UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 22, 2014
ALTISOURCE RESIDENTIAL CORPORATION
(Exact name of Registrant as specified in its charter)
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| | | | |
MARYLAND | | 001-35657 | | 46-0633510 |
(State or other jurisdiction of incorporation or organization) | | (Commission File Number) | | (I.R.S. Employer Identification No.) |
c/o Altisource Asset Management Corporation
402 Strand Street
Frederiksted, United States Virgin Islands 00840-3531
(Address of principal executive offices including zip code)
(340) 692-1055
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition
On July 22, 2014, Altisource Residential Corporation issued a press release announcing financial results for its quarter ended June 30, 2014. A copy of the press release is attached hereto as Exhibit 99.1.
The information in this Item 2.02, including the information in Exhibit 99.1, is furnished solely pursuant to Item 2.02 of this Form 8-K. Consequently, it is not deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities of that Section. It may only be incorporated by reference in another filing under the
Securities Exchange Act of 1934 or Securities Act of 1933 if such subsequent filing specifically references this Item 2.02 of this Form 8-K.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits.
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| | |
Exhibit No. | | Description |
Exhibit 99.1 | | Press Release of Altisource Residential Corporation dated July 22, 2014 |
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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| | |
| | Altisource Residential Corporation |
July 22, 2014 | By: | /s/ Stephen H. Gray |
| | Stephen H. Gray General Counsel and Secretary |
Exhibit 99.1
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FOR IMMEDIATE RELEASE | |
| FOR FURTHER INFORMATION CONTACT: Kenneth D. Najour Chief Financial Officer T: 340-713-7722 E: Kenneth.Najour@AltisourceAMC.com |
Altisource Residential Corporation Reports Second Quarter 2014 Results
FREDERIKSTED, U.S. Virgin Islands, July 22, 2014 (GLOBE NEWSWIRE) - Altisource Residential Corporation (“Residential” or the “Company”) (NYSE: RESI) announced today financial and operating results for the second quarter of 2014. Net income for the second quarter of 2014 totaled $67.8 million, or $1.18 per diluted share, compared to net income of $5.2 million, or $0.26 per diluted share, for the second quarter of 2013.
Net income for the six months ended June 30, 2014 totaled $109.7 million, or $1.97 per diluted share, compared to net income of $4.2 million, or $0.29 per diluted share, for the six months ended June 30, 2013.
Residential also reported estimated taxable income of $26.5 million for the second quarter of 2014 compared to taxable income of $3.3 million for the second quarter of 2013 and $25.8 million for the first quarter of 2014.
Second quarter 2014 highlights:
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• | Agreed to acquire an aggregate of 4,374 non-performing and re-performing mortgage loans having an aggregate market value of underlying properties of $1.23 billion. |
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• | Declared and paid a dividend of $0.45 per share, marking Residential’s third consecutive quarterly dividend increase. |
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• | Resolved 1,156 loans, up from 822 loans in the first quarter of 2014. |
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• | Increased rental portfolio to 142 properties, well in excess of target of 100 rental properties by June 30, 2014. |
Chairman William Erbey stated, “Residential had a very strong quarter, marking the third consecutive increase in our quarterly dividend.”
“We are very pleased with our second quarter results and the execution of our strategic plan. We continue to be focused on acquiring portfolios that grow our rental portfolio while delivering attractive returns to shareholders,” said Chief Executive Officer Ashish Pandey.
Webcast and conference call
The Company will host a webcast and conference call on Tuesday, July 22, 2014, at 10:00 a.m. Eastern Time to discuss its financial results for the second quarter of 2014. The conference call will be webcast live over the internet from the Company’s website at www.altisourceresi.com and can be accessed by clicking on the “Shareholders” link.
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 it expects to convert the majority of remaining loans into renovated rental properties. Additional information is available at www.altisourceresi.com.
