Hunt Companies Finance Trust Reports Third Quarter 2018 Financial Results

⁽¹⁾ 

Core Earnings is a non-GAAP measure.  Please refer to the reconciliation of the most comparable GAAP measure below.

For the period ended
September 30, 2018

Multi-Family 
MBS⁽¹⁾⁽²⁾

Commercial 
Mortgage Loans

MSRs

Unrestricted 
Cash⁽³⁾

Total

Market Value

5,331,931

544,586,537

4,209,124

9,912,051

564,039,643

Collateralized loan obligations

-

(503,487,121)

-

-

(503,487,121)

Other⁽⁴⁾

4,071

17,920,855

-

(4,109,446)

13,815,480

Restricted Cash and Due to Broker

-

77,694,264

-

-

77,694,264

Equity Allocated

5,336,002

136,714,535

4,209,124

5,802,605

152,062,266

(1)

Information with respect to Multi-Family MBS and the resulting total is presented on a non-GAAP basis. On a GAAP basis, which excludes the impact of consolidation of the FREMF 2012-KF01 Trust, the fair value of our investments in Multi-Family MBS is eliminated on consolidation.

(2)

Includes the fair value of our net investments in the FREMF 2012-KF01 Trust.

(3)

Includes cash and cash equivalents.

(4)

Includes principal receivable, interest receivable, prepaid and other assets, interest payable, dividend payable and accrued expenses and other liabilities.

Month

Dividend

Record Date

Payment Date

October 2018

$0.1823

October 15, 2018

October 26, 2018

November 2018

$0.1823

November 15, 2018

November 27, 2018

December 2018

$0.1823

December 17, 2018

December 27, 2018

FIVE OAKS INVESTMENT CORP. AND SUBSIDIARIES

Consolidated Balance Sheets

09/30/2018

12/31/2017

ASSETS

(unaudited)

Cash and cash equivalents

$             9,912,051

$             34,347,339

Restricted cash

77,694,265

11,275,263

Available-for-sale securities, at fair value (includes pledged securities of $0 and $1,295,225,428 for June 30, 2018 and December 31, 2017, respectively)

-

1,290,825,648.00

Commercial mortgage loans, held-for-investment, at amortized cost

544,586,537

-

Multi-family loans held in securitization trusts, at fair value

24,787,988

1,130,874,274

Residential loans held in securitization trusts, at fair value

-

119,756,455

Mortgage servicing rights, at fair value

4,209,124

2,963,861

Deferred offering costs

122,233

179,382

Accrued interest receivable

2,542,868

8,852,036

Investment related receivable

16,242,900

7,461,128

Derivative assets, at fair value

-

5,349,613

Other assets

713,762

656,117

Total assets

$           680,811,728

$        2,612,541,116

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES:

Repurchase agreements:

Available-for-sale securities

$                            -

$        1,234,522,000

Collateralized loan obligations net of discount of $2,716,862 and deferred financing cost of $3,977,017 for September 30, 2018)

503,487,121

-

Multi-family securitized debt obligations

19,462,838

1,109,204,743

Residential securitized debt obligations

-

114,418,318

Accrued interest payable

854,060

6,194,464

Dividends payable

1,450,609

39,132

Deferred income

397,203

222,518

Due to broker

-

1,123,463

Fees and expenses payable to Manager

3,001,338

752,000

Other accounts payable and accrued expenses

96,293

273,201

Total liabilities

$           528,749,462

$        2,466,749,839

COMMITMENTS AND CONTINGENCIES (NOTE 15)

STOCKHOLDERS' EQUITY:

Preferred Stock: par value $0.01 per share; 50,000,000 shares authorized, 8.75% Series A cumulative redeemable, $25 liquidation preference, 1,610,000 and 1,610,000 issued and outstanding at September 30, 2018 and December 31, 2017, respectively

37,156,972

37,156,972

Common Stock: par value $0.01 per share; 450,000,000 shares authorized, 23,687,664 and 22,143,758 shares issued and outstanding, at September 30, 2018 and December 31, 2017, respectively

236,787

221,393

Additional paid-in capital

231,296,687

224,048,169

Accumulated other comprehensive income (loss)

-

(12,617,794)

Cumulative distributions to stockholders

(112,438,915)

(104,650,235)

Accumulated earnings (deficit)

(4,189,265)

1,632,772

Total stockholders' equity

152,062,266

145,791,277

Total liabilities and stockholders' equity

$           680,811,728

$        2,612,541,116

FIVE OAKS INVESTMENT CORP. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

Three Months Ended September 30,

Nine Months Ended September 30,

2018

2017

2018

2017

Revenues:

(unaudited)

(unaudited)

(unaudited)

(unaudited)

Interest income:

Available-for-sale securities

$                            -

$                7,827,281

$              10,748,966

$              21,308,582

Residential mortgage loans held-for-sale

-

12,082

-

69,416

Commercial mortgage loans held-for-investment

9,365,400

-

15,259,400

-

Multi-family loans held in securitization trusts

336,824

13,473,913

20,540,942

40,992,241

Residential loans held in securitization trusts

-

1,249,966

2,102,352

3,903,924

Cash and cash equivalents

17,024

63,264

134,002

138,745

Interest expense:

