Press Release

Sutherland Asset Management Corporation Announces Third Quarter 2017 Results

- Quarterly Net Income of $0.37 per share of common stock -

- Quarterly Core Earnings of $0.38 per share of common stock -

- Originated $808.6 Million of Loans During Third Quarter 2017 -

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

Company Release - 11/8/2017 8:06 PM ET

NEW YORK, Nov. 8, 2017 /PRNewswire/ -- Sutherland Asset Management Corporation ("Sutherland" or the "Company") (NYSE: SLD) today reported financial results for the quarter ended September 30, 2017.   

Third Quarter Highlights:

  • Net income of $12.4 million, or $0.37 per share of common stock
  • Core earnings of $12.9 million, or $0.38 per share of common stock
  • Adjusted net book value of $16.68 per share of common stock as of September 30, 2017
  • Originated $278.8 million of small balance commercial ("SBC") loans
  • Originated $38.9 million of loans guaranteed by the U.S. Small Business Administration (the "SBA") under its Section 7(a) loan program
  • Originated $490.9 million of residential mortgage loans
  • Completed the securitization of $154.9 million of acquired SBC owner-occupied loans and sold $139.4 million of the senior bonds at a weighted average pass-through rate of 3.3%
  • Completed issuance of a Collateralized Loan Obligation ("CLO") of $243.8 million of originated transitional loans and sold $198.8 million of the senior bonds at a floating rate of LIBOR plus 139 basis points.

A summary of Sutherland's operating results for the quarter ended September 30, 2017 is presented below. Sutherland reported U.S. GAAP net income for the three months ended September 30, 2017 of $12.4 million, or $0.37 per share of common stock, and Core Earnings (a non-GAAP financial measure) of $12.9 million, or $0.38 per share of common stock.

Thomas Capasse, Chairman and Chief Executive Officer commented, "We are quite energized by the team's ability to originate over $800 million in the third quarter which resulted in quarterly per share earnings growth of 9%.  Our ongoing effort to grow our platform and strengthen our balance sheet was supported by a successful Convertible Note offering, which further strengthened our funding mix.  As we look to the remainder of 2017 and beyond, we remain committed to executing on our strategic objectives to raise funds in an accretive manner to continue to expand our platform and build long term value for our shareholders." 

Common Dividends

During the third quarter of 2017, the Company's Board of Directors declared a quarterly cash dividend of $0.37 per share of common stock and operating partnership unit ("OP unit") in its operating partnership subsidiary for the quarter ended September 30, 2017 to common stockholders and OP unit holders of record as of September 30, 2017.  The dividend was paid on October 20, 2017.  

The Company issued a full detailed presentation of its third quarter 2017 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 accounting principles generally accepted in the United States ("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 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 September 30, 2017:

 





(In Millions)



Three Months Ended

September 30, 2017

Net Income


$

12.4

Reconciling items:




Unrealized (gain) loss on mortgage-backed securities



(0.2)

Unrealized (gain) loss on mortgage servicing rights



1.7

Total reconciling items



1.5

      Income tax adjustments



(1.0)

Core earnings


$

12.9





 

Webcast and Earnings Conference Call

Management will host a webcast and conference call on Thursday, November 9, 2017 at 8:30 am ET to provide a general business update and discuss the financial results for the quarter ended September 30, 2017.  The conference call can be accessed by dialing 877-545-1402 (domestic) or 719-457-2716 (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 November 23, 2017.  To access the replay, dial 844-512-2921 (domestic) or 412-317-6671 (international). The replay pin number is 1816994.

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
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)


September 30, 2017


December 31, 2016

Assets







Cash and cash equivalents


$

70,590


$

59,566

Restricted cash



16,057



20,190

Short-term investments



99,994



319,984

Loans, net (including $158,393 and $81,592 held at fair value)



892,896



1,011,121

Loans, held for sale, at fair value



200,318



181,797

Mortgage backed securities, at fair value



41,371



32,391

Loans eligible for repurchase from Ginnie Mae



101,408



137,986

Derivative instruments



4,131



5,785

Servicing rights (including $68,815 and $61,376 held at fair value)



