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Boulder City, CO, United States
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Boulder City, CO, United States

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CHRISTIANSTED, U.S. Virgin Islands, March 01, 2017 (GLOBE NEWSWIRE) -- Altisource Residential Corporation (“RESI” or the “Company”) (NYSE:RESI) today announced financial and operating results for the fourth quarter and full year of 2016. ________________ 1 Transaction is subject to negotiation of definitive transaction agreements and RESI's completion of due diligence. 2 First sale closed in January 2017. Second sale is subject to negotiation of definitive purchase agreement and buyer's completion of due diligence. “During the fourth quarter and throughout the entire 2016 fiscal year, we continued to execute on our objectives. We have achieved tremendous growth in both our rental portfolio and in rental revenues, all while continuing to improve our rental property operating metrics,” said Chief Executive Officer, George Ellison. “We have successfully integrated the 4,262 high-yielding rental properties we acquired on September 30, 2016 and accelerated the sale of our non-rental assets to facilitate the acquisition of additional targeted rental assets. We had a strong 2016 and have had a promising start to 2017. We are excited to continue our impressive growth and to leverage our cost-effective property management relationships to generate robust returns and long-term value for our stockholders.” RESI continues to deliver on its commitment to be one of the top single-family rental REITs serving working class American families and their communities. Its strategy is to build long-term shareholder value through the creation of a large portfolio of single-family rental homes that are targeted to operate at a best-in-class yield. The Company believes there is a compelling opportunity in the single-family rental market and that it has implemented the right strategic plan to capitalize on the sustained growth in single-family rental demand. The Company targets the moderately-priced single-family home market that, in the Company's view, offers optimal yield opportunities. In order to achieve this goal, RESI has focused on (i) identifying and acquiring high-yielding single-family rental properties in pools or on a targeted, individual basis; (ii) working with our property managers to implement a cost-effective and scalable property management structure; (iii) selling certain mortgage loans and non-rental REO properties that do not meet the Company’s targeted rental criteria, which generates cash that the Company may reinvest in acquiring additional single-family rental properties; and (iv) resolving the remaining mortgage loans in its portfolio, including the conversion of a portion of the underlying properties to rental units. Through these avenues, the Company can capitalize on attractive single-family rental economics and continue its transition to a 100% single-family rental REIT, which will position the Company to provide a consistent return on equity and long-term growth for its investors. Net loss for the fourth quarter of 2016 totaled $61.2 million, or $1.14 per diluted share, compared to net loss of $66.2 million, or $1.18 per diluted share, for the fourth quarter of 2015. Net loss for the year ended December 31, 2016 totaled $228.0 million, or $4.18 per diluted share, compared to net loss of $46.0 million, or $0.81 per diluted share, for the year ended December 31, 2015. The Company expects to host a webcast and conference call on Wednesday, March 1, 2017, at 8:30 a.m. Eastern Time to discuss its financial results for the fourth quarter and full year of 2016. 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. Residential is focused on providing quality, affordable rental homes to families throughout the United States. Additional information is available at www.altisourceresi.com. This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, regarding management’s beliefs, estimates, projections, anticipations and assumptions with respect to, among other things, the Company’s financial results, future operations, business plans and investment strategies as well as industry and market conditions. These statements may be identified by words such as “anticipate,” “intend,” “expect,” “may,” “could,” “should,” “would,” “plan,” “estimate,” “seek,” “believe” and other expressions or words of similar meaning. We caution that forward-looking statements are qualified by the existence of certain risks and uncertainties that could cause actual results and events to differ materially from what is contemplated by the forward-looking statements. Factors that could cause the Company’s actual results to differ materially from these forward-looking statements may include, without limitation, our ability to implement our business strategy; our ability to make distributions to our stockholders; the impact of changes to the supply of, value of and the returns on sub-performing and non-performing loans and single-family rental properties; our ability to successfully modify or otherwise resolve sub-performing and non-performing loans; our ability to convert loans to single-family rental properties and acquire single-family rental properties generating attractive returns; our ability to complete potential transactions in accordance with anticipated terms and on a timely basis or at all; our ability to predict costs; difficulties in identifying single-family properties to acquire; our ability to integrate newly acquired rental assets into the portfolio; our ability to effectively compete with competitors; our ability to apply the net proceeds from financings in target assets in a timely manner; changes in interest rates and the market value of the collateral underlying our sub-performing and nonperforming loan portfolios or acquired single-family properties; our ability to obtain and access financing arrangements on favorable terms, or at all; our ability to retain the exclusive engagement of Altisource Asset Management Corporation; the failure of Altisource Portfolio Solutions S.A. and its affiliates to effectively perform its obligations under various agreements with us; the failure of Main Street Renewal, LLC to effectively perform under its property management agreement with us; the failure of our servicers to effectively perform their servicing obligations under their servicing agreements with us; our failure to qualify or maintain qualification as a REIT; our failure to maintain our exemption from registration under the Investment Company Act of 1940, as amended; the impact of adverse real estate, mortgage or housing markets; the impact of adverse legislative or regulatory tax changes and other risks and uncertainties detailed in the “Risk Factors” and other sections described from time to time in the Company’s current and future filings with the Securities and Exchange Commission. In addition, financial risks such as liquidity, interest rate and credit risks could influence future results. The foregoing list of factors should not be construed as exhaustive. The statements made in this press release are current as of the date of this press release only. The Company undertakes no obligation to publicly update or revise any forward-looking statements or any other information contained herein, whether as a result of new information, future events or otherwise.


News Article | February 15, 2017
Site: www.businesswire.com

IRVINE, Calif.--(BUSINESS WIRE)--CoreLogic® (NYSE: CLGX), a leading global property information, analytics and data-enabled solutions provider, today released its December 2016 National Foreclosure Report which shows the foreclosure inventory declined by 30 percent and completed foreclosures declined by 40 percent compared with December 2015. The number of completed foreclosures nationwide decreased year over year from 36,000 in December 2015 to 21,000 in December 2016, representing a decrease of 82 percent from the peak of 118,336 in September 2010. The foreclosure inventory represents the number of homes at some stage of the foreclosure process and completed foreclosures reflect the total number of homes lost to foreclosure. Since the financial crisis began in September 2008, there have been approximately 6.5 million completed foreclosures nationally, and since homeownership rates peaked in the second quarter of 2004, there have been approximately 8.6 million homes lost to foreclosure. As of December 2016, the national foreclosure inventory included approximately 329,000, or 0.8 percent, of all homes with a mortgage compared with 467,000 homes, or 1.2 percent, in December 2015. CoreLogic also reports that the number of mortgages in serious delinquency (defined as 90 days or more past due including loans in foreclosure or REO) declined by 19.4 percent from December 2015 to December 2016 with 1 million mortgages, or 2.6 percent, in serious delinquency, the lowest level since August 2007. The decline was geographically broad with year-over-year decreases in serious delinquency in 48 states and the District of Columbia. “While the decline in serious delinquency has been geographically broad, some oil-producing markets have shown the effects of low oil prices on the housing market,” said Dr. Frank Nothaft, chief economist for CoreLogic. “Serious delinquency rates rose in Louisiana, Wyoming and North Dakota, reflecting the weakness in oil production.” “Foreclosure and delinquency trends continue to head in the right direction powered principally by increasing employment levels, stringent underwriting standards and higher home prices over the past few years. We expect to see further declines in delinquency and foreclosure rates in 2017,” said Anand Nallathambi, president and CEO of CoreLogic. “As the foreclosure inventory diminishes, we must look ahead and tackle tight housing supply and growing affordability issues which are keeping many potential homebuyers, especially first-time buyers, on the sidelines.” *November 2016 data was revised. Revisions are standard, and to ensure accuracy CoreLogic incorporates newly released data to provide updated results. For ongoing housing trends and data, visit the CoreLogic Insights Blog: www.corelogic.com/blog. The data in this report represents foreclosure activity reported through December 2016. This report separates state data into judicial versus non-judicial foreclosure state categories. In judicial foreclosure states, lenders must provide evidence to the courts of delinquency in order to move a borrower into foreclosure. In non-judicial foreclosure states, lenders can issue notices of default directly to the borrower without court intervention. This is an important distinction since judicial states, as a rule, have longer foreclosure timelines, thus affecting foreclosure statistics. A completed foreclosure occurs when a property is auctioned and results in the purchase of the home at auction by either a third party, such as an investor, or by the lender. If the home is purchased by the lender, it is moved into the lender’s real estate-owned (REO) inventory. In “foreclosure by advertisement” states, a redemption period begins after the auction and runs for a statutory period, e.g., six months. During that period, the borrower may regain the foreclosed home by paying all amounts due as calculated under the statute. For purposes of this Foreclosure Report, because so few homes are actually redeemed following an auction, it is assumed that the foreclosure process ends in “foreclosure by advertisement” states at the completion of the auction. The foreclosure inventory represents the number and share of mortgaged homes that have been placed into the process of foreclosure by the mortgage servicer. Mortgage servicers start the foreclosure process when the mortgage reaches a specific level of serious delinquency as dictated by the investor for the mortgage loan. Once a foreclosure is “started,” and absent the borrower paying all amounts necessary to halt the foreclosure, the home remains in foreclosure until the completed foreclosure results in the sale to a third party at auction or the home enters the lender’s REO inventory. The data in this report accounts for only first liens against a property and does not include secondary liens. The foreclosure inventory is measured only against homes that have an outstanding mortgage. Generally, homes with no mortgage liens are not subject to foreclosure and are, therefore, excluded from the analysis. Approximately one-third of homes nationally are owned outright and do not have a mortgage. CoreLogic has approximately 85 percent coverage of U.S. foreclosure data. The data provided is for use only by the primary recipient or the primary recipient's publication or broadcast. This data may not be re-sold, republished or licensed to any other source, including publications and sources owned by the primary recipient's parent company without prior written permission from CoreLogic. Any CoreLogic data used for publication or broadcast, in whole or in part, must be sourced as coming from CoreLogic, a data and analytics company. For use with broadcast or web content, the citation must directly accompany first reference of the data. If the data is illustrated with maps, charts, graphs or other visual elements, the CoreLogic logo must be included on screen or website. For questions, analysis or interpretation of the data, contact Lori Guyton at lguyton@cvic.com or Bill Campbell at bill@campbelllewis.com. Data provided may not be modified without the prior written permission of CoreLogic. Do not use the data in any unlawful manner. This data is compiled from public records, contributory databases and proprietary analytics, and its accuracy is dependent upon these sources. CoreLogic (NYSE: CLGX) is a leading global property information, analytics and data-enabled solutions provider. The company’s combined data from public, contributory and proprietary sources includes over 4.5 billion records spanning more than 50 years, providing detailed coverage of property, mortgages and other encumbrances, consumer credit, tenancy, location, hazard risk and related performance information. The markets CoreLogic serves include real estate and mortgage finance, insurance, capital markets, and the public sector. CoreLogic delivers value to clients through unique data, analytics, workflow technology, advisory and managed services. Clients rely on CoreLogic to help identify and manage growth opportunities, improve performance and mitigate risk. Headquartered in Irvine, Calif., CoreLogic operates in North America, Western Europe and Asia Pacific. For more information, please visit www.corelogic.com. CORELOGIC and the CoreLogic logo are trademarks of CoreLogic, Inc. and/or its subsidiaries.


