EX-99.1 2 ex-99d1.htm EX-99.1 sld_Ex99_1

Picture 6

Exhibit 99.1

 

SUTHERLAND ASSET MANAGEMENT CORPORATION ANNOUNCES FIRST QUARTER 2018 RESULTS

-  First Quarter Net Income of $0.56 per share of common stock      -

-  First Quarter Core Earnings of $0.47 per share of common stock   -

-  Added $402.1 Million of SBC Loans During First Quarter 2018      -

-  Declared and Paid First Quarter Dividend of $0.37 Per Share      -

 

New York, New York, May 8, 2018 / PRNewswire / – Sutherland Asset Management Corporation (“Sutherland” or the “Company”) (NYSE: SLD) today reported financial results for the quarter ended March 31, 2018.      

First Quarter Highlights:

·

Net income of $18.5 million, or $0.56 per share of common stock

·

Core earnings of $15.5 million, or $0.47 per share of common stock

·

Adjusted net book value of $16.88 per share of common stock as of March 31, 2018

·

Originated $211.6 million of small balance commercial (“SBC”) loans

·

Originated $48.3 million of loans guaranteed by the U.S. Small Business Administration (the “SBA”) under its Section 7(a) loan program

·

Originated $439.0 million of residential mortgage loans

·

Acquired $142.2 million of SBC loans

Highlights Subsequent to Quarter End:

·

Issued $50.0 million in aggregate principal of 6.50% Senior Notes due 2021 

 

A summary of Sutherland’s operating results for the quarter ended March 31, 2018 is presented below. Sutherland reported U.S. GAAP net income for the three months ended March 31, 2018 of $18.5 million, or $0.56 per share of common stock, and Core Earnings (a non-GAAP financial measure) of $15.5 million, or $0.47 per share of common stock.

 

Thomas Capasse, Chairman and Chief Executive Officer commented, “We are pleased with our team’s ability to deploy capital by growing new loan originations and identifying accretive portfolio acquisition opportunities with the potential to generate outsized returns, which we benefitted from this quarter.  As a result, our quarterly per share earnings increased by $0.18 per share over the fourth quarter.  As we move further into 2018, we continue to be focused on growing our core origination platform while sourcing opportunistic acquisitions.”

 

The Company issued a full detailed presentation of its first quarter 2018 results, which can be viewed in the investor relations section at www.sutherlandam.com.

Use of Non-GAAP Financial Information

In addition to the results presented in accordance with U.S. GAAP, this press release includes Core Earnings which is a non-U.S. GAAP financial measure. The Company defines Core Earnings as net income adjusted for unrealized or realized gains (losses) related to certain mortgage backed securities, unrealized gains (losses) related to residential mortgage servicing rights, and one-time non-recurring gains or losses, such as gains or losses on discontinued operations, bargain purchase gains or merger related expenses.

The Company believes that providing investors with this non-U.S. GAAP financial information, in addition to the related U.S. GAAP measures, gives investors greater transparency into the information used by management in its financial and operational decision-making. However, because Core Earnings is an incomplete measure of the Company's financial performance and involves differences from net income computed in accordance with U.S. GAAP, it should be considered along with, but not as an alternative to, the Company's net income computed in accordance with U.S. GAAP as a measure of the Company's financial performance. In addition, because not all companies use identical calculations, the Company's presentation of Core Earnings may not be comparable to other similarly-titled measures of other companies.

 

The following table reconciles net income computed in accordance with U.S. GAAP to Core Earnings for the three months ended March 31, 2018:  

 

 

 

 

(In Thousands)

    

 

Three Months Ended March 31, 2018

Net Income

 

$

18,518

Reconciling items:

 

 

 

Unrealized loss on mortgage-backed securities

 

 

79

Unrealized (gain) on mortgage servicing rights

 

 

(4,155)

Total reconciling items

 

$

(4,076)

Core earnings before income taxes

 

$

14,442

     Income tax adjustments

 

 

1,047

Core earnings

 

$

15,489

Webcast and Earnings Conference Call

Management will host a webcast and conference call on Wednesday, May 9, 2018 at 8:30 am ET to provide a general business update and discuss the financial results for the quarter ended March 31, 2018.  The conference call can be accessed by dialing 888-289-0438 (domestic) or 323-794-2423 (international).

 

The conference call will also be available in the Investor Relations section of the Company’s website at www.sutherlandam.com. To listen to a live broadcast, go to the site at least 15 minutes prior to the scheduled start time in order to register, download and install any necessary audio software.  A replay of the call will also be available on the Company’s website approximately two hours after the live call through May 23, 2018.  To access the replay, dial 844-512-2921 (domestic) or 412-317-6671 (international). The replay pin number is 5676498.

