March 1, 2017

Altisource Residential Corporation Reports Fourth Quarter and Full Year 2016 Results; Continues to Meet Growth, Operating and Disposition Objectives

CHRISTIANSTED, U.S. Virgin Islands, March 01, 2017 (GLOBE NEWSWIRE) -- Altisource Residential Corporation ("RESI" or the "Company") (NYSE:RESI) today announced financial and operating results for the fourth quarter and full year of 2016.

Fourth Quarter 2016 Highlights and Recent Developments

  • Executed a non-binding letter of intent to purchase up to 3,500 rental homes with seller financing from two entities sponsored by Amherst Holdings, LLC, with the first closing expected to occur in the first quarter of 2017.1
  • Successfully integrated the recently purchased portfolio of 4,262 rental properties into RESI's growing single-family rental business.
  • Increased fourth quarter 2016 rental revenue by 154% over the third quarter to $24.3 million.
  • Agreed to two loan sales totaling 2,940 mortgage loans with an unpaid principal balance ("UPB") of $694.7 million for estimated proceeds of approximately 97% of the September 30, 2016 balance sheet carrying value. Upon completion, the sales are expected to represent the divestiture of substantially all of RESI's mortgage loan portfolio.2
  • Sold 468 non-rental REO properties.
  • Completed repurchases of $2.8 million of stock, bringing total repurchases under the repurchase program to $46.5 million.

Full Year 2016 Highlights

  • Increased rental portfolio to 8,603 homes as of December 31, 2016, an increase of 215% over the 2,732 properties in the rental portfolio as of December 31, 2015.
  • Increased rental revenue by 267% over the 2015 fiscal year to $48.6 million.
  • Diversified the Company's property management services, adding Main Street Renewal, LLC as an additional nationwide property manager for a large portion of the Company's single-family rental portfolio.
  • Reduced the Company's mortgage loan portfolio by 54% from 7,036 loans with an aggregate UPB of $1.8 billion at December 31, 2015 to 3,474 loans with an aggregate UPB of $823.3 million at December 31, 2016.
  • Sold 2,668 non-rental REO properties compared to the 1,321 REO properties sold in 2015.
  • Continued to optimize funding by obtaining longer term financing and higher advance rates.

________________
1 Transaction is subject to negotiation of definitive transaction agreements and RESI's completion of due diligence.
2 First sale closed in January 2017. Second sale is subject to negotiation of definitive purchase agreement and buyer's completion of due diligence.

"During the fourth quarter and throughout the entire 2016 fiscal year, we continued to execute on our objectives. We have achieved tremendous growth in both our rental portfolio and in rental revenues, all while continuing to improve our rental property operating metrics," said Chief Executive Officer, George Ellison. "We have successfully integrated the 4,262 high-yielding rental properties we acquired on September 30, 2016 and accelerated the sale of our non-rental assets to facilitate the acquisition of additional targeted rental assets. We had a strong 2016 and have had a promising start to 2017. We are excited to continue our impressive growth and to leverage our cost-effective property management relationships to generate robust returns and long-term value for our stockholders."

Strategic Update

RESI continues to deliver on its commitment to be one of the top single-family rental REITs serving working class American families and their communities. Its strategy is to build long-term shareholder value through the creation of a large portfolio of single-family rental homes that are targeted to operate at a best-in-class yield. The Company believes there is a compelling opportunity in the single-family rental market and that it has implemented the right strategic plan to capitalize on the sustained growth in single-family rental demand. The Company targets the moderately-priced single-family home market that, in the Company's view, offers optimal yield opportunities.

In order to achieve this goal, RESI has focused on (i) identifying and acquiring high-yielding single-family rental properties in pools or on a targeted, individual basis; (ii) working with our property managers to implement a cost-effective and scalable property management structure; (iii) selling certain mortgage loans and non-rental REO properties that do not meet the Company's targeted rental criteria, which generates cash that the Company may reinvest in acquiring additional single-family rental properties; and (iv) resolving the remaining mortgage loans in its portfolio, including the conversion of a portion of the underlying properties to rental units. Through these avenues, the Company can capitalize on attractive single-family rental economics and continue its transition to a 100% single-family rental REIT, which will position the Company to provide a consistent return on equity and long-term growth for its investors.

Fourth Quarter and Full Year 2016 Financial Results

Net loss for the fourth quarter of 2016 totaled $61.2 million, or $1.14 per diluted share, compared to net loss of $66.2 million, or $1.18 per diluted share, for the fourth quarter of 2015. Net loss for the year ended December 31, 2016 totaled $228.0 million, or $4.18 per diluted share, compared to net loss of $46.0 million, or $0.81 per diluted share, for the year ended December 31, 2015.