News Article | February 15, 2017
Site: www.businesswire.com

OLD GREENWICH, Conn.--(BUSINESS WIRE)--Ellington Financial LLC (NYSE:EFC) today reported financial results for the quarter ended December 31, 2016. " For the fourth quarter, Ellington Financial had net income, including the full impact of mark-to-market adjustments, of $1.7 million or $0.05 per share," said Laurence Penn, Chief Executive Officer and President. " With this quarter's results, we conclude what has been a year of disappointing financial results. Overall, our assets performed well in 2016, but losses on our high-yield corporate credit hedges led to overall performance that fell far short of our expectations. Nevertheless, we remain very optimistic about our business and our future prospects, as we continue to see high-yielding opportunities and growing pipelines in our various loan businesses. " During the fourth quarter, we continued the shift in our credit portfolio away from certain securities such as non-Agency RMBS, and towards loan assets. As a result, we continued to shrink our high-yield corporate credit hedges during the quarter, and at this point our portfolio is no longer significantly exposed to the performance of those hedges. Despite our continued selling of non-Agency RMBS, our Credit portfolio and its leverage actually increased slightly during the quarter, finally reversing the trend from recent quarters. " Expanding and enhancing our financing arrangements for our loan portfolios remains a high priority for us. Since executing our first financing facility for small balance commercial mortgage loans early last year, we've added facilities for non-QM mortgage loans, residential NPLs, and consumer loans and ABS. We're currently evaluating additional borrowing facilities for both our non-QM mortgage business and our consumer loan business, and gaining long-term financing through the securitization markets remains a strong possibility for us in 2017 in several of our loan businesses. We believe that investment opportunities remain attractive in all of our loan businesses, and as 2017 progresses we are hopeful that we will be able to meaningfully increase our leverage and portfolio size. " During the fourth quarter we repurchased approximately 1.0% of our outstanding shares, which was accretive to our diluted book value by $0.04 per share. We expect to continue to repurchase shares as the market presents us with attractive opportunities, while balancing the accretive effects of our repurchases on book value per share against the attractiveness of the investment opportunities in our targeted asset classes, together with the effects on our expense ratios and the liquidity of our stock." The fourth quarter of 2016 was characterized by sharply higher interest rates and increased market volatility, especially in the aftermath of the U.S. elections in November. The election of Donald Trump to the U.S. presidency along with continued Republican control of Congress led to a surge in interest rates, as many market participants predicted that the policy goals of the new administration would lead to an acceleration in U.S. economic growth. Among the shared policy goals of the new administration and Congress are a lowering of corporate income tax rates, increased infrastructure spending, and a roll-back in regulation, such as many of the regulations included in the Dodd-Frank Act. The rise in long-term interest rates during the fourth quarter was the largest quarterly increase since the financial crisis, and one of the largest quarterly increases ever. Over the course of the quarter, the 10-year U.S. Treasury yield rose 85 basis points to end the quarter at 2.44%, and closed as high as 2.60% on December 15th. The yield curve steepened substantially during the quarter, with the 2-year U.S. Treasury yield rising 43 basis points to end the quarter at 1.19%. Equities rallied significantly following the election results, as did crude oil. Prices of Agency RMBS declined over the course of the quarter, roughly in line with the movements in interest rates and volatility. Within the broader fixed-income sector, credit sensitive securities, (including non-Agency MBS) rallied strongly during the quarter, in sympathy with the equity markets and other sectors. In December 2016, for the first time since late 2015 and only the second time in over ten years, the Federal Reserve increased its target range for the federal funds rate. Following the rate increase in late 2015 and heading into 2016, most market participants had anticipated multiple target range increases for 2016, but concerns around a global economic slowdown, as well as mixed data regarding the state of the U.S. economy, led the Federal Reserve to adopt a more measured stance in 2016. The recent change in administrations now presents the Federal Reserve with conflicting considerations: an increase in inflation appears more likely, which would call for monetary tightening, but the uncertainties associated with possible large scale government policy changes may call for a more cautious approach. Following the sharp increase in interest rates during the fourth quarter, mortgage rates also increased significantly. The Freddie Mac survey 30-year mortgage rate increased 90 basis points over the course of the quarter, ending the fourth quarter at 4.32%. In response to the increase in mortgage rates, the Mortgage Bankers Association Refinance Index, which tracks the volume of mortgage loan refinancing, declined over 50%, falling back to its early-2016 levels. Our Credit strategy generated gross income of $5.0 million for the fourth quarter, or $0.15 per share. The primary components of this strategy include: non-Agency RMBS; CMBS; performing, sub-performing, and non-performing residential and commercial mortgage loans; consumer loans and ABS; investments in mortgage-related entities; and credit hedges (including relative value trades involving credit hedging instruments). We also invest in U.S. and European CLOs and distressed corporate debt when attractive opportunities in those markets arise. During the fourth quarter, we had modest performance from our long securities and loan portfolios, and our credit hedges provided much less of a drag on our results as compared to the third quarter. As of December 31, 2016, our total long Credit portfolio (excluding derivatives) increased to $601.6 million from $516.3 million as of September 30, 2016. Over the course of the fourth quarter, we increased our holdings of residential and commercial mortgage loans, European RMBS, U.S. CMBS, both U.S. and European CLOs, and distressed corporate debt. We continued to net sell down our U.S. non-Agency RMBS, although we did so at a reduced pace relative to prior periods. As the case has been for some time, the fundamentals underlying non-Agency RMBS continue to be strong, led by a stable housing market. As legacy non-Agency RMBS continue to amortize, the range of expected outcomes on these assets has narrowed significantly; this trend, together with the minimal level of new RMBS issuance generally, has caused yield spreads on legacy non-Agency RMBS to compress significantly, leading us to rotate much of our Credit portfolio into higher-yielding assets. Our non-Agency RMBS portfolio, though much smaller now, performed well in the fourth quarter, benefiting from strong net interest margins, appreciation from our held positions, and net realized gains from positions sold. For the full year however, the positive effects of generally tighter spreads and profitable trading activity in our non-Agency portfolio were offset by losses on our credit hedges. While our non-Agency RMBS portfolio currently represents a much smaller portion of our total Credit portfolio than it ever has, we intend to continue to opportunistically increase and decrease the size of this portfolio as market conditions vary. As of December 31, 2016, our investments in U.S. non-Agency RMBS totaled $102.7 million, as compared to $118.9 million as of September 30, 2016. Throughout most of 2016, our credit hedges consisted primarily of financial instruments tied to high-yield corporate credit, such as credit default swaps, or "CDS," on high-yield corporate bond indices, as well as tranches and options on these indices; short positions in and CDS on corporate bonds; and positions involving exchange traded funds, or "ETFs," of high-yield corporate bonds. We also opportunistically overlaid these high-yield corporate credit hedges with certain relative value long/short positions involving the same or similar instruments. Throughout 2016, global central bank monetary policy was highly accommodative, and even included central bank corporate bond buying programs, first by the European Central Bank as announced earlier in the year, and then by the Bank of England as announced in August. Throughout the year, the combination of very low or even negative yields on many high quality sovereign bonds, together with persistent central bank buying of corporate bonds, drove yields on global high quality corporate bonds to record low levels, and pushed more overseas institutional investors into the U.S. corporate bond markets, including the high-yield corporate bond market. Starting in the third quarter, in response to the significant tightening that had occurred up to that point of "cash" bond spreads to CDS spreads in the high-yield corporate bond market, we shifted many of our credit hedges from CDS on high-yield corporate bond indices to certain instruments more directly tied to the performance of "cash" high-yield corporate bonds. During the third and fourth quarters, we significantly scaled back our use of high-yield corporate credit hedges. Over the course of the fourth quarter, the high-yield corporate credit markets continued to rally, although not to the same degree as in prior quarters. This again resulted in overall net losses on our credit hedges for the quarter. For the full year, our credit hedges significantly adversely impacted our results. In addition to using credit hedges, we also use interest rate hedges in our Credit strategy in order to protect our portfolio against the risk of rising interest rates. The interest rate hedges in our Credit strategy are principally in the form of interest rate swaps and, to a lesser extent, Eurodollar futures. With the fourth quarter surge in long-term interest rates, our interest rate hedges generated net gains for the quarter. For the full year, we had a modest loss on our interest rate hedges. We also use foreign currency hedges in our Credit strategy, in order to protect our assets denominated in euros and British pounds against the risk of declines in those currencies against the U.S. dollar. We had net gains on our foreign currency hedges for both the quarter and the full year, but these were significantly offset by net losses on foreign currency-related transactions and translation. Despite the significant recent losses in our credit hedges, we believe that our publicly traded partnership structure affords us valuable flexibility, especially with respect to our ability to adjust our exposures nimbly by hedging many forms of risk, such as credit risk, interest rate risk, and foreign currency risk. During the fourth quarter, yield spreads on CMBS tightened, especially after the U.S. Presidential election. CMBS conduit issuance picked up in the fourth quarter, reflecting a rush to finalize transactions before risk retention regulations came into effect in late December. Total CMBS conduit issuance totaled $15.5 billion, up 18% from the previous quarter. In 2016, conduit issuance was $47.1 billion, which was a 23% decline from 2015 CMBS conduit issuance. Our CMBS portfolio continues to be comprised entirely of post-crisis "B-pieces." B-pieces are the most subordinated (and therefore the highest yielding and riskiest) CMBS tranches. By purchasing new issue B-pieces, we believe that we are often able to effectively "manufacture" our risk more efficiently than what is generally available in the market, and to better target the collateral profiles and structures we prefer. We added two B-pieces during the fourth quarter and five B-pieces over the course of the full year. For the fourth quarter, positive income on our CMBS assets was offset by losses on our CMBX and high-yield corporate credit hedges, resulting in a small loss in the fourth quarter for our CMBS strategy, our first quarterly loss in this strategy in some time. Over the course of 2016, CMBS spreads were volatile and generally widened, but nevertheless our CMBS strategy was profitable for the full year, helped significantly by the positive full-year performance of our CMBX hedges. The CMBS risk retention regulations took effect on December 24, 2016, and early indications suggest that most new issuance of CMBS will follow