Press Release

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 -

Company Release - 5/8/2018 5:06 PM ET

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

 

Cision View original content:http://www.prnewswire.com/news-releases/sutherland-asset-management-corporation-announces-first-quarter-2018-results-300644945.html

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