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 Registration Statement on Form 10, its 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)
(Unaudited)
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| | | | | | | | | | | | | | | |
| Three months ended June 30, 2014 | | Three months ended June 30, 2013 | | Six months ended June 30, 2014 | | Six months ended June 30, 2013 |
| | | | | | | |
Rental revenues and net gain on investments: | | | | | | | |
Rental revenues | $ | 181 |
| | $ | — |
| | $ | 250 |
| | $ | — |
|
Net unrealized gain on mortgage loans | 105,042 |
| | 7,165 |
| | 170,172 |
| | 8,293 |
|
Net realized gain on mortgage loans | 10,819 |
| | 1,719 |
| | 20,140 |
| | 2,106 |
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Total rental revenues and net gain on investments | 116,042 |
| | 8,884 |
| | 190,562 |
| | 10,399 |
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Expenses: | | | | | | | |
Residential property operating expenses | 3,253 |
| | 84 |
| | 4,303 |
| | 84 |
|
Real estate depreciation and amortization | 103 |
| | — |
| | 151 |
| | — |
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Mortgage loan servicing costs | 16,925 |
| | 1,242 |
| | 28,362 |
| | 1,634 |
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Interest expense | 6,945 |
| | 654 |
| | 12,653 |
| | 696 |
|
General and administrative | 5,687 |
| | 714 |
| | 7,079 |
| | 1,701 |
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Related party general and administrative | 17,467 |
| | 1,156 |
| | 30,099 |
| | 2,234 |
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Total expenses | 50,380 |
| | 3,850 |
| | 82,647 |
| | 6,349 |
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Other income | 1,698 |
| | 193 |
| | 1,806 |
| | 193 |
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Income before income taxes | 67,360 |
| | 5,227 |
| | 109,721 |
| | 4,243 |
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Income tax (benefit) expense | (422 | ) | | — |
| | 26 |
| | — |
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Net income | $ | 67,782 |
| | $ | 5,227 |
| | $ | 109,695 |
| | $ | 4,243 |
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| | | | | | | |
Earnings per share of common stock – basic: | | | | | | | |
Earnings per basic share | $ | 1.19 |
| | $ | 0.27 |
| | $ | 1.98 |
| | $ | 0.31 |
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Weighted average common stock outstanding – basic | 57,138,695 |
| | 19,374,601 |
| | 55,297,630 |
| | 13,624,599 |
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Earnings per share of common stock – diluted: | | | | | | | |
Earnings per diluted share | $ | 1.18 |
| | $ | 0.26 |
| | $ | 1.97 |
| | $ | 0.29 |
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Weighted average common stock outstanding – diluted | 57,401,953 |
| | 20,259,184 |
| | 55,754,685 |
| | 14,522,227 |
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| | | | | | | |
Dividends declared per common share | $ | 0.45 |
| | $ | — |
| | $ | 0.93 |
| | $ | — |
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Altisource Residential Corporation
Consolidated Balance Sheets
(In thousands, except share and per share amounts)
(Unaudited)
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| | | | | | | |
| June 30, 2014 | | December 31, 2013 |
Assets: | | | |
Real estate held for use: | | | |
Land | $ | 3,875 |
| | $ | 478 |
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Rental residential properties, net | 14,917 |
| | 3,092 |
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Real estate owned | 231,013 |
| | 32,332 |
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Total real estate held for use, net | 249,805 |
| | 35,902 |
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Real estate assets held for sale | 27,572 |
| | 1,186 |
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Mortgage loans | 2,024,028 |
| | 1,207,163 |
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Mortgage loans held for investment | 144,009 |
| | — |
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Cash and cash equivalents | 130,758 |
| | 115,988 |
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Restricted cash | 10,269 |
| | 5,878 |
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Accounts receivable | 631 |
| | 1,428 |
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Related party receivables | 12,608 |