the "eligible vertical interest" retention model, whereby securitization sponsors retain 5% of the face amount of every tranche. Under this approach, 95% of the B-piece may be sold by the sponsor and remains freely tradable in the same manner as prior to CMBS risk retention. We expect to continue to buy B-pieces in this format, and we also intend to continue to evaluate opportunities created from the new risk retention regulations. As of December 31, 2016, our U.S. CMBS bond portfolio increased to $34.6 million, as compared to $29.1 million as of September 30, 2016. As of December 31, 2016, our portfolio of small balance commercial mortgage loans included 16 loans and one real estate owned, or "REO," property with an aggregate value of $62.8 million; by comparison, as of September 30, 2016, this portfolio included 20 loans and one REO property with an aggregate value of $58.7 million. Our portfolio, including related hedges, performed well for the fourth quarter as well as the full year. The number and aggregate value of loans held, as well as the income generated by our loans, may fluctuate significantly from period to period, especially as loans are resolved or sold. We expect to continue to emphasize purchasing distressed loans from banks and special servicers through negotiated transactions, as opposed to through widely circulated auctions where there is greater competition and less assurance that reserve prices will be reasonable. We also expect to continue to originate high-yielding "bridge" loans. We believe that opportunities will accelerate in both distressed loans and bridge loans, as many commercial mortgage loans—including many originated pre-crisis—reach their maturity but are unable to be refinanced. For most of 2016, our activity in the European credit markets was focused more on the non-performing loan market as compared to legacy MBS and CLOs. Our European non-performing loans include non-performing consumer loans, non-performing residential mortgage loans, and non-performing commercial mortgage loans made to small and medium-sized enterprises. We believe that non-performing loans in certain select markets, such as in Spain and Portugal, will continue to present attractive opportunities, and we are actively pursuing additional opportunities in these and other countries. During the fourth quarter, we added to our holdings of non-performing loans secured by real estate. Overall, excluding credit hedges, our European investments were profitable for both the quarter and the full year. Additionally, given the recent widening of legacy MBS and CLOs, we modestly increased our holdings in these sectors during the fourth quarter. We expect to take an opportunistic approach with respect to our participation in these markets. As of December 31, 2016, our investments in European non-dollar denominated assets totaled $75.2 million, as compared to $62.1 million as of September 30, 2016. As of December 31, 2016, our total holdings of European non-dollar denominated assets included $40.9 million in RMBS (mostly backed by non-performing loans), $8.7 million in CMBS, $22.4 million in CLOs, $3.0 million in ABS, and $0.2 million in distressed corporate debt. As of September 30, 2016, our total holdings of European non-dollar denominated assets included $36.6 million in RMBS (mostly backed by non-performing loans), $7.9 million in CMBS, $14.0 million in CLOs, $3.4 million in ABS, and $0.2 million in distressed corporate debt. These assets include securities denominated in British pounds as well as in euros. We remain active in non-performing and sub-performing U.S. residential mortgage loans, or "residential NPLs," and have continued to focus our acquisitions on smaller, less-competitively-bid, and more attractively-priced mixed legacy pools sourced from motivated sellers. During the fourth quarter we closed two purchases of mixed NPL pools, which contain a combination of performing and non-performing assets. While relatively small, our residential NPL portfolio performed very well both for the fourth quarter and the full year. As of December 31, 2016, we held $14.3 million in residential NPLs and related foreclosure property, as compared to $7.6 million as of September 30, 2016. Towards the end of the third quarter, we began financing some of our residential NPLs under a new repo facility with a large financial institution. We expect that this repo facility will not only increase our return on equity in this business, but should also enable us to increase our presence in the residential NPL market. During the fourth quarter our consumer loan portfolio grew modestly in size. This portfolio primarily consists of unsecured loans, but also includes auto loans. For the fourth quarter, we had an overall loss on our consumer loans. The loss resulted from our credit hedges, as well as from write-downs recognized with respect to loans purchased under one flow agreement where we have seen a greater persistence of default rates than we had anticipated. During the quarter, we terminated that flow agreement. We continue to purchase consumer loans under three existing flow agreements that collectively have outperformed expectations. Apart from the existing portfolio, we are in active negotiations to add a new flow agreement, and are also evaluating other opportunities in the space. For the year, our consumer loan portfolio was profitable excluding our high-yield corporate credit hedges, but modestly unprofitable after taking into account the effect of those credit hedges. As of December 31, 2016, we no longer held high-yield corporate credit hedges against our consumer loan portfolio. Our consumer loans are financed through the securitization market and through reverse repurchase agreements. As of December 31, 2016, our investments in U.S. consumer loans and ABS totaled $111.4 million, as compared to $115.7 million as of September 30, 2016. As expected, the pace of our non-QM loan purchases continued to trend upward in the fourth quarter, and our outlook for further growth in this sector remains positive. As of December 31, 2016, our non-QM mortgage loan portfolio totaled $71.6 million, as compared to $38.3 million as of September 30, 2016. To date, we've purchased approximately $100 million under our flow agreement, and loan performance has been excellent. The number of states where our origination partner is producing loans for us has increased according to expectations. We currently finance certain of our non-QM loans under a repo facility with a large financial institution, and are actively monitoring the securitization market for a potential issuance after we reach critical mass. Our Agency strategy generated gross income of $1.8 million, or $0.05 per share, during the fourth quarter of 2016. Over the course of the quarter, positive carry and net realized and unrealized gains on interest rate hedges were partially offset by net realized and unrealized losses on our Agency RMBS. Both prices and pay-ups decreased on our specified pools during the period. For the year ended December 31, 2016, our Agency strategy generated gross income of $8.9 million, or $0.26 per share. Consistent with past quarters, as of December 31, 2016, our Agency RMBS were principally comprised of "specified pools." Specified pools are fixed rate Agency pools with special characteristics, such as pools comprised of low loan balance mortgages, pools comprised of mortgages backed by investor properties, pools containing mortgages originated through the government-sponsored "Making Homes Affordable" refinancing programs, and pools containing mortgages with various other characteristics. Our Agency strategy also includes RMBS which are backed by ARMs or Hybrid ARMs and reverse mortgages, and CMOs, including IOs, POs, and IIOs. Our Agency strategy also includes interest rate hedges for our Agency RMBS, as well as certain relative value trading positions in interest rate-related and TBA-related instruments. The market for Agency RMBS changed dramatically during the fourth quarter. At the beginning of the quarter, low mortgage rates provided the potential for ongoing increases in refinancing activity, but by the end of the quarter markedly higher mortgage rates eliminated the incentive for many borrowers to refinance. As the quarter progressed, Agency RMBS declined substantially in price and their durations extended, exacerbating further price declines. For example, during the quarter, TBA 30-year Fannie Mae 3.5s, a widely traded Agency RMBS, declined approximately three points in price, and its duration roughly doubled. Nevertheless, the price declines were relatively muted when compared to prior instances of large-scale increases in interest rates, such as those that occurred in mid-2013, or before the financial crisis. This more muted response was in large part a consequence of the progressive shift, in recent years, in ownership of Agency RMBS away from "delta-hedgers" such as the GSEs and many money managers and mortgage REITs, who have often reacted to big downswings in the market by aggressively selling Agency RMBS, and towards "buy and hold" investors such as the Federal Reserve and depository institutions. Overall, Agency RMBS prepayment rates slowed over the course of the fourth quarter as mortgage rates increased, but the pace of the slowdown was much more gradual than most sell-side research had predicted. A variety of factors are helping to support prepayment activity, including the gradual loosening of mortgage credit underwriting standards relative to the immediate aftermath of the financial crisis; enhanced originator/servicer technology and infrastructure, which have streamlined the refinancing process and augmented refinancing capacity; employment in the mortgage industry, which remains at a post-financial crisis high; and increasing home prices and improvements in borrower credit profiles, both of which reflect continued improvement in the U.S. economy. In light of the increase in interest rates over the course of the fourth quarter, pay-ups on specified pools fell. Pay-ups are price premiums for specified pools relative to their TBA counterparts. The decline in pay-ups was actually quite modest given that specified pools were much longer in duration than TBAs at the beginning of the fourth quarter. Average pay-ups on our specified pools decreased to 0.76% as of December 31, 2016, from 1.12% as of September 30, 2016. We believe that the evolving prepayment landscape, driven by the factors described above, helped to dampen the severity of the fourth quarter decline in pay-ups. Technological advances in the mortgage origination and servicing industry have tended to have a much greater impact on non-specified pools as compared to specified pools. We believe that this trend will continue, driving greater investor interest in specified pools relative to TBAs. For the quarter ended December 31, 2016, we had total net realized and unrealized losses of $(18.5) million, or $(0.56) per share, on our aggregate Agency RMBS portfolio, while we had total net realized and unrealized gains of $15.5 million, or $0.47 per share, on our interest rate hedges and other activities. We actively traded our Agency RMBS portfolio during the quarter in order to capitalize on sector rotation opportunities. Our portfolio turnover for the quarter was approximately 14% (as measured by sales and excluding paydowns), and we had net realized losses of $(1.3) million, excluding interest rate hedges. During the fourth quarter, we continued to hedge interest rate risk, primarily through the use of interest rate swaps and short positions in TBAs. Net realized and unrealized losses from price declines of our specified pools were significantly countered by net realized and unrealized gains on our interest rate hedges. In our hedging portfolio, the relative proportion (based on 10-year equivalents1) of short TBA positions increased quarter over quarter relative to interest rate swaps. Overall, we believe that there remains a heightened risk of substantial interest rate and mortgage prepayment volatility in the near term, thus reinforcing the importance of our ability to hedge our Agency RMBS portfolio using a variety of tools, including TBAs. As of December 31, 2016, our long Agency RMBS portfolio was $827.4 million, up from $807.8 million as of September 30, 2016. During the fourth quarter, we continued to focus our Agency RMBS purchasing activity primarily on specified pools, especially those with higher coupons. As of December 31, 2016, the weighted average coupon on our fixed rate specified pools was 4.0%. Our Agency RMBS portfolio continues to include a small allocation to Agency IOs, and we increased our holdings of those during the fourth quarter. Some of the IOs that we purchased were backed by seasoned Ginnie Mae pools that have demonstrated