November 4, 2014

Altisource Residential Corporation Reports Third Quarter 2014 Results

FREDERIKSTED, U.S. Virgin Islands, Nov. 4, 2014 (GLOBE NEWSWIRE) -- Altisource Residential Corporation ("Residential" or the "Company") (NYSE:RESI) announced today financial and operating results for the third quarter of 2014. Net income for the third quarter of 2014 totaled $37.7 million, or $0.66 per diluted share, compared to net income of $13.7 million, or $0.53 per diluted share, for the third quarter of 2013.

Net income for the nine months ended September 30, 2014 totaled $147.4 million, or $2.62 per diluted share, compared to net income of $18.0 million, or $0.98 per diluted share, for the nine months ended September 30, 2013.

Residential also reported estimated taxable income of $38.7 million for the third quarter of 2014 compared to taxable income of $5.0 million for the third quarter of 2013 and $26.5 million for the second quarter of 2014.

Third quarter 2014 highlights:

  • Declared and paid a dividend of 0.55 per share, marking Residential's fourth consecutive quarterly dividend increase.
  • Generated strong estimated taxable income, up sequentially 46% over the second quarter of 2014.
  • Completed the acquisition of 1,289 non-performing mortgage loans having an aggregate market value of underlying properties of $320.7 million.
  • Completed its first non-performing loan securitization transaction, with gross proceeds of approximately $150.0 million.
  • Resolved 1,510 loans, up 31% from the 1,156 loans resolved in the second quarter of 2014.
  • Increased rental portfolio to 306 properties.

Chairman William Erbey stated, "Residential is proud to generate continued attractive returns, resulting in the fourth increase in our quarterly dividend in the past 12 months."

"We are pleased with our successful efforts in increasing loan resolutions by 31%, resulting in strong taxable income for the quarter," said Chief Executive Officer Ashish Pandey.

Webcast and conference call

The Company will host a webcast and conference call on Tuesday, November 4, 2014, at 10:00 a.m. Eastern Time to discuss its financial results for the third quarter of 2014. 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 affordable rental homes to families throughout the United States. It acquires single-family properties primarily through the purchase of distressed mortgage loan portfolios. Residential's strategy is to work with borrowers to modify and refinance loans to keep them in their homes, and it expects to convert the majority of remaining loans into renovated rental properties. 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 Registration Statement on Form 10, its 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 Three months ended Nine months ended Nine months ended
  September 30, 2014 September 30, 2013 September 30, 2014 September 30, 2013
         
Revenues:        
Rental revenues  $ 469  $ 6  $ 719  $ 6
Net unrealized gain on mortgage loans 88,726 17,670 258,898 25,963
Net realized gain on mortgage loans 13,727 1,909 33,867 4,015
Net realized gain on re-performing mortgage loans 302 302
Net realized gain on real estate 3,310 4,544
Interest income 2,568 156 2,757 368
Total revenues 109,102 19,741 301,087 30,352
Expenses:        
Residential property operating expenses 9,247 191 13,550 275
Real estate depreciation and amortization 313 4 464 4
Real estate selling costs and impairment 5,542 210 8,775 210
Mortgage loan servicing costs 21,226 2,154 49,588 3,788
Interest expense 11,699 467 24,352 1,163
General and administrative 1,819 980 5,665 2,480
Related party general and administrative 21,530 2,039 51,629 4,474
Total expenses 71,376 6,045 154,023 12,394
Other income (expense) 13 383 (6)
Income before income taxes 37,726 13,709 147,447 17,952
Income tax expense 50 76
Net income  $ 37,676  $ 13,709  $ 147,371  $ 17,952
         
Earnings per share of common stock - basic:        
Earnings per basic share  $ 0.66  $ 0.55  $ 2.63  $ 1.03
Weighted average common stock outstanding - basic 57,174,150 25,078,727 55,930,010 17,484,598
Earnings per share of common stock - diluted:        
Earnings per diluted share  $ 0.66  $ 0.53  $ 2.62  $ 0.98
Weighted average common stock outstanding - diluted 57,406,325 25,949,293 56,312,104 18,373,205
         
