Altisource Residential Corporation Reports Fourth Quarter and Full Year 2016 Results; Continues to Meet Growth, Operating and Disposition Objectives
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
- Agreed to two loan sales totaling 2,940 mortgage loans with an unpaid principal balance ("UPB") of
$694.7 millionfor estimated proceeds of approximately 97% of the September 30, 2016balance 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 millionof 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
- Diversified the Company's property management services, adding
Main Street Renewal, LLCas 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 billionat December 31, 2015to 3,474 loans with an aggregate UPB of $823.3 millionat 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
"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,
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
Webcast and Conference Call
The Company expects to host a webcast and conference call on
Residential is focused on providing quality, affordable rental homes to families throughout the United States. Additional information is available at www.altisourceresi.com.
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
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.
|Consolidated Statements of Operations|
|(In thousands, except share and per share amounts)|
|Three months ended ||Three months ended ||Year ended ||Year ended |
|Change in unrealized gain on mortgage loans||(40,603||)||(42,013||)||(195,909||)||88,829|
|Net realized gain on mortgage loans||5,420||10,533||35,760||58,061|
|Net realized gain on mortgage loans held for sale||64||35,927||50,230||36,432|
|Net realized gain on real estate||22,784||14,006||117,617||50,932|
|Residential property operating expenses||18,952||20,376||70,167||66,266|
|Real estate depreciation and amortization||14,237||3,080||27,027||7,472|
|Acquisition fees and costs||1,033||554||9,339||2,292|
|Selling costs and impairment||7,910||37,995||57,913||72,230|
|Mortgage loan servicing costs||6,635||14,357||34,595||62,346|
|General and administrative||1,949||1,735||10,556||10,105|
|Management fees to ||4,941||(2,073||)||19,175||22,966|
|Other (expense) income||—||—||(750||)||3,518|
|Loss before income taxes||(61,201||)||(66,145||)||(227,919||)||(45,939||)|
|Income tax expense||3||13||109||66|
|Loss per share of common stock - basic:|
|Loss per basic share||$||(1.14||)||$||(1.18||)||$||(4.18||)||$||(0.81||)|
|Weighted average common stock outstanding - basic||53,800,457||55,918,072||54,490,979||56,843,028|
|Loss per share of common stock - diluted:|
|Loss per diluted share||$||(1.14||)||$||(1.18||)||$||(4.18||)||$||(0.81||)|
|Weighted average common stock outstanding - diluted||53,800,457||55,918,072||54,490,979||56,843,028|
|Dividends declared per common share||$||0.15||$||0.10||$||0.75||$||1.83|
|Consolidated Balance Sheets|
|(In thousands, except share and per share amounts)|
|Real estate held for use:|
|Rental residential properties||926,320||231,167|
|Real estate owned||289,141||455,483|
|Total real estate held for use||1,436,261||742,996|
|Less: accumulated depreciation||(27,541||)||(7,127||)|
|Total real estate held for use, net||1,408,720||735,869|
|Real estate assets held for sale||133,327||250,557|
|Mortgage loans at fair value||460,444||960,534|
|Mortgage loans held for sale||108,036||317,336|
|Cash and cash equivalents||106,276||116,702|
|Accounts receivable, net||34,931||45,903|
|Related party receivables||—||2,180|
|Prepaid expenses and other assets||10,166||1,126|
|Repurchase and loan agreements||$||1,220,972||$||763,369|
|Other secured borrowings||144,099||502,599|
|Accounts payable and accrued liabilities||51,442||32,448|
|Related party payables||5,266||—|
|Commitments and contingencies||—||—|
|Common stock, ||537||556|
|Additional paid-in capital||1,182,245||1,202,418|
|Total liabilities and equity||$||2,284,847||$||2,450,773|
FOR FURTHER INFORMATION CONTACT:
Robin N. LoweChief Financial Officer T: 1-345-815-9919 E: Robin.Lowe@AltisourceAMC.com
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