some level of "burnout." Burnout often occurs after periods of high prepayments, when the mix of loans remaining in an RMBS pool becomes more concentrated in loans that tend to prepay more slowly; burnout can reflect a variety of factors, including the behavior of individual borrowers and overall trends in the mortgage banking industry. Our Agency IOs not only contribute to our portfolio in the form of their yields, but they also inherently serve as portfolio market value hedges in a rising interest rate environment. Our net Agency premium as a percentage of our specified pool holdings is one metric that we use to measure the overall prepayment risk of our specified pool portfolio. Net Agency premium represents the total premium (excess of market value over outstanding principal balance) on our specified pool holdings less the total premium on related net short TBA positions. The lower our net Agency premium, the less we believe that our specified pool portfolio is exposed to market-wide increases in Agency RMBS prepayments. The net short TBA position related to our specified pool holdings had a notional value of $370.6 million and a fair value of $390.3 million as of December 31, 2016, and a notional value of $366.9 million and a fair value of $393.4 million as of September 30, 2016. As of December 31, 2016 and September 30, 2016, our net Agency premium as a percentage of fair value of our specified pool holdings was approximately 3.2% and 4.7%, respectively. Excluding TBA positions used to hedge our specified pool holdings, our Agency premium as a percentage of fair value was approximately 5.7% and 8.1% as of December 31, 2016 and September 30, 2016, respectively. Our Agency premium percentage and net Agency premium percentage may fluctuate from period to period based on a variety of factors, including market factors such as interest rates and mortgage rates, and, in the case of our net Agency premium percentage, based on the degree to which we hedge prepayment risk with short TBA positions. We believe that our focus on purchasing pools with specific prepayment characteristics provides a measure of protection against prepayments. We prepare our financial statements in accordance with ASC 946, Financial Services—Investment Companies. As a result, our investments are carried at fair value and all valuation changes are recorded in the Consolidated Statement of Operations. We also measure our performance based on our diluted net-asset-value-based total return, which measures the change in our diluted book value per share and assumes the reinvestment of dividends at diluted book value per share and the conversion of all convertible units into common shares at their issuance dates. Diluted net-asset-value-based total return was 0.41% for the quarter ended December 31, 2016. Based on our diluted net-asset-value-based total return of 157.36% from our inception (August 17, 2007) through December 31, 2016, our annualized inception-to-date diluted net-asset-value-based total return was 10.61% as of December 31, 2016. The following table summarizes our operating results for the quarters ended December 31, 2016 and September 30, 2016 and the year ended December 31, 2016: The following tables summarize our portfolio holdings as of December 31, 2016 and September 30, 2016: Non-Agency RMBS and CMBS are generally securitized in senior/subordinated structures, or in excess spread/over-collateralization structures. Disregarding TBAs, Agency RMBS consist primarily of whole-pool pass through certificates. We actively invest in the TBA market. TBAs are forward-settling Agency RMBS where the mortgage pass-through certificates to be delivered are "To-Be-Announced." Given that we use TBAs primarily to hedge the risk of rising interest rates on our long holdings, we generally carry a net short TBA position. The mix and composition of our derivative instruments may vary from period to period. The following table summarizes, as of December 31, 2016, the estimated effects on the value of our portfolio, both overall and by category, of hypothetical, immediate, 50 basis point downward and upward parallel shifts in interest rates. Throughout the fourth quarter, reverse repo borrowing costs increased as LIBOR increased. In addition, as the end of the year approached, typical balance sheet constraints of lending banks further increased the cost of repo. Changes in the composition of our repo borrowings have also recently put upward pressure on the average cost of funds for our Credit portfolio, in that the amount of our securities-backed borrowings continues to decline relative to our loan-backed borrowings, which carry higher borrowing costs. We expect this trend to continue in 2017. From time to time we may have outstanding reverse repos on our positions in long U.S. Treasury securities. As of December 31, 2016 and September 30, 2016 we had $5.4 million and $15.8 million, respectively, of outstanding borrowings related to long U.S. Treasury securities. Our leverage ratio, excluding U.S. Treasury securities, increased to 1.63:1 as of December 31, 2016, as compared to 1.50:1 as of September 30, 2016. Our leverage ratio may fluctuate period over period based on portfolio management decisions, market conditions, and the timing of security purchase and sale transactions. The majority of our borrowed funds are in the form of reverse repos. The weighted average remaining term on our reverse repos as of December 31, 2016 decreased to 56 days from 63 days as of September 30, 2016. In addition to borrowings under reverse repos, as of December 31, 2016 and September 30, 2016 we had outstanding securitized debt of $24.1 million and $30.8 million, respectively, related to certain of our commercial mortgage loans and REO; this debt amortizes until its maturity in September 2018. Our borrowings outstanding under reverse repos were with a total of twenty-one counterparties as of December 31, 2016. As of December 31, 2016, we held liquid assets in the form of cash and cash equivalents in the amount of $123.3 million. Our expense ratio, which we define as our annualized base management fee and other operating expenses, but excluding interest expense, other investment related expenses, and incentive fees, over average equity, was 3.1% for the quarter ended December 31, 2016 and 2.9% for the quarter ended September 30, 2016. The increase in our expense ratio was principally due to a quarter-over-quarter increase in professional fees. We did not incur incentive fee expense for either the third or fourth quarters, or for the full year ended December 31, 2016. On February 8, 2017, our Board of Directors declared a dividend of $0.45 per share for the fourth quarter of 2016, payable on March 15, 2017 to shareholders of record on March 1, 2017. We expect to continue to recommend quarterly dividends of $0.45 per share until conditions warrant otherwise. The declaration and amount of future dividends remain in the discretion of the Board of Directors. Our dividends are paid on a quarterly basis, in arrears. On August 3, 2015, our Board of Directors approved the adoption of a share repurchase program under which we are authorized to repurchase up to 1.7 million common shares. The program, which is open-ended in duration, allows us to make repurchases from time to time on the open market or in negotiated transactions. Repurchases are at our discretion, subject to applicable law, share availability, price and our financial performance, among other considerations. During the three month period ended December 31, 2016, we repurchased 324,357 shares at an average price per share of $16.13 and a total cost of $5.2 million. In addition to making discretionary repurchases during our open trading windows, we also entered into a 10b5-1 plan to increase the number of trading days available to implement these repurchases. Through February 8, 2017, we have repurchased approximately 1.2 million shares under the current share repurchase program, for an aggregate cost of $20.1 million. Ellington Financial LLC is a specialty finance company that primarily acquires and manages mortgage-related assets, including residential mortgage-backed securities, residential mortgage loans, commercial mortgage-backed securities, commercial mortgage loans and other commercial real estate debt, real property, and mortgage-related derivatives. The Company also invests in corporate debt and equity securities, collateralized loan obligations, consumer loans and asset-backed securities backed by consumer and commercial assets, non-mortgage-related derivatives, and other financial assets, including private debt and equity investments in mortgage-related entities. Ellington Financial LLC is externally managed and advised by Ellington Financial Management LLC, an affiliate of Ellington Management Group, L.L.C. We will host a conference call at 11:00 a.m. Eastern Time on Tuesday, February 14, 2017, to discuss our financial results for the quarter ended December 31, 2016. To participate in the event by telephone, please dial (877) 241-1233 at least 10 minutes prior to the start time and reference the conference passcode 57491207. International callers should dial (810) 740-4657 and reference the same passcode. The conference call will also be webcast live over the Internet and can be accessed via the "For Our Shareholders" section of our web site at www.ellingtonfinancial.com. To listen to the live webcast, please visit www.ellingtonfinancial.com at least 15 minutes prior to the start of the call to register, download, and install necessary audio software. In connection with the release of these financial results, we also posted an investor presentation, that will accompany the conference call, on its website at www.ellingtonfinancial.com under "For Our Shareholders—Presentations." A dial-in replay of the conference call will be available on Tuesday, February 14, 2017, at approximately 2 p.m. Eastern Time through Tuesday, February 21, 2017 at approximately 11:59 p.m. Eastern Time. To access this replay, please dial (800) 585-8367 and enter the passcode 57491207. International callers should dial (404) 537-3406 and enter the same passcode. A replay of the conference call will also be archived on our web site at www.ellingtonfinancial.com. This press release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve numerous risks and uncertainties. Actual results may differ from our beliefs, expectations, estimates, and projections and, consequently, you should not rely on these forward-looking statements as predictions of future events. Forward-looking statements are not historical in nature and can be identified by words such as "believe," "expect," "anticipate," "estimate," "project," "plan," "continue," "intend," "should," "would," "could," "goal," "objective," "will," "may," "seek," or similar expressions or their negative forms, or by references to strategy, plans, or intentions. Examples of forward-looking statements in this press release include without limitation management's beliefs regarding the current economic and investment environment and our ability to implement our investment and hedging strategies, performance of our investment and hedging strategies, our exposure to prepayment risk in our Agency portfolio, statements regarding our net Agency premium, estimated effects on the fair value of our holdings of a hypothetical change in interest rates, statements regarding the drivers of our returns, our expected ongoing annualized expense ratio, and statements regarding our intended dividend policy including the amount to be recommended by management, and our share repurchase program. Our results can fluctuate from month to month and from quarter to quarter depending on a variety of factors, some of which are beyond our control and/or are difficult to predict, including, without limitation, changes in interest rates and the market value of our securities, changes in mortgage default rates and prepayment rates, our ability to borrow to finance our assets, changes in government regulations affecting our business, our ability to maintain our exclusion from registration under the Investment Company Act of 1940 and other changes in market conditions and economic trends. Furthermore, forward-looking statements are subject to risks and uncertainties, including, among other things, those described under Item 1A of the our Annual Report on Form 10-K filed on March 11, 2016 which can be accessed through our website at www.ellingtonfinancial.com or at the SEC's website (www.sec.gov). Other risks, uncertainties, and factors that could cause actual results to differ materially from those projected or implied may be described from time to time in reports we file with the SEC, including reports on Forms 10-Q, 10-K and 8-K. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.