89,372



83,854

Receivable from third parties



6,756



7,220

Other assets



35,356



54,277

Assets of consolidated VIEs



944,894



691,096

Total Assets


$

2,503,143


$

2,605,267

Liabilities







Secured short-term borrowings



522,767



927,462

Promissory note, net



6,494



7,378

Securitized debt obligations of consolidated VIEs, net



680,282



492,942

Convertible note, net



109,414



Senior secured note, net



138,074



Guaranteed loan financing



313,388



390,555

Contingent consideration



9,037



14,487

Liabilities for loans eligible for repurchase from Ginnie Mae



101,408



137,986

Derivative instruments



358



643

Dividends payable



12,289



11,505

Accounts payable and other accrued liabilities



54,579



70,207

Total Liabilities


$

1,948,090


$

2,053,165

Stockholders' Equity







Common stock, $0.0001 par value, 500,000,000 shares authorized, 31,996,440 and 30,549,084
shares issued and outstanding, respectively



3



3

Additional paid-in capital



539,664



513,295

Deficit



(3,952)



(201)

Total Sutherland Asset Management Corporation equity



535,715



513,097

Non-controlling interests



19,338



39,005

Total Stockholders' Equity


$

555,053


$

552,102

Total Liabilities and Stockholders' Equity


$

2,503,143


$

2,605,267

 

 

SUTHERLAND ASSET MANAGEMENT CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME




Three Months Ended September 30, 


Nine Months Ended September 30, 

(In Thousands, except share data)


2017


2016


2017


2016

Interest income


$

35,038


$

31,890


$

102,169


$

104,282

Interest expense



(19,908)



(14,097)



(53,579)



(42,043)

Net interest income before provision for loan losses


$

15,130


$

17,793


$

48,590


$

62,239

Provision for loan losses



(466)



(488)



(1,857)



(4,689)

Net interest income after provision for loan losses


$

14,664


$

17,305


$

46,733


$

57,550

Non-interest income (expense)













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



10,735





32,229



Other income



1,853



1,729



4,281



5,335

Servicing income, net of amortization and impairment of $976 and $5,252
for the three and nine months ended September 30, 2017, and $1,850 and
$6,079 for the three and nine months ended September 30, 2016,
respectively



6,134



1,661



16,208



4,420

Employee compensation and benefits



(13,715)



(4,822)



(40,630)



(14,005)

Allocated employee compensation and benefits from related party



(990)



(900)



(3,010)



(2,700)

Professional fees



(2,151)



(3,120)



(6,334)



(8,573)

Management fees – related party



(2,034)



(1,793)



(6,018)



(5,464)

Loan servicing expense



(3,388)



(1,830)



(7,513)



(3,889)

Other operating expenses



(7,447)



(3,373)



(19,183)



(11,185)

Total non-interest income (expense)


$

(11,003)


$

(12,448)


$

(29,970)


$

(36,061)

Net realized gain on financial instruments



5,695



2,454



13,151



3,720

Net unrealized gain on financial instruments



2,678



3,557



4,933



5,800

Income from continued operations before provision for income (taxes) benefit


$

12,034


$

10,868


$

34,847


$

31,009

Provision for income (taxes) benefit



340



(1,297)



(1,763)



(3,326)

Net income from continuing operations


$

12,374


$

9,571


$

33,084


$

27,683

Discontinued operations













Loss from discontinued operations (including gain on disposal of $267 in
the nine months ended September 30, 2016)









(576)

Income tax benefit









225

Loss from discontinued operations









(351)

Net income


$

12,374


$

9,571


$

33,084


$

27,332

Less: Net income attributable to non-controlling interest



533



777



1,891



2,217

Net income attributable to Sutherland Asset Management Corporation


$

11,841


$

8,794


$

31,193


$

25,115














Earnings (loss) per basic common share













Continuing operations


$

0.37


$

0.34


$

1.00


$

0.98

Discontinued operations









(0.01)

Earnings per basic common share


$

0.37


$

0.34


$

1.00


$

0.97














Earnings (loss) per diluted common share













Continuing operations


$

0.37


$

0.34


$

1.00


$

0.98

Discontinued operations


$


$


$


$

(0.01)

Earnings per diluted common share


$

0.37


$

0.34


$

1.00


$

0.97














Weighted-average shares outstanding













Basic



32,026,494



25,870,485



31,120,476



25,870,485

Diluted



32,028,980



25,870,485



31,121,449



25,870,485














Dividends declared per share of common stock


$

0.37


$

0.45


$

1.11


$

0.90

 

 

SUTHERLAND ASSET MANAGEMENT CORPORATION

UNAUDITED SEGMENT REPORTING

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2017








SBA Originations,


Residential







Loan


SBC


Acquisitions,


Mortgage


Corporate-



(In Thousands)


Acquisitions


Originations


and Servicing


Banking


Other


Consolidated

Interest income


$

7,800


$

17,258


$

9,039


$

941


$


$

35,038

Interest expense



(3,937)