Repurchase agreements - available-for-sale securities

-

(4,118,639)

(7,637,242)

(9,087,956)

Collateralized loan obligations

(4,366,632)

-

(7,255,799)

-

Multi-family securitized debt obligations

(237,980)

(12,766,808)

(19,404,532)

(38,866,888)

Residential securitized debt obligations

-

(995,293)

(1,685,971)

(3,100,616)

Net interest income

5,114,636

4,745,766

12,802,118

15,357,448

Other income:

Realized gain (loss) on sale of investments, net

(13,617)

(5,148,445)

(33,358,905)

(14,616,997)

Change in unrealized gain (loss) on fair value option securities

-

-

-

9,448,270

Realized gain (loss) on derivative contracts, net

-

(1,636,725)

25,984,870

2,049,400

Change in unrealized gain (loss) on derivative contracts, net

-

307,263

(5,349,613)

(8,583,100)

Realized gain (loss) on mortgage loans held-for-sale, net

-

(221,197)

-

(221,620)

Change in unrealized gain (loss) on mortgage loans held-for-sale

-

28,794

-

17,727

Change in unrealized gain (loss) on mortgage servicing rights

103,512

(102,945)

1,245,264

(457,720)

Change in unrealized gain (loss) on multi-family loans held in securitization trusts

957,549

694,730

(5,861,373)

2,797,566

Change in unrealized gain (loss) on residential loans held in securitization trusts

-

(155,252)

5,650,199

(773,674)

Other interest expense

-

-

-

(152,322)

Servicing income

285,745

276,211

702,127

721,468

Other income

27,942

8,369

88,434

33,275

Total other income (loss)

1,361,131

(5,949,197)

(10,898,997)

(9,737,727)

Expenses:

Management fee

586,926

573,412

1,767,252

1,670,804

General and administrative expenses

796,600

1,288,978

3,148,945

4,120,807

Operating expenses reimbursable to Manager

548,132

915,452

1,865,057

3,086,304

Other operating expenses

136,400

225,502

742,059

770,189

Compensation expense

54,683

49,562

201,845

155,384

Total expenses

2,122,741

3,052,906

7,725,158

9,803,488

Net income (loss)

4,353,026

(4,256,337)

(5,822,037)

(4,183,767)

Dividends to preferred stockholders

(880,509)

(880,509)

(2,631,744)

(2,631,744)

Net income (loss) attributable to common stockholders

$                3,472,517

$              (5,136,846)

$              (8,453,781)

$              (6,815,511)

Earnings (loss) per share:

Net income (loss) attributable to common stockholders (basic and diluted)

$                3,472,517

$              (5,136,846)

$              (8,453,781)

$              (6,815,511)

Weighted average number of shares of common stock outstanding

23,687,273

22,139,258

23,588,688

19,342,188

Basic and diluted income (loss) per share

$                         0.15

$                       (0.23)

$                       (0.36)

$                       (0.35)

Dividends declared per weighted average share of common stock

$                         0.06

$                         0.15

$                         0.22

$                         0.45

GAAP to Core Earnings Reconciliation

Three months Ended

Three months Ended

September 30, 2018

June 30, 2018

Reconciliation of GAAP to non-GAAP Information

Net Income (loss) attributable to common shareholders

$                     3,472,517

$                 (22,360,401)

Adjustments for non-core earnings

Realized (Gain) Loss on sale of investments, net

$                          13,617

$                  30,497,281

Realized (Gain) Loss on derivative contracts, net

$                                    -

$                 (23,192,076)

Unrealized (Gain) Loss on derivative contracts, net

$                                    -

$                  18,132,701

Unrealized (Gain) Loss on mortgage servicing rights

$                       (103,512)

$                   (1,084,063)

Unrealized (Gain) Loss on multi-family loans held in securitization trusts

$                       (957,549)

$                     5,463,148

Unrealized (Gain) Loss on residential loans held in securitization trusts

$                                    -

$                   (5,905,602)

Subtotal

$                    (1,047,444)

$                   23,911,389

Other Adjustments

Recognized compensation expense related to restricted common stock

$                            8,733

$                            4,857

Adjustment for consolidated securities

$                          39,551

$                        493,498

Adjustment for one-time charges

$                                    -

$                                    -

Subtotal

$                          48,284

$                        498,355

Core Earnings

$                     2,473,357

$                     2,049,343

Weighted average shares outstanding - Basic and Diluted

23,687,273

23,683,164

Core Earnings per weighted share outstanding - Basic and Diluted

$                              0.10

$                              0.09

Multi-Family Loans held in Securitization Trusts, at fair value⁽¹⁾

$

24,898,204

Multi-Family Securitized Debt Obligations (non-recourse)⁽²⁾

$

(19,566,273)

Net Carrying Value

$

5,331,931

Cash and Other

$

4,071

Net Capital in Multi-Family

$

5,336,002

(1)    Includes interest receivable

(2)    Includes interest payable