LUXEMBOURG, Feb. 16, 2017 (GLOBE NEWSWIRE) -- Altisource Portfolio Solutions S.A. (“Altisource” or the “Company”) (NASDAQ:ASPS) today reported financial results for the fourth quarter and full year 2016, reporting strong full year service revenue of $942.6 million.  Compared to 2015, 22% service revenue growth from customers other than Ocwen Financial Corporation (“Ocwen”) and higher property preservation services offset the expected loss in revenue from Ocwen’s declining portfolio, lower delinquencies and lower pricing for certain technologies. Fourth quarter 2016 service revenue of $227.2 million was 5% lower than the third quarter of 2016 from seasonally lower REO sales and lawn maintenance and 9% lower than the fourth quarter of 2015 primarily from lower pricing to Ocwen for certain technologies and a decline in the number of loans on REALServicing. 2016 pretax income of $44.3 million and fourth quarter 2016 pretax loss of $19.5 million were impacted by a litigation settlement loss of $28.0 million, which is net of an anticipated $4.0 million insurance recovery.  Further, in the fourth quarter of 2016 and the full year 2016, the Company incurred expenses of $3.9 million and $5.3 million, respectively, relating to severance and the exit from certain facilities. “In 2016, we continued our transformation from a mortgage services company generating the majority of revenue from Ocwen to a real estate and mortgage marketplace company offering many of the same innovative solutions to a diversified customer base.  Because the sales cycle was longer than originally projected, our 22% non-Ocwen service revenue growth and earnings were lower than we anticipated.  We are disappointed that we did not achieve our anticipated non-Ocwen revenue growth but the progress made in 2016 positions us for a higher rate of non-Ocwen growth in 2017 and beyond,” said Chief Executive Officer William B. Shepro. Mr. Shepro further commented, “I firmly believe in the value we’re creating.  The market reception for our products and services is very strong, and we are gaining more visibility into our growth prospects. We believe the ongoing investments we are making in our growth will produce a high return on investment and are critical to the franchise we are building.” While 2016 service revenue was flat compared to 2015, adjusted pretax income attributable to Altisource(1) of $117.2 million declined by 24%.  This was primarily the result of increased investments to support the Company’s growth initiatives, service revenue mix changes and software price concessions provided to Ocwen.  Fourth quarter 2016 adjusted pretax income attributable to Altisource(1) of $18.9 million was 36% lower than the third quarter of 2016 from seasonally lower REO sales and lawn maintenance, $3.9 million of costs to exit certain facilities and severance costs related to cost reduction initiatives, and service revenue mix.  Fourth quarter 2016 adjusted pretax income attributable to Altisource(1) was 53% lower than the fourth quarter of 2015 from lower service revenue, higher investments to support the Company’s growth initiatives and the $3.9 million of costs relating to our cost reduction initiatives. The Company’s 2016 diluted earnings per share of $1.46 and adjusted diluted earnings per share(1) of $4.59 were further impacted by an increase in the 2016 effective income tax rate from 16% in 2015 to 29% in 2016.  The effective tax rate increased primarily due to the $28.0 million litigation settlement loss and lower pretax income margins.  These items changed the mix of taxable income across the jurisdictions in which the Company operated.  Fourth quarter 2016 diluted loss per share of $1.08 and adjusted diluted earnings per share(1) of $0.55 were also impacted by an adjustment to increase the effective income tax rate for the first three quarters of 2016 from 20% to 29%.  Over the next several years, the Company expects that its effective cash income tax rate will return to a rate that is closer to the Company’s historical rate. The Company also announced that it is actively exploring refinancing its existing $480 million Senior Secured Term Loan to, among other things, extend the maturity date.  There can be no assurance that the Company will complete the refinancing transaction. Fourth Quarter 2016 Results Compared to the Third Quarter of 2016 and the Fourth Quarter 2015 (1) This is a non-GAAP measure that is defined and reconciled to the corresponding GAAP measure herein. This press release contains forward-looking statements that involve a number of risks and uncertainties.  These forward-looking statements include all statements that are not historical fact, including statements about management’s beliefs and expectations.  These statements may be identified by words such as “anticipate,” “intend,” “expect,” “may,” “could,” “should,” “would,” “plan,” “estimate,” “seek,” “believe,” “potential” and similar expressions.  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 the future and are not statements of historical fact, actual results may differ materially from what is contemplated by the forward-looking statements.  Altisource 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, Altisource’s ability to integrate acquired businesses, retain key executives or employees, retain existing customers and attract new customers, general economic and market conditions, behavior of customers, suppliers and/or competitors, technological developments, governmental regulations, taxes and policies, availability of adequate and timely sources of liquidity and other risks and uncertainties detailed in the “Forward-Looking Statements,” “Risk Factors” and other sections of Altisource’s Form 10-K and other filings with the Securities and Exchange Commission. Altisource will host a webcast at 11:00 a.m. EST today to discuss our fourth quarter and full year results.  A link to the live audio webcast will be available on Altisource’s website in the Investor Relations section.  Those who want to listen to the call should go to the website at least fifteen minutes prior to the call to register, download and install any necessary audio software.  A replay of the conference call will be available via the website approximately two hours after the conclusion of the call and will remain available for approximately 30 days. Altisource Portfolio Solutions S.A. is a premier marketplace and transaction solutions provider for the real estate, mortgage and consumer debt industries.  Altisource’s proprietary business processes, vendor and electronic payment management software and behavioral science-based analytics improve outcomes for marketplace participants.  Additional information is available at www.Altisource.com. Pretax income (loss) attributable to Altisource, adjusted pretax income attributable to Altisource, adjusted net income attributable to Altisource and adjusted diluted earnings per share are non-GAAP measures used by management, existing shareholders, potential shareholders and other users of our financial information to measure Altisource’s performance and do not purport to be alternatives to income (loss) before income taxes and non-controlling interests, net income (loss) attributable to Altisource or diluted earnings (loss) per share as measures of Altisource’s performance.  We believe these measures are useful to management, existing shareholders, potential shareholders and other users of our financial information in evaluating operating profitability more on a continuing cost basis as they exclude amortization expense related to acquisitions that occurred in prior periods as well as the effect of more significant non-recurring items from earnings.  We believe these measures are also useful in evaluating the effectiveness of our operations and underlying business trends in a manner that is consistent with management’s evaluation of business performance.  Furthermore, we believe the exclusion of more significant non-recurring items enables comparability to prior period performance and trend analysis. It is management’s intent to provide non-GAAP financial information to enhance the understanding of Altisource’s GAAP financial information, and it should be considered by the reader in addition to, but not instead of, the financial statements prepared in accordance with GAAP.  Each non-GAAP financial measure is presented along with the corresponding GAAP measure so as not to imply that more emphasis should be placed on the non-GAAP measure.  The non-GAAP financial information presented may be determined or calculated differently by other companies. Pretax income (loss) attributable to Altisource is calculated by deducting non-controlling interests from income (loss) before income taxes and non-controlling interests.  Adjusted pretax income attributable to Altisource is calculated by adding intangible asset amortization expense plus litigation settlement loss, net of $4.0 million insurance recovery, plus impairment losses and deducting the gain associated with the reduction of the Equator Earn Out) from pretax income (loss) attributable to Altisource.  Adjusted net income attributable to Altisource is calculated by adding intangible asset amortization expense (net of tax) plus litigation settlement loss, net of insurance recovery (net of tax), plus impairment losses (net of tax) and deducting the gain associated with the reduction of the Equator Earn Out (net of tax) from GAAP net income (loss) attributable to Altisource.  Adjusted diluted earnings per share is calculated by dividing net income (loss) attributable to Altisource plus intangible asset amortization expense (net of tax), plus litigation settlement loss, net of insurance recovery (net of tax), plus impairment losses (net of tax) less the gain associated with the reduction of the Equator Earn Out (net of tax) by the weighted average number of diluted shares. Reconciliations of the non-GAAP measures to the corresponding GAAP measures are as follows: Note: Amounts may not add to the total due to rounding.


News Article | February 23, 2017
Site: www.businesswire.com

NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency, Inc. (KBRA) is pleased to announce the assignment of preliminary ratings to the Class A notes, which are the sole class of securities issued in the VSD 2017-PLT1 transaction. VSD 2017-PLT1 is structured as a liquidation vehicle that monetizes recoveries from the assets to pay the rated notes. The transaction’s collateral is primarily comprised of performing loans (93.3% of the issuer’s basis), and also includes small exposures to non-performing loans (NPL) and real-estate-owned (REO) properties. Collectively, these equate to 201 assets, which have an aggregate unpaid principal balance (UPB) of $378.1 million and were acquired (191 assets) or originated (10 assets) by Värde Partners. Using the acquisition cost of the $299.6 million acquired assets and the UPB of the originated assets, the aggregate basis of the portfolio is $348.2 million (92.1% of UPB). The underlying collateral is comprised of commercial real estate properties (95.3% of the sponsor’s basis), land (4.5%) and single-family rental assets (0.2%). The top three state exposures are California (15.0%), Illinois (14.8%) and Texas (12.6%). The largest, top-ten, top-25 and top-50 relationships comprise 7.2%, 43.6%, 67.8%, and 84.2% of the pool’s acquisition basis, respectively. To evaluate and rate this transaction, KBRA followed a multi-step “ground-up” approach, which leveraged our commercial real estate methodologies. KBRA derived a “baseline value” for each collateral item using one or more methods. These included the income capitalization approach, comparable sales approach, as well as discounting third party valuation conclusions and the asset manager’s estimates of net recoveries. The baseline values were adjusted to derive KBRA’s baseline recovery proceeds, reflective of, among other items, the following: KBRA’s stressed resolution path and timeline, NOI captured from defaulted and REO assets, carry costs for non-income or negative-income producing assets, legal and foreclosure costs, and property sales costs. The baseline values and recovery proceeds were stressed further under the investment grade stress scenario. The resulting proceeds were applied to the transaction waterfall, while taking into account reserves, cash flow leakages and other structural elements, to determine our credit rating. This methodology is detailed in our publication entitled U.S. Liquidating Trust Rating Methodology for Pools of Distressed Commercial Real Estate, which was published on December 3, 2015, and can be accessed on our website. Overall, KBRA’s baseline recovery amounts were 83.9% of the UPB, 91.1% of the issuer’s acquisition basis, and 76.0% of the issuer’s projected net recovery amounts. For further details on KBRA’s analysis, please see our Presale Report, entitled VSD 2017-PLT1, which was published today at www.kbra.com. KBRA is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO). In addition, KBRA is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP).


LOS ANGELES, Feb. 16, 2017 /PRNewswire/ -- Rock legends REO SPEEDWAGON and STYX, along with very special guest star DON FELDER—formerly of the Eagles—will join forces for the "United We Rock" U.S. summer tour, which kicks off in Ridgefield, WA on June 20. Produced by Live Nation, tickets...