(10,252)



(3,795)



(797)



(1,127)



(19,908)

Net interest income before provision for loan losses


$

3,863


$

7,006


$

5,244


$

144


$

(1,127)


$

15,130

Provision for loan losses



(1,063)



168



429







(466)

Net interest income after provision for loan losses


$

2,800


$

7,174


$

5,673


$

144


$

(1,127)


$

14,664

Non-interest income (expense)



















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


$


$


$


$

10,735


$


$

10,735

Other income (loss)



402



961



444



46





1,853

Servicing income



4



166



1,556



4,408





6,134

Employee compensation and benefits



(106)



(1,879)



(2,862)



(8,735)



(133)



(13,715)

Allocated employee compensation and benefits from related party



(99)









(891)



(990)

Professional fees



(343)



(446)



(534)



(264)



(564)



(2,151)

Management fees – related party











(2,034)



(2,034)

Loan servicing expense



(787)



(661)



(228)



(1,712)





(3,388)

Other operating expenses



(1,467)



(2,750)



(993)



(1,677)



(560)



(7,447)

Total non-interest income (expense)


$

(2,396)


$

(4,609)


$

(2,617)


$

2,801


$

(4,182)


$

(11,003)

Net realized (loss) gain on financial instruments



(377)



2,768



3,304







5,695

Net unrealized gain (loss) on financial instruments



173



3,807



414



(1,728)



12



2,678

Net income (loss) before provision for income taxes


$

200


$

9,140


$

6,774


$

1,217


$

(5,297)


$

12,034

Provision for income taxes





(352)



(2,169)



(282)



3,143



340

Net income (loss)


$

200


$

8,788


$

4,605


$

935


$

(2,154)


$

12,374

Total Assets


$

426,699


$

1,152,153


$

525,862


$

298,435


$

99,994


$

2,503,143

 

 

SUTHERLAND ASSET MANAGEMENT CORPORATION

UNAUDITED SEGMENT REPORTING

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2017








SBA Originations,


Residential







Loan


SBC


Acquisitions,


Mortgage


Corporate-



(In Thousands)


Acquisitions


Originations


and Servicing


Banking


Other


Consolidated

Interest income


$

28,242


$

41,972


$

28,935


$

3,020


$


$

102,169

Interest expense



(12,472)



(23,798)



(12,120)



(2,310)



(2,879)



(53,579)

Net interest income before provision for loan losses


$

15,770


$

18,174


$

16,815


$

710


$

(2,879)


$

48,590

Provision for loan losses



(1,787)



84



(154)







(1,857)

Net interest income after provision for loan losses


$

13,983


$

18,258


$

16,661


$

710


$

(2,879)


$

46,733

Non-interest income (expense)



















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


$


$


$


$

32,229


$


$

32,229

Other income (loss)



769



2,708



706



98





4,281

Servicing income



37



(197)



3,598



12,770





16,208

Employee compensation and benefits



(386)



(5,713)



(7,457)



(26,359)



(715)



(40,630)

Allocated employee compensation and benefits from
related party



(301)









(2,709)



(3,010)

Professional fees



(868)



(1,110)



(1,499)



(753)



(2,104)



(6,334)

Management fees – related party











(6,018)



(6,018)

Loan servicing expense



(2,155)



(1,724)



1,359



(4,993)





(7,513)

Other operating expenses



(2,871)



(6,486)



(2,951)



(5,116)



(1,759)



(19,183)

Total non-interest income (expense)


$

(5,775)


$

(12,522)


$

(6,244)


$

7,876


$

(13,305)


$

(29,970)

Net realized (loss) gain on financial instruments



(106)



6,082



6,714





461



13,151

Net unrealized gain (loss) on financial instruments



1,647



6,671



625



(3,953)



(57)



4,933

Net income (loss) before provision for income taxes


$

9,749


$

18,489


$

17,756


$

4,633


$

(15,780)


$

34,847

Provision for income taxes





(10)



(4,999)



(1,252)



4,498



(1,763)

Net income (loss)


$

9,749


$

18,479


$

12,757


$

3,381


$

(11,282)


$

33,084

Total Assets


$

426,699


$

1,152,153


$

525,862


$

298,435


$

99,994


$

2,503,143

 

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SOURCE Sutherland Asset Management Corporation

Contact

To contact Sutherland Asset Management Corporation please use the information below: 


Waterfall Asset Management, LLC 
1140 Avenue of the Americas, 7th Floor
New York, NY 10036