Dividends declared per common share  $ 0.55  $ 0.10  $ 1.48  $ 0.10
         
         
Altisource Residential Corporation
Consolidated Balance Sheets
(In thousands, except share and per share amounts)
(Unaudited)
     
  September 30, 2014 December 31, 2013
Assets:    
Real estate held for use:    
Land  $ 9,865  $ 478
Rental residential properties (net of accumulated depreciation of $482 and $24, respectively) 38,470 3,092
Real estate owned 370,733 32,332
Total real estate held for use, net 419,068 35,902
Real estate assets held for sale 40,985 1,186
Mortgage loans 2,071,505 1,207,163
Mortgage loans held for sale 143,197
Cash and cash equivalents 76,027 115,988
Restricted cash 12,033 5,878
Accounts receivable 874 1,428
Related party receivables 19,254 9,260
Investment in affiliate 18,000 18,000
Deferred leasing and financing costs, net 3,688 2,293
Prepaid expenses and other assets 5,305 1,542
Total assets  $ 2,809,936  $ 1,398,640
Liabilities:    
Repurchase agreements  $ 1,258,329  $ 602,382
Other secured borrowings (including $15,000 repurchase agreement with NewSource) 165,000
Accounts payable and accrued liabilities 14,577 4,952
Related party payables 55,216 5,879
Total liabilities 1,493,122 613,213
Commitments and contingencies    
Equity:    
Common stock, $.01 par value, 200,000,000 authorized shares; 57,186,587 and 42,286,669 shares issued and outstanding, at September 30, 2014 and December 31, 2013, respectively 572 423
Additional paid-in capital 1,227,021 758,584
Retained earnings 89,221 26,420
Total equity 1,316,814 785,427
Total liabilities and equity  $ 2,809,936  $ 1,398,640
     

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 never 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 (unaudited, $ in thousands):

  U.S. GAAP Adjustments(1) Tax
  Three months ended Three months ended Three months ended
  September 30, 2014 September 30, 2014 September 30, 2014
Revenues:      
Rental revenues  $ 469 $ —   $ 469
Net unrealized gain on mortgage loans 88,726 (20,559) 68,167
Net realized gains 17,339 (3,260) 14,079
Interest income, advance recoveries and other 2,568 2,807 5,375
Total revenues 109,102 (21,012) 88,090
Expenses:      
Residential property operating expenses including depreciation 9,560 (1,244) 8,316
Mortgage loan servicing costs 21,226 (13,934) 7,292
General, administrative and other 40,590 (6,783) 33,807
Total expenses 71,376 (21,961) 49,415
Estimated income before income taxes  $ 37,726  $ 949  $ 38,675
       
  Nine months ended Nine months ended Nine months ended
  September 30, 2014 September 30, 2014 September 30, 2014
Revenues:      
Rental revenues  $ 719 $ —   $ 719
Net unrealized gain on mortgage loans 258,898 (107,468) 151,430
Net realized gains 38,713 (7,264) 31,449
Interest income, advance recoveries and other 2,757 8,760 11,517
Total revenues 301,087 (105,972) 195,115
Expenses:      
Residential property operating expenses including depreciation 14,014 (1,997) 12,017
Mortgage loan servicing costs 49,588 (37,127) 12,461
General, administrative and other 90,038 (10,363) 79,675
Total expenses 153,640 (49,487) 104,153
Estimated income before income taxes  $ 147,447 $ (56,485)  $ 90,962
       
_____________
(1) Adjustments between GAAP earnings and estimated taxable REIT income primarily represent temporary timing differences in the recognition of revenue and expense items, as provided above.
       
CONTACT: FOR FURTHER INFORMATION CONTACT:

         Robin N. Lowe

         Chief Financial Officer

         T: 345-815-9919

         E: Robin.Lowe@AltisourceAMC.com

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Source: Altisource Residential Corporation

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