PHILADELPHIA--(BUSINESS WIRE)--RAIT Financial Trust (RAIT) (NYSE: RAS) today announced that its Board of Directors has approved a comprehensive strategy and transformation initiative to drive long-term revenue growth and enhance shareholder value. Pursuant to this initiative, following the strategy that RAIT began pursuing in 2016, RAIT will continue to transform into a more focused, cost-efficient and lower leverage business concentrated on its core commercial real estate lending business. In connection with executing its strategy and transformation initiative, RAIT has identified several key priorities designed to differentiate RAIT, improve RAIT’s margins and enhance shareholder value over time by delivering stable and repeatable risk-adjusted returns. Our transformational strategy is focused on the following priorities: “We believe our strategy of transforming RAIT into a pure-play commercial real estate lender is the right strategy to differentiate RAIT, drive sustainable earnings and, ultimately, grow long-term shareholder value.” said Scott Davidson, RAIT’s Chief Executive Officer. “As we detail in our investor presentation and will discuss during our fourth quarter 2016 earnings call, we have achieved significant progress in 2016 in implementing our strategy and transformation initiative and look to carry that momentum into 2017.” RAIT has posted to its website an updated investor presentation which provides key elements of RAIT’s comprehensive strategy and transformation initiative. The full presentation, which RAIT will be using with shareholders as part of RAIT’s ongoing program to meet with investors and solicit their views and opinions regarding its strategy for enhancing shareholder value, is available on RAIT’s home page and in RAIT’s investor relations website in the “Presentations” section. Shareholders and other stakeholders are encouraged to read the entire presentation. RAIT plans to discuss its strategy and transformation initiative further during its fourth quarter 2016 earnings call. Interested parties can listen to the live conference call via webcast at 9:30 AM ET on Friday, February 24, 2017 from the home page of the RAIT Financial Trust website at www.rait.com or by dialing 1.844.775.2541, access code 64221042. For those who are not available to listen to the live call, the replay will be available shortly following the live call on RAIT’s website and telephonically until Friday, March 3, 2017, by dialing 855.859.2056, access code 64221042. RAIT Financial Trust is an internally-managed real estate investment trust focused on providing debt financing options to owners of commercial real estate throughout the United States. For more information, please visit www.rait.com or call Investor Relations at 215.207.2100. This press release may contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as “2017 expectations,” “guidance,” “may,” “plan”, “should,” “expect,” “intend,” “anticipate,” “estimate,” “believe,” “seek,” “opportunities” or other similar words or terms. Because such statements include risks, uncertainties and contingencies, actual results may differ materially from the expectations, intentions, beliefs, plans or predictions of the future expressed or implied by such forward-looking statements. RAIT’s forward-looking statements include, but are not limited to, statements regarding RAIT’s plans and initiatives and 2017 expectations to (i) simplify its business model, (ii) focus on its core commercial real estate lending business, (iii) increase loan origination levels, when compared to 2016, as capital from non-lending related asset sales is re-deployed, (iv) deleverage by using cash generated by asset sales to repay debt, (v) opportunistically divest and maximize the value of RAIT’s legacy REO portfolio and existing property management operations and, ultimately, minimize REO holdings, (vi) significantly reduce its total expense base, (vii) continue to sell non-lending assets, (viii) achieve significant annual expense savings in connection with the internalization of IRT, (ix) sell in whole or substantial part its Urban Retail commercial property management business and achieve costs savings in connection with such sale, and (x) enhance its long-term prospects and create value for its shareholders. Such forward-looking statements are based upon RAIT’s historical performance and its current plans, estimates, predictions and expectations and are not a representation that such plans, estimates, predictions or expectations will be achieved. Because such statements include risks, uncertainties and contingencies, actual results may differ materially from the expectations, intentions, beliefs, plans or predictions of the future expressed or implied by such forward-looking statements. Risks, uncertainties and contingencies that may affect the results expressed or implied by RAIT’s forward-looking statements include, but are not limited to: (i) whether RAIT will be able to continue to implement its strategy to transition RAIT to a more lender focused, simpler, and more cost-efficient business model, to deleverage and to generate enhanced returns for its shareholders; (ii) whether RAIT will be able to continue to opportunistically divest and maximize the value of RAIT’s legacy REO portfolio and existing property management operations and the majority of RAIT’s non-lending assets; (iii) whether anticipated cost savings from the internalization of IRT will be achieved; (iv) whether the divestiture of RAIT’s CRE portfolio and other non-lending assets will lead to lower asset management costs and lower expenses; (v) whether RAIT will be able to reduce compensation and G&A expenses and indebtedness; (vi) whether RAIT’s new leadership will lead to enhanced value for shareholders; (vii) whether RAIT will be able to create sustainable earnings and grow book value; (viii) whether RAIT will be able to redeploy capital from non-lending related asset sales; (ix) whether RAIT will be able to increase loan origination levels; (x) whether the disposition of non-core assets, reductions in debt levels and expected loan repayments will impact RAIT’s earning and CAD; (xi) whether RAIT will continue to pay dividends and the amount of such dividends; (xii) whether RAIT will be able to organically increase reliance on match-funded asset-level debt; (xiii) overall conditions in commercial real estate and the economy generally; (xiv) whether market conditions will enable us to continue to implement our capital recycling and debt reduction plan involving selling properties and repurchasing or paying down our debt; (xv) whether we will be able to originate sufficient bridge loans; (xvi) whether the timing and amount of investments, repayments, any capital raised and our use of leverage will vary from those underlying our assumptions; (xvii) changes in the expected yield of our investments; (xviii) changes in financial markets and interest rates, or to the business or financial condition of RAIT or its business; (xix) whether RAIT will be able to originate loans in the amounts assumed; (xx) whether RAIT will generate any CMBS gain on sale profits; (xxi) whether the amount of loan repayments will be at the level assumed; (xxii) whether our management changes will be successfully implemented; (xxiii) whether RAIT will be able to dispose of its industrial portfolio or sell the other properties; (xxiv) the availability of financing and capital, including through the capital and securitization markets; (xxv) risks, disruption, costs and uncertainty caused by or related to the actions of activist shareholders, including that if individuals are elected to our Board with a specific agenda, it may adversely affect our ability to effectively implement our business strategy and create value for our shareholders and perceived uncertainties as to our future direction as a result of potential changes to the composition of our Board may lead to the perception of a change in the direction of our business, instability or a lack of continuity which may be exploited by our competitors, cause concern to our current or potential customers, and may result in the loss of potential business opportunities and make it more difficult to attract and retain qualified personnel and business partners; and (xxvi) other factors described in RAIT’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and in other filings with the SEC. RAIT undertakes no obligation to update these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as may be required by law.


SCOTTSDALE, Ariz.--(BUSINESS WIRE)--Colony Starwood Homes (NYSE:SFR) (the “Company”), a leading single-family rental real estate investment trust (“REIT”), today announced operating and financial results for the three and twelve months ended December 31, 2016. Capitalized terms used herein have the meanings set forth in the Appendix. “Fourth quarter Core FFO of $0.47 per share, supported by our Same Store Core NOI margin of 66.2%, caps a year of tremendous accomplishments for Colony Starwood Homes,” stated Fred Tuomi, the Company’s CEO. “Demand for our high-quality, well-located single-family rental homes and operational efficiencies from market density produced Full Year Same Store NOI growth of 11.0%. Since completing our merger in early 2016, we have strengthened our balance sheet by reducing outstanding debt, extending maturities and increasing fixed rate debt from 10% to over 80% today. Having met or exceeded our stated goals for our first full year as Colony Starwood Homes, we are highly confident in our ability to continue delivering superior results. Our 2017 full-year growth expectations reflect strong fundamentals in our high growth markets, the underlying strength of our existing portfolio, and the additional growth opportunities we are pursuing.” The 2016 financial results of the Company (other than Quarterly Same Store or Full Year Same Store results) include the historical financial results of Starwood Waypoint Residential Trust (“SWAY”) beginning on January 5, 2016, which was the date of the merger between Colony American Homes (“CAH”) and SWAY (the “Merger”). Historical financial results (other than Same Store results) as of dates or for periods prior to January 5, 2016 represent only the pre-Merger financial results of CAH and do not reflect what the financial results would have been had the Merger been complete during such periods. Total revenues were $146.4 million for the three months ended December 31, 2016, and net loss attributable to common shareholders was approximately $10.5 million, or ($0.10) per share, driven by depreciation and amortization expense. NAREIT FFO was $40.0 million for the three months ended December 31, 2016, or $0.37 per share, and Core FFO was $51.0 million, or $0.47 per share. NAREIT FFO and Core FFO are common supplemental measures of operating performance for a REIT, and the Company believes both are useful to investors as a complement to GAAP measures because they facilitate an understanding of the operating performance of the Company’s properties. For the Company’s Quarterly Same Store portfolio of 28,146 homes, revenue for the three months ended December 31, 2016 was $131.4 million, a 5.4% increase in those homes’ revenues as compared to the three months ended December 31, 2015. For the Company’s Full Year Same Store portfolio of 22,363 homes, revenue for the twelve months ended December 31, 2016 was $402.7 million, a 6.2% increase in those homes’ revenues as compared to the twelve months ended December 31, 2015. For the Quarterly Same Store portfolio, property operating expenses were down by 8.8% from the three months ended December 31, 2015, resulting in an 15.5% growth of Quarterly Same Store NOI for the three months ended December 31, 2016 as compared to the three months ended December 31, 2015. For the Full Year Same Store portfolio, property operating expenses were down 0.7% from the twelve months ended December 31, 2015, resulting in an 11.0% increase of Full Year Same Store NOI for the twelve months ended December 31, 2016 as compared to the twelve months ended December 31, 2015. Quarterly and Full Year Same Store Core NOI margins were 66.2% and 63.8%, respectively. The table below summarizes Quarterly and Full Year Same Store operating results. (1) Quarterly Same Store and Full Year Same Store results reflect the three months and twelve months ended December 31, 2016, respectively. During the three months ended December 31, 2016, the Company acquired 549 homes for an aggregate estimated total investment of approximately $132.0 million, or approximately $240,000 per home, including estimated investment costs for renovation. The Company sold 228 single-family rental homes for gross sales proceeds of $38.2 million, resulting in a gain of approximately $1.3 million. For the twelve months ended December 31, 2016, the company acquired 1,079 homes for an aggregate estimated total investment of approximately $262.8 million, or $244,000 per home, including estimated investment costs for renovation. The Company sold 976 single-family rental homes for gross sales proceeds of $167.4 million, resulting in a gain of approximately $4.7 million. On May 4, 2016, the Company’s board of trustees (the “Board”) authorized the exit of the non-performing loan (“NPL”) business. The remaining operations of the NPL business segment are recorded as discontinued operations, net for the three and twelve months ended December 31, 2016 and all comparable periods. In Q4 the Company sold 220 real estate owned (“REO”) homes in the NPL business segment for $31.4 million of total cash proceeds, of which $14.4 million was used to pay down associated debt. As of