Safe Harbor Statement

This press release contains statements that constitute "forward-looking statements," as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and such statements are intended to be covered by the safe harbor provided by the same. These statements are based on management's current expectations and beliefs and are subject to a number of trends and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements; the Company can give no assurance that its expectations will be attained. Factors that could cause actual results to differ materially from the Company's expectations include, but are not limited to, applicable regulatory changes; general volatility of the capital markets; changes in the Company’s investment objectives and business strategy; the availability of financing on acceptable terms or at all; the availability, terms and deployment of capital; the availability of suitable investment opportunities; changes in the interest rates or the general economy; increased rates of default and/or decreased recovery rates on investments; changes in interest rates, interest rate spreads, the yield curve or prepayment rates; changes in prepayments of Company’s assets; the degree and nature of competition, including competition for the Company's target assets; and other factors, including those set forth in the Risk Factors section of the Company's most recent Annual Report on Form 10-K filed with the SEC, and other reports filed by the Company with the SEC, copies of which are available on the SEC's website, www.sec.gov. The Company undertakes no obligation to update these statements for revisions or changes after the date of this release, except as required by law.

 

 

 

 

 

Contact

Investor Relations
Sutherland Asset Management Corporation
212-257-4666
SutherlandIR@waterfallam.com

 

Additional information can be found on the Company’s website at www.sutherlandam.com. 

 

SUTHERLAND ASSET MANAGEMENT CORPORATION

UNAUDITED CONSOLIDATED BALANCE SHEETS

 

 

 

 

 

 

 

 

(In Thousands)

    

March 31, 2018

    

December 31, 2017

Assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

86,773

 

$

63,425

Restricted cash

 

 

13,964

 

 

11,666

Loans, net (including $40,430 and $188,150 held at fair value)

 

 

1,057,034

 

 

1,017,920

Loans, held for sale, at fair value

 

 

160,999

 

 

216,022

Mortgage backed securities, at fair value

 

 

47,181

 

 

39,922

Loans eligible for repurchase from Ginnie Mae

 

 

81,484

 

 

95,158

Investment in unconsolidated joint venture

 

 

50,229

 

 

55,369

Derivative instruments

 

 

5,022

 

 

4,725

Servicing rights (including $81,591 and $72,295 held at fair value)

 

 

104,613

 

 

94,038

Receivable from third parties

 

 

11,064

 

 

6,756

Other assets

 

 

53,592

 

 

56,840

Assets of consolidated VIEs

 

 

968,999

 

 

861,662

Total Assets

 

$

2,640,954

 

$

2,523,503

Liabilities

 

 

 

 

 

 

Secured borrowings

 

 

657,233

 

 

631,286

Promissory note

 

 

5,883

 

 

6,107

Securitized debt obligations of consolidated VIEs, net

 

 

679,871

 

 

598,148

Convertible notes, net

 

 

109,226

 

 

108,991

Senior secured notes, net

 

 

178,688

 

 

138,078

Guaranteed loan financing

 

 

278,500

 

 

293,045

Contingent consideration

 

 

10,732

 

 

10,016

Liabilities for loans eligible for repurchase from Ginnie Mae

 

 

81,484

 

 

95,158

Derivative instruments

 

 

756

 

 

282

Dividends payable

 

 

12,335

 

 

12,289

Accounts payable and other accrued liabilities

 

 

64,490

 

 

74,636

Total Liabilities

 

$

2,079,198

 

$

1,968,036

Stockholders’ Equity

 

 

 

 

 

 

Common stock, $0.0001 par value, 500,000,000 shares authorized, 31,996,440 and 31,996,440 shares issued and outstanding, respectively

 

 

 3

 

 

 3

Additional paid-in capital

 

 

539,457

 

 

539,455

Retained earnings (deficit)

 

 

2,559

 

 

(3,385)

Total Sutherland Asset Management Corporation equity

 

 

542,019

 

 

536,073

Non-controlling interests

 

 

19,737

 

 

19,394

Total Stockholders’ Equity

 

$

561,756

 

$

555,467

Total Liabilities and Stockholders’ Equity

 

$

2,640,954

 

$

2,523,503

 

 

SUTHERLAND ASSET MANAGEMENT CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31, 

(In Thousands, except share data)

    

2018

    

2017

Interest income

 

$

37,150

 

$

33,884

Interest expense

 

 

(22,666)

 

 

(16,441)

Net interest income before provision for loan losses

 

$

14,484

 

$

17,443

Provision for loan losses

 

 

(167)

 

 

(1,232)

Net interest income after provision for loan losses

 

$

14,317

 

$

16,211

Non-interest income

 

 

 

 

 

 

Gains on residential mortgage banking activities, net of variable loan expenses

 

 

11,734

 

 

10,509

Other income

 

 

1,334

 

 

840

Income on unconsolidated joint venture

 

 

5,739

 

 

 —

Servicing income, net of amortization and impairment of $1,350 and $2,765

 

 

6,410

 

 

4,442

Total non-interest income

 

$

25,217

 

$

15,791

Non-interest expense

 

 

 

 

 

 

Employee compensation and benefits

 

 

(15,320)

 

 

(13,464)

Allocated employee compensation and benefits from related party

 

 

(1,200)

 

 

(1,012)

