Altisource Residential Corporation Reports Third Quarter 2013 Results

Altisource Residential Corporation Reports Third Quarter 2013 Results

FREDERIKSTED, U.S. Virgin Islands, Oct. 22, 2013 (GLOBE NEWSWIRE) -- Altisource Residential Corporation ("Residential" or the "Company") (NYSE:RESI) announced today financial and operating results for the third quarter of 2013. Net income for the third quarter of 2013 totaled $13.7 million or $0.53 per share based on a weighted average of 25.9 million shares outstanding. 

Net income for the nine months ended September 30, 2013 totaled $18.0 million or $0.98 per share based on a weighted average of 18.4 million shares outstanding. 

Third quarter business performance highlights:

  • We acquired three portfolios of non-performing residential mortgage loans ("NPLs") having an aggregate market value of underlying properties of $712 million.
  • We entered into two master repurchase agreements with major financial institutions which have provided $325 million of additional borrowing capacity to finance the acquisition and ownership of sub-performing and non-performing residential mortgage loans and REO properties.
  • We declared and paid a dividend of $0.10 per share to our stockholders.
  • We priced our second accretive equity offering which closed on October 1, 2013, raising a total of $350 million. 

Chairman William Erbey stated, "I am pleased with our solid third quarter performance which underscores the strength of our differentiated business model. We believe that Residential's acquisition cost, efficient operating structure and low cost of capital provide it with a competitive advantage in the single-family rental REIT space." 

"The portfolio growth during the quarter and the additional accretive capital we raised are important steps in the successful execution of our business model," said Chief Executive Officer Ashish Pandey. "We continue to focus on growing our portfolio and resolving our loans which we believe will drive profitability."

Webcast and conference call

The Company will host a webcast and conference call on Tuesday, October 22, 2013, at 10 A.M Eastern Time to discuss its financial results for the third quarter of 2013. The conference call will be webcast live over the internet from the Company's website at and can be accessed by clicking on the "Shareholder" section.

About Residential

Residential is focused on providing affordable rental homes to families throughout the United States. It acquires single-family properties 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 convert the majority of loans into renovated rental properties. 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 achieve its business and strategy and 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 Registration Statements on Form S-11, its Quarterly Report on Form 10-Q for the first quarter of 2013 and 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
September 30, 2013
Nine months ended
September 30, 2013
Rental revenues and net gain on investments:    
Rental revenues $ 6 $ 6
Net unrealized gain on mortgage loans 17,670 25,963
Net realized gain on mortgage loans 1,909 4,015
Total rental revenues and net gain on investments 19,585 29,984
Residential rental property operating expenses 191 275
Real estate depreciation and amortization 4 4
Mortgage loan servicing costs 2,154 3,788
Interest expense 467 1,163
Related party general and administrative 2,039 4,474
General and administrative 1,190 2,690
Total expenses 6,045 12,394
Other income 169 362
Net income $ 13,709 $ 17,952
Earnings per share of common stock — basic:    
Earnings per basic share $ 0.55 $ 1.03
Weighted average common stock outstanding — basic 25,078,727 17,484,598
Earnings per share of common stock — diluted:    
Earnings per diluted share $ 0.53 $ 0.98
Weighted average common stock outstanding — diluted 25,949,293 18,373,205
Dividend declared per common share $ 0.10 $ 0.10
Altisource Residential Corporation
Consolidated Balance Sheets
(In thousands, except share and per share amounts)
 September 30, 2013December 31, 2012
Real estate assets, net:    
Land $ 224 $ —
Rental residential properties, net 1,128
Real estate owned 14,408
Real estate assets held for sale 1,074
Mortgage loans 641,903
Cash and cash equivalents 98,252 100,005
Restricted cash 3,092
Related party receivables 6,272
Deferred leasing and financing costs, net 1,744
Prepaid expenses and other assets 911 6
Total assets 769,008 100,011
Repurchase agreements 338,800
Accounts payable and accrued liabilities 2,408 46
Related party payables 2,746 54
Total liabilities 343,954 100
Commitments and contingencies    
Common stock, $.01 par value, 200,000,000 authorized shares; 25,087,236 and 7,810,708 shares issued and outstanding, respectively 251 78
Additional paid-in capital 409,449 99,922
Retained earnings/(accumulated deficit) 15,354 (89)
Total equity 425,054 99,911
Total liabilities and equity $ 769,008 $ 100,011

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: 

 Three months ended
September 30, 2013
Nine months ended
September 30, 2013
 (unaudited, $ in thousands)
Net income $ 13,709 $ 17,952
GAAP/tax differences:    
Gain on mortgage loans    
GAAP unrealized gain on mortgage loans (17,670) (25,963)
Tax gain on mortgage loans - modifications 3,802 5,560
Tax gain on mortgage loans - conversions 2,071 3,666
Net GAAP/tax difference from gain on mortgage loans (11,797) (16,737)
Capitalized advances 1,569 2,813
Interest income, advance recoveries and other items 1,504 2,381
Total GAAP/tax differences (8,724) (11,543)
Total estimated REIT taxable income $ 4,985 $ 6,409
CONTACT: Kenneth D. Najour

         Chief Financial Officer

         T: 561-682-8947