December 31, 2016 there was $19.3 million of outstanding associated debt; subsequent to December 31, 2016 this debt was paid in full and the warehouse line was extinguished. As of December 31, 2016, the Company had $3.8 billion of debt outstanding and approximately $492.0 million of undrawn commitments on its credit facilities. Since the Merger closed on January 5, 2016 through December 31, 2016, the Company reduced its outstanding debt by approximately $354.0 million. Subsequent to December 31, 2016, the Company sold $345.0 million of 3.50% convertible senior notes due 2022. The Company used the net proceeds from the new convertible offering to repurchase, in privately negotiated transactions, substantially all of its 4.50% convertible senior notes due in 2017. Remaining proceeds from the note issuance were used to repay amounts drawn on the Company’s credit facilities, to fund ongoing asset acquisitions and for general corporate purposes. The Company did not repurchase any shares in the fourth quarter of 2016 under its $250.0 million repurchase program, which is authorized through May 6, 2017. To date, the Company has purchased 2.4 million shares for an aggregate purchase price of $52.8 million at an average of $22.19 per share under the program. On February 22, 2017, the Board declared a dividend of $0.22 per common share for the first quarter of 2017, which will be paid on April 14, 2017 to shareholders of record on March 31, 2017. The Company does not provide forward-looking guidance for certain financial measures on a GAAP basis because it is unable to reasonably predict certain items contained in the GAAP measures, including one-time and infrequent items that are not indicative of the Company’s ongoing operations. Such items include, but are not limited to, discontinued operations, share-based compensation and other items not reflective of the Company's ongoing operations. (1) 2017 Full Year Same Store property count is expected to be approximately 28,850, subject to dispositions throughout the year. This outlook is based on a number of assumptions, many of which are outside the Company’s control and all of which are subject to change. This outlook reflects the Company’s expectations on (1) existing investments and (2) yield on incremental investments inclusive of the Company’s existing pipeline. All guidance is based on current expectations of future economic conditions and the judgment of the Company’s management team. Please refer to the Forward Looking Statement disclosure on page 8. A conference call is scheduled on Tuesday, February 28, 2017, at 10:00 a.m. Eastern Time to discuss the Company’s financial results for the three and twelve months ended December 31, 2016. The domestic dial-in number is 1-877-407-9039 (for U.S. and Canada) and the international dial-in number is 1-201-689-8470 (passcode not required). An audio webcast may be accessed at www.colonystarwood.com in the investor relations section. A replay of the call will be available through March 31, 2017 and can be accessed by calling 1-844-512-2921 (U.S. and Canada) or 1-412-317-6671 (international), replay pin number 13653043, or by using the link at www.colonystarwood.com, in the investor relations section. Colony Starwood Homes (NYSE: SFR) is one of the largest publicly traded owners and operators of single-family rental homes in the United States. Colony Starwood Homes acquires, renovates, leases, maintains and manages single-family homes in markets that exhibit favorable demographics and long-term economic trends, as well as strengthening demand for rental properties. Colony Starwood Homes is building its business upon a foundation of respect for its residents and the communities in which it operates. Additional information can be found at www.colonystarwood.com. A copy of the Fourth Quarter 2016 Supplemental Information Package (“Q4 2016 Supplement”) and this press release are available on the Company’s website at www.colonystarwood.com. This press release and the Q4 2016 Supplement contain and may refer to certain non-GAAP financial measures and terms that management believes are helpful in understanding our business, as further set forth in the definitions, explanations and reconciliations of each non-GAAP financial measure to its most comparable GAAP financial measures included in the Appendix. These measures and terms are in addition to, not a substitute for or superior to, measures of financial performance prepared in accordance with GAAP and should be read together with the most comparable GAAP measures. Certain statements in this press release and the quarterly supplement/presentation are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws and are based on certain assumptions and discuss future expectations, describe future plans and strategies and contain financial and operating projections or state other forward-looking information. The Company’s ability to predict results or the actual effect of future events, actions, plans or strategies is inherently uncertain. Although the Company believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, the Company’s actual results and performance could differ materially from those set forth in, or implied by, the forward-looking statements. Factors that could materially and adversely affect the Company’s business, financial condition, liquidity, results of operations and prospects, as well as the Company’s ability to make distributions to its shareholders, include, but are not limited to: the factors referenced in the Company’s Annual Report on Form 10-K; unanticipated increases in financing and other costs, including a rise in interest rates; the availability, terms and the Company’s ability to effectively deploy short-term and long-term capital; the possibility that unexpected liabilities may arise from the Company’s merger (the “Merger”) with Colony American Homes (“CAH”), including the outcome of any legal proceedings that have been or may be instituted against the Company, CAH or others in connection with the Merger and the associated transactions; changes in the Company’s business and growth strategies; the Company’s ability to hire and retain highly skilled managerial, investment, financial and operational personnel; volatility in the real estate industry, interest rates and spreads, the debt or equity markets, the economy generally or the rental home market specifically, whether the result of market events or otherwise; events or circumstances that undermine confidence in the financial markets or otherwise have a broad impact on financial markets, such as the sudden instability or collapse of large financial institutions or other significant corporations, terrorist attacks, natural or man-made disasters, or threatened or actual armed conflicts; declines in the value of single-family residential homes, and macroeconomic shifts in demand for, and competition in the supply of, rental homes; the availability of attractive investment opportunities in homes that satisfy the Company’s investment objective and business and growth strategies; the Company’s ability to convert the properties it acquires into rental homes generating attractive returns and to effectively control the timing and costs relating to the renovation and operation of the properties; the Company’s ability to complete its exit from the non-performing loan (“NPL”) (and related real estate owned) business in the anticipated time period on acceptable terms and to re-deploy net cash proceeds therefrom; the Company’s ability to lease or re-lease its rental homes to qualified residents on attractive terms or at all; the failure of residents to pay rent when due or otherwise perform their lease obligations; the Company’s ability to effectively manage its portfolio of rental homes; the concentration of credit risks to which the Company is exposed; the rates of default or decreased recovery rates on the Company’s target assets; the adequacy of the Company’s cash reserves and working capital; potential conflicts of interest with Starwood Capital Group, Colony Capital, LLC (“Colony Capital”), Colony NorthStar, Inc. (“Colony NorthStar”) and their affiliates and managed investment activities; the timing of cash flows, if any, from the Company’s investments; the Company’s expected leverage; financial and operating covenants contained in the Company’s credit facilities and securitizations that could restrict its business and investment activities; effects of derivative and hedging transactions; the Company’s ability to maintain effective internal controls as required by the Sarbanes-Oxley Act of 2002 and to comply with other public company regulatory requirements; the Company’s ability to maintain its exemption from registration as an investment company under the Investment Company Act of 1940, as amended; actions and initiatives of the U.S., state and municipal governments and changes to governments’ policies that impact the economy generally and, more specifically, the housing and rental markets; changes in governmental regulations, tax laws (including changes to laws governing the taxation of real estate investment trusts (“REITs”)) and rates, and similar matters; limitations imposed on the Company’s business and its ability to satisfy complex rules in order for the Company and, if applicable, certain of its subsidiaries to qualify as a REIT for U.S. federal income tax purposes and the ability of certain of the Company’s subsidiaries to qualify as taxable REIT subsidiaries for U.S. federal income tax purposes, and the Company’s ability and the ability of its subsidiaries to operate effectively within the limitations imposed by these rules; and estimates relating to the Company’s ability to make distributions to its shareholders in the future. You should not place undue reliance on any forward-looking statement and should consider all of the uncertainties and risks described above, as well as those more fully discussed in the reports and other documents filed by the Company with the Securities and Exchange Commission from time to time. Except as required by law, the Company is under no duty to, and the Company does not intend to, update any of the forward-looking statements appearing herein, whether as a result of new information, future events or otherwise. (1) For GAAP purposes, the Merger resulted in a reverse acquisition of SWAY by CAH. Historical financial statements for periods prior to the Merger include only the results of operations and financial position of CAH.


PHOENIX, AZ--(Marketwired - Feb 27, 2017) - Sperry Commercial Global Affiliates, LLC has announced that Insignia Commercial Real Estate, a leading Phoenix- based brokerage firm, has joined as its newest affiliate in Phoenix. Under the direction of Neil Sherman, Managing Director, Insignia has garnered a highly successful track record of $2.7 billion in closed transactions throughout the Arizona market over the past 32 years. The firm is known for representing buyers and sellers of multifamily, retail, office and land as well as handling sales of non-performing loans and REO properties on behalf of lenders and servicers across the country. "I believe this represents a fantastic opportunity to combine our team's market expertise with the 40 plus years legacy of success that Rand Sperry has created. I've known Rand and his stellar reputation since the late '80s and wanted to be involved early as he builds Sperry Commercial Global Affiliates into a major global brokerage platform," said Sherman. "I look forward to leveraging the reach and resources of this platform which includes property management, capital markets, equities and advisory services, to the benefit of our clients. "We look forward to bringing Neil and his team on board as our first Phoenix affiliate to carry the Sperry Commercial Global Affiliates name," said Rand Sperry, CEO, Sperry Commercial Global Affiliates. "I've known Neil for more than 15 years. Over that time, I've known him as one of the most active and hard-working brokers in the market. As the go-to broker in the Phoenix market, I'm excited to now bring him into our franchise to further build our brand." Sperry Commercial Global Affiliates has been aggressively adding affiliates across the country, including Las Vegas, Phoenix, Los Angeles, St. Louis, Chicago, Alabama and Dallas, further increasing its local market access. "The Phoenix market has been performing exceptionally well over the past eight or nine years, like most real estate markets across the US. Looking ahead, however, we believe the market will likely begin to level off or even pull back a bit. But that is exactly when investors will need the experience and knowledge of a sophisticated brokerage team," added Sherman. The current Insignia team numbers seven brokers and support personnel with plans to grow to 15 to 20 brokers within the next 12 to 15 months. Sherman noted that the firm plans to add a property management platform and a capital markets group over the next year as well. About Sperry Commercial Global Affiliates, LLC: Sperry Commercial Global Affiliates, LLC will offer the highest level of commercial real estate services available through thoughtful, cooperative, and ethical practices. The firm is headquartered in Irvine with more than 12 offices located throughout the Western United States. Unique to Sperry Commercial Global Affiliates, LLC are a system of tools for affiliates that include a comprehensive real estate intranet and transaction management platform named Sperry CENTRAL and a custom designed marketing support software system called SperryLINK, among other immediate industry advantages. For more information, visit www.sperrycga.com.