Webcast and Conference Call

The Company expects to host a webcast and conference call on Wednesday, March 1, 2017, at 8:30 a.m. Eastern Time to discuss its financial results for the fourth quarter and full year of 2016. 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 within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, regarding management's beliefs, estimates, projections, anticipations and assumptions with respect to, among other things, the Company's financial results, future operations, business plans and investment strategies as well as industry and market conditions. These statements may be identified by words such as "anticipate," "intend," "expect," "may," "could," "should," "would," "plan," "estimate," "seek," "believe" and other expressions or words of similar meaning. We caution that forward-looking statements are qualified by the existence of certain risks and uncertainties that could cause actual results and events to differ materially from what is contemplated by the forward-looking statements. Factors that could cause the Company's actual results to differ materially from these forward-looking statements may include, without limitation, our ability to implement our business strategy; our ability to make distributions to our stockholders; the impact of changes to the supply of, value of and the returns on sub-performing and non-performing loans and single-family rental properties; our ability to successfully modify or otherwise resolve sub-performing and non-performing loans; our ability to convert loans to single-family rental properties and acquire single-family rental properties generating attractive returns; our ability to complete potential transactions in accordance with anticipated terms and on a timely basis or at all; our ability to predict costs; difficulties in identifying single-family properties to acquire; our ability to integrate newly acquired rental assets into the portfolio; our ability to effectively compete with competitors; our ability to apply the net proceeds from financings in target assets in a timely manner; changes in interest rates and the market value of the collateral underlying our sub-performing and nonperforming loan portfolios or acquired single-family properties; our ability to obtain and access financing arrangements on favorable terms, or at all; our ability to retain the exclusive engagement of Altisource Asset Management Corporation; the failure of Altisource Portfolio Solutions S.A. and its affiliates to effectively perform its obligations under various agreements with us; the failure of Main Street Renewal, LLC to effectively perform under its property management agreement with us; the failure of our servicers to effectively perform their servicing obligations under their servicing agreements with us; our failure to qualify or maintain qualification as a REIT; our failure to maintain our exemption from registration under the Investment Company Act of 1940, as amended; the impact of adverse real estate, mortgage or housing markets; the impact of adverse legislative or regulatory tax changes and other risks and uncertainties detailed in the "Risk Factors" and other sections described from time to time in the Company's current and future filings with the Securities and Exchange Commission. In addition, financial risks such as liquidity, interest rate and credit risks could influence future results. The foregoing list of factors should not be construed as exhaustive.

The statements made in this press release are current as of the date of this press release only. The Company undertakes no obligation to publicly update or revise any forward-looking statements or any other information contained herein, whether as a result of new information, future events or otherwise.

Altisource Residential Corporation
Consolidated Statements of Operations
(In thousands, except share and per share amounts)
        
 Three months ended December 31, 2016 Three months ended December 31, 2015 Year ended December 31, 2016 Year ended December 31, 2015
Revenues:       
Rental revenues$24,321  $5,672  $48,563  $13,233 
Change in unrealized gain on mortgage loans(40,603) (42,013) (195,909) 88,829 
Net realized gain on mortgage loans5,420  10,533  35,760  58,061 
Net realized gain on mortgage loans held for sale64  35,927  50,230  36,432 
Net realized gain on real estate22,784  14,006  117,617  50,932 
Interest income72  16  497  611 
Total revenues12,058  24,141  56,758  248,098 
Expenses:       
Residential property operating expenses18,952  20,376  70,167  66,266 
Real estate depreciation and amortization14,237  3,080  27,027  7,472 
Acquisition fees and costs1,033  554  9,339  2,292 
Selling costs and impairment7,910  37,995  57,913  72,230 
Mortgage loan servicing costs6,635  14,357  34,595  62,346 
Interest expense16,808  14,217  53,868  53,694 
Share-based compensation794  45  1,287  184 
General and administrative1,949  1,735
  10,556  10,105 
Management fees to AAMC, net of reimbursements4,941  (2,073) 19,175  22,966 
Total expenses73,259  90,286  283,927  297,555 
Other (expense) income    (750) 3,518 
Loss before income taxes(61,201) (66,145) (227,919) (45,939)
Income tax expense3  13  109  66 
Net loss$(61,204) $(66,158) $(228,028) $(46,005)
        
Loss per share of common stock — basic:       
Loss per basic share$(1.14) $(1.18) $(4.18) $(0.81)
Weighted average common stock outstanding — basic53,800,457  55,918,072  54,490,979  56,843,028 
Loss per share of common stock — diluted:       
Loss per diluted share$(1.14) $(1.18) $(4.18) $(0.81)
Weighted average common stock outstanding — diluted53,800,457  55,918,072  54,490,979  56,843,028 
        
Dividends declared per common share$0.15  $0.10  $0.75  $1.83 


Altisource Residential Corporation
Consolidated Balance Sheets
(In thousands, except share and per share amounts)
    
 December 31, 2016 December 31, 2015
Assets:   
Real estate held for use:   
Land$220,800  $56,346 
Rental residential properties926,320  231,167 
Real estate owned289,141  455,483 
Total real estate held for use1,436,261  742,996 
Less: accumulated depreciation(27,541) (7,127)
Total real estate held for use, net1,408,720  735,869 
Real estate assets held for sale133,327  250,557 
Mortgage loans at fair value460,444  960,534 
Mortgage loans held for sale108,036  317,336 
Cash and cash equivalents106,276  116,702 
Restricted cash22,947  20,566 
Accounts receivable, net34,931  45,903 
Related party receivables  2,180 
Prepaid expenses and other assets10,166  1,126 
Total assets$2,284,847  $2,450,773 
Liabilities:   
Repurchase and loan agreements$1,220,972  $763,369 
Other secured borrowings144,099  502,599 
Accounts payable and accrued liabilities51,442  32,448 
Related party payables5,266   
Total liabilities1,421,779  1,298,416 
Commitments and contingencies   
Equity:   
Common stock, $0.01 par value, 200,000,000 authorized shares; 53,667,631 and 55,581,005 shares issued and outstanding as of December 31, 2016 and 2015, respectively537  556 
Additional paid-in capital1,182,245  1,202,418 
Accumulated deficit(319,714) (50,617)
Total equity863,068  1,152,357 
Total liabilities and equity$2,284,847  $2,450,773 
        

 

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


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