Altisource Residential Corporation Reports Second Quarter 2015 Results

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 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

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)
 Three months
ended June 30, 2015
 Three months
ended June 30, 2014
 Six months
ended June 30, 2015
 Six months
ended June 30, 2014
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 
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)
 June 30, 2015 December 31, 2014
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 
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   
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 


Robin N. Lowe
Chief Financial Officer
T: 1-345-815-9919