LOS ANGELES--(BUSINESS WIRE)--Broadway Financial Corporation (the “Company”) (NASDAQ Capital Market: BYFC), parent company of Broadway Federal Bank, f.s.b. (the “Bank”), today reported net income of $2.2 million, or $0.08 per diluted share, for the fourth quarter of 2016, compared to net income of $5.6 million, or $0.19 per diluted share for the fourth quarter of 2015. For the year ended December 31, 2016, the Company reported net income of $3.5 million, or $0.12 per diluted share, compared to $9.1 million, or $0.31 per diluted share, for the year ended December 31, 2015. Net income for the fourth quarter and calendar year 2016 include an income tax benefit of $2.2 million, which resulted from the reversal of the remaining valuation allowance on deferred tax assets, based on an analysis of the potential for full utilization of those assets. Also, results for the fourth quarter and calendar year 2016 were impacted by non-recurring professional fees totaling $369 thousand related to the repurchase of shares from the United States Department of the Treasury (the “U.S. Treasury”). In contrast, net income for the corresponding periods of 2015 include an income tax benefit of $4.6 million, which resulted from a partial reversal of the valuation allowance on deferred tax assets. Results during 2015 also included $3.7 million in loan loss provision recaptures, compared to $550 thousand in recaptures during 2016. Furthermore, 2015 results also included $1.8 million in gains on the sale of $164.1 million in loans, which were sold to meet regulatory guidelines regarding loan concentration. There were no loan sales during 2016 and thus no gains on the sale of loans. Excluding the unusual items mentioned above, earnings increased by $1.4 million during the fourth quarter of 2016 and $1.7 million during the year 2016, from the comparable periods during 2015, due to increases in net interest income and lower non-interest expense. Net interest income (before loan loss provision recaptures) increased to $2.9 million during the fourth quarter of 2016 from $2.4 million during the fourth quarter 2015 and increased to $11.4 million during the year 2016 from $11.3 million during the year 2015. Non-interest expense decreased by $1.1 million, or 27%, during the fourth quarter of 2016, compared to the fourth quarter of 2015, and decreased by $1.6 million, or 12%, during calendar 2016, compared to calendar 2015. Chief Executive Officer, Wayne Bradshaw commented, “We continue to focus on growth, profits, and value creation for our stockholders. Our strong loan quality has allowed us to obtain improved loan concentration limits from the Bank’s primary regulator, which in turn is providing opportunities to continue re-building our loan portfolio. We grew our loan portfolio by over 24% during the year, based on originations of $46.9 million during the fourth quarter and $137.7 million for the full year, and increased our net interest income by 20% during the fourth quarter over the comparable quarter in 2015. Moreover, we have been able to grow while improving the credit quality of our loan portfolio; at the end of 2016, we had less than $1.4 million in delinquent loans, no REO and all of our $2.9 million of non-accrual loans were current in their payments. “During 2016 we also took steps to strengthen our stockholder base by reducing the ownership of Broadway that is held by the U.S. Treasury, and attracting another high-quality institutional investor. As previously announced, these steps allowed us to reduce the U.S. Treasury’s stake by over 46% and increased the ownership of the Bank’s ESOP to 6.8% of the Company. “We are confident that our strategy of focusing on well-managed multi-family residential properties located within low-to-moderate income communities within Southern California, supplemented by new originations of construction loans that can leverage our existing customer relationships and the experience and expertise of our lending team, will result in continued growth that should benefit our stockholders.” For the fourth quarter of 2016, net interest income (before loan loss provision recapture) increased by $482 thousand, or 20%, from $2.4 million of net interest income for the fourth quarter of 2015. This increase reflected an increase in the average balance of loans receivable, which increased interest income by $996 thousand, offset in part by a decrease in average yield for the portfolio, which reduced interest income by $569 thousand. During 2016, the Bank originated $137.7 million of multi-family loans, which increased the average balance of loans receivable by $94.4 million during the fourth quarter of 2016, compared to the fourth quarter of 2015. The average yield on the loans decreased, however, by 76 basis points during the fourth quarter of 2016 compared to the comparable period in 2015, primarily because the average interest rate on loans originated during 2016 was 156 basis points lower than the average interest rate on loans that were paid off during 2016. Annualized net interest margin was 2.81% for the fourth quarter of 2016, compared to 2.42% for the fourth quarter of 2015. For the year ended December 31, 2016, net interest income totaled $11.4 million, up $122 thousand, or 1%, from $11.3 million of net interest income for the 2015. The increase in net interest income was primarily attributable to an increase of $49.6 million in the average balance of loans, which increased interest income by $2.2 million. Partially offsetting this increase was the impact of a decrease of 64 basis points in the average yield on loans to 4.24% for 2016, from 4.88% for 2015, which reduced loan interest income by $2.0 million. The decline in the average yield on loans was primarily attributable to the single family loans that were purchased at the end of 2015, which had an average balance of $90.5 million and an average yield of 2.46% during 2016. These purchased loans reduced the average yield on our single family loan portfolio to 3.45% for the year ended December 31, 2016 from 5.62% for the year ended December 31, 2015. Additionally, the competitive low-interest rate environment during 2016 decreased overall loan yields because the yield on new loans originated during 2016 was lower than the yield on loans that were paid off during the year. Net interest margin was 2.90% for 2016, compared to 3.11% for 2015. The Bank did not record any loan loss provision or recapture for the fourth quarter of 2016. On a year-to-date basis, the Bank recorded loan loss provision recaptures of $550 thousand. During the latter part of 2016 the increase in the requirements for the Bank’s allowance for loan and lease losses (“ALLL”) that resulted from growth in the Bank’s loan portfolio was offset by a decrease in ALLL requirements on the existing portfolio as the overall credit quality of the loan portfolio continued to improve. In comparison, the Bank recorded loan loss provision recaptures of $2.0 million and $3.7 million for the fourth quarter and calendar year 2015, respectively. Non-interest income for the fourth quarter of 2016 totaled $158 thousand, compared to $856 thousand for the fourth quarter of 2015. Non-interest income decreased by $698 thousand in the fourth quarter of 2016 primarily because the fourth quarter of 2015 included a gain on sale of loans of $499 thousand, as well as a settlement of a legal matter involving a customer that produced income of $148 thousand. Non-interest income for the year ended December 31, 2016 totaled $1.0 million, compared to $2.9 million for the year ended December 31, 2015. The decrease of $1.9 million in non-interest income during 2016 was primarily due to gains of $1.8 million from sales of loans during 2015. Additionally, the grant received from the U.S. Treasury’s Community Development Financial Institutions Fund in 2016 was $90 thousand lower than the grant received in 2015. Non-interest expense for the fourth quarter of 2016 totaled $3.1 million, compared to $4.2 million for the fourth quarter of 2015. The decrease of $1.1 million in non-interest expense was primarily due to a decrease of $1.2 million in compensation and benefits expense, as the fourth quarter of 2015 included a special accrual of $1.2 million for a contribution to the Company’s ESOP. Additionally, FDIC assessments decreased by $129 thousand and other expense, including OCC assessments, corporate insurance, appraisal costs and foreclosed property costs, decreased by $114 thousand in the fourth quarter of 2016. Partially offsetting these decreases in non-interest expense was an increase of $347 thousand in professional services expense for the fourth quarter of 2016 compared to the same period in 2015, primarily resulting from higher legal and consulting fees in connection with the repurchase of shares from the U.S. Treasury. For the year ended December 31, 2016, non-interest expense totaled $11.8 million, compared to $13.4 million for the same period in 2015. The decrease of $1.6 million in non-interest expense was primarily due to a decrease of $1.1 million in compensation and benefits expense, primarily reflecting the accrual for the ESOP contribution in 2015. Additionally, FDIC assessments decreased by $275 thousand and other expense decreased by $342 thousand in 2016, partially offset by the increase in professional fees related to the repurchase of shares from the U.S. Treasury. The Company recorded an income tax benefit of $2.2 million for the fourth quarter and the year ended December 31, 2016, compared to $4.6 million for the fourth quarter and the year ended December 31, 2015. The tax benefits for 2016 and 2015 reflected the reversals of the valuation allowance on deferred tax assets based on an analysis of the potential for utilization of the net operating losses included in the deferred tax assets. A portion of the net operating loss carryforwards were used to offset current taxable income in 2016 and 2015. As of December 31, 2016, the Company had no valuation allowance on its deferred tax assets, which totaled $6.9 million. Total assets increased by $26.2 million to $429.1 million at December 31, 2016 from $402.9 million at December 31, 2015. During 2016, the Bank increased net loans receivable by $75.3 million, which was funded with $49.4 million in cash and cash equivalents, an increase of $14.8 million in deposits, and an increase of $13.0 million in FHLB advances, as we grew our multi-family residential loan portfolio to improve net interest income. Loans receivable, net of ALLL, totaled $379.5 million at December 31, 2016, compared to $304.2 million at December 31, 2015. New loan originations during 2016 totaled $137.7 million, compared to $112.5 million during 2015. The Bank did not purchase any loans during 2016, but purchased $99.7 million in single family loans in the fourth quarter of 2015. There were no loan sales during 2016, compared to $164.1 million in sales during 2015. Loan repayments during 2016 totaled $63.4 million, compared to $41.7 million during 2015. At December 31, 2016, 60.3% of the Bank’s loan portfolio consisted of multi-family loans, 27.4% consisted of single family residential loans, 9.7% consisted of church loans, and 2.6% consisted of commercial and other loans. In comparison, at December 31, 2015, 38.7% of the Bank’s loan portfolio consisted of multi-family loans, 42.6% consisted of single family residential loans, 14.8% consisted of church loans, and 3.9% consisted of commercial real estate loans. Deposits increased to $287.4 million at December 31, 2016 from $272.6 million at December 31, 2015, which consisted of an increase of $9.8 million in core deposits (NOW, demand, money market and passbook accounts) and an increase of $5.0 million in CDs. The increase in core deposits during 2016 was primarily due to a new VIP money market product. The increase in CDs during 2016 was primarily due to an increase of $28.6 million in Certificate of Deposit Account Registry Service (“CDARS”) accounts. CDARS is a deposit placement service that allows the Bank to place customers’ funds in FDIC-insured certificates of deposits at other banks and, at the same time, receive an equal sum of funds from the customers of other banks in the CDARS Network. The increase in CDARS was partially offset by a decrease of $19.2 million in retail CDs, of which $10.0 million was from one, ongoing, deposit relationship, and $4.4 million was from maturities of QwickRate CDs. Total borrowings at December 31, 2016 consisted of advances to the Bank from the FHLB of $85.0 million, and subordinated debentures issued by the Company of $5.1 million, compared to advances from the FHLB of $72.0 million and subordinated debentures of $5.1 million at December 31, 2015. During 2016, the Bank borrowed $13.0 million from the FHLB to fund loan growth. Stockholders' equity was $45.5 million, or 10.61% of the Company’s total assets, at December 31, 2016, compared to $46.2 million, or 11.46% of the Company’s total assets, at December 31, 2015. The Company’s book value was $1.67 per share as of December 31, 2016, compared to $1.59 per share as of December 31, 2015. During the fourth quarter of 2016, the Company repurchased 2,513,835 voting shares, at a price of $1.59 per share, from the U.S. Treasury and two other stockholders for a total cost of $4.0 million, and made a loan of $1.2 million to the Bank’s ESOP. The Company financed these transactions with a dividend of $4.0 million received from the Bank, and proceeds of $1.2 million from a private placement of 737,861 shares of non-voting common stock. As a result of completing these transactions, the number of outstanding shares decreased to 27,300,734 shares at December 31, 2016, from 29,076,708 shares at December 31, 2015. Also, a part of these transactions, the U.S. Treasury reduced its stake in the Company by 46.3% and the Bank’s ESOP increased its holdings to just under 10% of the Company’s voting shares and 6.8% of the Company’s total shares. At December 31, 2016, the Bank’s Total Capital ratio was 16.62% and its Leverage ratio (Tier 1 Capital to adjusted total assets) was 10.60%, compared to a Total Capital ratio of 20.71% and a Leverage ratio of 11.56% at December 31, 2015. The decrease in the Bank’s Total Capital and Leverage ratios were primarily due to the dividend paid to the holding company during the fourth quarter of 2016. Broadway Financial Corporation conducts its operations through its wholly-owned subsidiary, Broadway Federal Bank, f.s.b., which is the leading community-oriented savings bank in Southern California serving low-to-moderate income communities. We offer a variety of residential and commercial real estate loan products for consumers, businesses, and non-profit organizations, other loan products, and a variety of deposit products, including checking, savings and money market accounts, certificates of deposits and retirement accounts. The Bank operates three full service branches, two in the city of Los Angeles, and one located in the nearby city of Inglewood, California. Shareholders, analysts and others seeking information about the Company are invited to write to: Broadway Financial Corporation, Investor Relations, 5055 Wilshire Blvd., Suite 500, Los Angeles, CA 90036, or visit our website at www.broadwayfederalbank.com. This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based upon our management’s current expectations, and involve risks and uncertainties. Actual results or performance may differ materially from those suggested, expressed, or implied by the forward-looking statements due to a wide range of factors including, but not limited to, the general business environment, the real estate market, competitive conditions in the business and geographic areas in which the Company conducts its business, regulatory actions or changes, and other risks detailed in the Company’s reports filed with the Securities and Exchange Commission, including the Company’s Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q. The Company undertakes no obligation to revise any forward-looking statement to reflect any future events or circumstances, except to the extent required by law.

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