2,879 23,530 3,233
Mortgage loan servicing costs16,246 16,925 34,512 28,362
Interest expense13,398 6,945 25,041 12,653
General and administrative1,569 2,808 6,350 3,846
Related party general and administrative5,151 17,467 20,801 30,099
Total expenses63,404 50,380 141,892 82,647
Other income 383 2,000 383
Income before income taxes13,115 67,360 25,542 109,721
Income tax expense (benefit)23 (422) 26 26
Net income$13,092 $67,782 $25,516 $109,695
Earnings per share of common stock – basic:
Earnings per basic share$0.23 $1.19 $0.45 $1.98
Weighted average common stock outstanding – basic57,208,273 57,138,695 57,204,602 55,297,630
Earnings per share of common stock – diluted:
Earnings per diluted share$0.23 $1.18 $0.44 $1.97
Weighted average common stock outstanding – diluted57,407,845 57,401,953 57,407,253 55,754,685
Dividends declared per common share$0.55 $0.45 $1.18 $0.93


Altisource Residential Corporation
Consolidated Balance Sheets
(In thousands, except share and per share amounts)
(Unaudited)
June 30, 2015 December 31, 2014
Assets:
Real estate held for use:
Land$23,743 $14,424
Rental residential properties (net of accumulated depreciation of $3,351 and $1,062, respectively)97,533 60,908
Real estate owned548,137 457,045
Total real estate held for use, net669,413 532,377
Real estate assets held for sale134,027 92,230
Mortgage loans at fair value1,716,489 1,959,044
Mortgage loans held for sale5,977 12,535
Cash and cash equivalents70,502 66,166
Restricted cash18,459 13,282
Accounts receivable45,981 10,313
Related party receivables 17,491
Investment in affiliate18,000 18,000
Deferred leasing and financing costs, net8,605 4,251
Prepaid expenses and other assets6,184 373
Total assets$2,693,637 $2,726,062
Liabilities:
Repurchase and loan and security agreements$810,236 $1,015,000
Other secured borrowings (including $14,991 repurchase agreement with NewSource at June 30, 2015 and December 31, 2014)538,916 339,082
Accounts payable and accrued liabilities54,247 11,678
Related party payables5,163 33,391
Total liabilities1,408,562 1,399,151
Commitments and contingencies
Equity:
Common stock, $.01 par value, 200,000,000 authorized shares; 57,216,166 and 57,192,212 shares issued and outstanding, at June 30, 2015 and December 31, 2014, respectively572 572
Additional paid-in capital1,227,246 1,227,091
Retained earnings57,257 99,248
Total equity1,285,075 1,326,911
Total liabilities and equity$2,693,637 $2,726,062

Non-GAAP measures - Estimated REIT taxable income

Estimated REIT taxable income is a measure that we use in connection with monitoring our compliance with certain REIT requirements. Estimated REIT taxable income should not be considered as an alternative to net income or net income per share as indicators of our operating performance.

The following table is a reconciliation of U.S. GAAP net income to estimated REIT taxable income ($ in thousands):

Three months ended
June 30, 2015
Six months ended
June 30, 2015
Income before income taxes$13,115 $25,542
Add net loss of taxable REIT subsidiaries9,119 14,066
Adjusted net income22,234 39,608
Book to tax differences:
Net unrealized gain on mortgage loans5,598 (7,051)
Net realized gain on mortgage loans(1,411) (4,255)
Net realized gain on re-performing mortgage loans194 112
Net realized gain on real estate sold(13,175) (23,974)
Interest income, advances and recoveries8,432 14,614
Depreciation(254) 100
Valuations and impairments3,743 14,451
Mortgage loan servicing cost12,301 25,461
Acquisition fees and due diligence(92) 36
Other book/tax differences, net97 223
Estimated REIT taxable income$37,667 $59,325


FOR FURTHER INFORMATION CONTACT: Robin N. Lowe Chief Financial Officer T: 1-345-815-9919 E: Robin.Lowe@AltisourceAMC.com

Source:Altisource Residential Corporation