| | 9,260 |
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Investment in affiliate | 18,000 |
| | 18,000 |
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Deferred leasing and financing costs, net | 3,457 |
| | 2,293 |
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Prepaid expenses and other assets | 260 |
| | 1,542 |
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Total assets | $ | 2,621,397 |
| | $ | 1,398,640 |
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Liabilities: | | | |
Repurchase agreements | $ | 1,271,483 |
| | $ | 602,382 |
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Accounts payable and accrued liabilities | 7,459 |
| | 4,952 |
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Related party payables | 31,947 |
| | 5,879 |
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Total liabilities | 1,310,889 |
| | 613,213 |
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Commitments and contingencies | — |
| | — |
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Equity: | | | |
Common stock, $.01 par value, 200,000,000 authorized shares; 57,162,071 and 42,286,669 shares issued and outstanding, at June 30, 2014 and December 31, 2013, respectively | 572 |
| | 423 |
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Additional paid-in capital | 1,226,939 |
| | 758,584 |
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Retained earnings | 82,997 |
| | 26,420 |
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Total equity | 1,310,508 |
| | 785,427 |
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Total liabilities and equity | $ | 2,621,397 |
| | $ | 1,398,640 |
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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 (unaudited, $ in thousands):
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| | | | | | | | | | | |
| U.S. GAAP | | Adjustments | | Tax |
| Three months ended June 30, 2014 | | Three months ended June 30, 2014 | | Three months ended June 30, 2014 |
Rental revenues and net gain on investments: | | | | | |
Rental revenues | $ | 181 |
| | $ | — |
| | $ | 181 |
|
Net unrealized gain on mortgage loans | 105,042 |
| | (58,655 | ) | | 46,387 |
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Net realized gain on mortgage loans | 10,819 |
| | (2,283 | ) | | 8,536 |
|
Interest income, advance recoveries and other | — |
| | 1,855 |
| | 1,855 |
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Total revenues | 116,042 |
| | (59,083 | ) | | 56,959 |
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Expenses: | | | | | |
Residential property operating expenses | 3,253 |
| | — |
| | 3,253 |
|
Real estate depreciation and amortization | 103 |
| | (7 | ) | | 96 |
|
Mortgage loan servicing costs | 16,925 |
| | (14,581 | ) | | 2,344 |
|
Interest expense | 6,945 |
| | — |
| | 6,945 |
|
General and administrative | 5,687 |
| | (2,774 | ) | | 2,913 |
|
Related party general and administrative | 17,467 |
| | (841 | ) | | 16,626 |
|
Total expenses | 50,380 |
| | (18,203 | ) | | 32,177 |
|
Other income | 1,698 |
| | — |
| | 1,698 |
|
Income before income taxes | $ | 67,360 |
| | $ | (40,880 | ) | | $ | 26,480 |
|
| | | | | |
| Six months ended June 30, 2014 | | Six months ended June 30, 2014 | | Six months ended June 30, 2014 |
Rental revenues and net gain on investments: | | | | | |
Rental revenues | $ | 250 |
| | $ | — |
| | $ | 250 |
|
Net unrealized gain on mortgage loans | 170,172 |
| | (84,194 | ) | | 85,978 |
|
Net realized gain on mortgage loans | 20,140 |
| | (3,405 | ) | | 16,735 |
|
Interest income, advance recoveries and other | — |
| | 2,854 |
| | 2,854 |
|
Total revenues | 190,562 |
| | (84,745 | ) | | 105,817 |
|
Expenses: | | | | | |
Residential property operating expenses | 4,303 |
| | — |
| | 4,303 |
|
Real estate depreciation and amortization | 151 |
| | (39 | ) | | 112 |
|
Mortgage loan servicing costs | 28,362 |
| | (23,203 | ) | | 5,159 |
|
Interest expense | 12,653 |
| | — |
| | 12,653 |
|
General and administrative | 7,079 |
| | (3,202 | ) | | 3,877 |
|
Related party general and administrative | 30,099 |
| | (867 | ) | | 29,232 |
|
Total expenses | 82,647 |
| | (27,311 | ) | | 55,336 |
|
Other income | 1,806 |
| | — |
| | 1,806 |
|
Income before income taxes | $ | 109,721 |
| | $ | (57,434 | ) | | $ | 52,287 |
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