Professional fees

 

 

(2,648)

 

 

(2,159)

Management fees – related party

 

 

(2,013)

 

 

(1,977)

Incentive fees – related party

 

 

(408)

 

 

 —

Loan servicing expense

 

 

(4,093)

 

 

(1,513)

Other operating expenses

 

 

(8,011)

 

 

(5,534)

Total non-interest expense

 

$

(33,693)

 

$

(25,659)

Net realized gain on financial instruments

 

 

12,232

 

 

2,966

Net unrealized gain on financial instruments

 

 

3,008

 

 

1,282

Income before provision for income taxes

 

$

21,081

 

$

10,591

Provision for income taxes

 

 

(2,563)

 

 

(1,034)

Net income

 

$

18,518

 

$

9,557

Less: Net income attributable to non-controlling interest

 

 

664

 

 

701

Net income attributable to Sutherland Asset Management Corporation

 

$

17,854

 

$

8,856

 

 

 

 

 

 

 

Earnings per common share - basic

 

$

0.56

 

$

0.29

Earnings per common share - diluted

 

$

0.56

 

$

0.29

 

 

 

 

 

 

 

Weighted-average shares outstanding

 

 

 

 

 

 

Basic

 

 

32,036,504

 

 

30,549,806

Diluted

 

 

32,045,844

 

 

30,549,806

 

 

 

 

 

 

 

Dividends declared per share of common stock

 

$

0.37

 

$

0.37

 

 

 

 

 

SUTHERLAND ASSET MANAGEMENT CORPORATION

UNAUDITED SEGMENT REPORTING

fOR THE three MONTHS ENDED march 31, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

    

 

    

SBA Originations,

    

Residential

    

 

    

 

 

 

Loan

 

SBC

 

Acquisitions,

 

Mortgage

 

Corporate-

 

 

(In Thousands)

 

Acquisitions

 

Originations

 

and Servicing

 

Banking

 

Other

 

Consolidated

Interest income

 

$

9,688

 

$

17,858

 

$

8,715

 

$

889

 

$

 —

 

$

37,150

Interest expense

 

 

(5,831)

 

 

(12,470)

 

 

(3,620)

 

 

(745)

 

 

 —

 

 

(22,666)

Net interest income before provision for loan losses

 

$

3,857

 

$

5,388

 

$

5,095

 

$

144

 

$

 —

 

$

14,484

Provision for loan losses

 

 

(272)

 

 

36

 

 

69

 

 

 —

 

 

 —

 

 

(167)

Net interest income after provision for loan losses

 

$

3,585

 

$

5,424

 

$

5,164

 

$

144

 

$

 —

 

$

14,317

Non-interest income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gains on residential mortgage banking activities, net of variable loan expenses

 

$

 —

 

$

 —

 

$

 —

 

$

11,734

 

$

 —

 

$

11,734

Other income

 

 

156

 

 

1,259

 

 

(123)

 

 

42

 

 

 —

 

 

1,334

Income from unconsolidated joint venture

 

 

5,739

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

5,739

Servicing income

 

 

 5

 

 

252

 

 

1,252

 

 

4,901

 

 

 —

 

 

6,410

Total non-interest income

 

$

5,900

 

$

1,511

 

$

1,129

 

$

16,677

 

$

 —

 

$

25,217

Non-interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Employee compensation and benefits

 

 

(173)

 

 

(2,637)

 

 

(3,255)

 

 

(9,114)

 

 

(141)

 

 

(15,320)

Allocated employee compensation and benefits from related party

 

 

(120)

 

 

 —

 

 

 —

 

 

 —

 

 

(1,080)

 

 

(1,200)

Professional fees

 

 

(317)

 

 

(389)

 

 

(479)

 

 

(109)

 

 

(1,354)

 

 

(2,648)

Management fees – related party

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(2,013)

 

 

(2,013)

Incentive fees – related party

 

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

(408)

 

 

(408)

Loan servicing expense

 

 

(808)

 

 

(631)

 

 

76

 

 

(2,730)

 

 

 —

 

 

(4,093)

Other operating expenses

 

 

(818)

 

 

(2,679)

 

 

(1,110)

 

 

(2,700)

 

 

(704)

 

 

(8,011)

Total non-interest expense

 

$

(2,236)

 

$

(6,336)

 

$

(4,768)

 

$

(14,653)

 

$

(5,700)

 

$

(33,693)

Net realized gain on financial instruments

 

 

148

 

 

8,699

 

 

3,385

 

 

 —

 

 

 —

 

 

12,232

Net unrealized gain (loss) on financial instruments

 

 

(46)

 

 

(2,367)

 

 

533

 

 

4,888

 

 

 —

 

 

3,008

Income before provision for income taxes

 

$

7,351

 

$

6,931

 

$

5,443

 

$

7,056

 

$

(5,700)

 

$

21,081

Total Assets

 

$

609,997

 

$

1,223,608

 

$

503,512

 

$

283,000

 

$

20,837

 

$

2,640,954